CNX » Topics » CONSOL Energy faces numerous uncertainties in estimating its economically recoverable coal reserves, and inaccuracies in its estimates could result in lower than expected revenues, higher than expected costs and decreased profitability.

This excerpt taken from the CNX 10-K filed Feb 28, 2005.

CONSOL Energy faces numerous uncertainties in estimating its economically recoverable coal reserves, and inaccuracies in it’s estimates could result in lower than expected revenues, higher than expected costs and decreased profitability.

 

There are numerous uncertainties inherent in estimating quantities and values of economically recoverable coal reserves, including many factors beyond our control. As a result, estimates of economically recoverable coal reserves are by their nature uncertain. Information about our reserves consists of estimates based on engineering, economic and geological data assembled and analyzed by our staff. None of our coal reserve estimates has been reviewed by independent experts.

 

Some of the factors and assumptions which impact economically recoverable reserve estimates include:

 

    geological conditions;

 

    historical production from the area compared with production from other producing areas;

 

    the assumed effects of regulations and taxes by governmental agencies;

 

    assumptions governing future prices; and

 

    future operating costs, including cost of materials, especially metal products.

 

Each of these factors may in fact vary considerably from the assumptions used in estimating reserves. For these reasons, estimates of the economically recoverable quantities of coal attributable to a particular group of properties, and classifications of these reserves based on risk of recovery and estimates of future net cash flows, may vary substantially. Actual production, revenues and expenditures with respect to our reserves will likely vary from estimates, and these variances may be material. As a result, our estimates may not accurately reflect its actual reserves.

 

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