Slide 1: 2008 Morgan Stanley Basic Materials Conference
2008 Morgan Stanley Basic Materials Conference February 20, 2008 New York Filed by CONSOL Energy Inc. Pursuant to Rule 425 under the Securities Act of 1933 and deemed filed pursuant to Rule 14a-12 and Rule 14d-2(b) of the Securities Exchange Act of 1934 Subject Company: CNX Gas Corporation Commissio
Slide 2: Cautionary Statements
2 Cautionary Statements Some statements in this presentation contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may relate to, among other things, future performance generally, business development activities, fut
Slide 3: CONSOL Energy's Assets
3 Coal Reserves Large, contiguous blocks owned-in fee Heat content Location Transportation River transportation subsidiary Dual rail access at several mines Coal export terminal Gas Company CONSOL Energy’s Assets – – – – – –
Slide 4: Global Long-Term Demand for Energy
4 World World United States World Energy Demand Today 453 QBtu / Year 81% Fossil Energy 703 QBtu / Year 82% Fossil Energy Energy Demand 2030 124 QBtu/Year 84% Fossil Energy 101 QBtu/Year 85% Fossil Energy +24% +55% Global Long-Term Demand for Energy Source: DOE NETL
Slide 5: Domestic Electricity Generation Forecast
5 Domestic Electricity Generation Forecast AEO’08 (early release) 1,000 1,500 2,000 2,500 3,000 3,500 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 55.4% 55.4% Petroleum Petroleum Coal Coal Natural gas Natural gas Renewables Renewables Nuclear Nuclear 14.0% 17.5% 17.5% 11.6%
Slide 6: Largest Coal Reserve Holder East of MS. River
6 Largest Coal Reserve Holder East of MS. River Northern Appalachia • Reserves ~ 2.7 billion tons • Production: 52.9 million tons Central Appalachia • Reserves ~ 800 million tons • Production: 10.7 million tons Illinois Basin • Reserves ~ 700 million tons PRB • Reserves ~ 300 million tons * 2007 pro
Slide 7: Coal Reserves Owned-in-fee
7 Coal Reserves Owned-in-fee ~ 77 QBtu Advantages of ownership: • Leverage to higher pricing • Ability to forecast and control future costs – no LBA payments Coal Reserves Approx. Approx. Company (billions of tons) % Owned QBtu Owned CONSOL Energy 4.5 70% 76.9 Peabody (excl. Patriot) 8.8 42% 70.2 Pa
Slide 8: Heating Value: ~99% of Production is High-Btu
8 Approx. 80% of CONSOL’s coal production Approx. 19% of CONSOL’s coal production Heating Value ~ 99% of Production is High-Btu 8,400 13,000 12,500 8,800 11,500 5,000 10,000 15,000 PRB PRB ILB CAPP NAPP Btu’s per pound of coal * Remaining 1% of production includes approximately 1.0 million tons from
Slide 9: Close Proximity to Scrubbed Customers
9 By 2012, ~ 142 gigawatts scrubbed East of MS. River 60 generating units within 50 miles of CONSOL’s Pitt8 coal reserves CONSOL’s Assets in Appalachia • Producing Complexes: 14 • Reserves: 3.5 billion tons Close Proximity to Scrubbed Customers
Slide 10: Scrubber Builds Are Being Completed
10 Percentage of Gigawatts Scrubbed by Year Scrubber Builds Are Being Completed Since 2006, CONSOL has signed 6 multi-year, multi-million ton agreements with domestic customers that in aggregate ~ 250 million tons of high-Btu coal 62% 28% 10% Thru 12/31/08 2009-2010 2011+
Slide 11: America's On Switch
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Slide 12: We're Working Down Here, To Keep America Running Up There
+ go-uer ‘America's On Switch, 2o-inr Pa 2 iy ra o = ey a 8 ie u ; Zo-uer + gone + go-uer yp so-inr so-uer p bone f vo-uer p co-inr eo-uer WE'RE WORKING DOWN HERE, TO KEEP AMERICA RUNNING UP THERE. yp eo-ine co-uer
Slide 13: 100% Ownership of Coal Export Terminal
13 100% Ownership of Coal Export Terminal Largest exporter of coal in the U.S. Served by two rail lines – Norfolk Southern – CSX Transport Capacity – Practical: 12 million tons Export Terminal at the Port of Baltimore Export Terminal at the Port of Baltimore Ground storage – 1.2 million tons Coal ex
Slide 14: Forecast: Coal Exports Up
14 Forecast: Coal Exports Up 20 million tons in 2 years Coal Exports 69.6 57.6 49.6 20,000 40,000 60,000 80,000 100,000 120,000 Sources: EIA, PIRA. Estimates include steam and metallurgical coal.
Slide 15: Unpriced Volumes: Ability to Capitalize on Up Cycle
15 33.4 4.5 53.1 5.1 62.8 5.2 Unpriced Volumes…Ability to Capitalize on Up Cycle 2009 2010 2011 Unpriced Steam Coal Unpriced Low-Vol Met Coal 2009 2010 2011 Production Guidance 70 – 76.6 – 80.6 76.7 – 80.7 (mm of Tons)
Slide 16: Appalachian Brownfield Opportunities
16 Appalachian Brownfield Opportunities Potential to grow Appalachian production through brownfield expansion by ~ 25 million tons over next 10 years Longwall Face Extensions Birch Shoemaker Additional Longwalls
Slide 17: Margin Focused and Production Disciplined
17 $2.45 $6.91 Margin Focused and Production Disciplined $10 $15 $20 $25 $30 $35 $40 2001 2002 2003 2004 2005 2006 2007 Avg. Production Cost Coal Margin Coal Production $35.61 $24.66 $26.76 $27.61 $30.06 $38.99 Avg. Realized Pricing $40. 66 As of December 31, 2007
Slide 18: River Transportation Subsidiary
18 River Transportation Subsidiary Assets on the inland waterways of Northern Appalachia 750 Barges 25 Tow Boats 5 Harbor Boats 24+ Million tons per year capability Alicia Dock
Slide 19: Transportation Flexibility at Mines
19 CSX NS Barge Rail-to-Barge Railroads Coal Delivery Options Transportation Flexibility at Mines (Millions of tons) 2006 Northern Appalachia Production Enlow Fork 10.7 X X X McElroy 10.5 X Bailey 10.2 X X X Loveridge 6.4 X X X Robinson Run 5.7 X X Blacksville 5.0 X X X Mine 84 3.5 X X Shoemaker 1.0
Slide 20: Unique Investment Proposition
20 Coal Reserves Large, contiguous blocks owned-in fee Location Transportation River transportation subsidiary Coal export terminal Gas Company Unique Investment Proposition – – – –
Slide 21: 2008 Morgan Stanley Basic Materials Conference
2008 Morgan Stanley Basic Materials Conference February 20, 2008 New York