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Q2 2016 Company Presentation – Consol Energy Inc.

Consol Energy Inc. · Jul 26, 2016 · 50 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. Q2 2016 Company Presentation – Consol Energy Inc. – slide 1
    Company Presentation Q2 2016
  2. Q2 2016 Company Presentation – Consol Energy Inc. – slide 2
    CONSOL Energy: Company Overview Transformative Journey Towards a Pure Play E&P Company December 5, 2013 transaction with Murray Energy Corp. in which we sold half of coal assets and related assets April 19, 2014 CONSOL Energy 150th…
  3. Q2 2016 Company Presentation – Consol Energy Inc. – slide 3
    E&P Division 4
  4. Q2 2016 Company Presentation – Consol Energy Inc. – slide 4
    E&P Operations E&P Division: Q2 2016 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…
  5. Q2 2016 Company Presentation – Consol Energy Inc. – slide 5
    E&P Operations 2016 Planned E&P Activity Overview E&P Activity Summary 2016 Plan Expected New Drilled Drilled Implied 2016 Wells Drilled in Uncompleted Completed 2016 TIL's 2017 Completions H2 2016 Inventory Inventory Remaining…
  6. Q2 2016 Company Presentation – Consol Energy Inc. – slide 6
    E&P Operations Bridging to Growth 450 400 380-385 75 350 329 (50) 5 23 300 250 Bcfe 200 150 100 50 0 2015 Total Production 2016 Base decline 2016: Gathering De- 2016: Non-Op (Ex NBL/HES) 2016:…
  7. Q2 2016 Company Presentation – Consol Energy Inc. – slide 7
    E&P Operations: 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…
  8. Q2 2016 Company Presentation – Consol Energy Inc. – slide 8
    E&P Operations - Benchmarking vs Peers Full-cycle Breakeven Operating Metrics Declined from 3.51 to 1.92 Per Mcfe, a 45% Projected Decline Hired Tim Dugan to run E&P operations 4.00 3.50 3.00 1.17 1.11 2.50 Cash OpEx 0.82…
  9. Q2 2016 Company Presentation – Consol Energy Inc. – slide 9
    Utica Success Normalized Well-to-Well Productivity Comparison 70 66 62 k: A measure of the strength of a well that normalizes for: 60 Lateral length Stage spacing Pressure management 50 46 This benchmark metric enables…
  10. Q2 2016 Company Presentation – Consol Energy Inc. – slide 10
    Utica Shale: Gaut 4IH Westmoreland County, PA 30,000 Flow Rate MCf/Day Casing Pressure 10,000 9,000 25,000 8,000 7,000 20,000 6,000 15,000 5,000 4,000 10,000 Expected to CUM 8.4 BCF at 3,000 the time it hits line pressure 2,000…
  11. Q2 2016 Company Presentation – Consol Energy Inc. – slide 11
    Dry Utica: Switz 6 Pad Monroe County, OH Increased type curve from 2.4 2.8 Bcf/1,000 Evaluating proppant test for use on next pads 50000 6F Gas Rate (Mcf/d) 6F Casing Pressure (psig) 45000 6D Gas Rate (Mcf/d) 6D Casing Pressure…
  12. Q2 2016 Company Presentation – Consol Energy Inc. – slide 12
    Utica Shale: Monroe Cty, OH Cost Improvements Days vs. Depth (Wells in order of Horizontal TD Date) 0 SWITZ6B 5,000 DMeasured epth (ft.) SWITZ6F SWITZ6H 10,000 SWITZ6D Expect Additional 15,000 Realized 60+% Reduction in…
  13. Q2 2016 Company Presentation – Consol Energy Inc. – slide 13
    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)…
  14. Q2 2016 Company Presentation – Consol Energy Inc. – slide 14
    Gas Marketing 15
  15. Q2 2016 Company Presentation – Consol Energy Inc. – slide 15
    E&P Marketing Q2 2016 Gas Realization and Marketing Highlights CONSOL basin exports are projected to increase approximately 73,000 Dth /day for FY 2016 over FY 2015 as TETCOs U2GC and TEAM OPEN projects were put into service in late…
  16. Q2 2016 Company Presentation – Consol Energy Inc. – slide 16
    Gas Marketing Firm Transportation 1,800 Targeting FT opportunities that 1,600 access favorable markets at NEXUS favorable rates 1,400 1,200 1000S MMBtu/day ANR Will supplement direct FT with Columbia 1,000 firm sales to…
  17. Q2 2016 Company Presentation – Consol Energy Inc. – slide 17
    Gas Marketing Natural Gas Sales Midwest TETCO M3 Dominion South TCO Pool TETCO M2 East Tennessee Gas Sales CY 2016 Est. Columbia (TCO) 19% TETCO (M2) 26% TETCO (M3) 16% Dominion (DTI) 14% East Tennessee 12% TETCO ELA…
  18. Q2 2016 Company Presentation – Consol Energy Inc. – slide 18
    Gas Marketing Natural Gas Processing 500 Contracted capacity meets 450 current requirements 400 Inlet wet gas volumes to processing plants were 105 350 MMcf/d above CONSOLs 300 aggregate minimum MMcf/day committed volume…
  19. Q2 2016 Company Presentation – Consol Energy Inc. – slide 19
    Gas Marketing: Hedges Gas Hedges 280 E&P Hedge Program: Physical Sales With Fixed Basis Exposed to NYMEX 260 240 NYMEX Only Hedges Exposed to Basis Gas Volumes Hedged (Bcf) Program and actively 220 NYMEX + Basis(1) monitored…
  20. Q2 2016 Company Presentation – Consol Energy Inc. – slide 20
    Gas Marketing: Liquids Realizations Natural Gas Liquids, Oil, and Condensate Q2 2016 Avg. NGL Barrel Composition Q2 2016 liquids sold: 10.6 Bcfe 2Q16 Est Natural NGL Sales gasoline Comp Total weighted average price of liquids…
  21. Q2 2016 Company Presentation – Consol Energy Inc. – slide 21
    Financial 22
  22. Q2 2016 Company Presentation – Consol Energy Inc. – slide 22
    Financial: Liquidity (Contd) Debt and Liquidity Profile CNX CNXC: CNX CNX Equity Value of Ownership in Unit Market Consolidated 100% Attributable Owned LP (5) Affiliated Public MLPs Price Value Capitalization and Liquidity…
  23. Q2 2016 Company Presentation – Consol Energy Inc. – slide 23
    Financial: Daily Cash Management Report Daily Cash Management Report Cash Excluding CEI Debt Refinancing Notes: 600 1 CONE MLP IPO 400 2 Challenging bond refi 1 5 3 Challenging CNXC MLP IPO 200 Cash Balance (MM) - 3 4 We…
  24. Q2 2016 Company Presentation – Consol Energy Inc. – slide 24
    Financial: Legacy Liabilities Significant Legacy Liability Reductions Over Past 3 Years 4,500 400 Annual Cash Servicing Cost ( in Millions) 4,345 370 4,000 350 Projected 106MM Annual Cash Legacy Liabilities ( in Millions)…
  25. Q2 2016 Company Presentation – Consol Energy Inc. – slide 25
    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:…
  26. Q2 2016 Company Presentation – Consol Energy Inc. – slide 26
    Financial: CONEs Growing Cash Contribution CONSOL owns 32.7% of CONE Midstream Partners LPs (NYSE: CNNX) LP units and 50% of the General Partner CONE Midstream's and Gathering's Pro Rata Net (GP), which has a 2% interest in CNNX (and…
  27. Q2 2016 Company Presentation – Consol Energy Inc. – slide 27
    Guidance E&P Segment Guidance 2016E Production Volumes: Natural Gas (Bcf) 338 - 342 NGLs (MBbls) 6,150 - 6,300 Oil (MBbls) 62 - 68 Condensate (MBbls) 850 - 900 Total Production (Bcfe) 380 - 385 Natural Gas Basis Differential to…
  28. Q2 2016 Company Presentation – Consol Energy Inc. – slide 28
    Guidance Coal Segment Guidance 2016E Estimated Total Consolidated Coal Division Sales Volumes (in millions of tons) 24.5 - 27.5 Total Volumes Sold 26.8 % Committed 100% Total Consolidated Coal Division Capital Expenditures ( in…
  29. Q2 2016 Company Presentation – Consol Energy Inc. – slide 29
    Key Takeaways 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 cost deflation Adding two…
  30. Q2 2016 Company Presentation – Consol Energy Inc. – slide 30
    Appendix 31
  31. Q2 2016 Company Presentation – Consol Energy Inc. – slide 31
    Appendix Non-GAAP Reconciliation: EBITDA and Adj. EBITDA Three Months Ended June 30 2016 2016 2016 2016 2015 E&P Coal 1 Total Total ( in thousands) Other Division Division Company Company Net (Loss)/Income (294,499) (212,235)…
  32. Q2 2016 Company Presentation – 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 September 30 December 31 March 31 June 30 June 30 ( in…
  33. Q2 2016 Company Presentation – Consol Energy Inc. – slide 33
    Appendix Free Cash Flow Reconciliation Three Months Ended Six Months Ended June 30 June 30 ( in thousands) 2016 2016 Net Cash provided by Continuing Operations 83,571 206,307 Capital Expenditures (37,593) (115,257) Net…
  34. Q2 2016 Company Presentation – Consol Energy Inc. – slide 34
    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…
  35. Q2 2016 Company Presentation – Consol Energy Inc. – slide 35
    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 1,050 350 2,400 3,800 Locations(1) Avg EURs/1,000 ft 2.3 2.8 3.0 --…
  36. Q2 2016 Company Presentation – Consol Energy Inc. – slide 36
    Appendix: E&P Division Utica Shale Overview: A Leading Position in the Utica Shale 622,000 CONSOL net acres(1) Over 3,000 gross locations 101 wells online, as of 6/31/2016 5 wells TIL in Q2 2016 6,955 ft average TIL laterals in Q2…
  37. Q2 2016 Company Presentation – Consol Energy Inc. – slide 37
    Appendix: E&P Division Utica Shale: OH, PA & WV Dry Gas CHK Hubbard 3H IP Gas: 11,00 Mcf/d CHK Brown 10H CNX Gaut 4IH IP Gas: 9,500 Mcf/d Prod. Net 4.5 Bcf in 250 days (managed) HES NAC 3H-3* RRC Claysville Sportmans Club IP Gas:…
  38. Q2 2016 Company Presentation – Consol Energy Inc. – slide 38
    Appendix: Gaut 4IH Dry Utica Shale 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 + 200k…
  39. Q2 2016 Company Presentation – Consol Energy Inc. – slide 39
    Appendix: GH9 Dry Utica Shale 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 IP…
  40. Q2 2016 Company Presentation – Consol Energy Inc. – slide 40
    Appendix: Ohio Dry Utica Shale 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):…
  41. Q2 2016 Company Presentation – Consol Energy Inc. – slide 41
    Appendix: Switz 6 Dry Utica Shale 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 4 Utica Wells and 1 Marcellus Well Avg. Utica Lateral Length = 8,821…
  42. Q2 2016 Company Presentation – Consol Energy Inc. – slide 42
    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…
  43. Q2 2016 Company Presentation – Consol Energy Inc. – slide 43
    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…
  44. Q2 2016 Company Presentation – Consol Energy Inc. – slide 44
    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 900 2,200 2,250 150 1,000 2,200…
  45. Q2 2016 Company Presentation – Consol Energy Inc. – slide 45
    Appendix Marcellus Shale: Southwest PA Overview 44,000 CONSOL net acres NV56 Pad Over 900 gross locations(1) 6 Wells 8,753 Avg Lateral Length per well 9,230 Mcfe Avg 30-day IP per well 222 wells online, as of NV36 Pad NV57 Pad…
  46. Q2 2016 Company Presentation – Consol Energy Inc. – slide 46
    Appendix Marcellus Shale: North Wet Gas Overview 52,000 CONSOL net acres Over 1,000 gross locations(1) 144 wells online as of 6/31/2016 0 wells TIL in Q2 2016 8 wells per pad on average 1.8 Bcfe EUR/1,000 ft of lateral 750 ft…
  47. Q2 2016 Company Presentation – Consol Energy Inc. – slide 47
    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…
  48. Q2 2016 Company Presentation – Consol Energy Inc. – slide 48
    Appendix Marcellus Shale: Northern WV Dry Overview 111,000 CONSOL net acres Over 2,250 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…
  49. Q2 2016 Company Presentation – Consol Energy Inc. – slide 49
    Appendix Marcellus Shale: Central PA Overview 108,000 CONSOL net acres CRAWFORD 5 Pad Over 2,200 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…
  50. Q2 2016 Company Presentation – Consol Energy Inc. – slide 50
    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…

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