Profile: CONSOL Energy Inc. (CNX)

CONSOL Energy Inc. (CONSOL Energy) is a multi-fuel energy producer and energy services provider that primarily serves the electric power generation industry in the United States. During the year ended December 31, 2008, the Company produced high-Btu bituminous coal from 17 mining complexes in the United States. CONSOL Energy has two principal business units: Coal and Gas. The principal activities of the Coal unit are mining, preparation and marketing of steam coal, sold primarily to power generators and metallurgical coal, sold to metal and coke producers. The Coal unit includes four segments: Northern Appalachian, Central Appalachian, Metallurgical and Other Coal. The principal activity of the Gas unit is to produce pipeline-quality methane gas for sale primarily to gas wholesalers.

Coal Operations

During 2008, the Northern Appalachian aggregated segment included Blacksville #2, Robinson Run, McElroy, Loveridge, Bailey, Enlow Fork, Mine 84 and Shoemaker. In 2008, the Central Appalachian aggregated segment included, Jones Fork Complex, the Fola Complex and the Terry Eagle Complex. During 2008, the Metallurgical aggregated segment includes the two mines: Buchanan and Amonate Complex. The Other Coal segment includes its purchased coal activities, idled mine cost, coal segment business units not meeting aggregation criteria, as well as various other activities assigned to the coal segment but not allocated to each individual mine.

During 2008, CONSOL Energy had 17 active mining complexes, including a fully consolidated, 49% equity affiliate, all located in the United States. At December 31, 2008, CONSOL Energy had an estimated 4.5 billion tons of proven and probable reserves. CONSOL Energy’s proven and probable coal reserves fall within the range of commercially marketed coals in the United States. CONSOL Energy’s reserves are located in northern Appalachia (63%), central Appalachia (13%), the mid-western United States (18%), the western United States (4%) and in western Canada (2%) at December 31, 2008. In 2007, 96% of CONSOL Energy’s production came from underground mines and 4% from surface mines. During 2008, 84% of its production came from mines equipped with longwall mining systems.

Gas Operations

The Company's gas operations are primarily conducted by CNX Gas Corporation (CNX Gas), an 83.3%-owned subsidiary of CONSOL Energy at December 31, 2008. CNX Gas primarily produces coalbed methane. In the Appalachian Basin it operates principally in Central Appalachia and Northern Appalachia. The Company also operates in the Illinois Basin. During 2008, the Company drilled in the aggregate, 534 net development wells. As of December 31, 2008, 67 wells were still in process. During 2008, the Company drilled in the aggregate 60 net exploratory wells.

Other

CONSOL Energy provides other services both to the Company's own operations and to others. These include land services, industrial supply services, terminal services (including break bulk, general cargo and warehouse services), river and dock services, and coal waste disposal services. The Company is developing property assets previously used primarily to support its coal operations or property assets not being utilized.

Fairmont Supply Company, a CONSOL Energy subsidiary, is a general-line distributor of mining and industrial supplies in the United States. Fairmont Supply has 25 customer service centers nationwide. Fairmont Supply also provides integrated supply procurement and management services. Fairmont Supply provides mine supplies to CONSOL Energy’s mining operations. Approximately 43% of Fairmont Supply’s sales in 2008, were made to CONSOL Energy’s mines. In November 2008, Fairmont Supply Company acquired the assets of North Penn Pipe & Supply, LLC.

In 2008, approximately 9.1 million tons of coal were shipped through CONSOL Energy’s subsidiary, CNX Marine Terminal Inc.’s exporting terminal in the Port of Baltimore. Approximately 40% of the tonnage shipped was produced by CONSOL Energy coal mines. The terminal can either store coal or load coal directly into vessels from rail cars. It is also one of the few terminals in the United States served by two railroads, Norfolk Southern and CSX Transportation, Inc.

CONSOL Energy’s river operations, located in Monessen, Pennsylvania, transport coal from the Company’s mines, coal from other mines and non-coal commodities from river loadout facilities primarily along the Monongahela and Ohio Rivers in northern West Virginia and southwestern Pennsylvania. Products are delivered to customers along the Monongahela, Ohio Kanawha and Allegheny rivers. At December 31, 2008, the Company operated 24 towboats, five harbor boats and more than 700 barges. In 2008, its river vessels transported a total of 23.6 million tons of coal and other commodities, including eight million tons of coal produced by CONSOL Energy mines. CONSOL Energy provides dock services for its mines at Alicia Dock, located on the Monongahela River in Fayette County, Pennsylvania. CONSOL Energy transfers coal from rail cars to barges for customers that receive coal on the river system.

The Company operates an ash disposal facility on a 61-acre site in northern West Virginia to handle ash residues for coal customers that are unable to dispose of ash onsite at their generating facilities. The ash disposal facility can process 200 tons of material per hour. CONSOL Energy has a long-term contract with a co-generation facility to supply coal and take the residual fly ash and bottom ash. Bottom ash is disposed locally at the co-generation facility for road construction and other purposes.