CONSOL Energy Inc. May 2011 Investor Presentation Cautionary - - PowerPoint PPT Presentation

CONSOL Energy Inc. – May 2011 Investor Presentation

Cautionary Language

2

This presentation contains state ments, 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

• ur

annual report form 10-K filed with the Securities and Exchange Commission, involve risks and uncertainties that co uld cause actual results to differ materially from projected results. Accordingly, investors should not place undue reliance on forward-looking statements as a prediction of actual results. The forward-looking statements include estimates

• f unproved

reserves, projections and estimates concerning the timing and rates of return

• f future projects, and our future production, revenues, income and capital
• spending. The forward-looking statements in this presentation speak only as
• f the date of this presentation; we disclaim any obligation to update these

statements unless required by the securities laws, and we caution you not to rely on them unduly. This presentation does not constitute an offer to sell any securities of CONSOL Energy Inc. The United States Securities and Exchange Commission (SEC) permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves that a company has demonstrated by actual production

• r conclusive

formation tests to be economically and legally producible under existing economic and

• perating

conditions. We use certain terms in this presentation, such as “unproved reserves and/ or unproved resources” that the SEC's guidelines strictly prohibit us from including in filings with the SEC. We also caution you that the SEC views such “unproved reserves and/ or unproved resources” estimates as inherently unreliable and these estimates may be misleading to investors unless the investor is an expert in the gas industry. In this presentation, the term “unproved reserves and/ or unproved resources” refers to gas that we believe is economically recoverable, based

• n available data.

The unproved reserve data contained in this presentation is based on a summary review of the title to coalbed methane and

• ther gas rights we hold, as well as a summary review of the title

to the coal from which many of our 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

• wnership for development and production of the gas estate.

n

Over 4.4 billion tons of proven and probable coal reserves

─ Controls the largest amount of recoverable coal reserves east of

the Mississippi River

─ Controls the second largest amount of recoverable coal reserves

among United States coal producers

n

One of the nation’s largest coal producers with production of ~62 million tons of coal in 2010

─ Mines more high−Btu bituminous coal than any other United

States producer

─ Largest coal producer east of the Mississippi River ─ Largest United States producer of coal from underground mines

n

2010 coal exports of approximately 6.8 million tons

n

Over 3.7 Tcfe of proved reserves and PV-10 of $2.8 billion

n

Approximately 675,000 net acres in PA and WV prospective for the Marcellus Shale and another approximately 200,000 net acres prospective for the Ohio Utica / Point Pleasant

n

Over 50 horizontal Marcellus wells drilled to date; current Marcellus production of 54 MMcfe / day

n

Additional gas operations in three segments:

─ Coalbed Methane: produced 91.4 Bcf (71% of total gas

production) in 2010

─ Conventional: produced 24.6 Bcf (19% of gas production) in

2010; conventional reserves obtained primarily through Dominion acquisition

─ Other: CONSOL also controls significant acreage holdings

prospective for the New Albany, Chattanooga and Huron Shales

Key Points

n CONSOL Energy Inc. (NYSE:

CNX) is a multi−fuel energy producer and energy services provider focused in the U.S.

─ Current market cap of over

$11 billion

─ Headquartered in

Pittsburgh, PA

─ 8,630 employees

Revenue:Segment Overview

n 2010 Revenues: $5,236 million

Coal Natural Gas CNX Land Resources, Inc. Research & Development

Overview of CONSOL Energy

River & Dock Services Fairmont Supply Company CNX Marine Terminals, Inc.

Coal Division $4,411 84% Gas Division $825 16%

CONSOL Energy Inc.

Manages land assets of the Company and provides environmental conservation and protection services Largest private research and development facility in the industry that is devoted exclusively to coal and energy utilization and production General−line distributor of mining, drilling, and industrial supplies in the United States Transportation and distribution segment with a fleet of 620 barges, 22 towboats and 5 harbor boats Provides coal transshipment directly from rail cars to ocean-going vessels with capacity to load 14 million tons of coal per year

Other

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CONSOL Operational Timeline

U.S. Coal & Natural Gas Operator with History of Success

63% 12% 18% 4%1% 2%

Coal Reserves – December 2010: 4.4 Billion Tons

Northern Appalachia Central Appalachia Illinois Basin (Midwest) Northern Powder River Basin Emery Field (Utah) Western Canada

1860 1930 1990 2010 2000 1980

 June 1, 2010 -

CONSOL completes the acquisition of CNX Gas further solidifying the Company as a multi- fuel energy producer

 Started operations

in 1864 as Consolidation Coal Company through the merging of holdings of several western Maryland coal operators at the turning point of the Civil War

 Almost forced into

receivership by the Great Depression, CONSOL reorganized and restructured its coal

• perations, emerging from

near bankruptcy to end the decade of the 1930s financially solid and secure

 2005 - CNX Gas is

formed to explore, develop, produce and gather natural gas in the Appalachian Basin

 1984 - The

Company opens the largest underground coal mine complex in the world in Bailey, PA

 Innovated coal mining

improvements through R&D

 Implemented longwall

mining systems in larger underground mines -- the safest and most productive method for underground coal mining

 During World War II

CONSOL provided vital coal energy for transportation and home heating needs

 After the war, a merger

formed the Pittsburgh Consolidation Coal Company

 April 30, 2010 -

CONSOL acquires the Appalachian E&P business of Dominion Resources, resulting in a Marcellus shale position of approximately 675,000 net acres in PA and WV

 1999 - After years of

• wnership by outside
• rganizations such as

Conoco, DuPont and RWE A.G., CONSOL Energy begins trading

• n the NYSE under the

symbol CNX

 1991 - DuPont

Energy and RWE A.G. acquire Consolidation Coal and change the Company’s name to CONSOL Energy Inc.

 1927 - The Company

becomes the largest bituminous coal producer in the United States, a distinction it retains today

 Achieved through

acquisitions and expansion

• f existing operations

64% 13% 19% 4%

Gas Reserves – December 2010: 3.7 Trillion Cubic Feet

CBM Marcellus Other Conventional 4

CONSOL – Coal Division: Operational Overview

Reserves by Coal Type (million tons) 2010 Coal Revenue by Coal Type ($ mm) 2010 Coal Exports by Geography (million tons) Coal Cash Generation by Coal Type ($ mm)

Low Vol 146 3% High Vol 416 10% Thermal 3,839 87%

4,401 Million Tons

Low Vol 680 18% High Vol 172 4% Thermal 3001 78%

$3,853 Million

Asia 3.0 44% Europe 2.2 32%

• S. America

1.6 24%

6.8 Million Tons

60 178 135 227 259 35 27 14 18 46 199 92 142 114 144 50 100 150 200 250 300 350 400 450 500 1Q10 2Q10 3Q10 4Q10 1Q11 Thermal High Vol Low Vol

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CONSOL – Gas Division: Operational Overview

Total Proved Reserves by Gas Type (Bcfe) Proved Reserves by Category (Bcfe) Drill Bit Finding Costs ($ per mmcf) Proved Reserve and Production Growth (Bcfe)

CBM 1,789 48% Marcellus 859 23% Other Shale 100 3% Conventional 984 26%

3.7 Trillion Cubic Feet

PD 1,931 52% PUD 1,800 48%

3.7 Trillion Cubic Feet

1,265 1,343 1,422 1,911 3,732 56 58 77 94 128 20 40 60 80 100 120 140 160 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 2006 2007 2008 2009 2010 Proved Reserves Production $0.52 $1.25 $1.59 $0.39 $0.41 $- $0.20 $0.40 $0.60 $0.80 $1.00 $1.20 $1.40 $1.60 $1.80 2006 2007 2008 2009 2010 Drill Bit Finding Costs

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Differentiating Aspects of CONSOL

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Key Points § CONSOL owns in excess of 110,000

surface acres in PA / WV

─ Provides strategic advantage for

procuring rights-of-way for midstream operations

─ Ownership of readily-available

water sources, including freshwater lakes, treated mine water discharges and freshwater intakes along the Ohio River could provide significant cost savings

─ Currently treats over 30 billion

gallons / year at AMD facilities

§ CONSOL currently produces 94.5

MMcfe/d of low-BTU conventional gas and CBM

─ Existing production may be

blended with high-BTU Marcellus production to eliminate the need for gas processing in the near-term

─ Capacity enables blending of up to

1.8 Bcf/d Marcellus production

─ Results in significant cost savings

• vs. other local operators (Range,

Chesapeake, etc.)

§ Master Cooperation and Safety

Agreement provides access to CONSOL’s surface and certain oil and gas assets and defines cooperation and compensation mechanism for development conflicts between the coal and natural gas estates

Unique Competitive Advantages Facilitate Development

Treated Mine Water (TMW) Sources Surface Ownership, Blending Capability and Water Sourcing

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$- $2.00 $4.00 $6.00 $8.00 $10.00 $12.00 $14.00

Marcellus Is One of the Most Economic Plays in North America

Key Points

n Gas prices have declined

since mid-2008

n This decline has made

differentiation among the plays more important

n The Marcellus has the

lowest breakeven price of all

the plays and will remain attractive throughout the commodity cycle

(1) Jefferies Research Analysis: Assumes 15:1 crude oil price to natural gas price.

Estimated Pricing Required for a 20% Return vs. Historical NYMEX 5-Year Strip Average (1)

Oct 07 – Oct 08 $9.02 / MMBtu Avg. Nov 08 – June 10 $6.50 / MMBtu Avg. July 10 – Present $5.27 / MMBtu Avg.

5 Year NYMEX Strip Average @ 3/10/11: $5.14 / MMBtu 5 Yr. NYMEX Strip Avg.

(1)

Price Required to Generate Single Well 20% IRR ($ / Mcfe) $8.96 $7.08 $5.81 $5.58 $5.38 $5.11 $4.50 $4.13 $4.07 $4.01 $3.77 $3.61 $3.55

Woodford Barnett Fayetteville Haynesville Eagle Ford Dry Montney Niobrara Eagle Ford Oil Horn River Eagle Ford Wet Bakken Granite Wash CNX Marcellus

Current Natural Gas Pricing Environment Highlights Comparative Basin-Level Economics

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CONSOL Marcellus Acreage Position Key Points § 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 acreage

is either HBP or owned in fee.

§ Strong recent well results

and expected EURs

§ Superior economics

supported by high net revenue interest and potential wet gas / liquids component

CONSOL Marcellus: Premier Position in the Heart of the Play

CNX Marcellus Acreage

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Increasing Marcellus EURs Key Points § With more than 30

horizontal Marcellus wells producing, CONSOL’s EURs have been steadily improving

§ CONSOL’s recent horizontal

wells have averaged 5.5 Bcfe, with an average lateral length of 3,400 feet

─ This translates to one of

the highest EURs per foot among all Marcellus

• perators

§ CONSOL has recently

expanded its lateral lengths to 4,000 feet, which results in average SW PA EURs of 6.4 Bcfe

Best-in-Class Marcellus Well Results

Selected 2009 Wells Selected 2010 Wells

EURs Steadily Improving

2009 Wells 2010 Wells Type Curve

• Avg. EUR

2.77 Bcfe 5.5 Bcfe 6.4 Bcfe

• Avg. Lateral Length

1,528 Feet 3,409 Feet 4,000 Feet 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 1 2 3 4 5 6 7 8 9 10 1 2 3 4 5 6 7 8 9 10 Bcfe CONSOL SW PA Type Curve 6.4 Bcfe 11

2010 Lifting Costs / Mcfe 2010 Drill Bit F&D Cost / Mcfe Key Points § CONSOL’s F&D and lifting

costs are significantly below its peer group

§ CONSOL’s knowledge and

experience in the Appalachian basin have translated to some of the lowest per unit costs in the industry

§ Unique operational

advantages (water sourcing, immediate pad drilling, gas blending, etc.) will keep costs down relative to competitors

Industry-Leading Low-Cost E&P Operator

$0.66 $0.68 $0.91 $0.94 $0.97 $1.01 $1.05 $1.18 $1.45 $- $0.20 $0.40 $0.60 $0.80 $1.00 $1.20 $1.40 $1.60 UPL CNX RRC SWN XCO CHK COG EOG NFG $0.41 $0.54 $0.65 $0.77 $0.85 $1.00 $1.07 $1.07 $1.08 $- $0.20 $0.40 $0.60 $0.80 $1.00 $1.20 CNX XCO RRC REXX NFG UPL CHK COG SWN

Source: Public filings, Company management

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Key Points

§ CONSOL owns over 3,000 miles of

gas and water gathering pipeline

§ CONSOL controls over 0.7 Bcf/d

firm transport capacity on various interstate pipelines

─ Capacity to cover more than

2011, 2012, 2013 and 2014 hedged gas production and provide room for growth

§ 15-year firm transportation

agreement with Dominion Transmission Inc. (DTI), the interstate gas transmission subsidiary of Dominion

─ 7,800 miles of pipelines in six

states (OH, WV, PA, NY, MD, VA)

─ One of the largest underground

gas storage systems in the U.S.

§ 230,000 HP of compression

(primarily owned electric) with 544 MMcf/d capacity

§ Existing NGL stripping and

fractionation agreement with leading midstream company

§ Excess CBM blending capacity

available to meet pipeline specifications

Strong Infrastructure and Transportation Capacity

Region Pipelines Available Pipelines Under Contract Central Pennsylvania DTI, EQT, TCO, TETCO DTI, TETCO Southwest Pennsylvania DTI, EQT, NF, TCO, TETCO DTI, TCO, TETCO West Virginia DTI, EQT, TCO DTI, TCO

CONSOL’s Midstream Pipeline System

Significant Infrastructure in Place and Contracted Firm Transportation Capacity

CNX Marcellus Acreage Major Gas Transmission Lines

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Key Points

§ CONSOL’s financial goal is

to maximize our average margin per ton.

§ Operations is on a path to

lower production variations year to year and quarter to quarter.

§ Shipping more coal

• verseas at higher margins,

helps to achieve these goals both directly and indirectly.

Industry Leading Coal Margins

Lowering the risk of production variations while maximizing margins.

2009 2010 1Q11

• Avg. Realized Price Per Ton

$58.28 $61.35 $68.43

• Avg. Cost Per Ton

$44.87 $46.55 $46.50

• Avg. Margin Per Ton

$13.41 $14.80 $21.93

5 10 15 20 25 30 35 40 45 50 $0.00 $10.00 $20.00 $30.00 $40.00 $50.00 $60.00 $70.00 $80.00

1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11

Average Realized Price Average Cost Per Ton Average Margin Per Ton Production (tons mm) Sales (tons mm)

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10% 30% 60%

Approx 2011 International Revenue Split

Thermal High Vol Low Vol

CONSOL is Fully Participating in the Growing Overseas Market

Key Points

§ CONSOL’s Revenue from

Overseas Sales is Growing in both:

§ Absolute Terms § As a Percent of Total

Coal Revenue

§ CONSOL expects to export

10 million tons in 2011.

75% 25%

Approx 2011 Revenue Split

Domestic International

82% 18%

2010 Revenue Split

Domestic International

11% 27% 62%

2010 International Revenue Split

Thermal High Vol Low Vol

International Coal Revenue of $679 Million Coal Revenue of $3.82 Billion

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Health and Safety

§ 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 safety record is over three times better than the industry average § CONSOL Gas has been at Absolute Zero since 1994 § CONSOL’s operations have been nationally and internationally recognized § Four CONSOL coal mines have recently received awards of excellence for safety record § MCSA between CONSOL’s Gas and Coal operations defines safety, operational, administrative and dispute resolution procedures

associated with natural gas extraction and coal mining activities in the vicinity of CONSOL’s coal mines

§ Safety is the most important objective of the MCSA § The agreement requires annual meetings to coordinate CONSOL’s annual gas drilling plans with CONSOL’s 10-year mine plans

and to exchange results of samples, test results and title work Environmental

§ With a significant surface acreage position, CONSOL is strongly committed to environmental conservation and protection § Formed numerous cooperative partnerships with local and national wildlife and conservation organizations § Developed new techniques to extract hydrocarbons in a safe and environmentally friendly manner § Donated more than 150,000 acres to conservation efforts over the past 25 years § Participate in several reforestation projects with national conservation organizations § Through partnerships with the U.S. Department of Energy and other agencies, CONSOL conducts research to develop

technologies for reducing emissions from coal plants

§ Committed to 100% re-use and recycling of all its Marcellus and CBM water § Access to water sources including CONSOL-owned surface water sources and treated mine water (approved by DEP to use AMD) Key Points

§ Safety is at the core of

CONSOL’s operations

§ CONSOL’s incident rate has

dropped more than 50% since 2004 and is consistently less than half the industry average

§ CONSOL Gas has gone

4,872,490 cumulative man- hours without a loss-of-time accident (since 1994)

§ Absolute Zero philosophy

mandates that the only acceptable result is a zero incident rate

§ CONSOL has been honored

with numerous national awards of recognition for its health and safety practices

§ Master Cooperation and

Safety Agreement (MCSA) between CONSOL’s Gas and Coal operations with significant focus on safety

§ CONSOL is strongly

committed to environmental conservation

§ CONSOL recycles 100% of

its Marcellus and CBM water

Strong Commitment to Environment, Health and Safety

Safety Incidence Rate: CONSOL vs. Industry Peers

4.5 3.6 3.2 3.0 2.5 2.3 2.2 3.9 3.1 2.7 2.6 2.1 1.9 1.8 8.4 7.7 7.4 7.1 6.6 6.0 5.6 2004 2005 2006 2007 2008 2009 2010 Reportable Incidents per 200,000 Man-Hours CONSOL - Coal Op's CONSOL Energy Coal Industry 16

Drilling Overview

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CONSOL Drilling Activity

Marcellus Drilling Activity

Consol Marcellus Acreage with Drilling Activity (1)

Central Pennsylvania 3 Horizontal Wells drilled and completed Waiting on sales line – 20 MMcf/d total Southwest Pennsylvania 33 CNX Horizontal Wells in Greene and Washington Counties Daily Gas Production – 49 MMcf/d Key Points

§ Consol has drilled 37 horizontal

Marcellus wells

§ Total gross daily gas

production of 57 MMcf/d

§ Southwest Pennsylvania

─ 36 operated and 14 non-op

horizontal wells producing to sales

─ 4 horizontal wells drilled,

completed and tested – waiting on sales connection

─ 19 wells drilled and cased,

waiting on completion

§ Central Pennsylvania

─ Non-operated vertical

production only

─ 3 CNX horizontal wells

drilled and completed, recently connected to sales flowing 20 MMcf/d total

§ West Virginia

─ 30 horizontal farm-out wells

producing 110 MMcf/d to sales

─ 3 CNX horizontal wells

drilled and one approaching TD West VIrginia 30 Horizontal Wells in Harrison County Drilled on Farmout Acreage Daily Gas Production – 110 MMcf/d Southwest Pennsylvania 14 Non-Op Horizontal Wells in Washington County Daily Gas Production – 20 MMcf/d

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CONSOL Drilling Activity

Utica Drilling Activity by CONSOL and Others

CONSOL Ohio Utica Acreage with Test Wells

(1) Activity Map as of Oct 1st, 2010.

Key Points

§ CONSOL has about 200,000

net acres in Ohio which is prospective for the Utica Shale.

§ Ohio Utica is primarily

prospective for gas- condensate and oil production

§ Additional acreage in

Western Pennsylvania and West Virginia is prospective in the dry gas window of the Utica

§ CONSOL has drilled and

tested one vertical well in the Utica Shale in Belmont County, Ohio

§ The Utica completion was not

stimulated, and tested 1.5 MMcf/d on a short term test

§ Six additional Utica test wells

are planned for 2011 Utica Test – CNX Barnesville #1 1.5 MMcf/d Estimated Test Rate Un-stimulated Vertical Well Utica Test – Range Resources Zahn #1 Confirmed Test Rate of 4.4 MMcf/d Significant Utica Leasing and Drilling Activity in Portage and Surrounding Counties

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PA and WV Marcellus Net Lease Expirations by CONSOL Operating Area Key Points

n ~ 575,000 (87%) of

Pennsylvania and West Virginia Marcellus acreage is HBP or Fee

n CONSOL’s drilling program

will hold virtually all material acreage expiring in [2011 through 2015]

CONSOL Net Lease Expirations

3,508 29,050 26,094 19,442 6,831 1,965

• 5,000

10,000 15,000 20,000 25,000 30,000 35,000 2011 2012 2013 2014 2015 2016-2025 Central PA Southwestern PA West Virginia Approximately 87% of CONSOL’s Marcellus net acreage in PA and WV is HBP or Fee

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2010 Highlights

n 2010 Rig Inventory

─ 3 horizontal rigs, 2 walking rigs (July 2010)

n Green County, PA results

─ EURs (p-50 case) range from 3.5 Bcf to 9.9 Bcf; 5.5 Bcf

Average.

─ Maximum 24-hour production averaged 3.7 MMcf ─ 30-day production averaged 3.4 MMcf per day ─ Laterals average 3,400 feet ─ Drilling & Completion costs average $4.1 million

n Drilling operations in Southwest PA and Central PA n Drilling and Pad Configurations

─ Multi-well Pads ─ 3 to 6 wells per pad & 10 – 12 frac stages per well ─ 300 ft frac stage spacing

n Additional Improvements

─ High torque casing, LWD geosteering ─ Rotary steerable ─ Cutting drilling days from 15 to 11

CONSOL Gas Division – 2010 and 2011 Drilling Highlights

2011 Highlights

n 2010 Rig Inventory

─ 4 horizontal walking rigs

n Drilling operations in SW PA, Central PA and West Virginia n Drilling and Pad Configurations

─ Multi-well Pads ─ 10 to 12 wells per pad ─ Longer Laterals – 4,000’ ─ 10 – 15 frac stages per well

n Additional Improvements

─ Synthetic based mud system ─ Closed loop mud system ─ Closed top hole air drilling system ─ Improved geosteering with 3D seismic ─ Greater focus on microseismic ─ Focus on wellbore placement and completion design ─ Consistent practices across all operations ─ Implementation of Continuous Training Program 21

CONSOL Gas Division – 2011 Estimated Well Type Curve

Illustrative W ell Param eters

($MM, ex cept as noted)

Gros s E U R (B cfe) N R I N et E U R (B cfe) D rilling C

• st

C

• m

pletion C

• st

Total D & C Gathering Land & T itle Acquisition Total

M argin A nalysis

($ / Mcfe, ex cept as noted)

H enry H ub C ash Price ($ / M MBT U ) R ealized Price ($ / M cfe) Lease Operating Expense Production T axes Gross M argin T

• tal D

&C ,G,L,A C

• st ($ / Mcfe)1

AT AX IR R Price R equired for 20% AT AX IR R

• 1. Includes production loss (shrink) of 3.5%

Base

4.3 87.5% 3.7 1.9 1.3 3.2 0.4 0.1

• 3.7

Base

4.50 5.12 1.26 0.26 3.60 1.02 22.9% $4.27

2011 Type

5.7 87.5% 4.9 2.1 2.8 4.9 0.4 0.1

• 5.4

2011 Ty pe

4.50 5.12 1.26 0.26 3.60 1.13 22.5% $4.31

2011 Type (10%

D&C E fficiency) 5.7 87.5% 4.9 1.9 2.5 4.4 0.4 0.1

• 4.9

2011 Type (10%

D&C E fficiency) 4.50 5.12 1.26 0.26 3.60 1.02 26.8% $4.03

22

CONSOL Gas Division – 22% After-Tax IRR at $4.50 per MMBTU

• 5.0%

10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0% 50.0% 55.0% 60.0% 65.0% 70.0% 75.0% 80.0% 85.0% 90.0% 95.0% 100.0% $2.00 $2.50 $3.00 $3.50 $4.00 $4.50 $5.00 $5.50 $6.00 $6.50 $7.00 $7.50 $8.00

Internal Rate of Return %

Henry Hub Cash Price ($ / MMBTU) Well ATAX IRR Comparison - Type Curve Analysis

Base 2011 Type (10% D&C Efficiency) 2011 Type 23

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 and keeping a qualified workforce / Employee training and education n Public Relations – Consol taking a leadership role

─ Environmental and community education ─ Surface owner interactions 24

CONSOL Energy Inc.

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