CONSOL Energy achieved various financial records for the first quarter of 2009 EBITDA of $389.5 million, and EBIT of $283.3 million. CONSOL Energy also had record operating cash flows of $249.8 million.

This was one of the best quarters in the company’s history, said J. Brett Harvey, president and chief executive officer. Despite the weakened economy, CONSOL Energy was able to achieve outstanding net income and earnings per share. Both our coal and gas segments performed extremely well in these difficult times.

For 2009 CONSOL Energy has basically all of its intended coal production priced at an average realized price of $59.83 per ton, or nearly 23% more than 2008 realized pricing. CNX Gas has just over 50% of its planned 2009 gas production hedged at an average price of $9.52 per thousand cubic feet.

Quarter-To-Quarter Analysis of Financial Results

CONSOL Energy had net cash from operating activities of $249.8 million for the March 2009 quarter, with $126.4 million attributable to CNX Gas. For the company, this compares to $146.1 million for the March 2008 quarter, a raise of 71.0%. Once again, the improvement was due to elevated coal pricing and higher gas production.

The company had total capital expenditures of $299.6 million in the March 2009 quarter, with $133.6 million attributable to CNX Gas. For CONSOL Energy, capital expenditures are anticipated to decrease over the remaining quarters of 2009 as some projects already underway move toward completion.

Liquidity

As of March 31, 2009, the company had $440 million of short-term debt and $364.5 million in total liquidity, which is consisting of $71.6 million of cash and $292.9 million available to be borrowed under its $1 billion bank facility. As of March 31, 2009, CNX Gas Corporation had $80.4 million of short-term debt and $104.9 million in total liquidity, which is includes of $0.2 million of cash and $104.7 million accessible to be borrowed under its $200 million bank facility.

Sales and production include the company’s portion from equity affiliates and CONSOL Energy idated variable interest entities. Operating costs comprises items such as labor, supplies, power, preparation costs, project expenditures, subsidence costs, gas well plugging costs, charges for employee benefits (including Combined Fund premiums), royalties, in addition to production and property taxes. Non-operating charges comprise items such as charges for long-term liabilities, direct administration, selling and general administration. Operating margins per ton are defined as average realized price per ton less operating costs per ton.

Total coal sales were decreased in the March 2009 quarter, as the weak economy condensed coal burn at utilities and coal needs of steel companies.

Because of the economy, CONSOL Energy is working with some of its customers to postpone shipments where needed. We have long term relationships with our customers that we value highly, but we expect to capture the value for our shareholders in the contracts we have signed, continued Harvey. One option we’re pursuing is spreading the value over future tonnage.

Coal production was 16 million tons in the March 2009 quarter, decreased from 16.2 million tons in the year-earlier quarter. Harvey continued, CONSOL Energy will match its production with actual customer shipments. We are in the business of creating value for our shareholders, so we will not produce coal just to build inventory. When shipments rebound, so will our production.

Average realized price was $59.63 per ton, or 36.9% more than in the year-earlier quarter, due to general market conditions.

Operating costs were $32.30 per ton, or 14.1% more than in the year-ago quarter. Supply and maintenance costs were the largest factor, with the setting up of higher grade seals and a higher number of seals being built contributing to the increase. Higher gas well plugging costs, higher roof control costs, and higher equipment maintenance costs were also factors. In addition to this the labor costs raised as the result of a 2007 UMWA contract.

Total costs were $42.24 per ton, increased 13% higher than in the year-ago quarter, with most of the raise coming from operating costs.

Commenting on the costs, Harvey noted that the idling of some of CONSOL Energy’s higher cost mines in the middle of the first quarter could help lessen unit cost pressures during the rest of 2009.

Operating margins were $27.33 per ton in the March 2009 quarter, up 79.2% from $15.25 per ton, due to higher realized pricing per ton. Financial margins were $17.38 per ton, a nearly three-fold increase from the $6.18 per ton, also due to higher realized pricing.

Other Coal Activities

CNX marine terminals loaded about 2.2 million tons of coal in the March 2009 quarter, flat with the year-ago quarter.