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Scotia Howard Weil 45th Annual Energy Conference – Consol Energy Inc.

Consol Energy Inc. · Mar 27, 2017 · 30 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. Scotia Howard Weil 45th Annual Energy Conference – Consol Energy Inc. – slide 1
    SCOTIA HOWARD WEIL 2017 ENERGY CONFERENCE MARCH 27-28, 2017
  2. Scotia Howard Weil 45th Annual Energy Conference – Consol Energy Inc. – slide 2
    Who We Are: Differentiating Ourselves Through Three Pillars Values: Never compromised regardless of circumstance Operate daily free of injuries and environmental incidents Pursuit of perfection driving towards best-in-class…
  3. Scotia Howard Weil 45th Annual Energy Conference – Consol Energy Inc. – slide 3
    The Path Forward: Realization of Value How we plan to close the value gap: Today 15.73 Closing price 3/20/2016 1 GROW EBITDA PRUDENT GROWTH OF E&P PRODUCTION EFFICIENT CAPITAL ALLOCATION TO HIGH IRR, NAV ACCRETIVE AOIs 2 PAY…
  4. Scotia Howard Weil 45th Annual Energy Conference – Consol Energy Inc. – slide 4
    Weathered Downturn Without Issuing Equity Since the beginning of 2014, total follow-on Follow-On Equity Issued Across equity issued by Appalachian peers totaled Energy Industry 2015-2016 10.6 billion: 40,000 All seven Appalachian…
  5. Scotia Howard Weil 45th Annual Energy Conference – Consol Energy Inc. – slide 5
    EXPLORATION & PRODUCTION 6
  6. Scotia Howard Weil 45th Annual Energy Conference – Consol Energy Inc. – slide 6
    Continuous Improvement Capital Efficiency 160% 140% 120% NAV growth 100% being driven BTAX IRR (%) 1.24 Mcfe/ 1.83 Mcfe/ 2.78 Mcfe/ by improved 80% capital 60% efficiency 40% 20% 0% 1.43 1.52 0.46 0.60…
  7. Scotia Howard Weil 45th Annual Energy Conference – Consol Energy Inc. – slide 7
    Operational Evolution Key Performance Metrics(1) 2014 2016E Average EUR (Bcfe/1,000) 1.4 2.8 Total Marcellus capital (/ft) 1,345 835 Lease operating expense (LOE) (/Mcfe) 0.41 0.19 Average drilling days on well 27 18 Average…
  8. Scotia Howard Weil 45th Annual Energy Conference – Consol Energy Inc. – slide 8
    Dissolution of the Marcellus Shale Joint Venture 64% increase in Marcellus core acreage: Post-Exchange Marcellus Acreage Map Full control of stacked pay opportunity set Incremental 85 MMcfe/d of production Further strengthens balance…
  9. Scotia Howard Weil 45th Annual Energy Conference – Consol Energy Inc. – slide 9
    New World View: Stacked Pay 40+ years of stacked pay inventory(1) P Formation a The JV separation gives CONSOL complete y Name operational control in stacked pay opportunities Rhinestreet The Upper Devonian provides triple…
  10. Scotia Howard Weil 45th Annual Energy Conference – Consol Energy Inc. – slide 10
    Stacked Pay Value for SWPA: Pad Level Example Stacked Pay Pad Economics Example(1) 160,000 120% Unstacked NPV Stacked pay development improves IRR 140,000 Stacked NPV Unstacked IRR % 100% by 10-20 percentage points Stacked IRR %…
  11. Scotia Howard Weil 45th Annual Energy Conference – Consol Energy Inc. – slide 11
    Moving Utica Non-Core to Core Delineating the Utica through operated Delineation Opportunities and non-operated wells, data trades, and data purchases: Provides geologic and reservoir data to evaluate NAV impact and helps assess…
  12. Scotia Howard Weil 45th Annual Energy Conference – Consol Energy Inc. – slide 12
    Stacked Pay with the Utica: The Size of the Prize 360,000 net acres of double stacked pay opportunity 360,000+ in the core and non-core areas Net Acres 180,000 core acres with double stacked pay opportunity Utica stacked pay…
  13. Scotia Howard Weil 45th Annual Energy Conference – Consol Energy Inc. – slide 13
    Two-Year Development Plan 2017 2018 Consistently complete DUCs ( in millions) TD FRAC TIL Capex TD FRAC TIL Capex from December 2016 through Marcellus 12 13 13 80 54 42 40 260 2018 SWPA Utica 0 0 0 0 3 3 3 40 Upper Devonian - 2 3…
  14. Scotia Howard Weil 45th Annual Energy Conference – Consol Energy Inc. – slide 14
    E&P Capital Expenditure Guidance E&P Capital and Production Plans Capital expenditure projections based ( in millions) 2017E 2018E on current market conditions and forecast Drilling and Completion 465 - Flexibility exists to adjust…
  15. Scotia Howard Weil 45th Annual Energy Conference – Consol Energy Inc. – slide 15
    E&P Marketing: Gas Hedges 320 Hedge Position 300 NYMEX Only Hedges Exposed to Basis (Outer ring = NYMEX; Inner ring = Basis) 280 (2) NYMEX + Basis (2) 260 Gas Volumes Hedged (Bcf) 240 220 200 180 160 140 120 2017 100…
  16. Scotia Howard Weil 45th Annual Energy Conference – Consol Energy Inc. – slide 16
    DIVERSIFIED BUSINESS UNITS 17
  17. Scotia Howard Weil 45th Annual Energy Conference – Consol Energy Inc. – slide 17
    Business Development: Strategy CONSOL has a strong track record of successful divestitures: 20 NAV-enhancing divestitures since 2012 Over 5 billion of combined value Team is now focused on divesting E&P assets: Recent Marcellus JV…
  18. Scotia Howard Weil 45th Annual Energy Conference – Consol Energy Inc. – slide 18
    Finance: Legacy Liabilities Significant legacy liability reductions over Balance Sheet Liability Long-Term Liability Guidance past three years: 12/31/2016 FY 2017E FY 2018E LTD 19 Miller Creek/Fola transaction drove WC 80…
  19. Scotia Howard Weil 45th Annual Energy Conference – Consol Energy Inc. – slide 19
    FINANCE 20
  20. Scotia Howard Weil 45th Annual Energy Conference – Consol Energy Inc. – slide 20
    Financial Outlook: NAV/Share Value Drivers Accelerating We expect growth while generating free cash flow: Stringent focus on capital allocation to drive the highest NAV per share decisions Become a leader in capital allocation, when…
  21. Scotia Howard Weil 45th Annual Energy Conference – Consol Energy Inc. – slide 21
    Conditions Improving for Complete Separation from CNXC Path to Completing Separation from CNXC Financial Conditions Growing Improving CNXC revenue and margins Performance Pursuing 3 parallel paths: - Outright sale Reduction…
  22. Scotia Howard Weil 45th Annual Energy Conference – Consol Energy Inc. – slide 22
    Finance: Leverage Ratio and Liquidity Projection Leverage Ratio 2016-2018E(1) Year-end 2016 leverage ratio below prior forecast; 2017E and 5.0 2018E targets reduced by 0.2x and 0.3x, respectively 4.4 4.0 Path to reaching and…
  23. Scotia Howard Weil 45th Annual Energy Conference – Consol Energy Inc. – slide 23
    Finance: E&P Guidance E&P Segment Guidance 2017E 2018E Production Volumes: Natural Gas (Bcf) 375 445 NGLs (MBbls) 5,800 5,950 Oil (MBbls) 45 40 Condensate (MBbls) 740 730 Total Production (Bcfe) 415 485 % Liquids 10% 8% Open…
  24. Scotia Howard Weil 45th Annual Energy Conference – Consol Energy Inc. – slide 24
    Finance: PA Mining Operations Guidance PA Mining Operations Consolidated 100% Basis 2017E 2018E Estimated Total Coal Sales Volumes (in millions of tons) 26.0 26.0 Total Committed Volumes (Contracted & Priced) 25.4 % Committed…
  25. Scotia Howard Weil 45th Annual Energy Conference – Consol Energy Inc. – slide 25
    Finance: 2017E EBITDA Guidance EBITDA Guidance by Segment 2017E Current Prior ( in millions) E&P(1) Coal Other Total Total (1/31/17) (12/13/16) Earnings Before Interest, Taxes and 705 390 (15) 1,080 840 DD&A (EBITDA)…
  26. Scotia Howard Weil 45th Annual Energy Conference – Consol Energy Inc. – slide 26
    CONSOL Energy Represents a Unique Value Story Driving NAV/share growth: Significant increases to estimated ultimate recoveries (EURs) Focus on Reducing drilling and completion (D&C) costs and capital intensity NAV/Share Growth…
  27. Scotia Howard Weil 45th Annual Energy Conference – Consol Energy Inc. – slide 27
    APPENDIX 28
  28. Scotia Howard Weil 45th Annual Energy Conference – Consol Energy Inc. – slide 28
    Finance: Q4 2016 Review Non-GAAP Reconciliation: EBITDA and Adjusted EBITDA Three Months Ended December 31, 2016 2016 2016 2016 2015 PA Mining E&P Division Operations Other(1) Total Company Total Company ( in thousands) Division…
  29. Scotia Howard Weil 45th Annual Energy Conference – Consol Energy Inc. – slide 29
    Finance: Q4 2016 Review Non-GAAP Reconciliation: Trailing Twelve Months EBIT, EBITDA, and Adjusted EBITDA Three Months Three Months Three Months Three Months Year Ended Ended Ended Ended Ended March 31, June 30, September 30, December…
  30. Scotia Howard Weil 45th Annual Energy Conference – Consol Energy Inc. – slide 30
    Finance: Q4 2016 Review Free Cash Flow Reconciliation Three Months Ended Year Ended December 31, December 31, ( in thousands) 2016 2016 Net Cash provided by Continuing Operations 87,139 459,350 Capital Expenditures (47,431)…

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