Earnings Results First Quarter 2018 May 3, 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, 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 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 deep dry Utica well with positive ▪ Transferring completion design and spacing lessons from Stacked Pay Development early results Monroe County and Green Hill to Richhill stacked pay ▪ Approximately $250 million remaining on outstanding ▪ Bought back ~$200 million of common stock since Oct. ‘17 Share Repurchases repurchase authorization through 3Q18 Debt Repayment ▪ Payed down ~$391 million in debt in the period ▪ Continue to target steady state 2.5x net debt/EBITDAX ▪ Closed GP transaction in early January and rebranded as ▪ Fully aligned management teams with a clear CNX Midstream Integration CNX Midstream; closed Shirley-Pennsboro asset drop for development plan and well commitments sets the stage $265 million helping to pay for a large portion of the cost of and Shirley-Penns Drop for steady and prolonged distribution growth the GP ▪ Sold SOG assets for ~$88 million in cash proceeds; sold an ▪ Further focuses development activity on top-tier SOG and Other Asset Sales additional ~$14 million in scattered acreage and other Marcellus and Utica assets; reduces legacy liabilities and miscellaneous assets cash servicing costs to de minimis levels ▪ On May 2, 2018, executed a transaction with HG Energy II; CNX received 11,400 DevCo I Marcellus acres and $5 ▪ Transaction and revised GGA results in further de-risked HG Exchange Transaction million in cash in exchange for 95% interest in DevCo II 15% distribution growth based on minimum well midstream assets and scattered acres in DevCo III; CNXM commitments alone received additional well commitments from both parties 3
SOG Sale Drives Continued Reduction in Legacy Liabilities Conventional Shallow Oil and Gas (SOG) assets sold in SOG Wells Included in Sale West Virginia and Pennsylvania, including CBM (1) ▪ Agreement signed mid-February - Closed on March 30, 2018 ▪ ~11,000 wells ▪ Cash proceeds of $88 million ▪ Buyer assumed liabilities of ~$200 million - Primarily asset retirement obligations ▪ Associated annual production of ~20 Bcfe (1) Excludes wells located in the Murray and CONSOL Energy development area. 4
Share Buybacks To-Date and Potential Capacity 2018E-2022E As of: Q3 2017 End Year-End 2017 As of 4/20/2018 Buyback Potential Additional Share Reduction S/O: 85+ million share 230.1 million 223.7 million 217.9 million reduction (2) 250 $10,000 ▪ Prior to spin (~$100 million): $9,000 - 6.4 million shares repurchased at a volume ~$110/share Shares Outstanding (millions) 200 $8,000 weighted average price of $16.08 (3) with drop Market Cap ($ in millions) proceeds (1) ▪ $7,000 Since spin (~$100 million): 150 $6,000 - 6.7 million shares repurchased at a volume weighted average price of $14.61 (4) $5,000 ▪ Approximately $250 million remaining on share 100 $4,000 repurchase authorization for 2018 $3,000 50 $2,000 Potential share count reduction of ~60% $1,000 by year-end 2022 including additional drop proceeds - $- 2017 2018E 2019E 2020E 2021E 2022E Market Cap Shares Outstanding - Including Drop Proceeds Shares Outstanding - No Additional Sales/Drops (1) Stock repurchase price assumes static year-forward EV/EBITDAX multiple of 5.9x on guided adjusted EBITDAX and net debt levels. Market cap estimate includes deployment of ~$1.8 billion related to potential drop proceeds and tax refunds. See CNX Analyst Day materials dated March 13, 2018 for full details. (2) Not including deployment of ~$1.8 billion of potential drop proceeds and tax refunds. (3) Shares repurchased from October-November 2017. Included rights to CEIX share distribution at a ratio of 1 share of CEIX for every 8 shares held of CNX. 5 (4) Shares repurchased as of market close 4/20/2018.
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