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Howard Weil 40th Annual Energy Conference
March 27, 2012
J. Brett Harvey, Chairman and CEO, CONSOL Energy Inc.
Cautionary Language
2
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 the timing and rates of return of future projects, and our future production,
revenues, income and capital spending. These forward-looking statements involve risks and uncertainties that could cause
actual results to differ materially from those statements, estimates and projections. Accordingly, investors should not place
undue reliance on forward-looking statements as a prediction of future actual results. Factors that could cause future actual
results to differ from the forward-looking statements are described in detail under the captions "Forward Looking
Statements" and "Risk Factors" in CONSOL Energy Inc.’s annual report on Form 10-K for the year ended December 31,
2011 filed with the Securities and Exchange Commission (SEC), as updated by any subsequent Form 10-Qs. The forward-
looking statements in this presentation speak only as of the date of this presentation; we disclaim any obligation to update
the statements, and we caution you not to rely on them unduly.
The SEC permits oil and gas companies, in their filings with the SEC, to disclose only proved, probable and possible oil and
gas reserves that a company anticipates as of a given date to be economically and legally producible and deliverable by
application of development projects to known accumulations. We may use certain terms in this press release, such as EUR
(estimated ultimate recovery), unproved reserves and total resource potential, that the SEC's rules strictly prohibit us from
including in filings with the SEC. These measures are by their nature more speculative than estimates of reserves prepared
in accordance with SEC definitions and guidelines and accordingly are less certain. We also note that the SEC strictly
prohibits us from aggregating proved, probable and possible reserves in filings with the SEC due to the different levels of
certainty associated with each reserve category.
Except for proved reserve data, the information this presentation is based on a summary review of the title to the gas rights
we hold, as well as a summary review of the title to the coal from which many of our coalbed methane rights derive. As is
customary in the gas industry, prior to the commencement of gas drilling operations on our properties, we conduct a
thorough title examination and perform curative work with respect to significant defects. We are typically responsible for
curing any title defects at our expense. This curative work may include the acquisition of additional property rights in order
to perfect our ownership for development and production of the gas estate.
This presentation does not constitute an offer to sell or a solicitation of offers to buy securities of CONSOL Energy Inc.
CONSOL Energy Inc – Corporate Profile
3
Ticker: CNX
Headquartered in
Pittsburgh, Pennsylvania
Founded in 1860
9,164 Employees
Market Cap = $8.5 Billion
EV = $11.4 Billion
2011 Revenue = $6.1 Billion
The leading diversified fuel producer in the Eastern United States
.
4.5 billion tons of proven and probable coal
reserves
High-Btu thermal coal
High-vol coking coal
Premium low-vol coking coal
2012 coal production will be managed to match
market demand
3.5 Tcfe of (net) proved reserves
361,000 net Marcellus Shale acres
100,000 net Utica Shale acres in Ohio
1Q12 net production guidance of 36 - 38 Bcf
About 50% of 2012 shale wells target liquids
Coal and Gas: Rich Asset Base With Some Vertical Integration
4
Manages land
assets of the
Company
R&D facility
devoted to coal,
gas, and energy
utilization and
production
Distributor of
mining, gas
drilling, and
industrial
supplies
Fleet of 620
barges, 22
towboats and 5
harbor boats
Baltimore Port with
capacity to load 14
million tons of coal
per year
Manages gas
gathering assets
of the Company
CONSOL Energy Inc
Coal Natural Gas
Other
Midstream CNX Land Resources
Inc.
Research &
Development
Fairmont Supply
Company
River & Dock
Services
CNX Marine Terminals
Inc.
5
Investment Thesis and Scorecard
Tier-One Coal and E&P Assets Provide Synergies and Risk Reduction
Low cost, high-BTU coal that can travel and transform target markets.
Low cost gas assets close to market, with liquids potential in 2012.
Long-Lived Assets Enable Strategic Value Enhancements
New JV’s create strategic partnerships and accelerate asset exploration and delineation.
Solid Balance Sheet and Liquidity To Capitalize on Our Organic Projects
Repaid $500 million of debt and raised the dividend by 25% in 2011. Ended 2011 with $2.7 billion in liquidity.
Consistent Operating and Financial Results
Record 2011 earnings and cash flow, 528% production replacement at $0.47 per Mcf.
Updated 2012 Guidance Recently
Already includes 1 MTs of lower sales, lowered met coal price guidance, and exports within 9-11 MTs
CONSOL continues to respond to challenging market conditions
Idled Blacksville and Buchanan longwall operations.
Reduced $180 million in original 2012 capital budget.
Reduced Marcellus shale well count to 99 wells, down from 122 on Jan. 2012 & 140 on Aug. 2011.
6
Capital Spending $MM
Division Spending Category 2011A 2012E
Coal Maintenance of Production + Safety $261 $327
Growth (Efficiency & New Projects) $297 $349
Total Coal $558 $676
Gas CBM & Other $232 $ 97
Growth (Marcellus and Utica Exploration) $430 $526
Total Gas $662 $623
Other Mandatory (Water, Transportation, Other) $ 89 $190
Discretionary $ 73 $ 55
Total Other $162 $245
Totals Maintenance/Mandatory $582 $614
Growth/Discretionary $800 $930
Total Capital $1,382 $1,544
CONSOL Energy – Capital Spending & Flexibility
Strategy Relies On Cultivating Our Tier One Long-Lived Assets Consistent operations driven by reinvesting in core business
Organic growth projects on both coal and gas projects
7
E&P Division Goals: Migrating Capital and Activity to High Value Areas
Program Goals to Drive CBM and Marcellus Costs Lower
Marcellus program through multi-well pads and lengthening laterals
Reported 4Q11 fully loaded Marcellus costs of $2.74 per Mcf
Marcellus Horizon Objectives
Ramp up development of our wet acreage position with our partner Noble Energy
Focusing on 100% NRI acreage in Greene and Westmoreland counties, PA
Further delineate Central PA and Northern WV position
99 gross wells expected for 2012; 39 wells targeting liquids
Utica Horizon Objectives
Explore and exploit the Ohio Utica Formation with our partner Hess Corporation
22 gross wells expected for 2012; 22 wells targeting liquids
8
Net Wells Drilled By Formation From 2009 Through 2012E
Formation Region 2009 2010 2011 1Q12E 2012E
Total Shales 17 24 78 15.0 60.5
Marcellus Shale Central PA 0 4 19 4.5 6.5
Southwest PA 17 20 50 8.0 40
West Virginia 0 0 9 2.0 3
Totals 17 24 78 14.5 49.5
Utica Shale 0 0 0 0.5 11
Coalbed Methane Virginia 204 181 214 22.0 87
Conventional and Other 18 129 36 10.0 31
Totals 239 334 328 47.0 178.5
% Shales Wells: Dry gas target 100% 100% 100% 80% 50%
% Shales Wells: Liquids target 0% 0% 0% 20% 50%
Total Production (Bcfe) 94 128 154 36-38 160
Total Capital ($MM) 335 420 662 129 623
Drilling Results and Forecast Migrating Capital and Activity to High Value Areas
CONSOL Energy & Noble Energy JV
9
2012 Development Plan
Six rigs running as of January 2012 (2 in CPA, 3 in SW PA, 1 in WV)
99 (gross) wells to be drilled by the JV, including 39 in the liquids-rich area
Note: The net proceeds will increase above the minimums shown when gas
prices exceed $4.00 per MMBtu for three consecutive months.
Total value of the carry is $2.1 billion.
$-
$100
$200
$300
$400
$500
$600
2011 2012 2013
$356 $356 $356
$160
$73
Guaranteed Net Proceeds ($MM)
Gathering
PDPs
Annual Pymt
CONSOL Energy & Hess Corporation JV
Sold 50% of 200,000 Gross Ohio Utica
Cash: $60 Million
Carry: $554 million covering 50% of CNX’s share of drilling and completion costs.
Partnered with top tier Oil Operator with Marketing History
Structured as an Exploration Play
Raises CONSOL’s Exposure to Liquids/Oil
Targeting 22 gross wells in 2012
First well to be completed in April
10
Total Deal Consideration of $594 million or $6,000 per acre
11
Marcellus JV Position Significant scale and impact
Large Acreage Position Within
Marcellus Fairway
50% of 628,000 net acres, including:
161,000 acres in the liquids-rich window
High NRI (~88%)
87% of Acreage Held by Production
Allows flexibility in development and
lowers cost
Requires fewer permits and smaller
environmental footprint
9.9 Tcfe “3P” Reserves, net to
CONSOL
Access to Established Infrastructure
OH
PA
WV
MD
VA
Industry Recognized Sweet Spot in SW PA
Key Geologic Attributes
Systematic Development and Expansion
Adds Efficiency
Continue to Test Other Acreage for Future
Development
Hutchinson 10-Well Pad
Initial production rates 5 - 16 MMcf/d
5 wells 5 - 9 MMcf/d
5 wells 10 - 16 MMcf/d
Potentially Extends Sweet Spot Further
North
12
Pad Location
SW PA Sweet Spot
Marcellus Sweet Spot Hutchinson Pad results may extend sweet spot further north
Dry Gas
Wet Gas
13
Marcellus Drilling and Completion Cost Lateral lengths increasing while gaining efficiencies
1,000
2,000
3,000
4,000
5,000
2009 2010 2011
Lateral Length Ft.
100
150
200
250
2009 2010 2011
17% Improvement
$/Ft. Drilling Cost
100
150
200
250
300
350
2009 2010 2011
29% Improvement
Completion Cost $M/Stage
14
External source to Majorsville 350 GPM optional
-
N. Nineveh
Nineveh
Greenhill
Morris
Leatherwood
Alex Paris
Rutan
Majorsville
Columbian Chemical Ohio River to Majorsville 800 GPM
Ohio River via Shoemaker Mine 500 GPM
N. WV R.O. Project 1000 GPM
Alex Paris Booster Project 800 GPM
Sufficient for 16 Frac Stages per Day
Moving Water by Pipeline
Reduces environmental and safety risk
Smaller activity footprint
Improves efficiency of completion
operations
Lowers overall costs
Water Sourcing Plan for SW PA Supply established and infrastructure build-out underway
15
Gas Gathering System Plan for SW PA Systematic expansion to stay ahead of drilling activity
Gas Gathering System Installed or Under
Construction to Support 2012 Drilling
Pad Drilling Allows for Lower Number of
Permits, Efficiency and Reduced Costs
Early Infrastructure Development Creates
Backbone for Future Expansion
Firm Transportation and Processing
Contracts Cover Production Through mid
2014
Firm – 365 MMBtu, net
Processing – 115 MMBtu, net
OH
PA
WV
MD
VA
Dry Gas
Wet Gas
16
Over 500-Day Period, CNX Wells in SW PA Yielded 21%
More Production Than Competitor Well Average
0
1,000
2,000
3,000
4,000
0 100 200 300 400 500 600 700 800 900 1,000
Days
Mcf/d
Gross Wellhead Gas Production
CNX Avg. 2010-2011 (39 laterals ~2,285 ft.)
Competitor Avg. 2009-2010 (103 laterals ~2,800
ft.)
CNX Avg. 2008-2009 (13 laterals ~1,625 ft.)
NBL Acq. Model (normalized to 2,850 lateral ft.)
Marcellus Wells Improving
World Coal Market Participation
Growing Coal Exports
Cash Generation from Met Products
Unique Asset Portfolio
Mines – Safe, Reliable and Low Cost
Rail – Dual Rail Service
Port Access
Research & Development
Boots on the Ground in International Markets
Coal Capital Expenditures of $676 Million for 2012
Coal Division Strategy
17
Participating in Growing World Coal Markets with a Portfolio of Assets that CAN NOT be replicated
$0
$500
$1,000
$1,500
$2,000
2009 20102011
Mill
ion $
’s
Coal Division Cash by Coal Category
Thermal
Low-Vol + High-Vol
Strength in Market Diversity Produce Locally, Distribute Globally
18
CONSOL Ships To Four Continents
Widening of The Panama Canal Should Improve Shipping Costs and
Potential Coal Margins
Marketing: 1Q12 Forecasts and 2011 Coal Statistics Produce Locally, Distribute Globally
Sales volumes 63.2 MTs for $4.5B of revenue
Achieved record annual average $72.24 price
per ton
Low-Vol met coal volumes increased to 5.6
MTs at an average price exceeding $190.00 per
ton
High-Vol met coal volumes grow to 4.8 MTs at
an average price of $80.00 per ton
Total export volumes increased 68% over 2010
levels to a record of 11.4 MTs
Expanded new markets
Developed 16 new customers with 5 new met
customers
High-Vol met coal shipments to domestic &
Export steel makers
Four new multiple-year export thermal sales
agreements resulting in over 3 MTs
2011 Coal Sales Facts
19
Note: Set at the midpoint of guidance
1Q
2012
Year
2012
1Q
2011
Year
2011
Thermal 13.2 50.4 14.2 52.8
Low Vol 1.0 4.8 1.4 5.6
High Vol 1.0 5.0 1.1 4.8
Mid Vol 0.0 0.4 0.0 0.0
Total 15.2 60.6 16.7 63.2
Sales Tons by Product – 1st Quarter 2012
20
Weighted Individual Plants by: Capacity Factor, Age, Size, Heat Rate
Lowest weighted plants were assumed to be shut down first
Performed some sensitivity around scrubbed plants
CONSOL Positioned for EPA Regulations R&D Study of industry coal burn due to regulations - 90% of CONSOL Thermal Coal sold to scrubbed facilities
Baseline (2009) 309.0 GW 943.2 MM tpy Coal
Regulatory Impact - 40.0 GW - 79.9 MM tpy
- 8.3 GW - 14.4 MM tpy
New Capacity + 16.5 GW + 52.1 MM tpy
- 31.8 GW
(-10%)
Bit
Sub
Other
- 42.2 MM tpy
(-4%)
- 36.4 MM tpy
- 18.4 MM tpy
+12.6 MM tpy
Overall -7%
21
Our Assets, Strategy and People Create An Investment Opportunity
Coal and gas operations are long-lived, low-cost, and provide solid growth
Our well-capitalized assets provide more consistent operational execution
Our emphasis on safety and compliance increases reliability
Balance sheet remains strong with $2.7 billion of liquidity (as of 12/31/2011)
Valuation remains compelling using sum of the parts
Marcellus liquids and Utica results (1Q12) to drive valuation improvement
Stabilization and rebound in the met coal markets
Solid Execution of our core program and coal projects to serve a rebounding market
CONSOL Energy Inc. – Questions?
22