Jefferies Industrial Conference August 11, 2009 Chicago
Met Coal, Thermal Coal, and Gas 3
Met Coal Overview n Buchanan Mine in southwestern Virginia A low-cost longwall mine +100 mm tons of high quality, low-vol reserves n 2009 sales estimated at 2.3 mm tons; prices just under 100 1.7 mm tons to be shipped in 2H n 2010…
Thermal Coal Overview n CONSOL Energy is the largest producer in Americas premier thermal coal basin: Northern Appalachia n Northern Appalachia has: The highest Btus per pound of any thermal coal Location value, straddling eastern…
CNX Gas Overview n 83.3% owned by CONSOL Energy n Largest Appalachian Basin gas producer in terms of revenue, net income, and return on capital employed n CNX Gas is the highest margin producer in the industry n In 2009:…
Financial Review 7
2009 Second Quarter Results n Net Income of 113 million n GAAP EPS of 0.62 n Net Cash from Operations of 316 million n Coal Production: 14.4 million tons n Margins per ton: 10.94 For the second consecutive quarter, CONSOL…
Short Term Financial Flexibility (at June 30, 2009) (MM) Amount / Amount Letters Amount Capacity Drawn of Credit Available Cash and Cash Equivalents - CONSOL 101 - - 101 Cash and Cash Equivalents - CNX Gas 7 - - 7 AR…
Long Term Financial Flexibility (at June 30, 2009) n Manageable Long-Term Debt: 490 million of long-term debt No scheduled debt payments until 2010 CONSOL Energy has been careful to create shareholder value without…
Coal Operations 11
Met Coal Outlook n Have resumed production at Buchanan Mine, with 2 shifts currently running 1.7 mm tons to be shipped in 2H n 2010 sales estimated at 5.0 mm tons, with 3 shifts expected to be running 3.3 mm tons remain unpriced…
Thermal Coal Outlook n July and August will see reduced levels of production n By September 1, we expect to have all of our longwalls running For 2010, we could ship 59-63 million tons, with a return to more favorable economic…
Scrubber Builds Are Being Completed Since 2006, CONSOL has signed 6 multi-year, multi-million ton agreements with domestic customers that in aggregate 250 million tons of high-Btu coal 10% 28% Percentage of Gigawatts Scrubbed by…
Close Proximity to Scrubbed Customers By 2012, 142 gigawatts scrubbed east of Mississippi River 60 generating units within 50 miles of CONSOLs NAPP coal reserves CONSOLs Assets in Appalachia Producing Complexes: 16 Reserves:…
CNX Gas Corporation 17
Leading Appalachian Producer Among Appalachian producers, CNX Gas is: 1 in Sales Revenue 1 in Profitability and Returns 1 in Production Growth 2 in Production Volume 2 in Market Capitalization Industry-wide, CNX Gas is: 1 in…
2009 Second Quarter Results Net Income of 33.0 million GAAP EPS of 0.22 Gas Production of 22.5 Bcf Margin per Mcf: 3.14 Zero Lost-Time Incidents for Employees Another quarter of record production enabled us to increase 2009…
Asset Overview Nittany Marcellus Mountaineer Virginia Ops Red represents CBM acres Blue represents O&G/Shale acres Chattanooga Gray represents both CBM and O&G/Shale acres Reserve Base/Resource Potential 1.422 Tcf of…
Gas Operations Summary Coal Bed Methane: Most experience related to active coal mining Most CBM horizontal drilling experience Marcellus Shale: Successfully adopted state-of-the-art exploration techniques Successfully benefited…
Marcellus Shale Results Peak Daily July 13 Daily Cumulative Production Production Production (MMcf) Well Name Turn in date Peak date (MMcf) (MMcf) Through July 13 1. CNX3 10/5/2008 12/16/2008 6.6 1.8 681 2. CNX2 1/28/2009 2/13/09…
Advances in the Marcellus Reserves per well increasing: From 3.0 Bcf in Dec. 2008 to 3.5 Bcf today Costs dropping: From 5.2 million in Dec. 2008 to 3.5 million today Well spacing dropping: From 160 acres in Dec. 2008 to 40…
Hedge Position CNX Gas has one of the best hedge books in the industry: 2009 2010 2011 2012 Total Yearly Production (Bcf) 89 NA NA NA Volumes Hedged (Bcf) 47.5 45.6 11.3 15.1 Average Hedge Price (/Mcf) 9.10 7.94 6.89 6.84 Hedge…
CONSOL Energys Value Discount n CONSOL Energy has out-earned the competition, yet trades at a 38% discount (market cap of 9.5 billion vs. 6.9 billion): CONSOL had GAAP net income of 113 mm in Q2 and 196 mm in Q1 Peabody had GAAP…
Jefferies Industrial Conference August 11, 2009 Chicago
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