CNX Gas Updates Acreage Position and Estimate of Net Unproved Reserves
July 18 2006 - 8:30AM
PR Newswire (US)
PITTSBURGH, July 18 /PRNewswire-FirstCall/ -- CNX Gas Corporation
(NYSE:CXG) has updated its assessment of gross acreage and net
unproved reserves. (Logo:
http://www.newscom.com/cgi-bin/prnh/20051213/CNXLOGO) After an
extensive cataloging effort, CNX Gas controls the coalbed methane
estate and/or the oil and gas estate on 2.440 million gross acres.
CNX Gas estimates that 1.586 million of these gross acres contain
2.039 trillion cubic feet of net unproved reserves. When combined
with the previously announced 1.130 trillion cubic feet of proved
reserves, the company estimates its total recoverable reserves to
be 3.169 trillion cubic feet. Significantly, 640,000 gross acres
remain unevaluated. The remaining 214,000 acres have been leased to
other entities that provide CNX Gas with royalty income. This
analysis has been prepared with assistance from Schlumberger Data
Services, but has not been certified by them. The term "unproved
reserves" describes CNX Gas' estimate of reserves that it believes
has the potential to be commercially recoverable at a NYMEX price
of $7.00 per Mcf, based on available data. As a result of this
assessment, CNX Gas has selected two areas to begin a more detailed
evaluation: Its coalbed methane acreage in central Pennsylvania,
designated "Nittany," and its New Albany shale acreage in western
Kentucky and southern Illinois, designated "Cardinal." In Nittany,
CNX Gas controls 248,000 gross acres. The acreage is estimated to
hold unproved reserves of 181 Bcf. The acreage is expected to be
developed using a combination of vertical frac wells and horizontal
wells. We estimate that we need a NYMEX gas price of less than
$5.00 in order to earn a 15% after tax rate-of-return in this area.
In Cardinal, CNX Gas controls 70,000 gross acres. The acreage is
estimated to hold unproved reserves of 358 Bcf. The acreage is
expected to be developed through horizontal drilling. We estimate
that we need a NYMEX gas price of less than $5.00 in order to earn
a 15% after tax rate-of-return in this area. In both of these
areas, CNX Gas will be taking immediate action to form development
teams which will initiate land work, acquire necessary permits,
drill test wells, and other action to fully assess the commercial
viability of these initial assessments. On July 18, the company
will make a presentation regarding acreage and reserves in
Pittsburgh to institutional investors and analysts. CNX Gas will
also make a marketing presentation that will focus on the status of
Duke Energy's Jewell Ridge lateral and the options it creates for
the sale of future production. A pre-recorded version of the
presentation will be webcast for the benefit of those not
attending. The recorded presentation and accompanying slides will
be placed on the investor relations portion of the CNX Gas website
at http://www.cnxgas.com/ and will be available for viewing
concurrently with the beginning of the live presentation at 8:00
a.m. Eastern Time on July 18. At the July 18 meeting, we will not
update our December 31, 2005 assessment of the company's proved
reserves. The U.S. Securities and Exchange Commission (the "SEC")
permits oil and gas companies, in filings made with the SEC, to
disclose only proved reserves that a company has demonstrated by
actual production or conclusive formation tests to be economically
and legally producible under existing economic and operating
conditions. In this release, we use the term "unproved" to describe
estimates of commercially recoverable reserves that the SEC's
guidelines strictly prohibit us from including in filings with the
SEC. These estimates are, by their nature, more speculative than
estimates of proved reserves and accordingly are subject to
substantially greater risk of being actually realized by the
company. We also caution you that the SEC views such "unproved"
reserve estimates as inherently unreliable and these estimates may
be misleading to investors unless the investor is an expert in the
gas industry. References to "unproved" reserves and their
recoverability and economic viability are forward-looking
statements (as defined in Section 21E of the Securities Exchange
Act of 1934). These statements 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. 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: our
business strategy; our financial position; our cash flow and
liquidity; declines in the prices we receive for our gas affecting
our operating results and cash flow; uncertainties in estimating
our gas reserves; replacing our gas reserves; uncertainties in
exploring for and producing gas; our inability to obtain additional
financing necessary in order to fund our operations, capital
expenditures and to meet our other obligations; disruptions,
capacity constraints in or other limitations on the pipeline
systems which deliver our gas; competition in the gas industry; the
availability of personnel and supplies, increased costs, the
effects of government regulation and permitting and other legal
requirements; legal uncertainties regarding the ownership of the
coalbed methane estate, costs associated with perfecting title for
gas rights in some of our properties; our need to use unproven
technologies to extract coalbed methane in some properties; our
relationships and arrangements with CONSOL Energy; and other
factors discussed under "Risk Factors" in the 10-K for the year
ended December 31, 2005. We are including this cautionary statement
in this release to make applicable and take advantage of the safe
harbor provisions of the Private Securities Litigation Reform Act
of 1995 for any forward-looking statements made by, or on behalf,
of us. Description CNX GAS CORPORATION is an independent natural
gas exploration, development, production and gathering company
operating in the Appalachian Basin of the United States. In May
2006, Business Week cited CNX Gas in its survey of Hot Growth
Companies. Effective June 30, 2006, CNX Gas was added to the
membership of companies included in the Russell 3000(R) Index and
the Russell Midcap(R) Index. Contact: Dan Zajdel Director -
Investor and Public Relations (412) 854-6719 http://www.cnxgas.com/
http://www.newscom.com/cgi-bin/prnh/20051213/CNXLOGO
http://photoarchive.ap.org/ DATASOURCE: CNX Gas Corporation
CONTACT: Dan Zajdel, Director - Investor and Public Relations of
CNX Gas Corporation, +1-412-854-6719, or Web site:
http://www.cnxgas.com/
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