Cnx Resources Corporation · NYSE:CNX
Cnx Resources — CONSOL Energy — Investor Presentation (May 2011)
25 slides from Cnx Resources's investor presentation, May 2011
Slide 1: CONSOL Energy Inc. – May 2011 Investor Presentation
CONSOL Energy Inc. – May 2011 Investor Presentation
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). These statements, which are described in detail in our annual report form 10-K filed with the Securities and E
Slide 3: Overview of CONSOL Energy
Overview of CONSOL Energy Key Points CONSOL Energy Inc. n CONSOL Energy Inc. (NYSE: CNX) is a multi−fuel energy producer and energy services provider focused in the U.S. Coal Natural Gas ─ Current market cap of over $11 billion n Over 4.4 billion tons of proven and probable coal reserves n Over 3.7
Slide 4: U.S. Coal & Natural Gas Operator with History of Success
U.S. Coal & Natural Gas Operator with History of Success CONSOL Operational Timeline April 30, 2010 - During World War II 1991 - DuPont 1999 - After years of CONSOL acquires the 1927 - The Company CONSOL provided vital Energy and RWE ownership by outside Appalachian E&P becomes the largest
Slide 5: CONSOL – Coal Division: Operational Overview
CONSOL – Coal Division: Operational Overview Reserves by Coal Type (million tons) 2010 Coal Revenue by Coal Type ($ mm) 4,401 Million Tons $3,853 Million Thermal 3,839 Thermal 87% 3001 78% High Vol 172 4% High Vol Low Vol Low Vol 416 146 680 10% 3% 18% 2010 Coal Exports by Geography (million tons) C
Slide 6: CONSOL – Gas Division: Operational Overview
CONSOL – Gas Division: Operational Overview Total Proved Reserves by Gas Type (Bcfe) Proved Reserves by Category (Bcfe) 3.7 Trillion Cubic Feet 3.7 Trillion Cubic Feet Marcellus 859 23% Other Shale PD CBM 100 PUD 3% 1,931 1,789 1,800 52% 48% 48% Conventional 984 26% Drill Bit Finding Costs ($ per mm
Slide 7: Differentiating Aspects of CONSOL
Differentiating Aspects of CONSOL 7
Slide 8: Unique Competitive Advantages Facilitate Development
Unique Competitive Advantages Facilitate Development Surface Ownership, Blending Capability and Water Sourcing Key Points Treated Mine Water (TMW) Sources § CONSOL owns in excess of 110,000 surface acres in PA / WV ─ Provides strategic advantage for procuring rights-of-way for midstream operations ─
Slide 9: Marcellus Is One of the Most Economic Plays in North America
Marcellus Is One of the Most Economic Plays in North America Current Natural Gas Pricing Environment Highlights Comparative Basin-Level Economics Key Points Estimated Pricing Required for a 20% Return vs. Historical NYMEX 5-Year Strip Average (1) n Gas prices have declined since mid-2008 July 10 – P
Slide 10: Marcellus: Premier Position in the Heart of the Play
CONSOL Marcellus: Premier Position in the Heart of the Play Key Points CONSOL Marcellus Acreage Position § CONSOL holds one of the top Marcellus positions with approximately 675,000 net acres in PA and WV § Significant existing production and offset activity validates the position § 85% of CONSOL’s
Slide 11: Best-in-Class Marcellus Well Results
Best-in-Class Marcellus Well Results EURs Steadily Improving Key Points Increasing Marcellus EURs § With more than 30 Selected 2009 Wells Selected 2010 Wells horizontal Marcellus wells producing, CONSOL’s EURs have been steadily 9.0 improving § CONSOL’s recent horizontal 8.0 wells have averaged 5.5
Slide 12: Industry-Leading Low-Cost E&P Operator
Industry-Leading Low-Cost E&P Operator Key Points 2010 Drill Bit F&D Cost / Mcfe § CONSOL’s F&D and lifting $1.20 costs are significantly below $1.07 $1.07 $1.08 its peer group $1.00 $1.00 § CONSOL’s knowledge and $0.85 experience in the $0.80 $0.77 Appalachian basin have $0.65 translated to some of
Slide 13: Strong Infrastructure and Transportation Capacity
Strong Infrastructure and Transportation Capacity Significant Infrastructure in Place and Contracted Firm Transportation Capacity Key Points Region Pipelines Available Pipelines Under Contract § CONSOL owns over 3,000 miles of Central Pennsylvania DTI, EQT, TCO, TETCO DTI, TETCO gas and water gather
Slide 14: Industry Leading Coal Margins
Industry Leading Coal Margins Lowering the risk of production variations while maximizing margins. Key Points $80.00 50 § CONSOL’s financial goal is to maximize our average 45 $70.00 margin per ton. § Operations is on a path to 40 lower production variations $60.00 year to year and quarter to 35 qua
Slide 15: CONSOL is Fully Participating in the Growing Overseas Market
CONSOL is Fully Participating in the Growing Overseas Market Key Points 2010 Revenue Split 2010 International Revenue § CONSOL’s Revenue from Split Overseas Sales is Growing in Coal Revenue of $3.82 Billion International Coal Revenue of $679 Million both: § Absolute Terms § As a Percent of Total 82%
Slide 16: Strong Commitment to Environment, Health and Safety
Strong Commitment to Environment, Health and Safety Key Points Health and Safety § Safety is at the core of CONSOL’s operations § Safety is at the core of CONSOL’s operations § Established Absolute Zero philosophy, which sets zero incidents as the only acceptable result § CONSOL’s coal operations sa
Slide 17: Drilling Overview
Drilling Overview (s¥ CONSOL ENERGY AMERICA'S ENERGY STARTS HERE.
Slide 18: Drilling Activity: Marcellus
CONSOL Drilling Activity Marcellus Drilling Activity Key Points Consol Marcellus Acreage with Drilling Activity (1) § Consol has drilled 37 horizontal Marcellus wells § Total gross daily gas Central Pennsylvania production of 57 MMcf/d 3 Horizontal Wells drilled and completed § Southwest Pennsylvani
Slide 19: Drilling Activity: Utica
CONSOL Drilling Activity Utica Drilling Activity by CONSOL and Others Key Points CONSOL Ohio Utica Acreage with Test Wells § CONSOL has about 200,000 net acres in Ohio which is prospective for the Utica Significant Utica Leasing and Utica Test – Range Resources Zahn #1 Shale. Drilling Activity in Po
Slide 20: Net Lease Expirations
CONSOL Net Lease Expirations Key Points PA and WV Marcellus Net Lease Expirations by CONSOL Operating Area n ~ 575,000 (87%) of Pennsylvania and West Approximately 87% of CONSOL’s Virginia Marcellus acreage is Marcellus net acreage in PA and WV is HBP or Fee HBP or Fee 35,000 n CONSOL’s drilling pro
Slide 21: Gas Division – 2010 and 2011 Drilling Highlights
CONSOL Gas Division – 2010 and 2011 Drilling Highlights 2010 Highlights 2011 Highlights n 2010 Rig Inventory n 2010 Rig Inventory ─ 3 horizontal rigs, 2 walking rigs (July 2010) ─ 4 horizontal walking rigs n Green County, PA results n Drilling operations in SW PA, Central PA and West Virginia ─ EURs
Slide 22: Gas Division – 2011 Estimated Well Type Curve
CONSOL Gas Division – 2011 Estimated Well Type Curve Illustrative Well Parameters ($MM, except as noted) Base 2011 Type 2011 Type (10%D&C Efficiency) Gross EUR (Bcfe) 4.3 5.7 5.7 NRI 87.5% 87.5% 87.5% Net EUR (Bcfe) 3.7 4.9 4.9 Drilling Cost 1.9 2.1 1.9 Completion Cost 1.3 2.8 2.5 Total D&C 3.2 4.9
Slide 23: Gas Division – 22% After-Tax IRR at $4.50 per MMBTU
CONSOL Gas Division – 22% After-Tax IRR at $4.50 per MMBTU Well ATAX IRR Comparison - Type Curve Analysis 100.0% 95.0% 90.0% 85.0% 80.0% Base 75.0% 2011 Type (10% D&C Ef f iciency) 70.0% 2011 Type 65.0% Internal Rate of Return % 60.0% 55.0% 50.0% 45.0% 40.0% 35.0% 30.0% 25.0% 20.0% 15.0% 10.0% 5.0%
Slide 24: Gas Division – Concerns & Challenges Proactively Being Addressed
CONSOL Gas Division –Concerns & Challenges - Proactively Being Addressed n Regulatory ─ Legislative restrictions ─ Delays in PINDI and permitting ─ Water use and disposal ─ Local highway bonding / road permits / township ordinances ─ Lease pooling agreements n Safety – Contractor training / Finding
Slide 25: CONSOL Energy Inc.
CONSOL Energy Inc. (s¥ CONSOL ENERGY AMERICA'S ENERGY STARTS HERE.