Slide 1: Earnings Results Third Quarter 2018
Earnings Results Third Quarter 2018 October 30, 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 Q3 2018 EXPECTATION STRATEGIC INITIATIVE ▪ Consolidated FY2018 EBITDAX guidance increasing to ▪ Based on midpoint of guidance range and share count $990-$1,010 million from $945-$970 million EBITDAX Guidance per Share ▪ Attributable FY2018 EBITDAX guidance increasing to as of Octob
Slide 4: Debt Discipline and EBITDAX Growth Drive Available Capacity
Debt Discipline and EBITDAX Growth Drive Available Capacity Net Debt Attributable to CNX Shareholders Shares Repurchased Since Program Announced 250.0 6.4 5.8 $ in millions September 30, 2018 5.3 8.3 1.7 1.0 200.0 E&P Midstream Total Shares (millions) Total Debt (GAAP)(1) $1,769.5 $437.0 $2,206.5 15
Slide 5: Q3 2018 Results
Q3 2018 Results Net Income and Adjusted EBITDAX ▪ Consolidated net income of $147 million in the 2018 third quarter; consolidated adjusted net income of $57 million(1); adjusted net income excludes the following pre- Consolidated Adjusted EBITDAX tax items: Per Share(2) increased - $131 million gain
Slide 6: "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 Q3 2018 Standalone + CNXM LP & GP + Unallocated(1) + CNX Ga
Slide 7: Marketing: Natural Gas Hedging and Basis Protection
Marketing: Natural Gas Hedging and Basis Protection 400 4.7 350 Gas Volumes Hedged (Bcf) 0.5 300 ▪ Layering in hedges out to 2023 to 250 protect margins on proved 8.8 200 371.3 362.6 developed production and a 33.4 150 303.1 portion of PUDs (capex) 100 203.5 159.2 ▪ Locking-in revenue and de-risking
Slide 8: Financial Guidance
Financial Guidance PREVIOUS (8/2/2018) UPDATE (10/30/2018) 2018E 2018E Revenue and Other Operating Income E&P Consolidated E&P Consolidated Production Volumes: Natural Gas (Bcf) 450-475 457.5-467.5 NGLs (MBbls) 6,000 6,000 Condensate (MBbls) 475-500 475-500 Total Production (Bcfe) 490-515 497.5-507.
Slide 9: Operations: Q3 2018 Results Summary
Operations: Q3 2018 Results Summary Y/Y Q/Q ▪ Marcellus Shale costs were $2.05 per Mcfe in Q3 2018, a decrease of ($/Mcfe) $0.15 from $2.20 per Mcfe vs. Q3 2017, or a 7% decline 3Q 2018 3Q 2017 Change 3Q 2018 2Q 2018 Change Average Sales Price(1) - Driven by decreases to LOE and DD&A $2.92 $2.50 $0.
Slide 10: Operations: Q3 2018 Activity and Updated 2018 Development Plan
Operations: Q3 2018 Activity and Updated 2018 Development Plan Q3 2018 YTD 2018 2018E Average HZ Rigs Lateral at Period ($ in millions) TD FRAC TIL Length(1) End TD FRAC TIL TD FRAC TIL SWPA Marcellus 15 15 21 7,759 3 42 31 30 59 39 41 Central Utica - - - - - - 1 1 2 1 1 WV Marcellus 2 5 5 8,376 - 5
Slide 11: SWPA Marcellus: New Wells Far Exceeding Vintage
SWPA Marcellus: New Wells Far Exceeding Vintage Morris (MOR) Marcellus – Legacy(1) vs. Now 3,000,000 ▪ Optimized drawdown, production facilities, and gathering 8000’ Normalized Cumulative 2,500,000 +77% systems to maximize NPV/well Increase in EUR from ▪ Increased lateral length, increased proppant
Slide 12: Deep Dry Utica: Drilling Efficiency Improving Rapidly
Deep Dry Utica: Drilling Efficiency Improving Rapidly Drilling Capital per Lateral Foot(1) 120% GH 9A GAUT 4I % of First Deep Dry Utica 100% Drilling Costs 80% MARCHAND 3M 60% BELL POINT 6P SHAW 1H 40% AIKENS 5J RHL 11E SHAW 1D 20% AIKENS 5M SHAW 1G SHAW 1J 0% Time Drilling Depth vs. Days 0 20 40
Slide 13: Operational and Analytical Progress Continues in FY2018
Operational and Analytical Progress Continues in FY2018 Efficiency Milestones Optimized Development Planning Technological Advancements Tested 10 Evolution different Averaging 7 days Added over electric frac dissolvable and from rig move off 45,000 lateral diversion Drilled Increasing fleet starting
Slide 14: Appendix
CNX Appendix
Slide 15: Marketing: Highlights and Liquids Realizations
Marketing: Highlights and Liquids Realizations Marketing Highlights Natural Gas Liquids, Oil and Condensate ▪ Directly-marketed ethane volumes were 272,200 barrels in ▪ Q3 2018 liquids sold: 10.4 Bcfe Q3 and, on an equivalent basis, yielded a $1.08 per ▪ Total weighted average price of all liquids i
Slide 16: Marketing: Natural Gas Hedging – Gain/Loss Projections
Marketing: Natural Gas Hedging – Gain/Loss Projections Q4 2018 CY20 Hedged Volumes Hedged Forward Forecasted Gain/(Loss) (1) (000 MMBtu) Price Market ($/MMBtu) ($ in 000's) ($/MMBtu) NYMEX 95,220 $2.98 $3.21 ($0.24) ($22,400) Basis: DOM South (DOM) 7,360 ($0.59) ($0.46) ($0.13) ($967) TCO Pool (TCO)
Slide 17: Non-GAAP Reconciliation
Non-GAAP Reconciliation Three Months Ended September 30, 2018 2018 2018 2018 2017 E&P Total Total Midstream Unallocated(1) ($ in thousands) Division Company Company Net Income (Loss) $54,431 $31,173 $61,152 $146,756 ($26,441) Less: Income from Discontinued Operations - - - - 4,645 Add: Interest Expe
Slide 18: Non-GAAP Reconciliation
Non-GAAP Reconciliation Three Months Three Months Three Months Three Months Twelve Months Ended Ended Ended Ended Ended December 31, March 31, June 30, September 30, September 30, ($ in thousands) 2017 2018 2018 2018 2018 Net Income $276,643 $545,546 $61,394 $146,756 $1,030,339 Less: Loss from Disco