CNX Gas Updates Acreage Position and Estimate of Net Unproved Reserves

PITTSBURGH, July 18  /PRNewswire-FirstCall/ -- CNX Gas Corporation (NYSE:CXG) has updated its assessment of gross acreage and net unproved reserves.

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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
  [phone]
  
  http://www.cnxgas.com/

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DATASOURCE: CNX Gas Corporation



CONTACT:  Dan Zajdel, Director - Investor and Public Relations of CNX Gas

Corporation, [phone], or  



Web site:  http://www.cnxgas.com/ 

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