The leading diversified fuel producer in Appalachia CONSOL drill - - PDF document

8/ 2/ 2010 1

CONSOL Energy Inc.

August 2010 Investor Presentations

CONSOL drill site in Greene County, Pa.

The leading diversified fuel producer in Appalachia

The unprove d 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

• ur 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 de velopment and production of the gas e state.

This presentation contains statements, estimates and projections which are forward-looking statements (as defined in Section 2 1 E of the Securities Exchange Act of 1 9 3 4 ). These statements, which are described in detail in

• ur

annual report form 1 0 -K filed with the Securities and Exchange Commission, involve risks and uncertainties that could 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 s e curities of CONSOLEnergy 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.

Cautionary Language

2

8/ 2/ 2010 2

CONSOL ’s Coal Operations Ran Well in Q1 and Q2

• Safety was improved
• Internal production goals

were achieved

• T
• tal production costs

were flat from Q1 to Q2

CONSOL ’s mines are poised to meet higher commitments for the remainder of 2010.

3

15.9 14.9 15.2 16.5 $44.40 $47.38 5 10 15 20 25 30 35 40 45 50 1 2 3 4 2010 Quarterly Production (MM tons) Unit Costs ($/ton)

Coal Division’s Unit Costs Vary With Production Levels

Total coal production costs in 2010 Q1 and Q2 were each $706 million.

Expected 2010 Quarters

4

8/ 2/ 2010 3

CONSOL ’s M arketing Achievements in Q2

• Generated a record

$1 billion from coal sales

• Loaded a record 43 vessels

with 3.3 mm tons

• Booked 300,000 tons of

high-vol coal for Asia in 2H at $76 per ton

• Booked 200,000 tons of

thermal coal for Europe in 2H at $61 per ton

CONSOL ’s marketers also booked meaningful volumes at higher prices for 2011 and 2012. CONSOL ’s 100%-owned Baltimore Terminal

5

CONSOL ’s New BM X M ine Opens in Late 2013

CONSOL ’s Bailey Prep Plant will expand to serve the BM X M ine

• 5 MM tons/ year of

low-cost NAPP coal

• Potential Markets:
• Asian mills
• European generators
• Brazilian mills
• Domestic generators

CONSOL is expanding production of its premium product to meet the growing demands of world markets.

8/ 2/ 2010 4

CONSOL Also Looking to M onetize CAPP M et Reserves

• Amonate, Elk Creek, and

Itmann properties

• 5 MM tons/ year of low-

vol, medium-vol, and high-vol

• Potential EBITDA of

$350 MM, assuming $150 per ton sales price

CONSOL is assessing options, including joint-venturing,

• utright sale, and possible sole development.

New Developments in CONSOL ’s Gas Division

8

CONSOL ’s gas production in Q2 grew 42%, to a record 31.9 Bcf.

• Gas Division had Q2 net

income of $33.5 million

• 3 Rigs Running in the

Marcellus by the end of August, w/ 4 rigs running by end of 2010

• Signed for 200 MMcf of

takeaway capacity on Dominion

CONSOL ’s New Patterson Apex Walking Rig

8/ 2/ 2010 5

50 100 150 200 250 300 350 400 2010 2015

CONSOL Issues 2011 Production Guidance of 170 Bcf

CONSOL now expects 2011 production to be higher than earlier forecast.

Marcellus Other 142 Annualized Bcf 350 Bcf 2010 2011 2012 2013 2014 2015 Gross M arcellus Wells Drilled 22 63 131 165 170 170 Total M arcellus Rigs 2 5 8 10 10 10 Annual wells / rig 11 13 16 17 17 17

9

170 Bcf

CONSOL has Three M arcellus Shale Operating Areas

CONSOL has 750,000 Net Acres in M arcellus Shale.

10

Former Dominion Marcellus Acreage Legacy CONS OL Energy Marcellus Acreage

Central Pa. Ops

PA VA OH MD WV

SW Pa. Ops WV Ops

8/ 2/ 2010 6

1,570 1,400 742 730 720 652 585 584 500 492 350 343 280 250 250 250 229 170 147 120 108 88 200 400 600 800 1,000 1,200 1,400 1,600 1,800 CHK RRC Pro Forma CNX TLM NFG East STO ATLS EQT D Chief XCO XTO / XOM APC CNX UPL EOG COG SWN Antero C RZO CLR

CONSOL has a Leading Acreage Position and …

. . . Not All M arcellus Acres Are Equal

• 98% of the acres are HBP (held by production)
• Have an average NRI (net revenue interest) of 89%
• Have essentially no drilling commitments

Source: As calculated by CONSOL Energy based on public filings.

CONSOL can drill for economics, not to hold leases.

Net Acres (000’s)

11

750 CNX

16.2 38.2 18.1 41.1 1.9 2.9 38.2 16.2 Proved Reserves (Tcfe) Total Unproved Reserves and Potential Resource Base (Tcfe) 1.9 2.9

Note: Total Unproved Reserves and Potential Resource Base calculated using mid-point of CONSOL Energy estimates.

CONSOL ’s Gas Reserve Potential Has Doubled

Pre-Acquisition Post-Acquisition Pre-Acquisition Post-Acquisition Pre-Acquisition Post-Acquisition

Proved Reserves T

• tal Unproved Reserves and

Potential Resource Base T

• tal Resource Potential

CONSOL has extraordinary current and long-term opportunities.

12

8/ 2/ 2010 7

Sewickley Coal Seam – 900 feet Pittsburgh Coal Seam – 1,000 feet Freeport Coal Seam – 1,650 feet Upper Devonian Sands – 1,750 - 5,500 feet M arcellus Shale – 7,000+ feet

CONSOL Energy’s Value Proposition

CONSOL has the largest concentration

• f Appalachian energy assets.

Oriskany Tight Sands, Utica and Trenton Black River Shales – 8,000+ feet

13

Sewickley Coal Seam - CBM – 900 feet Pittsburgh Coal Seam - CBM – 1,000 feet Freeport Coal Seam - CBM – 1,650 feet

Illustrative M arcellus Well Economics

After-Tax IRR At Various Prices M argin Analysis

CONSOL expect a 29.5% After-Tax IRR at $5.00 / M M BTU.

0% 5% 1 0% 1 5% 20% 25% 30% 35% 40% 45% 50% 55% 60% 65% 70% 75% 80% 85% 90% 95% 1 00% $2.00 $2.50 $3.00 $3.50 $4.00 $4.50 $5.00 $5.50 $6.00 $6.50 $7.00 $7.50 $8.00 Henry Hub Cash Price ($ / MMBTU) Internal Rate of Return (%) (1) Assumes 3,000 ft. laterals (2) Difference represents basis premium and gas quality characteristics (3) Includes production loss (shrink) of 3.5%

14

($M M , except as noted)

Gross EUR (Bcfe)

(1)

4.3 NRI 87.5% Net EUR (Bcfe) 3.7 Drilling Cost (1) $1.9 Complet ion Cost (1) 1.3 Total D&C $3.2 Gathering 0.4 Land & Tit le 0.1 Total $3.7

M argin Analysis

($ / M cfe, except as noted)

Henry Hub Cash Price ($ / M M BTU) $5.00 Realized Price ($ / M cfe) (2) 5.67 Lease Operating Expense $1.26 Production Taxes 0.28 Gross M argin $4.13 Tot al D&C,G,L Cost ($ / M cfe)

(3)

$1.02 ATAX IRR 29.5% Henry Hub Price Required for 20% ATAX IRR $4.27

8/ 2/ 2010 8

Latest Five Wells Appear to be Very Good

15

CONSOL is achieving results much better than the type curve would suggest.

All in Greene County, Pa.:

• EURs (p-50 case) range from 5.5 Bcf to 9.9 Bcf
• Laterals average 2,200 feet
• D&C Costs average $ 4.2 million
• Projected after-tax IRRs range from 44% to 70%

CONSOL Energy has one of the best gas hedge books in the industry:

2010 2011 2012 T

• tal Y

early Production (Bcf) 141 170 NA VolumesHedged (Bcf) 48.4 22.6 15.1 Average Hedge Price ($/ M cf) $7.85 $6.84 $6.84

CONSOL Energy’s Gas Hedge Position

CONSOL ’s low cost position allows for flexibility in hedging.

16

8/ 2/ 2010 9

CONSOL ’s Investment Thesis

17

CONSOL expects to generate significant cash flow, especially as its thermal coal is re-priced in the coming years.

• Internally generated cash is funding growth in gas:
• Q1 Adjusted EBITDA $350 million
• Q2 Adjusted EBITDA $350 million
• 2010 Capex Guidance $1.1 billion
• Over time, as the gas business

expands, so should CONSOL ’s multiple.

CONSOL Energy Inc.

August 2010 Investor Presentations

CONSOL drill site in Greene County, Pa.

The leading diversified fuel producer in Appalachia