Optimistic about the future of natural gas, Consol Energy is moving to further shed its 150-year-old coal mining business and become a full-fledged oil and gas company.
The Cecil-based energy company said on Tuesday it could sell or spin off its coal business — which includes a controlling stake in three sprawling underground mines in Greene County that sell coal to power plants — as early as this year.
The company announced its plans along with a fourth-quarter earnings report that showed widening losses but carried the expectation that natural gas prices would rise, and productivity gains and cost controls would drive growth.
The plan is another step in the company’s strategy to move away from coal. In 2015, Consol spun off coal assets in 2015 to form CNX Coal Resources, a master limited partnership that owns 25 percent stake and fully operates the Greene County mining complex.
On Tuesday, the company said a third option for Consol’s coal business would be to simply let CNX Coal take over the parent company’s stake in the mining complex.
During an earnings call with investors and analysts, David M. Khani, Consol’s chief financial officer, said Consol would pursue the path that gives the company’s shareholders the best deal. Mr. Khani believes a sale is possible, given how the company has successfully navigated the “topsy-turvy” coal market.
“If you look at that [management] team coupled with that asset, that would be an outstanding platform to build upon moving forward,” Mr. Khani said, adding that “we’ve got a horse race, so to speak, that’s ongoing.”
A spokesman declined to say whether the company had already lined up interested buyers.
A year ago, Consol was able to find a buyer for its metallurgical coal mines, which sell coal to steel mills, for $420 million. The company said at the time it would use that money to pay down debt.
On Tuesday, Consol reported a fourth-quarter loss of $306 million, or a loss of $1.33 a share, down from a profit of $30 million, or a profit of 13 cents per share, during the year-ago quarter.
For the full year, the company lost $848 million, or $3.70 a share, wider than losses of $375 million, or $1.64 a share, in 2015.
But the average sales price that Consol got for its natural gas during the fourth quarter improved to $2.22 per thousand cubic feet, up from $1.83 per thousand cubic feet one year before.
And productivity gains and cost savings during the quarter are encouraging, said Timothy C. Dugan, Consol’s chief operating officer for exploration and production.
The division produced 101.3 billion cubic feet equivalent (Bcfe) of oil, gas and related liquids, a 6 percent increase from the year-ago quarter. Total production costs dropped 4 percent, and the company is completing its drilling operations faster.
“The drilling efficiencies in part continue to drive our performance,” Mr. Dugan said.
Consol’s stock, which has more than doubled in the last year, fell 7.4 percent on Tuesday, closing at $16.94.
Fourth-quarter earnings released Monday by CNX Coal showed some improvements in the mining conditions in Greene County complex.
The mines sold 1.8 million tons during the fourth quarter, compared to 1.2 million tons during the year-ago quarter. Domestic demand remained strong as natural gas prices rose, meaning more power plants could find it economical to burn coal for electricity, the company said.
However, the average price for its coal dipped 14 percent to $45 a ton in the fourth quarter, as some higher-priced coal contracts rolled off and were replaced by lower-priced sales, CNX Coal reported.
Daniel Moore: firstname.lastname@example.org, 412-263-2743 and Twitter @PGdanielmoore.