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Q1 2017 Earnings Results – Consol Energy Inc.

Consol Energy Inc. · May 2, 2017 · 37 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. Q1 2017 Earnings Results – Consol Energy Inc. – slide 1
    EARNINGS RESULTS FIRST QUARTER 2017
  2. Q1 2017 Earnings Results – Consol Energy Inc. – slide 2
    Q1 2017 Highlights Continue to expect annual production growth and free cash flow Free Cash Flow generation Raising 2017 and 2018 production guidance based on improved cycle times Production and optimized type curves EBITDA…
  3. Q1 2017 Earnings Results – Consol Energy Inc. – slide 3
    Operations: E&P Results Summary Y/Y Q/Q (1) 1Q 2017 1Q 2016 Change 1Q 2017(1) 4Q 2016 Change (1) Average Sales Price (/Mcfe) 2.85 2.73 0.12 2.85 2.77 0.08 (2) Total Production Costs (/Mcfe) 2.32 2.41 (0.09) 2.32 2.27 0.05 Sales…
  4. Q1 2017 Earnings Results – Consol Energy Inc. – slide 4
    Operations: Operations Summary SWPA SWPA WV OH Q1 2017 Summary Marcellus Upper Devonian Marcellus Dry Utica TOTAL Horizontal Rigs 1 - - 1 2 Drilled 2 - - 7 9 Completed 5 - 2 4 11 Turned In Line (TIL) 5 1 - - 6 Avg. TIL Lateral…
  5. Q1 2017 Earnings Results – Consol Energy Inc. – slide 5
    Operations: Drilling Cycle Time Efficiencies Utica Q1 2017 drilling days/1,000 lateral length improved 23% compared to 2016 helping to Monroe County Drilling Cost Savings reduce cost per lateral foot by 11% 1.4 450 1.3 The…
  6. Q1 2017 Earnings Results – Consol Energy Inc. – slide 6
    Operations: Completions Cycle Time Efficiencies Marcellus Efficiency Q1 2017 lateral feet/day stimulated increased Marcellus Frac Efficiency 56% compared to 2016 1,400 1,245 Faster total completion activities: 27% 1,200…
  7. Q1 2017 Earnings Results – Consol Energy Inc. – slide 7
    Operations: Revised Type Curves Monroe County, OH Dry Utica Revised Type Curve Shape vs. Prior Plan Better-than-expected reservoir performance driving accelerated production forecast, but EUR unchanged Accelerated production…
  8. Q1 2017 Earnings Results – Consol Energy Inc. – slide 8
    Operations: Gaut 4IH Update as of Q1 2017 End Gaut 4IH IP: 61.4 MMcf/d Initial InitialSICP: SICP:9,921 9,921psig psig Lateral Length: 5,808 EUR: EUR:3.53.5Bcf/1,000 Bcf/1,000lateral lateral Cum. Production as of 3/31/2017:…
  9. Q1 2017 Earnings Results – Consol Energy Inc. – slide 9
    Marketing: Q1 2017 E&P Marketing Highlights Executed two long-term physical sales with Natural Gas Price Reconciliation customers on East Tennessee 2017 2016 - Allows CONSOL to forego 80,000 Q1 Q1 Dth/day of FT renewals NYMEX…
  10. Q1 2017 Earnings Results – Consol Energy Inc. – slide 10
    Marketing: Gas Hedges 350.0 Gas Hedges 2017-2021 5.2 300.0 Gas Volumes Hedged (Bcf) 29.4 250.0 200.0 37.7 150.0 307.2 253.8 15.1 100.0 170.0 50.0 109.8 25.0 - Approximately 73% of total 2017E 2017 2018 2019 2020 2021…
  11. Q1 2017 Earnings Results – Consol Energy Inc. – slide 11
    Marketing: Gas Hedges Continued Physical Fixed Basis and Fixed Price Sales(1) Q2 2017 2017 2018 2019 2020 2021 Physical Fixed Basis Sales Volumes (Bcf) 13.1 58.7 88.5 69.8 41.0 9.5 Average Basis Prices (/Mcf) (0.11) 0.01 0.15 0.10…
  12. Q1 2017 Earnings Results – Consol Energy Inc. – slide 12
    Marketing: Natural Gas Sales Market Mix MIDWEST TETCO M3 DOMINION SOUTH TCO POOL TETCO M2 EAST TENNESEE Natural Gas Sales Market Mix 2017E 2018E Columbia (TCO) 11% 9% TETCO (M2) 42% 44% TETCO (M3) 11% 8% Dominion…
  13. Q1 2017 Earnings Results – Consol Energy Inc. – slide 13
    Marketing: Liquids Realizations Natural Gas Liquids, Oil, and Condensate Wet Gas Flexibility Q1 2017 liquids sold: 8.9 Bcfe Gas High Total weighted average price of all liquids Avoid Processing Optimize increased 39% to 29.72 per…
  14. Q1 2017 Earnings Results – Consol Energy Inc. – slide 14
    Marketing: Market Currently Undersupplied Cumulative Nationwide Population Cumulative Lower 48 Weighted Heating Degree Days Storage Withdrawal 4.00 500.00 One of the lowest levels of heating 3.50 demand recently observed 0.00…
  15. Q1 2017 Earnings Results – Consol Energy Inc. – slide 15
    Marketing: Pipeline Projects will Make a Difference Regional Export by Delivery Market Forecast New Pipeline Projects Changing the Landscape 20 Regional Export Capacity (Bcf/d) 18 16 14 12 Southwest 10 8 Midwest 6…
  16. Q1 2017 Earnings Results – Consol Energy Inc. – slide 16
    Marketing: But When Will Supply Respond Permian Region Production and Rig Count Marcellus Region Production and Rig Count 9 600 20 160 Historically, it appears 300+ 8 rigs were required to grow 18 Permian gas production 140 500…
  17. Q1 2017 Earnings Results – Consol Energy Inc. – slide 17
    Finance: Q1 2017 Results Adjusted net income attributable to CONSOL Energy Shareholders in the 2017 first quarter of 38 million, or 0.17 per diluted share(1); on a GAAP basis, a net loss attributable to CONSOL Energy shareholders of…
  18. Q1 2017 Earnings Results – Consol Energy Inc. – slide 18
    Finance: Q1 2017 Review Net Increase/(Decrease) in Cash Generated positive free cash flow - Organic free cash flow from continuing operations in Q1 2017 of 98 million compared to 40 million in Q1 2016 - Total free cash flow in Q1…
  19. Q1 2017 Earnings Results – Consol Energy Inc. – slide 19
    Finance: Strong Liquidity Position of 1.7 Billion Amount/ Amount Letters Amount March 31, 2017 ( in millions) Capacity Drawn of Credit Available (1) Cash and Cash Equivalents 55 - - 55 Revolving Credit Facility(2) 2,000 0 333…
  20. Q1 2017 Earnings Results – Consol Energy Inc. – slide 20
    Finance: Debt and Liquidity Profile CNX CNXC: CNX CNX Unit Market Consolidated 100% Attributable Equity Value of Ownership in Affiliated Public MLPs Owned (5) Price(5) Value Capitalization and Liquidity 3/31/2017 3/31/2017…
  21. Q1 2017 Earnings Results – Consol Energy Inc. – slide 21
    Finance: Leverage Ratio and Liquidity Projection Leverage Ratio 2016-2018E(1) Reduced 2017 and 2018 expected leverage ratio targets by an 5.0 4.4 additional 0.2x each since the end of 4Q16 4.0 Path to reaching and maintaining a…
  22. Q1 2017 Earnings Results – Consol Energy Inc. – slide 22
    Finance: Legacy Liabilities Significant legacy liability reductions over Balance Sheet Liability Long-Term Liability Guidance past three years: 3/31/2017 FY 2017E FY 2018E LTD 19 Miller Creek/Fola transaction drove WC 79 substantial…
  23. Q1 2017 Earnings Results – Consol Energy Inc. – slide 23
    Finance: Segment Guidance E&P Segment Guidance 2017E 2018E PA Mining Operations Consolidated 100% Basis 2017E Production Volumes: Coal Sales Volumes: Natural Gas (Bcf) 380-400 Total Coal Sales Volumes (millions of tons) 25.6-27.6 NGLs…
  24. Q1 2017 Earnings Results – Consol Energy Inc. – slide 24
    Finance: Raising 2017E EBITDA Guidance EBITDA Guidance by Segment 2017E Current Prior PA Mining ( in millions) E&P(1) Other Total Total Operations (5/2/17) (1/31/17) Earnings Before Interest, Taxes and DD&A 705 410 (20) 1,095…
  25. Q1 2017 Earnings Results – Consol Energy Inc. – slide 25
    APPENDIX 26
  26. Q1 2017 Earnings Results – Consol Energy Inc. – slide 26
    Operations: Acreage Position Acreage Position and PDPs by Asset Region and Formation SWPA WV CPA OH Total Upper Devonian Net Acres 111,500 157,000 35,500 - 304,000 Net Acres 103,000 62,000 234,500 13,500 413,000 Fee Acres 41,000…
  27. Q1 2017 Earnings Results – Consol Energy Inc. – slide 27
    Asset Region 1: Southwest Pennsylvania Overview Upper Devonian Shale Total net acres: 112,000 Marcellus Shale Average EUR/1,000 of 2.7 Bcf(1) Total net acres: 103,000 Total NRI: 89% Sizable capital expenditure in the next two…
  28. Q1 2017 Earnings Results – Consol Energy Inc. – slide 28
    Southwest Pennsylvania Modeling Inputs and Economics Reserves Detail Assumptions SWPA Marcellus Type Curve (2.7 Bcfe/1000') Gross EUR (Bcfe) 22.6 IP (MMcfe/d) 19.0 600,000 BTU 1,130 Decline 69% BTAX ROR % (3) B-factor 1.65…
  29. Q1 2017 Earnings Results – Consol Energy Inc. – slide 29
    Asset Region 2: West Virginia Overview Marcellus Shale Average EUR/1,000 of 2.9 Bcf(1) Total net acres: 62,000 Total NRI: 86% Focus on completing DUC inventory: sunk capital results in improved IRR Utica Shale Average EUR/1,000…
  30. Q1 2017 Earnings Results – Consol Energy Inc. – slide 30
    West Virginia Modeling Inputs and Economics Reserves Detail Assumptions WV Marcellus Type Curve (2.9 Bcfe/1000') Gross EUR (Bcfe) 22.8 IP (MMcf/d) 14.0 BTU 1,260 Decline 69% 400,000 Gas BTAX ROR % (4) 50,000 B-factor 1.65 Gross…
  31. Q1 2017 Earnings Results – Consol Energy Inc. – slide 31
    Asset Region 3: Central Pennsylvania Overview Marcellus Shale Average EUR/1,000 of 1.8 Bcf(1) Total net acres: 234,000 Total NRI: 88% Weighted average EUR/1000 for the entire region is 1.5 Bcf Evaluate Marcellus development in…
  32. Q1 2017 Earnings Results – Consol Energy Inc. – slide 32
    Central Pennsylvania Modeling Inputs and Economics Reserves Detail Assumptions CPA Marcellus Type Curve (1.8 Bcf/1000') Gross EUR (Bcf) 15.8 IP (MMcf/d) 13.3 400,000 BTU 1,000 Decline 69% B-factor 1.65 BTAX ROR % (3) Gas…
  33. Q1 2017 Earnings Results – Consol Energy Inc. – slide 33
    Asset Region 4: Ohio Overview Total Ohio Utica: Total net acres: 121,000 Total NRI: 89% Utica Dry: Average EUR/1,000 of 2.8 Bcfe(1) 23,000 net undeveloped acres Continued development of Monroe County 100 net locations Utica…
  34. Q1 2017 Earnings Results – Consol Energy Inc. – slide 34
    Ohio Modeling Inputs and Economics OH Utica Total Assumptions OH Wet Utica Type Curve (2.1 Bcfe/1000') Net Locations(1) 483 IP (MMcf/d) 16.3 Wells Online (3/31/17) 98 Decline 71% 500,000 30,000 Gas B-factor 1.40 BTAX ROR % (4)…
  35. Q1 2017 Earnings Results – Consol Energy Inc. – slide 35
    Non-GAAP Reconciliation: EBITDA and Adjusted EBITDA Three Months Ended March 31, 2017 2017 2017 2017 2016 PA Mining (1) E&P Division Operations Other Total Company Total Company ( in thousands) Division Net (Loss) Income (93,502)…
  36. Q1 2017 Earnings Results – Consol Energy Inc. – slide 36
    Non-GAAP Reconciliation: TTM EBIT, EBITDA and Adjusted EBITDA Three Months Three Months Three Months Three Months Twelve Months Ended Ended Ended Ended Ended June 30, September 30, December 31, March 31, March 31, ( in thousands)…
  37. Q1 2017 Earnings Results – Consol Energy Inc. – slide 37
    Free Cash Flow Reconciliation Three Months Ended Three Months Ended March 31, March 31, ( in thousands) 2017 2016 Net Cash provided by Continuing Operations 205,194 119,808 Capital Expenditures (112,978) (78,968) Net Distributions…

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