CONSOL Energy Proved Gas Reserves Nearly Double, from 1.9 Tcf to 3.7 Tcf; 2010 Drill Bit Finding Cost of $0.41 per Mcfe; +486% of Production Replaced; Total 3P Reserves Increase from 6.5 Tcf to 14.2 Tcf; 2010 Marcellus Shale EURs Average 5.5 Bcf Per Well

CONSOL Energy Inc. the leading diversified fuel producer in the Eastern U.S., has proved gas reserves of 3.7 trillion cubic feet (Tcf) as of December 31, 2010. This is an increase of 1.8 Tcf, or 95%, from the 1.9 Tcf reported at year-end 2009. The proved developed reserves (PDP) increased by 86% and the proved undeveloped reserves (PUD) increased 107%. Of the 3.7 Tcf of proved reserves, 52%, are categorized as proved developed and 48% are classified as proved undeveloped.

CONSOL Energy invested $255.7 million in drilling capital in 2010. This yielded extensions and discoveries of 621.3 Bcf, resulting in a drill bit finding cost of $0.41 per Mcfe. The net impacts of revisions, which include pricing and production, yielded another 380.0 Bcf. The 621.3 Bcfe from extensions and discoveries, when divided by 2010 production of 127.9 Bcf, means that the company replaced 486% of its 2010 production through the drill bit.

“CONSOL Energy had another very successful year in adding proved gas reserves,” commented J. Brett Harvey, chairman and chief executive officer. “We saw solid growth in our coalbed methane reserves and a nice jump in our Marcellus Shale PDP bookings from our 2010 program. The reserves from our 2010 Marcellus Shale program averaged 5.5 Bcf per well. When you consider that our laterals averaged 3,400 feet, this means that we booked about 1 Bcf of reserves for every 600 feet of lateral.”

The company also has total proved, probable, and possible reserves (also known as “3P reserves”) of 14.2 Tcf as of December 31, 2010. This is an increase of 7.7 Tcf, or 118%, in 3P reserves from the 6.5 Tcf reported at year-end 2009. The company’s 3P reserves have been determined in accordance with the guidelines of the Society of Petroleum Engineers Petroleum Resources Management System (SPE-PRMS).

As reported on January 27, 24 horizontal wells were drilled in the Marcellus Shale in 2010, and 13 were turned on line. Total well costs averaged $4.1 million. The expected ultimate recovery (EUR) averaged 5.5 Bcf per well. The average lateral was 3,400 feet. Maximum 24-hour production averaged 3.7 MMcf per well per day, while 30-day production averaged 3.4 MMcf per well per day. Total daily production from the Marcellus Shale grew from 14 MMcf per day as of December 31, 2009 to 40 MMcf per day as of December 31, 2010.

The future net cash flows of CONSOL Energy’s proved gas reserves have a present value of nearly $2.78 billion before income taxes, assuming a ten percent discount rate, as of December 31, 2010. This compares with a value of nearly $1.48 billion at December 31, 2009. The increase in value was driven by the acquisition of the Dominion properties, extensions and discoveries, and to a lesser extent, slightly higher prices. The values assume flat pricing and constant unit costs. The average price used in the latest reserve study was $4.46 per Mcf, versus $4.19 per Mcf used in 2009. Both prices exclude the effects of hedged production.

A new category was added to the above table in 2010: the Utica Shale. It underlies many of CONSOL Energy’s other formations in eastern Ohio, southwestern Pennsylvania, and northern West Virginia. In the third quarter of 2010, CONSOL announced its first Utica Shale discovery in Belmont County, Ohio. The formation, encountered at a depth of 8,450 feet, was 200 feet thick. A 24-hour test yielded an open flow of 1.5 million cubic feet on this vertical, unstimulated well.

Drilling capital in 2011 is expected to total $475 million. CONSOL Energy expects to invest $225 million for development drilling. This category includes Virginia CBM and Marcellus Shale in Southwest Pa. An additional $215 million is planned for delineation drilling, including Marcellus Shale drilling in Central Pa. and Northern West Virginia. The company expects to drill 70 horizontal wells in the Marcellus Shale in 2011. CONSOL will also conduct a six-well Utica Shale exploration program for $35 million. Investment in midstream assets in 2011 is expected to be $200 million, for a total gas capital budget of $675 million.