Pardee Resources Company
Climate Impact & Sustainability Data (2012)
Reporting Period: 2012
Environmental Metrics
Social Achievements
- The Company fulfills its corporate citizen responsibilities by contributing annually to local causes, such as volunteer fire departments, schools and community programs.
- Each year the Company awards scholarships to local West Virginia high school graduates to attend West Virginia University and Southern West Virginia Community Technical College.
Environmental Challenges
- Extraordinary volatility in both the natural gas and coal markets. Natural gas prices reached ten-year lows while domestic coal production declined 7% from 2011. Central Appalachian coal production was especially hard hit, falling 16%.
- The U.S. coal industry suffered one of its worst years ever in 2012 with the combination of unseasonably warm weather, record-low natural gas prices, slowing economic growth and a stifling regulatory environment that forced mine closures, layoffs and massive production cuts.
- Primarily due to a steep decline in natural gas prices, Gulf Coast oil and gas revenues from production decreased 26% from $3.1 million in 2011 to $2.3 million in 2012.
Mitigation Strategies
- Maintaining a strong balance sheet limits the impact of the swings in commodities markets.
- Our diversified portfolio helps to reduce the volatility in our earnings as the energy markets often move in the opposite direction of the general economy, while the housing and timber markets usually move in tandem with the economy.
- Since our revenues are derived primarily from royalty income, we enjoy high operating margins and therefore swings in prices have a relatively limited impact on our earnings.
- The Company restructured its lease on 8,700 acres of oil and gas it owns in Elk and Cameron Counties, Pennsylvania to ensure income from the property in the absence of drilling activity.