I think I figured out the answer (however, it may be incorrect, please do let me know). Also, this answer is very conceptual, rather than theoretical. We assume the following:
All protons experience a force of repulsion and electrons do the same.
To counter this force of repulsion, intermolecular forces brought upon by hydrogen bonding, dipole dipole bonding, etc. keep the atom together.
For example, let's say that the repulsion force between two O2 atoms is 5 newtons (obviously not to scale). Thus, to maintain the particles together there has to be a counter force of 5 Newtons. When we break these intermolecular bonds (easily achievable by exciting the atoms through adding heat, causing the atoms to shake vigorously and loosening the intermolecular forces) the intermolecular force falls and the result is that the repulsive force applies a force of around 5 Newtons for some distance d. This Force*Distance is the very definition of Energy.
The excited particles now find other atoms to bond to. Since they have broken free, they can now bond to atoms that will allow a smaller force of repulsion. The favorable compounds in combustion are water and carbon-dioxide. No matter was every converted to energy.