Cnx Resources Corporation · NYSE:CNX
Cnx Resources — CONSOL Energy — Howard Weil 42nd Annual Energy Conference (March 2014)
25 slides from Cnx Resources's conference presentation, Mar 25, 2014
Slide 1: Howard Weil 42nd Annual Energy Conference
Howard Weil 42nd Annual Energy Conference March 25, 2014
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). Such statements include estimates of reserves and resources, projections and estimates concerning
Slide 3: Appalachian E&P Transformation Creating Value
Appalachian E&P Transformation Creating Value CONSOL acquires CONSOL announces gas 90,000 acres in W. Va. reserves increase 44% CONSOL announces sale of five mines CONSOL recruits new COO – Gas CONSOL announces CONSOL announces possible structural Upper Devonian changes success Premier E&P entity ba
Slide 4: Strong Liquidity Position of $2.1 Billion
Strong Liquidity Position of $2.1 Billion Cash on hand of $327 million Accounts receivable securitization and revolving credit facilities of $1.8 billion Amount/ Amount Letters Amount December 31, 2013 ($ in million) Capacity Drawn of Credit Available Cash and Cash Equivalents $327 $0 $0 $327 Ac
Slide 5: CONSOL Potential Stacked Shale Plays
CONSOL Potential Stacked Shale Plays Rhinestreet _______ Burkett _________ Marcellus _________ Utica _________ 5
Slide 6: Pittsburgh Airport: ~9,000 Contiguous Acres
Pittsburgh Airport: ~9,000 Contiguous Acres Potential Lateral Spacing Well EUR % Resource Play Wells Length (ft) (acres) Capex(1) (Bcfe)(1) Liquids (Bcfe) Upper Devonian (Burkett) 45 8,000 138 9.8 9.3 16% 419 Marcellus 45 8,000 138 9.8 13.3 16% 599 Additional value from potential Upper Devonian well
Slide 7: Dominion Transmission: ~90,000 Contiguous Acres
Dominion Transmission: ~90,000 Contiguous Acres West Virginia Lost Creek ~33,000 net acres (dry gas) Fink-Kennedy ~46,000 net acres (wet gas) Racket- Newberne: ~9,000 net acres (wet gas) Acreage allows for +350 Marcellus Shale wells, with stacked play potential. CONSOL now has 228,000 net acres in t
Slide 8: Projected Dual Pay: The Appeal of Monroe County
Projected Dual Pay: The Appeal of Monroe County ~11k highly contiguous acres 100% WI to CONSOL Energy Acquired for dual wet Marcellus and dry Utica development Very close to water, pipelines, and gas processing Multiple cost sharing opportunities Marcellus 5,700’ TVD include: ─ Roads ─ Loc
Slide 9: Recent IP rates in and around Monroe County, OH
Recent IP rates in and around Monroe County, OH 30.3 MMcf/d Avg 24-hr rate 32.5 MMcf/d Avg 24-hr rate Recent nearby Utica Shale and Marcellus Shale IP rates have been very encouraging. 9
Slide 10: Recent West Virginia Results Impressive
Recent West Virginia Results Impressive PHL13 (*completed using RCS/SSL) 6 wells – 7,999’ average length 13.0 MMcf/d – 24 hr IP on first two wells, all wells IP’d greater than 10.0 MMcf/d AUD3 1 well – 8,396’ 6.95 MMcf/d – 24 hour IP CENT3 1 well – 7,470’ 8.5 MMcf/d – 24 hour IP Recent results by CO
Slide 11: Improved Marcellus Drilling and Completion Results
Improved Marcellus Drilling and Completion Results Drilling Summary 2011 2012 2013 Wells TD'd 78 64 46 Lateral Ft 300,466 328,428 366,615 Total MD 92,264' 794,098' 730,316' Average Lateral 3,853' 5,514' 7,970' Average TMD 11,824' 13,280' 15,876' Average Drill Cost $180/ft $220/ft $190/ft Average Lat
Slide 12: Pre vs. Post RCS/SSL Results
Pre vs. Post RCS/SSL Results SWPA are actual results - Seeing 10 MMcf/d 30-day average production results in area W.Va. results are for the PHL pad - Data from first two wells is encouraging In CPA, post RCS/SSL results are theoretical since program has been focused on SWPA and W.Va. CPA W.Va.
Slide 13: Upper Devonian Exploration Well – NV39F
Upper Devonian Exploration Well – NV39F 5 underlying Marcellus wells on pad Washington County, PA ─ Drilled lateral length of 4,889’ ─ Frac’d 17 stages in Burkett Shale ─ Tested 3.0 MMcf/d, TIL 6/21/13 ─ Currently producing 2.9 MMcf/d ─ Great impact on underlying Marcellus wells that tested 10.0
Slide 14: Upper Devonian Burkett Shale Sweet Spot
Upper Devonian Burkett Shale Sweet Spot CONSOL is well situated within what could be the best part of the Burkett fairway, with an estimated 345,000 net acres of potential. 14
Slide 15: Increased Proved Reserves by 44%
Increased Proved Reserves by 44% (in Bcfe) 6,000 172 105 (172 ) 1,633 5,731 5,000 3,993 4,000 3,000 44% increase in proved reserves 87% increase in Marcellus Shale 2,000 proved reserves 948% reserve replacement 1,000 0 YE 2012 Extensions & Performance Price Revisions Production YE 2013 Discove
Slide 16: Achieving 30% Gas Production Growth
Achieving 30% Gas Production Growth Hired Timothy Dugan as COO – Gas 30 years experience in shales: Barnett Utica Marcellus Operational roles at: Chesapeake Cabot EQT Experience in: Reservoir Engineering Field Operations Airport acreage drilling Tim will ensure that CONSOL
Slide 17: 2014 Strategy: Grow Gas Production by 30%
2014 Strategy: Grow Gas Production by 30% (in Bcfe) Gas Production 400 +30% 300 +30% 215.0 - 235.0 200 172.4 153.5 156.3 127.9 94.4 100 76.6 48.6 48.4 56.1 58.2 44.5 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014E 2015E 2016E 2014 Marcellus Shale production expected to grow 87%. Sourc
Slide 18: 2014 Marcellus Shale Drilling Program: 162 wells
2014 Marcellus Shale Drilling Program: 162 wells Large Acreage Position within Marcellus Fairway: approximately 446,000 net acres 87% of Acreage HBP Allowing for Development Flexibility ─ 50% of approximately 690,000 gross acres NBL Operated ─ Approximately 100,000 net acres outside of 170,000 G
Slide 19: CNX Hedge Program and Integrated Infrastructure
CNX Hedge Program and Integrated Infrastructure Actively Monitored Hedge Program: 2014 Competitor and CNX Hedge Positions Recently increased hedge position for 2014 and (As Percent of Total Production compared to 2013) will add incremental hedges for 2015 Swaps Collars Priced Coal 2013 Hedge + Pri
Slide 20: Coal Division
Coal Division Successfully concluded expansion: - Completed BMX Mine - Completed Enlow Fork overland belt project - Completed new Buchanan Mine portal Segment should begin producing substantial cash flow: (Tons in millions) Low-Vol High-Vol Thermal Coal Margins 2014E Sales Guidance 4.2 - 4.7 2.3
Slide 21: Summary
Summary We have the team We have the assets We have the balance sheet We have the culture and value system, and We have the skill set to be successful Our Assets, Strategy, and People Create An Investment Opportunity. 21
Slide 22: Appendix
(= CONSOL ENERGY AMERICA’S ENERGY STARTS HERE. Appendix 22
Slide 23: CNX Active Hedge Program
CNX Active Hedge Program Actively Monitored Hedge Program: 2013 Hedge Positions Production Coal Production Hedge + Priced Coal Recently increased hedge position for 2014 and 1,000,000 84% 62% 59% 74% 51% 90% will add incremental hedges for 2015 Hedged Hedged Hedged Hedged Hedged Hedged 800,000 + P
Slide 24: Firm Transportation and Firm Sales
Firm Transportation and Firm Sales 1,200,000 1,000,000 800,000 MMBtu/d 600,000 400,000 200,000 - 2014 2015 2016 Columbia Dominion Texas Eastern (TETCO) East Tennessee TETCO Firm Sale #1 TETCO Firm Sale #2 TETCO Firm Sale #3 CONSOL is currently “long” FT and in discussions to add more to meet our pro
Slide 25: Processing Position: Marcellus / Utica
Processing Position: Marcellus / Utica CONSOL’s current position has allowed for the development of Marshall County, W.Va. acreage, in partnership with Noble Energy Future processing capacity and expansion rights will allow for significant growth of liquids- rich Marcellus/Utica production ─ CON
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