CNX Resources Corporation

10/28/2021 | Press release | Distributed by Public on 10/28/2021 05:00

Sales Agreement - Form 8-K



3Q 2021 Earnings Results &
Supplemental Information of CNX Resources
TABLE OF CONTENTS: Page:
Production Volumes and Activity Summary........................................................................................................................ 2
Hedge Volumes and Pricing…........................................................................................................................................... 3
Gas Hedging Gain/Loss Projections….............................................................................................................................. 4
Consolidated Statements of Income.................................................................................................................................. 5
Consolidated Balance Sheets............................................................................................................................................ 6
Consolidated Statements of Cash Flows…....................................................................................................................... 7
Market Mix and Natural Gas Price Reconciliation….......................................................................................................... 8
Price and Cost Data (Per Mcfe)......................................................................................................................................... 9
Guidance…........................................................................................................................................................................ 10
Non-GAAP Reconciliations
Definitions.......................................................................................................................................................................... 11
Sales of Natural Gas, NGL and Oil, including Cash Settlements and Natural Gas, NGL and Oil Production Costs.........
12
Quarterly Adjusted EBITDAX and Adjusted Net Income.................................................................................................... 13
Operating Margin............................................................................................................................................................... 14
Cash Operating Margin...................................................................................................................................................... 15
Net Debt and Adjusted EBITDAX TTM.............................................................................................................................. 16
Free Cash Flow.................................................................................................................................................................. 17

NOTE: Please note that CNX is unable to provide a reconciliation of non-GAAP projected financial results contained in this presentation, including the non-GAAP measures referenced above, to their respective comparable financial measure calculated in accordance with GAAP. This is due to our inability to calculate the comparable GAAP projected metrics, including operating income, net cash provided by operating activities and total production costs, given the unknown effect, timing, and potential significance of certain income statement items.



PRODUCTION VOLUMES
GAS Q3-2021 Q2-2021 Q1-2021 Q4-2020 Q3-2020
Shale Sales Volumes (Bcf) 130.3 115.0 121.1 124.7 95.2
CBM Sales Volumes (Bcf) 12.2 12.6 12.7 13.3 13.0
Other Sales Volumes (Bcf) 0.1 0.1 - 0.1 -
LIQUIDS*
NGLs Sales Volumes (Bcfe) 10.1 9.5 6.5 8.1 6.9
Oil and Condensate Sales Volumes (Bcfe) 0.8 0.7 0.3 0.3 0.6
TOTAL (Bcfe) 153.5 137.9 140.6 146.5 115.7
Average Daily Production (MMcfe) 1,668.7 1,515.6 1,562.5 1,592.5 1,257.6
* NGLs, Oil and Condensate are converted to Mcfe at the rate of one barrel equals six Mcf based upon the approximate relative energy content of oil and natural gas, which is not indicative of the relationship of oil, NGLs, condensate, and natural gas prices.
Q3 2021 ACTIVITY SUMMARY TD Frac TIL
Average Lateral Length(1)
Rigs at Period End
SWPA Central Marcellus 6 8 8 12,329 1
Utica - - - - -
WV Shirley-Pennsboro Marcellus - - - - -
Utica - - - - -
CPA South Utica - - - - -
Total 6 8 8 12,329 1
(1) Measured in lateral feet from perforation to perforation.


2

HEDGE VOLUMES AND PRICING
Q4 2021 2021 2022 2023 2024 2025 2026
NYMEX Hedges
Volumes (Bcf) 125.0 468.0 450.0 350.0 294.2 185.6 138.3
Average Prices ($/Mcf) $3.01 $2.96 $2.94 $2.88 $2.86 $2.79 $2.80
Physical Fixed Price Sales and Index Hedges
Volumes (Bcf) 5.4 22.3 20.8 34.5 46.4 41.7 46.7
Average Prices ($/Mcf) $2.53 $2.51 $2.50 $2.15 $2.32 $2.10 $2.07
Total Volumes Hedged (Bcf)(1)
130.4 490.3 470.8 384.5 340.6 227.3 185.0
NYMEX + Basis (fully-covered volumes)(2)
Volumes (Bcf) 130.4 490.3 452.3 355.2 338.5 193.2 86.2
Average Prices ($/Mcf) $2.54 $2.48 $2.43 $2.30 $2.25 $2.09 $2.07
NYMEX Hedges Exposed to Basis
Volumes (Bcf) - - 18.5 29.3 2.1 34.1 98.8
Average Prices ($/Mcf) - - $2.94 $2.88 $2.86 $2.79 $2.80
Total Volumes Hedged (Bcf)(1)
130.4 490.3 470.8 384.5 340.6 227.3 185.0
Estimated Conversion Factor(3)
1.099 1.089 1.097 1.084 1.082 1.072 1.063
(1) Hedge positions as of 10/7/2021. Excludes basis hedges in excess of NYMEX hedges of 3.6 Bcf and 26.3 Bcf for Q4 2021 and 2021, respectively. Q4 2021 and 2021 excess basis hedges exclude purchased swaps. See table below.
(2) Includes the impact of NYMEX and basis-only hedges as well as physical sales agreements.
(3) To convert Bcf to TBtu, multiply by conversion factor; to convert $/Mcf to $/MMBtu, divide by conversion factor.
Purchased Swaps Q4 2021 2021
Basis Hedges
Volumes (Bcf) 3.4 23.6
Average Fixed Prices ($/Mcf) ($0.78) ($0.78)
For financial hedging, CNX utilizes over-the-counter swaps to manage its exposure to natural gas price fluctuations. Typically, CNX "sells" swaps under which CNX receives a fixed price from and pays a floating price to its hedge counterparties. In order to enhance production flexibility, during the first quarter of 2021, CNX purchased, rather than sold, financial swaps for the period April through October of 2021 under which CNX will pay a fixed price to and receive a floating price from its hedge counterparties. Swaps purchased have the effect of reducing total hedged volumes for the period of the swap.


3

HEDGING GAIN/LOSS PROJECTIONS
Q4 2021 CY2021 CY2022
Wtd. Avg. Avg. Forecasted Wtd. Avg. Avg. Forecasted Wtd. Avg. Avg. Forecasted
Hedged Volumes Hedged Forward
Gain/(Loss)(2)
Hedged Volumes Hedged Forward
Gain/(Loss)(2)
Hedged Volumes Hedged Forward
Gain/(Loss)(2)
($/MMBtu) (000 MMBtu) Price
Market(1)
($ in 000s) (000 MMBtu) Price
Market(1)
($ in 000s) (000 MMBtu) Price Market ($ in 000s)
NYMEX 137,365 $2.74 $5.78 ($418,076) 509,633 $2.72 $3.83 ($590,080) 493,588 $2.68 $4.39 ($848,366)
Index - - - - 900 $2.40 $3.03 ($571) 7,300 $2.06 $3.56 ($10,950)
Basis:
DOM South (DOM) 17,910 ($0.60) ($0.86) $3,652 62,865 ($0.57) ($0.77) $10,183 106,763 ($0.64) ($0.83) $20,288
TCO Pool (TCO) 27,940 ($0.55) ($0.70) $5,217 104,590 ($0.53) ($0.56) $4,947 62,950 ($0.53) ($0.64) $6,993
Michcon (NMC) 11,960 ($0.17) ($0.31) $1,649 47,450 ($0.17) ($0.19) $1,219 49,880 ($0.20) ($0.22) $701
TETCO ELA (TEB) 1,840 ($0.09) ($0.15) $109 7,300 ($0.09) ($0.16) $536 5,475 ($0.09) ($0.12) $184
TETCO WLA (TWB) 1,840 ($0.08) ($0.06) ($44) 7,300 ($0.08) ($0.07) ($105) 5,475 ($0.08) ($0.08) ($6)
TETCO M3 (TMT) 2,898 $0.84 $0.17 ($45) 7,173 $0.95 ($0.27) $3,802 8,555 $0.11 $0.38 ($8,558)
TETCO M2 (BM2) 41,860 ($0.61) ($0.87) $10,848 170,575 ($0.60) ($0.80) $32,449 177,025 ($0.58) ($0.83) $44,544
Transco Zone 5 South (DKR) 2,600 $0.97 $0.83 ($150) 8,045 $0.66 $0.37 $988 7,275 $0.58 $0.87 ($5,883)
Total Financial Basis Hedges 108,848 $21,236 415,298 $54,019 423,398 $58,263
Total Projected Realized Loss ($396,840) ($536,632) ($801,053)
Note: Forward market prices, hedged volumes, and hedge prices are as of 10/7/2021. Anticipated hedging activity is not included in projections.
(1) January - October prices are settled.
(2) Forecasted Gain/(Loss) amounts are based on sum of current monthly hedge positions vs. strip.

4

CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Dollars in thousands, except per share data
Revenue and Other Operating (Loss) Income: Q3-2021 Q2-2021 Q1-2021 Q4-2020 Q3-2020
Natural Gas, NGL and Oil Revenue $585,915 $369,449 $381,225 $287,262 $182,213
(Loss) Gain on Commodity Derivative Instruments (1,507,270) (538,859) 33,414 289,977 (168,834)
Purchased Gas Revenue 16,311 16,706 33,484 27,468 31,541
Other Revenue and Operating Income 24,783 25,494 24,950 21,996 21,155
Total Revenue and Other Operating (Loss) Income (880,261) (127,210) 473,073 626,703 66,075
Costs and Expenses:
Operating Expense
Lease Operating Expense 11,193 10,248 9,268 9,753 10,377
Transportation, Gathering and Compression 90,609 84,114 77,158 73,606 68,810
Production, Ad Valorem, and Other Fees 9,552 7,445 5,968 6,656 5,994
Depreciation, Depletion and Amortization 129,734 122,607 128,944 144,648 114,464
Exploration and Production Related Other Costs 3,073 2,929 2,076 5,655 2,141
Purchased Gas Costs 14,192 14,551 32,411 24,194 31,721
Selling, General, and Administrative Costs 24,851 23,677 28,321 33,024 22,714
Other Operating Expense 21,654 15,140 15,658 14,911 23,284
Total Operating Expense 304,858 280,711 299,804 312,447 279,505
Other Expense
Other Expense 3,177 5,865 4,366 11,398 2,180
(Gain) Loss on Assets Sales and Abandonments, net (12,446) (7,186) (2,873) 336 (3,567)
Loss on Debt Extinguishment 18,653 - - 710 108
Interest Expense 37,944 39,576 36,372 37,634 37,921
Total Other Expense 47,328 38,255 37,865 50,078 36,642
Total Costs and Expenses 352,186 318,966 337,669 362,525 316,147
(Loss) Earnings Before Income Tax (1,232,447) (446,176) 135,404 264,178 (250,072)
Income Tax (Benefit) Expense (359,526) (92,117) 37,379 68,420 (61,279)
Net (Loss) Income (872,921) (354,059) 98,025 195,758 (188,793)
Less: Net Income Attributable to Noncontrolling Interest - - - - 15,905
Net (Loss) Income Attributable to CNX Resources Shareholders ($872,921) ($354,059) $98,025 $195,758 ($204,698)
(Loss) Earnings per Share
Basic ($4.05) ($1.61) $0.45 $0.88 ($1.03)
Diluted ($4.05) ($1.61) $0.43 $0.87 ($1.03)
Weighted-Average Shares Outstanding Q3-2021 Q2-2021 Q1-2021 Q4-2020 Q3-2020
Weighted-Average Shares of Common Stock Outstanding 215,738,737 219,897,242 219,923,634 223,676,251 198,727,472
Effect of Diluted Shares* - - 8,746,814 2,572,785 -
Weighted-Average Diluted Shares of Common Stock Outstanding 215,738,737 219,897,242 228,670,448 226,249,036 198,727,472
*During periods in which the Company incurs a net loss, diluted weighted average shares outstanding are equal to basic weighted average shares outstanding because the effect of all equity awards is antidilutive.


5

CONSOLIDATED BALANCE SHEETS
(Unaudited)
Dollars in thousands 30-Sep-21 30-Jun-21 31-Mar-21 31-Dec-20 30-Sep-20
ASSETS
Current Assets:
Cash and Cash Equivalents $365 $39,365 $29,610 $15,617 $150,132
Restricted Cash 220,386 768 733 735 733
Accounts and Notes Receivable
Trade, net 250,406 157,667 147,714 145,929 75,929
Other Receivables, net 10,234 10,727 9,719 4,238 4,653
Supplies Inventories 5,486 5,698 7,249 9,657 10,090
Recoverable Income Taxes - - - 88 644
Derivative Instruments 83,870 107,625 70,251 84,657 77,608
Prepaid Expenses 13,077 12,126 12,170 12,411 12,450
Total Current Assets 583,824 333,976 277,446 273,332 332,239
Property, Plant and Equipment:
Property, Plant and Equipment: 11,206,740 11,128,496 11,084,358 10,963,996 10,904,837
Less-Accumulated Depreciation, Depletion and Amortization 4,246,423 4,119,856 4,064,594 3,938,451 3,841,699
Total Property, Plant and Equipment-Net 6,960,317 7,008,640 7,019,764 7,025,545 7,063,138
Other Non-Current Assets:
Operating Lease Right-of-Use Assets 69,871 83,618 93,226 108,683 124,329
Derivative Instruments 179,176 204,459 235,695 188,237 160,098
Goodwill 323,314 323,314 323,314 323,314 323,314
Other Intangible Assets 85,181 86,819 88,457 90,095 91,733
Restricted Cash - 4,751 5,019 5,247 5,456
Other Non-Current Assets 26,470 26,533 26,316 27,311 28,867
Total Other Non-Current Assets 684,012 729,494 772,027 742,887 733,797
TOTAL ASSETS $8,228,153 $8,072,110 $8,069,237 $8,041,764 $8,129,174
LIABILITIES AND EQUITY
Current Liabilities:
Accounts Payable $107,266 $118,574 $114,535 $118,185 $117,004
Derivative Instruments 1,168,597 415,774 83,762 42,329 144,545
Current Portion of Finance Lease Obligations 495 406 5,139 6,876 7,419
Current Portion of Long-Term Debt 231,675 23,098 22,055 22,574 22,488
Current Portion of Operating Lease Obligations 35,461 47,198 52,500 52,575 52,032
Other Accrued Liabilities 223,852 204,145 179,916 198,773 164,473
Total Current Liabilities 1,767,346 809,195 457,907 441,312 507,961
Non-Current Liabilities:
Long-Term Debt 2,203,731 2,265,970 2,346,205 2,401,427 2,577,974
Finance Lease Obligations 1,097 854 956 1,057 2,322
Operating Lease Obligations 34,785 36,569 39,965 53,235 66,180
Derivative Instruments 858,767 285,865 83,705 127,290 203,709
Deferred Income Taxes 51,739 411,380 503,653 466,253 398,878
Asset Retirement Obligations 81,029 81,903 82,689 84,712 61,761
Other Non-Current Liabilities 43,143 43,443 43,747 44,041 40,213
Total Non-Current Liabilities 3,274,291 3,125,984 3,100,920 3,178,015 3,351,037
TOTAL LIABILITIES 5,041,637 3,935,179 3,558,827 3,619,327 3,858,998
Stockholders' Equity
Common Stock 2,124 2,191 2,207 2,208 2,249
Capital in Excess of Par Value 2,899,731 2,950,083 2,959,934 2,959,357 2,989,699
Preferred Stock - - - - -
Retained Earnings 299,438 1,199,570 1,563,318 1,476,056 1,290,498
Accumulated Other Comprehensive Loss (14,777) (14,913) (15,049) (15,184) (12,270)
TOTAL STOCKHOLDERS' EQUITY 3,186,516 4,136,931 4,510,410 4,422,437 4,270,176
TOTAL LIABILITIES AND EQUITY $8,228,153 $8,072,110 $8,069,237 $8,041,764 $8,129,174


6

CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Dollars in thousands
Cash Flows from Operating Activities: Q3-2021 Q2-2021 Q1-2021 Q4-2020 Q3-2020
Net (Loss) Income ($872,921) ($354,059) $98,025 $195,758 ($188,793)
Depreciation, Depletion and Amortization 129,734 122,607 128,944 144,648 114,464
Amortization of Deferred Financing Costs 5,992 6,122 6,034 6,600 5,807
Stock-Based Compensation 3,075 3,178 7,525 2,473 2,503
(Gain) Loss on Asset Sales and Abandonments, net (12,446) (7,186) (2,873) 336 (3,567)
Loss on Debt Extinguishment 18,653 - - 710 108
Loss (Gain) on Commodity Derivative Instruments 1,507,270 538,859 (33,414) (289,977) 168,834
(Gain) Loss on Other Derivative Instruments (1,416) (465) (4,194) (1,338) 152
Net Cash (Paid) Received in Settlement of Commodity Derivative Instruments (131,091) (10,359) 2,405 77,490 90,310
Deferred Income Taxes (359,689) (92,322) 37,352 68,408 (61,278)
Other (295) (554) (150) (337) (527)
Changes in Operating Assets:
Accounts and Notes Receivable (91,059) (10,605) (7,586) (69,738) (3,427)
Recoverable Income Taxes - - 88 555 113,796
Supplies Inventories 212 1,525 411 433 227
Prepaid Expenses (946) 296 290 223 (1,842)
Changes in Other Assets 13 (1,048) (36) (306) (129)
Changes in Operating Liabilities:
Accounts Payable (7,773) 18,508 (3,807) (18,844) (14,153)
Accrued Interest (29,095) 24,634 (9,872) 9,653 (8,409)
Other Operating Liabilities 56,241 158 562 34,026 9,141
Changes in Other Liabilities (48) (62) (56) (49) (55)
Net Cash Provided by Operating Activities 214,411 239,227 219,648 160,724 223,162
Cash Flows from Investing Activities:
Capital Expenditures (96,763) (128,958) (123,429) (92,055) (108,335)
Proceeds from Asset Sales 12,265 6,964 5,005 16,341 5,855
Net Cash Used in Investing Activities (84,498) (121,994) (118,424) (75,714) (102,480)
Cash Flows from Financing Activities:
Payments on Long-Term Notes (174,614) - - (363,348) (50,000)
Net (Payments on) Proceeds from CNXM Revolving Credit Facility (14,000) (77,000) (54,000) (52,000) 24,000
Net Proceeds from (Payments on) CNX Revolving Credit Facility 65,350 - (800) (249,200) (140,000)
Proceeds from Issuance of CNX Senior Notes - - - 500,000 207,000
Proceeds from Issuance of CNXM Senior Notes 395,000 - - - -
Net Payments on CSG Non-Revolving Credit Facilities (147,431) (7,290) (5,823) (5,587) (5,202)
Net Payments on Other Debt (122) (688) (1,838) (1,807) (1,779)
Distributions to CNXM Noncontrolling Interest Holders - - - - (21,055)
Proceeds from Issuance of Common Stock 183 2 4,799 252 151
Shares Withheld for Taxes (9) (45) (4,491) (61) (1)
Purchases of Common Stock (77,740) (22,690) (23,988) (37,247) -
Debt Issuance and Financing Fees (663) - (1,320) (10,734) (3,396)
Net Cash Provided by (Used in) Financing Activities 45,954 (107,711) (87,461) (219,732) 9,718
Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash 175,867 9,522 13,763 (134,722) 130,400
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period 44,884 35,362 21,599 156,321 25,921
Cash, Cash Equivalents, and Restricted Cash at End of Period $220,751 $44,884 $35,362 $21,599 $156,321


7

MARKET MIX AND NATURAL GAS PRICE RECONCILIATION
2021E
Gas Sold (%)(1)
Basis
DOM South 3% ($0.77)
ETNG Mainline 3% $0.28
TCO Pool 20% ($0.56)
TETCO ELA & WLA 3% ($0.11)
TETCO M3 6% ($0.27)
TETCO M2 34% ($0.80)
Michcon 10% ($0.19)
Physical basis sales 21% ($0.32)
Weighted Average Basis 100% ($0.51)
NYMEX $3.83
Weighted Average Basis (Not considering hedging) ($0.51)
Realized Price (per MMBtu) $3.32
Conversion Factor (MMBtu/Mcf) 1.090
Realized Price Before Financial Hedging (per Mcf) $3.62
(1) Individual market percentages exclude physical basis sales, which are shown separately.

8

PRICE AND COST DATA (PER MCFE) - NON-GAAP
Q3-2021 Q2-2021 Q1-2021 Q4-2020 Q3-2020
Average Sales Price - Natural Gas $3.61 $2.51 $2.60 $1.90 $1.51
Average (Loss) Gain on Commodity Derivative Instruments - Cash Settlement- Gas ($0.92) ($0.08) $0.02 $0.56 $0.83
Average Sales Price - Oil and Condensate* $10.00 $8.85 $6.48 $5.33 $6.58
Average Sales Price - NGLs* $6.19 $4.38 $4.93 $2.88 $2.19
Average Sales Price of Natural Gas, NGL and Oil, including Cash Settlement
$2.96 $2.60 $2.73 $2.49 $2.36
Lease Operating Expense (LOE) $0.07 $0.07 $0.07 $0.07 $0.09
Production, Ad Valorem, and Other Fees $0.06 $0.05 $0.04 $0.05 $0.05
Transportation, Gathering and Compression $0.59 $0.61 $0.55 $0.50 $0.59
Depreciation, Depletion and Amortization (DD&A) $0.83 $0.87 $0.90 $0.96 $0.98
Total Natural Gas, NGL and Oil Production Costs
$1.55 $1.60 $1.56 $1.58 $1.71
Total Natural Gas, NGL and Oil Production Cash Costs, before DD&A
$0.72 $0.73 $0.66 $0.62 $0.73
Natural Gas, NGL and Oil Production Cash Margin, before DD&A $2.24 $1.87 $2.07 $1.87 $1.63
Fully Burdened Cash Costs, before DD&A(1)
$1.06 $1.09 $1.01 $1.01 $1.17
Fully Burdened Cash Margin, before DD&A $1.90 $1.51 $1.72 $1.48 $1.19
Note: "Total Natural Gas, NGL and Oil Production Costs" excludes Selling, General, and Administration and Other Operating Expenses.
*NGLs, Oil, and Condensate are converted to Mcfe at the rate of one barrel equals six Mcf based upon the approximate relative energy content of oil and natural gas, which is not indicative of the relationship of oil, NGLs, condensate, and natural gas prices.
(1) Fully burdened cash costs include production cash costs, selling, general and administrative (SG&A) cash costs, other operating cash expense, other cash (income) expense, other revenue and operating income, and cash interest expense. Q3 2021, Q2 2021, Q1 2021, Q4 2020 and Q3 2020 total fully burdened cash costs exclude a gain on asset sales of $0.08 per Mcfe, $0.05 per Mcfe, $0.02 per Mcfe, $0.00 per Mcfe and $0.03 per Mcfe, respectively. Q3 2021, Q2 2021, Q1 2021, Q4 2020 and Q3 2020 exclude unrealized losses on interest rate swaps and noncash amortization of $0.03 per Mcfe, $0.04 per Mcfe, $0.01 per Mcfe, $0.04 per Mcfe and $0.05 per Mcfe, respectively. Q32021 excludes loss on debt extinguishment of $0.12. Q42020 and Q32020 also exclude fees related to the Merger of CNX Midstream of $0.05 per Mcfe and $0.04 per Mcfe, respectively.
Natural Gas Price Reconciliation Q3-2021 Q2-2021 Q1-2021 Q4-2020 Q3-2020
NYMEX Natural Gas ($/MMBtu) $4.01 $2.83 $2.69 $2.66 $1.98
Average Differential (0.70) (0.50) (0.30) (0.91) (0.57)
BTU Conversion (MMBtu/Mcf)* 0.30 0.18 0.21 0.15 0.10
(Loss) Gain on Commodity Derivative Instruments-Cash Settlement (0.92) (0.08) 0.02 0.56 0.83
Realized Gas Price per Mcf $2.69 $2.43 $2.62 $2.46 $2.34
*Conversion factor 1.09 1.08 1.09 1.08 1.07


9

GUIDANCE
Previous Updated
($ in millions) 2021E 2021E
Low High Low High
Capital Expenditures $430 - $470 $460 - $470
Production Volumes (Bcfe) 540 - 570 570 - 580
% of Natural Gas Hedged 94% 91%
Prices on Open Volumes(1)
Natural Gas NYMEX ($/MMBtu) $3.19 $3.83
Natural Gas Basis Differential ($/MMBtu) ($0.53) ($0.51)
NGL Realized Price ($/Bbl) ~$25.00 ~$34.00
($ in millions)
Adjusted EBITDAX(2)
$975 - $1,025 $1,150 - $1,175
($ in millions)
Free Cash Flow (FCF)(2)
~$475 ~$500
FCF Per Share(2)(3)
$2.18 $2.37
(1) Forward market prices for updated guidance as of 10/7/2021.
(2) Non-GAAP measures. See "Non-GAAP Financial Measures" for definitions. FCF for previous and updated guidance includes approximately $50 million in expected asset sales in 2021.
(3) Previous guidance for 2021 FCF per share based on shares outstanding of 217,921,030 as of 7/15/2021. Updated guidance for 2021 FCF per share based on shares outstanding of 211,199,776 as of 10/15/2021.

2021E ACTIVITY SUMMARY TIL
Average Lateral Length(1)
SWPA Central Marcellus 24 12,000
Utica 2 14,500
WV Shirley-Pennsboro Marcellus 11 12,000
Utica - -
Total 37 -
(1) Measured in lateral feet from perforation to perforation.


10

Non-GAAP Measures (Definitions, Purpose, and Reconciliations)

CNX's management uses certain non-GAAP financial measures for planning, forecasting and evaluating business and financial performance, and believes that they are useful for investors in analyzing the company. Although these are not measures of performance calculated in accordance with generally accepted accounting principles (GAAP), management believes that these financial measures are useful to an investor in evaluating CNX because (i) analysts utilize these metrics when evaluating company performance and have requested this information as of a recent practicable date, (ii) these metrics are widely used to evaluate a company's operating performance, and (iii) we want to provide updated information to investors. Investors should not view these metrics as a substitute for measures of performance that are calculated in accordance with GAAP. In addition, because all companies do not calculate these measures identically, these measures may not be comparable to similarly titled measures of other companies.

Definitions: EBIT is defined as earnings before deducting net interest expense (interest expense less interest income) and income taxes. EBITDAX is defined as earnings before deducting net interest expense (interest expense less interest income), income taxes, depreciation, depletion and amortization, and exploration. Adjusted EBITDAX is defined as EBITDAX after adjusting for the discrete items listed below. Although EBIT, EBITDAX, and adjusted EBITDAX are not measures of performance calculated in accordance with generally accepted accounting principles, management believes that they are useful to an investor in evaluating CNX Resources because they are widely used to evaluate a company's operating performance. We exclude stock-based compensation from adjusted EBITDAX because we do not believe it accurately reflects the actual operating expense incurred during the relevant period and may vary widely from period to period irrespective of operating results. Investors should not view these metrics as a substitute for measures of performance that are calculated in accordance with generally accepted accounting principles. In addition, because all companies do not calculate EBIT, EBITDAX or adjusted EBITDAX identically, the presentation here may not be comparable to similarly titled measures of other companies. Sales of natural gas, NGL and oil, including cash settlements excludes the impacts of changes in the fair value of commodity derivative instruments prior to settlement, which are often volatile, and only includes the impact of settled commodity derivative instruments. Natural gas, NGL and oil production costs excludes certain expenses that are not directly related to CNX's natural gas producing activities and are managed outside our production operations. Adjusted Net Income is defined as net income after adjusting for the discrete items listed below as well as the tax effectiveness. Operating Margins are defined as adjusted EBIT divided by Total Revenue after adjusting for unrealized loss on commodity derivative instruments. Adjusted Trailing-Twelve-Months (TTM) EBITDAX is defined as EBITDAX over the trailing-twelve-months after adjusting for the discrete items listed below. Cash Operating Margins are defined as adjusted EBITDA divided by total Revenue after adjusting for unrealized loss on commodity derivative instruments. Net Debt is defined as total long-term debt minus cash and cash equivalents. Free Cash Flow (FCF) is defined as operating cash flow minus capex plus proceeds from asset sales. Organic FCF is defined as operating cash flow minus capex.

Reconciliations of EBIT, EBITDAX, adjusted EBITDAX, sales of natural gas, NGL and oil, including cash settlements, natural gas, NGL and oil production costs, adjusted net income, operating margins, cash operating margins, net debt, Adjusted TTM EBITDAX, FCF and organic FCF to the most directly comparable GAAP financial measures are as follows:


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Non-GAAP Measures
Sales of Natural Gas, NGL and Oil, including cash settlements excludes the impacts of changes in the fair value of commodity derivative instruments prior to settlement, which are often volatile, and only includes the impact of settled commodity derivative instruments. Sales of Natural Gas, NGL and Oil, including cash settlements also excludes purchased gas revenue and other revenue and operating income, which are not directly related to CNX's natural gas producing activities. Natural Gas, NGL and Oil Production Costs excludes certain expenses that are not directly related to CNX's natural gas producing activities and are managed outside our production operations (See Note 21 - Segment Information of the Notes to the Audited Consolidated Financial Statements in Item 8 of CNX's 2020 Annual Report on Form 10-K as filed with the SEC on February 9, 2021). These expenses include, but are not limited to, interest expense, impairment of exploration and production properties, impairment of goodwill and other corporate expenses such as selling, general and administrative costs.
(Dollars in millions) Q3-2021 Q2-2021 Q1-2021 Q4-2020 Q3-2020
Total Revenue and Other Operating (Loss) Income ($880) ($127) $473 $627 $66
Add (Deduct):
Purchased Gas Revenue (16) (17) (34) (28) (32)
Gain or Loss on Commodity Derivative Instruments and Monetization 1,376 529 (31) (212) 259
Other Revenue and Operating Income (25) (26) (25) (22) (21)
Sales of Natural Gas, NGL and Oil, including Cash Settlements, a Non-GAAP Financial Measure $455 $359 $383 $365 $272
Total Operating Expense $305 $281 $300 $312 $280
Add (Deduct):
Depreciation, Depletion and Amortization (DD&A) - Corporate (4) (3) (3) (2) (3)
Exploration and Production Related Other Costs (3) (3) (2) (6) (2)
Purchased Gas Costs (14) (15) (33) (24) (32)
Selling, General and Administrative Costs (25) (24) (28) (33) (23)
Other Operating Expense (21) (15) (16) (15) (23)
Natural Gas, NGL and Oil Production Costs, a Non-GAAP Financial Measure1
$238 $221 $218 $232 $197
1 Natural Gas, NGL and Oil production costs consists primarily of lease operating expense, production ad valorem and other fees, transportation, gathering and compression and production related depreciation, depletion and amortization.


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Non-GAAP Measures
EBIT is defined as earnings before deducting net interest expense (interest expense less interest income) and income taxes. EBITDAX is defined as earnings before deducting net interest expense (interest expense less interest income), income taxes, depreciation, depletion and amortization, and exploration. Adjusted EBITDAX is defined as EBITDAX after adjusting for the discrete items listed below.
(Dollars in millions) Q3-2021 Q2-2021 Q1-2021 Q4-2020 Q3-2020
Net (Loss) Income ($873) ($354) $98 $196 ($189)
Interest Expense 38 39 37 38 38
Interest Income - - - - (2)
Income Tax (Benefit) Expense (360) (92) 37 68 -61
(Loss) Earnings Before Interest & Taxes (EBIT) (1,195) (407) 172 302 (214)
Depreciation, Depletion & Amortization 130 123 129 144 115
Exploration Expense 3 3 2 6 2
(Loss) Earnings Before Interest, Taxes, DD&A and Exploration (EBITDAX) ($1,062) ($281) $303 $452 ($97)
Adjustments:
Unrealized Loss (Gain) on Commodity Derivative Instruments 1,376 529 (31) -212 259
Merger Related Costs - - - 6 5
Stock-Based Compensation 3 3 8 2 3
Loss on Debt Extinguishment 19 - - 1 -
Severance - - - 1 -
Total Pre-tax Adjustments 1,398 532 (23) (202) 267
Adjusted EBITDAX $336 $251 $280 $250 $170
Adjusted Net Income is defined as net income after adjusting for the discrete items listed below as well as the related tax effect.
(Dollars in millions) Q3-2021 Q2-2021 Q1-2021 Q4-2020 Q3-2020
Net (Loss) Income from EBITDAX Reconciliation ($873) ($354) $98 $196 ($189)
Adjustments:
Total Pre-tax Adjustments from EBITDAX Reconciliation 1,398 532 (23) (202) 267
Tax Effect of Adjustments (365) (138) 6 53 (70)
Adjusted Net Income $160 $40 $81 $47 $8


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Non-GAAP Measures
Operating Margin: Adjusted EBIT divided by Total Revenue after adjusting for unrealized loss (gain) on commodity derivative instruments.
(Dollars in millions) Q3-2021 Q2-2021 Q1-2021 Q4-2020 Q3-2020
Total Revenue and Other Operating (Loss) Income ($880) ($127) $473 $627 $66
Net (Loss) Income ($873) ($354) $98 $196 ($189)
Interest Expense 38 39 37 38 38
Interest Income - - - - (2)
Income Tax (Benefit) Expense (360) (92) 37 68 (61)
(Loss) Earnings Before Interest & Taxes (EBIT) (1,195) (407) 172 302 (214)
Depreciation, Depletion & Amortization 130 123 129 144 115
(Loss) Earnings Before Interest, Taxes, DD&A (EBITDA) ($1,065) ($284) $301 $446 ($99)
Adjustments:
Unrealized Loss (Gain) on Commodity Derivative Instruments $1,376 $529 ($31) ($212) $259
Merger Related Costs - - - 6 5
Total Adjustments $1,376 $529 ($31) ($206) $264
Total Revenue Minus Unrealized Loss (Gain) on Commodity Derivative Instruments $496 $402 $442 $415 $325
Adjusted EBIT $181 $122 $141 $96 $50
Operating Margin 36 % 30 % 32% 23% 15%


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Non-GAAP Measures
Cash Operating Margin: Adjusted EBITDA divided by Total Revenue after adjusting for unrealized loss (gain) on commodity derivative instruments.
(Dollars in millions) Q3-2021 Q2-2021 Q1-2021 Q4-2020 Q3-2020
Total Revenue and Other Operating (Loss) Income ($880) ($127) $473 $627 $66
Net (Loss) Income ($873) ($354) $98 $196 ($189)
Interest Expense 38 39 37 38 38
Interest Income - - - - (2)
Income Tax (Benefit) Expense (360) (92) 37 68 (61)
(Loss) Earnings Before Interest & Taxes (EBIT) (1,195) (407) 172 302 (214)
Depreciation, Depletion & Amortization 130 123 129 144 115
(Loss) Earnings Before Interest, Taxes, DD&A (EBITDA) ($1,065) ($284) $301 $446 ($99)
Adjustments:
Unrealized Loss (Gain) on Commodity Derivative Instruments 1,376 $529 ($31) ($212) $259
Stock-Based Compensation 3 3 8 2 3
Merger Related Costs - - - 6 5
Loss on Debt Extinguishment 19 - - 1 -
Total Adjustments $1,398 $532 ($23) ($203) $267
Total Revenue Minus Unrealized Loss (Gain) on Commodity Derivative Instruments $496 $402 $442 $415 $325
Adjusted EBITDA $333 $248 $278 $243 $168
Cash Operating Margin 67 % 62 % 63 % 59 % 52 %


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Non-GAAP Measures
Net Debt: Total long-term debt minus cash and cash equivalents.
Management uses net debt to determine the company's outstanding debt obligations that would not be readily satisfied by its cash and cash equivalents on hand. Management believes that using net debt attributable to CNX Resources shareholders is useful to investors in determining the company's leverage ratio since the company could choose to use its cash and cash equivalents to retire debt.
(Dollars in millions)
Net Debt 30-Sep-21 30-Jun-21
Total Long-Term Debt (GAAP)(1)
$2,436 $2,289
Less: Cash and Cash Equivalents 221 45
Net Debt $2,215 $2,244
(1) Includes current portion
Adjusted TTM EBITDAX: EBITDAX over the trailing-twelve-months after adjusting for the discrete items listed below.
Three Months Ended Twelve Months Ended
(Dollars in millions) 31-Dec-20 31-Mar-21 30-Jun-21 30-Sep-21 30-Sep-21
Net (Loss) Income $196 $98 ($354) ($873) ($933)
Interest Expense 38 37 39 38 152
Income Tax (Benefit) Expense 68 37 (92) (360) (347)
(Loss) Earnings Before Interest & Taxes (EBIT) 302 172 (407) (1,195) (1,128)
Depreciation, Depletion & Amortization 144 129 123 130 526
Exploration Expense 6 2 3 3 14
(Loss) Earnings Before Interest, Taxes, DD&A, and Exploration (EBITDAX) 452 303 (281) (1,062) (588)
Adjustments:
Unrealized Loss (Gain) on Commodity Derivative Instruments (212) (31) 529 1,376 1,662
Merger Related Costs 6 - - - 6
Stock Based Compensation 2 8 3 3 16
Loss on Debt Extinguishment 1 - - 19 20
Severance 1 - - - 1
Total Pre-tax Adjustments (202) (23) 532 1,398 1,705
Adjusted EBITDAX TTM $250 $280 $251 $336 $1,117


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Non-GAAP Measures
The Company's management believes that the following measures provide useful information to external users of the Company's consolidated financial statements, such as industry analysts, lenders and ratings agencies. Free cash flow and organic free cash flow should not be considered as alternatives to net cash provided by operating activities or any other measure of liquidity presented in accordance with GAAP.
Free Cash Flow (FCF): Operating cash flow minus capex plus proceeds from asset sales.
Organic Free Cash Flow (FCF): Operating cash flow minus capex.
Free Cash Flow
(Dollars in millions) Q3-2021 Q2-2021 Q1-2021 Q4-2020 Q3-2020 Q2-2020 Q1-2020
Net Cash Provided by Operating Activities $215 $239 $219 $161 $223 $144 $267
Capital Expenditures (97) (129) (123) (92) (108) (135) (152)
Proceeds from Asset Sales 12 7 5 16 6 12 14
Free Cash Flow $130 $117 $101 $85 $121 $21 $129
Organic Free Cash Flow
(Dollars in millions) Q3-2021 Q2-2021 Q1-2021 Q4-2020 Q3-2020 Q2-2020 Q1-2020
Net Cash Provided by Operating Activities $215 $239 $219 $161 $223 $144 $267
Capital Expenditures (97) (129) (123) (92) (108) (135) (152)
Organic Free Cash Flow $118 $110 $96 $69 $115 $9 $115

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, 2020 filed with the Securities and Exchange Commission (SEC) and any subsequent reports filed with the SEC. Those risk factors discuss, among other matters, pricing volatility or pricing decline for natural gas and NGLs; the failure to realize the anticipated costs savings, synergies and other benefits of CNX's purchase of the outstanding interests in CNXM not already owned by CNX; local, regional and national economic conditions and the impact they may have on our customers; the impact of outbreaks of communicable diseases such as COVID-19 on business activity, our operations and national and global economic conditions, generally; conditions in the oil and gas industry, including a sustained decrease in the level of supply or demand for oil or natural gas or a sustained decrease in the price of oil or natural gas; the financial condition of our customers; any non-performance by customers of their contractual obligations; changes in customer, employee or supplier relationships resulting from the proposed transaction; and changes in safety, health, environmental and other regulations.

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