CNX Increases Capital Budget
CNX Gas Corporation (NYSE: CXG) announced that J. Michael Onifer has been promoted to Senior Vice President - Established Business Units and Randall M. Albert has been promoted to Senior Vice President - Emerging Business Units.
Michael Onifer will continue to be responsible for Virginia Operations, while Randall Albert will continue to be responsible for Mountaineer, as well as the Nittany and Cardinal exploratory plays.
Nicholas J. DeIuliis, president and chief executive officer, commented that, "It is not coincidence that Mike Onifer and Randy Albert join the executive office concurrently. Both bring decades of experience in CNX Gas operations. Both have performed in an exemplary manner, especially as additional responsibilities have been placed upon them in recent months. Our operations ran smoothly in the second quarter, with preliminary sales production of 14.9 Bcf, a company record."
CNX Gas has also made an important new hire, Dr. DeAnn Craig, who is Senior Vice President - Asset Assessment. Dr. Craig was most recently employed by Chevron North America Exploration and Production (Chevron), where her duties included assisting in capital budget preparation and analysis. DeAnn is also a prior president of the Society of Petroleum Engineers.
Nick DeIuliis spoke about the hiring of Dr. Craig, saying, "We are thrilled to have Dr. Craig lead our asset assessment program. As our emerging plays develop and as our acreage position continues to expand, DeAnn will play a key role in helping us to determine how we can best deploy our capital to more quickly and efficiently monetize our asset base. She'll be able to apply analytical techniques she's honed with major oil companies to enhance the systematic approach we already employ. Our expectation is that DeAnn will quickly build a world-class engineering and technical assessment staff and institute best-in-class processes within CNX Gas."
Mr. DeIuliis continued, "Our operational team is now situated where asset plays that are unassessed within the company will be efficiently and accurately evaluated by DeAnn's team, then if warranted as economic, will be started-up under Randy, and then as they reach critical mass will be efficiently operated under Mike. With these three individuals, the core of our operations group is established for the coming years."
In conjunction with the executive appointments, CNX Gas has also increased the 2007 Capital Budget from $312 million to $336 million. The increase is due primarily to land costs related to increasing the inventory of available well sites that the company will be able to drill in the Mountaineer, Nittany, and Cardinal plays. Both figures are exclusive of the recently announced Peabody transaction.
Mr. DeIuliis continued, "I view all of these announcements as facets in our continued growth. We have production growth targets of 15% per year, with a 2010 production target in excess of 100 Bcf. to get there, we need to continuously assess and remove operational bottlenecks. Eighteen months ago, drill rig availability was the primary bottleneck that we faced. Then as we accelerated our drilling, land and permit availability became our main area of focus. We countered by placing more capital resources on acquiring sites and obtaining permits. Now, we believe our key challenge relates to our ability to timely assess our huge acreage position and to deploy capital across a much wider asset class. We ended 2006 with 2.46 million gross acres, 640,000 of which were not included in our 3-P reserve assessment. With our recent transactions, we now have 3.6 million gross acres, including 1.6 million acres that need technical assessment. Our asset class is also evolving, as we move from a historically pure-play Central Appalachian coalbed methane producer to a multi-basin unconventional gas producer. These recent actions show that we will devote the necessary resources to monetize this exceptional asset base sooner rather than later."
J. Michael Onifer had been Vice President - Virginia Operations & Administration. In this position, he is responsible for annual production in excess of 50 billion cubic feet (Bcf) and the wholly owned Cardinal States Gathering System. Mr. Onifer graduated from Virginia Tech with a B.S. degree in mining engineering. In 2004, he attended the Program for Management Development at the Harvard Business School. Mr. Onifer started his career as a project engineer at CONSOL Energy and held various coal-related positions, including Superintendent -- Buchanan Mine. He joined CNX Gas in late 2000 as a production foreman and advanced through various management positions.
Randall M. Albert had been Vice President - Emerging Business Units. In this position, he is responsible developing coalbed methane (CBM) in southwestern Pennsylvania and northern West Virginia (Mountaineer), exploring for CBM in central Pennsylvania (Nittany), and exploring for gas in the New Albany Shale formation in western Kentucky (Cardinal). Earlier, he held the position of General Manager - Technical Services and Administration. Mr. Albert graduated from Virginia Tech with a B.S. degree in mining engineering. He joined CNX Gas in 1990. From 1980 to 1990 Mr. Albert held various mining positions including Mine Engineer. He is a registered professional engineer in Virginia and West Virginia.
Dr. DeAnn Craig, while at Chevron North America headquarters, worked with appropriations and expenditures and the requests for authorizations to make such expenditures. She was an internal expert on project economic evaluation and also led a team that worked on improving probabilistic reporting of production and capital and expenditures. Dr. Craig began her career at Phillips Petroleum as a petroleum engineer, where she rose to the position of Manager, Worldwide Drilling and Production. Later, she became president of Phillips' Canadian exploration and development operations. This was followed by a tour in Washington, D.C., where she was a government affairs representative for Phillips, while also serving as president of the Society of Petroleum Engineers. Dr. Craig earned her Ph.D., two master's degrees, and a B.S. degree from the Colorado School of Mines, where she is also a member of the Board of Trustees. Dr. Craig holds an MBA from Regis University in Denver and is also a registered professional engineer in Colorado.
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