Barclays CEO Energy & Power Conference September 9-10, 2015 - PowerPoint PPT Presentation

Barclays CEO Energy & Power Conference September 9-10, 2015

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). Statements that are not historical, are forward-looking, and include our operational and strategic plans; estimates of coal and gas reserves and resources; the projected timing and rates of return of future investments; and projections and estimates of 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, plans, 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 materially from the forward-looking statements include risks, contingencies and uncertainties that relate to, among other matters, the following: we may not receive the prices we expect to receive for our natural gas and coal; we may not obtain on a timely basis the permits required for drilling and mining; we may not accurately estimate the volume of hydrocarbons that are recoverable from our oil and gas assets; we may encounter unexpected operational issues when we drill and mine, including equipment failures, geological conditions and higher than expected costs for equipment, supplies, services and labor; we may not achieve the efficiencies we expect to realize in our drilling and completion operations, and as a result, our projected cost savings may not be fully realized; our joint venture partners, who operate assets in which we have a significant interest, may not perform as we expect; we may not be able to sell non-core assets on acceptable terms; we may be unable to complete the anticipated drop downs of assets into CNX Coal Resources LP and CONE Midstream LP on acceptable terms; we may be unable to incur indebtedness on reasonable terms; and other factors, many of which are beyond our control. Additional factors 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, 2014 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 presentation, 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. We caution you that the SEC views such estimates as inherently unreliable and these estimates may be misleading to investors unless the investor is an expert in the natural gas industry 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 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. As a result of our title review or otherwise, we may be required to acquire property rights from third parties at our expense in order to effectively drill and produce the oil and gas rights we control and third parties may participate in the wells we drill, thereby reducing our working interest in those wells. This presentation does not constitute an offer to sell or a solicitation of offers to buy securities of CONSOL Energy Inc. or CNX Coal Resources LP. 2

Key Takeaways  CONSOL Energy’s E&P Division has demonstrated that it can stand on its own as a premier Appalachian Basin producer:  Gas production has grown significantly  Capital intensity and costs are down dramatically  Dry Utica has opened up a new opportunity set  Our base plan is achievable and will help us to more easily reach our free cash flow targets due to conservative plan assumptions:  NYMEX strip gas pricing with conservative basis differentials  Conservative thermal and met pricing  Modest levels of asset sales assumed between $75-$125 million  CONSOL Energy has approximately $2 billion of assets available for sale and the proceeds of these sales will be used to further reduce debt  Not including MLP drop-downs or strategic transactions CONSOL Energy’s base plan, coupled with additional asset sales, will result in significant flexibility, including the ability, if appropriate, to separate its coal and E&P businesses by means of a spin transaction 3

Agenda  E&P division  Increasing 2015E gas production to 320-330 Bcfe, up from 300-310 Bcfe; 20% gas production growth expected in 2016E  Waterfall chart that details bridge to 2015 and 2016 production growth forecast  Marcellus and Utica overview  Emerging dry gas Utica play’s “game changing” potential  Gas marketing strategy  Diversity of sales-points and end-markets  Discipline when signing up for FT, weighing pricing uplift vs. burdening company with off-balance sheet liability/commitment  Hedging update – locked in additional NYMEX and basis hedges for 2H15 and 2016 to be about 2/3 hedged on gas  Coal division  Premier US coal assets, lowest cost per Btu, highest margin, well capitalized  Positive free cash flow generation with stable production even in current low price environment  Minimized volume and price risk with aggressive contracting program; now entering prime contracting season  Financial  Focused on positive free cash flow generation through production growth, operating cost reductions and capex efficiency  Active asset monetization in full gear to supplement free cash flow to go on offense  Providing streamlined 2015 and 2016 operational and financial guidance to model both sides of CONSOL’s business 4

Company Overview Transformative Journey Eleven years ago – traditional coal producer, the largest underground  producer in the world Ten years ago – created CNX Gas  Five years ago – acquired Dominion Resources’ Appalachian E&P  business and became a coal company with a growing natural gas business Late 2013 – transaction with Murray Energy Corp. that transitioned half of  coal assets and related assets April 19, 2014 – CONSOL Energy 150th Anniversary  June 12, 2014 – Analyst Day to roll out growing Appalachian E&P Division  with best in class coal assets September 25, 2014 – IPO of CONE Midstream Partners LP (NYSE:  CNNX) December 10, 2014 – Announced intention to pursue the Initial Public  Offerings of a Thermal Coal MLP and Metallurgical Coal Subsidiary, in addition to a $250 Million stock repurchase program June 30, 2015 – IPO of CNX Coal Resources LP (NYSE: CNXC)  We are a growing E&P company focused on developing the Appalachian shale with the benefit of fully capitalized, premier coal assets to help fund E&P growth 5

E&P Division 6

E&P Division Gas Division Production Growth E&P Production Volumes 450 450 Production by Area 400 400 +20% 2015E 2016E 350 350 Marcellus 51% 50% 320-330 CBM 23% 18% 300 300 Utica (Wet & Dry) 19% 26% 236 Other 7% 6% 250 250 Bcfe 200 200 172 156 154 128 150 150 100 100 50 50 0 0 2010 2011 2012 2013 2014 2015E 2016E Marcellus CBM Utica Other Increasing 2015E production guidance by 20 – 30 Bcfe to 320 – 330 Bcfe; +20% year-over-year growth target for 2016E Source: Company filings. Note: Acquired ~23 Bcfe of Conventional gas production from Dominion E&P in 2010. Divested ~11 Bcfe in 2011. 7

E&P Division Bridging to Growth 450 390 86 400 325 350 104 15 300 14 Bcfe 236 -50 250 15 8 200 -38 150 100 50 0 2014 Total 2015 Base 2015: Gathering 2015: Non-Op 2015: Production 2015 Total 2016 Base 2016: Gathering 2016: Non-Op 2016: Production 2016 Total Production decline De-bottlenecking (Ex NBL/HES) Adds Production decline De-bottlenecking (Ex NBL/HES) Adds Production Prod. Adds Prod. Adds 2016 production growth primarily driven by wells’ productivity improvements, pipeline infrastructure debottlenecking projects and completion of inventory of drilled but uncompleted wells Note: Production volumes reflect the mid-point of their contribution to the 2015 and 2016 production guidance ranges. 8 Source: Company filings and estimates.