CNX Gas

CNX Gas Corporation (NYSE:CXG) is an independent natural gas exploration, development, production and gathering company operating in the Appalachian Basin of the United States. The Pittsburgh-based company believes that it is the second largest gas producer in the Appalachian Basin, with 2006 production expected to be 55.7 billion cubic feet (Bcf), a 15% increase over 2005. CNX Gas has a tremendous asset base. Proved reserves as of December 31, 2005 were 1,130.4 Bcf, with a PV-10 value of $3.051 billion. A recently-completed study identified net unproved reserves of 2,039 Bcf. Importantly, over 90% of the net unproved reserves are economic at gas prices of around $5 per thousand cubic feet (Mcf), or less. The company has access to 2.44 million gross acres, of which 640,000 remain unevaluated.

CNX Gas' primary operations are in the Oakwood Field in southwestern Virginia, where since the early 1980s the company has drilled in a mostly contiguous block of 267,000 acres. By year-end 2006, CNX Gas will have drilled over 2,000 vertical frac wells in this field. CNX Gas also owns an extensive gathering system in Virginia.

In 2006, CNX Gas has begun a systematic effort to develop its 523,000 acres in Northern Appalachia. In its Mountaineer play, where gas is produced from the Pittsburgh 8 coal seam, the company is drilling 18 vertical-to-horizontal wells.

For 2007, CNX Gas will continue to accelerate its efforts to develop its asset base. Two new plays have been identified, dubbed Nittany and Cardinal. Nittany is a coalbed methane play in central Pennsylvania, while Cardinal is a New Albany shale play in western Kentucky.

CNX Gas has no debt and has been funding its $175 million 2006 capital budget through internally-generated cash. For the first nine months of 2006, CNX Gas generated earnings of $121.6 million and free cash flow of $87.5 million. CNX Gas benefits from its Appalachian location, where gas commands a premium over NYMEX. The company is a low-cost producer, with recent all-in costs of only $2.85 per Mcf. The company is very focused on return-on-capital-employed. Through the first nine months of 2006, CNX Gas generated an annualized 21.9% ROCE.

Superior safety performance translates into superior financial performance in the long term. At CNX Gas, working in a safe manner is a condition of employment and our expectation is to continually perform accident-free. During the first nine months of 2006, our employees had no lost time incidents. In fact, we've worked over 2.0 million man-hours since our previous lost time incident.

The company has also been recognized for its environmental record. CNX Gas believes that it could be the world leader in capturing coalbed methane from active mining operations. It is in the U.S., according to 2004 DOE data.

The ultimate goal is to make CNX Gas the finest energy producer in the U.S. We want to create shareholder value by wisely investing capital to organically grow reserves and production, continually operating as a low cost producer, and constantly working safely and in an environmentally-friendly manner.

Statistics

• Market Capitalization: $4 billion
• Proved Gas Reserves (12/31/05): 1,130 Bcf
• Expected 2006 Gas Production: 55.7 Bcf
• Return-on-capital-employed (YTD): 21.9%
• Employees: 165

Nicholas J. DeIuliis, President and CEO, CNX Gas Corporation