Jan 6, 2016 2 min read

In another sign of the energy times, Consol Energy Inc. announced Wednesday it reduced its 2016 budget for natural gas exploration and production to between $205 million and $325 million.

That is a significant dropoff from what the Southpointe-based company previously planned to spend during the year – $400 million to $500 million.

Consol, however, is still hoping to increase gas production by 15 percent through efficient and cost-effective production techniques.

Natural gas prices declined precipitously over the past year because of oversupply and lack of sufficient pipelines to transport the resource. A number of oil and gas firms cut costs and reduced production in the Marcellus and Utica shales as a result.

Consol laid off employees and stopped drilling new wells last year. The company planned to extend that drilling ban through 2016, but said in the announcement it could resume that program later this year if it is considered financially feasible. A major factor, Consol said, is “the assessment of the dry Utica wells drilled in 2015.”

Consol also announced it plans to spend $170 million and $190 million on coal this year. Coal also is reeling from suppressed prices and demand, and the company said its Coal Division lowered its sales expectations to between 27 million and 32 million tons.

“These are extremely difficult times and one of the most challenging coal markets I have seen in my long tenure in the industry,” said Jimmy Brock, chief executive of CNX Coal Resources GP, LLC.

“We are working with our customers on delivery schedules and making the operational decisions we believe are necessary in this environment. Although the timing of shipments creates quarter-to-quarter volatility, we expect the committed tons will be shipped.”