Cnx Resources Corporation · NYSE:CNX
Cnx Resources — CONSOL Energy — DUG East 2016
14 slides from Cnx Resources's conference presentation, 2016
Slide 1: DUG East 2016
DUG East 2016 Tim Dugan Chief Operating Officer, CONSOL Energy
Slide 2: Cautionary Language
Cautionary Language This presentation contains statements, estimates and projections which are forward-looking statements (as defined in Section 21E of the Securities Exchange Act of 1934, as amended). Statements that are not historical, are forward-looking, and include our operational and strategic
Slide 3: The CONSOL Energy Evolution
The CONSOL Energy Evolution Transformative Journey Into a Pure-Play E&P Company Late 2013 – transaction with Murray Energy Corp. that transitioned half of coal assets and related assets April 19, 2014 – CONSOL Energy 150th Anniversary June 12, 2014 – Analyst Day to roll out growing Appalachian
Slide 4: E&P Operations: Radical Rate of Change
E&P Operations: Radical Rate of Change Beginning to outperform peers on growth and unit cost performance E&P Production Volumes 450 Focused on reaching “critical mass” with the Production by Area 400 2015A 2016E ~15% ability to be a standalone company 350 Marcellus 51% 54% 329 300 CBM 23% 19% ─ 15
Slide 5: Utica Success
Utica Success ~622,000 CONSOL net acres(1) Over 3,500 gross locations ─ 97 wells online, as of 3/31/2016 ─ 10 wells TIL in Q1 2016 ─ 8,574 ft average TIL laterals in Q1 2016 ─ 4 – 6 wells per pad ─ 180-acre spacing (1,100 ft. inter-lateral spacing) assuming 7,000 ft lateral EURs: ─ Ohio Wet: 2
Slide 6: Model Centric Approach
Model Centric Approach 3D Unconventional Reservoir / Frac Model Earth Model Performance Forecasting Performance Dashboards Advanced Planning Tool Shortens decision timeline and reduces the number of wells to optimization 6
Slide 7: Utica Success: Normalized Well-to-Well Productivity Comparison
Utica Success Normalized Well-to-Well Productivity Comparison 70 66 62 𝐀√k: Additional benchmark metric, which in 60 a way, replaces initial production, or IP, testing, by normalizing: 50 46 ─ Lateral length Normalized 𝐀√𝐤 ─ Stage spacing 40 37 ─ Pressure management 29 29 30 ‘A’ represents…
Slide 8: Lessons Learned: Proppant Testing
Lessons Learned: Proppant Testing Dry Utica: Monroe County, Ohio Switz 6D well: Switz 6F well: Switz 6H well: Lateral length: 9,859' Lateral length: 10,122’ Lateral length: 9,157’ Proppant: Proppant: Proppant: ─ 100-mesh ─ 100-mesh ─ 40/70 White Sand ─ 40/70 Ceramic ─ 40/70 Curable Resin
Slide 9: Land Economic Uplift
Land Economic Uplift $2.00 Realized Gas Price CAPEX ($MM) CONSOL benefits from high NRI acreage position $10.0 $12.5 $15.0 $17.5 $20.0 ─ ~70,000 Utica fee acres 100% 38% 21% 15% 10% 8% 3.0 BCF/1000' Expect to reduce dry Utica D&C costs to under NRI (%) $15 million over the next 2-3 wells 95% 29%
Slide 10: Type Curve Economic Uplift
Type Curve Economic Uplift Model centric approach accelerates optimization of: Completion ─ # proppant / foot, spacing ─ Optimal design is determined by reservoir characteristics Volume Production Protocol ─ Managing pressure has proven to positively impact production in dry Utica wells and shou
Slide 11: Operational Efficiencies Economic Uplift
Operational Efficiencies Economic Uplift Completions Cycle Time Efficiency Gains 35 2,500 32 30 26 2,000 25 Average Days/Well Feet / Day 20 1,500 16 Stimulation Efficiency 15 Drillout Efficiency 1,000 Flowback Efficiency 10 5 500 0 2014 2015 2016 0 2014 2015 2016 Note: Average days per well is norma
Slide 12: Midstream Economic Uplift
Midstream Economic Uplift Access to Dry Marcellus gathering systems help both E&P and midstream service providers lower cost and maximize the value of existing assets ─ Diversified Marcellus operators have an advantage Dry Utica offers additional blending capacity for “damp” Marcellus production
Slide 13: Conclusions: Game Changer
Conclusions: Game Changer Expected CPA Dry Utica Economic Progression 70% 5% 61%+ 60% 6% 30%+ 50% ATAX IRR (%) 40% 30% 5% 20% 15% 10% 0% Industry Land Type Curve Efficiencies Midstream Total Expected Average ATAX Uplift IRR The Dry Utica significantly changes our opportunity set 13
Slide 14: DUG East 2016
DUG East 2016 Tim Dugan Chief Operating Officer, CONSOL Energy