PITTSBURGH — CONSOL Energy Inc. expects to invest approximately $1.5 billion in 2014 to accelerate its growth in natural gas production.

CONSOL is targeting 30 percent natural gas production growth in 2014.

J. Brett Harvey, chairman and CEO, said the company sold low-growth, non-core coal assets in 2013. The primary sale, which closed last month, yielded approximately $1 billion in cash.

“We will apply these funds toward our aggressive 2014 natural gas drilling program,” Harvey said.

“And once the BMX longwall starts late in the first quarter, we expect our coal business to also generate meaningful cash.”

Gas operations

Within the gas operations category, CONSOL expects to invest about $1.1 billion, much of which will be directed toward drilling and completion costs in the Marcellus and Utica shales. Approximately one-half of the company’s total drilling capital will target the liquids-rich areas within these two plays.

On the dry side, the drilling will primarily focus on those areas in the Marcellus that have established high net revenue interest, economies of scale, or reservoir performance.

In the Marcellus Shale joint venture, CONSOL and its partner plan to operate an average of 4-5 horizontal rigs each to drill at least a combined 162 gross wells.

At least 88 of the joint venture wells will be drilled in the liquids-rich areas of the play, including two within the recently acquired acreage that lies beneath the Pittsburgh International Airport.

Dry gas locations

At least 74 wells are planned to target the dry gas area of the joint venture. These dry locations include six Upper Devonian laterals (five Burkett; one Rhinestreet) in Washington County, Pa., (four) and Doddridge County, W.Va., (two).

Current plans of both partners include increased usage of shorter stage laterals and reduced cluster spacing.

In the Utica Shale joint venture, a total of 32 gross wells are planned to be drilled within the liquids-rich corridor that runs across Harrison, Belmont, Guernsey, and Noble counties of Ohio.

The Utica drilling and completions capital reflects a $115 million reduction for drilling carry expected to be paid by a joint venture partner.

The Marcellus JV drilling carry is currently suspended and will be reinstated upon Henry Hub natural gas prices being equal or greater than $4 for three consecutive months. Based on current Henry Hub futures and the corresponding reinstatement of the drilling carry, approximately $220 million of the Marcellus JV drilling carry is expected to be realized for drilling and completions capital incurred between March and December of the current year.

Separate from the joint venture activity, CONSOL expects to invest $24 million in Monroe County, Ohio.

In addition to continuing to build-out its land position, the company will drill two 100 percent-owned laterals. One well will target the liquids-rich Marcellus formation, while the other will be designed to penetrate the dry-gas Utica zone. Both will be drilled from the same pad.

The coalbed methane program will again be kept at minimal drilling levels, with the expected drilling of only 71 wells.

Estimated production

CONSOL Energy projects its 2014 natural gas production to be between 215 – 235 Bcfe, of which 5 percent-8 percent is expected to be NGLs/condensates/oil.

With the continued focus on the liquids-rich areas of its plays, the company expects that mix to increase to 10 percent-15 percent by the end of 2016, while overall volumes are expected to increase 30% per year over the same time period.

Within the coal operations category for 2014, CONSOL anticipates investing $200 million to complete the BMX Mine in mid-March. This underground mine is adjacent to CONSOL’s Bailey and Enlow Fork mines in Southwestern Pennsylvania. On a full-year basis, the single-longwall BMX Mine is expected to produce approximately 5 million annual tons of high-quality Pittsburgh seam coal .