CNX Announces Strategic Bolt-On Acquisition

PITTSBURGH, Dec. 5, 2024 - CNX Resources Corp. (NYSE: CNX) ("CNX" or "the company") announced today it has entered into a definitive agreement to acquire the natural gas upstream and associated midstream business of Apex Energy II, LLC ("Apex"), a portfolio company of funds managed by Carnelian Energy Capital Management, L.P. ("Carnelian"), in the Appalachian Basin for total cash consideration of approximately $505 million, subject to certain adjustments including an effective date of October 1, 2024. Completion of the transaction, which is subject to the satisfaction of customary closing conditions, is expected to occur in the first quarter of 2025.

CNX president and CEO Nick Deiuliis stated, "This transaction represents a rare opportunity to acquire a highly complementary asset adjacent to our existing operations. It underscores our confidence in the stacked pay development opportunities that have been unlocked from pioneering the deep Utica in this region."

The acquisition strategically expands CNX's existing stacked Marcellus and Utica undeveloped leasehold in the CPA region and provides an existing infrastructure footprint that can be leveraged for future development. Additionally, CNX expects operational and other development synergies to add incremental value to the core business in the coming years.

The acquisition is expected to be immediately accretive to CNX's key metric of free cash flow per share. The attractive acquisition price and free cash flow profile of the assets allows the company to maintain its strong balance sheet and preserve significant capital allocation flexibility moving forward.

Transaction Highlights

• Valuation supported by substantial cash flow from existing production base:
  • Expected 2025 average daily production of 180 - 190 MMcfe/d
  • Expected 2025 EBITDA¹ of approximately $150 - $160 million at recent strip
• Fully integrated gathering midstream aligns with CNX's low-cost strategy:
  • Expected 2025 operating costs of approximately $0.16/Mcfe for the acquired assets
  • Significant existing infrastructure can be leveraged for future stacked pay development of the Marcellus and Utica
• Expands core strategic development footprint:
  • Adds approximately 36,000 total net acres (94% held) in Westmoreland County, Pennsylvania
  • Includes approximately 8,600 acres of undeveloped Utica and 12,600 acres of undeveloped Marcellus

Financing Highlights

Total cash consideration for the acquisition is approximately $505 million and will be funded with CNX's secured credit facility. In May 2024, CNX amended its secured credit facilities, extending the maturities to May 2029 and increasing the total elected commitment amounts to $2.0 billion. As of September 30, 2024, CNX had approximately $1.8 billion of available borrowing capacity under the secured credit facilities. Post acquisition, the company expects leverage ratios to be minimally impacted, preserving its significant capital allocation flexibility.

Advisors

BofA Securities is serving as exclusive financial advisor to CNX. Jones Day is serving as legal advisor to CNX. Piper Sandler & Co is serving as exclusive financial advisor to Apex and Carnelian. Kirkland & Ellis LLP is serving as legal advisor to Apex and Carnelian.

About CNX Resources
CNX Resources Corporation (NYSE: CNX) is unique. We are a premier, ultra-low carbon intensive natural gas development, production, midstream, and technology company centered in Appalachia, one of the most energy abundant regions in the world. With the benefit of a 160-year regional legacy, substantial asset base, leading core operational competencies, technology development and innovation, and astute capital allocation methodologies, we responsibly develop our resources and deploy free cash flow to create long-term per share value for our shareholders, employees, and the communities where we operate. As of December 31, 2023, CNX had 8.74 trillion cubic feet equivalent of proved natural gas reserves. The company is a member of the Standard & Poor's Midcap 400 Index. Additional information is available at www.cnx.com.

Cautionary Statements

We are including the following cautionary statement in this press release to make applicable and take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 for any forward-looking statements made by, or on behalf of us. With the exception of historical matters, the matters discussed in this press release are forward-looking statements (as defined in 21E of the Securities Exchange Act of 1934 (the "Exchange Act")) that involve risks and uncertainties that could cause actual results to differ materially from projected results. Accordingly, investors should not place undue reliance on forward-looking statements as a prediction of actual results. These forward-looking statements may include projections and estimates concerning the timing and success of specific projects and our future production, revenues, income, and capital spending. When we use the words "believe," "intend," "expect," "may," "should," "anticipate," "could," "estimate," "plan," "predict," "project," "will," or their negatives, or other similar expressions, the statements which include those words are usually forward-looking statements. When we describe a strategy that involves risks or uncertainties, we are making forward-looking statements. The forward-looking statements in this press release speak only as of the date of this press release; we disclaim any obligation to update these statements. We have based these forward-looking statements on our current expectations and assumptions about future events. While our management considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies, and uncertainties, most of which are difficult to predict and many of which are beyond our control. Specific factors that could cause future actual results to differ materially from the forward-looking statements include our ability to successfully complete and integrate the asset acquisition and the performance of the acquired asset, including whether the acquired asset is accretive to free cash flow per share and within the expected timeframe, as well as other factors that 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, 2023 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; local, regional and national economic conditions and the impact they may have on our customers; the impact of events beyond our control, including a global or domestic health crisis; dependence on gathering, processing and transportation facilities and other midstream facilities owned by others; conditions in the oil and gas industry; our current long-term debt obligations, and the terms of the agreements that govern that debt; strategic determinations, including the allocation of capital and other resources to strategic opportunities; cyber-incidents targeting our systems, oil and natural gas industry systems and infrastructure, or the systems of our third-party service providers; and changes in safety, health, environmental and other regulations.

1. CNX is unable to provide a reconciliation of projected financial results contained in this press release 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 and net cash provided by operating activities, given the unknown effect, timing, and potential significance of certain income statement items.

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SOURCE CNX Resources Corporation