DUG East 2016 Tim Dugan Chief Operating Officer, CONSOL Energy - PowerPoint PPT Presentation

DUG East 2016 Tim Dugan Chief Operating Officer, CONSOL Energy

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 our economically recoverable gas, oil and condensate; 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 incur indebtedness on reasonable terms; with respect to the sale of the Buchanan and Amonate mines and other coal assets to Coronado IV LLC - disruption to our business, including customer, employee and supplier relationships resulting from this transaction, and the impact of the transaction on our future operating results; 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, 2015 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

The CONSOL Energy Evolution Transformative Journey Into a Pure-Play E&P Company  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)  July 1, 2015 – IPO of CNX Coal Resources (NYSE: CNXC)  July 28, 2015 – Announced first PA Dry Utica well (Gaut 4I) result in Westmoreland County  March 31, 2016 – Sold Buchanan Mine and associated met coal reserves Coal-E&P Revenue Split, 2014 Coal-E&P Revenue Split, 2015, excl. Buchanan Coal-E&P Revenue Split, 2012 E&P Revenues E&P Revenues E&P Revenues Coal Revenues Coal Revenues Coal Revenues Transforming this 152-year-old coal company into a powerful E&P company 3

E&P Operations: Radical Rate of Change Beginning to outperform peers on growth and unit cost performance E&P Production Volumes  Focused on reaching “critical mass” with the 450 Production by Area ability to be a standalone company 400 ~15% 2015A 2016E 350 Marcellus 51% 54% 329 ─ 15 th largest producer of natural gas, CBM 23% 19% 300 Utica (Wet & Dry) 17% 21% according to the Natural Gas Supply 236 Other 9% 6% 250 Bcfe 200 Association 172 156 154 128 150 ─ Currently producing over 1 Bcfe of net 100 50 production as of Q4 2015 0 2010 2011 2012 2013 2014 2015 2016E Marcellus CBM Utica Other Source: Company filings. Note: Acquired ~23 Bcfe of Conventional gas production from Dominion E&P in 2010. Divested ~11 Bcfe in 2011. Full-cycle Breakeven Operating Metrics $4.00  Rate of change in reducing operating expenses $3.50 has been substantial $3.00 $1.17 Cash OpEx (plus G&A) $1.11 ─ ~20% CAGR reduction in OPEX from 2013- $2.50 of $1.52/Mcfe, plus $0.82 PUD-to-PDP CapEx of $2.00 $0.84 2016; expected to further decline in 2016 $0.59 $0.48 $0.48/Mcfe, equals $0.37 $1.50 $0.17 $0.17 $0.29 $0.09 total full cycle cash Approximately 2/3 rds the production from $0.07  $1.00 costs of $2.00/Mcfe $1.02 $1.10 $1.04 $1.00 Appalachian peers, while driving costs lower $0.50 $0.38 $0.23 $0.24 $0.16 $0.00 2013 2014 2015 2016E SG&A Direct Admin Gathering & Transport. Production Taxes Lifting PUD F&D $/MCFE Exceeded cost reduction target of 15% in 2015 with a 19% reduction and projecting an additional 13% reduction for 2016 4

Utica Success  ~622,000 CONSOL net acres (1)  Over 3,500 gross locations ─ 97 wells online, as of 3/31/2016 ─ 10 wells TIL in Q1 2016 ─ 8,574 ft average TIL laterals in Q1 2016 ─ 4 – 6 wells per pad ─ 180-acre spacing (1,100 ft. inter-lateral spacing) assuming 7,000 ft lateral  EURs: ─ Ohio Wet: 2.3 Bcfe EUR/1,000 ft of lateral ─ Ohio Dry: 2.8 Bcfe EUR/1,000 ft of lateral ─ PA/WV Dry: 3.0 Bcfe EUR/1,000 ft of lateral Note: Townships are shown in yellow and purple (acres owned in fee) where CONSOL holds 3,000 or more acres (as of 12/31/2015). Gross locations are as of 12/31/2015. (1) Comprised of ~119,000 net acres in Ohio Utica (~79,000 in the JV and ~40,000 non-JV) and ~306,000 and ~197,000 net prospective acres in PA and WV respectively. 5

Model Centric Approach 3D Unconventional Reservoir / Frac Model Earth Model Performance Forecasting Performance Dashboards Advanced Planning Tool Shortens decision timeline and reduces the number of wells to optimization 6

Utica Success Normalized Well-to-Well Productivity Comparison 70 66 𝐁 √k : Additional benchmark metric, which in 62  60 a way, replaces initial production, or IP, testing, by normalizing: 50 46 ─ Lateral length Normalized 𝐁 √ 𝐥 ─ Stage spacing 40 37 ─ Pressure management 29 29  ‘A’ represents the area in square feet of the 30 25 24 23 23 21 21 19 19 19 17 17 15 14 contributing hydraulic fracture we create 20  ‘k’ is the permeability or the ability of the 10 10 10 10 9 7 6 6 6 reservoir-hydraulic fracture system to flow 10 gas 0  104 wells in current Earth Model – 28 with 1 Gaut-4I MND-6H 2 3 4 GH-9 Switz 6H Switz 6F 5 6 Switz 6D 7 8 9 10 11 12 13 14 15 16 17 18 Switz 6B 19 20 21 production data Well * CONSOL has 5 out of the top 10 wells on list 7 * Non-Operated well.