CNX
Consol Energy Inc
Energy, Industrial/Transportation
04/15/2015
Presented
| Date | 04/09/2015 |
| Price | $28.48 |
| Market Cap | $6.51B |
| Ent Value | $9.62B |
| P/E Ratio | 39x |
| Book Value | $23.14 |
| Div Yield | 0.88% |
| Shares O/S | 228.65M |
| Ave Daily Vol | 3,560,000 |
| Short Int | 9.75% |
Current
| Price | $34.08 |
| Market Cap | $5.15B |
| CONSOL Energy Inc., together with its subsidiaries, operates as an integrated energy company in the United States and internationally. The company operates through two divisions, Exploration and Production (E&P), and Coal. The E&P division produces pipeline quality natural gas primarily to gas wholesalers. This division owns rights to extract natural gas in Pennsylvania, West Virginia, and Ohio from approximately 441,000 net Marcellus Shale acres; and controls approximately 118,000 net acres of Utica Shale potential in eastern Ohio, as well as controls 108,000 net acres in Southwestern Pennsylvania and Northern West Virginia that contain the rights to the natural gas in Utica Shale; and owns rights to extract coalbed methane (CBM) in Virginia from approximately 268,000 net CBM acres, which cover a portion of its coal reserves in Central Appalachia. It also owns shallow oil and gas acreage position approximately 853,000 net acres in Illinois, Indiana, Kentucky, West Virginia, Pennsylvania, Virginia, and New York; various acres that have Upper Devonian potential; 218,000 net acres of Chattanooga Shale; and 386,000 net acres of Huron Shale potential in Kentucky, West Virginia, and Virginia, as well as provides midstream gas services. The Coal division engages in mining, preparation, and marketing of thermal coal primarily to power generators, and metallurgical coal to metal and coke producers. It offers thermal coal, and low and high metallurgical coal. The company also provides energy services, including coal terminal services, water services, and land resource management services. CONSOL Energy Inc. was founded in 1864 and is headquartered in Canonsburg, Pennsylvania. |
Publicly traded companies mentioned herein: CONE Midstream Partners LP (CNNX), CONSOL Energy Inc (CNX), Foresight Energy LP (FELP), Range Resources Corp (RRC)
Highlights
In early December, 2014 CONSOL Energy (CNX) management announced a plan to split up the business. The presenter sees a favorable risk/ reward setup for bears heading into the corporate action, whereby a master limited partnership (MLP) will be formed (holding the thermal coal assets) and offered to the public in mid-2015; and a portion of the metallurgical coal subsidiary will be offered to the public as well. If all goes smoothly, CNX will have a majority interest in the MLP and a majority stake in the met coal business, and the core business will be a more pure oil and gas E&P with an interest in CONE Midstream Partners. CNX is presently burning cash and is expected to generate just under $1 billion of EBITDA in 2015; a large portion of its earnings could be at risk if coal prices slide further. Based on his sum-of-the-parts model, the breakup of CNX would simply reveal how overvalued the company is at present levels ($28 - $29), and there appears to be downside risk to the low $20s.
◆Signing up and creating account with us unlocks this content for you. Contact us today for full access to DeMatteo Research and more.
◆Signing up and creating account with us unlocks this content for you. Contact us today for full access to DeMatteo Research and more.