The slow-motion assassination of King Coal is no whodunit. The crime scene’s permeated with cheap natural gas — cheap enough to increasingly make gas, not coal,  the fuel of choice for U.S. power plants.

This, however, has proven a very costly coup for natural gas producers, who’ve been so successful that after a year of unfavorable weather it’s now unprofitable to drill gas wells almost anywhere.  And in the few spots where there’s still something to be gained by doing so, drillers are chocking back output in wait for higher prices.

When those higher prices arrive — and arrive they will — coal industry survivors will be among the biggest beneficiaries. Their commodity will become more attractive relative to natural gas as fuel, while still likely fetching improved prices.

Today we’re recommending a company poised to profit on both sides of this commodity equation. CONSOL Energy (NYSE: CNX) is an Appalachian coal miner working some of the richest, most accessible and least sulfurous coal seams in North America.

Even as the industry’s worst year ever forced several large bankruptcies last year, CONSOL’s coal mines earned $500 million before income tax last year. That was up $91 million from the prior year, as cost savings more than offset declines in coal volumes sold and realized prices.

CONSOL accomplished this business feat the old-fashioned way: it’s cut its workforce by nearly 30% over the last 18 months and ditched its defined benefit retirement plan as well as retiree health insurance.

The company blamed “the sharp decline in the commodity price environment.” No prizes for guessing whether the benefits will return once coal prices improve.

Nearly all of this year’s expected coal output has been sold and priced, along with 59% (sold) and 40% (priced) of next year’s larger output, which is expected to increase modestly.

But while coal continues to deliver the cash flow needed to pay the (declining) interest expense and legacy costs, CONSOL’s been open about its desire to get out of business entirely and get on with exploiting an even more valuable resource sitting underneath its land: natural gas.

It controls 622,000 acres of land more or less over the sweet spots of the Marcellus and Utica shale gas deposits. Production from Marcellus wells has increased rapidly over the last two years, though CONSOL is still trying to catch up to regional rivals with longer track records on reducing costs. This year, output is forecast to increase 15% just from the completion and connection of previously drilled wells, since the company has idled all its drilling rigs. But it will have the flexibility to ramp up spending quickly once prices rise. And the handful of Utica wells CONSOL has drilled suggest that formation could make it lots of money.

Source: CONSOL Energy presentation

In pursuit of its stated goal of “transforming to [a] pure-play E&P,” CONSOL has just netted $420 million from the sale of its metallurgical coal mine in Virginia. Last year it launched a master limited partnership, CNX Coal Resources (NYSE: CNXC), that it hoped would become a buyer of its Pennsylvania coal assets.

That plan might now be further along if CNXC’s unit price hadn’t been cut in half since last July. CONSOL also cosponsors the CONE Midstream Partners (NYSE: CNNX) gas gathering MLP with its joint venture partner, Noble Energy (NYSE: NBL).  CONE has also been discounted heavily over the last year, enough so to have just been added to the MLP Profits Growth Portfolio.

But here at the Energy Strategist we’re more interested in CONSOL itself for the excellent exposure it offers to the coming rebound in natural gas prices. We’re adding CNX to the Aggressive Portfolio; buy below $19.