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Q4 2015 Results – Consol Energy Inc.

Consol Energy Inc. · Jan 26, 2016 · 65 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. Q4 2015 Results – Consol Energy Inc. – slide 1
    Company Presentation Q4 2015
  2. Q4 2015 Results – Consol Energy Inc. – slide 2
    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…
  3. Q4 2015 Results – Consol Energy Inc. – slide 3
    Q4 2015 Overview 4
  4. Q4 2015 Results – Consol Energy Inc. – slide 4
    Q4 2015 Overview CONSOL Energy: Fourth Quarter 2015 Results Net income Attributable to CONSOL Energy Shareholders for the fourth quarter was 30.4 million - Includes the following pre-tax items: 109.9 million benefit related to…
  5. Q4 2015 Results – Consol Energy Inc. – slide 5
    Q4 2015 Overview CONSOL Energy: Net (Decrease)/Increase in Cash E&P Division: - 2015 production of 328.7 Bcfe, up approximately 93.0 Bcfe from 2014, a 39.5% increase - Production volumes expected to grow approximately 15% in 2016 over…
  6. Q4 2015 Results – Consol Energy Inc. – slide 6
    Q4 2015 Overview Solid Liquidity Position of 856 Million Amount/ Amount Letters Amount December 31, 2015 ( in million) Capacity Drawn of Credit Available Cash and Cash Equivalents(1) 66 - - 66 Revolving Credit Facility(2) 2,000 952 258…
  7. Q4 2015 Results – Consol Energy Inc. – slide 7
    Q4 2015 Overview E&P Division: Q4 2015 Results Summary Y/Y Q-to-Q Seq. Q-to-Q E&P Division 4Q2015 4Q2014 Change 4Q2015 3Q2015 Change (1) Average Sales Price ( / Mcfe) 2.78 3.90 (1.12) 2.78 2.35 0.43 (2) Average Costs ( / Mcfe) 2.45…
  8. Q4 2015 Results – Consol Energy Inc. – slide 8
    Q4 2015 Overview E&P Division: Q4 2015 Operations Summary Marcellus Shale Quarterly Summary Utica Shale Quarterly Summary Avg. TIL Turned Turned Avg. TIL Sub- Horizontal Lateral Sub- Horizontal Drilled Completed In Line Counties…
  9. Q4 2015 Results – Consol Energy Inc. – slide 9
    Q4 2015 Overview Coal Division: Q4 2015 Results Summary Y/Y Q-to-Q Seq. Q-to-Q Coal Division 4Q2015 4Q2014 Change 4Q2015 3Q2015 Change Average Sales Price ( / ton) 52.37 61.19 (8.82) 52.37 56.34 (3.97) Average Costs ( / ton) 41.97…
  10. Q4 2015 Results – Consol Energy Inc. – slide 10
    Q4 2015 Overview Coal Division: FY 2016 and FY 2017 Marketing Forecasts FY 2016E Sales Tons by Segment 2016E Coal Sales Facts and Goals 6% Contracted tons for 2016: 97% 13% - Priced: 94% 96% of the PA Ops tons are expected to be…
  11. Q4 2015 Results – Consol Energy Inc. – slide 11
    E&P Division 12
  12. Q4 2015 Results – Consol Energy Inc. – slide 12
    E&P Division 2016 Planned E&P Activity Overview E&P Activity Summary 2016 Plan Drilled Drilled Uncompleted Completed 2016 2016 Inventory Inventory Completions TIL Marcellus SW PA Operated 29 23 25 42 SW PA Non-Op 5 10 - 10 WV…
  13. Q4 2015 Results – Consol Energy Inc. – slide 13
    E&P Division Gas Division Production Growth E&P Production Volumes 450 450 Production by Area 400 15% 400 2015A 2016E 350 Marcellus 51% 54% 329 350 CBM 23% 19% 300 300 Utica (Wet & Dry) 17% 21% 250 Other 9% 6% 236 250…
  14. Q4 2015 Results – Consol Energy Inc. – slide 14
    E&P Division Bridging to Growth 400 71 378 350 104 329 5 23 300 -50 250 236 Bcfe 15 8 200 -38 150 100 50 0 2014 Total 2015 Base 2015: Gathering 2015: Non-Op 2015: Production 2015 Total 2016 Base 2016:…
  15. Q4 2015 Results – Consol Energy Inc. – slide 15
    E&P Division: Capital Expenditures Efficiencies Driving Reduced E&P Capital Expenditures Without Sacrificing Growth Deferring activity, increasing capital efficiency 2016 E&P Capital Budget: improvements and identification of…
  16. Q4 2015 Results – Consol Energy Inc. – slide 16
    E&P Division Utica Shale Overview: A Leading Position in the Utica Shale 622,000 CONSOL net acres(1) Over 3,000 gross locations 87 wells online, as of 12/31/2015 14 wells TIL in Q4 2015 8,082 ft average TIL laterals in Q4 2015 4…
  17. Q4 2015 Results – Consol Energy Inc. – slide 17
    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…
  18. Q4 2015 Results – Consol Energy Inc. – slide 18
    Utica Shale: Gaut 4IH Westmoreland County, PA CONSOL GAUT4IH 61.4 MMcf/d 24-hr IP rate 7,968 psi; 5,840 ft. lateral 5,800 single lateral; 100% WI to CONSOL 30 stage completion 200 stages with 500k proppant: 160k 100 mesh +…
  19. Q4 2015 Results – Consol Energy Inc. – slide 19
    Utica Shale: Gaut 4IH Westmoreland County, PA Flow Rate MCf/Day Casing Pressure PSIG 30,000 10000 9500 25,000 9000 Casing Flowing Pressure (psig) 8500 20,000 Gas Rate (Mcf/d) 8000 15,000 7500 7000 10,000 6500…
  20. Q4 2015 Results – Consol Energy Inc. – slide 20
    Utica Shale: GH 9 Greene County, PA Range Resources - Claysville Sportsmans Club 1 IP Gas 59.0 MMcf/d EQT Pettit Spud in Aug. 2015 13,400 ft. TVD 4,000-4,500 ft. lateral 100% WI and 96% NRI to CONSOL EQT Scotts Run 24 hr…
  21. Q4 2015 Results – Consol Energy Inc. – slide 21
    Utica Shale: Ohio Dry Gas CNX Activity and Recent IP Rates In-and-Around Monroe County, OH 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…
  22. Q4 2015 Results – Consol Energy Inc. – slide 22
    Utica Shale: Switz 6 Monroe County, OH CONSOL SWITZ 6 Pad (Utica): 4 Utica wells & 1 Marcellus well CNX Switz 6D: 24-hr test rate 44.7 MMcf/d 6,835 psig Remaining wells flowing back 4 Utica Wells and 1 Marcellus Well Avg.…
  23. Q4 2015 Results – Consol Energy Inc. – slide 23
    Utica Shale: Switz 6D Monroe County, OH Gas Rate Casing Pressure 50,000 10000 The limited decline in flowing casing pressure bodes well for a strong stabilized production 40,000 rate going forward 8000 Flowing Casing Pressure…
  24. Q4 2015 Results – Consol Energy Inc. – slide 24
    Utica Shale: Monroe Cty, OH Cost Improvements Days vs. Depth (Well in order of Horizontal TD Date) 0 5,000 Measured Depth (ft.) 10,000 Switz-6B-HSU Switz-6F-HSU 15,000 60+% Reduction in Days to Drill Switz-6H-HSU 20,000…
  25. Q4 2015 Results – Consol Energy Inc. – slide 25
    Utica Shale: PA Utica D&C Cost Reduction Plan Waterfall Diagram - PA Dry Utica Drilling and Completion Costs Per Well Assume 7000' lateral on a development 4-well pad ( in millions) 30.0 26.2 (8.2) 25.0 (2.2) 20.0 (0.4) (0.8) (1.2)…
  26. Q4 2015 Results – Consol Energy Inc. – slide 26
    Gas Marketing 27
  27. Q4 2015 Results – Consol Energy Inc. – slide 27
    Gas Marketing E&P Marketing Highlights Average gas price for the fourth quarter of 2015, including hedging, was a +0.36 per MMBtu differential to NYMEX (2.63 vs. 2.27); excluding hedging, gas price was (0.54) per MMBtu below NYMEX…
  28. Q4 2015 Results – Consol Energy Inc. – slide 28
    Gas Marketing Firm Transportation 1,600 NEXUS Targeting pipeline projects that 1,400 access favorable markets at ANR 1,200 favorable rates Columbia 1000s MMBtu/day 1,000 East Tennessee Will supplement direct FT with 800…
  29. Q4 2015 Results – Consol Energy Inc. – slide 29
    Gas Marketing Natural Gas Sales Midwest TETCO M3 Dominion South TCO Pool TETCO M2 East Tennessee Gas Sales CY 2016 Est. Columbia (TCO) 21% TETCO (M2) 20% TETCO (M3) 16% Dominion (DTI) 12% East Tennessee 10% TETCO ELA…
  30. Q4 2015 Results – Consol Energy Inc. – slide 30
    Gas Marketing Natural Gas Processing Contracted capacity meets Contracted Capacity at Processing Plants current requirements 500 Inlet wet gas volumes to 450 processing plants were 176 400 MMcf/d above CONSOLs aggregate minimum…
  31. Q4 2015 Results – Consol Energy Inc. – slide 31
    Gas Marketing: Firm TransportAsset or Liability Total Off Balance Sheet Firm Transportation, Gathering and Processing Commitments 20.0 180% 167% 18.0 152% 160% 16.0 140% 17.5 FT Commitments as % of EV 14.0 14.3 120%…
  32. Q4 2015 Results – Consol Energy Inc. – slide 32
    Gas Marketing: Hedges Gas Hedges 250 E&P Hedge Program: 225 Physical Sales With Fixed Basis Exposed to NYMEX Program and actively NYMEX Only Hedges Exposed to Basis 200 monitored hedges NYMEX + Basis (1) Gas Volumes Hedged…
  33. Q4 2015 Results – Consol Energy Inc. – slide 33
    Gas Marketing Natural Gas Liquids, Oil, and Condensate Q4 2015 Avg. NGL Barrel Composition Q4 2015 liquids sold: 12.0 Bcfe 4Q15 Actual Natural (100% gasoline Ethane Ethane Total weighted average price of liquids increased 15% 0%…
  34. Q4 2015 Results – Consol Energy Inc. – slide 34
    Coal Division 35
  35. Q4 2015 Results – Consol Energy Inc. – slide 35
    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…
  36. Q4 2015 Results – Consol Energy Inc. – slide 36
    Coal Division 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)) Train loadout…
  37. Q4 2015 Results – Consol Energy Inc. – slide 37
    Coal Division Not All NAPP Longwalls Are Created Equal 25 5.0 2015 Production - CNX/CNXC Assets 2015 Production - Other Longwalls 2015 Sulfur 4.5 20 4.0 Production (million tons) Sulfur (% as received) 3.5 15 3.0 2.5 10…
  38. Q4 2015 Results – Consol Energy Inc. – slide 38
    Financial 39
  39. Q4 2015 Results – Consol Energy Inc. – slide 39
    Financial: Focused on Free Cash Flow Solid liquidity position CNXC and CONE Asset monetization program Reduction in legacy liabilities Guidance: Production, price realizations, operating and capital costs - Growing E&P…
  40. Q4 2015 Results – Consol Energy Inc. – slide 40
    Financial: Liquidity Debt and Liquidity Profile CNX CNXC: CNX CNX Unit Market Consolidated 100% Attributable Equity Value of Ownership in Affiliated Public MLPs Onwed LP (5) Price (5) Value Capitalization and Liquidity 12/31/2015…
  41. Q4 2015 Results – Consol Energy Inc. – slide 41
    Financial: Legacy Liabilities Significant Legacy Liability Reductions Over Past 3 Years 4,500 375 370 4,345 4,000 350 325 Annual Cash Servicing Cost 3,500 Projected 107MM Annual Cash 300 Servicing Cost for FY 2016, a Legacy…
  42. Q4 2015 Results – Consol Energy Inc. – slide 42
    Financial: CNX Coal Resources LP (CNXC:NYSE) CNXC: Organizational Structure and CNX Ownership CONSOL Energy Inc. CNXC owns a 20% undivided interest(1) in, and (CONSOL Energy) operational control over, CONSOL Energys Pennsylvania NYSE:…
  43. Q4 2015 Results – Consol Energy Inc. – slide 43
    Financial: CONEs Growing Cash Contribution CONSOL owns 32.1% of CONE Midstream Partners LPs CONE Midstream's and Gathering's Pro Rata Net (CNNX:NYSE) LP units and 50% of the General Partner Income Contribution to CNX (GP), which has a…
  44. Q4 2015 Results – Consol Energy Inc. – slide 44
    Financial: Guidance Summary E&P Segment Guidance 2016E Production Volumes: Natural Gas (Bcf) 335 NGLs (MBbls) 6,000 Oil (MBbls) 65 Condensate (MBbls) 1,000 Total Production (Bcfe) +15% Natural Gas Basis Differential to NYMEX…
  45. Q4 2015 Results – Consol Energy Inc. – slide 45
    Financial: Guidance Summary Coal Segment 2016E Total Coal Operations Estimated Total Coal Sales Volumes 27.0 - 32.0 Total Committed Volumes (Contracted & Priced) 27.8 % Committed 94% Estimated Total Average Price (/Ton) 50.00 -…
  46. Q4 2015 Results – Consol Energy Inc. – slide 46
    Financial: Summary Plans and Goals Aligned to Drive Increased Valuation Milestones: Improving E&P performance from high-grading activities, improving completion techniques, reducing cycle times, and service deflation Benefits from…
  47. Q4 2015 Results – Consol Energy Inc. – slide 47
    Appendix 48
  48. Q4 2015 Results – Consol Energy Inc. – slide 48
    Appendix Non-GAAP Reconciliation: Quarter-over-Quarter EBITDA and Adj. EBITDA Three Months Ended December 31 ( in thousands) 2015 2014 Net Income 34,325 73,666 Add: Interest Expense 49,082 53,025 Less: Interest Income (431) (476)…
  49. Q4 2015 Results – Consol Energy Inc. – slide 49
    Appendix Non-GAAP Reconciliation: Trailing Twelve Months EBITDA and Adj. EBITDA Three Months Ended Three Months Ended Three Months Ended Three Months Ended Twelve Months Ended March 31 June 30 September 30 December 31 December 31 (…
  50. Q4 2015 Results – Consol Energy Inc. – slide 50
    Appendix Joint Ventures Summary of JV Carry Eligible Capital Description Marcellus / Noble Energy Inc. Utica / Hess Corporation Ownership 50/50 50/50 (1) Acreage 349,541 79,266 (2) Zones PA and WV Marcellus, Burkett to Onondaga OH…
  51. Q4 2015 Results – Consol Energy Inc. – slide 51
    Appendix Marcellus Shale: Overview 436,000 CONSOL net acres 88% NRI 91% HBP 23.9 Tcfe 3P Over 8,900 gross potential wells(1) Marcellus production grew at a 71% CAGR from 2013 to 2015 Producing Pads Note: Townships are…
  52. Q4 2015 Results – Consol Energy Inc. – slide 52
    Appendix Marcellus Shale: Growth Runway and Depth of Inventory Marcellus Shale Upside Potential Total Gross Prospective Marcellus Acreage 785,000 - Gross Acres within JV 699,000 - Acres outside JV 100% CONSOL 86,000 Acreage per…
  53. Q4 2015 Results – Consol Energy Inc. – slide 53
    Appendix Marcellus Shale: Sub-Regions Summary Marcellus Shale North South SWPA CPA WV Ohio(1) Total Wet Wet Net Acres 44,000 108,000 111,000 14,000 52,000 107,000 436,000 Approximate Gross 800 2,000 2,400 100 1,400 2,200…
  54. Q4 2015 Results – Consol Energy Inc. – slide 54
    Appendix Marcellus Shale: Southwest PA Overview 44,000 CONSOL net acres NV56 Pad Over 800 gross locations(1) 6 Wells 8,753 Avg Lateral Length per well 9,230 Mcfe Avg 30-day IP per well 189 wells online, as of NV36 Pad NV57 Pad…
  55. Q4 2015 Results – Consol Energy Inc. – slide 55
    Appendix Marcellus Shale: North Wet Gas Overview 52,000 CONSOL net acres Over 1,400 gross locations(1) 136 wells online as of 12/31/2015 0 wells TIL in Q4 2015 6 wells per pad on average 1.8 Bcfe EUR/1,000 ft of lateral…
  56. Q4 2015 Results – Consol Energy Inc. – slide 56
    Appendix Marcellus Shale: South Wet Gas Overview 107,000 CONSOL net SHR1 Pad 6 Wells acres 8,741 Avg Lateral Length per well WEESE (Triad Hunter) 3 Wells PENS1 Pad 10,143 Mcfe Avg 30-day IP per well Over 2,200 gross 9 Wells 3,711…
  57. Q4 2015 Results – Consol Energy Inc. – slide 57
    Appendix Marcellus Shale: Northern WV Dry Overview 111,000 CONSOL net acres Over 2,400 gross ANDERSON (PDC Mountaineer) 3 Wells PHL10 Pad locations(1) 4,859 Avg Lateral Length per well 6 Wells 595 MMcf/well 1st 6-Month Cum 4,636…
  58. Q4 2015 Results – Consol Energy Inc. – slide 58
    Appendix Marcellus Shale: Central PA Overview 108,000 CONSOL net acres CRAWFORD 5 Pad Over 2,000 gross 2 Wells 7,305 Avg Lateral Length per well locations(1) 13,586 Mcfe Avg 24-hr IP per well 624 Mmcfe/well 60 day Cum 56 wells…
  59. Q4 2015 Results – Consol Energy Inc. – slide 59
    Appendix Utica Shale: Growth Runway and Depth of Inventory Utica Shale Upside Potential Total Gross Prospective Utica Acreage 701,000 - Gross Acres within JV 158,000 - Acres outside JV 100% CONSOL 543,000 Acreage spacing per well…
  60. Q4 2015 Results – Consol Energy Inc. – slide 60
    Appendix Utica Shale: Sub-Regions Summary Utica Shale Ohio Wet Ohio Dry PA/WV Dry Total Net Acres 89,000 30,000 503,000 622,000 Approximate Gross 500 300 2,200 3,000 Locations(1) Avg EURs/1,000 ft 2.1 2.4 2.4 --…
  61. Q4 2015 Results – Consol Energy Inc. – slide 61
    Appendix Utica Shale: Offset Peer Acreage 622,000 CONSOL net acres in Utica 306,000 net acres in PA 197,000 net acres in WV 30,000 net acres in OH Dry 14,000 net acres in Monroe County, OH 89,000 net acres in OH Wet…
  62. Q4 2015 Results – Consol Energy Inc. – slide 62
    Appendix Utica Shale: CNX Acreage Position in the Core OH Wet Gas Utica HES Cadiz B HES Cadiz A IP GAS: 10,254 Mcf/d 85,000 CONSOL net acres GPOR - Boy Scout 33H CHK - Buell 8H IP OIL: 191 Bbl/d IP GAS: 9,500 Mcf/d IP GAS: 8,006…
  63. Q4 2015 Results – Consol Energy Inc. – slide 63
    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…
  64. Q4 2015 Results – Consol Energy Inc. – slide 64
    Appendix CONE Corporate Structure 65 Source: CONE Midstream Partners LP.
  65. Q4 2015 Results – Consol Energy Inc. – slide 65
    Appendix Coal Division: Low-cost, Highly Productive Longwall Mining Operations During 2014, the PA mining complex generated the h i g h e s t c a s h m a r g i n o f a n y o f i t s c o a l p e e r s (1)(2) The design of the…

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