CONSOL Energy CNX has priced $500 million senior notes yielding 8.00% interest per year and maturing on 2023. The notes are offered at 98.552% of its face value.
The company intends to utilize the proceeds of the new issue along with borrowings from its revolving credit facility to the extent necessary, to purchase nearly all of the $1.02 billion in its outstanding 8.25% senior notes due 2020 and the $250 million in its outstanding 6.375% senior notes due 2021 pursuant to the tender offers and consent solicitations that commenced on Mar 9, 2015.
CONSOL Energy exited 2014 with long-term debts of $3.27 billion. This financial arrangement to redeem high interest bearing notes from proceeds of lower interest notes will help the company to save on interest expenses.
CONSOL Energy has gradually shifted its focus from coal operations to natural gas related businesses. This is yielding positive results and benefiting the company at a time when the coal market looks extremely bleak. The company aims to invest nearly $1 billion in E&P operations in 2015 and aims to produce 300–310 billion cubic feet equivalents (Bcfe) of natural gas in 2015 and 30% more in 2016.
Fourth-quarter 2014 earnings of 25 cents per share were ahead of our expectation by 25%. CONSOL Energy expects first-quarter 2015 coal sales to be in the range of 8.0–8.5 million tons, while natural gas production is expected to reach 70–74 Bcfe during the aforesaid period.
CONSOL Energy currently has a Zacks Rank #3 (Hold). Better-ranked stocks in the space are Hallador Energy Company HNRG, Rhino Resource Partners LP RNO and Westmoreland Resource Partners, LP WMLP. Both Hallador Energy Company and Rhino Resource Partners sport a Zacks Rank #1 (Strong Buy) while Westmoreland Resource Partners has a Zacks Rank #2.
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