Cnx Resources Corporation · NYSE:CNX
Cnx Resources — CONSOL Energy — Q1 2016 Earnings Presentation
23 slides from Cnx Resources's earnings presentation, 2016
Slide 1: Earnings Conference Call Q1 2016
Earnings Conference Call Q1 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: Q1 2016 Review
Q1 2016 Review CONSOL Energy: First Quarter 2016 Results Adjusted net loss2 attributable to continuing operations in the 2016 first quarter of $16 million, or ($0.07) per diluted share - Excludes the following pre-tax items: $29.3 million unrealized loss on commodity derivative instruments $2.
Slide 4: Net (Decrease)/Increase in Cash
Q1 2016 Review CONSOL Energy: Net (Decrease)/Increase in Cash Improving on solid liquidity position Net debt reduced by $445 million as of Q1 2016 quarter-end Focus on positive free cash flow - Both E&P and Coal Divisions projected to generate organic positive free cash flow in 2016 - Addition
Slide 5: Buchanan (VA Operations) Asset Sale
Q1 2016 Review Buchanan (VA Operations) Asset Sale Sold Buchanan metallurgical coal mine to Coronado IV LLC (EMG backed) for a total transaction value of $460 million Cash proceeds at closing of $403 million (before expenses) Remaining cash consideration of ~$22 million held in escrow for up t
Slide 6: E&P Division: Q1 2016 Results Summary
Q1 2016 Review E&P Division: Q1 2016 Results Summary Y/Y Q-to-Q Seq. Q-to-Q E&P Division 1Q2016 1Q2015 Change 1Q2016 4Q2015 Change (1) Average Sales Price ($ / Mcfe) $2.73 $3.56 ($0.83) $2.73 $2.78 ($0.05) (2) Average Costs ($ / Mcfe) $2.41 $2.91 ($0.50) $2.41 $2.37 $0.04 Sales Volumes (Bcfe) 97.5 7
Slide 7: E&P Operations - Benchmarking vs Peers
E&P Operations - Benchmarking vs Peers Full-cycle Breakeven Operating Metrics Declined from $3.51 To $2.00 Per Mcfe, a 43% decline $4.00 Hired Tim Dugan to run E&P operations $3.50 $3.00 $1.17 $1.11 $2.50 $0.82 $2.00 Cash OpEx $0.84 $0.59 $0.48 (plus G&A) of $0.37 $1.52/Mcfe, $1.50 $0.17 $0.17 $0.29
Slide 8: Strong Liquidity Position of ~$1.3 Billion
Q1 2016 Review Strong Liquidity Position of ~$1.3 Billion Amount/ Amount Letters Amount March 31, 2016 ($ in million) Capacity Drawn of Credit Available Cash and Cash Equivalents(1) $418 - - $418 Revolving Credit Facility(2) $2,000 $852 $286 $862 Total $2,418 $852 $286 $1,280 (1) Cash and cash equiv
Slide 9: E&P Marketing
E&P Marketing Q1 2016 Gas Realization and Marketing Highlights CONSOL basin exports are projected to increase approximately 73,000 Dth /day for FY 2016 over FY 2015 as TETCO’s U2GC and TEAM OPEN projects were put into service in late 2015, increasing expected realizations by marketing gas to the h
Slide 10: E&P Division: Lifting costs
E&P Operations E&P Division: Lifting costs CONSOL Operated Lifting Costs, 2015 to 2016E 0.40 0.07 (0.03) 0.35 (0.02) (0.01) 0.30 (0.01) (0.02) 0.30 0.29 0.25 $ / Mcfe 0.20 0.15 0.10 0.05 - 2015 Direct Admin & Contract Repair & Well Service Well Site Production 2016E Accounting Adj. Services Maintena
Slide 11: E&P Division: Q1 2016 Operations Summary
E&P Operations E&P Division: Q1 2016 Operations Summary Marcellus Shale Quarterly Summary Utica Shale Quarterly Summary Avg. TIL Turned Turned Avg. TIL Sub- Horizontal Lateral Sub- Horizontal Drilled Completed In Line Counties Drilled Completed In Line Lateral Counties Regions Rigs Length Regions Ri
Slide 12: 2016 Planned E&P Activity Overview
E&P Operations 2016 Planned E&P Activity Overview E&P Activity Summary – 2016 Plan Drilled Drilled 2016 2016 Uncompleted Completed Completions TIL's Inventory Inventory Remaining Remaining Marcellus SW PA Operated 18 17 6 23 SW PA Non-Op 5 2 - 2 WV Operated 7 - - - WV Non-Op 49 - - - Total Marcellus
Slide 13: Dry Utica: Gaut 4IH Westmoreland County, PA
Dry Utica: Gaut 4IH Westmoreland County, PA Flow Rate Mcf/Day Casing Pressure 30,000 10,000 9,000 25,000 8,000 7,000 20,000 6,000 15,000 5,000 4,000 10,000 3,000 2,000 5,000 1,000 0 0 9/25/2015 10/25/2015 11/25/2015 12/25/2015 1/25/2016 2/25/2016 3/25/2016 Note: Production data has been normalized f
Slide 14: Dry Utica: Switz 6 Pad Monroe County, OH
Dry Utica: Switz 6 Pad Monroe County, OH 50,000 6D Gas Rate (Mcf/d) 6D Casing Pressure (psig) 45,000 6F Gas Rate (Mcf/d) 6F Casing Pressure (psig) 6H Gas Rate (Mcf/d) 6H Casing Pressure (psig) 40,000 35,000 30,000 25,000 Production 20,000 15,000 10,000 Casing Pressure 5,000 0 10/13/2015 11/13/2015 1
Slide 15: E&P Operations - Benchmarking vs Peers
E&P Operations - Benchmarking vs Peers Beginning to outperform peers on growth and unit cost performance E&P Production Volumes Indexed Production Growth 450 260 Production by Area 400 ~15% 2015A 2016E 240 350 Marcellus 51% 54% 329 220 CBM 23% 19% 300 Utica (Wet & Dry) 17% 21% 200 250 Other 9% 6% 23
Slide 16: Risk Management: Commodity Hedges
Risk Management: Commodity Hedges Gas Hedges 280 Physical Sales With Fixed Basis Exposed to NYMEX E&P Hedge Program: 260 NYMEX Only Hedges Exposed to Basis Program and actively 240 NYMEX + Basis (1) monitored hedges 220 200 Gas Volumes Hedged (Bcf) ─ Program Hedge - protect 180 margins on up to 90
Slide 17: Guidance: E&P Segment 2016E
Guidance E&P Segment Guidance 2016E Production Volumes: Natural Gas (Bcf) 335 NGLs (MBbls) 6,000 Oil (MBbls) 65 Condensate (MBbls) 1,000 Total Production (Bcfe) ~+15% Natural Gas Basis Differential to NYMEX ($/Mcf) ($0.35) - ($0.45) NGL Realized Price ($/Bbl) $8.00 - $10.00 Condensate Realized Price
Slide 18: Guidance: Coal Segment 2016E
Guidance Coal Segment Guidance 2016E Estimated Total Consolidated Coal Division Sales Volumes (in millions of tons) 23.9 - 27.4 Total Volumes Sold 25.0 % Committed 98% Total Consolidated Coal Division Capital Expenditures ($ in millions): Production $85 - $95 Other (Land/Water/Safety/Terminal) $20 -
Slide 19: Key Takeaways
Key Takeaways Plans and Goals Aligned to Drive Increased Valuation Milestones: Improving E&P performance from high-grading activities, improving completion techniques, reducing cycle times, and service cost deflation Benefits from recent long-term contracting activities and operating cost redu
Slide 20: Appendix
(= CONSOL ENERGY AMERICA’S ENERGY STARTS HERE. Appendix 20
Slide 21: Non-GAAP Reconciliation: Quarter-over-Quarter EBITDA and Adj. EBITDA
Appendix Non-GAAP Reconciliation: Quarter-over-Quarter EBITDA and Adj. EBITDA Three Months Ended March 31 2016 2016 2016 2016 2015 E&P Coal Total Total ($ in thousands) Other Division Division Company Company Net (Loss)/Income ($23,541) ($49,015) ($23,902) ($96,458) $79,030 Less: Net Loss/(Income) A
Slide 22: Non-GAAP Reconciliation: Trailing Twelve Months EBITDA
Appendix Non-GAAP Reconciliation: Trailing Twelve Months EBITDA and Adj. EBITDA Three Months Ended Three Months Ended Three Months Ended Three Months Ended Twelve Months Ended June 30 September 30 December 31 March 31 March 31 ($ in thousands) 2015 2015 2015 2016 2016 Net (Loss)/Income ($603,301) $1
Slide 23: Free Cash Flow Reconciliation
Appendix Free Cash Flow Reconciliation Three Months Ended March 31 2016 Organic Free Cash Flow From Continuing Operations: Net Cash provided by Continuing Operations $ 119,808 Capital Expenditures (78,968) Net Investment in Equity Affiliates (5,578) Organic Free Cash Flow From Continuing Operations