Mine Influenced Water for E&P use. Marshall A. Roberts Director of Water Marketing

Transcription

1 Mine Influenced Water for E&P use Marshall A. Roberts Director of Water Marketing

2 About CONSOL Energy Company Founded in 1860; began operations in 1864 Market Cap = $7.53 billion (as of 2/9/15) 2014 Total Revenue = $3.7 billion Member Fortune 500; S&P 500 One of the largest independent natural gas E&P companies. Operations centered in the major shale formations located in the Appalachian basin 6.8 tcf natural gas reserves Three premier mining complexes with access to seaborne markets via wholly-owned Baltimore Marine Terminal

3 CONSOL s Unique Perspective Surface Sewickley Coal Seam 900 ft Pittsburgh Coal Seam 1,000 ft Freeport Coal Seam 1,650 ft Upper Devonian Sands - 1,750 5,500 ft Rhinestreet Shale - 7,400 7,800 ft Marcellus Shale 8,000 ft 8,000 ft - 8,000 ft Utica Shale 11,500 ft CONSOL Energy is the only company that operates across all of these different horizons

4 CONSOL Energy Family of Companies 2015 CONSOL Energy E&P A wholly-owned division of CONSOL ENERGY 40+ year organic drilling inventory in Appalachian Shales CONE Midstream Partners, LP A Marcellus midstream affiliate of CONSOL Energy and Noble Energy Approx. 500,000 acres of dedicated Marcellus Shale acreage CONSOL Energy The parent company retains controlling interest in some of the most valuable resources in the Appalachian basin Thermal Coal MLP Made up of Bailey, Enlow Fork, Harvey Mines & related infrastructure Publically-traded company expected to IPO in mid-2015 Metallurgical Coal Subsidiary Made up of Buchanan Mine & related infrastructure IPO expected in the second half of 2015 Registration statements relating to the securities of the Thermal Coal MLP and the Metallurgical Coal Subsidiary that would be sold in the offerings referred to in this presentation have not been filed with the Securities and Exchange Commission (SEC) or become effective. This presentation does not constitute an offer to sell, or the solicitation of an offer to buy, any securities. Any offering will be made only by means of a prospectus.

5 CONSOL Energy s Transformative Journey The Journey Begins 1999 CONSOL Energy begins trading on the New York Stock Exchange under CNX CONSOL Energy begins transformation to a diversified energy producer CNX Gas corporate subsidiary is formed as a stand-alone, publicly-traded natural gas subsidiary of CONSOL Energy 2010 CONSOL Energy announces sale of five thermal coal mines CONSOL Energy acquires Dominion Resources natural gas exploration and production assets, tripling CONSOL s Marcellus Shale acreage position CONSOL Energy acquires all outstanding CNX Gas shares 2014 Wholly-owned E&P Division and Coal Division CONE Midstream Partners, formed by CONSOL Energy and Noble Energy, begins trading on the NYSE under CNNX

6 Mine Influenced Water Raw Mine Water or Abandoned Mine Water (Untreated) 6

7 Mine Influenced Water / Standard Treatment MIW is not always what it seems 7

8 Water Marketing Division Water is essential for our production processes coal and gas production product preparation dust management Drilling CONSOL has produced water for almost 150 years, yet it has always been a liability both on our books and in operations CONSOL utilizes a holistic water management approach to manage water-related risks, minimize impacts, operate efficiently, and create value Water is fundamental to business and should be an asset, not a liability

9 Water Marketing Division Our current challenge is taking a liability like water and turning it into an opportunity Taking our cue from the development of our gas segment and Midstream Segment, we have formed our Water Business Turning challenges into opportunities is a process we ve successfully managed in the past

10 Began using treated mine water for our own hydraulic fracturing needs Recycle 100% of our flowback water to drill and complete the next well Began recycling our produced water Began selling MIW to 3 rd parties for industrial use 223,276,995 total gallons MIW sold YTD 2015 CONSOL captures value from the synergies of our business operations

11 Fresh Water Sources - Riverfront locations develop long-term trucking contracts with 3 rd party customers, maximizing the use of existing access points - Increase reservoir/lake sales revenue - Increase margin from all freshwater locations/charge a premium/clearance price exceeding municipal prices Water is fundamental to business and should be an asset, not a liability

12 Pipeline Water Sales - Increase 3 rd -party sales off existing water pipelines - Secure tap locations and customer in conjunction with major pipeline projects to reduce installation costs and maximize sales point proximity Water is fundamental to business and should be an asset, not a liability

13 Treated Mine Water Sales - Market treated mine water from MIW and RO facilities to expand customer base - Pipeline and trucking options Water is fundamental to business and should be an asset, not a liability

14 Proximity, Quantity, Quality Mapping and proper acreage ownership helps identify potential beneficiaries of MIW

15 Proximity, Quantity, Quality Mapping and proper acreage ownership helps identify potential beneficiaries of MIW

16 Never Underestimate the Power of PR Work with state legislature Minimize the amount of fresh water used in E&P process Utilize liability water sources for other industries Large E&P companies being Environmental Stewards and working with the State to limit the amount of fresh water used in process Social License to Operate

17 Conclusion Dual but not conflicting goals: Minimize our water footprint Capture the value that can be gained to further minimize our costs Water management planning up front helps minimize environmental and cost impacts while realizing opportunities

18 Mine Influenced Water Thank you! Marshall A. Roberts Director of Water Marketing