Earnings Results Fourth Quarter 2018 January 31, 2019
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 operational and strategic plans; estimates of gas reserves and resources; projected timing and rates of return of future investments; and projections and estimates of future production, revenues, income and capital spending. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those statements, estimates and projections. Investors should not place undue reliance on forward-looking statements as a prediction of future actual results. The forward-looking statements in this presentation speak only as of the date of this presentation; we disclaim any obligation to update the statements, and we caution you not to rely on them unduly. Specific factors that could cause future actual results to differ materially from the forward-looking statements are described in detail under the captions "Forward Looking Statements" and "Risk Factors" in our annual report on Form 10-K for the year ended December 31, 2017 filed with the SEC, as supplemented by our quarterly reports on Form 10-Q. Those risk factors discuss, among other matters, pricing volatility or pricing decline for natural gas and NGLs; operational risks relating to midstream facilities, pipeline systems, drilling natural gas wells, access to key services and equipment, access to adequate water sources and customer interactions; the impact of laws and regulations on our business and industry; competitive and economic concerns; risks associated with our debt and hedging strategy; our ability to acquire economically recoverable natural gas reserves; challenges associated with strategic determinations, including the allocation of capital to strategic opportunities; our development and exploration projects and potential acquisitions or divestitures, as well as CNXM's midstream system development. Reserves. Currently, the SEC permits oil and gas companies, in their filings with the SEC, to disclose only proved, probable and possible oil and gas reserves that a company anticipates as of a given date to be economically and legally producible and deliverable by application of development projects to known accumulations. We may use certain terms in this presentation, such as EUR (estimated ultimate recovery), unproved reserves and total resource potential, that the SEC's rules strictly prohibit us from including in filings with the SEC. We caution you that the SEC views such estimates as inherently unreliable and these estimates may be misleading to investors unless the investor is an expert in the natural gas industry. These measures are by their nature more speculative than estimates of reserves prepared in accordance with SEC definitions and guidelines and accordingly are less certain. We also note that the SEC strictly prohibits us from aggregating proved, probable and possible reserves in filings with the SEC due to the different levels of certainty associated with each reserve category. Title. Except for proved reserve data, the information included in this presentation is based on a summary review of the title to the gas rights we hold. As is customary in the gas industry, prior to the commencement of natural gas drilling operations on our properties, we conduct a thorough title examination and perform curative work with respect to significant defects. We are typically responsible for curing any title defects at our expense. As a result of our title review or otherwise, we may be required to acquire property rights from third parties at our expense in order to effectively drill and produce the gas rights we control and third parties may participate in the wells we drill, thereby reducing our working interest in those wells. Reconciliation. As it relates to the disclosures within this presentation of projected Adjusted EBITDA and EBITDAX for fiscal or quarterly periods in 2019-2022, for CNX or CNXM, CNX Resources is unable to provide a reconciliation of such metrics to projected operating income, the most directly comparable financial measure calculated in accordance with GAAP, due to the unknown effect, timing, and potential significance of certain income statement items for each of CNX and CNXM, respectively. Data. This presentation has been prepared by CNX and includes market data and other statistical information from sources believed by CNX to be reliable, including independent industry publications, government publications and other published independent sources. Some data are also based on CNX’s good faith estimates, which are derived from its review of internal sources as well as the independent sources described above. Although CNX believes these sources are reliable, it has not independently verified the information and cannot guarantee its accuracy or completeness. Not an Offer. This presentation does not constitute an offer to sell or a solicitation of offers to buy securities of CNX Resources Corporation or CNX Midstream Partners LP. 2
Executive Summary Q4 2018 EXPECTATION STRATEGIC INITIATIVE 2018 Production & ▪ Q4 2018 Consolidated Adjusted EBITDAX Per Share (2) ▪ Adjusted EBITDAX per share growth remains an output of EBITDAX per Share Growth (1) increased 90% year-over-year prudent capital allocation ▪ Leverage will continue to be evaluated on a number of ▪ Ended year at 2.25x attributable net debt / TTM Balance Sheet & bases in order to fully evaluate the health of the balance attributable adjusted EBITDAX or below the stated 2.5x Leverage Ratio (1) sheet and capacity to buy back shares as well as invest in target incremental activity and M&A opportunities ▪ Repurchased an additional 6.8 million shares from the ▪ Share repurchases remain a major part of the strategy and beginning of the quarter through January 18, 2019 Share Repurchases will be executed opportunistically through 2019 and into bringing the total number of retired shares to 32.6 million 2020 since the program began in Q4 2017 ▪ Production of 136 Bcfe in Q4 2018 resulted in 507 Bcfe ▪ Majority of development plan for 2019 remains in SWPA produced for the full year Operational Execution Marcellus while SWPA and CPA Utica wells continue to be ▪ Many operational successes in 2018 headlined by studied outperformance in SWPA Marcellus and CPA Utica ▪ 2019 capital guidance supports base development activity; ▪ Updated 2019 guidance includes minimum production of incremental activity will depend on factors such as CNX 2019 Guidance Update 495-515 Bcfe and D&C capital of $575-$625 million share price, forward strip pricing, Utica data set, and ▪ Pro forma minimum production growth of 3-7% supply/demand indicators ▪ Guidance updates will be made accordingly through the year ▪ The CNX philosophy and strategy drove the 14% ▪ Capital allocation through a rate of returns focus continues reduction in shares since October 2017 while drastically to be the strategy; share repurchases remain a priority along Commitment to the Strategy reducing leverage and growing operational scale with growing balance sheet capacity through disciplined ▪ Grew EBITDAX year-over-year despite divestitures production and EBITDAX growth CNX Resources is unable to provide a reconciliation of projected Adjusted EBITDAX to projected net income, the most comparable financial measure calculated in accordance with GAAP, due to the unknown effect, timing, and potential significance of certain income statement items. (1) See non-GAAP reconciliation table below. 3 (2) When using shares outstanding as of January 18, 2019.
Steadfast in Philosophy PHILOSOPHY RETURNS Maximize the Risk-adjusted returns set basis for all capital allocation decisions long-term per share FLEXIBILITY value of the firm Flexibility in development plans and capital deployment drive optionality through prudent HEDGING capital allocation Hedging and minimal commitments reduce risk and continuous REPURCHASES cost management Substantial share repurchases compound per share value 4
Confident in Strategy This process, which grew EBITDAX and PLAN RISK Strategy reduced MITIGATION designed to shares through NAV/SHARE GROWTH work HIGH RATES OF 2018, is through the RETURN primed to be cycle and SHARE COUNT REDUCTION does so at STRONG deployed in MARGINS strip pricing 2019 and BALANCE SHEET CAPACITY in all beyond LOW COST periods STRUCTURE EBITDAX GROWTH MINIMAL PLAN COMMITMENTS FLEXIBILITY INCREMENTAL ACTIVITY BASED ON REAL-TIME HEDGE BOOK DECISIONS MINIMUM BASE OF ACTIVITY 5
The Strategy Drives Significant EBTIDAX per Share Growth Per Share Adjusted EBITDAX Attributable to CNX Resources Shareholders Q1 2017 – Q4 2018 $1.60 $1.41 $1.40 $1.20 $1.08 $1.03 $1.00 $0.96 $0.83 $0.80 $0.60 $0.54 $0.48 $0.45 $0.40 $0.20 $- Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Note: Calculated as Adjusted EBITDAX divided by period end shares outstanding as disclosed in SEC filings. 6
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