CONSOL Energy Inc

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Pittsburgh, Pennsylvania-based CNX Gas Corporation (NYSE:CXG) controls 185,000 of Marcellus shale acreage primarily located in southwestern Pennsylvania and northern West Virginia. The company was originally spun out of CONSOL Energy and is a subsidiary 83% owned by it. On a revenue basis it is the leading gas producer in the Appalachian Basin.

As of September, 2008 it had commenced a drilling program in the Marcellus with one vertical 8,000 ft deep well which had initial flow rate of 1.3 MMcf per day. CNX invested $6 million in this well. It was stimulated with a five-stage, slickwater frac. The company already has an extensive coal-bed methane (CBM) operation in the area so the shale gas is being blended with the CBM production in order to take advantage of the already existing extensive gas gathering system. Additional wells are planned. As of October, 2008, a second horizontal well was drilled and pending hydro-fracturing.

CNX was reported to be actively leasing drilling rights in Greene County, Pennsylvania.

In October, 2008 the company was also reported as active in Marshall County, West Virginia and having invested $34 million during 2008 in a gas well drilling program in West Virginia. Twenty-two wells have been drilled there so far in 2008. A total of thirty-four wells are planned to be drilled by year-end. The company has also invested around $10 million in gas processing plants.

In December, 2008, CNX reported its first horizontal well has a flow rate of 6.5 million cubic feet (MMcf) per day. It is located in Washington County, and is believed to be the same one previously reported in September as a vertical well with initial production of 1.3 MMcf per day.

In January, 2009 it was reported that a second and third horizontal well had been drilled and are in the process of being fraced.

A February, 2009 report indicated that so far CNX has 10 Marcellus wells and 186,000 acres under lease in that formation. Their total Appalachian shale acreage including Marcellus, Huron and Chattanooga shales is 633,000 acres.

In March, there was a report about CNX moving its corporate headquarters to Southpointe II in Canonsburg, PA where CONSOL's headquarters are also located. Marcellus shale gas production is starting to be a very significant income producer for CNX as its 4th quarter income nearly doubled. In the past most of its income was derived from coal bed methane (CBM) production, but now Marcellus production is kicking in. The company intends to ramp up Marcellus drilling in 2009 with a CapEx budget of almost $50 million, and are cutting back on the level of CBM drilling.

• J. Brett Harvey is Chairman and CEO.
• Nicholas J. DeIuliis is CNX's President and COO.
• Randy Albert is Senior Vice President of Emerging Business Units.
• Laural Ziemba is Manager of Public Relations
• Dan Zajdel is a spokesman for CNX