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Barclays CEO Power Conference – CNX Resources

CNX Resources · Sep 5, 2017 · 35 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. Barclays CEO Power Conference – CNX Resources – slide 1
    BARCLAYS CEO ENERGY-POWER CONFERENCE SEPTEMBER 5, 2017
  2. Barclays CEO Power Conference – CNX Resources – slide 2
    Agenda Executive Summary Company Update Overview FY2017 Activity Summary Marcellus Operations Utica Operations Marketing Overview Guidance Updates Strategic Initiatives Asset Sale Update Coal Separation Overview Q&A 3
  3. Barclays CEO Power Conference – CNX Resources – slide 3
    Executive Summary Reducing 2017 E&P Division production guidance to approximately 405-415 Bcfe, compared to the previously stated guidance of 420-440 Bcfe - Reaffirming capital guidance for FY2017 of 620-645 million - Reaffirming…
  4. Barclays CEO Power Conference – CNX Resources – slide 4
    COMPANY UPDATE 5
  5. Barclays CEO Power Conference – CNX Resources – slide 5
    CONSOL Energys Evolution With the sale of the Looking to the future Buchanan mine and working towards other remaining legacy complete separation Announces sale of coal assets, CONSOLs from coal; monetizing five thermal coal mines…
  6. Barclays CEO Power Conference – CNX Resources – slide 6
    Acreage Position SWPA WV CPA OH Total Upper Devonian Net Acres 111,500 157,000 35,500 - 304,000 Net Acres 103,000 62,000 234,500 13,500 413,000 Fee Acres 41,000 2,000 19,000 3,000 65,000 Marcellus (1) Approx. Net Locations 572…
  7. Barclays CEO Power Conference – CNX Resources – slide 7
    FY2017 Activity Focus OH Dry Utica CPA Deep Dry Utica Switz Aikens/Marchand Eight pads Two Aikens wells offsetting Drilling began Q3 2016 Gaut 4IH TILs began July 2017 - Drilling began Q1 2017 - TILs scheduled Q4 2017 Marchand…
  8. Barclays CEO Power Conference – CNX Resources – slide 8
    Operational Evolution Key Performance Metrics(1) 2014 2017E Average EUR (Bcfe/1,000) 1.4 2.8 Lease operating expense (LOE) (/Mcfe) 0.49 0.19 Average Marcellus drilling days on well 27 14 Completion efficiency (ft/day) 575 1,040…
  9. Barclays CEO Power Conference – CNX Resources – slide 9
    Operational Evolution: Richhill Type Curve and EUR Increase Richhill, SWPA Marcellus Richhill-23D and 23E: Actual Production vs. Decline Curve EUR increasing 20%, from 1.9 100,000 BCF/1000, to 2.2 BCF/1000 RHL-23D and 23E compared…
  10. Barclays CEO Power Conference – CNX Resources – slide 10
    Operational Evolution: Additional Revised Type Curves Monroe County, OH Dry Utica Revised Type Curve Shape vs. Prior Plan Better-than-expected reservoir performance, but EUR unchanged Accelerated production driven by: - Optimized…
  11. Barclays CEO Power Conference – CNX Resources – slide 11
    CPA Deep Dry Utica: Aikens Drilling Update Aikens wells offsetting Gaut 4IH show Aikens 5J and 5M vs. Gaut 4IH: Days vs. Depth Drilled 173% improvement in feet drilled/day Days Aikens 5J drilled in 43 days and 5M drilled 0 20 40 60…
  12. Barclays CEO Power Conference – CNX Resources – slide 12
    Marketing: Natural Gas Sales Market Mix MIDWEST TETCO M3 DOMINION SOUTH TCO POOL TETCO M2 EAST TENNESEE Natural Gas Sales Market Mix 2017E 2018E Columbia (TCO) 10% 10% TETCO (M2) 50% 52% TETCO (M3) 10% 6% Dominion…
  13. Barclays CEO Power Conference – CNX Resources – slide 13
    Marketing: Gas Hedges 350 5.4 Gas Hedges 2017-2021 21.1 300 Gas Volumes Hedged (Bcf) 250 30.6 200 150 309.8 308.0 21.7 100 200.0 50 120.2 - 25.3 0 Approximately 77% of total 2017E 2017 2018 2019 2020 2021…
  14. Barclays CEO Power Conference – CNX Resources – slide 14
    Updated 2017E EBITDA Guidance Current Prior PA Mining ( in millions) E&P(1) Other Total Total Operations (as of 9/5/17) (as of 8/1/17) Earnings Before Interest, Taxes and DD&A 675 380 (20) 1,035 1,055 (EBITDA) Adjustments:…
  15. Barclays CEO Power Conference – CNX Resources – slide 15
    Segment Guidance E&P Segment Guidance 2017E PA Mining Operations Consolidated 100% Basis 2017E Production Volumes: Coal Sales Volumes: Natural Gas (Bcf) 360-370 Total Coal Sales Volumes (millions of tons) 25.6-27.6 NGLs (MBbls)…
  16. Barclays CEO Power Conference – CNX Resources – slide 16
    STRATEGIC INITIATIVES 17
  17. Barclays CEO Power Conference – CNX Resources – slide 17
    Asset Sale Update Q1 2017 Earnings Call Q3 2017 May 2017 Closed on 385 million in asset Closed on 108 million of sales YTD sales YTD 6,300 Utica/Point Pleasant acres Reached signed sales agreement on in Ohio for 77 million…
  18. Barclays CEO Power Conference – CNX Resources – slide 18
    SpinCo Structure: Material Components Pennsylvania Premier U.S. thermal coal assets 90% owned by CNX when combining direct Mining Complex ownership (75%) with ownership in CNXC MLP (PAMC) MLP owns 25% of PAMC; CONSOL Energy owns…
  19. Barclays CEO Power Conference – CNX Resources – slide 19
    Pennsylvania Mining Complex: Overview Pennsylvania Mining Complex (PAMC) consists of three like-new underground mines and related infrastructure with high-Btu bituminous coal - PAMC 766.7 million tons reserves(1) / 28.5 million tons…
  20. Barclays CEO Power Conference – CNX Resources – slide 20
    Pennsylvania Mining Complex: Longwall Productivity 2016 production 2016 productivity 30 7.3 7.3 6.9 7.0 Productivity (tons / employee hour) 6.4 6.4 6.5 25 6.0 Production (million tons) 6.0 20 4.9 5.0 4.8 4.4 4.0…
  21. Barclays CEO Power Conference – CNX Resources – slide 21
    Pennsylvania Mining Complex: Transportation Advantage Transportation Overview PAMC has best-in-U.S. access to export infrastructure Logistics infrastructure and proximity to coal- fired power plants allow operational and marketing…
  22. Barclays CEO Power Conference – CNX Resources – slide 22
    Pennsylvania Mining Complex: Marketing PAMC Marketing Strategy 2016 Coal Sales Portfolio by Market Segment Maximize sales to established customer base of rail- 1 served power plants in the Eastern U.S., with a focus Domestic - PJM on…
  23. Barclays CEO Power Conference – CNX Resources – slide 23
    Pennsylvania Mining Complex: Marketing (Contd) Top 15 PAMC Customer Plants(1) Share of Tons Delivered Top 15 PAMC Customer Plants Annual Coal Burn 2011 70 9% 60 12% 50 Tons (Millions) 11% 40 30 31% 20 37% 10 PAMC 0…
  24. Barclays CEO Power Conference – CNX Resources – slide 24
    CNXC: Value of CNX Passive Ownership in PAMC CNX Coal Resources LP value to CNX is comprised of four main drivers: Ownership of Retained EBITDA Cash Distributions Drop Downs LP and GP/IDR 75% ownership of PA CNX % LP Units' share…
  25. Barclays CEO Power Conference – CNX Resources – slide 25
    Baltimore Terminal: Overview Overview: Coal export terminal 15 million tons per year capacity throughput; 1.1 million tons coal storage yard capacity Strategically located: able to access the attractive seaborne markets supplying…
  26. Barclays CEO Power Conference – CNX Resources – slide 26
    Coal Legacy Liabilities Significant legacy liability reductions over Balance Sheet Liability Long-Term Liability Guidance past three years: 6/30/2017 FY 2017E FY 2018E LTD 18 Miller Creek/Fola transaction drove WC 78 substantial…
  27. Barclays CEO Power Conference – CNX Resources – slide 27
    Spin Process: Leverage Ratio and Restricted Payments Bucket Leverage ratio down nearly 40% since end of 2015 Net Debt / TTM Adj. EBITDA 6.0x 2,500 5.0x 2,000 Total Liquidity ( millions) 4.0x 3.0x 2.8x (1) 1,500 3.0x 1,000…
  28. Barclays CEO Power Conference – CNX Resources – slide 28
    Summary TWO PREMIER STANDALONE COMPANIES NAV/SHARE DRIVEN Free cash flow Optimized completion design Disciplined spending rather than chasing production E&P RemainCo UNIQUE ASSET BASE Multiple decades of high NRI inventory…
  29. Barclays CEO Power Conference – CNX Resources – slide 29
    Q&A 30
  30. Barclays CEO Power Conference – CNX Resources – slide 30
    APPENDIX 31
  31. Barclays CEO Power Conference – CNX Resources – slide 31
    Non-GAAP Reconciliation: EBITDA and Adjusted EBITDA Three Months Ended June 30, 2017 2017 2017 2017 2016 PA Mining E&P Division Operations Other(1) Total Company Total Company ( in thousands) Division Net Income (Loss) 227,413…
  32. Barclays CEO Power Conference – CNX Resources – slide 32
    Non-GAAP Reconciliation: TTM EBIT, EBITDA, and Adj. EBITDA Three Months Three Months Three Months Three Months Twelve Months Three Months Twelve Months Ended Ended Ended Ended Ended Ended Ended June 30, September 30, December 31,…
  33. Barclays CEO Power Conference – CNX Resources – slide 33
    Non-GAAP Reconciliation: Noncontrolling Interest and Net Debt Three Months Three Months Three Months Three Months Twelve Months Three Months Twelve Months Ended Ended Ended Ended Ended Ended Ended June 30, September 30, December 31,…
  34. Barclays CEO Power Conference – CNX Resources – slide 34
    Non-GAAP Reconciliation: Free Cash Flow Three Months Ended Three Months Ended Six Months Ended Six Months Ended June 30, June 30, June 30, June 30, ( in thousands) 2017 2016 2017 2016 Net Cash provided by Continuing Operations…
  35. Barclays CEO Power Conference – CNX Resources – slide 35
    Appendix: Strong Liquidity Position of 2 Billion Amount/ Amount Letters Amount June 30, 2017 ( in millions) Capacity Drawn of Credit Available (1) Cash and Cash Equivalents 293 - - 293 Revolving Credit Facility(2) 2,000 0 314…

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