
The telephone call that changed Nicholas J. DeIuliis' life came as he was beginning a vacation.
Mr. DeIuliis, then 36, was on his way to Ocean City, Md., with his wife, Joyce, and their 3-year-old twin daughters. As director of strategic planning for Consol Energy, he had spent six months "inside a tornado," planning for, and successfully launching, an initial public offering in which Consol sold 20 percent of a new spinoff, CNX Gas.
Now the plan was to relax with his family: "I was under direct orders from my wife to take the vacation."
As he neared the Bay Bridge, his cell phone rang. The call was from Brett Harvey, the chief executive officer of Consol Energy.
"You might want to pull over," he said. "I've got something I want to talk with you about."
When Mr. DeIuliis pulled over, Mr. Harvey got right to the point: he wanted him to head the new company.
Mr. DeIuliis asked for time to think. Mr. Harvey said "you have until tomorrow morning."
When his wife asked what the phone call was about, Mr. DeIuliis said, "We'll talk when we get to the beach," but that didn't work. He told her about the offer.
"It got pretty quiet in the car for about 1 1\u20442 or 2 hours."
The call to head CNX Gas was the latest twist in a career path that at times seemed more a result of dumb luck than of smart planning. As Mr. DeIuliis tells the story now, when he went to see his high school guidance counselor, he was thinking of becoming a chef, because of his interest in cooking. His guidance counselor said, "What about chemical engineering?" and Nick thought, "That sounds like fun."
"It wasn't driven by the job market or the starting wage or anything having to do with what a chemical engineer did," he said.
That type of whimsical decision making can lead to disaster, but in his case, it worked out, as he spent four years at Penn State University obtaining a degree in chemical engineering. After graduating in 1990, he went to work as a research associate at Carnegie Mellon University, with the intent of pursuing a Ph. D.
"It was probably the smartest thing I ever did in my life," he said, because it made him realize that he did not want to spend six or seven years doing that type of work to gain a Ph.D.
Scanning the Sunday paper for job listings, he saw an ad for a position with Consol Energy as a research engineer. He interviewed for the job and came away thinking, "I botched that; I don't know a thing about coal."
Three weeks later, he was offered the job. Only later did he learn that he received the offer because the first three people in line for the job didn't take it.
In 1998, Mr. Harvey offered him the strategic planning position, and in the early 2000s, he and Mr. Harvey began having discussions about the value of CNX Gas, a wholly owned subsidiary created in 1994 to extract and market the methane that would otherwise escape into the atmosphere as a waste product from Consol's coal deposits.
"As we would speak to investors, we would talk about the gas company and talk about the value of the gas company," Mr. Harvey said. "The investors never really gave what I thought was credit for the value of the company.
"I went to the board and said, 'The only way we're going to establish the value is to put a marker out there as a value independent of Consol energy.'"
In other words, putting a piece of the company out to market. Consol spun out CNX as a separate company in June 2005 and did a private placement in August 2005 at $16 per share. CNX then filed with the Securities Exchange Commission to conduct an initial public offering, which happened on January 19, 2006. With 28 million of 151 million shares offered, shares closed the day at $22, putting the company's market capitalization upwards of $3 billion.
Mr. DeIuliis led the effort of taking the company public, which at one point involved the "huge logistical nightmare" of giving presentations to investors in more than 20 cities in three-and-a-half weeks.
The day after Mr. Harvey interrupted his vacation, Mr. DeIuliis called back to accept the job offer, on one condition.
"I want to be able to pick my team that I work with," he said.
Mr. Harvey agreed, and Mr. DeIuliis' vacation became a working vacation, as he began planning how to build his new company.
For Mr. DeIuliis, known throughout the company as "Nick," ("nobody can pronounce my last name," he says -- dee-YOU-lee-ees), it has meant building a company culture.
Ask Nick DeIuliis what the No. 1 element of the corporate culture at CNX Gas is, and he will say, "Safety." Ask him what the primary factor in the company's success is, and he will say, "Safety." Ask him what the chief consideration is in awarding employee bonuses and incentives, and he will say, "Safety."
This preoccupation, if not obsession, with safety, did not originate with Mr. DeIuliis. It goes back to the company's pre-IPO days as a subsidiary of Consol. Indeed, taking that time into consideration, CNX recently marked 14 years without a lost-time accident among its workforce.
A second value that helps to make the corporate culture at CNX unique, he said, is the focus on capital discipline.
"Growth is important, but it is not the end objective," he said, "The end objective is to get a return on our capital above the cost of capital."
As a management principle, that sounds self-evident; but Mr. DeIuliis said that it is often overlooked.
"Today within the natural gas industry, earnings and cash flow are secondary to production growth. People want to see growth in production, more cubic feet of gas coming out of the ground, and they're willing to pay you for that even if it means lower earnings. or poorer cash flows or lower returns on your capital."
But while the emphasis on capital discipline may not be in vogue, Mr. DeIuliis said that the aspect of CNX's culture that is the hardest for new employees to grasp, as well as the hardest to maintain, is "the proactive duty to say what you think."
"You've got a duty to speak up, say what you think and speak your mind," he said.
When that type of communication is practiced, one of the results is innovation.
"You'd be surprised at how few good ideas really come out of the CEO's office," he said.
Mr. DeIuliis does not yet speak about when he might leave CNX Gas, but he does speak about what he would like to leave behind:
"Hopefully... a number of multimillionaires and a number of employees that have been able to go work at a company where they enjoyed the work, they were challenged, and their families were provided a wage that got them all the important things in life."
The man who made the phone call that changed Nicholas DeIuliis' life still feels good about his decision to tap Mr. DeIuliis for the job.
Mr. DeIuliis' ascension to the top of the corporate ladder at CNX Gas, together with the company's performance so far, " really is a testament to the work ethic of the region," said Mr. Harvey. "I think the region should be very proud of that."