CNX Gas Corporation had net income for the quarter ended September 30, 2007 of $31.3 million, or $0.21 per diluted share. This compares to net income of $37.6 million, or $0.25 per diluted share for the quarter ended September 30, 2006. Production was 14.4 billion cubic feet (Bcf), or 157.0 million cubic feet (MMcf) per day. This compares to 14.4 Bcf, or 156.8 MMcf per day in the year- ago quarter.
Nicholas J. DeIuliis, president and chief executive officer, said, "During the quarter, we maintained our stellar safety record, showed continued unit cost improvement compared to the second quarter, and continued to execute our 346-well drilling program. We set daily production records with our Virginia frac production and our Mountaineer production. We also advanced the start-up date of our Nittany project from December 31 to November 1. These positives were offset during the quarter by the deferral of some gob gas production associated with the idled Buchanan Mine. Fortunately, our production associated with active mining at Buchanan should rebound to normal levels shortly after the mine resumes coal production."
"Additionally," Mr. DeIuliis continued, "We're beginning to formulate our 2008 drilling program. While not yet finalized, I think it's reasonable to expect that we will drill over 500 wells next year, which would be a 44% increase from the 2007 program. A plan of this size will enable CNX Gas to continue to accelerate the monetization of our tremendous asset base and achieve 2008 production of 73 Bcf."
In early October, after the end of the 90-day deductible period, CNX Gas became eligible to file a claim with its insurance carriers for business interruption insurance pursuant to the Buchanan Mine idling. Therefore, earnings impacts to CNX Gas that occur beyond that date may be mitigated by insurance recovery.
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