EARNINGS RESULTS SECOND QUARTER 2017
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 plans; estimates of coal and gas reserves and resources; the projected timing and rates of return of future investments; and projections and estimates of 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, plans, 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 materially from the forward-looking statements include risks, contingencies and uncertainties that relate to, among other matters, the following: uncertainties as to the timing and manner of the separation (whether by sale or spin-off) and whether it will be completed (including any dropdowns of the coal business); the possibility that various closing conditions for the separation may not be satisfied; the impact of the separation on our business; the expected tax treatment of the separation; the risk that the coal and natural gas exploration and production businesses will not be separated successfully or such separation may be more difficult, time-consuming or costly than expected, which could result in additional demands on our resources, systems, procedures and controls, disruption of our ongoing business and diversion of management's attention from other business concerns; competitive responses to the separation; we may not receive the prices we expect to receive for our natural gas, natural gas liquids, and coal, including due to oversupply relative to the demand available for our products; we may not obtain on a timely basis the permits required for drilling and mining; we may not accurately estimate the volume of hydrocarbons that are recoverable from our oil and natural gas assets; we may encounter unexpected operational issues or disruptions when we drill and mine, including equipment failures, geological conditions, and higher than expected costs for equipment, supplies, services and labor, including with respect to third-party contractors; we may not achieve the efficiencies we expect to realize in our drilling and completion operations, and as a result, our projected cost savings may not be fully realized; our participation in joint ventures may restrict our operational and corporate flexibility, and actions taken by a joint venture partner may impact our financial position and operational results; we may not be able to sell non-core assets on acceptable terms; acquisitions and divestitures that we anticipate making or have made may not occur or produce anticipated benefits, or may cause disruptions to our business operations; we may be subject to environmental and other government regulations that adversely impact our operating costs and the market for our natural gas and coal; failure by Murray Energy to satisfy liabilities it acquired from us, or failure to perform its obligations under various arrangements, which we guaranteed, could materially or adversely affect our results of operations, financial position, and cash flows; we may be unable to incur indebtedness on reasonable terms; provisions in our multi-year coal sales contracts may provide limited protection and may result in economic penalties to us or permit the customer to terminate the contract; the majority of our common units in CNX Coal Resources LP are subordinated, and we may not receive related distributions; and other factors, many of which are beyond our control. Additional factors 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, 2016 filed with the Securities and Exchange Commission (SEC), as updated by any subsequent quarterly reports on 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. Currently, 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 presentation, 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. We caution you that the SEC views such estimates as inherently unreliable and these estimates may be misleading to investors unless the investor is an expert in the natural gas industry. 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 included in this presentation is based on a summary review of the title to the gas rights we hold. As is customary in the gas industry, prior to the commencement of natural 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. As a result of our title review or otherwise, we may be required to acquire property rights from third parties at our expense in order to effectively drill and produce the gas rights we control and third parties may participate in the wells we drill, thereby reducing our working interest in those wells. This presentation does not constitute an offer to sell or a solicitation of offers to buy securities of CONSOL Energy Inc. or CNX Coal Resources LP. 2
Executive Summary: Q2 2017 vs. Q1 2017 Q2 2017 Q1 2017 Q/Q Δ DRIVERS GUIDANCE Accelerated drilling cycle times due to operational TD Well Count – 2017E 34 25 +9 efficiencies 2018 TIL schedule pulled forward creating more Production – 2018E (Bcfe) 520-550 490-520 +30 production over longer portion of the year Reaffirming 2017E guidance of 420-440 Bcfe E&P Capital – 2017E Increase in drilling activity $620-$645 $555 +$78 (1) Completions service cost inflation ($ millions) Total Company EBITDA – 2017E $870 $925 -$55 Decline in basis and Henry Hub spot pricing ($ millions) RESULTS Proceeds from Asset Sales $326 $19 +$307 Recently closed on four asset sales for $215 million ($ millions) Leverage Ratio 3.0x 3.5x -0.5x Continued reduction in net debt (Net Debt / TTM Adj. EBITDA) NYMEX pricing declined ~$0.20 and basis widened Average E&P Sales Price $2.47 $2.85 -$0.38 ($/Mcfe) NGL average sales price down ~45% Q/Q Total Production Costs $2.20 $2.32 -$0.12 Reductions in DD&A, gathering, and taxes ($/Mcfe) Production 3.0 Bcfe flowing production sold in acreage deal (2) 92.2 95.0 -2.8 (Bcfe) TIL schedule delay pushed wells into early Q3 2017 Note: The terms “net debt” and “TTM adjusted EBITDA" are non-GAAP financial measures, which are defined and reconciled to the relevant GAAP measure below, under the caption “Non -GAAP Reconciliation." (1) Comparison based on midpoint of 2Q17 total E&P capital expenditure range. (2) Sale of 3.0 Bcfe of flowing production was retroactive starting on January 1, 2017 through May 31, 2017. 3
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