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CONSOL Energy Completes $1 Billion Senior Secured Loan Agreement

Posted on: Thursday, 28 June 2007, 09:00 CDT

PITTSBURGH, June 28 /PRNewswire-FirstCall/ -- CONSOL Energy has completed a $1 billion Senior Secured Loan Agreement, effective June 27, 2007, to replace an existing facility of $750 million. The new agreement, which includes more-favorable pricing and flexibility, is a five-year $1 billion revolving credit facility. The facility was subscribed at about $1.2 billion. The annual pre-tax benefits of the new pricing are expected to be approximately $4 million.

"This new facility further enhances our financial flexibility by expanding the size of the facility while reducing our costs," said William J. Lyons, executive vice president and chief financial officer. "CONSOL has continued to build operational and financial momentum since this facility was last set in April of 2005. The strong response we received from our banking partners shows continued confidence in the company, its strategy and in the fundamentals of the energy sector."

The facility is secured by the assets of the company. Collateral will be provided to the banks and shared equally and ratably with the holders of CONSOL Energy Inc. 7-7/8% bonds maturing in 2012. The facility provides for release of collateral upon achievement of certain credit ratings.

The revolving credit facility will be used for general corporate purposes of CONSOL Energy and its subsidiaries.

PNC Bank, National Association, and Citicorp North America, Inc., acted as co-administrative agents for the facility. Bank of Nova Scotia-New York Agency, Bank of America, N.A., and Union Bank of California, N.A., acted as co-syndication agents. PNC Bank, National Association, and Citicorp North America, Inc., acted as joint lead arrangers. There are 22 lending institutions in the syndicate.

CONSOL Energy Inc., a member of the Standard & Poor's 500 equity index, has annual revenues of $3.7 billion. The company was named one of America's most admired companies in 2005 by Fortune magazine. It received the U.S. Department of the Interior's Office of Surface Mining National Award for Excellence in Surface Mining for the company's innovative reclamation practices in 2002 and 2003. Also in 2003, the company was listed in Information Week magazine's "Information Week 500" list for its information technology operations. In 2002, the company received a U.S. Environmental Protection Agency Climate Protection Award. Additional information about the company can be found at its web site: http://www.consolenergy.com/.

For purposes of this press release, references to "CONSOL Energy," the "company,""we,""our," or "us" or similar words (other than the legal names of companies) shall include CONSOL Energy Inc. and its respective subsidiaries.

Forward-Looking Statements

We are including the following cautionary statement in this document 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. With the exception of historical matters various statements in this document, including those that express a belief, expectation, or intention, as well as those that are not statements of historical fact, are forward-looking statements (as defined in Section 21E of the Securities Exchange Act of 1934) that 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. The forward-looking statements may include projections and estimates concerning the timing and success of specific projects and our future production, revenues, income and capital spending. When we use the words "believe,""intend,""expect,""may,""should,""anticipate,""could,""would,""will,""estimate,""plan,""predict,""project," or their negatives, or other similar expressions, the statements which include those words are usually forward-looking statements. When we describe strategy that involves risks or uncertainties, we are making forward-looking statements. The forward-looking statements in this document speak only as of the date of this document; we disclaim any obligation to update these statements unless required by securities law, and we caution you not to rely on them unduly. 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, uncertainties and contingencies include, but are not limited to, the following:

-- an extended decline in prices we receive for our coal and gas affecting our operating results and cash flows; -- reliance on customers extending existing contracts or entering into new long-term contracts for coal; -- reliance on major customers; -- our inability to collect payments from customers if their creditworthiness declines; -- the disruption of rail, barge and other systems that deliver our coal; -- a loss of our competitive position because of the competitive nature of the coal industry and the gas industry, or a loss of our competitive position because of overcapacity in these industries impairing our profitability; -- our inability to hire qualified people to meet replacement or expansion needs; -- coal users switching to other fuels in order to comply with various environmental standards related to coal combustion; -- the inability to produce a sufficient amount of coal to fulfill our customers' requirements which could result in our customers initiating claims against us; -- the risks inherent in coal mining being subject to unexpected disruptions, including geological conditions, equipment failure, timing of completion of significant construction or repair of equipment, fires, accidents and weather conditions which could cause our results to deteriorate; -- increases in the price of commodities used in our mining operations could impact our cost of production; -- obtaining governmental permits and approvals for our operations; -- the effects of government regulation; -- the effects of stringent federal and state safety regulations; -- the effects of mine closing, reclamation and certain other liabilities; -- uncertainties in estimating our economically recoverable coal and gas reserves; -- we do not insure against all potential operating risks; -- the outcomes of various legal proceedings, which proceedings are more fully described in our reports filed under the Securities Exchange Act of 1934; -- increased exposure to employee related long-term liabilities; -- our participation in multi-employer pension plans may expose us to obligations beyond the obligation to our employees; -- lump sum payments made to retiring salaried employees pursuant to our defined benefit pension plan; -- our ability to comply with laws or regulations requiring that we obtain surety bonds for workers' compensation and other statutory requirements; -- acquisitions that we recently have made or may make in the future including the accuracy of our assessment of the acquired businesses and their risks, achieving any anticipated synergies, integrating the acquisitions and unanticipated changes that could affect assumptions we may have made; -- the anti-takeover effects of our rights plan could prevent a change of control; -- risks in exploring for and producing gas; -- new gas development projects and exploration for gas in areas where we have little or no proven gas reserves; -- the disruption of pipeline systems which deliver our gas; -- the availability of field services, equipment and personnel for drilling and producing gas; -- replacing our natural gas reserves which if not replaced will cause our gas reserves and gas production to decline; -- costs associated with perfecting title for gas rights in some of our properties; -- we need to use unproven technologies to extract coalbed methane on some of our properties; -- location of a vast majority of our gas producing properties in three counties in southwestern Virginia, making us vulnerable to risks associated with having our gas production concentrated in one area; -- other persons could have ownership rights in our advanced gas extraction techniques which could force us to cease using those techniques or pay royalties; -- the coalbeds from which we produce methane gas frequently contain water that may hamper production; and -- other factors discussed in our 2006 Form 10-K under "Risk Factors," as updated by any subsequent Form 10-Qs, which are on file at the Securities and Exchange Commission.

CONSOL Energy undertakes no obligation to update these statements unless otherwise required by applicable law.

CONSOL Energy Inc.

CONTACT: Charles E. Mazur, Jr. of CONSOL Energy Inc., +1-412-831-4340

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

Source: PRNewswire-FirstCall

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