|
x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
|
51-0337383
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
Class
|
|
Shares outstanding as of July 17, 2018
|
Common stock, $0.01 par value
|
|
213,059,169
|
|
TABLE OF CONTENTS
|
||
|
|
Page
|
PART I FINANCIAL INFORMATION
|
|
|
|
|
|
ITEM 1.
|
Condensed Financial Statements
|
|
|
Consolidated Statements of Income for the three and six months ended June 30, 2018 and 2017
|
|
|
Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2018 and 2017
|
|
|
Consolidated Balance Sheets at June 30, 2018 and December 31, 2017
|
|
|
Consolidated Statement of Stockholders’ Equity for the six months ended June 30, 2018
|
|
|
Consolidated Statements of Cash Flows for the six months ended June 30, 2018 and 2017
|
|
|
||
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|
ITEM 2.
|
||
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|
ITEM 3.
|
||
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ITEM 4.
|
||
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PART II OTHER INFORMATION
|
|
|
|
|
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ITEM 1.
|
||
|
|
|
ITEM 1A.
|
Risk Factors
|
|
|
|
|
ITEM 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
|
|
|
|
ITEM 6.
|
ITEM 1.
|
CONDENSED FINANCIAL STATEMENTS
|
(Dollars in thousands, except per share data)
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
(Unaudited)
|
June 30,
|
|
June 30,
|
||||||||||||
Revenues and Other Operating Income:
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Natural Gas, NGLs and Oil Revenue
|
$
|
334,517
|
|
|
$
|
260,306
|
|
|
$
|
740,140
|
|
|
$
|
578,069
|
|
Gain on Commodity Derivative Instruments
|
25,660
|
|
|
83,788
|
|
|
60,747
|
|
|
61,325
|
|
||||
Purchased Gas Revenue
|
9,930
|
|
|
10,316
|
|
|
27,985
|
|
|
19,294
|
|
||||
Midstream Revenue
|
23,483
|
|
|
—
|
|
|
49,737
|
|
|
—
|
|
||||
Other Operating Income
|
8,534
|
|
|
16,658
|
|
|
19,244
|
|
|
32,308
|
|
||||
Total Revenue and Other Operating Income
|
402,124
|
|
|
371,068
|
|
|
897,853
|
|
|
690,996
|
|
||||
Costs and Expenses:
|
|
|
|
|
|
|
|
||||||||
Operating Expense
|
|
|
|
|
|
|
|
||||||||
Lease Operating Expense
|
25,338
|
|
|
21,074
|
|
|
62,148
|
|
|
42,705
|
|
||||
Transportation, Gathering and Compression
|
75,767
|
|
|
86,599
|
|
|
162,028
|
|
|
180,931
|
|
||||
Production, Ad Valorem, and Other Fees
|
7,703
|
|
|
4,606
|
|
|
16,936
|
|
|
13,935
|
|
||||
Depreciation, Depletion and Amortization
|
119,087
|
|
|
91,640
|
|
|
243,754
|
|
|
187,318
|
|
||||
Exploration and Production Related Other Costs
|
3,699
|
|
|
19,717
|
|
|
6,079
|
|
|
29,502
|
|
||||
Purchased Gas Costs
|
9,747
|
|
|
10,194
|
|
|
26,801
|
|
|
19,089
|
|
||||
Impairment of Exploration and Production Properties
|
—
|
|
|
—
|
|
|
—
|
|
|
137,865
|
|
||||
Impairment of Other Intangible Assets
|
18,650
|
|
|
—
|
|
|
18,650
|
|
|
—
|
|
||||
Selling, General, and Administrative Costs
|
34,909
|
|
|
21,754
|
|
|
66,258
|
|
|
43,556
|
|
||||
Other Operating Expense
|
17,786
|
|
|
24,106
|
|
|
33,832
|
|
|
42,282
|
|
||||
Total Operating Expense
|
312,686
|
|
|
279,690
|
|
|
636,486
|
|
|
697,183
|
|
||||
Other (Income) Expense
|
|
|
|
|
|
|
|
||||||||
Other Expense (Income)
|
575
|
|
|
5,475
|
|
|
(5,917
|
)
|
|
9,550
|
|
||||
Gain on Asset Sales
|
(3,280
|
)
|
|
(134,581
|
)
|
|
(14,622
|
)
|
|
(138,577
|
)
|
||||
Gain on Previously Held Equity Interest
|
—
|
|
|
—
|
|
|
(623,663
|
)
|
|
—
|
|
||||
Loss (Gain) on Debt Extinguishment
|
23,413
|
|
|
36
|
|
|
39,048
|
|
|
(786
|
)
|
||||
Interest Expense
|
38,438
|
|
|
40,683
|
|
|
76,989
|
|
|
82,289
|
|
||||
Total Other Expense (Income)
|
59,146
|
|
|
(88,387
|
)
|
|
(528,165
|
)
|
|
(47,524
|
)
|
||||
Total Costs And Expenses
|
371,832
|
|
|
191,303
|
|
|
108,321
|
|
|
649,659
|
|
||||
Earnings From Continuing Operations Before Income Tax
|
30,292
|
|
|
179,765
|
|
|
789,532
|
|
|
41,337
|
|
||||
Income Tax (Benefit) Expense
|
(31,102
|
)
|
|
57,958
|
|
|
182,592
|
|
|
10,536
|
|
||||
Income From Continuing Operations
|
61,394
|
|
|
121,807
|
|
|
606,940
|
|
|
30,801
|
|
||||
Income From Discontinued Operations, net
|
—
|
|
|
47,703
|
|
|
—
|
|
|
99,743
|
|
||||
Net Income
|
61,394
|
|
|
169,510
|
|
|
606,940
|
|
|
130,544
|
|
||||
Less: Net Income Attributable to Noncontrolling Interest
|
19,380
|
|
|
—
|
|
|
37,363
|
|
|
—
|
|
||||
Net Income Attributable to CNX Resources Shareholders
|
$
|
42,014
|
|
|
$
|
169,510
|
|
|
$
|
569,577
|
|
|
$
|
130,544
|
|
(Dollars in thousands, except per share data)
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
(Unaudited)
|
June 30,
|
|
June 30,
|
||||||||||||
Earnings Per Share
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Basic
|
|
|
|
|
|
|
|
||||||||
Income from Continuing Operations
|
$
|
0.19
|
|
|
$
|
0.53
|
|
|
$
|
2.60
|
|
|
$
|
0.13
|
|
Income from Discontinued Operations
|
—
|
|
|
0.21
|
|
|
—
|
|
|
0.44
|
|
||||
Total Basic Earnings Per Share
|
$
|
0.19
|
|
|
$
|
0.74
|
|
|
$
|
2.60
|
|
|
$
|
0.57
|
|
Dilutive
|
|
|
|
|
|
|
|
||||||||
Income from Continuing Operations
|
$
|
0.19
|
|
|
$
|
0.52
|
|
|
$
|
2.57
|
|
|
$
|
0.13
|
|
Income from Discontinued Operations
|
—
|
|
|
0.21
|
|
|
—
|
|
|
0.43
|
|
||||
Total Dilutive Earnings Per Share
|
$
|
0.19
|
|
|
$
|
0.73
|
|
|
$
|
2.57
|
|
|
$
|
0.56
|
|
|
|
|
|
|
|
|
|
||||||||
Dividends Declared Per Share
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
(Dollars in thousands)
|
June 30,
|
|
June 30,
|
||||||||||||
(Unaudited)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net Income
|
$
|
61,394
|
|
|
$
|
169,510
|
|
|
$
|
606,940
|
|
|
$
|
130,544
|
|
Other Comprehensive Income:
|
|
|
|
|
|
|
|
||||||||
Actuarially Determined Long-Term Liability Adjustments (Net of tax: ($687), ($2,034), ($781), ($4,086))
|
1,812
|
|
|
3,464
|
|
|
1,982
|
|
|
6,966
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Comprehensive Income
|
63,206
|
|
|
172,974
|
|
|
608,922
|
|
|
137,510
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Less: Comprehensive Income Attributable to Noncontrolling Interest
|
19,380
|
|
|
—
|
|
|
37,363
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Comprehensive Income Attributable to CNX Resources Shareholders
|
$
|
43,826
|
|
|
$
|
172,974
|
|
|
$
|
571,559
|
|
|
$
|
137,510
|
|
|
(Unaudited)
|
|
|
||||
(Dollars in thousands)
|
June 30,
2018 |
|
December 31,
2017 |
||||
ASSETS
|
|
|
|
||||
Current Assets:
|
|
|
|
||||
Cash and Cash Equivalents
|
$
|
54,846
|
|
|
$
|
509,167
|
|
Accounts and Notes Receivable:
|
|
|
|
||||
Trade
|
132,016
|
|
|
156,817
|
|
||
Other Receivables
|
17,421
|
|
|
48,908
|
|
||
Supplies Inventories
|
10,499
|
|
|
10,742
|
|
||
Recoverable Income Taxes
|
27,780
|
|
|
31,523
|
|
||
Prepaid Expenses
|
56,431
|
|
|
95,347
|
|
||
Current Assets Held for Sale
|
20,153
|
|
|
—
|
|
||
Total Current Assets
|
319,146
|
|
|
852,504
|
|
||
Property, Plant and Equipment:
|
|
|
|
||||
Property, Plant and Equipment
|
8,941,426
|
|
|
9,316,495
|
|
||
Less—Accumulated Depreciation, Depletion and Amortization
|
2,399,555
|
|
|
3,526,742
|
|
||
Property, Plant and Equipment of Assets Held for Sale, Net
|
230,593
|
|
|
—
|
|
||
Total Property, Plant and Equipment—Net
|
6,772,464
|
|
|
5,789,753
|
|
||
Other Assets:
|
|
|
|
||||
Investment in Affiliates
|
22,347
|
|
|
197,921
|
|
||
Goodwill
|
796,359
|
|
|
—
|
|
||
Other Intangible Assets
|
106,476
|
|
|
—
|
|
||
Other
|
190,966
|
|
|
91,735
|
|
||
Total Other Assets
|
1,116,148
|
|
|
289,656
|
|
||
TOTAL ASSETS
|
$
|
8,207,758
|
|
|
$
|
6,931,913
|
|
|
(Unaudited)
|
|
|
||||
(Dollars in thousands, except per share data)
|
June 30,
2018 |
|
December 31,
2017 |
||||
LIABILITIES AND EQUITY
|
|
|
|
||||
Current Liabilities:
|
|
|
|
||||
Accounts Payable
|
$
|
186,397
|
|
|
$
|
211,161
|
|
Current Portion of Long-Term Debt
|
6,915
|
|
|
7,111
|
|
||
Other Accrued Liabilities
|
227,871
|
|
|
223,407
|
|
||
Current Liabilities Held for Sale
|
53,808
|
|
|
—
|
|
||
Total Current Liabilities
|
474,991
|
|
|
441,679
|
|
||
Long-Term Debt:
|
|
|
|
||||
Long-Term Debt
|
2,330,780
|
|
|
2,187,026
|
|
||
Capital Lease Obligations
|
16,846
|
|
|
20,347
|
|
||
Total Long-Term Debt
|
2,347,626
|
|
|
2,207,373
|
|
||
Deferred Credits and Other Liabilities:
|
|
|
|
||||
Deferred Income Taxes
|
235,407
|
|
|
44,373
|
|
||
Asset Retirement Obligations
|
7,606
|
|
|
198,768
|
|
||
Other
|
103,205
|
|
|
139,821
|
|
||
Total Deferred Credits and Other Liabilities
|
346,218
|
|
|
382,962
|
|
||
TOTAL LIABILITIES
|
3,168,835
|
|
|
3,032,014
|
|
||
Stockholders’ Equity:
|
|
|
|
||||
Common Stock, $.01 Par Value; 500,000,000 Shares Authorized, 213,420,535 Issued and Outstanding at June 30, 2018; 223,743,322 Issued and Outstanding at December 31, 2017
|
2,138
|
|
|
2,241
|
|
||
Capital in Excess of Par Value
|
2,372,650
|
|
|
2,450,323
|
|
||
Preferred Stock, 15,000,000 shares authorized, None issued and outstanding
|
—
|
|
|
—
|
|
||
Retained Earnings
|
1,940,507
|
|
|
1,455,811
|
|
||
Accumulated Other Comprehensive Loss
|
(6,494
|
)
|
|
(8,476
|
)
|
||
Total CNX Resources Stockholders’ Equity
|
4,308,801
|
|
|
3,899,899
|
|
||
Noncontrolling Interest
|
730,122
|
|
|
—
|
|
||
TOTAL STOCKHOLDERS' EQUITY
|
5,038,923
|
|
|
3,899,899
|
|
||
TOTAL LIABILITIES AND EQUITY
|
$
|
8,207,758
|
|
|
$
|
6,931,913
|
|
(Dollars in thousands)
|
Common
Stock
|
|
Capital in
Excess
of Par
Value
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Total CNX Resources Corporation
Stockholders’
Equity
|
|
Non-
Controlling
Interest
|
|
Total
Stockholders'
Equity
|
||||||||||||||
Balance at December 31, 2017
|
$
|
2,241
|
|
|
$
|
2,450,323
|
|
|
$
|
1,455,811
|
|
|
$
|
(8,476
|
)
|
|
$
|
3,899,899
|
|
|
$
|
—
|
|
|
$
|
3,899,899
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net Income
|
—
|
|
|
—
|
|
|
569,577
|
|
|
—
|
|
|
569,577
|
|
|
37,363
|
|
|
606,940
|
|
|||||||
Other Comprehensive Income (Net of ($781) Tax)
|
—
|
|
|
—
|
|
|
—
|
|
|
1,982
|
|
|
1,982
|
|
|
—
|
|
|
1,982
|
|
|||||||
Comprehensive Income
|
—
|
|
|
—
|
|
|
569,577
|
|
|
1,982
|
|
|
571,559
|
|
|
37,363
|
|
|
608,922
|
|
|||||||
Issuance of Common Stock
|
7
|
|
|
1,556
|
|
|
—
|
|
|
—
|
|
|
1,563
|
|
|
—
|
|
|
1,563
|
|
|||||||
Purchase and Retirement of Common Stock (11,086,082 shares)
|
(110
|
)
|
|
(88,578
|
)
|
|
(80,031
|
)
|
|
—
|
|
|
(168,719
|
)
|
|
—
|
|
|
(168,719
|
)
|
|||||||
Shares Withheld for Taxes
|
—
|
|
|
—
|
|
|
(4,850
|
)
|
|
—
|
|
|
(4,850
|
)
|
|
(347
|
)
|
|
(5,197
|
)
|
|||||||
Acquisition of CNX Gathering, LLC
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
718,577
|
|
|
718,577
|
|
|||||||
Amortization of Stock-Based Compensation Awards
|
—
|
|
|
9,349
|
|
|
—
|
|
|
—
|
|
|
9,349
|
|
|
1,269
|
|
|
10,618
|
|
|||||||
Distributions to CNXM Noncontrolling Interest Holders
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(26,740
|
)
|
|
(26,740
|
)
|
|||||||
Balance at June 30, 2018
|
$
|
2,138
|
|
|
$
|
2,372,650
|
|
|
$
|
1,940,507
|
|
|
$
|
(6,494
|
)
|
|
$
|
4,308,801
|
|
|
$
|
730,122
|
|
|
$
|
5,038,923
|
|
(Dollars in thousands)
|
Six Months Ended
|
||||||
(Unaudited)
|
June 30,
|
||||||
Cash Flows from Operating Activities:
|
2018
|
|
2017
|
||||
Net Income
|
$
|
606,940
|
|
|
$
|
130,544
|
|
Adjustments to Reconcile Net Income to Net Cash Provided By Operating Activities:
|
|
|
|
||||
Net Income from Discontinued Operations
|
—
|
|
|
(99,743
|
)
|
||
Depreciation, Depletion and Amortization
|
243,754
|
|
|
187,318
|
|
||
Amortization of Deferred Financing Costs
|
4,821
|
|
|
—
|
|
||
Impairment of Exploration and Production Properties
|
—
|
|
|
137,865
|
|
||
Impairment of Other Intangible Assets
|
18,650
|
|
|
—
|
|
||
Stock-Based Compensation
|
10,618
|
|
|
7,917
|
|
||
Gain on Sale of Assets
|
(14,622
|
)
|
|
(138,577
|
)
|
||
Gain on Previously Held Equity Interest
|
(623,663
|
)
|
|
—
|
|
||
Loss (Gain) on Debt Extinguishment
|
39,048
|
|
|
(786
|
)
|
||
(Gain) Loss on Commodity Derivative Instruments
|
(60,747
|
)
|
|
(61,325
|
)
|
||
Net Cash Paid in Settlement of Commodity Derivative Instruments
|
(307
|
)
|
|
(79,388
|
)
|
||
Deferred Income Taxes
|
190,194
|
|
|
10,536
|
|
||
Equity in Earnings of Affiliates
|
(3,447
|
)
|
|
(22,385
|
)
|
||
Changes in Operating Assets:
|
|
|
|
||||
Accounts and Notes Receivable
|
44,156
|
|
|
6,661
|
|
||
Recoverable Income Taxes
|
3,743
|
|
|
6,492
|
|
||
Supplies Inventories
|
243
|
|
|
328
|
|
||
Prepaid Expenses
|
1,327
|
|
|
6,480
|
|
||
Changes in Operating Liabilities:
|
|
|
|
||||
Accounts Payable
|
(3,198
|
)
|
|
20,813
|
|
||
Accrued Interest
|
(3,358
|
)
|
|
795
|
|
||
Other Operating Liabilities
|
1,504
|
|
|
699
|
|
||
Changes in Other Liabilities
|
(5,374
|
)
|
|
13,516
|
|
||
Other
|
648
|
|
|
44,572
|
|
||
Net Cash Provided by Continuing Operating Activities
|
450,930
|
|
|
172,332
|
|
||
Net Cash Provided by Discontinued Operating Activities
|
—
|
|
|
128,140
|
|
||
Net Cash Provided by Operating Activities
|
450,930
|
|
|
300,472
|
|
||
Cash Flows from Investing Activities:
|
|
|
|
||||
Capital Expenditures
|
(496,659
|
)
|
|
(249,962
|
)
|
||
CNX Gathering LLC Acquisition, Net of Cash Acquired
|
(299,272
|
)
|
|
—
|
|
||
Proceeds from Asset Sales
|
153,420
|
|
|
328,167
|
|
||
Net Distributions from Equity Affiliates
|
3,650
|
|
|
24,700
|
|
||
Net Cash (Used in) Provided by Continuing Investing Activities
|
(638,861
|
)
|
|
102,905
|
|
||
Net Cash Provided by Discontinued Investing Activities
|
—
|
|
|
(6,380
|
)
|
||
Net Cash (Used in) Provided by Investing Activities
|
(638,861
|
)
|
|
96,525
|
|
||
Cash Flows from Financing Activities:
|
|
|
|
||||
Payments on Miscellaneous Borrowings
|
(3,748
|
)
|
|
(5,973
|
)
|
||
Payments on Long-Term Notes
|
(723,419
|
)
|
|
(117,185
|
)
|
||
Net Payments on CNXM Revolving Credit Facility
|
(138,500
|
)
|
|
—
|
|
||
Proceeds from CNX Revolving Credit Facility
|
422,000
|
|
|
—
|
|
||
Proceeds from Issuance of CNXM Senior Notes
|
394,000
|
|
|
—
|
|
||
Distributions to CNXM Noncontrolling Interest Holders
|
(26,740
|
)
|
|
—
|
|
||
Proceeds from Issuance of Common Stock
|
1,563
|
|
|
723
|
|
||
Shares Withheld for Taxes
|
(5,197
|
)
|
|
(7,093
|
)
|
||
Purchases of Common Stock
|
(166,720
|
)
|
|
—
|
|
||
Debt Repurchase and Financing Fees
|
(19,629
|
)
|
|
(298
|
)
|
||
Net Cash Used in Continuing Financing Activities
|
(266,390
|
)
|
|
(129,826
|
)
|
||
Net Cash Used in Discontinued Financing Activities
|
—
|
|
|
(21,935
|
)
|
||
Net Cash Used in Financing Activities
|
(266,390
|
)
|
|
(151,761
|
)
|
||
Net (Decrease) Increase in Cash and Cash Equivalents
|
(454,321
|
)
|
|
245,236
|
|
||
Cash and Cash Equivalents at Beginning of Period
|
509,167
|
|
|
46,299
|
|
||
Cash and Cash Equivalents at End of Period
|
$
|
54,846
|
|
|
$
|
291,535
|
|
|
For the Three Months Ended June 30,
|
|
For the Six Months Ended June 30,
|
||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||
Antidilutive Options
|
2,300,785
|
|
|
2,360,197
|
|
|
2,300,785
|
|
|
2,360,197
|
|
Antidilutive Restricted Stock Units
|
—
|
|
|
194,071
|
|
|
7,828
|
|
|
190,658
|
|
Antidilutive Performance Share Units
|
—
|
|
|
1,284,924
|
|
|
178,189
|
|
|
1,284,924
|
|
Antidilutive Performance Stock Options
|
927,268
|
|
|
802,804
|
|
|
927,268
|
|
|
802,804
|
|
|
3,228,053
|
|
|
4,641,996
|
|
|
3,414,070
|
|
|
4,638,583
|
|
|
For the Three Months Ended June 30,
|
|
For the Six Months Ended June 30,
|
||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||
Options
|
73,583
|
|
|
28,838
|
|
|
227,301
|
|
|
90,462
|
|
Restricted Stock Units
|
7,260
|
|
|
221
|
|
|
178,397
|
|
|
334,261
|
|
Performance Share Units
|
—
|
|
|
—
|
|
|
357,597
|
|
|
560,936
|
|
|
80,843
|
|
|
29,059
|
|
|
763,295
|
|
|
985,659
|
|
|
For the Three Months Ended June 30,
|
|
For the Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Income from Continuing Operations
|
$
|
61,394
|
|
|
$
|
121,807
|
|
|
$
|
606,940
|
|
|
$
|
30,801
|
|
Less: Net Income Attributable to Non-Controlling Interest
|
19,380
|
|
|
—
|
|
|
37,363
|
|
|
—
|
|
||||
Net Income from Continuing Operations Attributable to CNX Resources Shareholders
|
$
|
42,014
|
|
|
$
|
121,807
|
|
|
$
|
569,577
|
|
|
$
|
30,801
|
|
Income from Discontinued Operations
|
—
|
|
|
47,703
|
|
|
—
|
|
|
99,743
|
|
||||
Net Income Attributable to CNX Resources Shareholders
|
$
|
42,014
|
|
|
$
|
169,510
|
|
|
$
|
569,577
|
|
|
$
|
130,544
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average shares of common stock outstanding
|
215,991,490
|
|
|
230,058,422
|
|
|
218,944,422
|
|
|
229,938,462
|
|
||||
Effect of dilutive shares
|
2,938,470
|
|
|
2,139,974
|
|
|
2,701,442
|
|
|
2,286,571
|
|
||||
Weighted-average diluted shares of common stock outstanding
|
218,929,960
|
|
|
232,198,396
|
|
|
221,645,864
|
|
|
232,225,033
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Earnings per Share:
|
|
|
|
|
|
|
|
||||||||
Basic (Continuing Operations)
|
$
|
0.19
|
|
|
$
|
0.53
|
|
|
$
|
2.60
|
|
|
$
|
0.13
|
|
Basic (Discontinued Operations)
|
—
|
|
|
0.21
|
|
|
—
|
|
|
0.44
|
|
||||
Total Basic
|
$
|
0.19
|
|
|
$
|
0.74
|
|
|
$
|
2.60
|
|
|
$
|
0.57
|
|
|
|
|
|
|
|
|
|
||||||||
Dilutive (Continuing Operations)
|
$
|
0.19
|
|
|
$
|
0.52
|
|
|
$
|
2.57
|
|
|
$
|
0.13
|
|
Dilutive (Discontinued Operations)
|
—
|
|
|
0.21
|
|
|
—
|
|
|
0.43
|
|
||||
Total Dilutive
|
$
|
0.19
|
|
|
$
|
0.73
|
|
|
$
|
2.57
|
|
|
$
|
0.56
|
|
|
|
||
Balance at December 31, 2017
|
$
|
(8,476
|
)
|
Other Comprehensive Income before Reclassifications
|
1,643
|
|
|
Amounts Reclassified from Accumulated Other Comprehensive Loss, net of tax
|
339
|
|
|
Current Period Other Comprehensive Income
|
1,982
|
|
|
Balance at June 30, 2018
|
$
|
(6,494
|
)
|
|
For the Three Months Ended June 30,
|
|
For the Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Actuarially Determined Long-Term Liability Adjustments*
|
|
|
|
|
|
|
|
||||||||
Amortization of Prior Service Costs
|
$
|
(90
|
)
|
|
$
|
(749
|
)
|
|
$
|
(181
|
)
|
|
$
|
(1,498
|
)
|
Recognized Net Actuarial Loss
|
354
|
|
|
6,247
|
|
|
708
|
|
|
12,550
|
|
||||
Total
|
264
|
|
|
5,498
|
|
|
527
|
|
|
11,052
|
|
||||
Less: Tax Benefit
|
94
|
|
|
2,034
|
|
|
188
|
|
|
4,086
|
|
||||
Net of Tax
|
$
|
170
|
|
|
$
|
3,464
|
|
|
$
|
339
|
|
|
$
|
6,966
|
|
|
For the Three Months Ended June 30,
|
|
For the Six Months Ended June 30,
|
||||||||||||
2018
|
|
2017
|
|
2018
|
|
2017
|
|||||||||
Revenue from Contracts with Customers
|
|
|
|
|
|
|
|
||||||||
Natural Gas Revenue
|
$
|
289,294
|
|
|
$
|
233,723
|
|
|
$
|
636,642
|
|
|
$
|
507,270
|
|
NGLs Revenue
|
39,557
|
|
|
21,637
|
|
|
90,441
|
|
|
60,920
|
|
||||
Condensate Revenue
|
4,996
|
|
|
3,885
|
|
|
11,499
|
|
|
8,189
|
|
||||
Oil Revenue
|
670
|
|
|
1,061
|
|
|
1,558
|
|
|
1,690
|
|
||||
Total Natural Gas, NGLs and Oil Revenue
|
334,517
|
|
|
260,306
|
|
|
740,140
|
|
|
578,069
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Purchased Gas Revenue
|
9,930
|
|
|
10,316
|
|
|
27,985
|
|
|
19,294
|
|
||||
Midstream Revenue
|
23,483
|
|
|
—
|
|
|
49,737
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Other Sources of Revenue and Other Operating Income
|
|
|
|
|
|
|
|
||||||||
Gain on Commodity Derivative Instruments
|
25,660
|
|
|
83,788
|
|
|
60,747
|
|
|
61,325
|
|
||||
Other Operating Income
|
8,534
|
|
|
16,658
|
|
|
19,244
|
|
|
32,308
|
|
||||
Total Revenue and Other Operating Income
|
$
|
402,124
|
|
|
$
|
371,068
|
|
|
$
|
897,853
|
|
|
$
|
690,996
|
|
|
For the Three Months Ended
|
|
For the Six Months Ended
|
||||
|
June 30, 2017
|
|
June 30, 2017
|
||||
Coal Revenue
|
$
|
303,707
|
|
|
$
|
620,155
|
|
Other Outside Sales
|
14,856
|
|
|
27,742
|
|
||
Freight-Outside Coal
|
17,763
|
|
|
30,045
|
|
||
Miscellaneous Other Income
|
8,934
|
|
|
26,330
|
|
||
Gain on Sale of Assets
|
5,581
|
|
|
13,536
|
|
||
Total Revenue and Other Income
|
$
|
350,841
|
|
|
$
|
717,808
|
|
Total Costs
|
289,790
|
|
|
605,620
|
|
||
Income From Operations Before Income Taxes
|
$
|
61,051
|
|
|
$
|
112,188
|
|
Income Tax Expense
|
9,035
|
|
|
2,668
|
|
||
Less: Net Income Attributable to Noncontrolling Interest
|
4,313
|
|
|
9,777
|
|
||
Income From Discontinued Operations, net
|
$
|
47,703
|
|
|
$
|
99,743
|
|
Cash Consideration
|
$
|
305,000
|
|
CNX Gathering Cash on Hand at January 3, 2018 Distributed to Noble
|
2,620
|
|
|
Fair Value of Previously Held Equity Interest
|
799,033
|
|
|
Total Estimated Fair Value of Consideration Transferred
|
$
|
1,106,653
|
|
Fair Value of Assets Acquired:
|
|
||
Cash and Cash Equivalents
|
$
|
8,348
|
|
Accounts and Notes Receivable
|
21,199
|
|
|
Prepaid Expense
|
2,006
|
|
|
Other Current Assets
|
163
|
|
|
Property, Plant and Equipment, Net
|
1,043,340
|
|
|
Intangible Assets
|
128,781
|
|
|
Other
|
593
|
|
|
Total Assets Acquired
|
1,204,430
|
|
|
|
|
||
Fair Value of Liabilities Assumed:
|
|
||
Accounts Payable
|
26,059
|
|
|
CNXM Revolving Credit Facility
|
149,500
|
|
|
Total Liabilities Assumed
|
175,559
|
|
|
|
|
||
Total Identifiable Net Assets
|
1,028,871
|
|
|
Fair Value of Noncontrolling Interest in CNXM
|
(718,577
|
)
|
|
Goodwill
|
796,359
|
|
|
Net Assets Acquired
|
$
|
1,106,653
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||
|
June 30, 2018
|
|
June 30, 2018
|
||||
Midstream Revenue
|
$
|
61,325
|
|
|
$
|
125,503
|
|
Earnings From Continuing Operations Before Income Tax
|
$
|
27,795
|
|
|
$
|
63,329
|
|
|
Pro Forma
|
||||||
(in thousands, except per share data) (unaudited)
|
Three Months Ended June 30, 2017
|
|
Six Months Ended June 30, 2017
|
||||
Pro Forma Total Revenue and Other Operating Income
|
$
|
395,774
|
|
|
$
|
740,411
|
|
Pro Forma Net Income from Continuing Operations
|
$
|
150,789
|
|
|
$
|
92,979
|
|
Less: Pro Forma Net income Attributable to Noncontrolling Interests
|
$
|
18,720
|
|
|
$
|
38,134
|
|
Pro Forma Net Income from Continuing Operations Attributable to CNX
|
$
|
132,069
|
|
|
$
|
54,845
|
|
Pro Forma Income per Share from Continuing Operations (Basic)
|
$
|
0.58
|
|
|
$
|
0.24
|
|
Pro Forma Income per Share from Continuing Operations (Diluted)
|
$
|
0.58
|
|
|
$
|
0.24
|
|
|
For the Three Months Ended June 30,
|
|
For the Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Service Cost
|
$
|
96
|
|
|
$
|
149
|
|
|
$
|
193
|
|
|
$
|
193
|
|
Interest Cost
|
300
|
|
|
476
|
|
|
600
|
|
|
619
|
|
||||
Amortization of Prior Service Credits
|
(90
|
)
|
|
(143
|
)
|
|
(181
|
)
|
|
(186
|
)
|
||||
Recognized Net Actuarial Loss
|
373
|
|
|
604
|
|
|
746
|
|
|
786
|
|
||||
Curtailment Gain
|
(416
|
)
|
|
—
|
|
|
(416
|
)
|
|
—
|
|
||||
Net Periodic Benefit Cost
|
$
|
263
|
|
|
$
|
1,086
|
|
|
$
|
942
|
|
|
$
|
1,412
|
|
|
June 30,
2018 |
|
December 31,
2017 |
||||
Property, Plant and Equipment
|
|
|
|
||||
Intangible drilling cost
|
$
|
3,772,658
|
|
|
$
|
3,849,689
|
|
Proved gas properties
|
937,243
|
|
|
1,999,891
|
|
||
Gas gathering equipment
|
2,017,836
|
|
|
1,182,234
|
|
||
Unproved gas properties
|
1,093,985
|
|
|
919,733
|
|
||
Gas wells and related equipment
|
743,752
|
|
|
834,120
|
|
||
Surface land and other equipment
|
309,894
|
|
|
309,602
|
|
||
Other gas assets
|
66,058
|
|
|
221,226
|
|
||
Total Property, Plant and Equipment
|
8,941,426
|
|
|
9,316,495
|
|
||
Less: Accumulated Depreciation, Depletion and Amortization
|
2,399,555
|
|
|
3,526,742
|
|
||
Total Property, Plant and Equipment Assets Held for Sale - Net
|
230,593
|
|
|
—
|
|
||
Total Property, Plant and Equipment - Net
|
$
|
6,772,464
|
|
|
$
|
5,789,753
|
|
|
June 30,
2018 |
|
December 31,
2017 |
||||
Debt:
|
|
|
|
||||
Senior Notes due April 2022 at 5.875% (Principal of $1,314,307 and $1,705,682
plus Unamortized Premium of $2,416 and $3,544, respectively) |
$
|
1,316,723
|
|
|
$
|
1,709,226
|
|
CNX Revolving Credit Facility
|
422,000
|
|
|
—
|
|
||
CNX Midstream Partners LP Senior Notes due March 2026 at 6.50% (Principal of $400,000 less Unamortized Discount of $5,750 at June 30, 2018)
|
394,250
|
|
|
—
|
|
||
Senior Notes due April 2023 at 8.00% (Principal of $200,000 and $500,000 less Unamortized Discount of $1,720 and $4,751, respectively)
|
198,281
|
|
|
495,249
|
|
||
CNX Midstream Partners LP Revolving Credit Facility
|
11,000
|
|
|
—
|
|
||
Other Note Maturing in 2018 (Principal of $358 less Unamortized Discount of $8 at December 31, 2017)
|
—
|
|
|
350
|
|
||
Less: Unamortized Debt Issuance Costs
|
11,474
|
|
|
17,536
|
|
||
|
2,330,780
|
|
|
2,187,289
|
|
||
Less: Amounts Due in One Year*
|
—
|
|
|
263
|
|
||
Long-Term Debt
|
$
|
2,330,780
|
|
|
$
|
2,187,026
|
|
|
Amount of Commitment Expiration Per Period
|
||||||||||||||||||
|
Total
Amounts
Committed
|
|
Less Than
1 Year
|
|
1-3 Years
|
|
3-5 Years
|
|
Beyond
5 Years
|
||||||||||
Letters of Credit:
|
|
|
|
|
|
|
|
|
|
||||||||||
Firm Transportation
|
$
|
251,057
|
|
|
$
|
251,057
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Other
|
285
|
|
|
285
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total Letters of Credit
|
251,342
|
|
|
251,342
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Surety Bonds:
|
|
|
|
|
|
|
|
|
|
||||||||||
Employee-Related
|
1,850
|
|
|
1,850
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Environmental
|
25,973
|
|
|
25,914
|
|
|
59
|
|
|
—
|
|
|
—
|
|
|||||
Other
|
12,315
|
|
|
10,805
|
|
|
1,510
|
|
|
—
|
|
|
—
|
|
|||||
Total Surety Bonds
|
40,138
|
|
|
38,569
|
|
|
1,569
|
|
|
—
|
|
|
—
|
|
|||||
Total Commitments
|
$
|
291,480
|
|
|
$
|
289,911
|
|
|
$
|
1,569
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Operating Lease Obligations Due
|
Amount
|
||
Less than 1 year
|
$
|
9,607
|
|
1 - 3 years
|
13,325
|
|
|
3 - 5 years
|
10,756
|
|
|
More than 5 years
|
38,477
|
|
|
Total Operating Lease Obligations
|
$
|
72,165
|
|
Obligations Due
|
Amount
|
||
Less than 1 year
|
$
|
207,148
|
|
1 - 3 years
|
419,091
|
|
|
3 - 5 years
|
306,479
|
|
|
More than 5 years
|
620,806
|
|
|
Total Purchase Obligations
|
$
|
1,553,524
|
|
|
June 30,
|
|
December 31,
|
|
Forecasted to
|
||
|
2018
|
|
2017
|
|
Settle Through
|
||
Natural Gas Commodity Swaps (Bcf)
|
1,064.1
|
|
|
1,067.2
|
|
|
2023
|
Natural Gas Basis Swaps (Bcf)
|
775.5
|
|
|
688.1
|
|
|
2023
|
Asset Derivative Instruments
|
|
Liability Derivative Instruments
|
||||||||||||||
|
June 30,
|
|
December 31,
|
|
|
June 30,
|
|
December 31,
|
||||||||
|
2018
|
|
2017
|
|
|
2018
|
|
2017
|
||||||||
Commodity Swaps:
|
|
|
|
|
|
|
|
|
||||||||
Prepaid Expense
|
$
|
27,226
|
|
|
$
|
62,369
|
|
|
Other Accrued Liabilities
|
$
|
26,943
|
|
|
$
|
5,985
|
|
Other Assets
|
132,594
|
|
|
59,281
|
|
|
Other Liabilities
|
10,381
|
|
|
42,419
|
|
||||
Total Asset
|
$
|
159,820
|
|
|
$
|
121,650
|
|
|
Total Liability
|
$
|
37,324
|
|
|
$
|
48,404
|
|
|
|
|
|
|
|
|
|
|
||||||||
Basis Only Swaps:
|
|
|
|
|
|
|
|
|
||||||||
Prepaid Expense
|
$
|
10,932
|
|
|
$
|
14,965
|
|
|
Other Accrued Liabilities
|
$
|
26,969
|
|
|
$
|
35,306
|
|
Other Assets
|
35,101
|
|
|
24,223
|
|
|
Other Liabilities
|
20,557
|
|
|
17,179
|
|
||||
Total Asset
|
$
|
46,033
|
|
|
$
|
39,188
|
|
|
Total Liability
|
$
|
47,526
|
|
|
$
|
52,485
|
|
|
For the Three Months Ended
|
|
For the Six Months Ended
|
||||||||||||
|
June 30,
|
|
June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Cash Received (Paid) in Settlement of Commodity Derivative Instruments:
|
|
|
|
|
|
|
|
||||||||
Commodity Swaps:
|
|
|
|
|
|
|
|
||||||||
Natural Gas
|
$
|
17,058
|
|
|
$
|
(15,509
|
)
|
|
$
|
16,624
|
|
|
$
|
(40,116
|
)
|
Propane
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,216
|
)
|
||||
Natural Gas Basis Swaps
|
(374
|
)
|
|
(16,776
|
)
|
|
(16,931
|
)
|
|
(38,056
|
)
|
||||
Total Cash Received (Paid) in Settlement of Commodity Derivative Instruments
|
16,684
|
|
|
(32,285
|
)
|
|
(307
|
)
|
|
(79,388
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Unrealized Gain (Loss) on Commodity Derivative Instruments:
|
|
|
|
|
|
|
|
||||||||
Commodity Swaps:
|
|
|
|
|
|
|
|
||||||||
Natural Gas
|
46,450
|
|
|
70,282
|
|
|
49,250
|
|
|
232,886
|
|
||||
Propane
|
—
|
|
|
—
|
|
|
—
|
|
|
1,147
|
|
||||
Natural Gas Basis Swaps
|
(37,474
|
)
|
|
45,791
|
|
|
11,804
|
|
|
(93,320
|
)
|
||||
Total Unrealized Gain on Commodity Derivative Instruments
|
8,976
|
|
|
116,073
|
|
|
61,054
|
|
|
140,713
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Gain (Loss) on Commodity Derivative Instruments:
|
|
|
|
|
|
|
|
||||||||
Commodity Swaps:
|
|
|
|
|
|
|
|
||||||||
Natural Gas
|
63,508
|
|
|
54,773
|
|
|
65,874
|
|
|
192,770
|
|
||||
Propane
|
—
|
|
|
—
|
|
|
—
|
|
|
(69
|
)
|
||||
Natural Gas Basis Swaps
|
(37,848
|
)
|
|
29,015
|
|
|
(5,127
|
)
|
|
(131,376
|
)
|
||||
Total Gain on Commodity Derivative Instruments
|
$
|
25,660
|
|
|
$
|
83,788
|
|
|
$
|
60,747
|
|
|
$
|
61,325
|
|
|
Fair Value Measurements at June 30, 2018
|
|
Fair Value Measurements at December 31, 2017
|
||||||||||||||||||||
Description
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
||||||||||||
Gas Derivatives
|
$
|
—
|
|
|
$
|
121,003
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
59,949
|
|
|
$
|
—
|
|
Put Option
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(3,500
|
)
|
|
$
|
—
|
|
|
June 30, 2018
|
|
December 31, 2017
|
||||||||||||
|
Carrying
Amount
|
|
Fair
Value
|
|
Carrying
Amount
|
|
Fair
Value
|
||||||||
Cash and Cash Equivalents
|
$
|
54,846
|
|
|
$
|
54,846
|
|
|
$
|
509,167
|
|
|
$
|
509,167
|
|
Long-Term Debt
|
$
|
2,342,254
|
|
|
$
|
2,329,810
|
|
|
$
|
2,204,825
|
|
|
$
|
2,281,282
|
|
|
June 30, 2018
|
||
Assets:
|
|
||
Cash
|
$
|
707
|
|
Receivables - Related Party
|
12,072
|
|
|
Receivables - Third Party
|
7,546
|
|
|
Other Current Assets
|
2,726
|
|
|
Property, Plant and Equipment, net
|
792,513
|
|
|
Other Assets
|
3,494
|
|
|
Total Assets
|
$
|
819,058
|
|
Liabilities:
|
|
||
Accounts Payable
|
$
|
38,327
|
|
Accounts Payable - Related Party
|
3,211
|
|
|
Revolving Credit Facility
|
11,000
|
|
|
Long-Term Debt
|
393,169
|
|
|
Total Liabilities
|
$
|
445,707
|
|
|
For the Three Months Ended
|
|
For the Six Months Ended
|
||||
|
June 30, 2018
|
|
June 30, 2018
|
||||
Revenue
|
|
|
|
||||
Gathering Revenue - Related Party
|
$
|
37,576
|
|
|
$
|
75,306
|
|
Gathering Revenue - Third Party
|
23,438
|
|
|
49,577
|
|
||
Total Revenue
|
61,014
|
|
|
124,883
|
|
||
Expenses
|
|
|
|
||||
Operating Expense - Related Party
|
5,079
|
|
|
9,514
|
|
||
Operating Expense - Third Party
|
7,406
|
|
|
15,874
|
|
||
General and Administrative Expense - Related Party
|
3,619
|
|
|
7,232
|
|
||
General and Administrative Expense - Third Party
|
2,320
|
|
|
4,868
|
|
||
(Gain) Loss on Asset Sales
|
(254
|
)
|
|
2,501
|
|
||
Depreciation Expense
|
5,443
|
|
|
11,299
|
|
||
Interest Expense
|
7,119
|
|
|
9,608
|
|
||
Total Expense
|
30,732
|
|
|
60,896
|
|
||
Net Income
|
$
|
30,282
|
|
|
$
|
63,987
|
|
|
|
|
|
||||
Net Cash Provided by Operating Activities
|
$
|
53,674
|
|
|
$
|
95,541
|
|
Net Cash Used in Investing Activities
|
$
|
(24,969
|
)
|
|
$
|
(35,125
|
)
|
Net Cash Used in Financing Activities
|
$
|
(29,964
|
)
|
|
$
|
(62,903
|
)
|
|
CNX Gathering
|
|
CNXM
|
|
Total
|
||||||
Balance at December 31, 2016
|
$
|
151,075
|
|
|
$
|
18,133
|
|
|
$
|
169,208
|
|
Equity in Earnings
|
9,823
|
|
|
38,523
|
|
|
48,346
|
|
|||
Distributions
|
(17,254
|
)
|
|
(24,929
|
)
|
|
(42,183
|
)
|
|||
Asset Transfer
|
(2,527
|
)
|
|
2,527
|
|
|
—
|
|
|||
Balance at December 31, 2017
|
$
|
141,117
|
|
|
$
|
34,254
|
|
|
$
|
175,371
|
|
|
For the Three Months Ended
|
|
For the Six Months Ended
|
||||
|
June 30, 2017
|
|
June 30, 2017
|
||||
Other Operating Income:
|
|
|
|
||||
Equity in Earnings of Affiliates - CNX Gathering
|
$
|
284
|
|
|
$
|
2,150
|
|
Equity in Earnings of Affiliates - CNXM
|
$
|
9,712
|
|
|
$
|
19,784
|
|
|
|
|
|
||||
Transportation, Gathering and Compression:
|
|
|
|
||||
Gathering Services - CNX Gathering
|
$
|
232
|
|
|
$
|
485
|
|
Gathering Services - CNXM
|
$
|
31,695
|
|
|
$
|
65,749
|
|
|
Marcellus
Shale
|
|
Utica Shale
|
|
Coalbed Methane
|
|
Other
Gas
|
|
Total
E&P
|
|
Midstream
|
|
Unallocated
|
|
Intercompany Eliminations
|
|
Consolidated
|
|
||||||||||||||||||
Natural Gas, NGLs and Oil Revenue
|
$
|
178,305
|
|
|
$
|
107,758
|
|
|
$
|
46,882
|
|
|
$
|
1,572
|
|
|
$
|
334,517
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
334,517
|
|
(A)
|
Purchased Gas Revenue
|
—
|
|
|
—
|
|
|
—
|
|
|
9,930
|
|
|
9,930
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,930
|
|
|
|||||||||
Midstream Revenue
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
61,325
|
|
|
—
|
|
|
(37,842
|
)
|
|
23,483
|
|
|
|||||||||
Gain on Commodity Derivative Instruments
|
9,128
|
|
|
5,371
|
|
|
2,155
|
|
|
9,006
|
|
|
25,660
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
25,660
|
|
|
|||||||||
Other Operating Income
|
—
|
|
|
—
|
|
|
—
|
|
|
8,595
|
|
|
8,595
|
|
|
—
|
|
|
—
|
|
|
(61
|
)
|
|
8,534
|
|
(B)
|
|||||||||
Total Revenue and Other Operating Income
|
$
|
187,433
|
|
|
$
|
113,129
|
|
|
$
|
49,037
|
|
|
$
|
29,103
|
|
|
$
|
378,702
|
|
|
$
|
61,325
|
|
|
$
|
—
|
|
|
$
|
(37,903
|
)
|
|
$
|
402,124
|
|
|
Earnings (Loss) From Continuing Operations Before Income Tax
|
$
|
47,273
|
|
|
$
|
46,486
|
|
|
$
|
12,405
|
|
|
$
|
(64,039
|
)
|
|
$
|
42,125
|
|
|
$
|
27,795
|
|
|
$
|
(39,628
|
)
|
|
$
|
—
|
|
|
$
|
30,292
|
|
|
Segment Assets
|
|
|
|
|
|
|
|
|
$
|
6,055,545
|
|
|
$
|
1,830,007
|
|
|
$
|
333,372
|
|
|
$
|
(11,166
|
)
|
|
$
|
8,207,758
|
|
(C)
|
||||||||
Depreciation, Depletion and Amortization
|
|
|
|
|
|
|
|
|
$
|
111,125
|
|
|
$
|
7,962
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
119,087
|
|
|
||||||||
Capital Expenditures
|
|
|
|
|
|
|
|
|
$
|
238,889
|
|
|
$
|
25,285
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
264,174
|
|
|
(A)
|
Included in Total Natural Gas, NGLs and Oil Revenue are sales of
$36,849
to NJR Energy Services Company and
$34,644
to Direct Energy Business Marketing LLC, each of which comprises over 10% of sales.
|
(B)
|
Includes equity in earnings of unconsolidated affiliates of
$1,669
for Total E&P.
|
(C)
|
Includes investments in unconsolidated equity affiliates of
$22,347
for Total E&P.
|
|
Marcellus
Shale |
|
Utica Shale
|
|
Coalbed Methane
|
|
Other
Gas |
|
Total
E&P |
|
Unallocated
|
|
Consolidated
|
|
||||||||||||||
Natural Gas, NGLs and Oil Revenue
|
$
|
154,424
|
|
|
$
|
39,450
|
|
|
$
|
51,973
|
|
|
$
|
14,459
|
|
|
$
|
260,306
|
|
|
$
|
—
|
|
|
$
|
260,306
|
|
(D)
|
Purchased Gas Revenue
|
—
|
|
|
—
|
|
|
—
|
|
|
10,316
|
|
|
10,316
|
|
|
—
|
|
|
10,316
|
|
|
|||||||
(Loss) Gain on Commodity Derivative Instruments
|
(21,545
|
)
|
|
(2,063
|
)
|
|
(6,788
|
)
|
|
114,184
|
|
|
83,788
|
|
|
—
|
|
|
83,788
|
|
|
|||||||
Other Operating Income
|
—
|
|
|
—
|
|
|
—
|
|
|
16,658
|
|
|
16,658
|
|
|
—
|
|
|
16,658
|
|
|
|||||||
Total Revenue and Other Operating Income
|
$
|
132,879
|
|
|
$
|
37,387
|
|
|
$
|
45,185
|
|
|
$
|
155,617
|
|
|
$
|
371,068
|
|
|
$
|
—
|
|
|
$
|
371,068
|
|
|
Earnings (Loss) From Continuing Operations Before Income Tax
|
$
|
16,411
|
|
|
$
|
9,063
|
|
|
$
|
(36
|
)
|
|
$
|
25,257
|
|
|
$
|
50,695
|
|
|
$
|
129,070
|
|
|
$
|
179,765
|
|
(E)
|
Segment Assets
|
|
|
|
|
|
|
|
|
$
|
6,194,820
|
|
|
$
|
2,830,375
|
|
|
$
|
9,025,195
|
|
(F)
|
||||||||
Depreciation, Depletion and Amortization
|
|
|
|
|
|
|
|
|
$
|
91,640
|
|
|
$
|
—
|
|
|
$
|
91,640
|
|
|
||||||||
Capital Expenditures
|
|
|
|
|
|
|
|
|
$
|
145,839
|
|
|
$
|
—
|
|
|
$
|
145,839
|
|
|
(D)
|
Included in Total Natural Gas, NGLs and Oil Revenue are sales of
$40,273
to Direct Energy Business Marketing LLC and
$34,733
to NJR Energy Services Company, each of which comprises over 10% of sales.
|
(E)
|
Includes equity in earnings of unconsolidated affiliates of
$10,055
for Total E&P.
|
(F)
|
Includes investments in unconsolidated equity affiliates of
$188,649
for Total E&P.
|
|
Marcellus
Shale
|
|
Utica Shale
|
|
Coalbed Methane
|
|
Other
Gas
|
|
Total
E&P
|
|
Midstream
|
|
Unallocated
|
|
Intercompany Eliminations
|
|
Consolidated
|
|
|||||||||||||||||||
Natural Gas, NGLs and Oil Revenue
|
$
|
383,321
|
|
|
$
|
238,080
|
|
|
$
|
104,383
|
|
|
$
|
14,356
|
|
|
$
|
740,140
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
740,140
|
|
(A)
|
|
Purchased Gas Revenue
|
—
|
|
|
—
|
|
|
|
|
27,985
|
|
|
27,985
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
27,985
|
|
|
|||||||||||
Midstream Revenue
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
125,503
|
|
|
—
|
|
|
(75,766
|
)
|
|
49,737
|
|
|
||||||||||
(Loss) Gain on Commodity Derivative Instruments
|
(385
|
)
|
—
|
|
897
|
|
|
(275
|
)
|
|
60,510
|
|
|
60,747
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
60,747
|
|
|
|||||||||
Other Operating Income
|
—
|
|
|
—
|
|
|
—
|
|
|
19,386
|
|
|
19,386
|
|
|
—
|
|
|
—
|
|
|
(142
|
)
|
|
19,244
|
|
(B)
|
||||||||||
Total Revenue and Other Operating Income
|
$
|
382,936
|
|
|
$
|
238,977
|
|
|
$
|
104,108
|
|
|
$
|
122,237
|
|
|
$
|
848,258
|
|
|
$
|
125,503
|
|
|
$
|
—
|
|
|
$
|
(75,908
|
)
|
|
$
|
897,853
|
|
|
|
Earnings (Loss) From Continuing Operations Before Income Tax
|
$
|
91,515
|
|
|
$
|
102,593
|
|
|
$
|
25,522
|
|
|
$
|
(77,695
|
)
|
|
$
|
141,935
|
|
|
$
|
63,329
|
|
|
$
|
584,268
|
|
|
$
|
—
|
|
|
$
|
789,532
|
|
|
|
Segment Assets
|
|
|
|
|
|
|
|
|
$
|
6,055,545
|
|
|
$
|
1,830,007
|
|
|
$
|
333,372
|
|
|
$
|
(11,166
|
)
|
|
$
|
8,207,758
|
|
(C)
|
|||||||||
Depreciation, Depletion and Amortization
|
|
|
|
|
|
|
|
|
$
|
226,991
|
|
|
$
|
16,763
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
243,754
|
|
|
|||||||||
Capital Expenditures
|
|
|
|
|
|
|
|
|
$
|
455,397
|
|
|
$
|
41,262
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
496,659
|
|
|
(A)
|
Included in Total Natural Gas, NGLs and Oil Revenue are sales of
$115,845
to NJR Energy Services Company and
$92,571
to Direct Energy Business Marketing LLC, each of which comprises over 10% of sales.
|
(B)
|
Includes equity in earnings of unconsolidated affiliates of
$3,447
for Total E&P
|
(C)
|
Includes investments in unconsolidated equity affiliates of
$22,347
for Total E&P.
|
|
Marcellus
Shale |
|
Utica Shale
|
|
Coalbed Methane
|
|
Other
Gas |
|
Total
E&P |
|
Unallocated
|
|
Consolidated
|
|
||||||||||||||
Natural Gas, NGLs and Oil Revenue
|
$
|
343,599
|
|
|
$
|
93,118
|
|
|
$
|
110,600
|
|
|
$
|
30,752
|
|
|
$
|
578,069
|
|
|
$
|
—
|
|
|
$
|
578,069
|
|
(D)
|
Purchased Gas Revenue
|
—
|
|
|
—
|
|
|
—
|
|
|
19,294
|
|
|
19,294
|
|
|
—
|
|
|
19,294
|
|
|
|||||||
(Loss) Gain on Commodity Derivative Instruments
|
(54,210
|
)
|
|
(4,751
|
)
|
|
(15,987
|
)
|
|
136,273
|
|
|
61,325
|
|
|
—
|
|
|
61,325
|
|
|
|||||||
Other Operating Income
|
—
|
|
|
—
|
|
|
—
|
|
|
32,308
|
|
|
32,308
|
|
|
—
|
|
|
32,308
|
|
|
|||||||
Total Revenue and Other Operating Income
|
$
|
289,389
|
|
|
$
|
88,367
|
|
|
$
|
94,613
|
|
|
$
|
218,627
|
|
|
$
|
690,996
|
|
|
$
|
—
|
|
|
$
|
690,996
|
|
|
Earnings (Loss) From Continuing Operations Before Income Tax
|
$
|
46,380
|
|
|
$
|
26,870
|
|
|
$
|
3,572
|
|
|
$
|
(165,298
|
)
|
|
$
|
(88,476
|
)
|
|
$
|
129,813
|
|
|
$
|
41,337
|
|
(E)
|
Segment Assets
|
|
|
|
|
|
|
|
|
$
|
6,194,820
|
|
|
$
|
2,830,375
|
|
|
$
|
9,025,195
|
|
(F)
|
||||||||
Depreciation, Depletion and Amortization
|
|
|
|
|
|
|
|
|
$
|
187,318
|
|
|
$
|
—
|
|
|
$
|
187,318
|
|
|
||||||||
Capital Expenditures
|
|
|
|
|
|
|
|
|
$
|
249,962
|
|
|
$
|
—
|
|
|
$
|
249,962
|
|
|
(D)
|
Included in Total Natural Gas, NGLs and Oil Revenue are sales of
$91,763
to NJR Energy Services Company and
$86,639
to Direct Energy Business Marketing LLC, each of which comprises over 10% of sales.
|
(E)
|
Includes equity in earnings of unconsolidated affiliates of
$22,385
for Total E&P.
|
(F)
|
Includes investments in unconsolidated equity affiliates of
$188,649
for Total E&P.
|
|
For the Three Months Ended June 30,
|
|
For the Six Months Ended June 30,
|
||||||||||||
2018
|
|
2017
|
|
2018
|
|
2017
|
|||||||||
Total Segment Revenue from Contracts with External Customers
|
$
|
367,930
|
|
|
$
|
270,622
|
|
|
$
|
817,862
|
|
|
$
|
597,363
|
|
Gain on Commodity Derivative Instruments
|
25,660
|
|
|
83,788
|
|
|
60,747
|
|
|
61,325
|
|
||||
Other Operating Income
|
8,534
|
|
|
16,658
|
|
|
19,244
|
|
|
32,308
|
|
||||
Total Consolidated Revenue and Other Operating Income
|
$
|
402,124
|
|
|
$
|
371,068
|
|
|
$
|
897,853
|
|
|
$
|
690,996
|
|
|
For the Three Months Ended June 30,
|
|
For the Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Segment Income (Loss) Before Income Taxes for reportable business segments:
|
|
|
|
|
|
|
|
||||||||
Total E&P
|
$
|
42,125
|
|
|
$
|
50,695
|
|
|
$
|
141,935
|
|
|
$
|
(88,476
|
)
|
Midstream
|
27,795
|
|
|
—
|
|
|
63,329
|
|
|
—
|
|
||||
Total Segment Income (Loss) Before Income Taxes for reportable business segments
|
69,920
|
|
|
50,695
|
|
|
205,264
|
|
|
(88,476
|
)
|
||||
Unallocated Expenses:
|
|
|
|
|
|
|
|
||||||||
Other (Expense) Income
|
(575
|
)
|
|
(5,475
|
)
|
|
5,917
|
|
|
$
|
(9,550
|
)
|
|||
Gain on Certain Asset Sales
|
3,010
|
|
|
134,581
|
|
|
12,386
|
|
|
138,577
|
|
||||
Gain on Previously Held Equity Interest
|
—
|
|
|
—
|
|
|
623,663
|
|
|
—
|
|
||||
(Loss) Gain on Debt Extinguishment
|
(23,413
|
)
|
|
(36
|
)
|
|
(39,048
|
)
|
|
786
|
|
||||
Impairment of Other Intangible Assets
|
(18,650
|
)
|
|
—
|
|
|
(18,650
|
)
|
|
—
|
|
||||
Income From Continuing Operations Before Income Tax
|
$
|
30,292
|
|
|
$
|
179,765
|
|
|
$
|
789,532
|
|
|
$
|
41,337
|
|
|
June 30,
|
||||||
2018
|
|
2017
|
|||||
Segment assets for total reportable business segments
|
|
|
|
||||
E&P
|
$
|
6,055,545
|
|
|
$
|
6,194,820
|
|
Midstream
|
1,830,007
|
|
|
—
|
|
||
Intercompany Eliminations
|
(11,166
|
)
|
|
—
|
|
||
Items excluded from segment assets:
|
|
|
|
||||
Cash and Cash Equivalents
|
54,846
|
|
|
291,535
|
|
||
Recoverable Income Taxes
|
27,780
|
|
|
112,073
|
|
||
Deferred Income Taxes
|
—
|
|
|
—
|
|
||
Assets Held for Sale
|
250,746
|
|
|
—
|
|
||
Discontinued Operations
|
—
|
|
|
2,426,767
|
|
||
Total Consolidated Assets
|
$
|
8,207,758
|
|
|
$
|
9,025,195
|
|
December 31, 2017
|
$
|
—
|
|
Acquisitions
|
796,359
|
|
|
June 30, 2018
|
$
|
796,359
|
|
|
June 30, 2018
|
||
Other Intangible Assets
|
|
||
Customer Relationships
|
$
|
128,781
|
|
Less: Impairment of Other Intangible Assets
|
(18,650
|
)
|
|
Less: Accumulated Amortization for Customer Relationships
|
(3,655
|
)
|
|
Total Other Intangible Assets, net
|
$
|
106,476
|
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
||||||||||
Estimated Annual Amortization Expense
|
$
|
6,552
|
|
|
$
|
6,552
|
|
|
$
|
6,552
|
|
|
$
|
6,552
|
|
|
$
|
6,552
|
|
ITEM 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
|
2018
|
|
2019
|
|
Volumes Hedged (Bcf), as of 7/11/18
|
|
370.9*
|
|
333.7
|
|
|
For the Three Months Ended June 30,
|
||||||||||
(Dollars in thousands)
|
2018
|
|
2017
|
|
Variance
|
||||||
Income from Continuing Operations
|
$
|
61,394
|
|
|
$
|
121,807
|
|
|
$
|
(60,413
|
)
|
Income from Discontinued Operations, net
|
—
|
|
|
47,703
|
|
|
(47,703
|
)
|
|||
Net Income
|
$
|
61,394
|
|
|
$
|
169,510
|
|
|
$
|
(108,116
|
)
|
Less: Net Income Attributable to Noncontrolling Interest
|
19,380
|
|
|
—
|
|
|
19,380
|
|
|||
Net Income Attributable to CNX Resources Shareholders
|
$
|
42,014
|
|
|
$
|
169,510
|
|
|
$
|
(127,496
|
)
|
|
|
For the Three Months Ended June 30,
|
|||||||||||||
in thousands (unless noted)
|
|
2018
|
|
2017
|
|
Variance
|
|
Percent Change
|
|||||||
LIQUIDS
|
|
|
|
|
|
|
|
|
|||||||
NGLs:
|
|
|
|
|
|
|
|
|
|||||||
Sales Volume (MMcfe)
|
|
8,365
|
|
|
8,140
|
|
|
225
|
|
|
2.8
|
%
|
|||
Sales Volume (Mbbls)
|
|
1,394
|
|
|
1,357
|
|
|
37
|
|
|
2.7
|
%
|
|||
Gross Price ($/Bbl)
|
|
$
|
28.38
|
|
|
$
|
15.96
|
|
|
$
|
12.42
|
|
|
77.8
|
%
|
Gross Revenue
|
|
$
|
39,557
|
|
|
$
|
21,637
|
|
|
$
|
17,920
|
|
|
82.8
|
%
|
|
|
|
|
|
|
|
|
|
|||||||
Oil:
|
|
|
|
|
|
|
|
|
|||||||
Sales Volume (MMcfe)
|
|
69
|
|
|
132
|
|
|
(63
|
)
|
|
(47.7
|
)%
|
|||
Sales Volume (Mbbls)
|
|
11
|
|
|
22
|
|
|
(11
|
)
|
|
(50.0
|
)%
|
|||
Gross Price ($/Bbl)
|
|
$
|
58.32
|
|
|
$
|
48.18
|
|
|
$
|
10.14
|
|
|
21.0
|
%
|
Gross Revenue
|
|
$
|
670
|
|
|
$
|
1,061
|
|
|
$
|
(391
|
)
|
|
(36.9
|
)%
|
|
|
|
|
|
|
|
|
|
|||||||
Condensate:
|
|
|
|
|
|
|
|
|
|||||||
Sales Volume (MMcfe)
|
|
528
|
|
|
682
|
|
|
(154
|
)
|
|
(22.6
|
)%
|
|||
Sales Volume (Mbbls)
|
|
88
|
|
|
114
|
|
|
(26
|
)
|
|
(22.8
|
)%
|
|||
Gross Price ($/Bbl)
|
|
$
|
56.82
|
|
|
$
|
34.14
|
|
|
$
|
22.68
|
|
|
66.4
|
%
|
Gross Revenue
|
|
$
|
4,996
|
|
|
$
|
3,885
|
|
|
$
|
1,111
|
|
|
28.6
|
%
|
|
|
|
|
|
|
|
|
|
|||||||
GAS
|
|
|
|
|
|
|
|
|
|||||||
Sales Volume (MMcf)
|
|
113,599
|
|
|
83,266
|
|
|
30,333
|
|
|
36.4
|
%
|
|||
Sales Price ($/Mcf)
|
|
$
|
2.55
|
|
|
$
|
2.81
|
|
|
$
|
(0.26
|
)
|
|
(9.3
|
)%
|
Gross Revenue
|
|
$
|
289,294
|
|
|
$
|
233,723
|
|
|
$
|
55,571
|
|
|
23.8
|
%
|
|
|
|
|
|
|
|
|
|
|||||||
Hedging Impact ($/Mcf)
|
|
$
|
0.15
|
|
|
$
|
(0.39
|
)
|
|
$
|
0.54
|
|
|
(138.5
|
)%
|
Gain (Loss) on Commodity Derivative Instruments - Cash Settlement
|
|
$
|
16,684
|
|
|
$
|
(32,285
|
)
|
|
$
|
48,969
|
|
|
(151.7
|
)%
|
•
|
Transportation, gathering, and compression expense decreased on a per-unit basis primarily due to the
33.0%
increase in sales volumes, the shift towards dry Utica Shale production which has lower gathering costs and no processing costs, and a decrease in pipeline facility maintenance expense.
|
•
|
Depreciation, depletion and amortization decreased on a per-unit basis primarily due to a reduction in Marcellus and Utica rates as a result of an increase in the Company's associated reserves.
|
•
|
Lease operating expense decreased on a per-unit basis due to the overall increase in sales volumes, primarily Utica, in the 2018 period.
|
|
For the Three Months Ended June 30,
|
|||||||||||||
(in millions)
|
2018
|
|
2017
|
|
Variance
|
|
Percent
Change
|
|||||||
Other Income
|
|
|
|
|
|
|
|
|||||||
Interest Income
|
$
|
—
|
|
|
$
|
6
|
|
|
$
|
(6
|
)
|
|
(100.0
|
)%
|
Right of Way Sales
|
1
|
|
|
—
|
|
|
1
|
|
|
100.0
|
%
|
|||
Royalty Income
|
3
|
|
|
1
|
|
|
2
|
|
|
200.0
|
%
|
|||
Other
|
2
|
|
|
2
|
|
|
—
|
|
|
—
|
%
|
|||
Total Other Income
|
$
|
6
|
|
|
$
|
9
|
|
|
$
|
(3
|
)
|
|
(33.3
|
)%
|
|
|
|
|
|
|
|
|
|||||||
Other Expense
|
|
|
|
|
|
|
|
|||||||
Professional Services
|
$
|
1
|
|
|
$
|
10
|
|
|
$
|
(9
|
)
|
|
(90.0
|
)%
|
Bank Fees
|
3
|
|
|
3
|
|
|
—
|
|
|
—
|
%
|
|||
Other Land Rental Expense
|
1
|
|
|
—
|
|
|
1
|
|
|
100.0
|
%
|
|||
Other Corporate Expense
|
2
|
|
|
1
|
|
|
1
|
|
|
100.0
|
%
|
|||
Total Other Expense
|
$
|
7
|
|
|
$
|
14
|
|
|
$
|
(7
|
)
|
|
(50.0
|
)%
|
|
|
|
|
|
|
|
|
|||||||
Total Other Expense
|
$
|
1
|
|
|
$
|
5
|
|
|
$
|
(4
|
)
|
|
(80.0
|
)%
|
|
For the Three Months Ended June 30,
|
|||||||||||||
(in millions)
|
2018
|
|
2017
|
|
Variance
|
|
Percent
Change
|
|||||||
Total Company Earnings Before Income Tax
|
$
|
30
|
|
|
$
|
180
|
|
|
$
|
(150
|
)
|
|
(83.3
|
)%
|
Income Tax (Benefit) Expense
|
$
|
(31
|
)
|
|
$
|
58
|
|
|
$
|
(89
|
)
|
|
(153.7
|
)%
|
Effective Income Tax Rate
|
(102.7
|
)%
|
|
32.2
|
%
|
|
(134.9
|
)%
|
|
|
|
For the Three Months Ended
|
|
Difference to Three Months Ended
|
||||||||||||||||||||||||||||||||||||
|
June 30, 2018
|
|
June 30, 2017
|
||||||||||||||||||||||||||||||||||||
(in millions)
|
Marcellus
|
|
Utica
|
|
CBM
|
|
Other
Gas
|
|
Total E&P
|
|
Marcellus
|
|
Utica
|
|
CBM
|
|
Other
Gas
|
|
Total
E&P
|
||||||||||||||||||||
Natural Gas, NGLs and Oil Revenue
|
$
|
178
|
|
|
$
|
108
|
|
|
$
|
47
|
|
|
$
|
2
|
|
|
$
|
335
|
|
|
$
|
23
|
|
|
$
|
69
|
|
|
$
|
(5
|
)
|
|
$
|
(12
|
)
|
|
$
|
75
|
|
Gain (Loss) on Commodity Derivative Instruments
|
9
|
|
|
5
|
|
|
2
|
|
|
10
|
|
|
26
|
|
|
31
|
|
|
7
|
|
|
9
|
|
|
(105
|
)
|
|
(58
|
)
|
||||||||||
Purchased Gas Revenue
|
—
|
|
|
—
|
|
|
—
|
|
|
10
|
|
|
10
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||
Other Operating Income
|
—
|
|
|
—
|
|
|
—
|
|
|
8
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9
|
)
|
|
(9
|
)
|
||||||||||
Total Revenue and Other Operating Income
|
187
|
|
|
113
|
|
|
49
|
|
|
30
|
|
|
379
|
|
|
54
|
|
|
76
|
|
|
4
|
|
|
(126
|
)
|
|
8
|
|
||||||||||
Lease Operating Expense
|
11
|
|
|
9
|
|
|
5
|
|
|
—
|
|
|
25
|
|
|
4
|
|
|
4
|
|
|
(1
|
)
|
|
(3
|
)
|
|
4
|
|
||||||||||
Production, Ad Valorem, and Other Fees
|
5
|
|
|
2
|
|
|
2
|
|
|
(1
|
)
|
|
8
|
|
|
2
|
|
|
3
|
|
|
—
|
|
|
(2
|
)
|
|
3
|
|
||||||||||
Transportation, Gathering and Compression
|
73
|
|
|
16
|
|
|
11
|
|
|
1
|
|
|
101
|
|
|
17
|
|
|
6
|
|
|
(6
|
)
|
|
(3
|
)
|
|
14
|
|
||||||||||
Depreciation, Depletion and Amortization
|
51
|
|
|
40
|
|
|
19
|
|
|
1
|
|
|
111
|
|
|
—
|
|
|
26
|
|
|
(1
|
)
|
|
(6
|
)
|
|
19
|
|
||||||||||
Exploration and Production Related Other Costs
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(16
|
)
|
|
(16
|
)
|
||||||||||
Purchased Gas Costs
|
—
|
|
|
—
|
|
|
—
|
|
|
10
|
|
|
10
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||
Other Operating Expense
|
—
|
|
|
—
|
|
|
—
|
|
|
18
|
|
|
18
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
(4
|
)
|
||||||||||
Selling, General and Administrative Costs
|
—
|
|
|
—
|
|
|
—
|
|
|
29
|
|
|
29
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|
7
|
|
||||||||||
Total Operating Costs and Expenses
|
140
|
|
|
67
|
|
|
37
|
|
|
62
|
|
|
306
|
|
|
23
|
|
|
39
|
|
|
(8
|
)
|
|
(27
|
)
|
|
27
|
|
||||||||||
Interest Expense
|
—
|
|
|
—
|
|
|
—
|
|
|
31
|
|
|
31
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10
|
)
|
|
(10
|
)
|
||||||||||
Total E&P Division Costs
|
140
|
|
|
67
|
|
|
37
|
|
|
93
|
|
|
337
|
|
|
23
|
|
|
39
|
|
|
(8
|
)
|
|
(37
|
)
|
|
17
|
|
||||||||||
Earnings (Loss) Before Income Tax
|
$
|
47
|
|
|
$
|
46
|
|
|
$
|
12
|
|
|
$
|
(63
|
)
|
|
$
|
42
|
|
|
$
|
31
|
|
|
$
|
37
|
|
|
$
|
12
|
|
|
$
|
(89
|
)
|
|
$
|
(9
|
)
|
|
For the Three Months Ended June 30,
|
|||||||||||||
|
2018
|
|
2017
|
|
Variance
|
|
Percent
Change
|
|||||||
Marcellus Gas Sales Volumes (Bcf)
|
58.0
|
|
|
51.1
|
|
|
6.9
|
|
|
13.5
|
%
|
|||
NGLs Sales Volumes (Bcfe)*
|
6.3
|
|
|
5.4
|
|
|
0.9
|
|
|
16.7
|
%
|
|||
Condensate Sales Volumes (Bcfe)*
|
0.4
|
|
|
0.4
|
|
|
—
|
|
|
—
|
%
|
|||
Total Marcellus Sales Volumes (Bcfe)*
|
64.7
|
|
|
56.9
|
|
|
7.8
|
|
|
13.7
|
%
|
|||
|
|
|
|
|
|
|
|
|
||||||
Average Sales Price - Gas (per Mcf)
|
$
|
2.47
|
|
|
$
|
2.71
|
|
|
$
|
(0.24
|
)
|
|
(8.9
|
)%
|
Loss on Commodity Derivative Instruments - Cash Settlement - Gas (per Mcf)
|
$
|
0.16
|
|
|
$
|
(0.42
|
)
|
|
$
|
0.58
|
|
|
138.1
|
%
|
Average Sales Price - NGLs (per Mcfe)*
|
$
|
4.95
|
|
|
$
|
2.56
|
|
|
$
|
2.39
|
|
|
93.4
|
%
|
Average Sales Price - Condensate (per Mcfe)*
|
$
|
9.32
|
|
|
$
|
5.91
|
|
|
$
|
3.41
|
|
|
57.7
|
%
|
|
|
|
|
|
|
|
|
|
||||||
Total Average Marcellus Sales Price (per Mcfe)
|
$
|
2.90
|
|
|
$
|
2.34
|
|
|
$
|
0.56
|
|
|
23.9
|
%
|
Average Marcellus Lease Operating Expenses (per Mcfe)
|
0.16
|
|
|
0.12
|
|
|
0.04
|
|
|
33.3
|
%
|
|||
Average Marcellus Production, Ad Valorem, and Other Fees (per Mcfe)
|
0.07
|
|
|
0.04
|
|
|
0.03
|
|
|
75.0
|
%
|
|||
Average Marcellus Transportation, Gathering and Compression costs (per Mcfe)
|
1.13
|
|
|
0.98
|
|
|
0.15
|
|
|
15.3
|
%
|
|||
Average Marcellus Depreciation, Depletion and Amortization costs (per Mcfe)
|
0.81
|
|
|
0.91
|
|
|
(0.10
|
)
|
|
(11.0
|
)%
|
|||
Total Average Marcellus Costs (per Mcfe)
|
$
|
2.17
|
|
|
$
|
2.05
|
|
|
$
|
0.12
|
|
|
5.9
|
%
|
Average Margin for Marcellus (per Mcfe)
|
$
|
0.73
|
|
|
$
|
0.29
|
|
|
$
|
0.44
|
|
|
151.7
|
%
|
|
For the Three Months Ended June 30,
|
|||||||||||||
|
2018
|
|
2017
|
|
Variance
|
|
Percent
Change
|
|||||||
Utica Gas Sales Volumes (Bcf)
|
40.4
|
|
|
10.7
|
|
|
29.7
|
|
|
277.6
|
%
|
|||
NGLs Sales Volumes (Bcfe)*
|
2.1
|
|
|
2.7
|
|
|
(0.6
|
)
|
|
(22.2
|
)%
|
|||
Oil Sales Volumes (Bcfe)*
|
—
|
|
|
0.1
|
|
|
(0.1
|
)
|
|
(100.0
|
)%
|
|||
Condensate Sales Volumes (Bcfe)*
|
0.1
|
|
|
0.3
|
|
|
(0.2
|
)
|
|
(66.7
|
)%
|
|||
Total Utica Sales Volumes (Bcfe)*
|
42.6
|
|
|
13.8
|
|
|
28.8
|
|
|
208.7
|
%
|
|||
|
|
|
|
|
|
|
|
|||||||
Average Sales Price - Gas (per Mcf)
|
$
|
2.43
|
|
|
$
|
2.75
|
|
|
$
|
(0.32
|
)
|
|
(11.6
|
)%
|
Gain (Loss) on Commodity Derivative Instruments - Cash Settlement - Gas (per Mcf)
|
$
|
0.13
|
|
|
$
|
(0.19
|
)
|
|
$
|
0.32
|
|
|
168.4
|
%
|
Average Sales Price - NGLs (per Mcfe)*
|
$
|
4.05
|
|
|
$
|
2.84
|
|
|
$
|
1.21
|
|
|
42.6
|
%
|
Average Sales Price - Oil (per Mcfe)*
|
$
|
9.37
|
|
|
$
|
7.64
|
|
|
$
|
1.73
|
|
|
22.6
|
%
|
Average Sales Price - Condensate (per Mcfe)*
|
$
|
9.92
|
|
|
$
|
5.45
|
|
|
$
|
4.47
|
|
|
82.0
|
%
|
|
|
|
|
|
|
|
|
|||||||
Total Average Utica Sales Price (per Mcfe)
|
$
|
2.66
|
|
|
$
|
2.70
|
|
|
$
|
(0.04
|
)
|
|
(1.5
|
)%
|
Average Utica Lease Operating Expenses (per Mcfe)
|
0.21
|
|
|
0.36
|
|
|
(0.15
|
)
|
|
(41.7
|
)%
|
|||
Average Utica Production, Ad Valorem, and Other Fees (per Mcfe)
|
0.03
|
|
|
(0.04
|
)
|
|
0.07
|
|
|
175.0
|
%
|
|||
Average Utica Transportation, Gathering and Compression Costs (per Mcfe)
|
0.38
|
|
|
0.73
|
|
|
(0.35
|
)
|
|
(47.9
|
)%
|
|||
Average Utica Depreciation, Depletion and Amortization Costs (per Mcfe)
|
0.95
|
|
|
0.99
|
|
|
(0.04
|
)
|
|
(4.0
|
)%
|
|||
Total Average Utica Costs (per Mcfe)
|
$
|
1.57
|
|
|
$
|
2.04
|
|
|
$
|
(0.47
|
)
|
|
(23.0
|
)%
|
Average Margin for Utica (per Mcfe)
|
$
|
1.09
|
|
|
$
|
0.66
|
|
|
$
|
0.43
|
|
|
65.2
|
%
|
|
For the Three Months Ended June 30,
|
|||||||||||||
|
2018
|
|
2017
|
|
Variance
|
|
Percent
Change
|
|||||||
CBM Gas Sales Volumes (Bcf)
|
14.8
|
|
|
16.5
|
|
|
(1.7
|
)
|
|
(10.3
|
)%
|
|||
|
|
|
|
|
|
|
|
|||||||
Average Sales Price - Gas (per Mcf)
|
$
|
3.17
|
|
|
$
|
3.15
|
|
|
$
|
0.02
|
|
|
0.6
|
%
|
Gain (Loss) on Commodity Derivative Instruments - Cash Settlement - Gas (per Mcf)
|
$
|
0.15
|
|
|
$
|
(0.41
|
)
|
|
$
|
0.56
|
|
|
136.6
|
%
|
|
|
|
|
|
|
|
|
|||||||
Total Average CBM Sales Price (per Mcf)
|
$
|
3.31
|
|
|
$
|
2.74
|
|
|
$
|
0.57
|
|
|
20.8
|
%
|
Average CBM Lease Operating Expenses (per Mcf)
|
0.36
|
|
|
0.37
|
|
|
(0.01
|
)
|
|
(2.7
|
)%
|
|||
Average CBM Production, Ad Valorem, and Other Fees (per Mcf)
|
0.11
|
|
|
0.11
|
|
|
—
|
|
|
—
|
%
|
|||
Average CBM Transportation, Gathering and Compression Costs (per Mcf)
|
0.77
|
|
|
1.01
|
|
|
(0.24
|
)
|
|
(23.8
|
)%
|
|||
Average CBM Depreciation, Depletion and Amortization Costs (per Mcf)
|
1.23
|
|
|
1.25
|
|
|
(0.02
|
)
|
|
(1.6
|
)%
|
|||
Total Average CBM Costs (per Mcf)
|
$
|
2.47
|
|
|
$
|
2.74
|
|
|
$
|
(0.27
|
)
|
|
(9.9
|
)%
|
Average Margin for CBM (per Mcf)
|
$
|
0.84
|
|
|
$
|
—
|
|
|
$
|
0.84
|
|
|
100.0
|
%
|
|
For the Three Months Ended June 30,
|
|||||||||||||
|
2018
|
|
2017
|
|
Variance
|
|
Percent
Change |
|||||||
Other Gas Sales Volumes (Bcf)
|
0.4
|
|
|
4.9
|
|
|
(4.5
|
)
|
|
(91.8
|
)%
|
|||
Oil Sales Volumes (Bcfe)*
|
0.1
|
|
|
0.1
|
|
|
—
|
|
|
—
|
%
|
|||
Total Other Sales Volumes (Bcfe)*
|
0.5
|
|
|
5.0
|
|
|
(4.5
|
)
|
|
(90.0
|
)%
|
|||
|
|
|
|
|
|
|
|
|||||||
Average Sales Price - Gas (per Mcf)
|
$
|
2.66
|
|
|
$
|
2.83
|
|
|
$
|
(0.17
|
)
|
|
(6.0
|
)%
|
Gain on Commodity Derivative Instruments - Cash Settlement - Gas (per Mcf)
|
$
|
0.08
|
|
|
$
|
(0.38
|
)
|
|
$
|
0.46
|
|
|
121.1
|
%
|
Average Sales Price - Oil (per Mcfe)*
|
$
|
9.79
|
|
|
$
|
8.55
|
|
|
$
|
1.24
|
|
|
14.5
|
%
|
|
|
|
|
|
|
|
|
|||||||
Total Average Other Sales Price (per Mcfe)
|
$
|
3.65
|
|
|
$
|
2.51
|
|
|
$
|
1.14
|
|
|
45.4
|
%
|
Average Other Lease Operating Expenses (per Mcfe)
|
1.01
|
|
|
0.60
|
|
|
0.41
|
|
|
68.3
|
%
|
|||
Average Other Production, Ad Valorem, and Other Fees (per Mcfe)
|
(0.71
|
)
|
|
0.14
|
|
|
(0.85
|
)
|
|
(607.1
|
)%
|
|||
Average Other Transportation, Gathering and Compression Costs (per Mcfe)
|
0.41
|
|
|
0.83
|
|
|
(0.42
|
)
|
|
(50.6
|
)%
|
|||
Average Other Depreciation, Depletion and Amortization Costs (per Mcfe)
|
0.72
|
|
|
0.99
|
|
|
(0.27
|
)
|
|
(27.3
|
)%
|
|||
Total Average Other Costs (per Mcfe)
|
$
|
1.43
|
|
|
$
|
2.56
|
|
|
$
|
(1.13
|
)
|
|
(44.1
|
)%
|
Average Margin for Other (per Mcfe)
|
$
|
2.22
|
|
|
$
|
(0.05
|
)
|
|
$
|
2.27
|
|
|
4,540.0
|
%
|
|
For the Three Months Ended June 30,
|
|||||||||||||
|
2018
|
|
2017
|
|
Variance
|
|
Percent
Change |
|||||||
Purchased Gas Sales Volumes (in Bcfe)
|
3.5
|
|
|
3.3
|
|
|
0.2
|
|
|
6.1
|
%
|
|||
Average Sales Price (per Mcfe)
|
$
|
2.82
|
|
|
$
|
3.14
|
|
|
$
|
(0.32
|
)
|
|
(10.2
|
)%
|
Average Cost (per Mcfe)
|
$
|
2.77
|
|
|
$
|
3.11
|
|
|
$
|
(0.34
|
)
|
|
(10.9
|
)%
|
|
For the Three Months Ended June 30,
|
|||||||||||||
(in millions)
|
2018
|
|
2017
|
|
Variance
|
|
Percent
Change |
|||||||
Equity in Earnings of Affiliates
|
$
|
2
|
|
|
$
|
10
|
|
|
$
|
(8
|
)
|
|
(80.0
|
)%
|
Gathering Income
|
2
|
|
|
3
|
|
|
(1
|
)
|
|
(33.3
|
)%
|
|||
Water Income
|
4
|
|
|
1
|
|
|
3
|
|
|
300.0
|
%
|
|||
Other
|
—
|
|
|
3
|
|
|
(3
|
)
|
|
(100.0
|
)%
|
|||
Total Other Operating Income
|
$
|
8
|
|
|
$
|
17
|
|
|
$
|
(9
|
)
|
|
(52.9
|
)%
|
•
|
Equity in Earnings of Affiliates
decreased
$8
million primarily due to the acquisition and consolidation of CNXM in the current year. See Note 6 - Acquisitions and Dispositions in the Notes to the Unaudited Consolidated Financial Statements in Item 1 of this Form 10-Q for additional information.
|
•
|
Water income
increased
$3
million due to increased sales of freshwater to third parties for hydraulic fracturing.
|
|
For the Three Months Ended June 30,
|
|||||||||||||
(in millions)
|
2018
|
|
2017
|
|
Variance
|
|
Percent
Change
|
|||||||
Lease Expiration Costs
|
$
|
1
|
|
|
$
|
19
|
|
|
$
|
(18
|
)
|
|
(94.7
|
)%
|
Land Rentals
|
1
|
|
|
1
|
|
|
—
|
|
|
—
|
%
|
|||
Other
|
2
|
|
|
—
|
|
|
2
|
|
|
100.0
|
%
|
|||
Total Exploration and Production Other Costs
|
$
|
4
|
|
|
$
|
20
|
|
|
$
|
(16
|
)
|
|
(80.0
|
)%
|
•
|
Lease Expiration Costs relate to leases where the primary term expired. The
$18
million
decrease
in the
three months
ended
June 30, 2018
was primarily due to leases in both Monroe and Noble County, Ohio that were no longer in the Company's future drilling plans therefore were not renewed in the 2017 period.
|
|
For the Three Months Ended June 30,
|
|||||||||||||
|
2018
|
|
2017
|
|
Variance
|
|
Percent
Change |
|||||||
Idle Rig Expense
|
$
|
1
|
|
|
$
|
4
|
|
|
$
|
(3
|
)
|
|
(75.0
|
)%
|
Unutilized Firm Transportation and Processing Fees
|
10
|
|
|
12
|
|
|
(2
|
)
|
|
(16.7
|
)%
|
|||
Insurance Expense
|
1
|
|
|
1
|
|
|
—
|
|
|
—
|
%
|
|||
Other
|
6
|
|
|
5
|
|
|
1
|
|
|
20.0
|
%
|
|||
Total Other Operating Expense
|
$
|
18
|
|
|
$
|
22
|
|
|
$
|
(4
|
)
|
|
(18.2
|
)%
|
•
|
Unutilized Firm Transportation and Processing Fees represent pipeline transportation capacity obtained to enable gas production to flow uninterrupted as sales volumes increase, as well as additional processing capacity for NGLs. The
decrease
in the period-to-period comparison was primarily due to the increase in the utilization of capacity. The Company attempts to minimize this expense by releasing (selling) unutilized firm transportation capacity to other parties when possible and when beneficial. The revenue received when this capacity is released (sold) is included in Gathering Income in other operating income above.
|
•
|
Idle Rig Expense relates to the temporary idling of some of the Company's natural gas rigs. The total idle rig expense incurred by the Company decreased
$3
million for the current quarter compared to the prior year quarter due to contacts that expired in the current period.
|
|
For the Three Months Ended
|
||
(in millions)
|
June 30, 2018
|
||
Midstream Revenue - Related Party
|
$
|
38
|
|
Midstream Revenue - Third Party
|
23
|
|
|
Total Revenue
|
$
|
61
|
|
|
|
||
Transportation, Gathering and Compression
|
$
|
12
|
|
Depreciation, Depletion and Amortization
|
8
|
|
|
Selling, General, and Administrative Costs
|
6
|
|
|
Total Operating Costs and Expenses
|
26
|
|
|
Interest Expense
|
7
|
|
|
Total Midstream Division Costs
|
33
|
|
|
Earnings Before Income Tax
|
$
|
28
|
|
|
TOTAL
|
|
Dry Gas (BBtu/d) (**)
|
698
|
|
Wet Gas (BBtu/d) (**)
|
653
|
|
Condensate (MMcfe/d)
|
9
|
|
Total Gathered Volumes
|
1,360
|
|
|
For the Six Months Ended June 30,
|
||||||||||
(Dollars in thousands)
|
2018
|
|
2017
|
|
Variance
|
||||||
Income from Continuing Operations
|
$
|
606,940
|
|
|
$
|
30,801
|
|
|
$
|
576,139
|
|
Income from Discontinued Operations, net
|
—
|
|
|
99,743
|
|
|
(99,743
|
)
|
|||
Net Income
|
$
|
606,940
|
|
|
$
|
130,544
|
|
|
$
|
476,396
|
|
Less: Net Income Attributable to Noncontrolling Interest
|
37,363
|
|
|
—
|
|
|
37,363
|
|
|||
Net Income Attributable to CNX Resources Shareholders
|
$
|
569,577
|
|
|
$
|
130,544
|
|
|
$
|
439,033
|
|
|
|
For the Six Months Ended June 30,
|
|||||||||||||
in thousands (unless noted)
|
|
2018
|
|
2017
|
|
Variance
|
|
Percent Change
|
|||||||
LIQUIDS
|
|
|
|
|
|
|
|
|
|||||||
NGLs:
|
|
|
|
|
|
|
|
|
|||||||
Sales Volume (MMcfe)
|
|
19,474
|
|
|
16,219
|
|
|
3,255
|
|
|
20.1
|
%
|
|||
Sales Volume (Mbbls)
|
|
3,246
|
|
|
2,703
|
|
|
543
|
|
|
20.1
|
%
|
|||
Gross Price ($/Bbl)
|
|
$
|
27.84
|
|
|
$
|
22.56
|
|
|
$
|
5.28
|
|
|
23.4
|
%
|
Gross Revenue
|
|
$
|
90,441
|
|
|
$
|
60,920
|
|
|
$
|
29,521
|
|
|
48.5
|
%
|
|
|
|
|
|
|
|
|
|
|||||||
Oil:
|
|
|
|
|
|
|
|
|
|||||||
Sales Volume (MMcfe)
|
|
163
|
|
|
217
|
|
|
(54
|
)
|
|
(24.9
|
)%
|
|||
Sales Volume (Mbbls)
|
|
27
|
|
|
36
|
|
|
(9
|
)
|
|
(25.0
|
)%
|
|||
Gross Price ($/Bbl)
|
|
$
|
57.24
|
|
|
$
|
46.68
|
|
|
$
|
10.56
|
|
|
22.6
|
%
|
Gross Revenue
|
|
$
|
1,558
|
|
|
$
|
1,690
|
|
|
$
|
(132
|
)
|
|
(7.8
|
)%
|
|
|
|
|
|
|
|
|
|
|||||||
Condensate:
|
|
|
|
|
|
|
|
|
|||||||
Sales Volume (MMcfe)
|
|
1,319
|
|
|
1,445
|
|
|
(126
|
)
|
|
(8.7
|
)%
|
|||
Sales Volume (Mbbls)
|
|
220
|
|
|
241
|
|
|
(21
|
)
|
|
(8.7
|
)%
|
|||
Gross Price ($/Bbl)
|
|
$
|
52.32
|
|
|
$
|
34.02
|
|
|
$
|
18.30
|
|
|
53.8
|
%
|
Gross Revenue
|
|
$
|
11,499
|
|
|
$
|
8,189
|
|
|
$
|
3,310
|
|
|
40.4
|
%
|
|
|
|
|
|
|
|
|
|
|||||||
GAS
|
|
|
|
|
|
|
|
|
|||||||
Sales Volume (MMcf)
|
|
231,114
|
|
|
169,364
|
|
|
61,750
|
|
|
36.5
|
%
|
|||
Sales Price ($/Mcf)
|
|
$
|
2.75
|
|
|
$
|
3.00
|
|
|
$
|
(0.25
|
)
|
|
(8.3
|
)%
|
Gross Revenue
|
|
$
|
636,642
|
|
|
$
|
507,270
|
|
|
$
|
129,372
|
|
|
25.5
|
%
|
|
|
|
|
|
|
|
|
|
|||||||
Hedging Impact ($/Mcf)
|
|
$
|
—
|
|
|
$
|
(0.47
|
)
|
|
$
|
0.47
|
|
|
(100.0
|
)%
|
Loss on Commodity Derivative Instruments - Cash Settlement
|
|
$
|
(307
|
)
|
|
$
|
(79,388
|
)
|
|
$
|
79,081
|
|
|
(99.6
|
)%
|
•
|
Transportation, gathering, and compression expense decreased on a per-unit basis primarily due to the
34.7%
increase in sales volumes, as well as the shift towards dry Utica Shale production which has lower gathering costs and no processing costs, and a decrease in pipeline facility maintenance expense.
|
•
|
Depreciation, depletion and amortization decreased on a per-unit basis primarily due to a reduction in Marcellus and Utica rates as a result of an increase in the Company's associated reserves.
|
•
|
Lease operating expense increased on a per-unit basis primarily due to an increase in water disposal costs in the period-to-period comparison associated with the increase in sales volumes.
|
|
For the Six Months Ended June 30,
|
|||||||||||||
(in millions)
|
2018
|
|
2017
|
|
Variance
|
|
Percent
Change
|
|||||||
Other Income
|
|
|
|
|
|
|
|
|||||||
Royalty Income
|
$
|
10
|
|
|
$
|
6
|
|
|
$
|
4
|
|
|
66.7
|
%
|
Right of Way Sales
|
4
|
|
|
1
|
|
|
3
|
|
|
300.0
|
%
|
|||
Interest Income
|
—
|
|
|
7
|
|
|
(7
|
)
|
|
(100.0
|
)%
|
|||
Other
|
4
|
|
|
3
|
|
|
1
|
|
|
33.3
|
%
|
|||
Total Other Income
|
$
|
18
|
|
|
$
|
17
|
|
|
$
|
1
|
|
|
5.9
|
%
|
|
|
|
|
|
|
|
|
|||||||
Other Expense
|
|
|
|
|
|
|
|
|||||||
Professional Services
|
$
|
5
|
|
|
$
|
16
|
|
|
$
|
(11
|
)
|
|
(68.8
|
)%
|
Bank Fees
|
5
|
|
|
6
|
|
|
(1
|
)
|
|
(16.7
|
)%
|
|||
Other Land Rental Expense
|
2
|
|
|
1
|
|
|
1
|
|
|
100.0
|
%
|
|||
Other Corporate Expense
|
—
|
|
|
4
|
|
|
(4
|
)
|
|
(100.0
|
)%
|
|||
Total Other Expense
|
$
|
12
|
|
|
$
|
27
|
|
|
$
|
(15
|
)
|
|
(55.6
|
)%
|
|
|
|
|
|
|
|
|
|||||||
Total Other (Income) Expense
|
$
|
(6
|
)
|
|
$
|
10
|
|
|
$
|
(16
|
)
|
|
(160.0
|
)%
|
|
For the Six Months Ended June 30,
|
|||||||||||||
(in millions)
|
2018
|
|
2017
|
|
Variance
|
|
Percent
Change
|
|||||||
Total Company Earnings Before Income Tax
|
$
|
790
|
|
|
$
|
41
|
|
|
$
|
749
|
|
|
1,826.8
|
%
|
Income Tax (Benefit) Expense
|
$
|
183
|
|
|
$
|
11
|
|
|
$
|
172
|
|
|
1,563.6
|
%
|
Effective Income Tax Rate
|
23.1
|
%
|
|
25.5
|
%
|
|
(2.4
|
)%
|
|
|
|
For the Six Months Ended
|
|
Difference to Six Months Ended
|
||||||||||||||||||||||||||||||||||||
|
June 30, 2018
|
|
June 30, 2017
|
||||||||||||||||||||||||||||||||||||
(in millions)
|
Marcellus
|
|
Utica
|
|
CBM
|
|
Other
Gas
|
|
Total E&P
|
|
Marcellus
|
|
Utica
|
|
CBM
|
|
Other
Gas
|
|
Total
E&P
|
||||||||||||||||||||
Natural Gas, NGLs and Oil Revenue
|
$
|
383
|
|
|
$
|
238
|
|
|
$
|
104
|
|
|
$
|
15
|
|
|
$
|
740
|
|
|
$
|
40
|
|
|
$
|
145
|
|
|
$
|
(7
|
)
|
|
$
|
(16
|
)
|
|
$
|
162
|
|
Gain (Loss) on Commodity Derivative Instruments
|
—
|
|
|
1
|
|
|
—
|
|
|
60
|
|
|
61
|
|
|
54
|
|
|
6
|
|
|
16
|
|
|
(76
|
)
|
|
—
|
|
||||||||||
Purchased Gas Revenue
|
—
|
|
|
—
|
|
|
—
|
|
|
28
|
|
|
28
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9
|
|
|
9
|
|
||||||||||
Other Operating Income
|
—
|
|
|
—
|
|
|
—
|
|
|
19
|
|
|
19
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(14
|
)
|
|
(14
|
)
|
||||||||||
Total Revenue and Other Operating Income
|
383
|
|
|
239
|
|
|
104
|
|
|
122
|
|
|
848
|
|
|
94
|
|
|
151
|
|
|
9
|
|
|
(97
|
)
|
|
157
|
|
||||||||||
Lease Operating Expense
|
27
|
|
|
21
|
|
|
12
|
|
|
2
|
|
|
62
|
|
|
12
|
|
|
12
|
|
|
—
|
|
|
(5
|
)
|
|
19
|
|
||||||||||
Production, Ad Valorem, and Other Fees
|
10
|
|
|
3
|
|
|
4
|
|
|
—
|
|
|
17
|
|
|
3
|
|
|
1
|
|
|
—
|
|
|
(1
|
)
|
|
3
|
|
||||||||||
Transportation, Gathering and Compression
|
150
|
|
|
32
|
|
|
26
|
|
|
4
|
|
|
212
|
|
|
33
|
|
|
11
|
|
|
(7
|
)
|
|
(6
|
)
|
|
31
|
|
||||||||||
Depreciation, Depletion and Amortization
|
104
|
|
|
80
|
|
|
36
|
|
|
7
|
|
|
227
|
|
|
—
|
|
|
51
|
|
|
(6
|
)
|
|
(5
|
)
|
|
40
|
|
||||||||||
Impairment of Exploration and Production Properties
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(138
|
)
|
|
(138
|
)
|
||||||||||
Exploration and Production Related Other Costs
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(24
|
)
|
|
(24
|
)
|
||||||||||
Purchased Gas Costs
|
—
|
|
|
—
|
|
|
—
|
|
|
27
|
|
|
27
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8
|
|
|
8
|
|
||||||||||
Other Operating Expense
|
—
|
|
|
—
|
|
|
—
|
|
|
34
|
|
|
34
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7
|
)
|
|
(7
|
)
|
||||||||||
Selling, General and Administrative Costs
|
—
|
|
|
—
|
|
|
—
|
|
|
54
|
|
|
54
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10
|
|
|
10
|
|
||||||||||
Total Operating Costs and Expenses
|
291
|
|
|
136
|
|
|
78
|
|
|
134
|
|
|
639
|
|
|
48
|
|
|
75
|
|
|
(13
|
)
|
|
(168
|
)
|
|
(58
|
)
|
||||||||||
Interest Expense
|
—
|
|
|
—
|
|
|
—
|
|
|
67
|
|
|
67
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(15
|
)
|
|
(15
|
)
|
||||||||||
Total E&P Division Costs
|
291
|
|
|
136
|
|
|
78
|
|
|
201
|
|
|
706
|
|
|
48
|
|
|
75
|
|
|
(13
|
)
|
|
(183
|
)
|
|
(73
|
)
|
||||||||||
Earnings (Loss) Before Income Tax
|
$
|
92
|
|
|
$
|
103
|
|
|
$
|
26
|
|
|
$
|
(79
|
)
|
|
$
|
142
|
|
|
$
|
46
|
|
|
$
|
76
|
|
|
$
|
22
|
|
|
$
|
86
|
|
|
$
|
230
|
|
|
For the Six Months Ended June 30,
|
|||||||||||||
|
2018
|
|
2017
|
|
Variance
|
|
Percent
Change
|
|||||||
Marcellus Gas Sales Volumes (Bcf)
|
114.1
|
|
|
104.0
|
|
|
10.1
|
|
|
9.7
|
%
|
|||
NGLs Sales Volumes (Bcfe)*
|
15.5
|
|
|
10.2
|
|
|
5.3
|
|
|
52.0
|
%
|
|||
Condensate Sales Volumes (Bcfe)*
|
1.0
|
|
|
0.7
|
|
|
0.3
|
|
|
42.9
|
%
|
|||
Total Marcellus Sales Volumes (Bcfe)*
|
130.6
|
|
|
114.9
|
|
|
15.7
|
|
|
13.7
|
%
|
|||
|
|
|
|
|
|
|
|
|
||||||
Average Sales Price - Gas (per Mcf)
|
$
|
2.66
|
|
|
$
|
2.92
|
|
|
$
|
(0.26
|
)
|
|
(8.9
|
)%
|
Loss on Commodity Derivative Instruments - Cash Settlement - Gas (per Mcf)
|
$
|
—
|
|
|
$
|
(0.52
|
)
|
|
$
|
0.52
|
|
|
100.0
|
%
|
Average Sales Price - NGLs (per Mcfe)*
|
$
|
4.60
|
|
|
$
|
3.50
|
|
|
$
|
1.10
|
|
|
31.4
|
%
|
Average Sales Price - Condensate (per Mcfe)*
|
$
|
8.73
|
|
|
$
|
5.67
|
|
|
$
|
3.06
|
|
|
54.0
|
%
|
|
|
|
|
|
|
|
|
|
||||||
Total Average Marcellus Sales Price (per Mcfe)
|
$
|
2.93
|
|
|
$
|
2.52
|
|
|
$
|
0.41
|
|
|
16.3
|
%
|
Average Marcellus Lease Operating Expenses (per Mcfe)
|
0.20
|
|
|
0.13
|
|
|
0.07
|
|
|
53.8
|
%
|
|||
Average Marcellus Production, Ad Valorem, and Other Fees (per Mcfe)
|
0.08
|
|
|
0.06
|
|
|
0.02
|
|
|
33.3
|
%
|
|||
Average Marcellus Transportation, Gathering and Compression costs (per Mcfe)
|
1.15
|
|
|
1.02
|
|
|
0.13
|
|
|
12.7
|
%
|
|||
Average Marcellus Depreciation, Depletion and Amortization costs (per Mcfe)
|
0.80
|
|
|
0.91
|
|
|
(0.11
|
)
|
|
(12.1
|
)%
|
|||
Total Average Marcellus Costs (per Mcfe)
|
$
|
2.23
|
|
|
$
|
2.12
|
|
|
$
|
0.11
|
|
|
5.2
|
%
|
Average Margin for Marcellus (per Mcfe)
|
$
|
0.70
|
|
|
$
|
0.40
|
|
|
$
|
0.30
|
|
|
75.0
|
%
|
|
For the Six Months Ended June 30,
|
|||||||||||||
|
2018
|
|
2017
|
|
Variance
|
|
Percent
Change
|
|||||||
Utica Gas Sales Volumes (Bcf)
|
81.9
|
|
|
22.3
|
|
|
59.6
|
|
|
267.3
|
%
|
|||
NGLs Sales Volumes (Bcfe)*
|
3.9
|
|
|
6.0
|
|
|
(2.1
|
)
|
|
(35.0
|
)%
|
|||
Oil Sales Volumes (Bcfe)*
|
—
|
|
|
0.1
|
|
|
(0.1
|
)
|
|
(100.0
|
)%
|
|||
Condensate Sales Volumes (Bcfe)*
|
0.3
|
|
|
0.7
|
|
|
(0.4
|
)
|
|
(57.1
|
)%
|
|||
Total Utica Sales Volumes (Bcfe)*
|
86.1
|
|
|
29.1
|
|
|
57.0
|
|
|
195.9
|
%
|
|||
|
|
|
|
|
|
|
|
|||||||
Average Sales Price - Gas (per Mcf)
|
$
|
2.64
|
|
|
$
|
2.83
|
|
|
$
|
(0.19
|
)
|
|
(6.7
|
)%
|
Gain (Loss) on Commodity Derivative Instruments - Cash Settlement- Gas (per Mcf)
|
$
|
0.01
|
|
|
$
|
(0.21
|
)
|
|
$
|
0.22
|
|
|
104.8
|
%
|
Average Sales Price - NGLs (per Mcfe)*
|
$
|
4.83
|
|
|
$
|
4.20
|
|
|
$
|
0.63
|
|
|
15.0
|
%
|
Average Sales Price - Oil (per Mcfe)*
|
$
|
8.60
|
|
|
$
|
7.67
|
|
|
$
|
0.93
|
|
|
12.1
|
%
|
Average Sales Price - Condensate (per Mcfe)*
|
$
|
8.68
|
|
|
$
|
5.66
|
|
|
$
|
3.02
|
|
|
53.4
|
%
|
|
|
|
|
|
|
|
|
|||||||
Total Average Utica Sales Price (per Mcfe)
|
$
|
2.78
|
|
|
$
|
3.03
|
|
|
$
|
(0.25
|
)
|
|
(8.3
|
)%
|
Average Utica Lease Operating Expenses (per Mcfe)
|
0.25
|
|
|
0.31
|
|
|
(0.06
|
)
|
|
(19.4
|
)%
|
|||
Average Utica Production, Ad Valorem, and Other Fees (per Mcfe)
|
0.04
|
|
|
0.06
|
|
|
(0.02
|
)
|
|
(33.3
|
)%
|
|||
Average Utica Transportation, Gathering and Compression Costs (per Mcfe)
|
0.37
|
|
|
0.71
|
|
|
(0.34
|
)
|
|
(47.9
|
)%
|
|||
Average Utica Depreciation, Depletion and Amortization Costs (per Mcfe)
|
0.93
|
|
|
1.03
|
|
|
(0.10
|
)
|
|
(9.7
|
)%
|
|||
Total Average Utica Costs (per Mcfe)
|
$
|
1.59
|
|
|
$
|
2.11
|
|
|
$
|
(0.52
|
)
|
|
(24.6
|
)%
|
Average Margin for Utica (per Mcfe)
|
$
|
1.19
|
|
|
$
|
0.92
|
|
|
$
|
0.27
|
|
|
29.3
|
%
|
|
For the Six Months Ended June 30,
|
|||||||||||||
|
2018
|
|
2017
|
|
Variance
|
|
Percent
Change
|
|||||||
CBM Gas Sales Volumes (Bcf)
|
30.7
|
|
|
33.2
|
|
|
(2.5
|
)
|
|
(7.5
|
)%
|
|||
|
|
|
|
|
|
|
|
|||||||
Average Sales Price - Gas (per Mcf)
|
$
|
3.40
|
|
|
$
|
3.34
|
|
|
$
|
0.06
|
|
|
1.8
|
%
|
Loss on Commodity Derivative Instruments - Cash Settlement - Gas (per Mcf)
|
$
|
(0.01
|
)
|
|
$
|
(0.48
|
)
|
|
$
|
0.47
|
|
|
97.9
|
%
|
|
|
|
|
|
|
|
|
|||||||
Total Average CBM Sales Price (per Mcf)
|
$
|
3.39
|
|
|
$
|
2.85
|
|
|
$
|
0.54
|
|
|
18.9
|
%
|
Average CBM Lease Operating Expenses (per Mcf)
|
0.39
|
|
|
0.37
|
|
|
0.02
|
|
|
5.4
|
%
|
|||
Average CBM Production, Ad Valorem, and Other Fees (per Mcf)
|
0.12
|
|
|
0.12
|
|
|
—
|
|
|
—
|
%
|
|||
Average CBM Transportation, Gathering and Compression Costs (per Mcf)
|
0.84
|
|
|
1.00
|
|
|
(0.16
|
)
|
|
(16.0
|
)%
|
|||
Average CBM Depreciation, Depletion and Amortization Costs (per Mcf)
|
1.21
|
|
|
1.25
|
|
|
(0.04
|
)
|
|
(3.2
|
)%
|
|||
Total Average CBM Costs (per Mcf)
|
$
|
2.56
|
|
|
$
|
2.74
|
|
|
$
|
(0.18
|
)
|
|
(6.6
|
)%
|
Average Margin for CBM (per Mcf)
|
$
|
0.83
|
|
|
$
|
0.11
|
|
|
$
|
0.72
|
|
|
654.5
|
%
|
|
For the Six Months Ended June 30,
|
|||||||||||||
|
2018
|
|
2017
|
|
Variance
|
|
Percent
Change |
|||||||
Other Gas Sales Volumes (Bcf)
|
4.6
|
|
|
9.9
|
|
|
(5.3
|
)
|
|
(53.5
|
)%
|
|||
Oil Sales Volumes (Bcfe)*
|
0.1
|
|
|
0.1
|
|
|
—
|
|
|
—
|
%
|
|||
Total Other Sales Volumes (Bcfe)*
|
4.7
|
|
|
10.0
|
|
|
(5.3
|
)
|
|
(53.0
|
)%
|
|||
|
|
|
|
|
|
|
|
|||||||
Average Sales Price - Gas (per Mcf)
|
$
|
2.89
|
|
|
$
|
3.01
|
|
|
$
|
(0.12
|
)
|
|
(4.0
|
)%
|
Loss on Commodity Derivative Instruments - Cash Settlement- Gas (per Mcf)
|
$
|
(0.12
|
)
|
|
$
|
(0.45
|
)
|
|
$
|
0.33
|
|
|
73.3
|
%
|
Average Sales Price - Oil (per Mcfe)*
|
$
|
9.86
|
|
|
$
|
7.86
|
|
|
$
|
2.00
|
|
|
25.4
|
%
|
|
|
|
|
|
|
|
|
|||||||
Total Average Other Sales Price (per Mcfe)
|
$
|
2.96
|
|
|
$
|
2.63
|
|
|
$
|
0.33
|
|
|
12.5
|
%
|
Average Other Lease Operating Expenses (per Mcfe)
|
0.52
|
|
|
0.62
|
|
|
(0.10
|
)
|
|
(16.1
|
)%
|
|||
Average Other Production, Ad Valorem, and Other Fees (per Mcfe)
|
0.03
|
|
|
0.14
|
|
|
(0.11
|
)
|
|
(78.6
|
)%
|
|||
Average Other Transportation, Gathering and Compression Costs (per Mcfe)
|
0.90
|
|
|
0.95
|
|
|
(0.05
|
)
|
|
(5.3
|
)%
|
|||
Average Other Depreciation, Depletion and Amortization Costs (per Mcfe)
|
0.64
|
|
|
1.03
|
|
|
(0.39
|
)
|
|
(37.9
|
)%
|
|||
Total Average Other Costs (per Mcfe)
|
$
|
2.09
|
|
|
$
|
2.74
|
|
|
$
|
(0.65
|
)
|
|
(23.7
|
)%
|
Average Margin for Other (per Mcfe)
|
$
|
0.87
|
|
|
$
|
(0.11
|
)
|
|
$
|
0.98
|
|
|
890.9
|
%
|
|
For the Six Months Ended June 30,
|
|||||||||||||
|
2018
|
|
2017
|
|
Variance
|
|
Percent
Change |
|||||||
Purchased Gas Sales Volumes (in Bcfe)
|
8.8
|
|
|
5.9
|
|
|
2.9
|
|
|
49.2
|
%
|
|||
Average Sales Price (per Mcfe)
|
$
|
3.19
|
|
|
$
|
3.28
|
|
|
$
|
(0.09
|
)
|
|
(2.7
|
)%
|
Average Cost (per Mcfe)
|
$
|
3.05
|
|
|
$
|
3.25
|
|
|
$
|
(0.20
|
)
|
|
(6.2
|
)%
|
|
For the Six Months Ended June 30,
|
|||||||||||||
(in millions)
|
2018
|
|
2017
|
|
Variance
|
|
Percent
Change |
|||||||
Equity in Earnings of Affiliates
|
$
|
3
|
|
|
$
|
22
|
|
|
$
|
(19
|
)
|
|
(86.4
|
)%
|
Gathering Income
|
5
|
|
|
6
|
|
|
(1
|
)
|
|
(16.7
|
)%
|
|||
Water Income
|
11
|
|
|
1
|
|
|
10
|
|
|
1,000.0
|
%
|
|||
Other
|
—
|
|
|
4
|
|
|
(4
|
)
|
|
(100.0
|
)%
|
|||
Total Other Operating Income
|
$
|
19
|
|
|
$
|
33
|
|
|
$
|
(14
|
)
|
|
(42.4
|
)%
|
•
|
Equity in Earnings of Affiliates
decreased
$19
million primarily due to the acquisition and consolidation of CNXM in the current year. See Note 6 - Acquisitions and Dispositions in the Notes to the Unaudited Consolidated Financial Statements in Item 1 of this Form 10-Q for additional information.
|
•
|
Water income
increased
$10
million due to increased sales of freshwater to third parties for hydraulic fracturing.
|
|
For the Six Months Ended June 30,
|
|||||||||||||
(in millions)
|
2018
|
|
2017
|
|
Variance
|
|
Percent
Change
|
|||||||
Lease Expiration Costs
|
$
|
2
|
|
|
$
|
27
|
|
|
$
|
(25
|
)
|
|
(92.6
|
)%
|
Land Rentals
|
2
|
|
|
2
|
|
|
—
|
|
|
—
|
%
|
|||
Other
|
2
|
|
|
1
|
|
|
1
|
|
|
100.0
|
%
|
|||
Total Exploration and Production Other Costs
|
$
|
6
|
|
|
$
|
30
|
|
|
$
|
(24
|
)
|
|
(80.0
|
)%
|
•
|
Lease Expiration Costs relate to leases where the primary term expired. The
$25
million
decrease
in the
six months
ended
June 30, 2018
was primarily due to leases in both Monroe and Noble County, Ohio that were no longer in the Company's future drilling plans so they were not renewed in the 2017 period.
|
|
For the Six Months Ended June 30,
|
|||||||||||||
|
2018
|
|
2017
|
|
Variance
|
|
Percent
Change |
|||||||
Unutilized Firm Transportation and Processing Fees
|
$
|
18
|
|
|
$
|
27
|
|
|
$
|
(9
|
)
|
|
(33.3
|
)%
|
Idle Rig Expense
|
4
|
|
|
5
|
|
|
(1
|
)
|
|
(20.0
|
)%
|
|||
Insurance Expense
|
2
|
|
|
1
|
|
|
1
|
|
|
100.0
|
%
|
|||
Severance Expense
|
1
|
|
|
—
|
|
|
1
|
|
|
100.0
|
%
|
|||
Other
|
9
|
|
|
8
|
|
|
1
|
|
|
12.5
|
%
|
|||
Total Other Operating Expense
|
$
|
34
|
|
|
$
|
41
|
|
|
$
|
(7
|
)
|
|
(17.1
|
)%
|
•
|
Unutilized Firm Transportation and Processing Fees represent pipeline transportation capacity obtained to enable gas production to flow uninterrupted as sales volumes increase, as well as additional processing capacity for NGLs. The
decrease
in the period-to-period comparison was primarily due to the increase in the utilization of capacity. The Company attempts to minimize this expense by releasing (selling) unutilized firm transportation capacity to other parties when possible and when beneficial. The revenue received when this capacity is released (sold) is included in Gathering Income in other operating income above.
|
(in millions)
|
For the period January 3, 2018 through June 30, 2018
|
||
Midstream Revenue - Related Party
|
$
|
76
|
|
Midstream Revenue - Third Party
|
50
|
|
|
Total Revenue
|
$
|
126
|
|
|
|
||
Transportation, Gathering and Compression
|
$
|
26
|
|
Depreciation, Depletion and Amortization
|
17
|
|
|
Selling, General, and Administrative Costs
|
12
|
|
|
Total Operating Costs and Expenses
|
55
|
|
|
Gain on Asset Sales
|
(2
|
)
|
|
Interest Expense
|
10
|
|
|
Total Midstream Division Costs
|
63
|
|
|
Earnings Before Income Tax
|
$
|
63
|
|
|
TOTAL
|
|
Dry Gas (BBtu/d) (**)
|
703
|
|
Wet Gas (BBtu/d) (**)
|
682
|
|
Condensate (MMcfe/d)
|
17
|
|
Total Gathered Volumes
|
1,402
|
|
|
For the Six Months Ended June 30,
|
||||||||||
|
2018
|
|
2017
|
|
Change
|
||||||
Cash Provided by Operating Activities
|
$
|
451
|
|
|
$
|
300
|
|
|
$
|
151
|
|
Cash (Used) Provided by in Investing Activities
|
$
|
(639
|
)
|
|
$
|
97
|
|
|
$
|
(736
|
)
|
Cash Used in Financing Activities
|
$
|
(266
|
)
|
|
$
|
(152
|
)
|
|
$
|
(114
|
)
|
•
|
Net income increased $476 million in the period-to-period comparison.
|
•
|
Adjustments to reconcile net income to cash provided by operating activities primarily consisted of a $624 million gain on previously held equity interest, a $179 million change in deferred income taxes, a $138 million decrease in impairment of exploration and production properties, a $128 million change in discontinued operations (See Note 5 - Discontinued Operations in the Notes to the Unaudited Consolidated Financial Statements included in Item 1 of this Form 10-Q for more information), a $80 million net change in commodity derivative instruments, a $40 million increase in the loss (gain) on debt extinguishment, and a $124 million change in gain on the sale of assets.
|
•
|
Capital expenditures increased $247 million in the period-to-period comparison primarily due to increased expenditures in both the Marcellus and Utica Shale plays resulting from increased drilling and completions activity.
|
•
|
In January 2018, CNX acquired Noble Energy's interest in CNX Gathering for a net payment of $299 million. See Note 6 - Acquisitions and Dispositions in the Notes to the Unaudited Consolidated Financial Statements in Item 1 of this Form 10-Q for additional information.
|
•
|
Proceeds from the sale of assets decreased $175 million primarily due to the sale of approximately 32,900 net undeveloped acres in Ohio, Pennsylvania, and West Virginia during the six months ended June 2017. This was partially offset by the proceeds received from the 2018 sale of our shallow oil and gas and CBM assets in Pennsylvania and West Virginia.
|
•
|
In the six months ended June 30, 2018, CNX repurchased $405 million of the 2022 bonds and $318 million of the 2023 bonds. CNXM also received proceeds of $394 million from long-term borrowings. In the six months ended June 30, 2017, CNX repurchased $117 million of the 2022 bonds. See Note 11 - Long-Term Debt in the Notes to the Unaudited Consolidated Financial Statements in Item 1 of this Form 10-Q for additional information.
|
•
|
In the six months ended June 30, 2018, CNX repurchased $167 million of its common stock on the open market. No repurchases were made in the six months ended June 30, 2017.
|
•
|
In the six months ended June 30, 2018, there were $422 million of borrowings on the CNX credit facility.
|
•
|
In the six months ended June 30, 2018, there were $139 million of net payments on the CNXM credit facility.
|
•
|
In the six months ended June 30, 2018, there were $27 million in distributions to CNXM unitholders.
|
•
|
In the six months ended June 30, 2018, there were $20 million in debt issuance and financing fees. These fees were negligible in the six months ended June 30, 2017.
|
•
|
Financing activities of discontinued operations changed $22 million. See Note 5 - Discontinued Operations in the Notes to the Unaudited Consolidated Financial Statements included in Item 1 of this Form 10-Q for more information.
|
|
Payments due by Year
|
||||||||||||||||||
|
Less Than
1 Year
|
|
1-3 Years
|
|
3-5 Years
|
|
More Than
5 Years
|
|
Total
|
||||||||||
Purchase Order Firm Commitments
|
$
|
57,788
|
|
|
$
|
122,130
|
|
|
$
|
41,202
|
|
|
$
|
—
|
|
|
$
|
221,120
|
|
Gas Firm Transportation and Processing
|
149,360
|
|
|
296,961
|
|
|
265,277
|
|
|
620,806
|
|
|
1,332,404
|
|
|||||
Long-Term Debt
|
—
|
|
|
—
|
|
|
1,948,003
|
|
|
394,251
|
|
|
2,342,254
|
|
|||||
Interest on Long-Term Debt
|
136,036
|
|
|
272,072
|
|
|
192,467
|
|
|
78,000
|
|
|
678,575
|
|
|||||
Capital (Finance) Lease Obligations
|
6,915
|
|
|
13,882
|
|
|
2,964
|
|
|
—
|
|
|
23,761
|
|
|||||
Interest on Capital (Finance) Lease Obligations
|
1,491
|
|
|
1,517
|
|
|
51
|
|
|
—
|
|
|
3,059
|
|
|||||
Operating Lease Obligations
|
9,607
|
|
|
13,325
|
|
|
10,756
|
|
|
38,477
|
|
|
72,165
|
|
|||||
Long-Term Liabilities—Employee Related (a)
|
1,870
|
|
|
3,940
|
|
|
4,318
|
|
|
25,636
|
|
|
35,764
|
|
|||||
Other Long-Term Liabilities (b)
|
185,887
|
|
|
29,604
|
|
|
—
|
|
|
7,606
|
|
|
223,097
|
|
|||||
Total Contractual Obligations (c)
|
$
|
548,954
|
|
|
$
|
753,431
|
|
|
$
|
2,465,038
|
|
|
$
|
1,164,776
|
|
|
$
|
4,932,199
|
|
(a)
|
Employee related long-term liabilities include salaried retirement contributions and work-related injuries and illnesses.
|
(b)
|
Other long-term liabilities include royalties and other long-term liability costs.
|
(c)
|
The significant obligation table does not include obligations to taxing authorities due to the uncertainty surrounding the ultimate settlement of amounts and timing of these obligations.
|
•
|
An aggregate principal amount of
$1,314
million
of
5.875%
Senior Notes due in April 2022 plus
$2
million of unamortized bond premium. Interest on the notes is payable April 15 and October 15 of each year. Payment of the principal and interest on the notes is guaranteed by most of CNX's subsidiaries.
|
•
|
An aggregate principal amount of $
400
million
of
6.50%
Senior Notes due in March 2026 issued by CNXM, less
$6
million of unamortized bond discount. Interest on the notes is payable March 15 and September 15 of each year. Payment of the principal and interest on the notes is guaranteed by certain of CNXM's subsidiaries. CNX is not a guarantor of these notes.
|
•
|
An aggregate principal amount of $
200
million
of
8.00%
Senior Notes due in April 2023 less
$2
million of unamortized bond discount. Interest on the notes is payable April 1 and October 1 of each year. Payment of the principal and interest on the notes is guaranteed by most of CNX’s subsidiaries.
|
•
|
An aggregate principal amount of $
11
million
in outstanding borrowings under the CNXM revolver. CNX is not a guarantor of CNXM's revolving credit facility.
|
•
|
An aggregate principal amount of $
24
million
of capital leases with a weighted average interest rate of
7.11%
per annum.
|
•
|
prices for natural gas and natural gas liquids are volatile and can fluctuate widely based upon a number of factors beyond our control including oversupply relative to the demand for our products, weather and the price and availability of alternative fuels;
|
•
|
our dependence on gathering, processing and transportation facilities and other midstream facilities owned by CNXM and others;
|
•
|
uncertainties in estimating our economically recoverable natural gas reserves, and inaccuracies in our estimates;
|
•
|
the high-risk nature of drilling natural gas wells;
|
•
|
our identified drilling locations are scheduled out over multiple years, making them susceptible to uncertainties that could materially alter the occurrence or timing of their drilling;
|
•
|
the impact of potential, as well as any adopted environmental regulations including any relating to greenhouse gas emissions on our operating costs as well as on the market for natural gas and for our securities;
|
•
|
environmental regulations introduce uncertainty that could adversely impact the market for natural gas with potential short and long-term liabilities;
|
•
|
the risks inherent in natural gas operations, including our reliance upon third-party contractors, being subject to unexpected disruptions, including geological conditions, equipment failure, timing of completion of significant construction or repair of equipment, fires, explosions, accidents and weather conditions that could impact financial results;
|
•
|
decreases in the availability of, or increases in the price of, required personnel, services, equipment, parts and raw materials to support our operations;
|
•
|
if natural gas prices remain depressed or drilling efforts are unsuccessful, we may be required to record writedowns of our proved natural gas properties;
|
•
|
a loss of our competitive position because of the competitive nature of the natural gas industry or overcapacity in this industry impairing our profitability;
|
•
|
deterioration in the economic conditions in any of the industries in which our customers operate, a domestic or worldwide financial downturn, or negative credit market conditions;
|
•
|
hedging activities may prevent us from benefiting from price increases and may expose us to other risks;
|
•
|
our inability to collect payments from customers if their creditworthiness declines or if they fail to honor their contracts;
|
•
|
existing and future government laws, regulations and other legal requirements that govern our business may increase our costs of doing business and may restrict our operations;
|
•
|
significant costs and liabilities may be incurred as a result of pipeline and related facility integrity management program testing and any related pipeline repair or preventative or remedial measures;
|
•
|
our ability to find adequate water sources for our use in natural gas drilling, or our ability to dispose of or recycle water used or removed from strata in connection with our gas operations at a reasonable cost and within applicable environmental rules;
|
•
|
the outcomes of various legal proceedings, including those which are more fully described in our reports filed under the Exchange Act;
|
•
|
anticipated acquisitions and divestitures may not occur or produce anticipated benefits;
|
•
|
risks associated with our debt;
|
•
|
failure to find or acquire economically recoverable natural gas reserves to replace our current natural gas reserves;
|
•
|
a decrease in our borrowing base, which could occur for a variety of reasons including lower natural gas prices, declines in proved natural gas reserves, and lending requirements or regulations;
|
•
|
we may operate a portion of our business with one or more joint venture partners or in circumstances where we are not the operator, which may restrict our operational and corporate flexibility and we may not realize the benefits we expect to realize from a joint venture;
|
•
|
changes in federal or state income tax laws;
|
•
|
challenges associated with strategic determinations, including the allocation of capital and other resources to strategic opportunities;
|
•
|
our development and exploration projects, as well as CNXM’s midstream system development, require substantial capital expenditures;
|
•
|
terrorist attacks or cyber-attacks could have a material adverse effect on our business, financial condition or results of operations;
|
•
|
construction of new gathering, compression, dehydration, treating or other midstream assets by CNXM may not result in revenue increases and may be subject to regulatory, environmental, political, legal and economic risks;
|
•
|
our success depends on key members of our management and our ability to attract and retain experienced technical and other professional personnel;
|
•
|
we may not achieve some or all of the expected benefits of the separation of CONSOL Energy;
|
•
|
CONSOL Energy may fail to perform under various transaction agreements that were executed as part of the separation;
|
•
|
CONSOL Energy may not be able to satisfy its indemnification obligations in the future and such indemnities may not be sufficient to hold us harmless from the full amount of liabilities for which CONSOL Energy will be allocated responsibility;
|
•
|
the separation of CONSOL Energy could result in substantial tax liability;
|
•
|
with respect to the sale of the Ohio JV Utica assets, disruption of our business, risks that the conditions to closing may not be satisfied, and the impact of the transaction on our future operating and financial results; and
|
•
|
other factors discussed in the 2017 Form 10-K under “Risk Factors,” as updated by any subsequent Forms 10-Q, which are on file at the Securities and Exchange Commission.
|
ITEM 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
|
For the Three Months Ended
|
|
|
||||||||||||||||
|
March 31,
|
|
June 30,
|
|
September 30,
|
|
December 31,
|
|
Total Year
|
||||||||||
2018 Fixed Price Volumes
|
|
|
|
|
|
|
|
|
|
||||||||||
Hedged Bcf
|
N/A
|
|
N/A
|
|
95.4
|
|
|
95.6
|
|
|
191.0
|
|
|||||||
Weighted Average Hedge Price per Mcf
|
N/A
|
|
N/A
|
|
$
|
2.81
|
|
|
$
|
2.85
|
|
|
$
|
2.83
|
|
||||
2019 Fixed Price Volumes
|
|
|
|
|
|
|
|
|
|
||||||||||
Hedged Bcf
|
82.3
|
|
|
83.2
|
|
|
84.1
|
|
|
84.1
|
|
|
333.7
|
|
|||||
Weighted Average Hedge Price per Mcf
|
$
|
2.72
|
|
|
$
|
2.71
|
|
|
$
|
2.71
|
|
|
$
|
2.72
|
|
|
$
|
2.72
|
|
2020 Fixed Price Volumes
|
|
|
|
|
|
|
|
|
|
||||||||||
Hedged Bcf
|
59.8
|
|
|
58.4
|
|
|
59.0
|
|
|
59.0
|
|
|
234.9*
|
|
|||||
Weighted Average Hedge Price per Mcf
|
$
|
2.79
|
|
|
$
|
2.71
|
|
|
$
|
2.71
|
|
|
$
|
2.70
|
|
|
$
|
2.72
|
|
2021 Fixed Price Volumes
|
|
|
|
|
|
|
|
|
|
||||||||||
Hedged Bcf
|
49.2
|
|
|
49.8
|
|
|
50.3
|
|
|
48.9
|
|
|
198.0*
|
|
|||||
Weighted Average Hedge Price per Mcf
|
$
|
2.55
|
|
|
$
|
2.55
|
|
|
$
|
2.55
|
|
|
$
|
2.53
|
|
|
$
|
2.54
|
|
2022 Fixed Price Volumes
|
|
|
|
|
|
|
|
|
|
||||||||||
Hedged Bcf
|
41.3
|
|
|
41.8
|
|
|
42.3
|
|
|
42.3
|
|
|
167.7
|
|
|||||
Weighted Average Hedge Price per Mcf
|
$
|
2.50
|
|
|
$
|
2.50
|
|
|
$
|
2.50
|
|
|
$
|
2.50
|
|
|
$
|
2.50
|
|
2023 Fixed Price Volumes
|
|
|
|
|
|
|
|
|
|
||||||||||
Hedged Bcf
|
9.4
|
|
9.5
|
|
9.6
|
|
9.6
|
|
38.1
|
||||||||||
Weighted Average Hedge Price per Mcf
|
$
|
2.48
|
|
|
$
|
2.48
|
|
|
$
|
2.48
|
|
|
$
|
2.48
|
|
|
$
|
2.48
|
|
ITEM 4.
|
CONTROLS AND PROCEDURES
|
ITEM 1.
|
LEGAL PROCEEDINGS
|
ISSUER PURCHASES OF EQUITY SECURITIES
|
||||||||||
|
(a)
|
(b)
|
(c)
|
(d)
|
||||||
Period
|
Total Number of Shares Purchased
(1)
|
Average Price Paid per Share
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (
2
)
|
Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (000's omitted)
|
||||||
April 1, 2018-
April 30, 2018
|
1,047,682
|
|
$
|
15.30
|
|
6,833,582
|
|
$
|
247,038
|
|
May 1, 2018-
May 31, 2018
|
2,757,800
|
|
$
|
15.68
|
|
9,591,382
|
|
$
|
203,786
|
|
June 1, 2018-
June 30, 2018
|
1,494,700
|
|
$
|
16.97
|
|
11,086,082
|
|
$
|
178,421
|
|
Total
|
5,300,182
|
|
$
|
15.97
|
|
|
|
ITEM 6.
|
EXHIBITS
|
10.1
|
|
*
|
|
|
|
|
|
31.1
|
|
|
|
|
|
|
|
31.2
|
|
|
|
|
|
||
32.1
|
|
|
|
|
|
||
32.2
|
|
|
|
|
|
||
101
|
|
|
Interactive Data File (Form 10-Q for the quarterly period ended June 30, 2018 furnished in XBRL).
|
CNX RESOURCES CORPORATION
|
|||
|
|
|
|
|
By:
|
|
/s/ N
ICHOLAS
J. D
EIULIIS
|
|
|
|
Nicholas J. DeIuliis
|
|
|
|
Chief Executive Officer and President and Director
(Duly Authorized Officer and Principal Executive Officer)
|
|
|
|
|
|
By:
|
|
/
S
/ D
ONALD
W. R
USH
|
|
|
|
Donald W. Rush
|
|
|
|
Chief Financial Officer and Executive Vice President
(Duly Authorized Officer and Principal Financial Officer)
|
|
|
|
|
|
By:
|
|
/
S
/ J
ASON
L. M
UMFORD
|
|
|
|
Jason L. Mumford
|
|
|
|
Controller
(Duly Authorized Officer and Principal Accounting Officer)
|
1.
|
A new Section 1.4 is added to read as follows
|
2.
|
Section 2.2,
Award Period
, is amended to add the following underlined language where indicated at the end thereof
|
2.2
|
Award Period. "Award Period" means each calendar year.
The final Award Period for this Plan is 2017.
|
3.
|
Section 2.17,
Participant
, is amended to add the following underlined language where indicated at the end thereof:
|
2.17
|
Participant. "Participant" means any eligible employee who has Compensation in excess of the Compensation Limit for any Award Period; provided, however, the foregoing provisions shall not limit the Committee's discretion to determine whether an employee remains eligible to continue to actively participate in the Plan; provided, however, that as of November 28, 2017, Participant shall not include any individual for whom Mining assumed the Transferred Obligations.
Effective July 1, 2018, there will be no further Participants in the Plan.
|
4.
|
Section 4.1,
Accounts
is amended to add the following underlined language where indicated:
|
4.1
|
Accounts
. The Compensation Credits granted to a Participant under the Plan shall be added to the Participant's Account as set forth in this Article.
Notwithstanding the foregoing or anything else in this Plan to the contrary, no Compensation Credits will be made to any Account after July 1, 2018.
|
1.
|
I have reviewed this report on Form 10-Q of CNX Resources Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date:
|
August 2, 2018
|
|
|
|
|
/s/ Nicholas J. DeIuliis
|
|
|
Nicholas J. DeIuliis
|
|
|
Chief Executive Officer and President and Director
(Duly Authorized Officer and Principal Executive Officer) |
|
1.
|
I have reviewed this report on Form 10-Q of CNX Resources Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information;
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date:
|
August 2, 2018
|
|
|
|
|
/s/ Donald W. Rush
|
|
|
Donald W. Rush
|
|
|
Chief Financial Officer and Executive Vice President
(Principal Financial Officer) |
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.
|
Date:
|
August 2, 2018
|
|
|
|
|
/s/ Nicholas J. DeIuliis
|
|
|
Nicholas J. DeIuliis
|
|
|
Chief Executive Officer and President and Director
(Duly Authorized Officer and Principal Executive Officer) |
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.
|
Date:
|
August 2, 2018
|
|
|
|
|
/s/ Donald W. Rush
|
|
|
Donald W. Rush
|
|
|
Chief Financial Officer and Executive Vice President
|
|