J.P. Morgan Global High Yield & Leveraged Finance Conference February 26, 2014
CONSOL Energys Evolution The Past 15 Years CONSOL Energy Equity CNX Gas (Adjusted Closing Price - NYSE) listed on 3.5B 4.0B 120 NYSE CONSOL Energy January 2006 Acquisition of Marcellus & IPO Dominion Utica acreage April 1999…
Value Proposition Sale of West Virginia Mines Estimated Coal Ops EBITDA 300 250 200 in millions 150 100 50 - Mine 1 Mine 2 Mine 3 Mine 4 Other Mines Mine 1 Mine 2 Mine 3 Mine 4 Mine 5 Retained Mines Divested Mines…
Use of Cash Proceeds ( in millions) 1,000 900 850 8 (361 ) 800 700 600 (115 ) 500 (31 ) 400 (37 ) 327 300 200 100 13 0 Beginning Receipt from Tetrick Credit DTI Acres / Fees Other Ending Cash Cash Balance Murray Override…
Pre-Transaction vs. Post-Transaction Credit Metrics CONSOL Energy ( in millions) 12/31/2011 12/31/2012 12/31/2013 Cash and Cash Equivalents 376 22 327 Available Liquidity 2,733 2,351 2,081 Total Debt 3,198 3,251 3,175 Net Debt(1)…
Strategy: Evolution Continues Grow natural gas production 30% annual production increase through 2016 Develop our liquids profile within our footprint High-grade our acreage position Aggressively manage coal margins and maintenance…
Executing Our Game Plan Centralizing our key managers Hired key personnel over the past few months Focused on executing a lean manufacturing model to squeeze out inefficiencies Raised the intensity and success of both JV…
Driving Costs Down Across All Parts of Our Business CONSOL-Operated Wells: Marcellus Drilling and Completions Summary Drilling Summary 2011 2012 2013 Average Lateral 3,853' 5,514' 7,970' Average Wells/Pad 4.8 6.3 7.0 Average Lateral…
Accelerating Production Growth Gas and Liquids Production (Bcfe) CONSOL is rapidly growing its natural gas production Total 2013 natural gas production: 172.4 Bcfe Total 2014 natural gas production guidance: 215 235 Bcfe (30% growth)…
Accelerating Production Growth (Contd) Drilling Results and Forecast Formation Region 2011 2012 2013 2014E Marcellus Shale: Southwest Pa. (incl NBL) 50 70 97 129 West Virginia 9 6 10 23 Central Pa. 19 13 10 9 Ohio 0 0 0 1(1)…
Marketing Our Products To Maximize Profit FT and Firm Sales: Total Marcellus/Utica Shale, CBM and Conventional 1,200,000 1,000,000 800,000 MMBtu/d 600,000 400,000 200,000 - 2014 2015 2016 Columbia…
Marketing Our Products To Maximize Profit (Contd) CNX Active Hedge Program Actively Monitored Hedge Program: 2013 Hedge Positions Production Coal Production Hedge + Priced Coal Recently increased hedge position for 2014 and 1,000,000…
Coring Up Our Land Position Allegheny County Airport Authority: Marcellus Shale, Upper Devonian (and Dry Utica Shale Potential) 8,800 Contiguous Acres: 6 pads with Up to 45 Marcellus and Potentially Upper Devonian Wells to be…
Coring Up Our Land Position (Contd) Dominion Transmission: 90,000 Contiguous Acres Fink-Kennedy 46,000 net Racket- acres Newberne: (wet gas) 9,000 net acres (wet gas) Lost Creek 33,000 net acres (dry gas) 90,000 Net…
Exploiting Our Existing Asset Base Surrounding Marcellus and Utica Activity Protg: Eisenbarth 3H test 6.9 MMcf/d (Marcellus) GPOR Irons 1-4H: 23 stage Utica well 30.3 MMcf/d Avg 24-hr rate tested 30 MMcf/d. Recently TIL, producing…
Exploiting Our Existing Asset Base (Contd) Projected Dual Pay - The Appeal of Monroe County 11k highly contiguous acres 100% WI to CONSOL Energy Acquired for dual wet Marcellus and dry Utica development Very close to water,…
Exploiting Our Existing Asset Base (Contd) Upper Devonian Exploration Well NV39F: 5 Underlying Marcellus Wells on Pad OH PA CONSOL MD WV Area Nineveh Core VA Washington County, PA Wet Gas Dry Gas Drilled lateral length of…
Gas Operations: Capital Expenditure ( in millions) 1,200 1,110 1,000 953 800 600 528 400 200 0 2012 2013 2014E Land Capex Other Gas Capex 2014E Total Gas Capex Estimate Natural Gas Operations: ( in millions) 2014E Capex…
Strong Liquidity Position of 2.1 Billion Cash on hand of 327 million Accounts receivable securitization and revolving credit facilities of 1.8 billion Amount/ Amount Letters Amount December 31, 2013 ( in million) Capacity Drawn of…
Strong Liquidity Position of 2.1 Billion (Contd) Revolving Credit Facilities Debt Covenants CONSOL Energy and CNX facilities are well within debt covenants December 31, Debt Covenants Limit 2013 CONSOL Energy Revolver: Minimum…
Maintaining Strong Liquidity Our 327 million in cash on hand at year-end Our BMX mine will start up in late 1Q14 and begin to generate cash flow We expect a 100-125 million tax rebate from the sale of the 5 mines Joint venture…
CONSOL Energy Overview Summary Gas and coal operations are long-lived, low-cost, and provide solid growth Our well-capitalized assets and highly trained personnel provide more consistent operational execution Our emphasis on safety…
Appendix 24
Appendix Gas Division Summary Impact of gas hedging for Q4 2013 was 0.40/Mcf compared to 0.84/Mcf from the year-earlier quarter Q-to-Q Gas Division 4Q2013 4Q2012 Change Average Sales Price ( / Mcfe) 4.26 4.44 (0.18) Average Costs…
Appendix EBIT & EBITDA Reconciliation YEAR YEAR YEAR CONSOL Energy TO DATE TO DATE TO DATE (Dollars in thousands) 2011 2012 2013 Net Income Attributable to CONSOL Energy Inc. Shareholders 632,497 388,470 660,442 Add: Interest…
Appendix Summary of Changes in Proved Reserves (in Bcfe) 6,000 172 105 (172 ) 1,633 5,731 5,000 3,993 4,000 3,000 44% increase in proved reserves 87% increase in Marcellus Shale proved 2,000 reserves 948% reserve…
Appendix CONSOL Cost Metrics Gas: Operating Costs per Mcfe ( per Mcfe) 6 5 4 3 2 1Q2011 2Q2011 3Q2011 4Q2011 1Q2012 2Q2012 3Q2012 4Q2012 1Q2013 2Q2013 3Q2013 4Q2013 CBM Marcellus Shallow Oil & Gas Coal: Cost per Ton Sold…
Appendix CONSOL-Operated Wells: Marcellus Drilling and Completions Summary Drilling Summary 2011 2012 2013 Wells TD'd 78 64 46 Lateral Ft 300,466' 328,428' 366,615' Total MD 92,264' 794,098' 730,316' Average Lateral 3,853' 5,514'…
Appendix Recent WV Results Further Validate DTI Storage Farm-In PHL13 (*completed using RCS/SSL) 6 wells 7,999 average length 13.0 MMcfd 24 hr IP on first two wells, all wells IPd greater than 10.0 MMcfd AUD3 1 well 8,396 6.95…
Appendix Upper Devonian Burkett Shale Sweet Spot CONSOL is Well Situated Within Best Part of Burkett Fairway 31
Appendix Coal Division Summary Q-to-Q Coal Division 4Q2013 4Q2012 Change Average Sales Price ( / ton) 66.85 75.84 (9.00) Average Costs ( / ton) 50.05 49.19 0.86 Coal Production (millions of tons) 7.1 6.6 0.5 Sales Volumes…
Appendix Marketing 1Q14 and 2014 Forecasts Sales Tons by Product Year 2014 2014 Coal Sales Facts and Goals Contracted tons for 2014: more than 82% - Priced: more than 78% 8% 14% Approximately 80% of the Low-Vol & High-Vol met coal…
Appendix BMX Mine Overview BMX Mine: Begin operations in mid-March 2014 - Lowest cost CNX mine 34
Appendix Our Domestic Coal Market Remains Solid PJM Coal Inventory Trailing 12 Months 5 Year Average 30 25 20 Tons (MM) 15 10 5 - Jan 13 Apr 13 Jul 13 Oct 13 Source: EIA, PIRA, and CONSOL analysis. 35
Appendix Retained Mines Sell Coal to 19 Countries 36
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