A Differentiated Company Barclays CEO Energy-Power Conference September 9, 2020
Low Risk 7-Year Free Cash Flow Plan CNXs programmatic approach to hedging in up and down markets 1 Commodity Price Risk eliminates near-term cash flow risk, and still allows company to participate in long term upside ahead for Natural…
Low Risk Differentiates CNX Risk Mitigated X Risk Not Mitigated Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 Commodity Price Risk X X X X X Operating Cost Risk X X X X X Capital Execution Risk X X X X X Midstream Control X X X X…
Gas Price Risk Differentiation 2021E(1) Hedged Gas Production 2022E(1) Hedged Gas Production 104% 38% of 2023(1) production 100 % 63% hedged under maintenance 60 % scenario at 2.81 NYMEX 87% 56% vs. 80 % 2% for peers at 2.38 %…
Lowest Cost Position Protects Cash Flows in Down Market 2022E-2025E Average All-In Cash Expense (/Mcfe)(1) CNX can generate 2.71 500MM of FCF 2.46 2.50 per year with a 2.25 2.21 commodity price CNX margin protected by where the…
Significant Upside to FCF if Gas Prices Go Up CNX would have a CNX extra 2022E-2025E Average All-In Cash Expense (/Mcfe)(1) margin of 3 Gas Price margin of 1.60 0.70 / Mcfe 2.71 per Mcfe and 2.46 2.50 generate 2.21 2.25 900MM(2)…
Capital Execution Risk Differentiation CNX is running a small capital program 2020E-2025E Average Annual Capital Expenditures(1) across 7-year plan 1,200 1 rig, 1 frac crew 1,000 Utilizing best crews 800 in millions…
CNX Has a Unique Competitive Advantage by Controlling its Midstream Fully Controls Primary Midstream Ownership Eliminates Risks Midstream Provider Risk: Sub-optimal capital allocation CNX Full ownership ensures that upstream capital…
Midstream Control Differentiation Industry Standard One-Pipe System CNX Two-Pipe System New Pad New Two-Pipe System Pad (High Pressure) (High Pressure and Low Pressure) As new high pressure wells are TIL, higher pressure gas The low…
CNXs Leverage Profile Reflects its Low-Risk 7-Year Plan 2020E Leverage Ratio(1) 5.1x 4.4x 3.7x 3.9x Peer Average: 3.5x 2.8x 2.9x CNX expects to de-lever to 1.3x 1.5x by early 2023 Peer 2 CNX Peer 3 Peer 1 Peer 5 Peer 6 Peer 4…
Peer Leverage Significantly Increases if Gas Prices Decline 10% decline in gas 2021E Adj. Leverage Ratio(1) 6.0x prices on open volumes for peers, 5.0x drives leverage 4.0x higher 3.0x 2.0x 1.0x CNX significantly 0.0x more…
CNX Consolidated Debt Maturities Maturities as of June 30, 2020 (Adjusted) Significant runway before nearest Notes 1,517 maturity in 2026 Manageable towers 49 for future refinancing 983 745 700 123 Significant liquidity 2020…
Relative Free Cash Flow Yield 2021E Free Cash Flow Yield(1) CNX Appalachia Peers Top 10 XOP S&P 500 Sectors CNX 2021E-2026E Average Expected FCF Yield: 26% Implied CNX share price of 35 assuming a 6.5% yield Source: Public…
CNX Should Trade at a Lower FCF Yield Due to Lower Risk Higher Lower RISK = Higher FCF Yield RISK = Lower FCF Yield 16
CNX Trades at a Significant Discount on Free Cash Flow Metric EV / 2021E EBITDA(1) EV / 2021E Free Cash Flow (1) 8.8x 236.9x Peer Average: 6.1x 6.8x 6.9x 5.8x 5.3x 4.5x 4.2x 107.3x Peer Average: 74.1x 32.5x 33.9x 14.3x…
Expected FCF Creates Great Share Price Appreciation Potential 70 250 60 200 Assumes CNX uses free 50 cash flow(1) to pay down debt until achieving 1.5x Shares Outstand (millions) 150 leverage (in line with 7- 40 year…
Free Cash Flow Provides Significant Upside Base plan assumes conservative 2.50 NYMEX gas price strip and still results in CNX generating 3.3B of FCF Prioritizing paying down debt to target 1.5x leverage Need to pay down 1.1B to…
History of Making the Right Strategic Decisions Track Record of Long-term, Sustainable Value Creation Competitive Advantages Past Strategic Actions CNX has a track record of Moving Forward exceptional foresight in avoiding the…
Trifecta of Attributes Allows for Substantial Value Creation Chairman of the Board wrote the book History of making wise capital on capital allocation (The Outsiders: allocation decisions; Astute Capital Eight Unconventional CEOs and…
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