Two gas drillers headquartered in the Pittsburgh region both ramped up their presence in the Marcellus Shale during the first quarter of 2013, but the results were drastically different.
Downtown-based EQT Corp.'s gas-centric strategy seemed to pay off in the three months ended March 31, while Cecil-based Consol Energy swung to a net loss for the quarter, according to earning reports the companies filed Thursday. Though each brought more wells online in the Marcellus Shale gas fields of Appalachia, Consol also faced a tempered coal market that kept its overall earnings low.
EQT announced first quarter net income of $100.3 million, up from $72 million seen in the same quarter one year ago. On a per-share basis, the firm reported earnings of 66 cents, up 18 cents from 2012. Revenues went up 25 percent to $458.1 million.
EQT drilled 33 Marcellus wells in the quarter, as well as two in the Utica Shale of Ohio and six in the Upper Devonian of Appalachia. The company plans to drill 153 Marcellus wells this year as part of a strategic effort to narrow its focus to gas drilling.
To help do that, the company is selling its Equitable Gas utility arm. Expenses related to the pending sale were $2.1 million for the quarter. EQT announced Thursday it had cleared the first hurdle of regulatory approval for the sale, with the completion of a federal antitrust review required by the Federal Trade Commission. The deal still requires approval from various state and federal agencies, and the company has said it expects the process to take about one year.
At Consol, the earnings report marked an unhappy ending to a quarter that saw a fire shut down mine operations in a climate of already-low coal costs.
The coal and natural gas producer reported a net loss of $1.6 million, or 1 cent per share, for the first quarter. That's down from a net income of $97 million, or 42 cents a share, in the same quarter a year ago.
First-quarter revenue was $1.29 billion, down from 2012's $1.43 billion.
In mid-March, the company's Blacksville No. 2 mine in Greene County was shut down after an underground fire broke out. No one was hurt, but the company has not yet decided when longwall operations can resume.
The shutdown has led to a pre-tax expense of $15.2 million. Other expenses related to a severance plan and a class-action shareholder lawsuit totaled $47.3 million.
Consol's overall coal inventory dropped to its lowest level in 15 years. Consol expanded coal sales in Brazil and China during the first quarter, and said three new potential customers in India were testing the firm's coal.
Meanwhile, the company's Marcellus Shale division saw a 60 percent increase in production to 10.7 billion cubic feet. That's about half the amount of gas produced by the company's coalbed methane operations during the quarter.
In a statement to shareholders, chairman and CEO J. Brett Harvey said Consol was planning to sell some assets and invest the money in higher return projects. "While we remain quiet about which specific assets are in focus, we assure you that both the list and process is comprehensive," he said.