October 2010 Investor Presentation The leading diversified fuel producer in Appalachia CONSOL begins pad drilling with its new Patterson Apex Walking Rig
Cautionary Language This presentation contains state ments, estimates and projections which are forward-looking statements (as defined in Section 21E of the Securities Exchange Act of 1934). These statements, which are described in detail in our annual report form 10-K filed with the Securities and Exchange Commission, involve risks and uncertainties that co uld cause actual results to differ materially from projected results. Accordingly, investors should not place undue reliance on forward-looking statements as a prediction of actual results. The forward-looking statements include estimates of unproved reserves, projections and estimates concerning the timing and rates of return of future projects, and our future production, revenues, income and capital spending. The forward-looking statements in this presentation speak only as of the date of this presentation; we disclaim any obligation to update these statements unless required by the securities laws, and we caution you not to rely on them unduly. This presentation does not constitute an offer to sell any securities of CONSOL Energy Inc. The United States Securities and Exchange Commission (SEC) permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing The unproved reserve data contained in this presentation is economic and operating conditions. We use certain terms in this based on a summary review of the title to coalbed methane and presentation, such as “unproved reserves and/ or unproved resources” that other gas rights we hold, as well as a summary review of the title the SEC's guidelines strictly prohibit us from including in filings with the SEC. to the coal from which many of our rights derive. As is We also caution you that the SEC views such “unproved reserves and/ or customary in the gas industry, prior to the commencement of unproved resources” estimates as inherently unreliable and these estimates gas drilling operations on our properties, we conduct a thorough may be misleading to investors unless the investor is an expert in the gas title examination and perform curative work with respect to industry. significant defects. We are typically responsible for curing any title defects at our expense. This curative work may include the In this presentation, the term “unproved reserves and/ or unproved acquisition of additional property rights in order to perfect our resources” refers to gas that we believe is economically recoverable, based ownership for development and production of the gas estate. on available data. 2
CONSOL Energy: Strength in Diversity � Coal � Low-vol coal � High-vol coal � Thermal coal � Gas CONSOL believes that it can create meaningful shareholder value by responsibly managing this unique portfolio. 3
CONSOL Energy’s Value Proposition Surface Surface Sewickley Coal Seam Sewickley Coal Seam - CBM – 900 feet – 900 feet Pittsburgh Coal Seam Pittsburgh Coal Seam - CBM – 1,000 feet – 1,000 feet Freeport Coal Seam Freeport Coal Seam - CBM – 1,650 feet – 1,650 feet Upper Devonian Sands – 1,750 - 5,500 feet M arcellus Shale – 7,000+ feet Oriskany Tight Sands, Utica and Trenton Black River Shales – 8,000+ feet CONSOL has the largest concentration of Appalachian energy assets. 4
Common Characteristics of CONSOL ’s Businesses � Emphasis on safety � World Class assets � Strategic location � Good pricing � Low costs Bailey M ine Overland Belt � High margins CONSOL ’s #1 performance metric is safety. 5
CONSOL Energy: 2010 Strategy � Investing $5 Billion to grow the gas division of CONSOL � Acquired Dominion Appalachian E&P assets for $3.475 billion � Purchased remaining shares of CNX Gas for $967 million � Expect to invest $500 million of capex for development and production CONSOL believes that its shareholders will reap substantial value from these transactions. 6
CONSOL Energy: 2010 Investing Strategy � CONSOL is spending $600 million in capex to maintain our leading coal position � CONSOL has spent $5.5 billion upgrading its mines in the past 7 years � With higher pricing, the re-tooled mines will now generate significant levels of cash for re-investment � In the short term, this cash will help to fund significant growth in gas production � In the longer term, we will balance capital needs of coal and gas based on economic returns. CONSOL believes that its ability to largely self-fund its growth in gas production is a competitive advantage. 7
CONSOL Coal’s Expanding M argins � In Q2, booked 300,000 tons of high-vol coal for Asia in 2H 2010 at $76 per ton � In Q2, booked 200,000 tons of thermal coal for Europe in 2H 2010 at $61 per ton � CONSOL has 28 million tons of un-priced thermal coal for 2011 and 42 million tons for 2012 Photo courtesy of Allegheny Energy CONSOL ’s expects to receive much higher prices for its un-priced thermal coal in 2011 and 2012. 8
CONSOL: Coal Low-Vol High-Vol Thermal Quarter Ended June 30, 2010 Total Coal Sales (millions of tons) 1.0 0.7 14.2 Average Realized Price Per Ton – $151.34 $75.52 $53.97 Company Produced Total Cost Per Ton, before DD&A $59.71 $36.51 $41.44 DD&A Per Ton $4.53 $4.37 $4.87 Total Cost Per Ton – Company Produced $64.24 $40.88 $46.31 Average Margin Per Ton, before DD&A $91.63 $39.01 $12.53 Sales (millions of tons) times Average Margin $92 $27 $178 Per Ton, before DD&A ($ MM) • CNX will sell 2.6 mm tons of low-vol coal during 2H10 at $164.70 per ton • CNX expects to sell 1.2-1.5 mm tons of high-vol during 2H10 at approx. $73 per ton • CNX expects to sell 29.4 mm tons of thermal coal during 2H10 near 2Q avg. realized price of $54 per ton Premium Prices - Low Costs = Industry Leading M argins 9
CONSOL: Coal’s Potential Growth CONSOL ’s Proposed BM X M ine Could Open in 2013/ 14 � 5 M M tons/ year of low-cost NAPP coal � Potential M arkets: � Asian mills � European generators � Brazilian mills CONSOL ’s Bailey Prep Plant could expand to serve the � Domestic generators BM X M ine CONSOL can expand production of its premium product if world markets demand it. 10
CONSOL: M anaging the Coal Portfolio Potential to M onetize CAPP M et Reserves in Southern West Virginia � Amonate, Elk Creek, and Itmann properties � 5 M M tons/ year of low- vol, medium-vol, and high-vol � Potential EBITDA of $350 M M , assuming $150 per ton sales price CONSOL is assessing options, including joint-venturing, outright sale, and possible sole development. 11
CONSOL has a Leading Acreage Position and … . . . Not All M arcellus Acres Are Equal Net Acres (000’s) 1,800 • 98% of the acres are HBP (held by production) 1,570 • Have an average NRI (net revenue interest) of 89% 1,600 • Have essentially no drilling commitments 1,400 1,400 1,200 1,000 750 800 742 730 720 652 585 584 600 500 492 400 350 343 280 250 250 250 229 170 200 147 120 108 88 0 CNX CHK RRC Pro TLM NFG East STO ATLS EQT D Chief XCO XTO / APC CNX UPL EOG COG SW N Antero CRZO CLR Forma XOM CNX CONSOL can drill for economics, not to hold leases. 12 Source: As calculated by CONSOL Energy based on public filings.
CONSOL has Three M arcellus Shale Operating Areas P A Central Pa. Ops OH SW Pa. Ops M D WV Ops VA WV Former Dominion M arcellus Acreage Legacy CONSOL Energy M arcellus Acreage CONSOL has 750,000 Net Acres in M arcellus Shale. 13
CONSOL is long FT Through 2013 P A DOM INION DOM INION OH TETCO TETCO M D DOM INION DOM INION COL COL UM BIA UM BIA VA WV Former Dominion M arcellus Acreage Legacy CONSOL Energy M arcellus Acreage CONSOL has +400 M M cf per day of unused take-away capacity. 14
CONSOL Energy: Gas Growth 400 350 Bcf 350 300 250 Marcellus 170 Bcf 200 142 Annualized Bcf 150 100 Other 50 0 2010 2011 2012 2013 2014 2015 # M arcellus Wells Drilled 22 63 131 165 170 170 Average M arcellus Rigs 2 5 8 10 10 10 Annual wells / rig 11 13 16 17 17 17 CONSOL expects to produce 350 Bcf by 2015. 15
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