PITTSBURGH, Feb. 19 /PRNewswire-FirstCall/ -- CONSOL Energy Inc. has announced a restructuring plan at its Fola Surface and Preparation Plant operations near Bickmore, W. Va., that will keep 301 people employed as work schedules are adjusted from a continuous operation to a traditional five-day work week.
The change in schedule will take effect Monday, Feb. 22 following a temporary weekend idle of the operations to make the workforce adjustments necessary to implement the restructuring plan, including a move of the majority of the mining equipment at the Fola surface operations to the Ike's Fork portions of the mine site.
Recently, the U.S. District Court issued a ruling allowing Fola to continue operating in six valley fills in the Ike's Fork permit area. It was through the efforts of West Virginia Gov. Joe Manchin and his administration, along with U.S. Senator Jay Rockefeller, and U.S. Reps. Nick Rahall and Shelley Moore Capito, as well as Fola employees and management that a successful outcome of the permitting issues resulted.
"We have a plan and our tonnages have been sold, but in an effort to manage our stockpiles and to balance coal production with expected customer demand and shipping schedules, we are faced with making adjustments which unfortunately will impact a portion of our workforce," said CONSOL Energy Executive Vice President and Chief Operating Officer Nicholas J. DeIuliis in announcing the restructuring plan.
"If we had not been able to obtain the stay on the Ike's Fork permit, the number of Fola employees impacted by the current restructuring would have been much greater," he added.
While the majority of Fola's workforce will remain at work under the new operational plan, a total of 157 employees will be impacted and will be laid off effective immediately.
In December, CONSOL Energy issued notice under the Worker Adjustment and Retraining Notification Act (WARN) of a possible layoff at its Fola Operations in February. At that time, the company attributed the layoff potential to both uncertain market conditions and the U.S. District Court remand of a Clean Water Act Section 404 permit needed for the Ike's Fork area of the mine. At that time, it was thought the ramifications of both would have the impact of shutting down Fola's surface operations.
However, as a result of the extended stay on the Ike's Fork permit, production in the Ike's Fork area of the Fola operations will be able to be maintained as stockpile levels are controlled. Reclamation activities will continue at Powellton and underground mining at Little Eagle Coal Company will also continue.
"Operating coal and gas assets in the current severe economic downturn is a major challenge," DeIuliis said. "However, the restructuring we are announcing today will allow us to match production with current market opportunities and will make us much more competitive moving through 2010 and beyond."
CONSOL Energy Inc., a high-Btu bituminous coal and natural gas company, is a member of the Standard & Poor's 500 Equity Index and the Fortune 500. At year-end 2009, it had 11 bituminous coal mining complexes in six states and reports proven and probable coal reserves of 4.5 billion tons. It is also a majority owner of CNX Gas Corporation, a leading Appalachian gas producer, with proved reserves of over 1.9 trillion cubic feet. Additional information about CONSOL Energy can be found at its web site: http://www.consolenergy.com/.
Forward-Looking Statements
Various statements in this document, including those that express a belief, expectation, or intention, as well as those that are not statements of historical fact, are forward-looking statements (as defined in Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995). The forward-looking statements may include projections and estimates concerning the timing and success of specific projects, our future production, revenues, income and capital spending. When we use the words "believe," "intend," "expect," "may," "should," "anticipate," "could," "would," "will," "estimate," "plan," "predict," "project," or their negatives, or other similar expressions, the statements which include those words are usually forward-looking statements. When we describe strategy that involves risks or uncertainties, we are making forward-looking statements. The forward-looking statements in this document speak only as of the date of this document; we disclaim any obligation to update these statements unless required by securities law, and we caution you not to rely on them unduly. We have based these forward-looking statements on our current expectations and assumptions about future events. While our management considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond our control. These risks, uncertainties and contingencies include, but are not limited to: the deteriorating economic conditions; an extended decline in prices we receive for our coal and gas affecting our operating results and cash flows; reliance on customers honoring existing contracts, extending existing contracts or entering into new long-term contracts for coal; reliance on major customers; our inability to collect payments from customers if their creditworthiness declines; the disruption of rail, barge and other systems that deliver our coal; a loss of our competitive position because of the competitive nature of the coal industry and the gas industry, or a loss of our competitive position because of overcapacity in these industries impairing our profitability; our inability to hire qualified people to meet replacement or expansion needs; coal users switching to other fuels in order to comply with various environmental standards related to coal combustion; the inability to produce a sufficient amount of coal to fulfill our customers' requirements which could result in our customers initiating claims against us; foreign currency fluctuations could adversely affect the competitiveness of our coal abroad; the risks inherent in coal mining being subject to unexpected disruptions, including geological conditions, equipment failure, timing of completion of significant construction or repair of equipment, fires, accidents and weather conditions which could impact financial results; increases in the price of commodities used in our mining operations could impact our cost of production; obtaining, maintaining and renewing governmental permits and approvals for our operations; the effects of proposals to regulate greenhouse gas emissions; the effects of government regulation; the effects of stringent federal and state employee health and safety regulations; the effects of mine closing, reclamation and certain other liabilities; the effects of subsidence from longwall mining operations on surface structures, water supplies, streams and surface land; uncertainties in estimating our economically recoverable coal and gas reserves; the outcomes of various legal proceedings, which proceedings are more fully described in our reports filed under the Securities Exchange Act of 1934; increased exposure to employee related long-term liabilities; minimum funding requirements by the Pension Protection Act of 2006 (the Pension Act) coupled with the significant investment and plan asset losses suffered during the current economic decline has exposed us to making additional required cash contributions to fund the pension benefit plans which we sponsor and the multi-employer pension benefit plans in which we participate; lump sum payments made to retiring salaried employees pursuant to our defined benefit pension plan; our ability to comply with laws or regulations requiring that we obtain surety bonds for workers' compensation and other statutory requirements; acquisitions that we recently have made or may make in the future including the accuracy of our assessment of the acquired businesses and their risks, achieving any anticipated synergies, integrating the acquisitions and unanticipated changes that could affect assumptions we may have made; the anti-takeover effects of our rights plan could prevent a change of control; risks in exploring for and producing gas; new gas development projects and exploration for gas in areas where we have little or no proven gas reserves; the disruption of pipeline systems which deliver our gas; the availability of field services, equipment and personnel for drilling and producing gas; replacing our natural gas reserves which if not replaced will cause our gas reserves and gas production to decline; costs associated with perfecting title for gas rights in some of our properties; location of a vast majority of our gas producing properties in three counties in southwestern Virginia, making us vulnerable to risks associated with having our gas production concentrated in one area; other persons could have ownership rights in our advanced gas extraction techniques which could force us to cease using those techniques or pay royalties; our ability to acquire water supplies needed for drilling, or our ability to dispose of water used or removed from strata at a reasonable cost and within applicable environmental rules; the coalbeds and other strata from which we produce methane gas frequently contain impurities that may hamper production; the enactment of Pennsylvania severance tax on natural gas may impact results of existing operations and impact the economic viability of exploiting new gas drilling and production opportunities in Pennsylvania; our hedging activities may prevent us from benefiting from price increases and may expose us to other risks; and other factors discussed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2008 under "Risk Factors," as updated by any subsequent Form 10-Qs, which are on file at the Securities and Exchange Commission.
CONSOL Energy Inc.
CONTACT: Joe Cerenzia, +1-412-996-8823, or Cathy St. Clair,
+1-276-498-8239, both of CONSOL Energy Inc.
Web Site: http://www.consolenergy.com/
