Slide 1: Earnings Conference Call Q2 2016
Earnings Conference Call Q2 2016
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: Q2 2016 Review: Second Quarter 2016 Results
Q2 2016 Review CONSOL Energy: Second Quarter 2016 Results Adjusted net loss attributable to continuing operations(1) in the 2016 second quarter of $49 million, or ($0.21) per diluted share - Excludes the following pre-tax items: $279.7 million unrealized loss on commodity derivative instruments
Slide 4: Q2 2016 Review: Net Change in Cash
Q2 2016 Review CONSOL Energy: Net (Decrease)/Increase in Cash Generated positive free cash flow - Increased organic free cash flow from continuing operations in Q2 2016 to $46 million; first half 2016 organic FCF of $85 million - Total free cash flow in Q2 2016 of $66 million; first half 2016 tota
Slide 5: E&P Division: Q2 2016 Results Summary
Q2 2016 Review E&P Division: Q2 2016 Results Summary Y/Y Q-to-Q Seq. Q-to-Q E&P Division 2Q2016 2Q2015 Change 2Q2016 1Q2016 Change (1) Average Sales Price ($ / Mcfe) $2.50 $2.68 ($0.18) $2.50 $2.73 ($0.23) (2) Average Costs ($ / Mcfe) $2.27 $2.76 ($0.49) $2.27 $2.41 ($0.14) Sales Volumes (Bcfe) 99.3
Slide 6: Gas Marketing: Hedges
Gas Marketing: Hedges Gas Hedges 280 E&P Hedge Program: Physical Sales With Fixed Basis Exposed to NYMEX 260 240 NYMEX Only Hedges Exposed to Basis Gas Volumes Hedged (Bcf) Program and actively 220 NYMEX + Basis(1) monitored hedges 200 180 ─ Program Hedge - protect 160 margins on up to 90% of our
Slide 7: Financial: Legacy Liabilities
Financial: Legacy Liabilities Significant Legacy Liability Reductions Over Past 3 Years $4,500 $400 Annual Cash Servicing Cost ($ in Millions) $4,345 $370 $4,000 $350 Projected $106MM Annual Cash Legacy Liabilities ($ in Millions) $3,500 Servicing Cost for FY 2016, a $300 $31MM reduction from the ye
Slide 8: E&P Operations - Benchmarking vs Peers
E&P Operations - Benchmarking vs Peers Full-cycle Breakeven Operating Metrics Declined from $3.51 to $1.92 Per Mcfe, a 45% Projected Decline Hired Tim Dugan to run E&P operations $4.00 $3.50 $3.00 $1.17 $1.11 $2.50 Cash OpEx $0.82 $2.00 (plus G&A) of $0.84 $0.59 $1.28/Mcfe, $0.48 plus PUD-to- $1.50
Slide 9: Financial: Liquidity
Financial: Liquidity Strong Liquidity Position of ~$1.3 Billion Amount/ Amount Letters Amount June 30, 2016 ($ in million) Capacity Drawn of Credit Available Cash and Cash Equivalents(1) $89 - - $89 Revolving Credit Facility(2) $2,000 $466 $309 $1,225 Total $2,089 $466 $309 $1,314 (1) Cash and cash
Slide 10: Financial: Liquidity (Cont'd)
Financial: Liquidity (Cont’d) Debt and Liquidity Profile CNX CNXC: CNX CNX Equity Value of Ownership in Unit Market Consolidated 100% Attributable Owned LP (5) Affiliated Public MLPs Price Value Capitalization and Liquidity 6/30/2016 6/30/2016 6/30/2016 Units (5) CNX Coal Resources LP (CNXC:NYSE) 12
Slide 11: Utica Shale: Gaut 4IH Westmoreland County, PA
Utica Shale: Gaut 4IH Westmoreland County, PA 30,000 Flow Rate MCf/Day Casing Pressure 10,000 9,000 25,000 8,000 7,000 20,000 6,000 15,000 5,000 4,000 10,000 Expected to CUM 8.4 BCF at 3,000 the time it hits line pressure 2,000 5,000 1,000 0 0 9/23/15 1/1/16 4/10/16 7/19/16 10/27/16 2/4/17 Note: Pro
Slide 12: Utica Success: Normalized Well-to-Well Productivity Comparison
Utica Success Normalized Well-to-Well Productivity Comparison 70 66 62 𝐀√k: A measure of the strength of a well that normalizes for: 60 • Lateral length • Stage spacing • Pressure management 50 46 This benchmark metric enables comparison between wells 40 37 more accurately than traditional IP…
Slide 13: E&P Operations: 2016 Planned E&P Activity Overview
E&P Operations 2016 Planned E&P Activity Overview E&P Activity Summary – 2016 Plan Expected New Drilled Drilled Implied 2016 Wells Drilled in Uncompleted Completed 2016 TIL's 2017 Completions H2 2016 Inventory Inventory Remaining Inventory Remaining Marcellus SW PA Operated 2 18 1 7 14 6 SW PA Non-O
Slide 14: Guidance: E&P Segment 2016E
Guidance E&P Segment Guidance 2016E Production Volumes: Natural Gas (Bcf) 338 - 342 NGLs (MBbls) 6,150 - 6,300 Oil (MBbls) 62 - 68 Condensate (MBbls) 850 - 900 Total Production (Bcfe) 380 - 385 Natural Gas Basis Differential to NYMEX ($Mcf) ($0.40) - ($0.50) NGL Realized Prices ($Bbl) $12.00 - $14.0
Slide 15: Guidance: Coal Segment 2016E
Guidance Coal Segment Guidance 2016E Estimated Total Consolidated Coal Division Sales Volumes (in millions of tons) 24.5 - 27.5 Total Volumes Sold 26.8 % Committed 100% Total Consolidated Coal Division Capital Expenditures ($ in millions): Production $85 - $95 Other (Land/Water/Safety/Terminal) $20
Slide 16: Key Takeaways
Key Takeaways Plans and Goals Aligned to Drive Increased Valuation Milestones: Improving E&P performance from high-grading activities, improving completion techniques, reducing cycle times, and service cost deflation Adding two rigs while maintaining disciplined on capital expenditures Benef
Slide 17: Appendix
(= CONSOL ENERGY AMERICA’S ENERGY STARTS HERE. Appendix 17
Slide 18: Non-GAAP Reconciliation: EBITDA and Adj. EBITDA
Appendix Non-GAAP Reconciliation: EBITDA and Adj. EBITDA Three Months Ended June 30 2016 2016 2016 2016 2015 E&P Coal 1 Total Total ($ in thousands) Other Division Division Company Company Net (Loss)/Income ($294,499) ($212,235) $38,085 ($468,649) ($603,301) Less: Loss from Discontinued Operations -
Slide 19: Non-GAAP Reconciliation: Trailing Twelve Months EBITDA
Appendix Non-GAAP Reconciliation: Trailing Twelve Months EBITDA and Adj. EBITDA Three Months Ended Three Months Ended Three Months Ended Three Months Ended Twelve Months Ended September 30 December 31 March 31 June 30 June 30 ($ in thousands) 2015 2015 2016 2016 2016 Net Income / (Loss) $125,470 $34
Slide 20: Free Cash Flow Reconciliation
Appendix Free Cash Flow Reconciliation Three Months Ended Six Months Ended June 30 June 30 ($ in thousands) 2016 2016 Net Cash provided by Continuing Operations $ 83,571 $ 206,307 Capital Expenditures (37,593) (115,257) Net Investment in Equity Affiliates - $ (5,578) Organic Free Cash Flow From Cont