Cnx Resources Corporation · NYSE:CNX
Cnx Resources — Q1 2018 Earnings Presentation
19 slides from Cnx Resources's earnings presentation, May 3, 2018
Slide 1: Earnings Results First Quarter 2018
Earnings Results First Quarter 2018 May 3, 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 Q1 2018 EXPECTATION STRATEGIC INITIATIVE ▪ Total production in the quarter of 129.5 Bcfe or average of ▪ Reaffirming production guidance of 520-525 Bcfe for Operational Execution 1.439 Bcfe/d exceeded YE2017 average monthly exit rate FY2018 of 1.390 Bcfe/d ▪ Turned-in-line RHL11E d
Slide 4: SOG Sale Drives Continued Reduction in Legacy Liabilities
SOG Sale Drives Continued Reduction in Legacy Liabilities Conventional Shallow Oil and Gas (SOG) assets sold in West Virginia and Pennsylvania, including CBM(1) SOG Wells Included in Sale ▪ Agreement signed mid-February - Closed on March 30, 2018 ▪ ~11,000 wells ▪ Cash proceeds of $88 million ▪ Buye
Slide 5: Share Buybacks To-Date and Potential Capacity
Share Buybacks To-Date and Potential Capacity 2018E-2022E As of: Q3 2017 End Year-End 2017 As of 4/20/2018 Buyback Potential Share Reduction Additional S/O: 230.1 million 223.7 million 217.9 million 85+ million share reduction(2) 250 $10,000 ▪ Prior to spin (~$100 million): $9,000 ~$110/share - 6.4
Slide 6: Exchange Agreement Expands SWPA Central Marcellus Inventory
Exchange Agreement Expands SWPA Central Marcellus Inventory SWPA Central Marcellus Inventory 2018E-2020E 500 450 Additional Locations from TILs 46 HG Exchange 400 70 TILs 55 350 TILs 73 300 Additional SWPA Central Marcellus 250 200 Prior Net SWPA Central Marcellus Inventory 461 SWPA Central Marcellu
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 (1) Q1 2018 Standalone + CNXM LP & GP + Unallocated + CNX G
Slide 8: Q1 2018 Results
Q1 2018 Results Net Income and Adjusted EBITDAX ▪ On a GAAP basis, net income attributable to CNX shareholders of $528 million in the 2018 first quarter or $2.35 per diluted share; adjusted net income attributable to CNX shareholders of $42 million, or $0.19 per diluted share(1); adjusted net income
Slide 9: Balance Sheet and Hedge Book Drive Capacity to Retire Shares
Balance Sheet and Hedge Book Drive Capacity to Retire Shares March 31, 2018 Net Debt Attributable to CNX Shareholders E&P Midstream Total Total Debt (GAAP)(1) $1,824 $413 $2,237 Target Less: Cash and Cash Equivalents $77 $6 $83 Net Debt (Non-GAAP) $1,747 $407 $2,154 <2.5x net debt Less: Net Debt Att
Slide 10: Marketing: Natural Gas Hedging and Basis Protection
Marketing: Natural Gas Hedging and Basis Protection 400 350 Gas Volumes Hedged (Bcf) 300 23.0 ▪ Systematically layering in hedges out to 2022 to protect 250 29.3 margins on proved developed 200 374.5 production and a portion of 150 312.8 56.0 PUDs (capex) 100 205.6 194.6 112.0 ▪ Locking-in revenue a
Slide 11: Financial Guidance: 2018E
Financial Guidance: 2018E 2018E Revenue and Other Operating Income E&P Consolidated Production Volumes: Natural Gas (Bcf) 450-475 NGLs (MBbls) 7,500-7,700 Oil (MBbls) 15-20 Condensate (MBbls) 590-610 Total Production (Bcfe) 500-525 % Liquids 9%-10% Basis calculated on 2018 market mix. Natural Gas Ba
Slide 12: Operations: Q1 2018 Results Summary
Operations: Q1 2018 Results Summary Y/Y Q/Q ▪ Marcellus Shale costs were $2.30 per Mcfe in Q1 ($/Mcfe) 1Q 2018 1Q 2017 Change 1Q 2018 4Q 2017 Change 2018, an increase of $0.12 from $2.18 per Mcfe vs. Average Sales Price(1) $3.00 $2.85 $0.15 $3.00 $2.80 $0.20 Q1 2017, or a 6% impairment (2) Total Pro
Slide 13: Operations: Q1 2018 Activity and 2018 Development Plan
Operations: Q1 2018 Activity and 2018 Development Plan Q1 2018 2018E Average Lateral Rigs at ($ in millions) TD FRAC TIL Length(1) Period End TD FRAC TIL SWPA Marcellus 17 3 6 9,281 2 62 48 46 Central Utica - 1 1 6,213 3 1 1 WV Marcellus - - - - 5 5 5 Shirley-Penns Utica - - - - - - - CPA South Utic
Slide 14: Consistent SWPA Marcellus Performance Sets Richhill Baseline
Consistent SWPA Marcellus Performance Sets Richhill Baseline Green Hill Production Comparison Over Time ▪ Applied learnings in SWPA Central is demonstrating consistent production results with capital efficiency increases Daily Production Normalized @ GH Legacy GH Modern GH-55 (2008-2011) (2015-2016)
Slide 15: Optimized Field Development Informs Richhill
Q1 2018 SWITZ Dry Utica Optimized Field Development Informs Richhill Ohio Dry Utica Field Spacing Changes 1100' vs 1350' Spacing 8,000’ Normalized Production Decreased Cycle Times 10,000 (Mcf/d) Proppant Selection and Loading 1,000 Full Field 0 50 100 150 200 250 300 350 Days Optimization 1100' Spac
Slide 16: Appendix
CNX Appendix
Slide 17: Marketing: Highlights and Liquids Realizations
Marketing: Highlights and Liquids Realizations Marketing Highlights Natural Gas Liquids, Oil and Condensate ▪ Directly-marketed ethane volumes were 439,000 barrels in ▪ Q1 2018 liquids sold: 12.0 Bcfe Q1 and, on an equivalent basis, yielded a $1.24 per ▪ Total weighted average price of all liquids d
Slide 18: Natural Gas Hedging – Gain/Loss Projections
Natural Gas Hedging – Gain/Loss Projections Q2 2018 CY2018 Hedged Volumes Hedged Forward Forecasted Gain/(Loss) Hedged Volumes Hedged Forward Forecasted (1) (000 MMBtu) Price Market ($/MMBtu) ($ in 000's) (000 MMBtu) Price Market ($/MMBtu) ($/MMBtu) NYMEX 94,185 $2.98 $2.70 $0.28 $26,560 377,775 $2.
Slide 19: Non-GAAP Reconciliation
Non-GAAP Reconciliation Three Months Ended March 31, 2018 2018 2018 2018 2017 E&P (1) Total Total Midstream Unallocated ($ in thousands) Division Company Company Net Income (Loss) $99,809 $35,534 $410,203 $545,546 ($38,966) Less: Loss from Discontinued Operations - - - - (36,269) Add: Interest Expen