CONSOL Energy Inc. officials are continuing to evaluate their "overall corporate structure" in a process that could include potential sales of parts of the Pittsburgh-based coal giant's holdings, the company has confirmed.On Friday, CONSOL issued a statement in response to what it called "market rumors or speculation" about a company-wide review that CEO Brett Harvey announced months ago in routine, quarterly financial reports."As we have stated previously, we believe the financial markets are not recognizing the full value of our world-class assets," CONSOL said in Friday's statement. "The evaluation process regarding our corporate structure continues and all options are being considered."CONSOL is one of West Virginia's largest coal companies. In 2012 it produced nearly 33 million tons of coal and employed 3,800 state residents among its nearly 9,000 employees.Top CONSOL officials have been saying for many months that the company was looking to "monetize" holdings, especially some of its "non-core assets."In its 2nd quarter 2013 financial report, released in late July, CONSOL said it had "stepped up its asset sale process" and put in place a process to evaluate all of its holdings for potential sales or restructuring."Investment bankers have been engaged, data rooms have been established, and in two cases, the process is proceeding to a second round of bidding," the company said in a press release at the time.During a July 25 conference call with industry analysts, Harvey partly explained CONSOL's strategy by noting that its greatly increased its natural gas operations, after for years being considered mostly a coal producer.
"If you look back a couple of years ago, it was all about coal," Harvey said. "And we made big money on the coal business as we developed the gas business."But as the gas business gets bigger and bigger and bigger, it's confusing on what you invest in [at] CONSOL," he said. "Are you investing in gas or are you investing in coal?"We think that we need to ... let our shareholders bask in the value of all these assets, whether it's by sale or by structure, and we're working on that right now," Harvey said.On Friday, the Wall Street Journal published a story that said CONSOL was "exploring ways to significantly reduce its coal holdings and focus more on natural gas."Citing unnamed sources "familiar with the matter," the Journal said CONSOL was considering splitting up its coal and gas assets, and having their stock traded separately. Also being considered was selling about half of its coal holdings, the Journal said, or even selling all of its coal assets.In West Virginia, most of CONSOL's coal production comes from large, unionized underground mines in the state's Northern Panhandle and the north-central region around Morgantown and Fairmont.Those CONSOL mines are generally considered by industry experts to be more insulated from some of the pressures affecting the rest of the mining business. CONSOL uses advanced longwall mining machines, and its operations generally produce high-sulfur coal that can be burned by scrubber-equipped power plants that are considered less likely to be shuttered by utilities.
And generally speaking, Northern Appalachian coal production - which includes Northern West Virginia -- has not been projected to show the steep declines that are ongoing in Southern West Virginia and Eastern Kentucky, where large-scale surface mining has been more prevalent and a larger share of high-quality reserves are believed to have been mined out.Reach Ken Ward Jr. at email@example.com