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FBR Capital Markets Co Boston Roadshow – Consol Energy Inc.

Consol Energy Inc. · Nov 13, 2013 · 44 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. FBR Capital Markets Co Boston Roadshow – Consol Energy Inc. – slide 1
    FBR Capital Markets & Co.: Boston Roadshow December 12-13, 2013
  2. FBR Capital Markets Co Boston Roadshow – Consol Energy Inc. – slide 2
    CONSOL Energy Overview Core Values Safety In 2012, CONSOLs Coal Division saw safety exceptions drop 10%, from 150 to 134 In 2012, CONSOLs Gas Division worked the entire year without having recorded a lost-time incident CONSOL has…
  3. FBR Capital Markets Co Boston Roadshow – Consol Energy Inc. – slide 3
    Strategy: Evolution Continues 4
  4. FBR Capital Markets Co Boston Roadshow – Consol Energy Inc. – slide 4
    CONSOL Energys Evolution The Past 15 Years CONSOL Energy Equity CNX Gas (Adjusted Closing Price - NYSE) listed on 3.5B 4.0B 120 NYSE CONSOL Energy January 2006 Acquisition of Marcellus & IPO Dominion Utica acreage April 1999…
  5. FBR Capital Markets Co Boston Roadshow – Consol Energy Inc. – slide 5
    Strategy: Evolution Continues Grow natural gas production 30% annual production increase through 2016 Develop our liquids profile within our footprint High-grade our acreage position Aggressively manage coal margins and maintenance…
  6. FBR Capital Markets Co Boston Roadshow – Consol Energy Inc. – slide 6
    Transaction Overview 7
  7. FBR Capital Markets Co Boston Roadshow – Consol Energy Inc. – slide 7
    Transaction Summary Divesting: 5 West Virginia longwall thermal coal mines, select reserves, and river division Total coal reserves of 1.1 billion tons, and production of approximately 30 million tons Mines have multi-year contracts,…
  8. FBR Capital Markets Co Boston Roadshow – Consol Energy Inc. – slide 8
    Retained Assets Oil and Gas operations intact Total coal reserves of 3.1 billion tons Our lower sulfur and lower cost assets Infrastructure Assets: Baltimore Terminal, midstream, and prep plants 12/31/2012 Approximate Reserves…
  9. FBR Capital Markets Co Boston Roadshow – Consol Energy Inc. – slide 9
    Strategy Going Forward Financial Focus to Fund Gas Production Growth Transaction generates 850 million in cash Cash is expected to fund natural gas production growth Expected to generate a cash tax benefit Transaction reduces coal…
  10. FBR Capital Markets Co Boston Roadshow – Consol Energy Inc. – slide 10
    Gas Division Overview 11
  11. FBR Capital Markets Co Boston Roadshow – Consol Energy Inc. – slide 11
    Gas Division Production Results and Forecast Gas and Liquids Production (Bcfe) CONSOL is rapidly growing its natural gas production Total 2013 natural gas production guidance: 170 172 Bcfe Total 2014 natural gas production guidance:…
  12. FBR Capital Markets Co Boston Roadshow – Consol Energy Inc. – slide 12
    Reserve Replacement Gas 2012 All Sources Reserve Replacement: 5-yr Average 3,000% 2,500% Average: 364% 2,000% 1,500% 1,000% 500% 0% (1) CONSOL Energy is in top quartile across peer group for all sources reserve…
  13. FBR Capital Markets Co Boston Roadshow – Consol Energy Inc. – slide 13
    5-Year Average F&D Costs Gas 2012 All Sources F&D Costs: 5-yr Average 35 Average: 25.80 30 25 20 /Boe 15 10 5 0 (1) CONSOL Energy is in top quartile across peer group for all sources F&D Costs Source: Howard…
  14. FBR Capital Markets Co Boston Roadshow – Consol Energy Inc. – slide 14
    Firm Transportation and Firm Sales Total Marcellus/Utica Shale, CBM and Conventional 1,200,000 1,000,000 800,000 MMBtu/d 600,000 400,000 200,000 - 2014 2015 2016 Columbia Dominion Texas Eastern East…
  15. FBR Capital Markets Co Boston Roadshow – Consol Energy Inc. – slide 15
    Processing Position: Marcellus / Utica CONSOLs current position has allowed for the development of Marshall County, WV acreage, in partnership with Noble Energy Future processing capacity under negotiation and expansion rights will…
  16. FBR Capital Markets Co Boston Roadshow – Consol Energy Inc. – slide 16
    Hedge Position: 2014-2016 100,000,000 5.00 90,000,000 4.51 80,000,000 Currently the company 4.50 70,000,000 employs a program hedge 4.12 60,000,000 4.03 /MMBtu MMBtu that locks in both NYMEX and 50,000,000 4.00 location…
  17. FBR Capital Markets Co Boston Roadshow – Consol Energy Inc. – slide 17
    Marcellus NGL Realizations CONSOLs 2013 YTD Marcellus NGL realization is 52.62/bbl (excluding 2013 YTD NGL Realizations wellhead condensate) (By Volume) 0.6% Ethane solutions for Marcellus/Utica anticipated to be online in coming…
  18. FBR Capital Markets Co Boston Roadshow – Consol Energy Inc. – slide 18
    Marcellus Shale Overview 19
  19. FBR Capital Markets Co Boston Roadshow – Consol Energy Inc. – slide 19
    2013 Marcellus Shale Drilling Program: 123 wells Large Acreage Position within Marcellus Fairway 87% of Acreage HBP Allowing for Development PA Flexibility OH 50% of approximately 600,000 gross acres NBL Operated 170,000 Gross…
  20. FBR Capital Markets Co Boston Roadshow – Consol Energy Inc. – slide 20
    Drilling Results and Forecast Formation Region 2011 2012 1Q2013 2Q2013 3Q2013 2013E Coalbed Methane: Virginia 214 44 17 24 14 65 Marcellus Shale: Central PA 19 13 5 0 0 10 Southwest PA (incl. NBL) 50 70 20 19 22 102 West Virginia…
  21. FBR Capital Markets Co Boston Roadshow – Consol Energy Inc. – slide 21
    Marcellus Drilling and Completions Summary CONSOL-Operated Wells Drilling Summary 2011 2012 2013 YTD Wells TD'd 78 64 33 Lateral Ft 300,466' 328,428' 256,209' Total MD 922,264' 794,098' 518,665' Average Lateral 3,853' 5,514'…
  22. FBR Capital Markets Co Boston Roadshow – Consol Energy Inc. – slide 22
    Marcellus Operations Overview SWPA Marcellus Operations Initial start of CNX Marcellus activity District Office in Waynesburg, PA Considerable fee legacy acreage CONSOL drilling activity intermingled with CONSOL mining…
  23. FBR Capital Markets Co Boston Roadshow – Consol Energy Inc. – slide 23
    Marcellus Operations Overview SWPA Marcellus Operations: Latest Well Results NV38 Pad 4 of 7 Wells 5,225 Avg Lateral Length per well NV36 Pad 9,664 Mcfe Avg 30-day IP per well 5 of 8 Wells 4,741 Avg Lateral Length per well 9,629…
  24. FBR Capital Markets Co Boston Roadshow – Consol Energy Inc. – slide 24
    Enhanced Completions: Short Stage Lengths (SSL) CNX SSL Wells vs. 300 Stage Wells NV-38A (Cumulative MCF/Lateral Ft.) NV-38B 90 NV-38C 80 NV-38D NV-38E 70 NV-38F Cumulative Gas (MCF/Lateral Ft.) NV-38G 60 NV-36A NV-36C…
  25. FBR Capital Markets Co Boston Roadshow – Consol Energy Inc. – slide 25
    Enhanced Production Techniques Early Results Encouraging Enhanced Techniques Well CNX SWPA 5000 ft Type Curve (8.4 Bcfe) 1,400,000 1,200,000 1,000,000 Cumulative Mmcf 800,000 600,000 400,000 200,000 - 0 50…
  26. FBR Capital Markets Co Boston Roadshow – Consol Energy Inc. – slide 26
    Marcellus Operations Overview CPA Marcellus Operations District Office in Indiana, PA 41 Horizontal wells drilled to date Over 1000 laterals laid out in plan Leases from Dominion E&P purchase Activity concentrated at Beaver…
  27. FBR Capital Markets Co Boston Roadshow – Consol Energy Inc. – slide 27
    Marcellus Operations Overview Allegheny County Airport Authority Approximately 8,700 contiguous acres: 6 pads with up to 49 Marcellus and a potentially similar number of Upper Devonian Wells to be drilled. Horizontal spud first…
  28. FBR Capital Markets Co Boston Roadshow – Consol Energy Inc. – slide 28
    Marcellus Operations Overview WV Marcellus Operations District Office in Jane Lew, WV 22 Horizontal wells drilled to date Over 1100 laterals laid out in plan Leases from Dominion E&P purchase Activity thus far at Philippi…
  29. FBR Capital Markets Co Boston Roadshow – Consol Energy Inc. – slide 29
    Marcellus Operations Overview WV Marcellus Operations: Latest Well Results NV38 Pad 4 of 7 Wells 5,225 Avg Lateral Length per well NV36 Pad 9,664 Mcfe Avg 30-day IP per well 5 of 8 Wells 4,741 Avg Lateral Length per well 9,629…
  30. FBR Capital Markets Co Boston Roadshow – Consol Energy Inc. – slide 30
    Marcellus Operations Overview Dominion Transmission: 90,000 Contiguous Acres Fink-Kennedy 46,000 net acres (wet gas) Racket- Newberne: 9,000 net acres (wet gas) Lost Creek 33,000 net acres (dry gas) 90,000 net…
  31. FBR Capital Markets Co Boston Roadshow – Consol Energy Inc. – slide 31
    Marcellus Gross JV Production Growth (Mcfe/Day) 450,000 June, 2013: 230 MMcfe/D 425,000 400,000 375,000 June, 2012: 175 MMcfe/D 350,000 Currently at 430 MMcfd/D 325,000 with an 300,000 expected 2013 exit rate above…
  32. FBR Capital Markets Co Boston Roadshow – Consol Energy Inc. – slide 32
    Marcellus Production Growth from Increased Drilling Average Gross JV Daily Marcellus Production 800 Noble WV SWPA CPA 700 600 500 MMcfe / D 400 300 200 100 Forecasted(1) - Jan-10 Jan-11 Jan-12 Jan-13…
  33. FBR Capital Markets Co Boston Roadshow – Consol Energy Inc. – slide 33
    Utica Shale Overview 34
  34. FBR Capital Markets Co Boston Roadshow – Consol Energy Inc. – slide 34
    Utica Shale Acreage Hess operates in a four county area of Jefferson, Harrison, Belmont, and Guernsey CONSOL operates in surrounding areas 30,000 Core Acres, net to CONSOL 35
  35. FBR Capital Markets Co Boston Roadshow – Consol Energy Inc. – slide 35
    Utica Operations Overview Utica YTD 2013 Joint Operations Mahoning County (off map) Hess Ops MAHN 2A: 2785/9 stage; 1.4 Cadiz A, 1H-23: 8.0 MMcfd + 357 MMcfd + 240 bopd test. bopd test, TIL producing 3.6 MMcfd MAHN 7A: 5411/18…
  36. FBR Capital Markets Co Boston Roadshow – Consol Energy Inc. – slide 36
    Status of Hess JV Utica Operations Well Status Notes Est. First Production Archer A 1H-31 Drilling Ran and cemented 9 5/8 casing 14-Jul Archer A 2H-31 Drilling Ran and cemented 9 5/8 casing 14-Jul Archer A 3H-31 Drilling Ran and…
  37. FBR Capital Markets Co Boston Roadshow – Consol Energy Inc. – slide 37
    Monroe County, Ohio Project 38
  38. FBR Capital Markets Co Boston Roadshow – Consol Energy Inc. – slide 38
    Dual Pay - The Appeal of Monroe County 10k highly contiguous acres Acquired for dual wet Marcellus and dry Utica development Very close to water, pipelines, and gas processing Multiple cost sharing opportunities Marcellus 5,700…
  39. FBR Capital Markets Co Boston Roadshow – Consol Energy Inc. – slide 39
    Surrounding Marcellus and Utica Activity Protg: Eisenbarth 3H test 6.9 MMcfd (Marcellus) Chevron Utica Well GPOR Irons 1-4H: 23 stage Utica well tested 30 MMcfd. Recently TIL, producing 28 MMcfd. CONSOL WI Moundsville Noble JV…
  40. FBR Capital Markets Co Boston Roadshow – Consol Energy Inc. – slide 40
    Upper Devonian 41
  41. FBR Capital Markets Co Boston Roadshow – Consol Energy Inc. – slide 41
    Upper Devonian Exploration Well NV39F 5 Underlying Marcellus Wells on Pad OH PA CONSOL MD WV Area Nineveh Core VA Wet Gas Dry Gas Washington County, PA Drilled lateral length of 4,889 Fracd 17 stages in Burkett Shale…
  42. FBR Capital Markets Co Boston Roadshow – Consol Energy Inc. – slide 42
    NV 39F Upper Devonian Daily production NV39FHSD Production Performance 5,000 4,500 NV39FHSD - Gas 4,000 Gas Rate (MCFD), Lateral Length 3,500 3,000 2,500 2,000 1,500 1,000 500 - - 20 40 60 80 100 120…
  43. FBR Capital Markets Co Boston Roadshow – Consol Energy Inc. – slide 43
    Whats Next Continued non-core asset sales Continue to evaluate monetizing some remaining infrastructure assets Announce 2014 capital budget in early 2014 Year-end gas reserve report in early 2014 Continued shale investment to…
  44. FBR Capital Markets Co Boston Roadshow – Consol Energy Inc. – slide 44
    Implementing Our Strategic Vision Transaction in line with our strategic goals to close the value gap Committed to multi-year production growth Marcellus Shale Utica Shale Retained coal assets generate high margins and can be sold…

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