CANONSBURG, Pa. (AP) — Despite continued weakness for energy prices, Consol Energy reported narrowing losses in the second quarter and said Tuesday that it would put two drill rigs located in the shale plays of the Northeast back into action this year.
The company is been slashing costs and selling assets for a couple of years, and executives at the company, based outside of Pittsburgh, believe that now is the time to get ready for what they expect will be a more robust environment for drillers.
"While the market remains challenging, we demonstrated cost improvements and the capital discipline result to sustainable long-term, which is further strengthening company, getting us to a place where we now pivoted from defensive mode to offensive mode," said CEO Nicholas Deluliis.
Consol lost $469.8 million, or $2.05 per share, compared with $603.3 million, or $2.64 for the same period in 2015. Losses, adjusted to account for discontinued operations, came to $1.02 per share, compared with the $2.52 loss per share the same quarter last year.
That was far worse than the per-share loss expectations of 17 cents on Wall Street, according to a poll by Zacks Investment Research.
And revenue tumbled from last year's $545.5 million, to $285.8 million, when most analysts were expecting revenue to grow stronger.
Yet investors focused instead on the fact that Consol stuck by its projections for the year, suggesting a strong second-half rebound.
In afternoon trading, shares jumped almost 4 percent to $17.86, a high for the year.
Consol is putting two rigs back in operation in the Utica and the Marcellus shale plays in August, drilling eight wells in Ohio and two in Washington County, Pennsylvania, where the company is based.
There has been some evidence that drillers are getting more active.
The number of rigs exploring for oil and natural gas in the U.S. increased by 15 last week to 462. That's still a drastic reduction from the 876 active rigs a year ago at this time, and evidence of the carnage in the energy industry caused by low demand and falling prices.
Yet the rig count appears to have bottomed out in May at 404 as prices rebounded.
Futures for natural gas and crude are up between 15 percent and 16 percent this year.