Barclays CEO Energy & Power Conference September 9-10, 2015
Key Takeaways CONSOL Energys E&P Division has demonstrated that it can stand on its own as a premier Appalachian Basin producer: Gas production has grown significantly Capital intensity and costs are down dramatically Dry Utica has…
Agenda E&P division Increasing 2015E gas production to 320-330 Bcfe, up from 300-310 Bcfe; 20% gas production growth expected in 2016E Waterfall chart that details bridge to 2015 and 2016 production growth forecast Marcellus and Utica…
Company Overview Transformative Journey Eleven years ago traditional coal producer, the largest underground producer in the world Ten years ago created CNX Gas Five years ago acquired Dominion Resources Appalachian E&P business and…
E&P Division Gas Division Production Growth E&P Production Volumes 450 450 Production by Area 400 +20% 400 2015E 2016E 350 Marcellus 51% 50% 320-330 350 CBM 23% 18% 300 300 Utica (Wet & Dry) 19% 26% 250 Other 7% 6% 236 250…
E&P Division Bridging to Growth 450 390 86 400 325 350 104 15 300 14 Bcfe 236 -50 250 15 8 200 -38 150 100 50 0 2014 Total 2015 Base 2015: Gathering 2015: Non-Op 2015: Production 2015 Total 2016…
E&P Division F&D/Mcfe: Continued Operational Efficiency Improvements 2010-2014 Drill-bit F&D Cost: 5-Year Average vs. E&P Peers 3.50 3.00 Average 2.06 2.50 2.00 /Mcfe 1.50 1.00 0.50 0.00 CNX 2012-2014 Drill-bit F&D…
E&P Division Marcellus Shale: Overview 441,000 CONSOL net acres 88% NRI 91% HBP 85,000 net fee acres 23.9 Tcfe 3P Over 8,900 gross potential wells(1) 2015 YTD drilled wells: 60 Marcellus production grew 93% in 2014 over…
E&P Division Utica Shale: Overview 614,000 CONSOL net acres(1) Includes 70,000 net fee acres in Ohio Utica Over 3,000 gross locations 66 wells online, as of 6/30/2015 9 wells TIL in Q2 2015 6,983 ft average TIL laterals in Q2…
E&P Division RRC Zahn 1 Utica Shale: PA/WV Dry Gas IP Gas: 4,500 Mcf/d REXX Cheeseman 1 IP Oil: 0 Bbl/d IP Gas: 9,200 Mcf/d CHK Hubbard 3H IP Oil: 0 Bbl/d IP Gas: 11,00 Mcf/d CHK Thompson 3H IP Oil: 0 Bbl/d IP Gas: 6,400 Mcf/d CNX…
Utica Shale: Gaut 4IH Westmoreland County, PA CONSOL GAUT4IH 61.4 MMcf/d 24-hr test rate 5,800 single lateral; 100% WI to CONSOL 30 stage completion 200 stages with 500k proppant : 160k 100 mesh + 200k 40/80 ceramic + 140k…
Utica Shale: Gaut 4IH Westmoreland County, PA 100,000 11,000 90,000 10,000 80,000 9,000 70,000 8,000 60,000 Strong pressure and flow data 7,000 bode well for production and EUR. With the well temporarily mcfd…
Utica Shale: GH 9 Greene County, PA Range Resources - Claysville Sportsmans Club 1 IP Gas 59.0 MMcf/d 100% WI to CONSOL EQT Scotts Run 24 hr IP 72.9 Expected TVD: 13,500 MMcf/d Currently drilling 8.5 curve section CNXs GH9…
Gas Marketing 16
Gas Marketing Firm Transportation CNX's Firm Transportation and Sales* 1,600,000 Targeting pipeline projects that 1,400,000 NEXUS access favorable markets at favorable rates 1,200,000 ANR Columbia (TCO) 1,000,000 MMBtu/day…
Gas Marketing Natural Gas Sales Midwest TETCO M3 Dominion South TCO Pool TETCO M2 East Tennessee Gas Sales CY 2015 Est. CY 2016 Est. Columbia (TCO) 24% 19% TETCO (M2) 19% 25% TETCO (M3) 20% 15% Dominion (DTI) 19% 18%…
Gas Marketing: Firm TransportAsset or Liability Total Off Balance Sheet Firm Transportation, Gathering and Processing Commitments 20.0 160% 147% 18.0 140% 16.0 17.5 16.0 120% 118% FT Commitments as % of EV 14.0 100%…
Gas Marketing: Hedges Gas Hedges E&P Hedge Program: Program and actively monitored hedges - Program Hedge - protect margins on up to 90% of our Proved Developed Production - Active Hedge Process - Supplements program hedges up to 80%…
Coal Division High Quality, Low Cost Assets with Long Mine Life Pennsylvania (PA) Operations Virginia (VA) Operations Other Type of Coal Primarily Thermal Primarily Met Primarily Thermal 5 Longwalls and 1 Longwall System and…
Coal Division Coal Division: Q3 and FY 2015 and 2016 Marketing Update and Forecasts 2015 Coal Sales Facts and Goals 2015 Sales Tons by Segment Contracted tons for 2015: 96% - Priced: 94% 7% 14% Approximately 82% of the PA Ops tons…
Coal Division Not All NAPP Longwalls Are Created Equal 30 5.0 2014 Production - CNXC Assets 2014 Production - Other Longwalls 2014 Sulfur 4.5 25 4.0 Production (million tons) Sulfur (% as received) 3.5 20 3.0 15 2.5…
Coal Division Minor MATS Impact Limited Sales Loss, Potential Remaining Customer Gain MATS compliance deadlines Surviving 2014 CNX Customers 20,000 (after 2015-2019 retirements) 18,000 2014 coal burn 16,000 Actual and Demonstrated…
Financial: Focused on Free Cash Flow CNXC IPO Strong liquidity position Growing revenue and income - CONE Midstream cash flows and EBITDA growing - E&P production volume growth - Steady coal production with lower cost base…
Financial: CNX Coal Resources LP (CNXC) IPO CNXC: Organizational Structure CONSOL Energy Inc. CNXC: 20% Undivided interest in Pennsylvania mining (CONSOL Energy) complex (Bailey, Enlow Fork and Harvey mines) NYSE: CNX Sold 10.6…
Financial: CNX Coal Resources LP (CNXC) CNXC Roadmap to Growing Value and Unitholder Returns Coal Contracting for 2016-19 Optimize Cost Structure Increase Volumes with Solid Stable Cash Flows Cash Margins Reduced Cost of…
Financial: CONE Midstream & Gathering Growing CONSOL owns 32.1% of CONE Midstream Partners (CNNX) CONE Midstream's and Gathering's Pro Rata Net LP units and 50% of the General Partner (GP), which has a Income Contribution to CNX 2%…
Financial: Liquidity Debt and Liquidity Profile, Pro Forma CNXC Offering PF CNXC Sources of Funds (MM) Actual CNXC IPO CNXC Initial Public Offering 150 6/30/2015 IPO 6/30/2015 CNXC Revolver Borrowing 200 Cash and Cash Equivalents…
Financial: Asset Monetizations Assets available for sale Engaged several investment bankers and advisors to assist in the sale process Actively engaged in discussions with prospective buyers on a number of asset packages Currently…
Financial: E&P Capital Expenditures Efficiencies Driving Reduced E&P Capital Expenditures Without Sacrificing Growth High-grading locations, capital efficiency improvements and cost reductions driving further E&P capital spending…
Financial: Legacy Liabilities Significant Legacy Liability Reductions Over Past 3 Years 4,500 375 370 4,345 4,000 Projected: 350 50MM Reduction in Legacy Liabilities 325 Annual Cash Servicing Cost 3,500 and 31MM Reduction in…
Financial: Guidance Summary Coal Segment 2015E 2016E Total Operations (in millions of tons) Estimated Total Coal Sales 28.4 - 29.9 30.6 - 33.4 Total Committed (Priced) 27.5 15.6 % Committed 94% 49% Capital Expenditures:…
Financial: Summary Plans and Goals Aligned to Drive Increased Valuation Milestones: Coal MLP executed Improving E&P performance from high-grading activities, improving completion techniques, reducing cycle times, and service…
Key Takeaways CONSOL Energys E&P Division has demonstrated that it can stand on its own as a premier Appalachian Basin producer: Gas production has grown significantly Capital intensity and costs are down dramatically Dry Utica has…
Appendix Non-GAAP Reconciliation: Quarter-over-Quarter EBITDA and Adj. EBITDA Three Months Ended June 30 ( in thousands) 2015 2014 Net Income / (Loss) (603,301) (24,935) Add: Interest Expense 46,507 64,211 Less: Interest Income…
Appendix Non-GAAP Reconciliation: Trailing Twelve Months EBITDA and Adj. EBITDA Twelve Months Ended June 30 ( in thousands) 2015 Net Income / (Loss) (452,250) Add: Interest Expense 210,051 Less: Interest Income (2,510) Add: Income…
Appendix Non-GAAP Reconciliation: Adjusted Net Cash Provided by Continuing Operations Three Months Ended June 30 ( in thousands) 2015 Net Cash Provided by Continuing Operations 61,742 Addback: Revolver Amendment (2,302) Addback:…
Appendix Second Quarter Highlights Average gas price for the second quarter of 2015, including hedging, was (0.06) per MMBtu below NYMEX (2.58 vs. 2.64); excluding hedging, gas price was (0.68) per MMBtu below NYMEX (1.96 vs. 2.64)…
Appendix Natural Gas Liquids, Oil, and Condensate Q2 2015 Avg. NGL Barrel Composition 2Q15 Actual Q2 liquids revenue composed 4% of total Natural (100% Company revenue and 12% of E&P sales revenue gasoline Ethane Ethane 15% 0%…
Appendix 46 Source: CONE Midstream Partners LP.
Appendix Utica Shale: Ohio Dry Gas CVX Conner well (Utica): GPOR Irons 1-4H (Utica): 25.0 MMcf/d Avg 24-hr rate 30.3 MMcf/d Avg 24-hr rate NBL / CNX MND 6H (Utica): 1 Utica Well Frac complete, waiting on pipeline / production…
Appendix Stacked Pay Potential: Appalachian Shale Acreage P a y Formation Name Wet Dry Total Net Acres Net Acres Net Acres Rhinestreet Shale Upper Cashaqua Shale Devonian 190,000 155,000 345,000 Middlesex Shale West…
Appendix Pennsylvania Mining Complex Pennsylvania mining complex consists of three like-new underground mines and related infrastructure with high-Btu bituminous coal (785.6 million tons proven and probable(1)) - PA mining complex…
Appendix Coal Continues to be the Low-Cost Choice for Electricity Generation U.S. power generation will remain highly dependent on thermal coal for the foreseeable future Coal generation maintains a market share of 37-39% through 2030…
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