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Credit Suisse 21st Annual Energy Summit – Consol Energy Inc.

Consol Energy Inc. · Feb 22, 2016 · 32 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. Credit Suisse 21st Annual Energy Summit – Consol Energy Inc. – slide 1
    21st Annual Credit Suisse Energy Summit February 22-23, 2016
  2. Credit Suisse 21st Annual Energy Summit – Consol Energy Inc. – slide 2
    Company Overview Transformative Journey Twelve years ago traditional coal producer, the largest underground producer in the world Ten years ago created CNX Gas Six years ago acquired Dominion Resources Appalachian E&P business and…
  3. Credit Suisse 21st Annual Energy Summit – Consol Energy Inc. – slide 3
    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…
  4. Credit Suisse 21st Annual Energy Summit – Consol Energy Inc. – slide 4
    Overview: E&P Division Marcellus Shale 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…
  5. Credit Suisse 21st Annual Energy Summit – Consol Energy Inc. – slide 5
    Overview: E&P Division Utica Shale Overview: A Leading Position in the Utica Shale 622,000 CONSOL net acres(1) Over 3,000 gross locations 8,082 ft average TIL laterals in Q4 2015 4 wells per pad on average 120-acre spacing…
  6. Credit Suisse 21st Annual Energy Summit – Consol Energy Inc. – slide 6
    Overview: 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…
  7. Credit Suisse 21st Annual Energy Summit – Consol Energy Inc. – slide 7
    Overview: CONE Midstream (Contd) Annualized Amount of Sponsor-Retained EBITDA CONE Sponsor Retained EBITDA is Growing 70 60 50 Millions 40 30 20 10 0 4Q 2014 1Q 2015 2Q 2015 3Q 2015 4Q 2015 Source: CONE…
  8. Credit Suisse 21st Annual Energy Summit – Consol Energy Inc. – slide 8
    Overview: 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…
  9. Credit Suisse 21st Annual Energy Summit – Consol Energy Inc. – slide 9
    E&P Division 10
  10. Credit Suisse 21st Annual Energy Summit – Consol Energy Inc. – slide 10
    E&P Division Gas Division Production Growth E&P Production Volumes Indexed Production Growth 450 260 Production by Area 400 15% 2015A 2016E 240 350 Marcellus 51% 54% 329 220 CBM 23% 19% 300 Utica (Wet & Dry) 17% 21% 200 250…
  11. Credit Suisse 21st Annual Energy Summit – Consol Energy Inc. – slide 11
    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…
  12. Credit Suisse 21st Annual Energy Summit – Consol Energy Inc. – slide 12
    E&P Division Bridging to Growth 400 71 378 350 329 23 5 300 -50 250 Bcfe 200 150 100 50 0 2015 Production 2016 Base decline 2016: Gathering De- 2016: Non-Op (Ex NBL/HES) 2016: Production Adds 2016 Total…
  13. Credit Suisse 21st Annual Energy Summit – Consol Energy Inc. – slide 13
    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…
  14. Credit Suisse 21st Annual Energy Summit – Consol Energy Inc. – slide 14
    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…
  15. Credit Suisse 21st Annual Energy Summit – Consol Energy Inc. – slide 15
    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…
  16. Credit Suisse 21st Annual Energy Summit – Consol Energy Inc. – slide 16
    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…
  17. Credit Suisse 21st Annual Energy Summit – Consol Energy Inc. – slide 17
    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…
  18. Credit Suisse 21st Annual Energy Summit – Consol Energy Inc. – slide 18
    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…
  19. Credit Suisse 21st Annual Energy Summit – Consol Energy Inc. – slide 19
    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…
  20. Credit Suisse 21st Annual Energy Summit – Consol Energy Inc. – slide 20
    Coal Division 21
  21. Credit Suisse 21st Annual Energy Summit – Consol Energy Inc. – slide 21
    Coal Division: Marketing 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…
  22. Credit Suisse 21st Annual Energy Summit – Consol Energy Inc. – slide 22
    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…
  23. Credit Suisse 21st Annual Energy Summit – Consol Energy Inc. – slide 23
    Financial 24
  24. Credit Suisse 21st Annual Energy Summit – Consol Energy Inc. – slide 24
    Financial: Focused on Free Cash Flow Solid liquidity position Reduction in legacy liabilities Guidance: Production, price realizations, operating and capital costs - Growing E&P production volumes - Reductions to operating and…
  25. Credit Suisse 21st Annual Energy Summit – Consol Energy Inc. – slide 25
    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…
  26. Credit Suisse 21st Annual Energy Summit – Consol Energy Inc. – slide 26
    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 109MM Annual Cash 300 Servicing Cost for FY 2016, a Legacy…
  27. Credit Suisse 21st Annual Energy Summit – Consol Energy Inc. – slide 27
    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 recent…
  28. Credit Suisse 21st Annual Energy Summit – Consol Energy Inc. – slide 28
    Appendix 29
  29. Credit Suisse 21st Annual Energy Summit – Consol Energy Inc. – slide 29
    Appendix: 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…
  30. Credit Suisse 21st Annual Energy Summit – Consol Energy Inc. – slide 30
    Appendix: Financial Guidance Summary Coal Segment 2016E 2017E Total Coal Operations (in millions of tons) Estimated Total Coal Sales Volumes 27.0 - 32.0 30.5 - 33.4 Total Committed Volumes (Contracted & Priced) 27.8 12.7 % Committed…
  31. Credit Suisse 21st Annual Energy Summit – Consol Energy Inc. – slide 31
    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)…
  32. Credit Suisse 21st Annual Energy Summit – Consol Energy Inc. – slide 32
    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 (…

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