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Analyst Meeting – CNX Resources

CNX Resources · Mar 13, 2018 · 116 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. Analyst Meeting – CNX Resources – slide 1
    Analyst & Investor Meeting Pittsburgh, Pennsylvania March 13, 2018
  2. Analyst Meeting – CNX Resources – slide 2
    Agenda Strategic Overview Marketing Nick DeIuliis, Chief Executive Officer Chad Griffith, VP Marketing Operations Finance Tim Dugan, Chief Operating Officer Don Rush Andrea Passman, VP Development Chuck Hardoby, VP Finance…
  3. Analyst Meeting – CNX Resources – slide 3
    Strategic Overview Nick DeIuliis
  4. Analyst Meeting – CNX Resources – slide 4
    154-Year Legacy is a Competitive Advantage The Dominion The vast Industrialist assets CNX interwoven Andrew Mellon acquired in 2010 financed the nature of trace their roots consolidation of the CNX to the late 1800s the coal…
  5. Analyst Meeting – CNX Resources – slide 5
    Greater than the Sum of the Parts Set in motion more than a decade ago, CNX emerged as a premier standalone E&P company on November 29, 2017 The separation of the businesses allows CNX to efficiently deploy its capital…
  6. Analyst Meeting – CNX Resources – slide 6
    Asset Base Creates Compelling Value Creation Opportunity Net Marcellus Acres / Reserves to % Operated Proved Reserves Large Net Utica Acres(1) Production (years) Contiguous Acreage 531,000 / 95.5% 18.6 7.6 Tcfe Position 652,000…
  7. Analyst Meeting – CNX Resources – slide 7
    The CNX Strategy is to Grow NAV/Share via Capital Allocation Key drivers of the strategy: Methodical execution driving IRR and EBITDAX growth Basin disruption through stacked pay development Top-tier balance sheet…
  8. Analyst Meeting – CNX Resources – slide 8
    Methodical Execution Driving IRR and EBITDAX Growth Expected Five-Year Plan Portfolio Economics Drill Bit Investment Driving EBITDAX Growth 80% 75% 2,000 70% 60% 1,500 50% in millions IRR (%) 40% 38% 1,000 30%…
  9. Analyst Meeting – CNX Resources – slide 9
    Stacked Pay Development Will Disrupt the Appalachian Basin Stacked pay provides 30% CNX has a non-replicable asset base increase to total field NPV allowing for stacked pay development Stacked pay drives superior IRRs through economies…
  10. Analyst Meeting – CNX Resources – slide 10
    Top Tier Balance Sheet Strength Drives Capital Optionality STEADY STATE DRILL BIT 2.5X LEVERAGE RATIO ROBUST HEDGE BOOK & IRR SHARE COUNT REDUCTION FT STRATEGY ANALYSIS DISCRETIONARY CASH FLOW ASSET MONETIZATIONS BOLT-ON…
  11. Analyst Meeting – CNX Resources – slide 11
    Leverage Ratio Capacity Allows for Share Count Reduction Growing EBITDAX Creates Natural Capacity Available Capacity Reinvested within 2.5x Leverage Ratio in Share Count Reduction 3.0x Cumulative available capacity of 2,500 250 10,000…
  12. Analyst Meeting – CNX Resources – slide 12
    CNXM 15% Distribution Growth De-Risked CNXM Distributable Cash Flows by Source Expected CNXM Distributions to CNX 2017-2022E 2017-2022E 140 300 130 120 250 103 100 200 80 in millions 80 in millions 150 60 60…
  13. Analyst Meeting – CNX Resources – slide 13
    Compensation Plan Reinforces Strategy Long-Term Incentive Short-Term Incentive Program (PSUs) Compensation Program 2016 Free Cash Flow Compensation plans motivate management to execute on: 2017 Free Cash Flow Methodical operational…
  14. Analyst Meeting – CNX Resources – slide 14
    Importance of Both Numerator and Denominator in NAV/Share DIFFERENTIATED ASSET BASE NAV OPERATIONAL EXECUTION DRIVEN BY GROWING RESERVES VALUE OPTIMIZED VALUE OF MLP PRUDENT ASSET MONETIZATION NAV/Share BALANCE SHEET & HEDGE…
  15. Analyst Meeting – CNX Resources – slide 15
    Operations Tim Dugan Andrea Passman
  16. Analyst Meeting – CNX Resources – slide 16
    Unique Stacked Acreage Portfolio Sets the Stage 531,000 ASSET BASE HIGHLIGHTS Total Net Marcellus Acres Vast multi-formation acreage position built over 150+ years 582 Net Undeveloped Marcellus Premier gathering infrastructure…
  17. Analyst Meeting – CNX Resources – slide 17
    Type Curve Guidance Areas Refined For Modeling Accuracy Type curve (TC) guidance areas refined to present more accurate characteristics of acreage - Went from five TC regions (SWPA, CPA, WV, and OH Dry & Wet) to now eight (SWPA:…
  18. Analyst Meeting – CNX Resources – slide 18
    Capital Efficiency Continues to Improve 160% Capital Efficiency (Mcfe/) NAV growth driven by optimization and 140% stacked pay 120% Increased EURs from 1.83 Mcfe/ 2.78 Mcfe/ 2.78 Mcfe/ 2.84 Mcfe/ model-driven spacing, 100%…
  19. Analyst Meeting – CNX Resources – slide 19
    EUR Increases Driven by Modeling and Optimization Marcellus EURs Modeling Maximizes NAV 3.5 2.9 3.0 2.7 85% increase in proppant loading from EUR (Bcfe/1000') 2.5 pre-2016 to 2018E 2.0 1.7 Subsurface communication mitigation…
  20. Analyst Meeting – CNX Resources – slide 20
    PDP Performance Drives Low Maintenance Capital PDP Base Decline % Maintenance Capital 900 35% Possible Cumulative FCF of 1.4 billion 800 2019E-2022E 30% 700 600 in millions 25% Possible FCF at (1) 500 Maintenance…
  21. Analyst Meeting – CNX Resources – slide 21
    Drilling Days Declining Steadily in Every Region Total Marcellus Average Drilling Days per Well CPA Utica Average Drilling Days per Well 30 140 25 120 Drilling Days Drilling Days 100 20 80 15 60 10 40 5 20 0 0 2014 2015…
  22. Analyst Meeting – CNX Resources – slide 22
    Completion Cycle Times Driving Capital Efficiency Total Portfolio Completions Cycle Times Marcellus Completions Cycle Times 5 5 4 4 Average Days/1,0000 ft Average Days/1,0000 ft 3 3 2 2 1 1 0 0 2014 2015 2016…
  23. Analyst Meeting – CNX Resources – slide 23
    DEVELOPMENT PLAN 24
  24. Analyst Meeting – CNX Resources – slide 24
    Shift to SWPA and Stacked Pay: Surplus Core Marcellus Inventory 450 3.5 400 TILs 46 350 3.0 Stacked Pay Factory TILs 55 up and running 300 TIL Locations 2.5 Net SWPA TILs 73 250 Central Marcellus 2.0 200 Inventory…
  25. Analyst Meeting – CNX Resources – slide 25
    Stacked Pay Creates Substantial Uplift Beyond Longer Laterals 25,000 140 Stacked pay PV10 is 4.4x unstacked pay 120 PV10(1) 20,000 PV10 ( in thousands) 100 Longer lateral PV10 is 1.9x shorter lateral 15,000 PV10(1) 80…
  26. Analyst Meeting – CNX Resources – slide 26
    Technological Advances Driving Tangible Results PORTFOLIO NAV OPTIMIZATION STACKED PAY FACTORY DESIGN Big data analysis OPTIMIZATION Ensures highest System modeling NPV combination DATA ACQUISTION Linear of fields while…
  27. Analyst Meeting – CNX Resources – slide 27
    Three Utica Areas Require Distinct Development Plans CPA UTICA OHIO UTICA Stacked pay play within the Manufacturing play MARCHAND 3M Utica and Point Pleasant 3.2 Bcf/1,000 3.5+ Bcf/1,000 80 of pay 300 of pay in Utica, Point GAUT…
  28. Analyst Meeting – CNX Resources – slide 28
    The Utica is a Precision Play OHIO (SWITZ) SWPA (RHL11E) CPA (Marchand3M) Understanding reservoir characteristics in combination with facies drives productivity 29
  29. Analyst Meeting – CNX Resources – slide 29
    Ohio Utica Model Drove SWPA and CPA Success Legacy Base Optimized The model drove early success and eliminated the need for trial and error testing Ohio Utica is the analogue model for rapid SWPA and CPA Utica optimization…
  30. Analyst Meeting – CNX Resources – slide 30
    SWPA Utica: Very Strong Early Results from Richhill 11E Richhill 11E SWPA Utica well currently flowing above 3.2 Bcfe/1000 type curve Most Recent SWPA Utica Well Drilled through series of natural fracture clusters, which were on Path…
  31. Analyst Meeting – CNX Resources – slide 31
    SWPA Utica Requires Engineered Design Onondaga Success is consistently hitting repeatable results by: - Drilling on seismic Point Pleasant - Managed pressure drilling - Cyber steering to improve in-zone statistics - Customized…
  32. Analyst Meeting – CNX Resources – slide 32
    SWPA Region Overview: Greater and Central SWPA Central Marcellus Utica Undeveloped Net Locations 391 438 EUR (Bcfe/1000)(1) 2.8 3.2 Total NRI 87% 89% Total PDPs 182 1 Net Current Production (Bcfe/d) 0.412 0.004 Core focus area for…
  33. Analyst Meeting – CNX Resources – slide 33
    SWPA Central: Focus of Activity in Three-Year Plan Morris Production Legacy vs. Now SWPA Marcellus TILs: 2017 vs. Three-Year Plan 80 73 70 60 55 50 46 TILs 40 30 20 11 10 0 2017 2018E 2019E 2020E Average EUR/1,000…
  34. Analyst Meeting – CNX Resources – slide 34
    Blending Strategy Helps Drive DevCo I Stacked Pay Economics 1200 Damp acreage requires processing to meet Requires Processing Wet Marcellus Gas BTU specifications 1150 Damp Marcellus Gas BTU Content 1110 Dry Tariff Line…
  35. Analyst Meeting – CNX Resources – slide 35
    Two Pipe Gathering System Creates Flexibility in DevCo I Industry Standard One-Pipe System CNX DevCo I Two-Pipe System New Pad New Stacked Pay Pad (High Pressure) (High Pressure and Low Pressure) As new high pressure wells are TIL,…
  36. Analyst Meeting – CNX Resources – slide 36
    Richhill (RHL): Stacked Pay Development Premier stacked pay field in SWPA Central - CNX expects to develop wet Marcellus laterals in the northern corridor first - While the northern Marcellus corridor is being developed, two dry Utica…
  37. Analyst Meeting – CNX Resources – slide 37
    CPA Dry Utica Update: Aikens 5J and 5M Aikens Wells EURs at 3.7 Bcf/1000 Aikens 5J 30000 Located in Westmoreland County, PA (CPA South 25000 region); two wells offsetting successful Gaut 4IH well Rate (Mcf/d) 20000 Average…
  38. Analyst Meeting – CNX Resources – slide 38
    Stacked Utica with Utica in CPA Utica, Point Pleasant and Lexington are all gas bearing contributing zones with a total thickness of nearly 300 - Verified by the Marchand core and logs UTICA Potential to multiply Utica…
  39. Analyst Meeting – CNX Resources – slide 39
    Perfect Pad to Create Stacked Pay Benchmark in 2019 Process Cellar technology construction allows for subsurface well heads Prior Target for faster return Days Days 120 90 Dry month construction 3D seismic drives well bore…
  40. Analyst Meeting – CNX Resources – slide 40
    Central PA Overview: North and South CPA South Marcellus Utica Undeveloped Net Locations 634 513 EUR (Bcf/1000)(1) 1.8 3.5 Total NRI 87% 87% Total PDPs 47 3 Net Current Production (Bcfe/d) 0.034 0.046 Gaut & Aikens wells have proved…
  41. Analyst Meeting – CNX Resources – slide 41
    Development Areas in Three-Year Plan OH Dry CPA South Utica Utica SHR/PENS SWPA Central Marcellus Marcellus and Utica 42
  42. Analyst Meeting – CNX Resources – slide 42
    Three-Year Drill Schedule and Estimated Reserves Growth Rig Schedule 2018E-2020E Reserve Growth and Estimates 2015-2022E 2018 2019 2020 16,000 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 14,500 Rig 1 14,000 Rig 2 12,000 12,000 12,500 Rig…
  43. Analyst Meeting – CNX Resources – slide 43
    Three-Year Development Plan 2018E 2019E 2020E ( in millions) TD FRAC TIL Capex TD FRAC TIL Capex TD FRAC TIL Capex SWPA Marcellus 62 48 46 60 52 55 71 78 73 Central Utica 3 1 1 19 14 14 27 28 28 WV Marcellus 5 5 5 10 10 7 15 11 11…
  44. Analyst Meeting – CNX Resources – slide 44
    Business Development Don Rush
  45. Analyst Meeting – CNX Resources – slide 45
    Track Record of Success: History of Monetizing Assets Annual average of 600 million in asset monetization Asset Sale Totals by Year from 2014-2017 4,500 414 million in assets sold in 2017 4,000 2018 effort continues 3,500 -…
  46. Analyst Meeting – CNX Resources – slide 46
    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 - Expected close…
  47. Analyst Meeting – CNX Resources – slide 47
    Virginia Coalbed Methane (CBM): Upstream Low Risk Proven IRR 270,000 contiguous acres, 100% WI 88% HBP, 87.5% NRI 4,000 PDPs at 165 MMcf/d 2017 EBITDA of 100 million Future Potential 4,300 potential undeveloped CBM locations…
  48. Analyst Meeting – CNX Resources – slide 48
    Ohio Utica Joint Venture Overview Low Risk, Mature Development 65% fee ownership, 46.5% avg. NRI (93% gross JV NRI) 31 gross operated JV wells (Noble County) 65 gross non-op JV wells, 47 non-op gross 3rd party wells 36,000 gross…
  49. Analyst Meeting – CNX Resources – slide 49
    CNX MIDSTREAM ASSET AND OPPORTUNITY 50
  50. Analyst Meeting – CNX Resources – slide 50
    De-Risked CNX Midstream Growth Driving CNX Upside CNXM Distributable Cash Flows by Source 2017-2022E 300 Ability to sustain 15% CNXM 250 distribution growth is projected without additional asset drops 200 in millions 150…
  51. Analyst Meeting – CNX Resources – slide 51
    Drop Inventory Drives Meaningful Upside to CNXM 15% Growth CNX Retained Undropped EBITDA including Potential Drop Candidates 2017 vs. 2020E Potential Candidates 2018E-2020E 200 CONVEY Water Business Existing DevCos 150 Primarily…
  52. Analyst Meeting – CNX Resources – slide 52
    CONVEY: CNXs Water Business Projected Water Infrastructure: YE2018 PA WV OH Total Cumulative Water System CapEx 219 94 17 330 ( millions) Water Pipelines (miles) 189 79 33 301 Water Storage Facilities (MMBbl) 1.2 0.6 0.3 2.1…
  53. Analyst Meeting – CNX Resources – slide 53
    CONVEY: Major Projects Wadestown Development SWPA Water Build Out 65 million - 5 year CapEx spend NPV 165 million, IRR 120% Initial water infrastructure buildout 38 miles of new water infrastructure Eliminates seasonal water…
  54. Analyst Meeting – CNX Resources – slide 54
    CONVEY: Drives High Distribution Growth Rate 55 million water EBITDA at proposed rates in 2018(1) Driven by margin on CNX fresh, reuse, and disposal rates Steady Water EBITDA Growth(1) Final rates to be determined at time of drop…
  55. Analyst Meeting – CNX Resources – slide 55
    Drop Down Inventory: Wadestown Wadestown: Five-Year Investment Outlook Greenfield Marcellus and Utica dedication in DevCo III Wadestown: Proposed Pipeline Buildout Wadestown metering and regulation Facility - New 1.2 Bcf/d Dominion…
  56. Analyst Meeting – CNX Resources – slide 56
    Drop Down Inventory: Central PA Midstream Buildout Central PA Utica: Five-Year Investment Outlook Currently undedicated to any midstream company Recent dry Utica well results proving commercial viability Opportunity to be first-mover…
  57. Analyst Meeting – CNX Resources – slide 57
    Virginia Coalbed Methane: Midstream (Cardinal States Gathering) Best-in-Class and Location Interconnects TransCanada TCO pipeline to premium Enbridge ETNG pipeline system As is 40% of the 250 MMcf/d capacity available to gather 3rd…
  58. Analyst Meeting – CNX Resources – slide 58
    CNX Midstream Ownership Valuation CNX Midstream drives value CNX Midstream Value to CNX CNXM Represents Significant Growth for CNX in through four main avenues ( in millions, except per share data) 2018E 2020E both IDRs and Retained…
  59. Analyst Meeting – CNX Resources – slide 59
    Marketing Chad Griffith
  60. Analyst Meeting – CNX Resources – slide 60
    Marketing Overview FIRM TRANSPORTATION HEDGE STRATEGY MARKET VIEW Selective FT commitments Foundation that enables the Current forward market - Utilize basis hedges to create execution of the companys Supply/demand balance synthetic FT…
  61. Analyst Meeting – CNX Resources – slide 61
    Firm Transportation Strategy Three-Filter Test for Taking on New FT Transportation, Gathering, & Processing 20.0 Commitments and Differentials(2) - 18.0 Total Obligations ( in billions) 1 Do we need it to get it to a liquid…
  62. Analyst Meeting – CNX Resources – slide 62
    Liquidity of In-Basin Markets Negates Need for FT It is no longer essential to have in-basin FT capacity to sell gas due to the liquidity of the in-basin markets Gas can be reliably sold on M2 without taking on unnecessary and…
  63. Analyst Meeting – CNX Resources – slide 63
    Peer Firm Transportation Benchmarking Total FT and Processing Commitments Total FT Commitments + 2018E Adjusted Net Debt(1)(2)(3) 18.4 21.7 18.7 11.6 12.2 8.9 10.8 7.1 5.6 3.7 1.8 2.1 2.7 1.1 CNX Peer 1 Peer 2 Peer 3 Peer…
  64. Analyst Meeting – CNX Resources – slide 64
    Differentiated Firm Transportation Portfolio Avg. Demand 1,600 Cost (/Dth) (000s Dth/d) 2018E 2018E 1,400 M2 DOM South 345 M3 WLA ETNG 201 1,200 ELA Michcon TCO Pool 475 1,000 Michcon 162 000s MMBtu/d TETCO ELA 30 800 TCO…
  65. Analyst Meeting – CNX Resources – slide 65
    Natural Gas Basis Risk and Financial Reporting Clarity Fully-hedged volumes provide revenue certainty and Basis hedging and hedge reporting example de-risks capital expenditures October NYMEX settles 3.30 & M2 Basis settles (1.10); CNX…
  66. Analyst Meeting – CNX Resources – slide 66
    Power Plants and LNG Driving Demand Growth 14.7 Bcf/d incremental demand from gas fuel type 13.9 Bcf/d LNG Export capacity by 2022 power plants by 2025 An additional 11.6 Bcf/d is proposed without a target in-service CNX acreage in the…
  67. Analyst Meeting – CNX Resources – slide 67
    NE Expansion Projects Remove Export Bottleneck Pipeline Expansion Project Takeaway Capacity 20 18 16 Supply Header Project 14 Atlantic Coast Pipeline 12 WB Xpress Mountaineer Xpress Bcf/d 10 PennEast 8 Nexus Project 6…
  68. Analyst Meeting – CNX Resources – slide 68
    Supply/Demand Fundamentals 2018 gas consumption expected to increase 3.5 Bcf/d to 77.5 Basin Demand Expected to Increase Bcf/d and increase an additional 2.2 Bcf/d in 2019(1) Roughly 6 GW of natural-gas fired power plant capacity in…
  69. Analyst Meeting – CNX Resources – slide 69
    Liquids and Processing Summary ACAA MarkWest Contracted Processing Capacity Blue Racer 365 MMcf/d Dominion MarkWest Majorsville Noble County Utica CNXM and other wet gathering systems provide optionality for CNX wet production…
  70. Analyst Meeting – CNX Resources – slide 70
    Finance Don Rush Chuck Hardoby
  71. Analyst Meeting – CNX Resources – slide 71
    Corporate Values Guide Decision Making AND KNOWLEDGE SET CNX ASSET BASE NAV/SHARE FOCUS RESPONSIBILITY CORPORATE 31% VALUES DISCIPLINED CAPITAL OWNERSHIP ALLOCATION STRATEGY EXCELLENCE FIVE YEAR ALIGNMENT OF EBITDAX…
  72. Analyst Meeting – CNX Resources – slide 72
    Strategy Resulting In Substantial EBITDAX Growth Expected EBITDAX 2018E-2022E(1) 2,000 1,800 1,600 1,400 1,200 in millions 1,000 800 600 400 200 0 2018E 2019E 2020E 2021E 2022E Low High (1) Based on…
  73. Analyst Meeting – CNX Resources – slide 73
    Balance Sheet Capacity and Dry Powder Upside through 2022E 8,000 7,000 Dry powder of 4 billion through 2022E 6,000 consists of potential Balance Sheet Capacity drop proceeds, tax 5,000 3 billion refunds, CNXM LP/GP in…
  74. Analyst Meeting – CNX Resources – slide 74
    Marketing: Natural Gas Hedging and Basis Protection 400 350 Gas Volumes Hedged (Bcf) 43.3 300 250 200 375.9 44 12.1 Systematically layering in 150 290.6 72.3 hedges out to 2022 to protect 100 182 181.9 margins on proved…
  75. Analyst Meeting – CNX Resources – slide 75
    Financial Guidance: 2018E-2020E 2018E 2019E 2020E Revenue and Other Operating Income E&P Consolidated E&P Consolidated E&P Consolidated Production Volumes: Natural Gas (Bcf) 450-475 505-575 610-700 NGLs (MBbls) 7,500-7,700 6,800-7,400…
  76. Analyst Meeting – CNX Resources – slide 76
    Financial Guidance: E&P 2018E 2018E Revenue and Other Operating Income E&P Production Volumes: Natural Gas (Bcf) 450-475 NGLs (MBbls) 7,500-7,700 Oil (MBbls) 15-20 Condensate (MBbls) 590-610 Total Production (Bcfe) 500-525 Basis…
  77. Analyst Meeting – CNX Resources – slide 77
    Financial Guidance: 2018E E&P Revenue Buildup 2018E Revenue Revenue Volumes Realized Price ( in millions) Natural Gas 462.5 Bcf 2.55 /Mcf 1,180 NGLs 7,600.0 MBbls 23.50 /Bbl 179 Condensate 602.5 MBbls 42.00 /Bbl 25 Oil 17.5…
  78. Analyst Meeting – CNX Resources – slide 78
    Financial Guidance: 2018E Natural Gas Marketing Mix and Basis Volumes 2018E CY 2018 Market (000 MMBtu) Gas Sold (%) Basis Michcon Northeast Pipeline Projects DOM South 45,074 9% (0.67) 2018E Gas: 6% ETNG/Cascade Creek TZ5 9,097 2%…
  79. Analyst Meeting – CNX Resources – slide 79
    Financial Guidance: 2018E NGL Barrel Composition and Pricing Approximately 200 million in revenue 2018E NGL Barrel Composition 2018E liquids sold: Natural N-Butane gasoline - NGLs: 7,600 MBbls 9% 8% - Condensate: 603 MBbls I-Butane…
  80. Analyst Meeting – CNX Resources – slide 80
    Financial Guidance: 2018E Natural Gas Hedging Gain/Loss Projections CY2018 CY2019 Hedged Volumes Hedged Forward Forecasted Gain/(Loss) (1) (000 MMBtu) Price Market (/MMBtu) ( in 000's) (/MMBtu) NYMEX 377,775 2.98 2.78 0.20 74,668…
  81. Analyst Meeting – CNX Resources – slide 81
    Financial Guidance: 2018E E&P EBITDAX Buildup 1,800 1,600 Other Operating Income Purchased Gas Sales Realized Hedging 1,400 Gain/(Loss) 0.15-0.18 / 0.06-0.08 / Mcfe Mcfe E&P EBITDAX + 1,200 Attributable CNXM EBITDA 1,000 825-850…
  82. Analyst Meeting – CNX Resources – slide 82
    Financial Guidance: 2018E CNXM EBITDA Attributable to CNX 250 200 150 in millions Non-Controlling Interest 100 50 60-65 million 0 Total Revenue Operating Expense General & EBITDA EBITDA Attributable (100% of…
  83. Analyst Meeting – CNX Resources – slide 83
    CAPITAL ALLOCATION OPTIONALITY DRIVING VALUE 84
  84. Analyst Meeting – CNX Resources – slide 84
    Capital Allocation Optionality Drives NAV/Share In late 2015, committed to strengthening the balance sheet through focusing on NAV/share - Positioned company for significant growth as a premier E&P company in the Appalachian Basin…
  85. Analyst Meeting – CNX Resources – slide 85
    Target Leverage Ratio Provides Capital Allocation Optionality IRR ANALYSIS Share count Bolt-on Drill bit Balance sheet reduction acquisitions 86
  86. Analyst Meeting – CNX Resources – slide 86
    Capital Allocation Optionality: Drill Bit IRR Opportunities Summary Assumptions Portfolio IRR Summary: Five Year Plan Gas pricing: 2.50/MMBtu 140% 300% 138% NGL pricing: 25/Bbl 120% 100% CND pricing: 45/Bbl IRR 80% Full Cycle…
  87. Analyst Meeting – CNX Resources – slide 87
    Capital Allocation Optionality: Share Buybacks 2018E-2022E As of: Q3 2017 End Year-End 2017 As of 3/6/2018 Buyback Potential Share Reduction Additional S/O: 230.1 million 223.8 million 219.8 million 90+ million share…
  88. Analyst Meeting – CNX Resources – slide 88
    Rehabilitated Balance Sheet Sets New Beginning Long-Term Liabilities Reduced by More than 4 Billion Over last Six Years 5,000 500 Annual Cash Servicing Costs ( in millions) 4,000 400 2018E hedge book and production Long-Term…
  89. Analyst Meeting – CNX Resources – slide 89
    Capital Allocation: Balance Sheet CNX EBITDAX Less Sensitive to Commodity Swings 3.50 Each 0.25 decline in HH price yields only a 35 million 1,400 Balance Sheet Highlights(1) YE 2017 YE 2018E 3.00 decline in 2018E EBITDAX 1,200…
  90. Analyst Meeting – CNX Resources – slide 90
    Tax Reform and NOLs Create Tailwind December 31, Tax reform law states that Alternative Minimum Tax (AMT) 2017 2016 amounts can be refunded at 50% in first year Deferred Tax Assets: - Expect to receive first proceeds in 2019: 95…
  91. Analyst Meeting – CNX Resources – slide 91
    Finance Summary: 2014-2018+ 2018+ Growing NAV/Share 2014- Company Transformation Growing EBITDAX Locking in Revenue and Returns 2017 and Balance Sheet Repair Ongoing Hedge Program Drill Bit IRR Analysis Continued…
  92. Analyst Meeting – CNX Resources – slide 92
    CNX is Designed and Managed Differently What about CNXs distinctive strategy drives value Growing IRRs based on steady and reliable execution Early movers on stacked pay development Target 2.5x leverage ratio and balance sheet…
  93. Analyst Meeting – CNX Resources – slide 93
    Q&A 94
  94. Analyst Meeting – CNX Resources – slide 94
    Appendix
  95. Analyst Meeting – CNX Resources – slide 95
    Stacked Pay: Pad Level Benefits SWPA Central stacked pay development of Utica and Marcellus yields the highest NAV/share Pay zone specific drilling & completion assignment reduces capital and increase efficiencies Pay zone…
  96. Analyst Meeting – CNX Resources – slide 96
    Stacked Pay: What are the Main Advantages Reduces capital - Pre-spud capital nearly eliminated for second formation Stacked Pay Pad Economics Example 350 140% - Use existing fuel gas to power D&C operations Reduces cycle times 300…
  97. Analyst Meeting – CNX Resources – slide 97
    Stacked Pay: Gas Blending Driving NAV/Share Midstream pipeline tariffs require Marcellus gas above 1110 BTU be processed Processing damp gas between 1100-1150 BTU range is NPV destructive Lateral Feet to Blend by BTU to Equal 1100…
  98. Analyst Meeting – CNX Resources – slide 98
    Stacked Pay: Marcellus/Utica vs. Marcellus/Upper Devonian Normalized NPV (NPV/Foot) 4.50 Stacked Pay with Marcellus and Utica 4.00 yields a higher NPV than stacking 3.50 PV10 ( in millions/Ft) Marcellus with Upper Devonian wells…
  99. Analyst Meeting – CNX Resources – slide 99
    Detailed IDR Model: Assuming 15% Distribution Growth GP + Floor Ceiling LP Share IDR Share IDR Share Minimum Quarterly Distribution (MQD) 0.212500 98% 2% 0% First Target Distribution 0.212500 0.244375 98% 2% 0% Second Target…
  100. Analyst Meeting – CNX Resources – slide 100
    Guidance: Natural Gas Hedging Gain/Loss Projections Q1 2018 CY2018 CY2019 Hedged Volumes Hedged Forward Forecasted Gain/(Loss) Hedged Volumes Hedged Forward Forecasted Gain/(Loss) (000 MMBtu) Price Market (1) (/MMBtu) ( in 000's) (000…

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