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Top NAPP mines see slight bump in YOY production in Q2

The top mines in Northern Appalachia, or NAPP, gained a little in production year over year in the second quarter, but many coal producers were hampered by rail service issues.

Output from the 25 highest-producing NAPP coal mines was 23.8 million tons in the second quarter of 2017, a lift from the 22.2 million tons they produced in the same quarter last year but a drop from 24.8 million tons in the first quarter.

For the 12 months ending June 30, production increased 5.7% year over year, from 91.4 million tons to 96.6 million.

CNX Coal Resources LP's Bailey mine was the top producer this quarter, jumping to 3.1 million tons in output from 2.7 million tons in the same period last year. CNX Coal's Enlow Fork and Harvey mines also saw increases in production year over year, and all three mines saw significant boosts in the recent 12-month period.

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CONSOL Energy Inc., sponsor of CNX Coal, recently said it is now focused 100% on spinning off its coal assets after attempts to sell the master limited partnership failed to produce any "compelling results."

CNX Coal reported a net income of $11.5 million in the second quarter. An executive said in an earnings call that a logistical bottleneck caused by service issues with CSX Corp. was a key risk to CNX Coal's guidance.

Murray Energy Corp. escalated an initial complaint to the U.S. Surface Transportation Board over delays in CSX service to a lawsuit against the railroad. Many of Murray's mines in Northern Appalachia increased output in the recent 12-month period compared to the previous one. In year-over-year totals, most Murray mines in the area also increased their production, with the exception of the Harrison County, Ohio County and Powhatan No. 6 mines. The latter mine's reserves have been depleted.

Alliance Resource Partners LP's Tunnel Ridge mine saw a minor drop year over year but a 26.9% increase in the recent 12-month period. Its Mountain View mine saw modest gains by both measures.

Alliance's net income attributable to the partnership dropped in the second quarter year over year, though it announced the first step in a structural streamlining in July. Alliance also announced it had acquired $100 million in gas assets.

Contura Energy Inc.'s Cumberland mine decreased year over year, dropping from 2.2 million tons to 1.9 million tons in the recent quarter, and declined 10.1% in the recent 12-month period. Contura announced Aug. 10 it was withdrawing its initial public offering due to market conditions that it said would undervalue its stock.

Arch Coal Inc.'s two NAPP mines saw increases in production year over year, but an executive from the coal producer said on its second-quarter earnings call that some of the coal it produced was left sitting on the ground due to service delays from CSX. Arch underwhelmed analysts with the earnings it posted in the second quarter.

Rosebud Mining Co.'s Brush Valley saw a huge production increase over the 12-month periods and jumped from a 55,000-ton output in the second quarter of 2016 to 206,000 tons in the recent quarter. Rosebud's Mine 78 saw a year-over-year increase as well.

Westmoreland Coal Co. saw declines in output in its Snyder and and Buckingham No. 6 mines year over year but a minor increase at its Sexton 2 Pit. Westmoreland posted a net loss of $50.5 million in the second quarter and lowered its guidance for the rest of the year.