Consol Energy Inc. is cutting its Marcellus Shale budget by another couple million dollars, equal to about 8 percent.
The company is now expecting to spend $920 million on capital spending for this year, which is $8 million less than what they announced back in January. Consol’s new budget plan consists of drilling and completing natural gas wells, as well as an estimated $100 million in Marcellus midstream gather systems. In 2014, Consol spent around $1.5 billion to support its natural gas production, which is quite a bit more when compared to this year. According to Consol’s statement, the remaining funds, which is about 52 percent of it, will be directed towards development of the company’s dry gas plays. These funds do not include land permitting or acquisitions.
Consol is now a part of a long list of drillers that have cut back capital budget spending in the Marcellus and Utica Shale plays. The low oil and natural gas prices are still taking drastic hits on the industry, which are continuing to drop. In a recent analysis by Pittsburg Business Times, the total amount of budget cuts for five companies this year, including Consol, that are operating in Pennsylvania equals out to about $1.5 billion.
Consol do say that the company is going to still try and shoot for 30 percent year-over-year growth in production and has hopes that it will be able to increase spending if energy prices do go up:
Consol is retaining the flexibility to increase activity levels in the second half of 2015 if the forward trend in gas prices justifies increasing production … Whether Consol increases its activity levels in 2015 will largely determine the production growth in 2016, which the company expects to exceed 20 percent over 2015 production levels.