Earnings Results Second Quarter 2018 August 2, 2018
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; our operational relationship with other parties, including midstream facilities; operational risks relating to pipeline systems, drilling natural gas wells, 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 2018-2022, 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. 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 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 further streamline the CNX portfolio allocation decisions ▪ Debt repayment and EBITDAX growth driving ▪ Optionality exists to deploy balance sheet capacity in Balance Sheet & Leverage Ratio potential leverage ratio well below stated 2.5x net highest return opportunities in development activity, debt/EBITDAX target by year-end share repurchases, or bolt-on acquisitions ▪ Repurchased 5.7 million shares from beginning of the ▪ Approximately $170 million remaining on repurchase quarter through July 17, 2018; total of 17.9 million Share Repurchases authorization that was recently extended through the shares since the program was announced or an 8% end of 2018 reduction of shares outstanding ▪ Q2 2018 production saw modest decline on just three ▪ 2018E TIL activity peaks in late Q3 2018 driving Production and Outlook TILs in the quarter; prolific wells from 1Q18 bolstered expected volume ramp in Q4 2018; reaffirming total production FY2018 production guidance of 490-515 Bcfe ▪ Increasing FY2018 attributable EBITDAX guidance to ▪ Will continue to make all capital allocation decisions $835-$860 million from $810-$835 million; increasing EBITDAX and Capital Guidance on a strict rate of return basis and look for FY2018 E&P capital expenditure guidance to $900- opportunities to increase efficiencies $950 million from $790-$915 million ▪ Richhill 11E well (TIL in March 2018) continues to ▪ Learnings from Richhill 11E are already being applied SWPA Utica and Stacked Pay flow above guided type curve supporting plans for to the design of the next SWPA deep Utica well stacked pay and blending strategy in the area expected TIL mid-2019 3
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 recently completed and turned-in-line - Two 50% working interest wells for which the company has drilled the top hole - Approximately 26,000 net undeveloped acres ▪ Acreage was not in CNX five-year development plan ▪ Transaction expected to close in Q3 2018 Total Asset Sales YTD of Approximately $765 Million ▪ OH JV transaction in conjunction with Q1 2018 asset sales (Shirley- Penns drop, SOG, and scattered acreage) total more than $765 million in cash proceeds ▪ Cash being deployed to pay down debt, continue share repurchases, invest in drilling and completion activity, and take advantage of bolt-on acquisitions when opportunities arise 4
Balance Sheet and Hedge Book Drive Capacity to Retire Shares Shares Repurchased Since Program Announced Net Debt Attributable to CNX Shareholders 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 $54.8 Net Debt (Non-GAAP) $1,901.8 $397.9 $2,299.7 230.1 213.1 100 Less: Net Debt Attributable to - $254.3 $254.3 Noncontrolling Interest (2) 50 Net Debt Attributable to $1,901.8 $143.6 $2,045.4 CNX Resources Shareholders 0 $ in millions S/O 3Q17E Repurchased Repurchased Repurchased Repurchased S/O 4Q17 1Q18 2Q18 7/1-7/17 7/17/2018 2Q18 Net Debt / Guided 2018E EBITDAX 2.4x ▪ Approximately $170 million remaining on outstanding Pro Forma 2Q2018 Net Debt (3) / Guided 2018E EBITDAX 2.0x authorization that was recently extended through YE2018 ▪ Repurchases will continue to be opportunistic and evaluated In Q2 2018, CNX redeemed ~$300 million of 8% notes due against other capital allocation decisions including investment in 2023 for a net interest savings of approximately $14 million development activity, debt repayment, and bolt-on acquisitions per year for five years (1) Includes current portion. (2) Calculated by taking an average minority interest percentage of 63.91%. 5 (3) For illustrative purposes; pro forma net debt includes additional $360 million transaction proceeds ($40 million deposit received in Q2 2018).
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