Barclays CEO Energy-Power Conference September 12, 2013
Cautionary Language This presentation contains statements, estimates and projections which are forward-looking statements (as defined in Section 21E of the Securities Exchange Act of 1934, as amended). Such statements include estimates of reserves and resources, projections and estimates concerning the timing and rates of return of future projects, and our future production, revenues, income and capital spending. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those statements, estimates and projections. Accordingly, investors should not place undue reliance on forward-looking statements as a prediction of future actual results. Factors that could cause future actual results to differ from the forward-looking statements are described in detail under the captions "Forward Looking Statements" and "Risk Factors" in CONSOL Energy Inc. ’s annual report on Form 10-K for the year ended December 31, 2012 filed with the Securities and Exchange Commission (SEC), as updated by any subsequent quarterly reports on Form 10-Qs. The forward-looking statements in this presentation speak only as of the date of this presentation; we disclaim any obligation to update the statements, and we caution you not to rely on them unduly. The SEC permits oil and gas companies, in their filings with the SEC, to disclose only proved, probable and possible oil and gas reserves that a company anticipates as of a given date to be economically and legally producible and deliverable by application of development projects to known accumulations. We may use certain terms in this press release, such as EUR (estimated ultimate recovery), unproved reserves and total resource potential, that the SEC's rules strictly prohibit us from including in filings with the SEC. These measures are by their nature more speculative than estimates of reserves prepared in accordance with SEC definitions and guidelines and accordingly are less certain. We also note that the SEC strictly prohibits us from aggregating proved, probable and possible reserves in filings with the SEC due to the different levels of certainty associated with each reserve category. Except for proved reserve data, the information included in this presentation is based on a summary review of the title to the gas rights we hold, as well as a summary review of the title to the coal from which many of our coalbed methane rights derive. As is customary in the gas industry, prior to the commencement of gas drilling operations on our properties, we conduct a thorough title examination and perform curative work with respect to significant defects. We are typically responsible for curing any title defects at our expense. This curative work may include the acquisition of additional property rights in order to perfect our ownership for development and production of the gas estate. This presentation does not constitute an offer to sell or a solicitation of offers to buy securities of CONSOL Energy Inc. 2
CONSOL Energy Overview The Leading Diversified Fuel Producer in the Eastern United States Ticker: CNX Headquartered in Pittsburgh, Pennsylvania Company Founded in 1860 Approx. 9,000 Employees Market Cap = $7.3 billion (1) 2012 Revenue = $5.4 billion 3 (1) As of September 3, 2013.
CONSOL Energy Overview Core Values Safety In 2012, CONSOL’s Coal Division saw safety exceptions drop 10%, from 150 to 134 ─ In 2012, CONSOL’s Gas Division worked the entire year without having recorded a lost -time ─ incident ─ CONSOL has invested approximately $1.2 billion since 2006 on coal-related safety projects Commitment to ―Absolute Zero‖ ─ Compliance ─ Coal and Gas Divisions saw an improvement in compliance of 11% and 53%, respectively, in 2012 when compared to 2011 ─ 2012 Corporate Responsibility Report: http://www.consolenergy.com/CorporateResponsibilityReport/2012New/index.html Continuous Improvement ─ Rebalancing portfolio: $350 million in asset sales for 2012 ─ Average drilling lateral length increase and average cost per stage decrease 4
CONSOL Energy Investment Thesis Ramping coal production: BMX Mine longwall mine (5 mm tons) will start on April 1, 2014 - Ramping gas/liquids production: 2014 guidance of 210 – 225 Bcfe represents growth of 22 – 30% from 2013 Liquids increasing to about10% of total mix CONSOL has executed at a high and consistent level in both good and challenging times Low cost operations; cost controls remains a high focus - High quality Tier 1 energy assets Coal: a) High quality low-vol coal; b) versatile high-vol /high-Btu thermal coal - Gas: a) Coalbed methane, b) Marcellus and c) Utica shale positions - CONSOL’s financial strength remains solid $2.4 billion in liquidity - Asset monetization to bring value forward CONSOL should be a core holding for every energy investor 5
CONSOL Energy Overview Strategic Overview – Our Four Main Investment Views Once the BMX mine opens, we revert to a $5-$6 per ton maintenance spending levels. 1. We will continue to organically grow our gas business through the drillbit. We do not intend to pursue ―transformational‖ M&A deals in either coal or gas. We may 2. continue to pursue bolt-on opportunities in the Marcellus and Utica shales. We will continue to monetize our non-core assets and regularly evaluate our core assets 3. to make sure full value is recognized. We are examining the optimal corporate structure to house our Tier-One assets. We 4. expect to provide an update during our next earnings call. 6
Operations Overview – Coal Strength in Market Diversity CONSOL Ships To Four Continents Export Forecast For 2013: 5-10 MTs Capture Growth and Existing Markets 7
CONSOL Energy Overview Coal Contracted Position 1 Q3 2013 2013 2014 2015 13.4 - 13.9 55.5 - 57.5 60.4 61.7 Estimated Coal Sales (millions of tons) Est. Low-Vol Met Sales 0.7 -0.9 4.0-4.2 4.7 5.2 — — Tonnage: Firm 0.2 2.8 — — Avg. Price: Sold (Firm) $ 113.81 $ 103.34 $ $ Est. High-Vol Met Sales 0.6+ 2.6+ 4.8 6.4 Tonnage: Firm 0.4 2.4 0.2 0.2 $ $ $ Avg. Price: Sold (Firm) $ 60.55 63.67 75.53 74.74 Est. Thermal Sales 12.3+ 49.9+ 50.9 50.1 Tonnage: Firm 12.3 49.8 28.1 14.8 Avg. Price: Sold (Firm) $ 59.02 $ 58.93 $ 60.45 $ 60.99 8 (1) As of July 28, 2013.
PJM Coal Inventory Our Domestic Coal Market Remains Solid PJM Coal Inventory Trailing 12 Months 5 Year Average 30 25 20 Tons (MM) 15 10 5 - Sep 12 Dec 12 Mar 13 Jun 13 Source: EIA, PIRA, and CONSOL analysis. 9
Operations Overview – Coal Why CNX Coal? CONSOL is participating in the growth of world coal markets Low-cost mines Dual rail service from Pittsburgh seam mines to Baltimore 100%-owned Baltimore terminal, with capacity of 16 million tons ―Boots on the ground‖ globally, through marketing partner X -Coal CONSOL ships to four continents In-house R&D lab with sensor-equipped coke oven Shipping coal to 53 different customers in 13 countries 10
Gas Reserves of 4.0 Tcfe as of 12/31/12 (in Bcfe) 5,000 242 (527) 954 4,500 (156) 3,993 4,000 3,480 3,500 3,000 2,500 15% increase in proved reserves 2,000 105% increase in Marcellus Shale proved reserves 1,500 611% reserve replacement Gas prices declined to $2.76 per mcfe 1,000 500 0 YE 2011 Extensions & Performance Price Revisions & Production YE 2012 Discoveries Revisions Plan Changes Source: Company filings. 11
Reserve Replacement – Gas 2012 All Sources Reserve Replacement: 5-yr Average 3,000% Average: 364% 2,500% 2,000% 1,500% 1,000% 500% 0% (1) CONSOL Energy is in top quartile across peer group for all sources reserve replacement Source: Howard Weil – 2012 Reserve and Finding Costs Study of the Oil & Gas Independents. 12 (1) Other Companies consists of 40 additional peer companies.
5-Year Average F&D Costs – Gas 2012 All Sources F&D Costs: 5-yr Average (in $/BOE) $35 Average: $25.80 $30 $25 $20 $15 $10 $5 $0 (1) CONSOL Energy is in top quartile across peer group for all sources F&D Costs Source: Howard Weil – 2012 Reserve and Finding Costs Study of the Oil & Gas Independents. 13 (1) Other Companies consists of 39 additional peer companies.
Production Ramp – Gas (in Bcfe) Gas Production 250 210 - 225 225 200 (1) 170 - 175 175 156.3 153.5 150 127.9 125 94.4 100 76.6 75 58.2 50 25 0 2007 2008 2009 2010 2011 2012 2013E 2014E In 2010, acquired ~23 Bcfe in Conventional gas production, primarily through the Dominion transaction. In 2011, divested ~11 Bcfe through the Marcellus JV (with Noble Energy) and Antero Royalty Interest transactions. Source: Company filings. 14 (1) Production growth in 2013 is expected to be more back-end weighted.
2013 Marcellus Shale Drilling Program: 117 wells Large Acreage Position within Marcellus Fairway PA 87% of Acreage HBP Allowing for Development OH Flexibility 50% of approximately 600,000 gross acres ─ NBL Operated 170,000 Gross Acres Average NRI of ~88% CONSOL Operated CONSOL Wells Drilled: Dry Gas 430,000 Gross Acres 2012 2013E Southwest PA 45 22 MD Central PA 13 10 Northern W.VA 6 10 WV 64 42 CONSOL Marcellus Total VA Noble Wells Drilled: Wet Gas 2012 2013E Wet Gas W.VA 25 75 Dry Gas 15
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