Cnx Resources Corporation · NYSE:CNX
Cnx Resources — Q2 2018 Earnings Presentation
18 slides from Cnx Resources's earnings presentation, Aug 2, 2018
Slide 1: Earnings Results Second Quarter 2018
Earnings Results Second Quarter 2018 August 2, 2018
Slide 2: Cautionary Language
Cautionary Language Risk Factors. This presentation, including the oral statements made in connection herewith, contains forward-looking statements, estimates and projections within the meaning of the federal securities laws. Statements that are not historical are forward-looking and may include our
Slide 3: Executive Summary
Executive Summary Q2 2018 EXPECTATION STRATEGIC INITIATIVE ▪ Announced sale of OH Utica JV assets for $400 ▪ Top-tier balance sheet and focused asset portfolio Ohio Utica JV Sale million will bring total asset sales to approximately creates platform for all future NAV accretive capital $765 YTD and
Slide 4: Sale of Ohio JV Assets Pulls Value Forward and Narrows Focus
Sale of Ohio JV Assets Pulls Value Forward and Narrows Focus OH Joint Venture Assets to be Sold for $800 Million Gross ▪ Net proceeds to CNX of approximately $400 million - 50 net producing wells with an average net revenue interest ("NRI") of 48% - Five 50% working interest wells the company recent
Slide 5: Balance Sheet and Hedge Book Drive Capacity to Retire Shares
Balance Sheet and Hedge Book Drive Capacity to Retire Shares Net Debt Attributable to CNX Shareholders Shares Repurchased Since Program Announced 250 June 30, 2018 E&P Midstream Total 200 Total Debt (GAAP)(1) $1,950.4 $404.1 $2,354.5 Shares (millions) 150 Less: Cash and Cash Equivalents $48.6 $6.2 $
Slide 6: Q2 2018 Results
Q2 2018 Results Net Income and Adjusted EBITDAX ▪ Net income attributable to CNX shareholders of $42 million in the 2018 second quarter or $0.19 per diluted share; adjusted net income attributable to CNX shareholders of Adjusted EBITDAX attributable $70 million, or $0.33 per diluted share(1); adjust
Slide 7: "Attributable Share" Reconciled to Consolidated Results
“Attributable Share” Reconciled to Consolidated Results Attributable to CNX Shareholders + Noncontrolling Interest = Consolidated Inside the MLP Outside the MLP 63.91% of CNXM E&P Attributable to Total "Attributable to Attributable to Total Q2 2018 Standalone + CNXM LP & GP + Unallocated(1) + CNX Ga
Slide 8: Marketing: Natural Gas Hedging and Basis Protection
Marketing: Natural Gas Hedging and Basis Protection 400 350 7.5 Gas Volumes Hedged (Bcf) 300 ▪ Systematically layering in hedges 250 10.7 out to 2023 to protect margins on 200 370.9 7.7 proved developed production and 150 326.2 a portion of PUDs (capex) 224.2 100 194.1 160.0 ▪ Locking-in revenue and
Slide 9: Financial Guidance
Financial Guidance PREVIOUS (6/29/2018) UPDATE (8/2/2018) 2018E 2018E Revenue and Other Operating Income E&P Consolidated E&P Consolidated Production Volumes: Natural Gas (Bcf) 450-475 450-475 NGLs (MBbls) 6,000 6,000 Adjusted 6/29/18 following sale Condensate (MBbls) 475-500 475-500 of OH Utica JV
Slide 10: Operations: Q2 2018 Results Summary
Operations: Q2 2018 Results Summary Y/Y Q/Q ▪ Marcellus Shale costs were $2.17 per Mcfe in Q2 2018, ($/Mcfe) 2Q 2018 2Q 2017 Change 2Q 2018 1Q 2018 Change an increase of $0.12 from $2.05 per Mcfe vs. Q2 2017, Average Sales Price(1) $2.87 $2.47 $0.40 $2.87 $3.00 ($0.13) or a 6% increase (2) Total Pro
Slide 11: Operations: Evolution Electric Frac Deal to Drive Efficiencies
Operations: “Evolution” Electric Frac Deal to Drive Efficiencies Conventional Pad Footprint Operational and Health, Safety, and Environmental Benefits All-Electric, Natural Gas-Powered, Disruptive Frac Eight pump, 56,000 HP fracturing fleet = 23-25 conventional pumps Technology ▪ Three-year deal is
Slide 12: Operations: Q2 2018 Activity and Updated 2018 Development Plan
Operations: Q2 2018 Activity and Updated 2018 Development Plan Q2 2018 YTD 2018 2018E Average Rigs at Lateral Period ($ in millions) TD FRAC TIL Length(1) End TD FRAC TIL TD FRAC TIL SWPA Marcellus 10 13 3 8,291 1 27 16 9 61 42 41 Central Utica - - - - - - 1 1 4 1 1 WV Marcellus 3 - - - 1 3 - - 5 5
Slide 13: Operations: SWPA Utica RHL11E Early Results Set the Stage
Operations: SWPA Utica RHL11E Early Results Set the Stage RHL11E Forecast vs. Peer Well Average and Guided Type Curve(1) 35,000 30,000 RHL11E currently flowing at 3.5 Bcfe/1000’ EUR, or 25,000 better than the 3.2 Bcfe/1000’ guided type curve for Mcf/d 20,000 the SWPA Central type curve region 15,000
Slide 14: Operations: De-risking Drill Plan with Customized Well Layouts
Operations: De-risking Drill Plan with Customized Well Layouts Well Layouts Before Seismic Data Well Layouts After Seismic Data Adjusted layouts allow for higher in-zone High capital placement and and de-risk capital production and production risk based impacts from on formation formation complexity
Slide 15: Appendix
CNX Appendix
Slide 16: Marketing: Highlights and Liquids Realizations
Marketing: Highlights and Liquids Realizations Marketing Highlights Natural Gas Liquids, Oil and Condensate ▪ Directly-marketed ethane volumes were 177,200 barrels in ▪ Q2 2018 liquids sold: 9.0 Bcfe Q2 and, on an equivalent basis, yielded a $1.23 per MMBtu premium over CNX Resources’ residue natura
Slide 17: Marketing: Natural Gas Hedging – Gain/Loss Projections
Marketing: Natural Gas Hedging – Gain/Loss Projections Q3 2018 CY20 Hedged Volumes Hedged Forward Forecasted Gain/(Loss) (000 MMBtu) Price Market ($/MMBtu) ($ in 000's) ($/MMBtu) NYMEX 95,220 $2.98 $2.87 $0.10 $9,877 Basis: DOM South (DOM) 7,360 ($0.59) ($0.64) $0.05 $350 TCO Pool (TCO) 9,200 ($0.27
Slide 18: Non-GAAP Reconciliation
Non-GAAP Reconciliation Three Months Ended June 30, 2018 2018 2018 2018 2017 E&P Total Total Midstream Unallocated(1) ($ in thousands) Division Company Company Net Income (Loss) $42,124 $27,780 ($8,510) $61,394 $169,510 Less: Income from Discontinued Operations - - - - (47,703) Add: Interest Expense