CONSOL Energy Announces Expected Net Investment in 2013 of $835 - $865 Million

CONSOL Energy Announces Expected Net Investment in 2013 of $835 - $865 Million

CONSOL Expects More Asset Sales in 2013 as it Continues to Rebalance its
Portfolio

PR Newswire

PITTSBURGH, Jan. 14, 2013

PITTSBURGH, Jan. 14, 2013 /PRNewswire/ --CONSOL Energy Inc. (NYSE: CNX)
expects to invest $835 - $865 million in its coal, gas, and water businesses
in 2013, after adjusting for certain expected proceeds. The table below shows
the components of the expected net investment.

 2013 Net Investment Details ($ MM)
                    Low  High
Coal Operations    410           520
Gas Operations     835           935
Water Operations   45            50
Total CapEx        1,290         1,505
Less: Asset Sales  (455)         (640)
Net Investment     835           865

(Logo: http://photos.prnewswire.com/prnh/20120416/NE87957LOGO)

"Our net investment in 2013 reflects both our ability to invest in our organic
growth opportunities in coal, gas, and liquids," commented J. Brett Harvey,
chairman and CEO, "while selling assets that have more value to others. We
have some flexibility in our 2013 investment plan, in both coal and gas. In
our coal division, once we complete the BMX Mine, we do not expect to be
investing in new  major coal growth projects. So, in 2014 and beyond, we
expect annual coal investments to approach maintenance-of-production levels of
$5 to $6 per ton."

CONSOL Energy expects to be able to fund this 2013 net investment through cash
flow from operations.

In 2013, CONSOL will receive the final annual installment of $328 million from
Noble Energy. This is reflected in the asset sales category. The remainder of
this category in the two cases represents a range of assumed asset sales, of
between $127 million and $312 million. We believe that this range is
achievable, given that the company sold assets of $350 million in 2012.

Within the coal operations category for 2013, CONSOL anticipates investing
$318 million for maintenance-of-production projects. Other major items include
$166 million for the BMX Mine, as well as $80 million for the Enlow Fork
overland belt project. The BMX Mine is scheduled for completion during the
first quarter of 2014, when 5 million annual tons of high-quality Pittsburgh
seam coal will be available to be sold in either the high-vol or thermal
markets. In 2012, CONSOL contracted and paid significant deposits to secure
replacement longwall mining shields at three of its mining complexes and new
longwall mining shields at the BMX mining complex. The company is nearing the
end of a process to fund this capital commitment in a $205 million operating
lease in 2013. This amount has been netted from the expected coal operations
capital expenditures.

Within the gas operations category, CONSOL expects to invest about $835 - $935
million. An estimated $160 million of this is to maintain production. This
figure is net of approximately $100 million in drilling carry from Hess
Corporation for drilling in the Ohio Utica Shale and independent of commodity
price levels. CONSOL assumes no carry from Noble Energy for drilling in the
Marcellus Shale, which is dependent on natural gas being priced at or above
$4.00 per MMBtu for three consecutive months. We remain focused and
disciplined to drill our higher rate of return projects and benefit from the
flexibility of our held-by-production (HBP) acreage position.

CONSOL plans to spend $600 million on continuing to develop its extensive
Marcellus Shale assets, which includes drilling capital of $415 million. The
budget anticipates that the CONSOL/Noble Energy joint venture will drill 126
(gross) horizontal Marcellus Shale wells, including 90 (gross) wells in the
liquids-rich area of the play. We will continue to evaluate the number of dry
gas wells that we drill in light of the commodity price curve and exercise
appropriate capital discipline. CONSOL expects to invest $74 million in
related gathering and compression.

In the CONSOL/Hess Corporation joint venture in the Utica Shale, CONSOL
expects to invest $122 million, with $90 million of that allocated towards
drilling capital for CONSOL's share of 27 (gross) wells. Because of the
drilling carry, Hess Corporation pays 75% of Utica Shale well costs, while
production is split 50/50.

The coalbed methane program will again be kept at minimal drilling levels,
with the expected drilling of only 63 wells. Total capital for the 2013 CBM
program is estimated to be $65 million.

Across all of the gas plays, the high case includes $660 of drilling capital,
$128 million of gathering and compression capital and $76 million for land.

As a result of the expected gas investment, CONSOL Energy projects its 2013
gas production to be between 170-180 Bcfe, of which 95% is expected to be dry
gas. Within this range are included approximately 250 Mbbls of oil and 1,200
Mbbls of condensate/NGLs. The total production, if achieved, will be an
increase of between 8 - 15%, as compared to actual 2012 production of 156.3
Bcfe.

Earnings call information:

CONSOL Energy will report additional operational and financial results for the
quarter ended December 31, 2012 at 7:00 a.m. ET on Thursday, January 31,
followed by a conference call at 10:00 a.m. ET. The call can be accessed at
the investor relations section of the company's web site, at
www.consolenergy.com.

About CONSOL Energy Inc.

CONSOL Energy Inc., the leading diversified fuel producer headquartered in the
Eastern U.S., is a member of the Standard & Poor's 500 Equity Index and the
Fortune 500. It has 12 bituminous coal mining complexes in four states and
reports proven and probable coal reserves of 4.4 billion tons. It is also a
leading Eastern U.S. gas producer, with proved reserves as of December 31,
2011 of 3.5 trillion cubic feet. Additional information about CONSOL Energy
can be found at its web site: www.consolenergy.com.

Forward-Looking Statements

Various statements in this release, including those that express a belief,
expectation or intention, may be considered forward-looking statements (as
defined in Section 21E of the Exchange Act) that 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 may include projections and estimates concerning
the timing and success of specific projects and our future production,
revenues, income and capital spending. When we use the words "believe,"
"intend," "expect," "may," "should," "anticipate," "could," "estimate,"
"plan," "predict," "project," or their negatives, or other similar
expressions, the statements which include those words are usually
forward-looking statements. When we describe strategy that involves risks or
uncertainties, we are making forward-looking statements. The forward-looking
statements in this press release, if any, speak only as of the date of this
press release; we disclaim any obligation to update these statements. We have
based these forward-looking statements on our current expectations and
assumptions about future events. While our management considers these
expectations and assumptions to be reasonable, they are inherently subject to
significant business, economic, competitive, regulatory and other risks,
contingencies and uncertainties, most of which are difficult to predict and
many of which are beyond our control. These risks, contingencies and
uncertainties relate to, among other matters, the following: deterioration in
economic conditions in any of the industries in which our customers operate,
or sustained uncertainty in financial markets cause conditions we cannot
predict; an extended decline in prices we receive for our coal and gas
affecting our operating results and cash flows; our customers extending
existing contracts or entering into new long-term contracts for coal; our
reliance on major customers; our inability to collect payments from customers
if their creditworthiness declines; the disruption of rail, barge, gathering,
processing and transportation facilities and other systems that deliver our
coal and gas to market; a loss of our competitive position because of the
competitive nature of the coal and gas industries, or a loss of our
competitive position because of overcapacity in these industries impairing our
profitability; coal users switching to other fuels in order to comply with
various environmental standards related to coal combustion emissions; the
impact of potential, as well as any adopted regulations relating to greenhouse
gas emissions on the demand for coal and natural gas, as well as the impact of
any adopted regulations on our coal mining operations due to the venting of
coalbed methane which occurs during mining; foreign currency fluctuations
could adversely affect the competitiveness of our coal abroad; the risks
inherent in coal and gas operations being subject to unexpected disruptions,
including geological conditions, equipment failure, timing of completion of
significant construction or repair of equipment, fires, explosions, accidents
and weather conditions which could impact financial results; our focus on new
gas development projects and exploration for gas in areas where we have little
or no proven gas reserves; decreases in the availability of, or increases in,
the price of commodities and services used in our mining and gas operations,
as well as our exposure under "take or pay" contracts we entered into with
well service providers to obtain services of which if not used could impact
our cost of production; obtaining and renewing governmental permits and
approvals for our coal and gas operations; the effects of government
regulation on the discharge into the water or air, and the disposal and
clean-up of, hazardous substances and wastes generated during our coal and gas
operations; the effects of stringent federal and state employee health and
safety regulations, including the ability of regulators to shut down a mine or
well; the potential for liabilities arising from environmental contamination
or alleged environmental contamination in connection with our past or current
coal and gas operations; the effects of mine closing, reclamation, gas well
closing and certain other liabilities; uncertainties in estimating our
economically recoverable coal and gas reserves; costs associated with
perfecting title for coal or gas rights on some of our properties; the
outcomes of various legal proceedings, which are more fully described in our
reports filed under the Securities Exchange Act of 1934; the impacts of
various asbestos litigation claims; increased exposure to employee related
long-term liabilities; increased exposure to multi-employer pension plan
liabilities; minimum funding requirements by the Pension Protection Act of
2006 (the Pension Act) coupled with the significant investment and plan asset
losses suffered during the recent economic decline has exposed us to making
additional required cash contributions to fund the pension benefit plans which
we sponsor and the multi-employer pension benefit plans in which we
participate; lump sum payments made to retiring salaried employees pursuant to
our defined benefit pension plan exceeding total service and interest cost in
a plan year; acquisitions and joint ventures that we recently have completed
or entered into or may make in the future including the accuracy of our
assessment of the acquired businesses and their risks, achieving any
anticipated synergies, integrating the acquisitions and unanticipated changes
that could affect assumptions we may have made and divestitures we anticipate
may not occur or produce anticipated proceeds including joint venture partners
paying anticipated carry obligations; the anti-takeover effects of our rights
plan could prevent a change of control; increased exposure on our financial
performance due to the degree we are leveraged; replacing our natural gas
reserves, which if not replaced, will cause our gas reserves and gas
production to decline; our ability to acquire water supplies needed for gas
drilling, or our ability to dispose of water used or removed from strata in
connection with our gas operations at a reasonable cost and within applicable
environmental rules; our hedging activities may prevent us from benefiting
from price increases and may expose us to other risks; and other factors
discussed in the 2011 Form 10-K under "Risk Factors," as updated by any
subsequent Form 10-Qs, which are on file at the Securities and Exchange
Commission.

SOURCE CONSOL Energy Inc.

Website: http://www.consolenergy.com
Contact: Investor Relations: Dan Zajdel, +1-724-485-4169, or Tyler Lewis,
+1-724-485-3157; or Media Relations: Lynn Seay, +1-724-485-4065
 
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