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Supplemental Gas Data | 12 Months Ended
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Dec. 31, 2016
SUPPLEMENTAL GAS DATA: [Abstract] |
Oil and Gas Exploration and Production Industries Disclosures [Text Block] | Supplemental Gas Data (unaudited): The following information was prepared in accordance with the FASB's Accounting Standards Update No. 2010-03, “Extractive Activities-Oil and Gas (Topic 932).” Capitalized Costs:
|  | As of December 31,
|  | 2016 |  | 2015
Proved gas properties |  | $ | 2,016,916 |  |  | $ | 1,922,602 |
Unproved gas properties |  | 1,116,282 |  |  | 1,421,083 |
Intangible drilling costs |  | 3,583,565 |  |  | 3,452,989 |
Gas wells and related equipment |  | 791,996 |  |  | 785,744 |
Gas gathering assets |  | 1,138,299 |  |  | 1,147,173 |
Gas well plugging |  | 176,961 |  |  | 115,121 |
Total Property, Plant and Equipment |  | 8,824,019 |  |  | 8,844,712 |
Accumulated Depreciation, Depletion and Amortization |  | (3,099,622 | ) |  | (2,691,005 | )
Net Capitalized Costs |  | $ | 5,724,397 |  |  | $ | 6,153,707 |
Costs incurred for property acquisition, exploration and development (*):
|  | For the Years Ended December 31,
|  | 2016 |  | 2015 |  | 2014
Property acquisitions |  |  |  |  |  |
Proved properties |  | $ | — |  |  | $ | — |  |  | $ | — |
Unproved properties |  | 1,537 |  |  | 76,676 |  |  | 119,597 |
Development |  | 138,813 |  |  | 666,315 |  |  | 952,733 |
Exploration |  | 32,259 |  |  | 95,371 |  |  | 45,006 |
Total |  | $ | 172,609 |  |  | $ | 838,362 |  |  | $ | 1,117,336 |
__________
(*) | Includes costs incurred whether capitalized or expensed.
Results of Operations for Producing Activities:
|  | For the Years Ended December 31,
|  | 2016 |  | 2015 |  | 2014
Natural Gas, NGLs and Oil Sales |  | $ | 793,673 |  |  | $ | 728,458 |  |  | $ | 1,007,381 |
(Loss) Gain on Commodity Derivative Instruments |  | (141,021 | ) |  | 392,942 |  |  | 23,193 |
Purchased Gas Sales |  | 43,256 |  |  | 14,450 |  |  | 8,999 |
Total Revenue |  | 695,908 |  |  | 1,135,850 |  |  | 1,039,573 |
Lease Operating Expense |  | 96,434 |  |  | 121,847 |  |  | 139,242 |
Production, Ad Valorem, and Other Fees |  | 31,049 |  |  | 30,438 |  |  | 39,418 |
Transportation, Gathering and Compression |  | 374,350 |  |  | 343,403 |  |  | 239,591 |
Purchased Gas Costs |  | 42,717 |  |  | 10,721 |  |  | 7,251 |
Impairment of Exploration and Production Properties |  | — |  |  | 828,905 |  |  | — |
Other Costs |  | 14,519 |  |  | 10,120 |  |  | 22,718 |
DD&A |  | 417,853 |  |  | 370,374 |  |  | 323,600 |
Total Costs |  | 976,922 |  |  | 1,715,808 |  |  | 771,820 |
Pre-tax Operating Income / (Loss) |  | (281,014 | ) |  | (579,958 | ) |  | 267,753 |
Income Taxes / (Benefit) |  | (69,308 | ) |  | (250,220 | ) |  | 45,162 |
Results of Operations for Producing Activities excluding Corporate and Interest Costs |  | $ | (211,706 | ) |  | $ | (329,738 | ) |  | $ | 222,591 |
The following is production, average sales price and average production costs, excluding ad valorem and severance taxes, per unit of production:
|  | For the Years Ended December 31,
|  | 2016 |  | 2015 |  | 2014
Production (MMcfe) |  | 394,387 |  |  | 328,657 |  |  | 235,714 |
Total average sales price before effects of financial settlements (per Mcfe) |  | $ | 2.01 |  |  | $ | 2.22 |  |  | $ | 4.27 |
Average effects of financial settlements (per Mcfe) |  | $ | 0.62 |  |  | $ | 0.60 |  |  | $ | 0.10 |
Total average sales price including effects of financial settlements (per Mcfe) |  | $ | 2.63 |  |  | $ | 2.82 |  |  | $ | 4.37 |
Average lifting costs, excluding ad valorem and severance taxes (per Mcfe) |  | $ | 0.24 |  |  | $ | 0.37 |  |  | $ | 0.59 |
During the years ended December 31, 2016, 2015 and 2014, we drilled 36.0, 132.8, and 180.3 net development wells, respectively. There were no net dry development wells in 2016, 2015, or 2014. During the year ended December 31, 2016, there were no net exploratory wells. During the years ended December 31, 2015 and 2014, we drilled 2.5 and 8.5 net exploratory wells, respectively. There were no net dry exploratory wells in 2016, 2015, or 2014. At December 31, 2016, there were 15.0 net development wells and no exploratory wells that have been partially drilled but not turned in-line. Additionally there are 65.5 net developmental wells that are drilled but uncompleted and 3.0 net developmental wells and no net exploratory well that have been completed and are awaiting final tie-in to production. We are committed to provide 431.4 Bcf of gas under existing sales contracts or agreements over the course of the next four years. We expect to produce sufficient quantities from existing proved developed reserves to satisfy these commitments. Most of our development wells and proved acreage are located in Virginia, West Virginia and Pennsylvania. Some leases are beyond their primary term, but these leases are extended in accordance with their terms as long as certain drilling commitments or other term commitments are satisfied. The following table sets forth, at December 31, 2016, the number of producing wells, developed acreage and undeveloped acreage:
|  | Gross |  | Net(1)
Producing Gas Wells (including gob wells) |  | 17,314 |  |  | 12,846 |
Producing Oil Wells |  | 189 |  |  | 30 |
Acreage Position: |  |  |  |
Proved Developed Acreage |  | 549,816 |  |  | 541,282 |
Proved Undeveloped Acreage |  | 34,467 |  |  | 30,038 |
Unproved Acreage |  | 4,804,804 |  |  | 3,745,533 |
Total Acreage |  | 5,389,087 |  |  | 4,316,853 |
____________
(1) | Net acres include acreage attributable to our working interests of the properties. Additional adjustments (either increases or decreases) may be required as we further develop title to and further confirm our rights with respect to our various properties in anticipation of development. We believe that our assumptions and methodology in this regard are reasonable.
Proved Oil and Gas Reserves Quantities: Annually, the preparation of natural gas reserves estimates are completed in accordance with CONSOL Energy's prescribed internal control procedures, which include verification of input data into a gas reserves forecasting and economic evaluation software, as well as multi-functional management review. The input data verification includes reviews of the price and cost assumptions used in the economic model to determine the reserves. Also, the production volumes are reconciled between the system used to calculate the reserves and other accounting/measurement systems. The technical employee responsible for overseeing the preparation of the reserve estimates is a petroleum engineer with over 10 years of experience in the oil and gas industry. Our 2016 gas reserves results, which are reported in the Supplemental Gas Data year ended December 31, 2016 Form 10-K, were audited by Netherland, Sewell & Associates, Inc. The technical person primarily responsible for overseeing the audit of our reserves is a registered professional engineer in the state of Texas with over 15 years of experience in the oil and gas industry. The gas reserves estimates are as follows:
|  |  |  |  |  | Condensate |  | Consolidated
|  | Natural Gas |  | NGLs |  | & Crude Oil |  | Operations
|  | (MMcf) |  | (Mbbls) |  | (Mbbls) |  | (MMcfe)
Balance December 31, 2013 (a) |  | 5,585,107 |  |  | 21,546 |  |  | 2,806 |  |  | 5,731,214 |
Revisions (b) |  | (46,560 | ) |  | 40,363 |  |  | 3,756 |  |  | 218,168 |
Price Changes |  | 15,512 |  |  | — |  |  | — |  |  | 15,512 |
Extensions and Discoveries (c) |  | 979,801 |  |  | 18,459 |  |  | 1,314 |  |  | 1,098,436 |
Production |  | (216,260 | ) |  | (2,578 | ) |  | (664 | ) |  | (235,714 | )
Balance December 31, 2014 (a) |  | 6,317,600 |  |  | 77,790 |  |  | 7,212 |  |  | 6,827,616 |
Revisions (d) |  | 1,052,978 |  |  | 45,993 |  |  | 6,662 |  |  | 1,368,909 |
Price Changes |  | (2,866,123 | ) |  | (45,675 | ) |  | (3,208 | ) |  | (3,159,421 | )
Extensions and Discoveries (e) |  | 840,800 |  |  | 13,916 |  |  | 1,707 |  |  | 934,542 |
Production |  | (285,041 | ) |  | (5,812 | ) |  | (1,458 | ) |  | (328,657 | )
Balance December 31, 2015 (a) |  | 5,060,214 |  |  | 86,212 |  |  | 10,915 |  |  | 5,642,989 |
Revisions (f) |  | 21,280 |  |  | (20,669 | ) |  | 481 |  |  | (99,849 | )
Price Changes |  | (179,914 | ) |  | (1,647 | ) |  | (35 | ) |  | (190,009 | )
Extensions and Discoveries (g) |  | 643,688 |  |  | 10,960 |  |  | 1,783 |  |  | 720,146 |
Production |  | (358,474 | ) |  | (5,119 | ) |  | (867 | ) |  | (394,387 | )
Purchases of Reserves In-Place (h) |  | 1,352,759 |  |  | 13,177 |  |  | 1,970 |  |  | 1,443,642 |
Sales of Reserves In-Place (h) |  | (711,155 | ) |  | (22,382 | ) |  | (4,240 | ) |  | (870,884 | )
Balance December 31, 2016 (a) |  | 5,828,398 |  |  | 60,532 |  |  | 10,007 |  |  | 6,251,648 |
Proved developed reserves (i): |  |  |  |  |  |  |  |
December 31, 2014 |  | 2,979,906 |  |  | 32,405 |  |  | 4,061 |  |  | 3,198,706 |
December 31, 2015 |  | 3,310,894 |  |  | 59,196 |  |  | 5,180 |  |  | 3,697,152 |
December 31, 2016 |  | 3,478,464 |  |  | 30,666 |  |  | 3,474 |  |  | 3,683,302 |
Proved undeveloped reserves: |  |  |  |  |  |  |  |
December 31, 2014 |  | 3,337,694 |  |  | 45,385 |  |  | 3,151 |  |  | 3,628,910 |
December 31, 2015 |  | 1,749,320 |  |  | 27,016 |  |  | 5,736 |  |  | 1,945,837 |
December 31, 2016 |  | 2,349,934 |  |  | 29,866 |  |  | 6,536 |  |  | 2,568,346 |
__________
(a) | Proved developed and proved undeveloped gas reserves are defined by SEC Rule 4.10(a) of Regulation S-X. Generally, these reserves would be commercially recovered under current economic conditions, operating methods and government regulations. CONSOL Energy cautions that there are many inherent uncertainties in estimating proved reserve quantities, projecting future production rates and timing of development expenditures. Proved oil and gas reserves are estimated quantities of natural gas which geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions and government regulations. Proved developed reserves are reserves expected to be recovered through existing wells, with existing equipment and operating methods.
(b) | Revisions for 2014 are primarily due to efficiencies in operations and well optimization and had the total effect of positive revisions. Additionally, the 2014 revisions include a reclassification of ethane volumes from natural gas to NGLs.
(c) | Extensions and Discoveries in 2014 are primarily due to the addition of wells on our Marcellus and Utica Shale acreage. We also included Marcellus Shale wells which are more than one offset location away due to continued use of reliable technology.
(d) | The upward revisions in 2015 are attributable to efficiencies in operations and well performance.
(e) | Extensions and Discoveries in 2015 are due mainly to the high grading of locations which resulted in the addition of wells on our Marcellus and Utica Shale acreage more than one offset location away with continued use of reliable technology.
(f) | The net downward revisions for 2016 are primarily due to changes in plans related to future locations.
(g) | Extensions and Discoveries in 2016 are due to the addition of wells on our Marcellus and Utica Shale acreage more than one offset location away with continued use of reliable technology.
(h) | Purchases and Sales of Reserves In-Place in 2016 is the result of our fourth quarter realignment of the Marcellus Shale properties as part of dissolving our joint venture with Noble Energy.
(i) | Included in our proved developed reserves at December 31, 2016 are producing wells with negative undiscounted cash flows that represent 199.3 Bcfe of natural gas and equivalents which represents 3.2% of our total reserves quantities. These consist primarily of conventional wells and the company includes these wells in our reserves as we continue to produce the properties.
|  | For the Year
|  | Ended
|  | December 31,
|  | 2016
Proved Undeveloped Reserves (MMcfe) |  |
Beginning proved undeveloped reserves |  | 1,945,837 |
Undeveloped reserves transferred to developed(a) |  | (211,876 | )
Disposition of reserves in place |  | (199,401 | )
Acquisition of reserves in place |  | 547,680 |
Price Changes |  | (188,066 | )
Plan and other revisions (b) |  | 4,906 |
Extension and discoveries (c) |  | 669,266 |
Ending proved undeveloped reserves(d)(e) |  | 2,568,346 |
_________
(a) | During 2016, various exploration and development drilling and evaluations were completed. Approximately, $58,694 of capital was spent in the year ended December 31, 2016 related to undeveloped reserves that were transferred to developed.
(b) Plan and other revisions are due to high grading of locations. These changes along with upward revisions attributable to efficiencies in operations and well performance had the total affect of a positive revision.
(c) | Extensions and discoveries are due mainly to the high grading of locations which resulted in the addition of wells on our Marcellus and Utica Shale acreage more than one offset location away with continued use of reliable technology.
(d) | Included in proved undeveloped reserves at December 31, 2016 are approximately 215,861 MMcfe of reserves that have been reported for more than five years. These reserves specifically relate to GOB (a rubble zone formed in the cavity created by the extraction of coal) production due to a complex fracture being generated in the overburden strata above the mined seam. Mining operations take a significant amount of time and our GOB forecasts are consistent with the future plans of the Buchanan Mine that was sold in March 2016 to Coronado IV LLC (See Note 2 - Discontinued Operations for more information) with the rights to this gas being retained by the Company. Evidence also exists that supports the continual operation of the mine beyond the current plan, unless there was an extreme circumstance resulting from an external factor. These reasons constitute the specific circumstances that exist to continue recognizing these reserves for CONSOL Energy.
(e) | Included in proved undeveloped reserves at December 31, 2016 are 175 gross proved undeveloped locations that generate positive future net revenue but have negative present worth discounted at 10 percent as of December 31, 2016, representing 58.9% of our total proved undeveloped reserves. Additionally, the 1,511.8 Bcfe of natural gas and equivalents attributable to these locations represent approximately 24.2% of our total proved reserves. The Company includes these well sites in its current drilling plans and currently intends to drill these sites as our economic modeling of these well locations generate positive future cash flows.
At December 31, 2016 there were no wells pending the determination of proved reserves. The following table represents the capitalized exploratory well cost activity as indicated:
|  | December 31,
|  | 2016 |  | 2015 |  | 2014
Costs reclassified to wells, equipment and facilities based on the determination of proved reserves |  | $ | 40,917 |  |  | $ | 17,179 |  |  | $ | 27,453 |
Costs expensed due to determination of dry hole or abandonment of project |  | $ | — |  |  | $ | — |  |  | $ | 2,041 |
CONSOL Energy's proved natural gas reserves are located in the United States.

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