CNX Gas Reports Record Third Quarter Results;
Net Income Doubles to a Record $67.4 million;
Production Rises By 38% to a Record 19.7 Bcf;
2008 and 2009 Production Guidance Raised
Pittsburgh, PA (October 22, 2008) – CNX Gas Corporation (NYSE: CXG), the leading E&P company in the Appalachian Basin, reported record net income for the quarter ended September 30, 2008 of $67.4 million, or $0.45 per diluted share. This is more than double the net income of $31.3 million, or $0.21 per diluted share, for the quarter ended September 30, 2007, and the highest quarterly net income in the company’s history.
Gas production net of royalty and line loss was also a record, at 19.7 billion cubic feet (Bcf), or 213.7 million cubic feet (MMcf) per day, for the quarter ended September 30, 2008. This was 38% higher than the 14.3 Bcf, or 156.0 MMcf per day, for the quarter ended September 30, 2007. It was also 5% higher than the 18.8 Bcf produced in the June 2008 quarter.
Nicholas J. DeIuliis, president and chief executive officer, said, “CNX Gas had an outstanding quarter, delivering record results that reflect the continuing growth of our CBM program, the strong early results of our shale program, and the benefits of our exploration program. Our net income and production in the third quarter were the highest in our three-year history and significantly higher than the year-earlier quarter. Also, our employees continued to work without a lost-time accident.
“In these times of economic uncertainty, CNX Gas is in a terrific position. We now anticipate, due to increased operating and capital efficiencies, of investing $515 million in our business in 2008. Our earlier capital expenditure guidance had been $552 million. Concurrently, we are raising 2008 production guidance, to 74 Bcf. In looking ahead to 2009, we estimate that we can now grow production by 15% to 85 Bcf. With current NYMEX pricing, and with nearly one-half of our production hedged at $9.74 per Mcf, we anticipate being able to fund this 2009 growth entirely through cash flow from operations. This combination may make us unique in the E&P industry.”
At September 30, 2008, the company had cash on hand of $3.1 million, while $58.2 million was drawn on its credit facility. Capital expenditures for the quarter were $170.4 million and quarterly return on capital employed was 24%, on an annualized after-tax basis.
Please use this link for a full transcript of the earnings release:
http://phx.corporate-ir.net/phoenix.zhtml?c=193034&p=irol-newsArticle&ID=1215543&highlight=