|
☒
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
|
☐
|
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 15, 2019
|
Common stock, $0.01 par value
|
|
187,563,388
|
|
TABLE OF CONTENTS
|
||
|
|
Page
|
PART I FINANCIAL INFORMATION
|
|
|
|
|
|
ITEM 1.
|
Condensed Consolidated Financial Statements
|
|
|
Consolidated Statements of Income for the three and six months ended June 30, 2019 and 2018
|
|
|
Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2019 and 2018
|
|
|
Consolidated Balance Sheets at June 30, 2019 and December 31, 2018
|
|
|
Consolidated Statements of Stockholders’ Equity for the three and six months ended June 30, 2019 and 2018
|
|
|
Consolidated Statements of Cash Flows for the six months ended June 30, 2019 and 2018
|
|
|
||
|
|
|
ITEM 2.
|
||
|
|
|
ITEM 3.
|
||
|
|
|
ITEM 4.
|
||
|
|
|
PART II OTHER INFORMATION
|
|
|
|
|
|
ITEM 1.
|
||
|
|
|
ITEM 1A.
|
Risk Factors
|
|
|
|
|
ITEM 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
|
|
|
|
ITEM 6.
|
ITEM 1.
|
CONDENSED CONSOLIDATED 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:
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Natural Gas, NGLs and Oil Revenue
|
$
|
342,865
|
|
|
$
|
334,517
|
|
|
$
|
778,811
|
|
|
$
|
740,140
|
|
Gain on Commodity Derivative Instruments
|
221,581
|
|
|
25,660
|
|
|
26,205
|
|
|
60,747
|
|
||||
Purchased Gas Revenue
|
18,768
|
|
|
9,930
|
|
|
34,989
|
|
|
27,985
|
|
||||
Midstream Revenue
|
18,895
|
|
|
23,483
|
|
|
37,338
|
|
|
49,737
|
|
||||
Other Operating Income
|
2,923
|
|
|
8,534
|
|
|
6,120
|
|
|
19,244
|
|
||||
Total Revenue and Other Operating Income
|
605,032
|
|
|
402,124
|
|
|
883,463
|
|
|
897,853
|
|
||||
Costs and Expenses:
|
|
|
|
|
|
|
|
||||||||
Operating Expense
|
|
|
|
|
|
|
|
||||||||
Lease Operating Expense
|
19,876
|
|
|
25,338
|
|
|
38,504
|
|
|
62,148
|
|
||||
Transportation, Gathering and Compression
|
84,614
|
|
|
75,767
|
|
|
164,023
|
|
|
162,028
|
|
||||
Production, Ad Valorem, and Other Fees
|
7,030
|
|
|
7,703
|
|
|
13,976
|
|
|
16,936
|
|
||||
Depreciation, Depletion and Amortization
|
128,999
|
|
|
119,087
|
|
|
254,159
|
|
|
243,754
|
|
||||
Exploration and Production Related Other Costs
|
5,567
|
|
|
3,699
|
|
|
8,825
|
|
|
6,079
|
|
||||
Purchased Gas Costs
|
18,772
|
|
|
9,747
|
|
|
34,986
|
|
|
26,801
|
|
||||
Impairment of Other Intangible Assets
|
—
|
|
|
18,650
|
|
|
—
|
|
|
18,650
|
|
||||
Selling, General, and Administrative Costs
|
48,970
|
|
|
34,909
|
|
|
84,709
|
|
|
66,258
|
|
||||
Other Operating Expense
|
17,976
|
|
|
17,786
|
|
|
41,451
|
|
|
33,832
|
|
||||
Total Operating Expense
|
331,804
|
|
|
312,686
|
|
|
640,633
|
|
|
636,486
|
|
||||
Other Expense (Income)
|
|
|
|
|
|
|
|
||||||||
Other (Income) Expense
|
(99
|
)
|
|
575
|
|
|
(681
|
)
|
|
(5,917
|
)
|
||||
(Gain) Loss on Asset Sales and Abandonments
|
(387
|
)
|
|
(3,280
|
)
|
|
2,699
|
|
|
(14,622
|
)
|
||||
Gain on Previously Held Equity Interest
|
—
|
|
|
—
|
|
|
—
|
|
|
(623,663
|
)
|
||||
Loss on Debt Extinguishment
|
77
|
|
|
23,413
|
|
|
7,614
|
|
|
39,048
|
|
||||
Interest Expense
|
40,152
|
|
|
38,438
|
|
|
75,923
|
|
|
76,989
|
|
||||
Total Other Expense (Income)
|
39,743
|
|
|
59,146
|
|
|
85,555
|
|
|
(528,165
|
)
|
||||
Total Costs and Expenses
|
371,547
|
|
|
371,832
|
|
|
726,188
|
|
|
108,321
|
|
||||
Earnings Before Income Tax
|
233,485
|
|
|
30,292
|
|
|
157,275
|
|
|
789,532
|
|
||||
Income Tax Expense (Benefit)
|
40,791
|
|
|
(31,102
|
)
|
|
29,231
|
|
|
182,592
|
|
||||
Net Income
|
192,694
|
|
|
61,394
|
|
|
128,044
|
|
|
606,940
|
|
||||
Less: Net Income Attributable to Noncontrolling Interest
|
30,217
|
|
|
19,380
|
|
|
52,904
|
|
|
37,363
|
|
||||
Net Income Attributable to CNX Resources Shareholders
|
$
|
162,477
|
|
|
$
|
42,014
|
|
|
$
|
75,140
|
|
|
$
|
569,577
|
|
|
|
|
|
|
|
|
|
||||||||
Earnings per Share
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.85
|
|
|
$
|
0.19
|
|
|
$
|
0.39
|
|
|
$
|
2.60
|
|
Diluted
|
$
|
0.84
|
|
|
$
|
0.19
|
|
|
$
|
0.38
|
|
|
$
|
2.57
|
|
|
|
|
|
|
|
|
|
||||||||
Dividends Declared
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
(Dollars in thousands)
|
June 30,
|
|
June 30,
|
||||||||||||
(Unaudited)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net Income
|
$
|
192,694
|
|
|
$
|
61,394
|
|
|
$
|
128,044
|
|
|
$
|
606,940
|
|
Other Comprehensive Income:
|
|
|
|
|
|
|
|
||||||||
Actuarially Determined Long-Term Liability Adjustments (Net of tax: ($14), ($687), ($29), ($781))
|
41
|
|
|
1,812
|
|
|
85
|
|
|
1,982
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Comprehensive Income
|
192,735
|
|
|
63,206
|
|
|
128,129
|
|
|
608,922
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Less: Comprehensive Income Attributable to Noncontrolling Interest
|
30,217
|
|
|
19,380
|
|
|
52,904
|
|
|
37,363
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Comprehensive Income Attributable to CNX Resources Shareholders
|
$
|
162,518
|
|
|
$
|
43,826
|
|
|
$
|
75,225
|
|
|
$
|
571,559
|
|
|
(Unaudited)
|
|
|
||||
(Dollars in thousands)
|
June 30,
2019 |
|
December 31,
2018 |
||||
ASSETS
|
|
|
|
||||
Current Assets:
|
|
|
|
||||
Cash and Cash Equivalents
|
$
|
32,611
|
|
|
$
|
17,198
|
|
Accounts and Notes Receivable:
|
|
|
|
||||
Trade
|
125,084
|
|
|
252,424
|
|
||
Other Receivables
|
11,636
|
|
|
11,077
|
|
||
Supplies Inventories
|
11,242
|
|
|
9,715
|
|
||
Recoverable Income Taxes
|
113,592
|
|
|
149,481
|
|
||
Prepaid Expenses
|
165,929
|
|
|
61,791
|
|
||
Total Current Assets
|
460,094
|
|
|
501,686
|
|
||
Property, Plant and Equipment:
|
|
|
|
||||
Property, Plant and Equipment
|
10,203,489
|
|
|
9,567,428
|
|
||
Less—Accumulated Depreciation, Depletion and Amortization
|
2,863,627
|
|
|
2,624,984
|
|
||
Total Property, Plant and Equipment—Net
|
7,339,862
|
|
|
6,942,444
|
|
||
Other Assets:
|
|
|
|
||||
Operating Lease Right-of-Use Assets
|
224,950
|
|
|
—
|
|
||
Investment in Affiliates
|
17,637
|
|
|
18,663
|
|
||
Goodwill
|
796,359
|
|
|
796,359
|
|
||
Other Intangible Assets
|
99,923
|
|
|
103,200
|
|
||
Other
|
207,872
|
|
|
229,818
|
|
||
Total Other Assets
|
1,346,741
|
|
|
1,148,040
|
|
||
TOTAL ASSETS
|
$
|
9,146,697
|
|
|
$
|
8,592,170
|
|
|
(Unaudited)
|
|
|
||||
(Dollars in thousands, except per share data)
|
June 30,
2019 |
|
December 31,
2018 |
||||
LIABILITIES AND EQUITY
|
|
|
|
||||
Current Liabilities:
|
|
|
|
||||
Accounts Payable
|
$
|
305,070
|
|
|
$
|
229,806
|
|
Current Portion of Finance Lease Obligations
|
7,133
|
|
|
6,997
|
|
||
Current Portion of Operating Lease Obligations
|
66,209
|
|
|
—
|
|
||
Other Accrued Liabilities
|
244,833
|
|
|
286,172
|
|
||
Total Current Liabilities
|
623,245
|
|
|
522,975
|
|
||
Non-Current Liabilities:
|
|
|
|
||||
Long-Term Debt
|
2,618,375
|
|
|
2,378,205
|
|
||
Finance Lease Obligations
|
10,569
|
|
|
13,299
|
|
||
Deferred Income Taxes
|
427,942
|
|
|
398,682
|
|
||
Operating Lease Obligations
|
137,464
|
|
|
—
|
|
||
Asset Retirement Obligations
|
32,951
|
|
|
37,479
|
|
||
Other
|
196,156
|
|
|
159,787
|
|
||
Total Non-Current Liabilities
|
3,423,457
|
|
|
2,987,452
|
|
||
TOTAL LIABILITIES
|
4,046,702
|
|
|
3,510,427
|
|
||
Stockholders’ Equity:
|
|
|
|
||||
Common Stock, $.01 Par Value; 500,000,000 Shares Authorized, 187,559,362 Issued and Outstanding at June 30, 2019; 198,663,342 Issued and Outstanding at December 31, 2018
|
1,879
|
|
|
1,990
|
|
||
Capital in Excess of Par Value
|
2,203,969
|
|
|
2,264,063
|
|
||
Preferred Stock, 15,000,000 shares authorized, None issued and outstanding
|
—
|
|
|
—
|
|
||
Retained Earnings
|
2,127,627
|
|
|
2,071,809
|
|
||
Accumulated Other Comprehensive Loss
|
(7,819
|
)
|
|
(7,904
|
)
|
||
Total CNX Resources Stockholders’ Equity
|
4,325,656
|
|
|
4,329,958
|
|
||
Noncontrolling Interest
|
774,339
|
|
|
751,785
|
|
||
TOTAL STOCKHOLDERS' EQUITY
|
5,099,995
|
|
|
5,081,743
|
|
||
TOTAL LIABILITIES AND EQUITY
|
$
|
9,146,697
|
|
|
$
|
8,592,170
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
(Unaudited)
|
June 30,
|
|
June 30,
|
||||||||||||
Dollars in Thousands
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Total Stockholders’ Equity, Beginning Balance
|
$
|
4,974,809
|
|
|
$
|
5,067,906
|
|
|
$
|
5,081,743
|
|
|
$
|
3,899,899
|
|
|
|
|
|
|
|
|
|
||||||||
Common Stock and Capital in Excess of Par Value:
|
|
|
|
|
|
|
|
||||||||
Beginning Balance
|
2,251,475
|
|
|
2,411,665
|
|
|
2,266,053
|
|
|
2,452,564
|
|
||||
Issuance of Common Stock
|
62
|
|
|
507
|
|
|
161
|
|
|
1,563
|
|
||||
Purchase and Retirement of Common Stock
|
(69,022
|
)
|
|
(42,402
|
)
|
|
(93,990
|
)
|
|
(88,688
|
)
|
||||
Amortization of Stock-Based Compensation Awards
|
23,333
|
|
|
5,018
|
|
|
33,624
|
|
|
9,349
|
|
||||
Ending Balance
|
2,205,848
|
|
|
2,374,788
|
|
|
2,205,848
|
|
|
2,374,788
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Retained Earnings:
|
|
|
|
|
|
|
|
||||||||
Beginning Balance
|
1,971,898
|
|
|
1,940,882
|
|
|
2,071,809
|
|
|
1,455,811
|
|
||||
Net Income
|
162,477
|
|
|
42,014
|
|
|
75,140
|
|
|
569,577
|
|
||||
Purchase and Retirement of Common Stock
|
(5,261
|
)
|
|
(42,354
|
)
|
|
(13,790
|
)
|
|
(80,031
|
)
|
||||
Shares Withheld for Taxes
|
(1,487
|
)
|
|
(35
|
)
|
|
(5,532
|
)
|
|
(4,850
|
)
|
||||
Ending Balance
|
2,127,627
|
|
|
1,940,507
|
|
|
2,127,627
|
|
|
1,940,507
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Accumulated Other Comprehensive Loss:
|
|
|
|
|
|
|
|
||||||||
Beginning Balance
|
(7,860
|
)
|
|
(8,306
|
)
|
|
(7,904
|
)
|
|
(8,476
|
)
|
||||
Other Comprehensive Income
|
41
|
|
|
1,812
|
|
|
85
|
|
|
1,982
|
|
||||
Ending Balance
|
(7,819
|
)
|
|
(6,494
|
)
|
|
(7,819
|
)
|
|
(6,494
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Total CNX Resources Corporation Stockholders' Equity
|
4,325,656
|
|
|
4,308,801
|
|
|
4,325,656
|
|
|
4,308,801
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Non-Controlling Interest:
|
|
|
|
|
|
|
|
||||||||
Beginning Balance
|
759,296
|
|
|
723,665
|
|
|
751,785
|
|
|
—
|
|
||||
Net Income
|
30,217
|
|
|
19,380
|
|
|
52,904
|
|
|
37,363
|
|
||||
Shares Withheld for Taxes
|
(25
|
)
|
|
—
|
|
|
(690
|
)
|
|
(347
|
)
|
||||
Amortization of Stock-Based Compensation Awards
|
540
|
|
|
691
|
|
|
1,152
|
|
|
1,269
|
|
||||
Distributions to CNXM Noncontrolling Interest Holders
|
(15,689
|
)
|
|
(13,614
|
)
|
|
(30,812
|
)
|
|
(26,740
|
)
|
||||
Acquisition of CNX Gathering, LLC
|
—
|
|
|
—
|
|
|
—
|
|
|
718,577
|
|
||||
Ending Balance
|
774,339
|
|
|
730,122
|
|
|
774,339
|
|
|
730,122
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Total Stockholders' Equity, Ending Balance
|
$
|
5,099,995
|
|
|
$
|
5,038,923
|
|
|
$
|
5,099,995
|
|
|
$
|
5,038,923
|
|
(Unaudited)
|
Six Months Ended
|
||||||
Dollars in Thousands
|
June 30,
|
||||||
Cash Flows from Operating Activities:
|
2019
|
|
2018
|
||||
Net Income
|
$
|
128,044
|
|
|
$
|
606,940
|
|
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:
|
|
|
|
||||
Depreciation, Depletion and Amortization
|
254,159
|
|
|
243,754
|
|
||
Amortization of Deferred Financing Costs
|
4,408
|
|
|
4,821
|
|
||
Impairment of Other Intangible Assets
|
—
|
|
|
18,650
|
|
||
Stock-Based Compensation
|
34,776
|
|
|
10,618
|
|
||
Loss (Gain) on Asset Sales and Abandonments
|
2,699
|
|
|
(14,622
|
)
|
||
Gain on Previously Held Equity Interest
|
—
|
|
|
(623,663
|
)
|
||
Loss on Debt Extinguishment
|
7,614
|
|
|
39,048
|
|
||
Gain on Commodity Derivative Instruments
|
(26,205
|
)
|
|
(60,747
|
)
|
||
Net Cash Paid in Settlement of Commodity Derivative Instruments
|
(30,710
|
)
|
|
(307
|
)
|
||
Deferred Income Taxes
|
29,231
|
|
|
190,194
|
|
||
Equity in Earnings of Affiliates
|
(1,030
|
)
|
|
(3,447
|
)
|
||
Return on Equity Investment
|
2,056
|
|
|
—
|
|
||
Changes in Operating Assets:
|
|
|
|
||||
Accounts and Notes Receivable
|
125,991
|
|
|
44,156
|
|
||
Recoverable Income Taxes
|
35,888
|
|
|
3,743
|
|
||
Supplies Inventories
|
(1,527
|
)
|
|
243
|
|
||
Prepaid Expenses
|
4,287
|
|
|
1,327
|
|
||
Changes in Operating Liabilities:
|
|
|
|
||||
Accounts Payable
|
29,346
|
|
|
(3,198
|
)
|
||
Accrued Interest
|
5,050
|
|
|
(3,358
|
)
|
||
Other Operating Liabilities
|
(36,392
|
)
|
|
1,504
|
|
||
Changes in Other Liabilities
|
(6,907
|
)
|
|
(5,374
|
)
|
||
Other
|
(105
|
)
|
|
648
|
|
||
Net Cash Provided by Operating Activities
|
560,673
|
|
|
450,930
|
|
||
Cash Flows from Investing Activities:
|
|
|
|
||||
Capital Expenditures
|
(628,365
|
)
|
|
(496,659
|
)
|
||
CNX Gathering LLC Acquisition, Net of Cash Acquired
|
—
|
|
|
(299,272
|
)
|
||
Proceeds from Asset Sales
|
7,087
|
|
|
153,420
|
|
||
Net Distributions from Equity Affiliates
|
—
|
|
|
3,650
|
|
||
Net Cash Used in Investing Activities
|
(621,278
|
)
|
|
(638,861
|
)
|
||
Cash Flows from Financing Activities:
|
|
|
|
||||
Payments on Miscellaneous Borrowings
|
(3,515
|
)
|
|
(3,748
|
)
|
||
Payments on Long-Term Notes
|
(405,876
|
)
|
|
(723,419
|
)
|
||
Net Proceeds from (Payments on) CNXM Revolving Credit Facility
|
124,000
|
|
|
(138,500
|
)
|
||
Proceeds from CNX Revolving Credit Facility
|
18,000
|
|
|
422,000
|
|
||
Proceeds from Issuance of CNX Senior Notes
|
500,000
|
|
|
—
|
|
||
Proceeds from Issuance of CNXM Senior Notes
|
—
|
|
|
394,000
|
|
||
Distributions to CNXM Noncontrolling Interest Holders
|
(30,812
|
)
|
|
(26,740
|
)
|
||
Proceeds from Issuance of Common Stock
|
161
|
|
|
1,563
|
|
||
Shares Withheld for Taxes
|
(6,222
|
)
|
|
(5,197
|
)
|
||
Purchases of Common Stock
|
(109,780
|
)
|
|
(166,720
|
)
|
||
Debt Repurchase and Financing Fees
|
(9,938
|
)
|
|
(19,629
|
)
|
||
Net Cash Provided by (Used in) Financing Activities
|
76,018
|
|
|
(266,390
|
)
|
||
Net Increase (Decrease) in Cash and Cash Equivalents
|
15,413
|
|
|
(454,321
|
)
|
||
Cash and Cash Equivalents at Beginning of Period
|
17,198
|
|
|
509,167
|
|
||
Cash and Cash Equivalents at End of Period
|
$
|
32,611
|
|
|
$
|
54,846
|
|
|
For the Three Months Ended June 30,
|
|
For the Six Months Ended June 30,
|
||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||
Anti-dilutive Options
|
2,041,273
|
|
|
2,300,785
|
|
|
2,041,273
|
|
|
2,300,785
|
|
Anti-dilutive Restricted Stock Units
|
150,007
|
|
|
—
|
|
|
220,858
|
|
|
7,828
|
|
Anti-dilutive Performance Share Units
|
—
|
|
|
—
|
|
|
—
|
|
|
178,189
|
|
Anti-dilutive Performance Stock Options
|
927,268
|
|
|
927,268
|
|
|
927,268
|
|
|
927,268
|
|
|
3,118,548
|
|
|
3,228,053
|
|
|
3,189,399
|
|
|
3,414,070
|
|
|
For the Three Months Ended June 30,
|
|
For the Six Months Ended June 30,
|
||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||
Options
|
7,093
|
|
|
73,583
|
|
|
20,841
|
|
|
227,301
|
|
Restricted Stock Units
|
515,265
|
|
|
7,260
|
|
|
973,234
|
|
|
178,397
|
|
Performance Share Units
|
—
|
|
|
—
|
|
|
342,882
|
|
|
357,597
|
|
|
522,358
|
|
|
80,843
|
|
|
1,336,957
|
|
|
763,295
|
|
|
For the Three Months Ended June 30,
|
|
For the Six Months Ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net Income
|
$
|
192,694
|
|
|
$
|
61,394
|
|
|
$
|
128,044
|
|
|
$
|
606,940
|
|
Less: Net Income Attributable to Non-Controlling Interest
|
30,217
|
|
|
19,380
|
|
|
52,904
|
|
|
37,363
|
|
||||
Net Income Attributable to CNX Resources Shareholders
|
$
|
162,477
|
|
|
$
|
42,014
|
|
|
$
|
75,140
|
|
|
$
|
569,577
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average Shares of Common Stock Outstanding
|
191,524,289
|
|
|
215,991,490
|
|
|
194,483,555
|
|
|
218,944,422
|
|
||||
Effect of Diluted Shares
|
1,256,443
|
|
|
2,938,470
|
|
|
1,507,800
|
|
|
2,701,442
|
|
||||
Weighted-average Diluted Shares of Common Stock Outstanding
|
192,780,732
|
|
|
218,929,960
|
|
|
195,991,355
|
|
|
221,645,864
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Earnings per Share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.85
|
|
|
$
|
0.19
|
|
|
$
|
0.39
|
|
|
$
|
2.60
|
|
Diluted
|
$
|
0.84
|
|
|
$
|
0.19
|
|
|
$
|
0.38
|
|
|
$
|
2.57
|
|
|
Amount
|
||
Balance at December 31, 2018
|
$
|
(7,904
|
)
|
Amounts Reclassified from Accumulated Other Comprehensive Loss, net of tax
|
85
|
|
|
Balance at June 30, 2019
|
$
|
(7,819
|
)
|
|
For the Three Months Ended June 30,
|
|
For the Six Months Ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Actuarially Determined Long-Term Liability Adjustments
|
|
|
|
|
|
|
|
||||||||
Amortization of Prior Service Costs
|
$
|
(4
|
)
|
|
$
|
(90
|
)
|
|
$
|
(8
|
)
|
|
$
|
(181
|
)
|
Recognized Net Actuarial Loss
|
59
|
|
|
354
|
|
|
122
|
|
|
708
|
|
||||
Total
|
55
|
|
|
264
|
|
|
114
|
|
|
527
|
|
||||
Less: Tax Benefit
|
14
|
|
|
94
|
|
|
29
|
|
|
188
|
|
||||
Net of Tax
|
$
|
41
|
|
|
$
|
170
|
|
|
$
|
85
|
|
|
$
|
339
|
|
|
For the Three Months Ended June 30,
|
|
For the Six Months Ended June 30,
|
||||||||||||
2019
|
|
2018
|
|
2019
|
|
2018
|
|||||||||
Revenue from Contracts with Customers
|
|
|
|
|
|
|
|
||||||||
Natural Gas Revenue
|
$
|
317,071
|
|
|
$
|
289,294
|
|
|
$
|
720,758
|
|
|
$
|
636,642
|
|
NGLs Revenue
|
24,025
|
|
|
39,557
|
|
|
53,790
|
|
|
90,441
|
|
||||
Condensate Revenue
|
1,680
|
|
|
4,996
|
|
|
4,007
|
|
|
11,499
|
|
||||
Oil Revenue
|
89
|
|
|
670
|
|
|
256
|
|
|
1,558
|
|
||||
Total Natural Gas, NGLs and Oil Revenue
|
342,865
|
|
|
334,517
|
|
|
778,811
|
|
|
740,140
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Purchased Gas Revenue
|
18,768
|
|
|
9,930
|
|
|
34,989
|
|
|
27,985
|
|
||||
Midstream Revenue
|
18,895
|
|
|
23,483
|
|
|
37,338
|
|
|
49,737
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Other Sources of Revenue and Other Operating Income
|
|
|
|
|
|
|
|
||||||||
Gain on Commodity Derivative Instruments
|
221,581
|
|
|
25,660
|
|
|
26,205
|
|
|
60,747
|
|
||||
Other Operating Income
|
2,923
|
|
|
8,534
|
|
|
6,120
|
|
|
19,244
|
|
||||
Total Revenue and Other Operating Income
|
$
|
605,032
|
|
|
$
|
402,124
|
|
|
$
|
883,463
|
|
|
$
|
897,853
|
|
|
Amount
|
||
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:
|
Amount
|
||
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,
|
|
June 30,
|
|||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Midstream Revenue
|
$
|
78,450
|
|
|
$
|
61,325
|
|
|
$
|
151,019
|
|
|
$
|
125,503
|
|
Earnings Before Income Tax
|
$
|
44,414
|
|
|
$
|
27,795
|
|
|
$
|
76,998
|
|
|
$
|
63,329
|
|
|
June 30,
2019 |
|
December 31,
2018 |
||||
Property, Plant and Equipment
|
|
|
|
||||
Intangible Drilling Cost
|
$
|
4,411,513
|
|
|
$
|
4,120,283
|
|
Proved Gas Properties
|
1,150,723
|
|
|
1,135,411
|
|
||
Gas Gathering Equipment
|
2,324,938
|
|
|
2,126,895
|
|
||
Unproved Gas Properties
|
946,114
|
|
|
927,667
|
|
||
Gas Wells and Related Equipment
|
983,214
|
|
|
859,359
|
|
||
Surface Land and Other Equipment
|
236,141
|
|
|
238,487
|
|
||
Other Gas Assets
|
150,846
|
|
|
159,326
|
|
||
Total Property, Plant and Equipment
|
10,203,489
|
|
|
9,567,428
|
|
||
Less: Accumulated Depreciation, Depletion and Amortization
|
2,863,627
|
|
|
2,624,984
|
|
||
Total Property, Plant and Equipment - Net
|
$
|
7,339,862
|
|
|
$
|
6,942,444
|
|
|
June 30,
2019 |
|
December 31, 2018
|
||||
Other Intangible Assets
|
|
|
|
||||
Gross Amortizable Asset - Customer Relationships
|
$
|
109,752
|
|
|
$
|
109,752
|
|
Less: Accumulated Amortization - Customer Relationships
|
9,829
|
|
|
6,552
|
|
||
Total Other Intangible Assets, net
|
$
|
99,923
|
|
|
$
|
103,200
|
|
•
|
the base rate, which is the highest of (i) the federal funds open rate plus 0.50%, (ii) PNC Bank, N.A.’s prime rate, or (iii) the one-month LIBOR rate plus 1.0%, in each case, plus a margin ranging from 0.25% to 1.25%; or
|
•
|
the base rate, which is the highest of (i) the federal funds open rate plus 0.50%, (ii) PNC Bank, N.A.’s prime rate, or (iii) the one-month LIBOR rate plus 1.0%, in each case, plus a margin ranging from 0.50% to 1.50%; or
|
•
|
the LIBOR rate, plus a margin ranging from 1.50% to 2.50%.
|
|
June 30,
2019 |
|
December 31,
2018 |
||||
Senior Notes due April 2022 at 5.875% (Principal of $894,307 and $1,294,307
plus Unamortized Premium of $1,215 and $2,069, respectively) |
$
|
895,522
|
|
|
$
|
1,296,376
|
|
CNX Credit Facility
|
630,000
|
|
|
612,000
|
|
||
Senior Notes due March 2027 at 7.25%, Issued at Par Value
|
500,000
|
|
|
—
|
|
||
CNX Midstream Partners LP Senior Notes due March 2026 at 6.50% (Principal of $400,000 less Unamortized Discount of $5,000 and $5,375, respectively)
|
395,000
|
|
|
394,625
|
|
||
CNX Midstream Partners LP Revolving Credit Facility
|
208,000
|
|
|
84,000
|
|
||
Less: Unamortized Debt Issuance Costs
|
10,147
|
|
|
8,796
|
|
||
Long-Term Debt
|
$
|
2,618,375
|
|
|
$
|
2,378,205
|
|
|
For the Three Months Ended
|
|
For the Six Months Ended
|
||||
|
June 30, 2019
|
|
June 30, 2019
|
||||
Operating Lease Cost
|
$
|
21,441
|
|
|
$
|
31,356
|
|
Finance Lease Cost:
|
|
|
|
||||
Amortization of Right-of-Use Assets
|
1,309
|
|
|
2,626
|
|
||
Interest on Lease Liabilities
|
324
|
|
|
676
|
|
||
Short-term Lease Cost
|
2,543
|
|
|
4,367
|
|
||
Variable Lease Cost*
|
7,539
|
|
|
11,539
|
|
||
Total Lease Cost
|
$
|
33,156
|
|
|
$
|
50,564
|
|
|
June 30,
|
||
|
2019
|
||
Operating Leases:
|
|
||
Operating Lease Right-of-Use Asset
|
$
|
224,950
|
|
|
|
||
Current Portion of Operating Lease Obligations
|
66,209
|
|
|
Operating Lease Obligations
|
137,464
|
|
|
Total Operating Lease Liabilities
|
$
|
203,673
|
|
|
|
||
Finance Leases:
|
|
||
Property, Plant and Equipment
|
$
|
72,932
|
|
Less—Accumulated Depreciation, Depletion and Amortization
|
61,102
|
|
|
Property, Plant and Equipment—Net
|
$
|
11,830
|
|
|
|
||
Current Portion of Finance Lease Obligations
|
$
|
7,133
|
|
Finance Lease Obligations
|
10,569
|
|
|
Total Finance Lease Liabilities
|
$
|
17,702
|
|
|
Operating
|
|
Finance
|
||||
|
Leases
|
|
Leases
|
||||
Twelve months ended June 30,
|
|
|
|
||||
2020
|
$
|
74,712
|
|
|
$
|
8,171
|
|
2021
|
59,536
|
|
|
7,627
|
|
||
2022
|
51,288
|
|
|
3,258
|
|
||
2023
|
5,465
|
|
|
243
|
|
||
2024
|
5,446
|
|
|
128
|
|
||
Thereafter
|
33,257
|
|
|
—
|
|
||
Total Lease Payments
|
229,704
|
|
|
19,427
|
|
||
Less: Interest
|
26,031
|
|
|
1,725
|
|
||
Present Value of Lease Liabilities
|
$
|
203,673
|
|
|
$
|
17,702
|
|
|
June 30,
|
|
|
2019
|
|
Weighted Average Remaining Lease Term (years):
|
|
|
Operating Leases
|
4.54
|
|
Finance Leases
|
2.47
|
|
|
|
|
Weighted Average Discount Rate:
|
|
|
Operating Leases
|
4.94
|
%
|
Finance Leases
|
7.10
|
%
|
|
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
|
$
|
198,316
|
|
|
$
|
162,443
|
|
|
$
|
35,873
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Other
|
265
|
|
|
265
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total Letters of Credit
|
198,581
|
|
|
162,708
|
|
|
35,873
|
|
|
—
|
|
|
—
|
|
|||||
Surety Bonds:
|
|
|
|
|
|
|
|
|
|
||||||||||
Employee-Related
|
1,850
|
|
|
1,850
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Environmental
|
11,296
|
|
|
11,237
|
|
|
59
|
|
|
—
|
|
|
—
|
|
|||||
Financial Guarantees
|
81,670
|
|
|
81,670
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Other
|
9,337
|
|
|
7,840
|
|
|
1,497
|
|
|
—
|
|
|
—
|
|
|||||
Total Surety Bonds
|
104,153
|
|
|
102,597
|
|
|
1,556
|
|
|
—
|
|
|
—
|
|
|||||
Total Commitments
|
$
|
302,734
|
|
|
$
|
265,305
|
|
|
$
|
37,429
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Obligations Due
|
Amount
|
||
Less than 1 year
|
$
|
251,384
|
|
1 - 3 years
|
492,206
|
|
|
3 - 5 years
|
423,726
|
|
|
More than 5 years
|
1,159,534
|
|
|
Total Purchase Obligations
|
$
|
2,326,850
|
|
|
June 30,
|
|
December 31,
|
|
Forecasted to
|
||
|
2019
|
|
2018
|
|
Settle Through
|
||
Natural Gas Commodity Swaps (Bcf)
|
1,515.8
|
|
|
1,484.4
|
|
|
2024
|
Natural Gas Basis Swaps (Bcf)
|
1,166.1
|
|
|
1,056.6
|
|
|
2024
|
Asset Derivative Instruments
|
|
Liability Derivative Instruments
|
||||||||||||||
|
June 30,
|
|
December 31,
|
|
|
June 30,
|
|
December 31,
|
||||||||
|
2019
|
|
2018
|
|
|
2019
|
|
2018
|
||||||||
Commodity Swaps:
|
|
|
|
|
|
|
|
|
||||||||
Prepaid Expense
|
$
|
144,771
|
|
|
$
|
28,612
|
|
|
Other Accrued Liabilities
|
$
|
1,606
|
|
|
$
|
34,640
|
|
Other Assets
|
176,794
|
|
|
164,310
|
|
|
Other Liabilities
|
37,603
|
|
|
52,011
|
|
||||
Total Asset
|
$
|
321,565
|
|
|
$
|
192,922
|
|
|
Total Liability
|
$
|
39,209
|
|
|
$
|
86,651
|
|
|
|
|
|
|
|
|
|
|
||||||||
Basis Only Swaps:
|
|
|
|
|
|
|
|
|
||||||||
Prepaid Expense
|
$
|
4,934
|
|
|
$
|
11,628
|
|
|
Other Accrued Liabilities
|
$
|
46,250
|
|
|
$
|
27,021
|
|
Other Assets
|
13,225
|
|
|
48,788
|
|
|
Other Liabilities
|
97,893
|
|
|
40,210
|
|
||||
Total Asset
|
$
|
18,159
|
|
|
$
|
60,416
|
|
|
Total Liability
|
$
|
144,143
|
|
|
$
|
67,231
|
|
|
For the Three Months Ended
|
|
For the Six Months Ended
|
||||||||||||
|
June 30,
|
|
June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Cash Received (Paid) in Settlement of Commodity Derivative Instruments:
|
|
|
|
|
|
|
|
||||||||
Natural Gas:
|
|
|
|
|
|
|
|
||||||||
Commodity Swaps
|
$
|
18,567
|
|
|
$
|
17,058
|
|
|
$
|
(8,383
|
)
|
|
$
|
16,624
|
|
Basis Swaps
|
(7,895
|
)
|
|
(374
|
)
|
|
(22,327
|
)
|
|
(16,931
|
)
|
||||
Total Cash Received (Paid) in Settlement of Commodity Derivative Instruments
|
10,672
|
|
|
16,684
|
|
|
(30,710
|
)
|
|
(307
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Unrealized Gain (Loss) on Commodity Derivative Instruments:
|
|
|
|
|
|
|
|
||||||||
Natural Gas:
|
|
|
|
|
|
|
|
||||||||
Commodity Swaps
|
226,845
|
|
|
46,450
|
|
|
176,084
|
|
|
49,250
|
|
||||
Basis Swaps
|
(15,936
|
)
|
|
(37,474
|
)
|
|
(119,169
|
)
|
|
11,804
|
|
||||
Total Unrealized Gain on Commodity Derivative Instruments
|
210,909
|
|
|
8,976
|
|
|
56,915
|
|
|
61,054
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Gain (Loss) on Commodity Derivative Instruments:
|
|
|
|
|
|
|
|
||||||||
Natural Gas:
|
|
|
|
|
|
|
|
||||||||
Commodity Swaps
|
245,412
|
|
|
63,508
|
|
|
167,701
|
|
|
65,874
|
|
||||
Basis Swaps
|
(23,831
|
)
|
|
(37,848
|
)
|
|
(141,496
|
)
|
|
(5,127
|
)
|
||||
Total Gain on Commodity Derivative Instruments
|
$
|
221,581
|
|
|
$
|
25,660
|
|
|
$
|
26,205
|
|
|
$
|
60,747
|
|
|
Fair Value Measurements at June 30, 2019
|
|
Fair Value Measurements at December 31, 2018
|
||||||||||||||||||||
Description
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
||||||||||||
Gas Derivatives
|
$
|
—
|
|
|
$
|
156,372
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
99,456
|
|
|
$
|
—
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||||||||||
|
Carrying
Amount
|
|
Fair
Value
|
|
Carrying
Amount
|
|
Fair
Value
|
||||||||
Cash and Cash Equivalents
|
$
|
32,611
|
|
|
$
|
32,611
|
|
|
$
|
17,198
|
|
|
$
|
17,198
|
|
Long-Term Debt (Excluding Debt Issuance Costs)
|
$
|
2,628,522
|
|
|
$
|
2,495,223
|
|
|
$
|
2,387,001
|
|
|
$
|
2,290,537
|
|
|
June 30,
|
|
December 31,
|
||||
|
2019
|
|
2018
|
||||
Assets:
|
|
|
|
||||
Cash
|
$
|
11,677
|
|
|
3,966
|
|
|
Receivables - Related Party
|
19,028
|
|
|
17,073
|
|
||
Receivables - Third Party
|
6,681
|
|
|
7,028
|
|
||
Other Current Assets
|
1,648
|
|
|
2,383
|
|
||
Property, Plant and Equipment, net
|
1,076,977
|
|
|
891,775
|
|
||
Operating Lease ROU Asset
|
7,875
|
|
|
—
|
|
||
Other Assets
|
3,731
|
|
|
3,203
|
|
||
Total Assets
|
$
|
1,127,617
|
|
|
$
|
925,428
|
|
Liabilities:
|
|
|
|
||||
Accounts Payable and Accrued Liabilities
|
$
|
96,295
|
|
|
$
|
43,919
|
|
Accounts Payable - Related Party
|
3,425
|
|
|
4,980
|
|
||
Revolving Credit Facility
|
208,000
|
|
|
84,000
|
|
||
Long-Term Debt
|
393,688
|
|
|
393,215
|
|
||
Long-Term Operating Lease Liabilities
|
1,171
|
|
|
—
|
|
||
Total Liabilities
|
$
|
702,579
|
|
|
$
|
526,114
|
|
|
For the Three Months Ended June 30,
|
|
For the Six Months Ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Revenue
|
|
|
|
|
|
|
|
||||||||
Gathering Revenue - Related Party
|
$
|
59,205
|
|
|
$
|
37,576
|
|
|
$
|
112,981
|
|
|
$
|
75,306
|
|
Gathering Revenue - Third Party
|
18,896
|
|
|
23,438
|
|
|
37,339
|
|
|
49,577
|
|
||||
Total Revenue
|
78,101
|
|
|
61,014
|
|
|
150,320
|
|
|
124,883
|
|
||||
Expenses
|
|
|
|
|
|
|
|
||||||||
Operating Expense - Related Party
|
6,514
|
|
|
5,079
|
|
|
12,062
|
|
|
9,514
|
|
||||
Operating Expense - Third Party
|
6,188
|
|
|
7,406
|
|
|
12,162
|
|
|
15,874
|
|
||||
General and Administrative Expense - Related Party
|
4,027
|
|
|
3,620
|
|
|
7,994
|
|
|
7,232
|
|
||||
General and Administrative Expense - Third Party
|
1,364
|
|
|
2,319
|
|
|
2,900
|
|
|
4,868
|
|
||||
(Gain) Loss on Asset Sales and Abandonments
|
—
|
|
|
(254
|
)
|
|
7,229
|
|
|
2,501
|
|
||||
Depreciation Expense
|
5,860
|
|
|
5,443
|
|
|
11,510
|
|
|
11,299
|
|
||||
Interest Expense
|
7,685
|
|
|
7,119
|
|
|
15,024
|
|
|
9,608
|
|
||||
Total Expense
|
31,638
|
|
|
30,732
|
|
|
68,881
|
|
|
60,896
|
|
||||
Net Income
|
$
|
46,463
|
|
|
$
|
30,282
|
|
|
$
|
81,439
|
|
|
$
|
63,987
|
|
|
|
|
|
|
|
|
|
||||||||
Net Cash Provided by Operating Activities
|
$
|
74,753
|
|
|
$
|
53,674
|
|
|
$
|
124,666
|
|
|
$
|
95,541
|
|
Net Cash Used in Investing Activities
|
$
|
(104,310
|
)
|
|
$
|
(24,969
|
)
|
|
$
|
(182,867
|
)
|
|
$
|
(35,125
|
)
|
Net Cash Provided by (Used in) Financing Activities
|
$
|
41,164
|
|
|
$
|
(29,964
|
)
|
|
$
|
65,912
|
|
|
$
|
(62,903
|
)
|
|
Marcellus
Shale
|
|
Utica Shale
|
|
Coalbed Methane
|
|
Other
Gas
|
|
Total
E&P
|
|
Midstream
|
|
Unallocated
|
|
Intercompany Eliminations
|
|
Consolidated
|
|
||||||||||||||||||
Natural Gas, NGLs and Oil Revenue
|
$
|
237,257
|
|
|
$
|
65,213
|
|
|
$
|
39,638
|
|
|
$
|
757
|
|
|
$
|
342,865
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
342,865
|
|
(A)
|
Purchased Gas Revenue
|
—
|
|
|
—
|
|
|
—
|
|
|
18,768
|
|
|
18,768
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
18,768
|
|
|
|||||||||
Midstream Revenue
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
78,450
|
|
|
—
|
|
|
(59,555
|
)
|
|
18,895
|
|
|
|||||||||
Gain on Commodity Derivative Instruments
|
6,831
|
|
|
2,747
|
|
|
1,085
|
|
|
210,918
|
|
|
221,581
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
221,581
|
|
|
|||||||||
Other Operating Income
|
—
|
|
|
—
|
|
|
—
|
|
|
3,038
|
|
|
3,038
|
|
|
—
|
|
|
—
|
|
|
(115
|
)
|
|
2,923
|
|
(B)
|
|||||||||
Total Revenue and Other Operating Income
|
$
|
244,088
|
|
|
$
|
67,960
|
|
|
$
|
40,723
|
|
|
$
|
233,481
|
|
|
$
|
586,252
|
|
|
$
|
78,450
|
|
|
$
|
—
|
|
|
$
|
(59,670
|
)
|
|
$
|
605,032
|
|
|
Earnings Before Income Tax
|
$
|
50,381
|
|
|
$
|
17,941
|
|
|
$
|
7,603
|
|
|
$
|
112,335
|
|
|
$
|
188,260
|
|
|
$
|
44,414
|
|
|
$
|
811
|
|
|
$
|
—
|
|
|
$
|
233,485
|
|
|
Segment Assets
|
|
|
|
|
|
|
|
|
$
|
6,887,043
|
|
|
$
|
2,116,492
|
|
|
$
|
146,203
|
|
|
$
|
(3,041
|
)
|
|
$
|
9,146,697
|
|
(C)
|
||||||||
Depreciation, Depletion and Amortization
|
|
|
|
|
|
|
|
|
$
|
120,705
|
|
|
$
|
8,294
|
|
|
$
|
—
|
|
|
|
|
|
$
|
128,999
|
|
|
|||||||||
Capital Expenditures
|
|
|
|
|
|
|
|
|
$
|
224,684
|
|
|
$
|
104,543
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
329,227
|
|
|
(A)
|
Included in Total Natural Gas, NGLs and Oil Revenue are sales of $48,476 to Direct Energy Business Marketing LLC, which comprises over 10% of revenue from contracts with customers for the period.
|
(B)
|
Includes equity in earnings of unconsolidated affiliates of $527 for Total E&P.
|
(C)
|
Includes investments in unconsolidated equity affiliates of $17,637 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
|
$
|
178,305
|
|
|
$
|
107,758
|
|
|
$
|
46,882
|
|
|
$
|
1,572
|
|
|
$
|
334,517
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
334,517
|
|
(D)
|
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
|
|
(E)
|
|||||||||
Total Revenue and Other Operating Income
|
$
|
187,433
|
|
|
$
|
113,129
|
|
|
$
|
49,037
|
|
|
$
|
29,103
|
|
|
$
|
378,702
|
|
|
$
|
61,325
|
|
|
$
|
—
|
|
|
$
|
(37,903
|
)
|
|
$
|
402,124
|
|
|
Earnings (Loss) 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
|
|
(F)
|
||||||||
Depreciation, Depletion and Amortization
|
|
|
|
|
|
|
|
|
$
|
111,125
|
|
|
$
|
7,962
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
119,087
|
|
|
||||||||
Capital Expenditures
|
|
|
|
|
|
|
|
|
$
|
238,889
|
|
|
$
|
25,285
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
264,174
|
|
|
(D)
|
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 revenue from contracts with customers for the period.
|
(E)
|
Includes equity in earnings of unconsolidated affiliates of $1,669 for Total E&P.
|
(F)
|
Includes investments in unconsolidated equity affiliates of $22,347 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
|
$
|
530,514
|
|
|
$
|
158,164
|
|
|
$
|
89,473
|
|
|
$
|
660
|
|
|
$
|
778,811
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
778,811
|
|
(A)
|
Purchased Gas Revenue
|
—
|
|
|
—
|
|
|
—
|
|
|
34,989
|
|
|
34,989
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
34,989
|
|
|
|||||||||
Midstream Revenue
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
151,019
|
|
|
—
|
|
|
(113,681
|
)
|
|
37,338
|
|
|
|||||||||
(Loss) Gain on Commodity Derivative Instruments
|
(20,627
|
)
|
|
(6,854
|
)
|
|
(3,217
|
)
|
|
56,903
|
|
|
26,205
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
26,205
|
|
|
|||||||||
Other Operating Income
|
—
|
|
|
—
|
|
|
—
|
|
|
6,296
|
|
|
6,296
|
|
|
—
|
|
|
—
|
|
|
(176
|
)
|
|
6,120
|
|
(B)
|
|||||||||
Total Revenue and Other Operating Income
|
$
|
509,887
|
|
|
$
|
151,310
|
|
|
$
|
86,256
|
|
|
$
|
98,848
|
|
|
$
|
846,301
|
|
|
$
|
151,019
|
|
|
$
|
—
|
|
|
$
|
(113,857
|
)
|
|
$
|
883,463
|
|
|
Earnings (Loss) Before Income Tax
|
$
|
137,312
|
|
|
$
|
49,945
|
|
|
$
|
20,502
|
|
|
$
|
(125,929
|
)
|
|
$
|
81,830
|
|
|
$
|
76,998
|
|
|
$
|
(1,553
|
)
|
|
$
|
—
|
|
|
$
|
157,275
|
|
|
Segment Assets
|
|
|
|
|
|
|
|
|
$
|
6,887,043
|
|
|
$
|
2,116,492
|
|
|
$
|
146,203
|
|
|
$
|
(3,041
|
)
|
|
$
|
9,146,697
|
|
(C)
|
||||||||
Depreciation, Depletion and Amortization
|
|
|
|
|
|
|
|
|
$
|
237,780
|
|
|
$
|
16,379
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
254,159
|
|
|
||||||||
Capital Expenditures
|
|
|
|
|
|
|
|
|
$
|
448,475
|
|
|
$
|
179,890
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
628,365
|
|
|
(A)
|
Included in Total Natural Gas, NGLs and Oil Revenue are sales of $116,245 to Direct Energy Business Marketing LLC and $94,447 to NJR Energy Services Company, each of which comprise over 10% of revenue from contracts with customers for the period.
|
(B)
|
Includes equity in earnings of unconsolidated affiliates of $1,030 for Total E&P.
|
(C)
|
Includes investments in unconsolidated equity affiliates of $17,637 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
|
|
(D)
|
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
|
|
(E)
|
|||||||||
Total Revenue and Other Operating Income
|
$
|
382,936
|
|
|
$
|
238,977
|
|
|
$
|
104,108
|
|
|
$
|
122,237
|
|
|
$
|
848,258
|
|
|
$
|
125,503
|
|
|
$
|
—
|
|
|
$
|
(75,908
|
)
|
|
$
|
897,853
|
|
|
Earnings (Loss) 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
|
|
(F)
|
||||||||
Depreciation, Depletion and Amortization
|
|
|
|
|
|
|
|
|
$
|
226,991
|
|
|
$
|
16,763
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
243,754
|
|
|
||||||||
Capital Expenditures
|
|
|
|
|
|
|
|
|
$
|
455,397
|
|
|
$
|
41,262
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
496,659
|
|
|
(D)
|
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 revenue from contracts with customers for the period.
|
(E)
|
Includes equity in earnings of unconsolidated affiliates of $3,447 for Total E&P.
|
(F)
|
Includes investments in unconsolidated equity affiliates of $22,347 for Total E&P.
|
|
For the Three Months Ended June 30,
|
|
For the Six Months Ended
June 30,
|
||||||||||||
2019
|
|
2018
|
|
2019
|
|
2018
|
|||||||||
Total Segment Revenue from Contracts with External Customers
|
$
|
380,528
|
|
|
$
|
367,930
|
|
|
$
|
851,138
|
|
|
$
|
817,862
|
|
Gain on Commodity Derivative Instruments
|
221,581
|
|
|
25,660
|
|
|
26,205
|
|
|
60,747
|
|
||||
Other Operating Income
|
2,923
|
|
|
8,534
|
|
|
6,120
|
|
|
19,244
|
|
||||
Total Consolidated Revenue and Other Operating Income
|
$
|
605,032
|
|
|
$
|
402,124
|
|
|
$
|
883,463
|
|
|
$
|
897,853
|
|
|
For the Three Months Ended June 30,
|
|
For the Six Months Ended
June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Segment Income Before Income Taxes for Reportable Business Segments:
|
|
|
|
|
|
|
|
||||||||
Total E&P
|
$
|
188,260
|
|
|
$
|
42,125
|
|
|
$
|
81,830
|
|
|
$
|
141,935
|
|
Midstream
|
44,414
|
|
|
27,795
|
|
|
76,998
|
|
|
63,329
|
|
||||
Total Segment Income Before Income Taxes for Reportable Business Segments
|
$
|
232,674
|
|
|
$
|
69,920
|
|
|
$
|
158,828
|
|
|
$
|
205,264
|
|
Unallocated Expenses:
|
|
|
|
|
|
|
|
||||||||
Other Income (Expense)
|
501
|
|
|
(575
|
)
|
|
1,531
|
|
|
5,917
|
|
||||
Gain on Certain Asset Sales
|
387
|
|
|
3,010
|
|
|
4,530
|
|
|
12,386
|
|
||||
Gain on Previously Held Equity Interest
|
—
|
|
|
—
|
|
|
—
|
|
|
623,663
|
|
||||
Loss on Debt Extinguishment
|
(77
|
)
|
|
(23,413
|
)
|
|
(7,614
|
)
|
|
(39,048
|
)
|
||||
Impairment of Other Intangible Assets
|
—
|
|
|
(18,650
|
)
|
|
—
|
|
|
(18,650
|
)
|
||||
Earnings Before Income Tax
|
$
|
233,485
|
|
|
$
|
30,292
|
|
|
$
|
157,275
|
|
|
$
|
789,532
|
|
|
June 30,
|
||||||
2019
|
|
2018
|
|||||
Segment Assets for Total Reportable Business Segments:
|
|
|
|
||||
E&P
|
$
|
6,887,043
|
|
|
$
|
6,055,545
|
|
Midstream
|
2,116,492
|
|
|
1,830,007
|
|
||
Intercompany Eliminations
|
(3,041
|
)
|
|
(11,166
|
)
|
||
Items Excluded from Segment Assets:
|
|
|
|
||||
Cash and Cash Equivalents
|
32,611
|
|
|
54,846
|
|
||
Recoverable Income Taxes
|
113,592
|
|
|
27,780
|
|
||
Assets Held for Sale
|
—
|
|
|
250,746
|
|
||
Total Consolidated Assets
|
$
|
9,146,697
|
|
|
$
|
8,207,758
|
|
ITEM 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
|
2019
|
|
2020
|
|
Volumes Hedged (Bcf), as of 7/8/19
|
|
396.6*
|
|
470.5
|
|
|
For the Three Months Ended June 30,
|
||||||||||
(Dollars in thousands)
|
2019
|
|
2018
|
|
Variance
|
||||||
Net Income
|
$
|
192,694
|
|
|
$
|
61,394
|
|
|
$
|
131,300
|
|
Less: Net Income Attributable to Noncontrolling Interest
|
30,217
|
|
|
19,380
|
|
|
10,837
|
|
|||
Net Income Attributable to CNX Resources Shareholders
|
$
|
162,477
|
|
|
$
|
42,014
|
|
|
$
|
120,463
|
|
|
For the Three Months Ended June 30,
|
|||||||||||||
|
2019
|
|
2018
|
|
Variance
|
|
Percent
Change
|
|||||||
Sales Volumes (Bcfe)
|
134.5
|
|
|
122.6
|
|
|
11.9
|
|
|
9.7
|
%
|
|||
|
|
|
|
|
|
|
|
|||||||
Average Sales Price (per Mcfe)
|
$
|
2.63
|
|
|
$
|
2.87
|
|
|
$
|
(0.24
|
)
|
|
(8.4
|
)%
|
Lease Operating Expense (per Mcfe)
|
0.15
|
|
|
0.21
|
|
|
(0.06
|
)
|
|
(28.6
|
)%
|
|||
Production, Ad Valorem, and Other Fees (per Mcfe)
|
0.05
|
|
|
0.06
|
|
|
(0.01
|
)
|
|
(16.7
|
)%
|
|||
Transportation, Gathering and Compression (per Mcfe)
|
0.98
|
|
|
0.82
|
|
|
0.16
|
|
|
19.5
|
%
|
|||
Depreciation, Depletion and Amortization (DD&A) (per Mcfe)
|
0.89
|
|
|
0.91
|
|
|
(0.02
|
)
|
|
(2.2
|
)%
|
|||
Average Costs (per Mcfe)
|
2.07
|
|
|
2.00
|
|
|
0.07
|
|
|
3.5
|
%
|
|||
Average Margin (per Mcfe)
|
$
|
0.56
|
|
|
$
|
0.87
|
|
|
$
|
(0.31
|
)
|
|
(35.6
|
)%
|
•
|
Lease operating expense decreased on a per unit basis primarily due to a decrease in water disposal costs in the period-to-period comparison due to an increase in the reuse of produced water in well completions in the current period.
|
•
|
Transportation, gathering, and compression expense increased on a per-unit basis primarily due to an increase in CNXM gathering fees related to an increase in our Marcellus production and an increase in firm transportation expense primarily as a result of new contracts that give CNX the ability to move and sell natural gas outside of the Appalachian basin. The decrease in production from CNX's lower cost dry Utica volumes also contributed to the increase on a per unit basis.
|
|
|
For the Three Months Ended June 30,
|
|||||||||||||
in thousands (unless noted)
|
|
2019
|
|
2018
|
|
Variance
|
|
Percent Change
|
|||||||
LIQUIDS
|
|
|
|
|
|
|
|
|
|||||||
NGLs:
|
|
|
|
|
|
|
|
|
|||||||
Sales Volume (MMcfe)
|
|
7,855
|
|
|
8,365
|
|
|
(510
|
)
|
|
(6.1
|
)%
|
|||
Sales Volume (Mbbls)
|
|
1,309
|
|
|
1,394
|
|
|
(85
|
)
|
|
(6.1
|
)%
|
|||
Gross Price ($/Bbl)
|
|
$
|
18.36
|
|
|
$
|
28.38
|
|
|
$
|
(10.02
|
)
|
|
(35.3
|
)%
|
Gross Revenue
|
|
$
|
24,025
|
|
|
$
|
39,557
|
|
|
$
|
(15,532
|
)
|
|
(39.3
|
)%
|
|
|
|
|
|
|
|
|
|
|||||||
Oil:
|
|
|
|
|
|
|
|
|
|||||||
Sales Volume (MMcfe)
|
|
10
|
|
|
69
|
|
|
(59
|
)
|
|
(85.5
|
)%
|
|||
Sales Volume (Mbbls)
|
|
2
|
|
|
11
|
|
|
(9
|
)
|
|
(81.8
|
)%
|
|||
Gross Price ($/Bbl)
|
|
$
|
50.52
|
|
|
$
|
58.32
|
|
|
$
|
(7.80
|
)
|
|
(13.4
|
)%
|
Gross Revenue
|
|
$
|
89
|
|
|
$
|
670
|
|
|
$
|
(581
|
)
|
|
(86.7
|
)%
|
|
|
|
|
|
|
|
|
|
|||||||
Condensate:
|
|
|
|
|
|
|
|
|
|||||||
Sales Volume (MMcfe)
|
|
222
|
|
|
528
|
|
|
(306
|
)
|
|
(58.0
|
)%
|
|||
Sales Volume (Mbbls)
|
|
37
|
|
|
88
|
|
|
(51
|
)
|
|
(58.0
|
)%
|
|||
Gross Price ($/Bbl)
|
|
$
|
45.36
|
|
|
$
|
56.82
|
|
|
$
|
(11.46
|
)
|
|
(20.2
|
)%
|
Gross Revenue
|
|
$
|
1,680
|
|
|
$
|
4,996
|
|
|
$
|
(3,316
|
)
|
|
(66.4
|
)%
|
|
|
|
|
|
|
|
|
|
|||||||
GAS
|
|
|
|
|
|
|
|
|
|||||||
Sales Volume (MMcf)
|
|
126,378
|
|
|
113,599
|
|
|
12,779
|
|
|
11.2
|
%
|
|||
Sales Price ($/Mcf)
|
|
$
|
2.51
|
|
|
$
|
2.55
|
|
|
$
|
(0.04
|
)
|
|
(1.6
|
)%
|
Gross Revenue
|
|
$
|
317,071
|
|
|
$
|
289,294
|
|
|
$
|
27,777
|
|
|
9.6
|
%
|
|
|
|
|
|
|
|
|
|
|||||||
Hedging Impact ($/Mcf)
|
|
$
|
0.08
|
|
|
$
|
0.15
|
|
|
$
|
(0.07
|
)
|
|
(46.7
|
)%
|
Gain on Commodity Derivative Instruments - Cash Settlement
|
|
10,672
|
|
|
16,684
|
|
|
(6,012
|
)
|
|
(36.0
|
)%
|
|
For the Three Months Ended June 30,
|
|||||||||||||
(in millions)
|
2019
|
|
2018
|
|
Variance
|
|
Percent
Change
|
|||||||
SG&A
|
|
|
|
|
|
|
|
|||||||
Salaries and Wages
|
$
|
10
|
|
|
$
|
10
|
|
|
$
|
—
|
|
|
—
|
%
|
Long-Term Equity-Based Compensation (Non-Cash)
|
24
|
|
|
6
|
|
|
18
|
|
|
300.0
|
%
|
|||
Short-Term Incentive Compensation
|
3
|
|
|
6
|
|
|
(3
|
)
|
|
(50.0
|
)%
|
|||
Other
|
12
|
|
|
13
|
|
|
(1
|
)
|
|
(7.7
|
)%
|
|||
Total SG&A
|
$
|
49
|
|
|
$
|
35
|
|
|
$
|
14
|
|
|
40.0
|
%
|
|
For the Three Months Ended June 30,
|
||||||||||||||
(in millions)
|
2019
|
|
2018
|
|
Variance
|
|
Percent
Change
|
||||||||
Other Income
|
|
|
|
|
|
|
|
||||||||
Royalty Income
|
$
|
1
|
|
|
$
|
3
|
|
|
$
|
(2
|
)
|
|
(66.7
|
)%
|
|
Right of Way Sales
|
3
|
|
|
1
|
|
|
2
|
|
|
200.0
|
%
|
||||
Other
|
1
|
|
|
2
|
|
|
(1
|
)
|
|
(50.0
|
)%
|
||||
Total Other Income
|
$
|
5
|
|
|
$
|
6
|
|
|
$
|
(1
|
)
|
|
(16.7
|
)%
|
|
|
|
|
|
|
|
|
|
||||||||
Other Expense
|
|
|
|
|
|
|
|
||||||||
Professional Services
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
—
|
%
|
|
Bank Fees
|
3
|
|
|
3
|
|
|
—
|
|
|
—
|
%
|
||||
Other Corporate Expense
|
1
|
|
|
3
|
|
|
(2
|
)
|
|
(66.7
|
)%
|
||||
Total Other Expense
|
$
|
5
|
|
|
$
|
7
|
|
—
|
|
$
|
(2
|
)
|
|
(28.6
|
)%
|
|
|
|
|
|
|
|
|
||||||||
Total Other (Income) Expense
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
(1
|
)
|
|
(100.0
|
)%
|
|
For the Three Months Ended June 30,
|
|||||||||||||
(in millions)
|
2019
|
|
2018
|
|
Variance
|
|
Percent
Change
|
|||||||
Total Company Earnings Before Income Tax
|
$
|
233
|
|
|
$
|
30
|
|
|
$
|
203
|
|
|
676.7
|
%
|
Income Tax Expense (Benefit)
|
$
|
41
|
|
|
$
|
(31
|
)
|
|
$
|
72
|
|
|
(232.3
|
)%
|
Effective Income Tax Rate
|
17.5
|
%
|
|
(102.7
|
)%
|
|
120.2
|
%
|
|
|
|
For the Three Months Ended
|
|
Difference to Three Months Ended
|
||||||||||||||||||||||||||||||||||||
|
June 30, 2019
|
|
June 30, 2018
|
||||||||||||||||||||||||||||||||||||
(in millions)
|
Marcellus
|
|
Utica
|
|
CBM
|
|
Other
Gas |
|
Total E&P
|
|
Marcellus
|
|
Utica
|
|
CBM
|
|
Other
Gas |
|
Total
E&P |
||||||||||||||||||||
Natural Gas, NGLs and Oil Revenue
|
$
|
237
|
|
|
$
|
66
|
|
|
$
|
40
|
|
|
$
|
—
|
|
|
$
|
343
|
|
|
$
|
59
|
|
|
$
|
(42
|
)
|
|
$
|
(7
|
)
|
|
$
|
(2
|
)
|
|
$
|
8
|
|
Gain on Commodity Derivative Instruments
|
7
|
|
2
|
|
|
1
|
|
|
211
|
|
|
221
|
|
|
(2
|
)
|
|
(3
|
)
|
|
(1
|
)
|
|
201
|
|
|
195
|
|
|||||||||||
Purchased Gas Revenue
|
—
|
|
|
—
|
|
|
—
|
|
|
19
|
|
|
19
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9
|
|
|
9
|
|
||||||||||
Other Operating Income
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
|
(5
|
)
|
||||||||||
Total Revenue and Other Operating Income
|
244
|
|
|
68
|
|
|
41
|
|
|
233
|
|
|
586
|
|
|
57
|
|
|
(45
|
)
|
|
(8
|
)
|
|
203
|
|
|
207
|
|
||||||||||
Lease Operating Expense
|
11
|
|
|
4
|
|
|
4
|
|
|
1
|
|
|
20
|
|
|
—
|
|
|
(5
|
)
|
|
(1
|
)
|
|
1
|
|
|
(5
|
)
|
||||||||||
Production, Ad Valorem, and Other Fees
|
4
|
|
|
2
|
|
|
2
|
|
|
(1
|
)
|
|
7
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
||||||||||
Transportation, Gathering and Compression
|
114
|
|
|
8
|
|
|
10
|
|
|
—
|
|
|
132
|
|
|
41
|
|
|
(8
|
)
|
|
(1
|
)
|
|
(1
|
)
|
|
31
|
|
||||||||||
Depreciation, Depletion and Amortization
|
65
|
|
|
36
|
|
|
17
|
|
|
3
|
|
|
121
|
|
|
14
|
|
|
(4
|
)
|
|
(2
|
)
|
|
2
|
|
|
10
|
|
||||||||||
Exploration and Production Related Other Costs
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
||||||||||
Purchased Gas Costs
|
—
|
|
|
—
|
|
|
—
|
|
|
19
|
|
|
19
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9
|
|
|
9
|
|
||||||||||
Other Operating Expense
|
—
|
|
|
—
|
|
|
—
|
|
|
18
|
|
|
18
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||
Selling, General and Administrative Costs
|
—
|
|
|
—
|
|
|
—
|
|
|
44
|
|
|
44
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15
|
|
|
15
|
|
||||||||||
Total Operating Costs and Expenses
|
194
|
|
|
50
|
|
|
33
|
|
|
89
|
|
|
366
|
|
|
54
|
|
|
(17
|
)
|
|
(4
|
)
|
|
27
|
|
|
60
|
|
||||||||||
Interest Expense
|
—
|
|
|
—
|
|
|
—
|
|
|
32
|
|
|
32
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
||||||||||
Total E&P Division Costs
|
194
|
|
|
50
|
|
|
33
|
|
|
121
|
|
|
398
|
|
|
54
|
|
|
(17
|
)
|
|
(4
|
)
|
|
28
|
|
|
61
|
|
||||||||||
Earnings Before Income Tax
|
$
|
50
|
|
|
$
|
18
|
|
|
$
|
8
|
|
|
$
|
112
|
|
|
$
|
188
|
|
|
$
|
3
|
|
|
$
|
(28
|
)
|
|
$
|
(4
|
)
|
|
$
|
175
|
|
|
$
|
146
|
|
|
For the Three Months Ended June 30,
|
|||||||||||||
|
2019
|
|
2018
|
|
Variance
|
|
Percent
Change
|
|||||||
Marcellus Gas Sales Volumes (Bcf)
|
84.3
|
|
|
58.0
|
|
|
26.3
|
|
|
45.3
|
%
|
|||
NGLs Sales Volumes (Bcfe)*
|
7.9
|
|
|
6.3
|
|
|
1.6
|
|
|
25.4
|
%
|
|||
Condensate Sales Volumes (Bcfe)*
|
0.2
|
|
|
0.4
|
|
|
(0.2
|
)
|
|
(50.0
|
)%
|
|||
Total Marcellus Sales Volumes (Bcfe)*
|
92.4
|
|
|
64.7
|
|
|
27.7
|
|
|
42.8
|
%
|
|||
|
|
|
|
|
|
|
|
|||||||
Average Sales Price - Gas (per Mcf)
|
$
|
2.51
|
|
|
$
|
2.47
|
|
|
$
|
0.04
|
|
|
1.6
|
%
|
Gain on Commodity Derivative Instruments - Cash Settlement - Gas (per Mcf)
|
$
|
0.08
|
|
|
$
|
0.16
|
|
|
$
|
(0.08
|
)
|
|
(50.0
|
)%
|
Average Sales Price - NGLs (per Mcfe)*
|
$
|
3.06
|
|
|
$
|
4.95
|
|
|
$
|
(1.89
|
)
|
|
(38.2
|
)%
|
Average Sales Price - Condensate (per Mcfe)*
|
$
|
7.52
|
|
|
$
|
9.32
|
|
|
$
|
(1.80
|
)
|
|
(19.3
|
)%
|
|
|
|
|
|
|
|
|
|||||||
Total Average Marcellus Sales Price (per Mcfe)
|
$
|
2.64
|
|
|
$
|
2.90
|
|
|
$
|
(0.26
|
)
|
|
(9.0
|
)%
|
Average Marcellus Lease Operating Expenses (per Mcfe)
|
0.12
|
|
|
0.16
|
|
|
(0.04
|
)
|
|
(25.0
|
)%
|
|||
Average Marcellus Production, Ad Valorem, and Other Fees (per Mcfe)
|
0.04
|
|
|
0.07
|
|
|
(0.03
|
)
|
|
(42.9
|
)%
|
|||
Average Marcellus Transportation, Gathering and Compression Costs (per Mcfe)
|
1.24
|
|
|
1.13
|
|
|
0.11
|
|
|
9.7
|
%
|
|||
Average Marcellus Depreciation, Depletion and Amortization Costs (per Mcfe)
|
0.69
|
|
|
0.81
|
|
|
(0.12
|
)
|
|
(14.8
|
)%
|
|||
Total Average Marcellus Costs (per Mcfe)
|
$
|
2.09
|
|
|
$
|
2.17
|
|
|
$
|
(0.08
|
)
|
|
(3.7
|
)%
|
Average Margin for Marcellus (per Mcfe)
|
$
|
0.55
|
|
|
$
|
0.73
|
|
|
$
|
(0.18
|
)
|
|
(24.7
|
)%
|
|
For the Three Months Ended June 30,
|
|||||||||||||
|
2019
|
|
2018
|
|
Variance
|
|
Percent
Change
|
|||||||
Utica Gas Sales Volumes (Bcf)
|
28.1
|
|
|
40.4
|
|
|
(12.3
|
)
|
|
(30.4
|
)%
|
|||
NGLs Sales Volumes (Bcfe)*
|
—
|
|
|
2.1
|
|
|
(2.1
|
)
|
|
(100.0
|
)%
|
|||
Condensate Sales Volumes (Bcfe)*
|
—
|
|
|
0.1
|
|
|
(0.1
|
)
|
|
(100.0
|
)%
|
|||
Total Utica Sales Volumes (Bcfe)*
|
28.1
|
|
|
42.6
|
|
|
(14.5
|
)
|
|
(34.0
|
)%
|
|||
|
|
|
|
|
|
|
|
|||||||
Average Sales Price - Gas (per Mcf)
|
$
|
2.34
|
|
|
$
|
2.43
|
|
|
$
|
(0.09
|
)
|
|
(3.7
|
)%
|
Gain on Commodity Derivative Instruments - Cash Settlement- Gas (per Mcf)
|
$
|
0.10
|
|
|
$
|
0.13
|
|
|
$
|
(0.03
|
)
|
|
(23.1
|
)%
|
Average Sales Price - NGLs (per Mcfe)*
|
$
|
—
|
|
|
$
|
4.05
|
|
|
$
|
(4.05
|
)
|
|
(100.0
|
)%
|
Average Sales Price - Condensate (per Mcfe)*
|
$
|
—
|
|
|
$
|
9.92
|
|
|
$
|
(9.92
|
)
|
|
(100.0
|
)%
|
|
|
|
|
|
|
|
|
|||||||
Total Average Utica Sales Price (per Mcfe)
|
$
|
2.44
|
|
|
$
|
2.66
|
|
|
$
|
(0.22
|
)
|
|
(8.3
|
)%
|
Average Utica Lease Operating Expenses (per Mcfe)
|
0.15
|
|
|
0.21
|
|
|
(0.06
|
)
|
|
(28.6
|
)%
|
|||
Average Utica Production, Ad Valorem, and Other Fees (per Mcfe)
|
0.05
|
|
|
0.03
|
|
|
0.02
|
|
|
66.7
|
%
|
|||
Average Utica Transportation, Gathering and Compression Costs (per Mcfe)
|
0.27
|
|
|
0.38
|
|
|
(0.11
|
)
|
|
(28.9
|
)%
|
|||
Average Utica Depreciation, Depletion and Amortization Costs (per Mcfe)
|
1.33
|
|
|
0.95
|
|
|
0.38
|
|
|
40.0
|
%
|
|||
Total Average Utica Costs (per Mcfe)
|
$
|
1.80
|
|
|
$
|
1.57
|
|
|
$
|
0.23
|
|
|
14.6
|
%
|
Average Margin for Utica (per Mcfe)
|
$
|
0.64
|
|
|
$
|
1.09
|
|
|
$
|
(0.45
|
)
|
|
(41.3
|
)%
|
|
For the Three Months Ended June 30,
|
|||||||||||||
|
2019
|
|
2018
|
|
Variance
|
|
Percent
Change
|
|||||||
CBM Gas Sales Volumes (Bcf)
|
13.9
|
|
|
14.8
|
|
|
(0.9
|
)
|
|
(6.1
|
)%
|
|||
|
|
|
|
|
|
|
|
|||||||
Average Sales Price - Gas (per Mcf)
|
$
|
2.85
|
|
|
$
|
3.17
|
|
|
$
|
(0.32
|
)
|
|
(10.1
|
)%
|
Gain on Commodity Derivative Instruments - Cash Settlement - Gas (per Mcf)
|
$
|
0.08
|
|
|
$
|
0.15
|
|
|
$
|
(0.07
|
)
|
|
(46.7
|
)%
|
|
|
|
|
|
|
|
|
|||||||
Total Average CBM Sales Price (per Mcf)
|
$
|
2.93
|
|
|
$
|
3.31
|
|
|
$
|
(0.38
|
)
|
|
(11.5
|
)%
|
Average CBM Lease Operating Expenses (per Mcf)
|
0.32
|
|
|
0.36
|
|
|
(0.04
|
)
|
|
(11.1
|
)%
|
|||
Average CBM Production, Ad Valorem, and Other Fees (per Mcf)
|
0.13
|
|
|
0.11
|
|
|
0.02
|
|
|
18.2
|
%
|
|||
Average CBM Transportation, Gathering and Compression Costs (per Mcf)
|
0.71
|
|
|
0.77
|
|
|
(0.06
|
)
|
|
(7.8
|
)%
|
|||
Average CBM Depreciation, Depletion and Amortization Costs (per Mcf)
|
1.22
|
|
|
1.23
|
|
|
(0.01
|
)
|
|
(0.8
|
)%
|
|||
Total Average CBM Costs (per Mcf)
|
$
|
2.38
|
|
|
$
|
2.47
|
|
|
$
|
(0.09
|
)
|
|
(3.6
|
)%
|
Average Margin for CBM (per Mcf)
|
$
|
0.55
|
|
|
$
|
0.84
|
|
|
$
|
(0.29
|
)
|
|
(34.5
|
)%
|
|
For the Three Months Ended June 30,
|
||||||||||
|
2019
|
|
2018
|
|
Variance
|
|
Percent
Change |
||||
Other Gas Sales Volumes (Bcf)
|
0.1
|
|
|
0.4
|
|
|
(0.3
|
)
|
|
(75.0
|
)%
|
Oil Sales Volumes (Bcfe)*
|
—
|
|
|
0.1
|
|
|
(0.1
|
)
|
|
(100.0
|
)%
|
Total Other Sales Volumes (Bcfe)*
|
0.1
|
|
|
0.5
|
|
|
(0.4
|
)
|
|
(80.0
|
)%
|
|
For the Three Months Ended June 30,
|
|||||||||||||
(in millions)
|
2019
|
|
2018
|
|
Variance
|
|
Percent
Change |
|||||||
Water Income
|
$
|
—
|
|
|
$
|
4
|
|
|
$
|
(4
|
)
|
|
(100.0
|
)%
|
Equity in Earnings of Affiliates
|
1
|
|
|
2
|
|
|
(1
|
)
|
|
(50.0
|
)%
|
|||
Gathering Income
|
2
|
|
|
2
|
|
|
—
|
|
|
—
|
%
|
|||
Total Other Operating Income
|
$
|
3
|
|
|
$
|
8
|
|
|
$
|
(5
|
)
|
|
(62.5
|
)%
|
•
|
Water income decreased $4 million due to sales of freshwater to third-parties for hydraulic fracturing in the 2018 period. There were nominal sales in the 2019 period.
|
|
For the Three Months Ended June 30,
|
|||||||||||||
(in millions)
|
2019
|
|
2018
|
|
Variance
|
|
Percent
Change
|
|||||||
Lease Expiration Costs
|
$
|
3
|
|
|
$
|
1
|
|
|
$
|
2
|
|
|
200.0
|
%
|
Land Rentals
|
2
|
|
|
1
|
|
|
1
|
|
|
100.0
|
%
|
|||
Other
|
—
|
|
|
2
|
|
|
(2
|
)
|
|
(100.0
|
)%
|
|||
Total Exploration and Production Other Costs
|
$
|
5
|
|
|
$
|
4
|
|
|
$
|
1
|
|
|
25.0
|
%
|
|
For the Three Months Ended June 30,
|
|||||||||||||
|
2019
|
|
2018
|
|
Variance
|
|
Percent
Change |
|||||||
Water Expense
|
$
|
—
|
|
|
$
|
3
|
|
|
$
|
(3
|
)
|
|
(100.0
|
)%
|
Consulting and Professional Services
|
—
|
|
|
3
|
|
|
(3
|
)
|
|
(100.0
|
)%
|
|||
Insurance Expense
|
1
|
|
|
1
|
|
|
—
|
|
|
—
|
%
|
|||
Idle Equipment and Service Charges
|
3
|
|
|
1
|
|
|
2
|
|
|
200.0
|
%
|
|||
Unutilized Firm Transportation and Processing Fees
|
14
|
|
|
10
|
|
|
4
|
|
|
40.0
|
%
|
|||
Total Other Operating Expense
|
$
|
18
|
|
|
$
|
18
|
|
|
$
|
—
|
|
|
—
|
%
|
•
|
Water Expense decreased $3 million due to the associated costs related to the sale of freshwater to third-parties for hydraulic fracturing in the 2018 period as shown in Total Other Operating Income above. There were nominal sales in the 2019 period.
|
•
|
Consulting and Professional Services in the prior year mainly related to the sale of the majority of CNX's shallow oil and gas assets in 2018 (See Note 5 - Acquisitions and Dispositions in the Notes to the Unaudited Consolidated Financial Statements in Item 1 of this Form 10-Q for additional information).
|
•
|
Idle Equipment and Service Charges primarily relate to the temporary idling of some of the Company's natural gas drilling rigs as well as related equipment and other services that may be needed in the natural gas drilling and completions process. The increase of $2 million in the period-to-period comparison was primarily a result of the acceleration of five months of idle rig expense due to CNX terminating one of its drilling rig contacts early.
|
•
|
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 increase in the period-to-period comparison was primarily due to previously-acquired capacity which was not utilized during the current period to transport the Company’s flowing production. The Company attempts to minimize this expense by releasing (selling) unutilized firm transportation capacity to other parties when possible and when beneficial. The
|
|
For the Three Months Ended June 30,
|
||||||||||
(in millions)
|
2019
|
|
2018
|
|
Variance
|
||||||
Midstream Revenue - Related Party
|
$
|
60
|
|
|
$
|
38
|
|
|
$
|
22
|
|
Midstream Revenue - Third Party
|
18
|
|
|
23
|
|
|
(5
|
)
|
|||
Total Revenue
|
$
|
78
|
|
|
$
|
61
|
|
|
$
|
17
|
|
|
|
|
|
|
|
||||||
Transportation, Gathering and Compression
|
$
|
13
|
|
|
$
|
12
|
|
|
$
|
1
|
|
Depreciation, Depletion and Amortization
|
8
|
|
|
8
|
|
|
—
|
|
|||
Selling, General, and Administrative Costs
|
5
|
|
|
6
|
|
|
(1
|
)
|
|||
Total Operating Costs and Expenses
|
26
|
|
|
26
|
|
|
—
|
|
|||
Interest Expense
|
8
|
|
|
7
|
|
|
1
|
|
|||
Total Midstream Division Costs
|
34
|
|
|
33
|
|
|
1
|
|
|||
Earnings Before Income Tax
|
$
|
44
|
|
|
$
|
28
|
|
|
$
|
16
|
|
|
For the Three Months Ended June 30,
|
|||||||
|
2019
|
|
2018
|
|
Variance
|
|||
Dry Gas (BBtu/d) (*)
|
891
|
|
|
698
|
|
|
193
|
|
Wet Gas (BBtu/d) (*)
|
731
|
|
|
653
|
|
|
78
|
|
Other (BBtu/d) (*)(**)
|
178
|
|
|
9
|
|
|
169
|
|
Total Gathered Volumes
|
1,800
|
|
|
1,360
|
|
|
440
|
|
|
For the Six Months Ended June 30,
|
||||||||||
(Dollars in thousands)
|
2019
|
|
2018
|
|
Variance
|
||||||
Net Income
|
$
|
128,044
|
|
|
$
|
606,940
|
|
|
$
|
(478,896
|
)
|
Less: Net Income Attributable to Noncontrolling Interest
|
52,904
|
|
|
37,363
|
|
|
15,541
|
|
|||
Net Income Attributable to CNX Resources Shareholders
|
$
|
75,140
|
|
|
$
|
569,577
|
|
|
$
|
(494,437
|
)
|
|
For the Six Months Ended June 30,
|
|||||||||||||
|
2019
|
|
2018
|
|
Variance
|
|
Percent
Change
|
|||||||
Sales Volumes (Bcfe)
|
267.5
|
|
|
252.1
|
|
|
15.4
|
|
|
6.1
|
%
|
|||
|
|
|
|
|
|
|
|
|||||||
Average Sales Price (per Mcfe)
|
$
|
2.80
|
|
|
$
|
2.94
|
|
|
$
|
(0.14
|
)
|
|
(4.8
|
)%
|
Lease Operating Expense (per Mcfe)
|
0.14
|
|
|
0.25
|
|
|
(0.11
|
)
|
|
(44.0
|
)%
|
|||
Production, Ad Valorem, and Other Fees (per Mcfe)
|
0.05
|
|
|
0.07
|
|
|
(0.02
|
)
|
|
(28.6
|
)%
|
|||
Transportation, Gathering and Compression (per Mcfe)
|
0.95
|
|
|
0.84
|
|
|
0.11
|
|
|
13.1
|
%
|
|||
Depreciation, Depletion and Amortization (DD&A) (per Mcfe)
|
0.89
|
|
|
0.89
|
|
|
—
|
|
|
—
|
%
|
|||
Average Costs (per Mcfe)
|
2.03
|
|
|
2.05
|
|
|
(0.02
|
)
|
|
(1.0
|
)%
|
|||
Average Margin (per Mcfe)
|
$
|
0.77
|
|
|
$
|
0.89
|
|
|
$
|
(0.12
|
)
|
|
(13.5
|
)%
|
•
|
Lease operating expense decreased on a per unit basis primarily due to a decrease in water disposal costs in the period-to-period comparison due to an increase in the reuse of produced water in well completions in the current period, and also due to the sale of the majority of CNX's shallow oil and gas assets and the sale of substantially all of CNX's Ohio Utica JV assets in 2018.
|
•
|
Transportation, gathering, and compression expense increased on a per-unit basis primarily due to an increase in CNXM gathering fees related to an increase in our Marcellus production and an increase in firm transportation expense primarily as a result of new contracts that give CNX the ability to move and sell natural gas outside of the Appalachian basin. The decrease in production from CNX's lower cost dry Utica volumes as well as the third quarter 2018 sale of CNX's Ohio JV assets also contributed to the increase on a per unit basis.
|
|
|
For the Six Months Ended June 30,
|
|||||||||||||
in thousands (unless noted)
|
|
2019
|
|
2018
|
|
Variance
|
|
Percent Change
|
|||||||
LIQUIDS
|
|
|
|
|
|
|
|
|
|||||||
NGLs:
|
|
|
|
|
|
|
|
|
|||||||
Sales Volume (MMcfe)
|
|
14,536
|
|
|
19,474
|
|
|
(4,938
|
)
|
|
(25.4
|
)%
|
|||
Sales Volume (Mbbls)
|
|
2,423
|
|
|
3,246
|
|
|
(823
|
)
|
|
(25.4
|
)%
|
|||
Gross Price ($/Bbl)
|
|
$
|
22.20
|
|
|
$
|
27.84
|
|
|
$
|
(5.64
|
)
|
|
(20.3
|
)%
|
Gross Revenue
|
|
$
|
53,790
|
|
|
$
|
90,441
|
|
|
$
|
(36,651
|
)
|
|
(40.5
|
)%
|
|
|
|
|
|
|
|
|
|
|||||||
Oil:
|
|
|
|
|
|
|
|
|
|||||||
Sales Volume (MMcfe)
|
|
34
|
|
|
163
|
|
|
(129
|
)
|
|
(79.1
|
)%
|
|||
Sales Volume (Mbbls)
|
|
6
|
|
|
27
|
|
|
(21
|
)
|
|
(77.8
|
)%
|
|||
Gross Price ($/Bbl)
|
|
$
|
45.78
|
|
|
$
|
57.24
|
|
|
$
|
(11.46
|
)
|
|
(20.0
|
)%
|
Gross Revenue
|
|
$
|
256
|
|
|
$
|
1,558
|
|
|
$
|
(1,302
|
)
|
|
(83.6
|
)%
|
|
|
|
|
|
|
|
|
|
|||||||
Condensate:
|
|
|
|
|
|
|
|
|
|||||||
Sales Volume (MMcfe)
|
|
580
|
|
|
1,319
|
|
|
(739
|
)
|
|
(56.0
|
)%
|
|||
Sales Volume (Mbbls)
|
|
97
|
|
|
220
|
|
|
(123
|
)
|
|
(55.9
|
)%
|
|||
Gross Price ($/Bbl)
|
|
$
|
41.46
|
|
|
$
|
52.32
|
|
|
$
|
(10.86
|
)
|
|
(20.8
|
)%
|
Gross Revenue
|
|
$
|
4,007
|
|
|
$
|
11,499
|
|
|
$
|
(7,492
|
)
|
|
(65.2
|
)%
|
|
|
|
|
|
|
|
|
|
|||||||
GAS
|
|
|
|
|
|
|
|
|
|||||||
Sales Volume (MMcf)
|
|
252,316
|
|
|
231,114
|
|
|
21,202
|
|
|
9.2
|
%
|
|||
Sales Price ($/Mcf)
|
|
$
|
2.86
|
|
|
$
|
2.75
|
|
|
$
|
0.11
|
|
|
4.0
|
%
|
Gross Revenue
|
|
$
|
720,758
|
|
|
$
|
636,642
|
|
|
$
|
84,116
|
|
|
13.2
|
%
|
|
|
|
|
|
|
|
|
|
|||||||
Hedging Impact ($/Mcf)
|
|
$
|
(0.12
|
)
|
|
$
|
—
|
|
|
$
|
(0.12
|
)
|
|
(100.0
|
)%
|
Loss on Commodity Derivative Instruments - Cash Settlement
|
|
$
|
(30,710
|
)
|
|
$
|
(307
|
)
|
|
$
|
(30,403
|
)
|
|
(9,903.3
|
)%
|
|
For the Six Months Ended June 30,
|
|||||||||||||
(in millions)
|
2019
|
|
2018
|
|
Variance
|
|
Percent
Change
|
|||||||
SG&A
|
|
|
|
|
|
|
|
|||||||
Salaries and Wages
|
$
|
21
|
|
|
$
|
21
|
|
|
$
|
—
|
|
|
—
|
%
|
Long-Term Equity-Based Compensation (Non-Cash)
|
35
|
|
|
11
|
|
|
24
|
|
|
218.2
|
%
|
|||
Short-Term Incentive Compensation
|
7
|
|
|
11
|
|
|
(4
|
)
|
|
(36.4
|
)%
|
|||
Other
|
22
|
|
|
23
|
|
|
(1
|
)
|
|
(4.3
|
)%
|
|||
Total SG&A
|
$
|
85
|
|
|
$
|
66
|
|
|
$
|
19
|
|
|
28.8
|
%
|
|
For the Six Months Ended June 30,
|
|||||||||||||
(in millions)
|
2019
|
|
2018
|
|
Variance
|
|
Percent
Change
|
|||||||
Other Income
|
|
|
|
|
|
|
|
|||||||
Royalty Income
|
$
|
4
|
|
|
$
|
10
|
|
|
$
|
(6
|
)
|
|
(60.0
|
)%
|
Right of Way Sales
|
4
|
|
|
4
|
|
|
—
|
|
|
—
|
%
|
|||
Interest Income
|
1
|
|
|
—
|
|
|
1
|
|
|
100.0
|
%
|
|||
Other
|
1
|
|
|
4
|
|
|
(3
|
)
|
|
(75.0
|
)%
|
|||
Total Other Income
|
$
|
10
|
|
|
$
|
18
|
|
|
$
|
(8
|
)
|
|
(44.4
|
)%
|
|
|
|
|
|
|
|
|
|||||||
Other Expense
|
|
|
|
|
|
|
|
|||||||
Professional Services
|
$
|
1
|
|
|
$
|
5
|
|
|
$
|
(4
|
)
|
|
(80.0
|
)%
|
Bank Fees
|
6
|
|
|
5
|
|
|
1
|
|
|
20.0
|
%
|
|||
Other Corporate Expense
|
2
|
|
|
2
|
|
|
—
|
|
|
—
|
%
|
|||
Total Other Expense
|
$
|
9
|
|
|
$
|
12
|
|
|
$
|
(3
|
)
|
|
(25.0
|
)%
|
|
|
|
|
|
|
|
|
|||||||
Total Other (Income) Expense
|
$
|
(1
|
)
|
|
$
|
(6
|
)
|
|
$
|
5
|
|
|
(83.3
|
)%
|
|
For the Six Months Ended June 30,
|
|||||||||||||
(in millions)
|
2019
|
|
2018
|
|
Variance
|
|
Percent
Change
|
|||||||
Total Company Earnings Before Income Tax
|
$
|
157
|
|
|
$
|
790
|
|
|
$
|
(633
|
)
|
|
(80.1
|
)%
|
Income Tax Expense
|
$
|
29
|
|
|
$
|
183
|
|
|
$
|
(154
|
)
|
|
(84.2
|
)%
|
Effective Income Tax Rate
|
18.6
|
%
|
|
23.1
|
%
|
|
(4.5
|
)%
|
|
|
|
For the Six Months Ended
|
|
Difference to Six Months Ended
|
||||||||||||||||||||||||||||||||||||
|
June 30, 2019
|
|
June 30, 2018
|
||||||||||||||||||||||||||||||||||||
(in millions)
|
Marcellus
|
|
Utica
|
|
CBM
|
|
Other
Gas
|
|
Total E&P
|
|
Marcellus
|
|
Utica
|
|
CBM
|
|
Other
Gas
|
|
Total
E&P
|
||||||||||||||||||||
Natural Gas, NGLs and Oil Revenue
|
$
|
531
|
|
|
$
|
158
|
|
|
$
|
89
|
|
|
$
|
1
|
|
|
$
|
779
|
|
|
$
|
148
|
|
|
$
|
(80
|
)
|
|
$
|
(15
|
)
|
|
$
|
(14
|
)
|
|
$
|
39
|
|
(Loss) Gain on Commodity Derivative Instruments
|
(21
|
)
|
|
(7
|
)
|
|
(3
|
)
|
|
57
|
|
|
26
|
|
|
(21
|
)
|
|
(8
|
)
|
|
(3
|
)
|
|
(3
|
)
|
|
(35
|
)
|
||||||||||
Purchased Gas Revenue
|
—
|
|
|
—
|
|
|
—
|
|
|
35
|
|
|
35
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|
7
|
|
||||||||||
Other Operating Income
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(13
|
)
|
|
(13
|
)
|
||||||||||
Total Revenue and Other Operating Income
|
510
|
|
|
151
|
|
|
86
|
|
|
99
|
|
|
846
|
|
|
127
|
|
|
(88
|
)
|
|
(18
|
)
|
|
(23
|
)
|
|
(2
|
)
|
||||||||||
Lease Operating Expense
|
21
|
|
|
9
|
|
|
9
|
|
|
—
|
|
|
39
|
|
|
(6
|
)
|
|
(12
|
)
|
|
(3
|
)
|
|
(2
|
)
|
|
(23
|
)
|
||||||||||
Production, Ad Valorem, and Other Fees
|
7
|
|
|
3
|
|
|
4
|
|
|
—
|
|
|
14
|
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
||||||||||
Transportation, Gathering and Compression
|
218
|
|
|
16
|
|
|
19
|
|
|
1
|
|
|
254
|
|
|
68
|
|
|
(16
|
)
|
|
(7
|
)
|
|
(3
|
)
|
|
42
|
|
||||||||||
Depreciation, Depletion and Amortization
|
127
|
|
|
73
|
|
|
33
|
|
|
5
|
|
|
238
|
|
|
23
|
|
|
(7
|
)
|
|
(3
|
)
|
|
(2
|
)
|
|
11
|
|
||||||||||
Exploration and Production Related Other Costs
|
—
|
|
|
—
|
|
|
—
|
|
|
8
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
2
|
|
||||||||||
Purchased Gas Costs
|
—
|
|
|
—
|
|
|
—
|
|
|
35
|
|
|
35
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8
|
|
|
8
|
|
||||||||||
Other Operating Expense
|
—
|
|
|
—
|
|
|
—
|
|
|
41
|
|
|
41
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|
7
|
|
||||||||||
Selling, General and Administrative Costs
|
—
|
|
|
—
|
|
|
—
|
|
|
74
|
|
|
74
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20
|
|
|
20
|
|
||||||||||
Total Operating Costs and Expenses
|
373
|
|
|
101
|
|
|
65
|
|
|
164
|
|
|
703
|
|
|
82
|
|
|
(35
|
)
|
|
(13
|
)
|
|
30
|
|
|
64
|
|
||||||||||
Interest Expense
|
—
|
|
|
—
|
|
|
—
|
|
|
61
|
|
|
61
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
|
(6
|
)
|
||||||||||
Total E&P Division Costs
|
373
|
|
|
101
|
|
|
65
|
|
|
225
|
|
|
764
|
|
|
82
|
|
|
(35
|
)
|
|
(13
|
)
|
|
24
|
|
|
58
|
|
||||||||||
Earnings (Loss) Before Income Tax
|
$
|
137
|
|
|
$
|
50
|
|
|
$
|
21
|
|
|
$
|
(126
|
)
|
|
$
|
82
|
|
|
$
|
45
|
|
|
$
|
(53
|
)
|
|
$
|
(5
|
)
|
|
$
|
(47
|
)
|
|
$
|
(60
|
)
|
|
For the Six Months Ended June 30,
|
|||||||||||||
|
2019
|
|
2018
|
|
Variance
|
|
Percent
Change
|
|||||||
Marcellus Gas Sales Volumes (Bcf)
|
166.0
|
|
|
114.1
|
|
|
51.9
|
|
|
45.5
|
%
|
|||
NGLs Sales Volumes (Bcfe)*
|
14.5
|
|
|
15.5
|
|
|
(1.0
|
)
|
|
(6.5
|
)%
|
|||
Condensate Sales Volumes (Bcfe)*
|
0.6
|
|
|
1.0
|
|
|
(0.4
|
)
|
|
(40.0
|
)%
|
|||
Total Marcellus Sales Volumes (Bcfe)*
|
181.1
|
|
|
130.6
|
|
|
50.5
|
|
|
38.7
|
%
|
|||
|
|
|
|
|
|
|
|
|||||||
Average Sales Price - Gas (per Mcf)
|
$
|
2.85
|
|
|
$
|
2.66
|
|
|
$
|
0.19
|
|
|
7.1
|
%
|
Loss on Commodity Derivative Instruments - Cash Settlement - Gas (per Mcf)
|
$
|
(0.12
|
)
|
|
$
|
—
|
|
|
$
|
(0.12
|
)
|
|
(100.0
|
)%
|
Average Sales Price - NGLs (per Mcfe)*
|
$
|
3.70
|
|
|
$
|
4.60
|
|
|
$
|
(0.90
|
)
|
|
(19.6
|
)%
|
Average Sales Price - Condensate (per Mcfe)*
|
$
|
6.88
|
|
|
$
|
8.73
|
|
|
$
|
(1.85
|
)
|
|
(21.2
|
)%
|
|
|
|
|
|
|
|
|
|||||||
Total Average Marcellus Sales Price (per Mcfe)
|
$
|
2.82
|
|
|
$
|
2.93
|
|
|
$
|
(0.11
|
)
|
|
(3.8
|
)%
|
Average Marcellus Lease Operating Expenses (per Mcfe)
|
0.11
|
|
|
0.20
|
|
|
(0.09
|
)
|
|
(45.0
|
)%
|
|||
Average Marcellus Production, Ad Valorem, and Other Fees (per Mcfe)
|
0.04
|
|
|
0.08
|
|
|
(0.04
|
)
|
|
(50.0
|
)%
|
|||
Average Marcellus Transportation, Gathering and Compression Costs (per Mcfe)
|
1.21
|
|
|
1.15
|
|
|
0.06
|
|
|
5.2
|
%
|
|||
Average Marcellus Depreciation, Depletion and Amortization Costs (per Mcfe)
|
0.70
|
|
|
0.80
|
|
|
(0.10
|
)
|
|
(12.5
|
)%
|
|||
Total Average Marcellus Costs (per Mcfe)
|
$
|
2.06
|
|
|
$
|
2.23
|
|
|
$
|
(0.17
|
)
|
|
(7.6
|
)%
|
Average Margin for Marcellus (per Mcfe)
|
$
|
0.76
|
|
|
$
|
0.70
|
|
|
$
|
0.06
|
|
|
8.6
|
%
|
|
For the Six Months Ended June 30,
|
|||||||||||||
|
2019
|
|
2018
|
|
Variance
|
|
Percent
Change
|
|||||||
Utica Gas Sales Volumes (Bcf)
|
58.6
|
|
|
81.9
|
|
|
(23.3
|
)
|
|
(28.4
|
)%
|
|||
NGLs Sales Volumes (Bcfe)*
|
—
|
|
|
3.9
|
|
|
(3.9
|
)
|
|
(100.0
|
)%
|
|||
Condensate Sales Volumes (Bcfe)*
|
—
|
|
|
0.3
|
|
|
(0.3
|
)
|
|
(100.0
|
)%
|
|||
Total Utica Sales Volumes (Bcfe)*
|
58.6
|
|
|
86.1
|
|
|
(27.5
|
)
|
|
(31.9
|
)%
|
|||
|
|
|
|
|
|
|
|
|||||||
Average Sales Price - Gas (per Mcf)
|
$
|
2.70
|
|
|
$
|
2.64
|
|
|
$
|
0.06
|
|
|
2.3
|
%
|
(Loss) Gain on Commodity Derivative Instruments - Cash Settlement- Gas (per Mcf)
|
$
|
(0.12
|
)
|
|
$
|
0.01
|
|
|
$
|
(0.13
|
)
|
|
(1,300.0
|
)%
|
Average Sales Price - NGLs (per Mcfe)*
|
$
|
—
|
|
|
$
|
4.83
|
|
|
$
|
(4.83
|
)
|
|
(100.0
|
)%
|
Average Sales Price - Condensate (per Mcfe)*
|
$
|
—
|
|
|
$
|
8.68
|
|
|
$
|
(8.68
|
)
|
|
(100.0
|
)%
|
|
|
|
|
|
|
|
|
|||||||
Total Average Utica Sales Price (per Mcfe)
|
$
|
2.58
|
|
|
$
|
2.78
|
|
|
$
|
(0.20
|
)
|
|
(7.2
|
)%
|
Average Utica Lease Operating Expenses (per Mcfe)
|
0.15
|
|
|
0.25
|
|
|
(0.10
|
)
|
|
(40.0
|
)%
|
|||
Average Utica Production, Ad Valorem, and Other Fees (per Mcfe)
|
0.05
|
|
|
0.04
|
|
|
0.01
|
|
|
25.0
|
%
|
|||
Average Utica Transportation, Gathering and Compression Costs (per Mcfe)
|
0.28
|
|
|
0.37
|
|
|
(0.09
|
)
|
|
(24.3
|
)%
|
|||
Average Utica Depreciation, Depletion and Amortization Costs (per Mcfe)
|
1.25
|
|
|
0.93
|
|
|
0.32
|
|
|
34.4
|
%
|
|||
Total Average Utica Costs (per Mcfe)
|
$
|
1.73
|
|
|
$
|
1.59
|
|
|
$
|
0.14
|
|
|
8.8
|
%
|
Average Margin for Utica (per Mcfe)
|
$
|
0.85
|
|
|
$
|
1.19
|
|
|
$
|
(0.34
|
)
|
|
(28.6
|
)%
|
|
For the Six Months Ended June 30,
|
|||||||||||||
|
2019
|
|
2018
|
|
Variance
|
|
Percent
Change
|
|||||||
CBM Gas Sales Volumes (Bcf)
|
27.6
|
|
|
30.7
|
|
|
(3.1
|
)
|
|
(10.1
|
)%
|
|||
|
|
|
|
|
|
|
|
|||||||
Average Sales Price - Gas (per Mcf)
|
$
|
3.24
|
|
|
$
|
3.40
|
|
|
$
|
(0.16
|
)
|
|
(4.7
|
)%
|
Loss on Commodity Derivative Instruments - Cash Settlement - Gas (per Mcf)
|
$
|
(0.11
|
)
|
|
$
|
(0.01
|
)
|
|
$
|
(0.10
|
)
|
|
(1,000.0
|
)%
|
|
|
|
|
|
|
|
|
|||||||
Total Average CBM Sales Price (per Mcf)
|
$
|
3.13
|
|
|
$
|
3.39
|
|
|
$
|
(0.26
|
)
|
|
(7.7
|
)%
|
Average CBM Lease Operating Expenses (per Mcf)
|
0.31
|
|
|
0.39
|
|
|
(0.08
|
)
|
|
(20.5
|
)%
|
|||
Average CBM Production, Ad Valorem, and Other Fees (per Mcf)
|
0.14
|
|
|
0.12
|
|
|
0.02
|
|
|
16.7
|
%
|
|||
Average CBM Transportation, Gathering and Compression Costs (per Mcf)
|
0.70
|
|
|
0.84
|
|
|
(0.14
|
)
|
|
(16.7
|
)%
|
|||
Average CBM Depreciation, Depletion and Amortization Costs (per Mcf)
|
1.24
|
|
|
1.21
|
|
|
0.03
|
|
|
2.5
|
%
|
|||
Total Average CBM Costs (per Mcf)
|
$
|
2.39
|
|
|
$
|
2.56
|
|
|
$
|
(0.17
|
)
|
|
(6.6
|
)%
|
Average Margin for CBM (per Mcf)
|
$
|
0.74
|
|
|
$
|
0.83
|
|
|
$
|
(0.09
|
)
|
|
(10.8
|
)%
|
|
For the Six Months Ended June 30,
|
||||||||||
|
2019
|
|
2018
|
|
Variance
|
|
Percent
Change |
||||
Other Gas Sales Volumes (Bcf)
|
0.2
|
|
|
4.6
|
|
|
(4.4
|
)
|
|
(95.7
|
)%
|
Oil Sales Volumes (Bcfe)*
|
—
|
|
|
0.1
|
|
|
(0.1
|
)
|
|
(100.0
|
)%
|
Total Other Sales Volumes (Bcfe)*
|
0.2
|
|
|
4.7
|
|
|
(4.5
|
)
|
|
(95.7
|
)%
|
|
For the Six Months Ended June 30,
|
|||||||||||||
(in millions)
|
2019
|
|
2018
|
|
Variance
|
|
Percent
Change |
|||||||
Water Income
|
$
|
—
|
|
|
$
|
11
|
|
|
$
|
(11
|
)
|
|
(100.0
|
)%
|
Equity in Earnings of Affiliates
|
1
|
|
|
3
|
|
|
(2
|
)
|
|
(66.7
|
)%
|
|||
Gathering Income
|
5
|
|
|
5
|
|
|
—
|
|
|
—
|
%
|
|||
Total Other Operating Income
|
$
|
6
|
|
|
$
|
19
|
|
|
$
|
(13
|
)
|
|
(68.4
|
)%
|
•
|
Water income decreased $11 million due to sales of freshwater to third-parties for hydraulic fracturing in the 2018 period. There were nominal sales in the 2019 period.
|
|
For the Six Months Ended June 30,
|
|||||||||||||
(in millions)
|
2019
|
|
2018
|
|
Variance
|
|
Percent
Change
|
|||||||
Lease Expiration Costs
|
$
|
5
|
|
|
$
|
2
|
|
|
$
|
3
|
|
|
150.0
|
%
|
Land Rentals
|
3
|
|
|
2
|
|
|
1
|
|
|
50.0
|
%
|
|||
Other
|
—
|
|
|
2
|
|
|
(2
|
)
|
|
(100.0
|
)%
|
|||
Total Exploration and Production Other Costs
|
$
|
8
|
|
|
$
|
6
|
|
|
$
|
2
|
|
|
33.3
|
%
|
|
For the Six Months Ended June 30,
|
|||||||||||||
|
2019
|
|
2018
|
|
Variance
|
|
Percent
Change |
|||||||
Unutilized Firm Transportation and Processing Fees
|
$
|
28
|
|
|
$
|
18
|
|
|
$
|
10
|
|
|
55.6
|
%
|
Idle Equipment and Service Charges
|
8
|
|
|
4
|
|
|
4
|
|
|
100.0
|
%
|
|||
Insurance Expense
|
1
|
|
|
2
|
|
|
(1
|
)
|
|
(50.0
|
)%
|
|||
Severance Expense
|
—
|
|
|
1
|
|
|
(1
|
)
|
|
(100.0
|
)%
|
|||
Consulting and Professional Services
|
—
|
|
|
4
|
|
|
(4
|
)
|
|
(100.0
|
)%
|
|||
Water Expense
|
—
|
|
|
4
|
|
|
(4
|
)
|
|
(100.0
|
)%
|
|||
Other
|
4
|
|
|
1
|
|
|
3
|
|
|
300.0
|
%
|
|||
Total Other Operating Expense
|
$
|
41
|
|
|
$
|
34
|
|
|
$
|
7
|
|
|
20.6
|
%
|
•
|
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 increase in the period-to-period comparison was primarily due to previously-acquired capacity which was not utilized during the current period to transport the Company’s flowing production. The Company attempts to minimize this expense by releasing (selling) unutilized firm transportation capacity to other parties when possible and when beneficial. The
|
•
|
Idle Equipment and Service Charges primarily relate to the temporary idling of some of the Company's natural gas drilling rigs as well as related equipment and other services that may be needed in the natural gas drilling and completions process. The increase of $4 million in the period-to-period comparison was primarily result of the acceleration of five months of idle rig expense due to CNX terminating one of its drilling rig contacts early, as well as additional idle service expense related to the Shaw 1G Utica Shale well that occurred in the first quarter of 2019.
|
•
|
Consulting and Professional Services in the prior year mainly related to the sale of the majority of CNX's shallow oil and gas assets in 2018 (See Note 5 - Acquisitions and Dispositions in the Notes to the Unaudited Consolidated Financial Statements in Item 1 of this Form 10-Q for additional information).
|
•
|
Water Expense decreased $4 million due to the associated costs related to the sales of freshwater to third-parties for hydraulic fracturing in the 2018 period in Total Other Operating Income above. There were nominal sales in the 2019 period.
|
(in millions)
|
For the six months ended June 30, 2019
|
|
For the period January 3, 2018 through June 30, 2018
|
|
Variance
|
||||||
Midstream Revenue - Related Party
|
$
|
114
|
|
|
$
|
76
|
|
|
$
|
38
|
|
Midstream Revenue - Third Party
|
37
|
|
|
50
|
|
|
(13
|
)
|
|||
Total Revenue
|
$
|
151
|
|
|
$
|
126
|
|
|
$
|
25
|
|
|
|
|
|
|
|
||||||
Transportation, Gathering and Compression
|
$
|
24
|
|
|
$
|
26
|
|
|
$
|
(2
|
)
|
Depreciation, Depletion and Amortization
|
16
|
|
|
17
|
|
|
(1
|
)
|
|||
Selling, General, and Administrative Costs
|
11
|
|
|
12
|
|
|
(1
|
)
|
|||
Total Operating Costs and Expenses
|
51
|
|
|
55
|
|
|
(4
|
)
|
|||
Other Expense
|
1
|
|
|
—
|
|
|
1
|
|
|||
Loss (Gain) on Asset Sales and Abandonments
|
7
|
|
|
(2
|
)
|
|
9
|
|
|||
Interest Expense
|
15
|
|
|
10
|
|
|
5
|
|
|||
Total Midstream Division Costs
|
74
|
|
|
63
|
|
|
11
|
|
|||
Earnings Before Income Tax
|
$
|
77
|
|
|
$
|
63
|
|
|
$
|
14
|
|
|
For the six months ended June 30, 2019
|
|
For the period January 3, 2018 through June 30, 2018
|
|
Variance
|
|||
Dry Gas (BBtu/d) (*)
|
865
|
|
|
703
|
|
|
162
|
|
Wet Gas (BBtu/d) (*)
|
715
|
|
|
682
|
|
|
33
|
|
Other (BBtu/d) (*)(**)
|
156
|
|
|
17
|
|
|
139
|
|
Total Gathered Volumes
|
1,736
|
|
|
1,402
|
|
|
334
|
|
|
For the Six Months Ended June 30,
|
||||||||||
|
2019
|
|
2018
|
|
Change
|
||||||
Cash Provided by Operating Activities
|
$
|
561
|
|
|
$
|
451
|
|
|
$
|
110
|
|
Cash Used in Investing Activities
|
$
|
(621
|
)
|
|
$
|
(639
|
)
|
|
$
|
18
|
|
Cash Provided by (Used in) Financing Activities
|
$
|
76
|
|
|
$
|
(266
|
)
|
|
$
|
342
|
|
•
|
Net income decreased $479 million in the period-to-period comparison.
|
•
|
Adjustments to reconcile net income to cash provided by operating activities primarily consisted of a $161 million change in deferred income taxes, a $624 million decrease in gain on previously held equity interest, $24 million increase in stock-based compensation, an $18 million decrease in impairment of other intangible assets, a $31 million decrease in the loss on debt extinguishment, and a $17 million change in loss (gain) on asset sales and abandonments.
|
•
|
Capital expenditures increased $132 million in the period-to-period comparison primarily due to increased expenditures in the Utica and Marcellus Shale plays resulting from increased drilling and completions activity as well as additional water expenditures due to the installation of new water pipelines. CNXM's capital expenditures increased due to additional spend in order to support both CNX's and third-party customer development plans.
|
•
|
Proceeds from asset sales decreased $146 million primarily due to the 2018 sale of substantially all of CNX's shallow oil and gas and certain CBM assets in Pennsylvania and West Virginia. See Note 5 - Acquisitions and Dispositions in the Notes to the Unaudited Consolidated Financial Statements in Item 1 of this Form 10-Q for additional information.
|
•
|
In January 2018, CNX completed the Midstream Acquisition for a net payment of $299 million. See Note 5 - Acquisitions and Dispositions in the Notes to the Unaudited Consolidated Financial Statements in Item 1 of this Form 10-Q for additional information.
|
•
|
During the six months ended June 30, 2019, CNX paid $406 million to repurchase $400 million of the senior notes due in 2022 at a 101.5% principal amount. During the six months ended June 30, 2018, CNX paid $405 million to repurchase $391 million of the senior notes due in 2022 at a 103.8% principal amount as well as $318 million to repurchase $300 million of the senior notes due in 2023 at a 106.0% principal amount. See Note 10 - Long-Term Debt in the Notes to the Unaudited Consolidated Financial Statements in Item 1 of this Form 10-Q for additional information.
|
•
|
During the six months ended June 30, 2019, CNX received proceeds of $500 million from the issuance of senior notes due in 2027. During the six months ended June 30, 2018, CNX received proceeds of $394 million from the issuance of CNXM's senior notes due in 2026. See Note 10 - 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, 2019, CNX repurchased $110 million of its common stock on the open market compared to $167 million in the six months ended June 30, 2018.
|
•
|
In the six months ended June 30, 2019, there were $18 million of net proceeds from the CNX credit facility and $422 million of proceeds in the 2018 period.
|
•
|
In the six months ended June 30, 2019, there were $124 million of net proceeds from the CNXM credit facility compared to $139 million of net payments during the six months ended June 30, 2018.
|
•
|
In the six months ended June 30, 2019, there were $10 million in debt issuance and financing fees compared to $20 million during the six months ended June 30, 2018.
|
•
|
In the six months ended June 30, 2019, there were $31 million in distributions to CNXM unitholders compared to $27 million during the six months ended June 30, 2018.
|
|
Payments due by Year
|
||||||||||||||||||
|
Less Than
1 Year
|
|
1-3 Years
|
|
3-5 Years
|
|
More Than
5 Years
|
|
Total
|
||||||||||
Purchase Order Firm Commitments
|
$
|
9,143
|
|
|
$
|
2,918
|
|
|
$
|
647
|
|
|
$
|
—
|
|
|
$
|
12,708
|
|
Gas Firm Transportation and Processing
|
242,241
|
|
|
489,288
|
|
|
423,079
|
|
|
1,159,534
|
|
|
2,314,142
|
|
|||||
Long-Term Debt
|
—
|
|
|
895,522
|
|
|
838,000
|
|
|
895,000
|
|
|
2,628,522
|
|
|||||
Interest on Long-Term Debt
|
149,669
|
|
|
301,527
|
|
|
185,537
|
|
|
160,749
|
|
|
797,482
|
|
|||||
Finance Lease Obligations
|
7,133
|
|
|
10,261
|
|
|
308
|
|
|
—
|
|
|
17,702
|
|
|||||
Interest on Finance Lease Obligations
|
1,038
|
|
|
625
|
|
|
62
|
|
|
—
|
|
|
1,725
|
|
|||||
Operating Lease Obligations
|
66,209
|
|
|
102,266
|
|
|
7,484
|
|
|
27,714
|
|
|
203,673
|
|
|||||
Interest on Operating Lease Obligations
|
8,506
|
|
|
8,557
|
|
|
3,427
|
|
|
5,541
|
|
|
26,031
|
|
|||||
Long-Term Liabilities—Employee Related (a)
|
1,865
|
|
|
3,984
|
|
|
4,409
|
|
|
25,316
|
|
|
35,574
|
|
|||||
Other Long-Term Liabilities (b)
|
201,284
|
|
|
24,642
|
|
|
8,250
|
|
|
12,375
|
|
|
246,551
|
|
|||||
Total Contractual Obligations (c)
|
$
|
687,088
|
|
|
$
|
1,839,590
|
|
|
$
|
1,471,203
|
|
|
$
|
2,286,229
|
|
|
$
|
6,284,110
|
|
(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 $895 million of 5.875% Senior Notes due in April 2022 plus $1 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 but does not include CNXM.
|
•
|
An aggregate principal amount of $630 million in outstanding borrowings under the CNX credit facility.
|
•
|
An aggregate principal amount of $500 million of 7.25% Senior Notes due in March 2027. Interest on the notes is payable March 14 and September 14 of each year. Payment of the principal and interest on the notes is guaranteed by most of CNX's subsidiaries but does not include CNXM.
|
•
|
An aggregate principal amount of $400 million of 6.50% Senior Notes due in March 2026 issued by CNXM, less $5 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 $208 million in outstanding borrowings under the CNXM revolver. CNX is not a guarantor of CNXM's revolving credit facility.
|
•
|
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 CNX Midstream Partners LP (NYSE: CNXM) (CNXM) and others;
|
•
|
uncertainties in estimating our economically recoverable natural gas reserves, and inaccuracies in our estimates;
|
•
|
the high-risk nature of drilling and developing 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;
|
•
|
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;
|
•
|
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 can increase costs and introduce uncertainty that could adversely impact the market for natural gas with potential short and long-term liabilities;
|
•
|
our operations are subject to operating risks that could increase our operating expenses and decrease our production levels which could adversely affect our results of operation and our operations are also subject to hazards and any losses or liabilities we suffer from hazards, which occur in our operations may not be fully covered by our insurance policies;
|
•
|
decreases in the availability of, or increases in the price of, required personnel, services, equipment, parts and raw materials in sufficient quantities or at reasonable costs to support our operations;
|
•
|
if natural gas prices decrease or drilling efforts are unsuccessful, we may be required to record write-downs of our proved natural gas properties;
|
•
|
changes in assumptions impacting management’s estimates of future financial results as well as other assumptions such as movement in our stock price, weighted-average cost of capital, terminal growth rates and industry multiples, could cause goodwill and other intangible assets we hold to become impaired and result in material non-cash charges to earnings;
|
•
|
a loss of our competitive position because of the competitive nature of the natural gas industry, consolidation within the industry or overcapacity in the industry adversely affecting our ability to sell our products and midstream services, which could impair 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;
|
•
|
existing and future government laws, regulations and other legal requirements and judicial decisions 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 operations and related increase in the regulation of gas gathering pipelines;
|
•
|
our ability to find adequate water sources for our use in shale gas drilling and production operations, or our ability to dispose of, transport or recycle water used or removed in connection with our gas operations at a reasonable cost and within applicable environmental rules;
|
•
|
failure to find or acquire economically recoverable natural gas reserves to replace our current natural gas reserves;
|
•
|
risks associated with our debt;
|
•
|
a decrease in our borrowing base, which could decrease for a variety of reasons including lower natural gas prices, declines in natural gas proved reserves, asset sales and lending requirements or regulations;
|
•
|
changes in federal or state income tax laws;
|
•
|
cyber-incidents 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;
|
•
|
terrorist activities could materially and adversely affect our business and results of operations;
|
•
|
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;
|
•
|
acquisitions and divestitures we anticipate may not occur or produce anticipated benefits;
|
•
|
the outcomes of various legal proceedings, including those which are more fully described in our reports filed under the Exchange Act;
|
•
|
there is no guarantee that we will continue to repurchase shares of our common stock under our current or any future share repurchase program at levels undertaken previously or at all;
|
•
|
negative public perception regarding our industry could have an adverse effect on our operations;
|
•
|
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; and
|
•
|
other factors discussed in the Company's 2018 Annual Report on 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
|
||||||||||
2019 Fixed Price Volumes
|
|
|
|
|
|
|
|
|
|
||||||||||
Hedged Bcf
|
N/A
|
|
N/A
|
|
103.9
|
|
|
109.0
|
|
|
212.9
|
|
|||||||
Weighted Average Hedge Price per Mcf
|
N/A
|
|
N/A
|
|
$
|
2.63
|
|
|
$
|
2.67
|
|
|
$
|
2.65
|
|
||||
2020 Fixed Price Volumes
|
|
|
|
|
|
|
|
|
|
||||||||||
Hedged Bcf
|
115.6
|
|
|
121.1
|
|
|
122.4
|
|
|
122.4
|
|
|
470.5*
|
|
|||||
Weighted Average Hedge Price per Mcf
|
$
|
2.58
|
|
|
$
|
2.51
|
|
|
$
|
2.51
|
|
|
$
|
2.51
|
|
|
$
|
2.52
|
|
2021 Fixed Price Volumes
|
|
|
|
|
|
|
|
|
|
||||||||||
Hedged Bcf
|
102.6
|
|
|
103.8
|
|
|
104.9
|
|
|
104.9
|
|
|
416.2
|
|
|||||
Weighted Average Hedge Price per Mcf
|
$
|
2.40
|
|
|
$
|
2.40
|
|
|
$
|
2.40
|
|
|
$
|
2.39
|
|
|
$
|
2.40
|
|
2022 Fixed Price Volumes
|
|
|
|
|
|
|
|
|
|
||||||||||
Hedged Bcf
|
68.9
|
|
|
69.7
|
|
|
70.4
|
|
|
70.4
|
|
|
279.4
|
|
|||||
Weighted Average Hedge Price per Mcf
|
$
|
2.45
|
|
|
$
|
2.45
|
|
|
$
|
2.45
|
|
|
$
|
2.45
|
|
|
$
|
2.45
|
|
2023 Fixed Price Volumes
|
|
|
|
|
|
|
|
|
|
||||||||||
Hedged Bcf
|
36.0
|
|
36.5
|
|
36.9
|
|
36.9
|
|
146.3
|
|
|||||||||
Weighted Average Hedge Price per Mcf
|
$
|
2.28
|
|
|
$
|
2.28
|
|
|
$
|
2.28
|
|
|
$
|
2.28
|
|
|
$
|
2.28
|
|
2024 Fixed Price Volumes
|
|
|
|
|
|
|
|
|
|
||||||||||
Hedged Bcf
|
15.3
|
|
|
15.3
|
|
|
15.4
|
|
|
15.4
|
|
|
61.4
|
|
|||||
Weighted Average Hedge Price per Mcf
|
$
|
2.60
|
|
|
$
|
2.60
|
|
|
$
|
2.60
|
|
|
$
|
2.60
|
|
|
$
|
2.60
|
|
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, 2019-
April 30, 2019
|
2,054,469
|
|
$
|
10.03
|
|
2,054,469
|
|
$
|
209,638
|
|
May 1, 2019-
May 31, 2019
|
5,025,352
|
|
$
|
7.91
|
|
5,025,352
|
|
$
|
169,912
|
|
June 1, 2019-
June 30, 2019
|
1,728,612
|
|
$
|
7.97
|
|
1,728,612
|
|
$
|
156,143
|
|
Total
|
8,808,433
|
|
|
|
|
ITEM 6.
|
EXHIBITS
|
10.1
|
|
|
|
|
|
|
|
10.2*
|
|
|
|
|
|
|
|
10.3*
|
|
|
|
|
|
|
|
10.4*
|
|
|
|
|
|
|
|
10.5*
|
|
|
|
|
|
|
|
31.1
|
|
|
|
|
|
|
|
31.2
|
|
|
|
|
|
||
32.1
|
|
|
|
|
|
||
32.2
|
|
|
|
|
|
||
101
|
|
|
Interactive Data File (Form 10-Q for the quarterly period ended June 30, 2019 furnished in XBRL).
|
CNX RESOURCES CORPORATION
|
|||
|
|
|
|
|
By:
|
|
/s/ NICHOLAS J. DEIULIIS
|
|
|
|
Nicholas J. DeIuliis
|
|
|
|
Director, Chief Executive Officer and President
(Duly Authorized Officer and Principal Executive Officer)
|
|
|
|
|
|
By:
|
|
/S/ DONALD W. RUSH
|
|
|
|
Donald W. Rush
|
|
|
|
Chief Financial Officer and Executive Vice President
(Duly Authorized Officer and Principal Financial Officer)
|
|
|
|
|
|
By:
|
|
/S/ JASON L. MUMFORD
|
|
|
|
Jason L. Mumford
|
|
|
|
Chief Accounting Officer and Vice President
(Duly Authorized Officer and Principal Accounting Officer)
|
Name of Recipient:
|
[DIRECTOR NAME]
|
Grant Date:
|
_______________________, 20__
|
Number of Deferred Stock Units Granted:
|
[# of Units] Deferred Stock Units
|
Vesting Schedule:
|
Upon the earlier to occur of: (i) one year from the Grant Date, or (ii) the date of the next regular Annual Meeting of Stockholders which occurs after the Grant Date.
|
Payment Date Election:
|
Vested Deferred Stock Units will be paid on the earlier of: (1) the date of your termination of service as a Director of the Company, or as soon as reasonably practicable thereafter but in no event later than the 15th day of the third month following such date, or (2) the date that you elected on the Payment Date Election Form previously filed with the Company. Notwithstanding the foregoing, Deferred Stock Units will be paid to you contemporaneously with any transaction that will result in a Change in Control of the Company.
|
•
|
the completion of a Change in Control (as such term is defined in the Plan); or
|
•
|
the termination of your service as a Director of the Company by reason of your death or Disability.
|
Name of Recipient:
|
____________________________
|
|
Award Date:
|
_______________________, 20__
|
|
Number of Shares Subject to Award:
|
_____ shares of the Company’s common stock
|
|
Vesting Schedule:
|
Upon the earlier to occur of: (i) one year from the Award Date, or (ii) the date of the next regular Annual Meeting of Stockholders which occurs after the Award Date
|
|
Issuance Schedule:
|
The shares under your restricted stock units will be issued to you on the vesting date or if the vesting date is not a business day, on the immediately following business day (or as soon as reasonably practicable thereafter but in no event later than the 15th day of the third month following such date), subject to (i) your satisfaction of all applicable income taxes, and (ii) any deferral election you may have made with respect to the payment of such shares.
|
|
Deferral Election
|
To the extent you have elected to defer the issuance and receipt of shares (in accordance with the procedures established by the Company), such shares shall be issued to you in accordance with the terms of the deferral election form executed by you. Further information concerning such deferral may be found by referring to a copy of your deferral election form and the Summary Plan Description for the Equity Incentive Plan attached as Exhibit A.
|
|
- your death or Disability; or
|
|
- completion of a Change in Control (as such term is defined in the Plan).
|
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:
|
July 30, 2019
|
|
|
|
|
/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:
|
July 30, 2019
|
|
|
|
|
/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:
|
July 30, 2019
|
|
|
|
|
/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:
|
July 30, 2019
|
|
|
|
|
/s/ Donald W. Rush
|
|
|
Donald W. Rush
|
|
|
Chief Financial Officer and Executive Vice President
|
|