Morgan Stanley Global Basic Materials Conference February 25-26, 2010
CONSOL Energy: An Energy Juggernaut COAL GAS High-vol met Coal Coalbed Methane Thermal Coal Conventional Gas Low-vol met Coal Marcellus Shale Chattanooga Shale CONSOL Energy has chosen to diversify by producing energy from…
CONSOL Energy: The 2009 GAAP Net Income Leader 2009 GAAP Net Income CONSOL Energy 540 Peabody Energy 448 Alliance Resource Partners 192 Walter Energy 137 Patriot Coal 127 Massey Energy 104 Alpha Natural Resources 58 Arch…
Q1 2010 Consensus GAAP Net Income Consensus Q1 2010 GAAP Net Income CONSOL Energy 147 Peabody Energy 110 CONSOL Energy is expected to dramatically out-earn the competition at the start of 2010, also. 5
Investing 1 Billion in 2010 n Invest 600 million in met coal and thermal coal: Increasing operating efficiency Maximize per ton margins Deploy excess cash to growing the gas business n Invest 400 million in gas: 100 Bcf of…
Financial Strategy n Past: For the last 18 months, CONSOL has invested within the limits of existing cash flow. n Now: Now that the economy appears to be recovering and credit markets have loosened, CONSOL Energy is again willing…
Liquidity/Long-Term Debt n Liquidity: CONSOL and CNX Gas have a collective 612 million in liquidity n Long-Term Debt: 490 million of long-term debt, of which 39 million is due in 2010 CONSOL Energy has ample liquidity coupled…
Met and Thermal Coal Segments 9
Met Coal Outlook n U.S. and international met market is currently strengthening Steel capacity utilization is increasing: US mills at 67% Asian mills at 82% CONSOL has never been better positioned to benefit from a…
Low-Vol Coking Coal Overview n Buchanan Mine, in southwestern Virginia A low-cost longwall mine +100 mm tons of high quality, low-vol reserves n 2010 sales estimated at 4.5 - 4.7 mm short tons 1.8 mm tons priced at 115 per short…
High-Vol Coking Coal Overview n Xcoal is marketing CONSOL Energy high-vol coking coal and thermal coal destined for Asia, through offices in: Beijing Tokyo Seoul Singapore This partnership establishes a meaningful presence for…
The Worlds Largest High-Vol Mine n Bailey/Enlow capacity is 23 million tons per year n Coal sold as High-Vol results in expanded margins of 15-20 per ton, with no capital investment 13
100%-Owned Baltimore Terminal 14
Thermal Coal Outlook n Utility stockpiles are a bit higher than normal, but trending towards normal: 45 days in the Northeast and 50-55 days in the Southeast n Rapidly approaching normal levels n NAPP forward prices are: 64 for…
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…
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 CNX Gas Marcellus Shale drill site. 19
Leading Appalachian Producer Among Appalachian producers, CNX Gas is: 1 in Sales Revenue (683 MM in 2009) 1 in Net Income and ROCE (165 MM and 10.6% in 2009) 1 in Production Growth (23% in 2009) 1 in Reserve Growth (34% in 2009) 2…
Asset Overview Red: CBM acres Blue: O&G/Shale acres Gray: both CBM and O&G/Shale acres 4.3 Million Gross Acres CBM and Marcellus Shale CBM and New Albany Shale CBM and Huron Shale Chattanooga Shale Size Description 1.9Tcf Proved…
Doubles Production in Five Years 300 Goal Guidance 200 200 100 Bcf 100 48.4 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 CNX Gas has doubled production since 2005, with almost no debt. The goal is to double…
Nearly Doubles Reserves 2,500 2,000 1,911 1,343 1,422 1,500 1,265 Bcf 1,040 1,130 1,000 500 0 2004 2005 2006 2007 2008 2009 The 5-year reserve growth nearly matches the production growth. The 2009 increase was largely…
Leads in 2009 Finding Costs Preliminary F&D Survey, Incl. All Revisions 2.00 1.50 1.00 0.53 0.50 0.00 CXG EQT RRC HK OXY CXO XEC EOG CRK BBG Per Credit Suisse, 2/10/2010. CNX Gas had high-quality bookings, too: Proved…
Gas Operations Summary Marcellus Shale: Successfully adopted state-of-the-art exploration techniques Successfully benefited from the horizontal drilling experience on the CBM side Many synergies with existing CBM Operations…
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 less than 3.5 million today Well spacing dropping: From 160 acres in Dec.…
Second Horizontal Rig in Marcellus Photo courtesy of Patterson-UTI CNX Gas will have a flex rig on site on in March 27
Hedge Position CNX Gas has one of the best hedge books in the industry: 2010 2011 2012 Total Yearly Production (Bcf) 100 NA NA Volumes Hedged (Bcf) 47.5 22.6 15.1 Average Hedge Price (/Mcf) 7.88 6.84 6.84 CNX Gas has one of…
One of the Industrys Best Stories With the reserve growth, The production growth, The industry-leading F&D costs, The Marcellus acreage, The second rig arriving, and The great hedge book, CNX Gas should be a core holding for…
CONSOL Energys Value Discount n CONSOL Energy has out-earned the competition, yet trades at a 34% discount (market cap of 11.9 billion vs. 8.9 billion). n Morgan Stanley has performed a comprehensive sum- of-the-parts analysis…
Morgan Stanley Global Basic Materials Conference February 25-26, 2010
Loading...
