Consol Energy expects to invest $122 million in its Utica shale joint venture with Hess Corp. in 2013, the company reported this morning.
Of that amount, $90 million will be allocated toward drilling capital on Consol's share of 27 wells in the Utica shale. Hess Corp. pays 75% of the Utica well costs because of a $100 million drilling carry, while production is split 50/50.
Consol has finished drilling a well in Ellsworth Township and is drilling a well in Jackson Township, both in Mahoning County. The company stared developing a well pad in Vienna Township in Trumbull County, but suspended work on that well during the summer.
Meantime, Consol plans to spend $600 million to develop its Marcellus shale assets, which includes drilling capital of $415 million as part of the company's joint venture with Noble Energy. The partnership anticipates drilling 126 horizontal wells in the Marcellus, including 90 wells in the liquids-rich area of the play. Another $74 million is budgeted for gathering and compression infrastructure.
Across all of the gas plays, Consol expects investments of $660 million of drilling capital, $128 million of gathering and compression capital, and $76 million for land. The company stated that its coalbed methane program would be kept at minimum levels, with just 63 wells planned. And, Consol also reported that it plans a net investment of between $835 million and $865 million in all of its coal, gas and water business in 2013.
"Our net investment in 2013 reflects both our ability to invest in organic growth opportunities in coal, gas, and liquids while selling assets that have more value to others," Consol's chairman and CEO, J. Brett Harvey, said in a statement."We have some flexibility in our 2013 investment plan, in both coal and gas," he stated. In our coal division, once we complete the BMX Mine, we do not expect to be investing in new major coal growth projects."