COST: 265 $MM
PITTSBURGH, April 27, 2020 /PRNewswire/ -- CNX Midstream Partners LP (NYSE: CNXM) ("CNXM", "CNX Midstream" or the "Partnership") today reported financial and operational results for the three months ended March 31, 2020(1).
First Quarter Results
The Partnership continued its solid financial performance during the three months ended March 31, 2020. Comparative results net to the Partnership, with the exception of net cash provided by operating activities, which is presented on a gross consolidated basis, were as follows:
Three Months Ended March 31, | |||||||
(in millions) | 2020 | 2019 | |||||
Net income | $ | 45.2 | $ | 35.1 | |||
Net cash provided by operating activities | $ | 40.1 | $ | 49.9 | |||
Adjusted EBITDA (non-GAAP)(2) | $ | 60.4 | $ | 54.4 | |||
Distributable cash flow (non-GAAP)(2) | $ | 46.9 | $ | 43.0 | |||
Distribution coverage ratio(2) | 6.29x | 1.49x |
"CNXM delivered another strong quarter," commented Nicholas J. DeIuliis, CEO of CNX Midstream GP LLC, the general partner of the Partnership (the "General Partner"). "As compared to the first quarter of 2019, Adjusted EBITDA and distributable cash flow were up by 11% and 9%, respectively.
Mr. DeIuliis continued, "CNXM is closing out capital projects on schedule and on budget, setting the business up for positive operating leverage and long-term free cash flow generation. Meanwhile, we are seeing a confluence of risks across the capital and commodity markets as a result of the COVID-19 pandemic and have taken the decisive actions to increase retained cash flow by reducing the distribution 80% and reducing this year's planned capital expenditures by 16%. These decisions will bolster CNXM's already strong balance sheet, enhance our liquidity position and long-term financial flexibility."
"Energy markets are experiencing temporary demand loss for refined liquids products. CNXM does not have crude oil or direct refined products exposure, but a portion of CNXM's natural gas throughput flows to downstream processing. Due to pricing and physical market constraints, some of its customers have reduced production volumes from a number of NGL-rich wells and may defer additional production. Despite these temporary deferrals, which push cash flows into later periods, we still expect to continue to generate significant free cash flow this year from our 100% fixed fee business. Our near-term focus is on prudent debt reduction and growing our liquidity position, which will create strong capital allocation opportunities in our business," concluded Mr. DeIuliis.
Guidance Update
Based on current expectations, management provides the following update:
($ in millions) | 2020E | 2020E | ||||||
Previous | Updated | |||||||
Throughput (BBtu/d)* | 1,600 | - | 1,750 | 1,400 | - | 1,550 | ||
Capital Expenditures | $80 | - | $100 | $65 | - | $85 | ||
Adjusted EBITDA(2) | $250 | - | $270 | $195 | - | $220 | ||
* Excludes third-party volumes under high-pressure short-haul agreements. |
The Partnership's updated guidance reflects potential ranges of customer production deferrals and approximate 16% reduction in capital expenditures as a result of cost savings initiatives. Per the long-term plan, as the major capital projects from 2019 are closed out this year, the forecasted capital intensity of the Partnership declines significantly.
Quarterly Distribution
CNXM today announced that the Board of Directors of its General Partner has declared a cash distribution of $0.0829 per unit with respect to the first quarter 2020. The distribution will be made on May 15, 2020 to unitholders of record as of the close of business on May 7, 2020.
The declared distribution represents an 80% reduction of its quarterly distribution from the previous quarter distribution per unit. This increases retained cash flow by approximately $30 million each quarter.
Capital Investment and Resources
For the first quarter of 2020, CNX Midstream's total capital investment net to the Partnership was $31.4 million, which includes investment in expansion projects of $25.7 million and maintenance capital of $5.7 million.
As of March 31, 2020, CNX Midstream had outstanding borrowings of $347.0 million under its $600.0 million revolving credit facility.
First Quarter Financial and Operational Results Conference Call
A conference call and webcast, during which management will discuss first quarter 2020 financial and operational results, is scheduled for April 27, 2020 at 11:00 a.m. Eastern Time. Prepared remarks by members of management will be followed by a question and answer period. Interested parties may listen via webcast at www.cnxmidstream.com. Participants who would like to ask questions may join the conference by phone by dialing 888-349-0097 (international 412-902-0126) five to ten minutes prior to the scheduled start time (reference the CNX Midstream call). An on-demand replay of the webcast will also be available at www.cnxmidstream.com shortly after the conclusion of the conference call. A telephonic replay will be available through May 12, 2020 by dialing 877-344-7529 (international: 412-317-0088) and using the conference playback number 10141739.
(1) | The Partnership's current financial interests in the development companies are: 100% in the Anchor Systems and 5% in the Additional Systems. Because the Partnership owns a controlling interest in each of these two development companies, it fully consolidates their financial results. CNX Gathering, which is wholly owned by CNX Resources Corporation, owns a 95% noncontrolling interest in the Additional Systems of the Partnership. |
(2) | Adjusted EBITDA is not a measure that is recognized under accounting principles generally accepted in the U.S. ("GAAP"). Definitions and reconciliations of these non-GAAP measures to GAAP reporting measures appear in the financial tables which follow. |
* * * * *
CNX Midstream is a growth-oriented master limited partnership that owns, operates, develops and acquires gathering and other midstream energy assets to service natural gas production in the Appalachian Basin in Pennsylvania and West Virginia. Our assets include natural gas gathering pipelines and compression and dehydration facilities, as well as condensate gathering, collection, separation and stabilization facilities. More information is available at our website www.cnxmidstream.com.
* * * * *
This press release is intended to be a qualified notice to nominees as provided for under Treasury Regulation Section 1.1446-4(b). Brokers and nominees should treat one hundred percent (100.0%) of CNX Midstream's distributions to non-U.S. investors as being attributed to income that is effectively connected with a United States trade or business. Accordingly, CNX Midstream's distributions to non-U.S. investors are subject to federal income tax withholding at the highest applicable effective tax rate. Nominees, and not CNX Midstream, are treated as withholding agents responsible for withholding on the distributions received by them on behalf of foreign investors.
* * * * *
This press release contains forward-looking statements within the meaning of the federal securities laws. Statements that are predictive in nature, that depend upon or refer to future events or conditions or that include the words "will," "believe," "expect," "anticipate," "intend," "estimate" and other expressions that are predictions of or indicate future events and trends and that do not relate to historical matters identify forward-looking statements. You should not place undue reliance on forward-looking statements. Forward-looking statements include, among others, statements regarding the payment of our quarterly distribution for the quarter ended March 31, 2020 and our anticipated 2020 financial performance. Forward-looking statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict, and there can be no assurance that actual outcomes and results will not differ materially from those expected by our management. You should not place undue reliance on forward-looking statements. Although forward-looking statements reflect our good faith beliefs at the time they are made, they involve known and unknown risks, uncertainties and other factors. While our management considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond our control. These risks, contingencies and uncertainties relate to, among other matters, the following: our reliance on our customers, including our Sponsor, CNX Resources Corporation; the effects of changes in market prices of natural gas, NGLs and crude oil on our customers' drilling and development plans on our dedicated acreage and the volumes of natural gas and condensate that are produced on our dedicated acreage because of the natural decline in production from existing wells, our success, in part, depends on our ability to maintain or increase natural gas and condensate throughput volumes on our midstream systems, which depends on the level of development and completion activity on acreage dedicated to us; the impact that the COVID-19 pandemic may have on us, our vendors and customers, including our financial position, operating results, ability to obtain future financing and demand for our services; changes in our customers' drilling and development plans in the Marcellus Shale and Utica Shale, and our customers' ability to meet such plans; our ability to maintain or increase volumes of natural gas and condensate on our midstream systems; the demand for natural gas and condensate gathering services, changes in general economic condition, and competitive conditions in our industry, including competition from the same and alternative energy sources; actions taken by third-party operators, gatherers, processors and transporters; our ability to successfully implement our business plan; our ability to complete internal growth projects on time and on budget; our ability to generate adequate returns on capital; the price and availability of debt and equity financing; the availability and price of oil and natural gas to the consumer compared to the price of alternative and competing fuels; energy efficiency and technology trends; operating hazards and other risks incidental to our midstream services; natural disasters, weather-related delays, casualty losses and other matters beyond our control; interest rates; labor relations; defaults by our customers under our gathering agreements; changes in availability and cost of capital; changes in o future laws and government regulations; and the effects of future litigation.
Although forward-looking statements reflect our good faith beliefs at the time they are made, they involve known and unknown risks, uncertainties and other factors. For more information concerning factors that could cause actual results to differ materially from those conveyed in the forward-looking statements, including, among others, that our business plans may change as circumstances warrant, please refer to the "Risk Factors" and "Forward-Looking Statements" sections of our Annual Report on Form 10-K for the year ended December 31, 2019 filed with the Securities and Commission on February 10, 2020 and subsequent Quarterly Reports on Form 10-Q. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, changed circumstances or otherwise, unless required by law.
CNX MIDSTREAM PARTNERS LP | |||||||
Three Months Ended | |||||||
2020 | 2019 | ||||||
Revenue | |||||||
Gathering revenue — related party | $ | 62,178 | $ | 53,776 | |||
Gathering revenue — third party | 17,953 | 18,443 | |||||
Miscellaneous income | 65 | — | |||||
Total Revenue | 80,196 | 72,219 | |||||
Expenses | |||||||
Operating expense — related party | 3,828 | 5,548 | |||||
Operating expense — third party | 8,596 | 5,974 | |||||
General and administrative expense — related party | 2,857 | 3,967 | |||||
General and administrative expense — third party | 2,765 | 1,536 | |||||
(Gain) loss on asset sales and abandonments | (11) | 7,229 | |||||
Depreciation expense | 7,578 | 5,650 | |||||
Interest expense | 8,793 | 7,339 | |||||
Total Expense | 34,406 | 37,243 | |||||
Net Income | 45,790 | 34,976 | |||||
Less: Net income (loss) attributable to noncontrolling interest | 571 | (131) | |||||
Net Income Attributable to General and Limited Partner Ownership Interest in CNX | $ | 45,219 | $ | 35,107 | |||
Calculation of Limited Partner Interest in Net Income: | |||||||
Net Income Attributable to General and Limited Partner Ownership Interest in CNX Midstream | $ | 45,219 | $ | 35,107 | |||
Less: General partner interest in net income, including incentive distribution rights | — | 5,279 | |||||
Limited partner interest in net income | $ | 45,219 | $ | 29,828 | |||
Earnings per limited partner unit: | |||||||
Basic | $ | 0.50 | $ | 0.47 | |||
Diluted | $ | 0.49 | $ | 0.47 | |||
Weighted average number of limited partner units outstanding (in thousands): | |||||||
Basic | 89,797 | 63,698 | |||||
Diluted | 92,822 | 63,758 | |||||
Cash distributions declared per unit (*) | $ | 0.0829 | $ | 0.3732 | |||
(*) Represents the cash distributions declared during the month following the end of each respective quarterly period. |
CNX MIDSTREAM PARTNERS LP | |||||||
March 31, 2020 | December 31, 2019 | ||||||
ASSETS | |||||||
Current Assets: | |||||||
Cash | $ | 5,235 | $ | 31 | |||
Receivables — related party | 21,714 | 21,076 | |||||
Receivables — third party | 4,980 | 7,935 | |||||
Other current assets | 2,064 | 1,976 | |||||
Total Current Assets | 33,993 | 31,018 | |||||
Property and Equipment: | |||||||
Property and equipment | 1,315,118 | 1,302,566 | |||||
Less — accumulated depreciation | 114,574 | 106,975 | |||||
Property and Equipment — Net | 1,200,544 | 1,195,591 | |||||
Other Assets: | |||||||
Operating lease right-of-use assets | 3,225 | 4,731 | |||||
Other assets | 2,945 | 3,262 | |||||
Total Other Assets | 6,170 | 7,993 | |||||
TOTAL ASSETS | $ | 1,240,707 | $ | 1,234,602 | |||
LIABILITIES AND PARTNERS' CAPITAL | |||||||
Current Liabilities: | |||||||
Trade accounts payable | $ | 9,696 | $ | 15,683 | |||
Accrued interest payable | 1,256 | 7,973 | |||||
Accrued liabilities | 21,271 | 43,634 | |||||
Due to related party | 51,688 | 4,787 | |||||
Total Current Liabilities | 83,911 | 72,077 | |||||
Other Liabilities: | |||||||
Long-term liabilities — related party | 85,000 | — | |||||
Long-Term Debt: | |||||||
Revolving credit facility | 347,000 | 311,750 | |||||
Senior Notes | 394,399 | 394,162 | |||||
Total Long-Term Debt | 741,399 | 705,912 | |||||
TOTAL LIABILITIES | 910,310 | 777,989 | |||||
Partners' Capital and Noncontrolling Interest: | |||||||
Limited partner units (89,799,224 issued and outstanding at March 31, 2020 and | 226,376 | 380,473 | |||||
Class B units (3,000,000 issued and outstanding at March 31, 2020 and none issued and | 34,590 | — | |||||
General partner interest | — | 7,280 | |||||
Partners' capital attributable to CNX Midstream Partners LP | 260,966 | 387,753 | |||||
Noncontrolling interest | 69,431 | 68,860 | |||||
Total Partners' Capital and Noncontrolling Interest | 330,397 | 456,613 | |||||
TOTAL LIABILITIES AND PARTNERS' CAPITAL | $ | 1,240,707 | $ | 1,234,602 |
CNX MIDSTREAM PARTNERS LP | |||||||
Three Months Ended March 31, | |||||||
2020 | 2019 | ||||||
Cash Flows from Operating Activities: | |||||||
Net income | $ | 45,790 | $ | 34,976 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation expense and amortization of debt issuance costs | 8,050 | 6,121 | |||||
Unit-based compensation | 504 | 612 | |||||
(Gain) loss on asset sales and abandonments | (11) | 7,229 | |||||
Other | 11 | 11 | |||||
Changes in assets and liabilities: | |||||||
Due to/from affiliate | (3,706) | (1,923) | |||||
Receivables — third party | 2,955 | 448 | |||||
Other current and non-current assets | 1,500 | (8,971) | |||||
Accounts payable and other accrued liabilities | (14,970) | 11,410 | |||||
Net Cash Provided by Operating Activities | 40,123 | 49,913 | |||||
Cash Flows from Investing Activities: | |||||||
Capital expenditures | (32,659) | (78,557) | |||||
Net Cash Used in Investing Activities | (32,659) | (78,557) | |||||
Cash Flows from Financing Activities: | |||||||
Contributions from general partner and noncontrolling interest holders, net | — | 30 | |||||
Vested units withheld for unitholders taxes | (309) | (664) | |||||
Quarterly distributions to unitholders | (37,201) | (27,268) | |||||
Net borrowings on secured $600.0 million credit facility | 35,250 | 52,650 | |||||
Net Cash (Used in) Provided by Financing Activities | (2,260) | 24,748 | |||||
Net Increase (Decrease) in Cash | 5,204 | (3,896) | |||||
Cash at Beginning of Period | 31 | 3,966 | |||||
Cash at End of Period | $ | 5,235 | $ | 70 |
CNX MIDSTREAM PARTNERS LP
RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA AND DISTRIBUTABLE CASH FLOW
(Dollars in thousands)
Definition of Non-GAAP Financial Measures
EBITDA and Adjusted EBITDA
We define EBITDA as net income (loss) before net interest expense, depreciation and amortization, and Adjusted EBITDA as EBITDA adjusted for gains or losses on asset sales and abandonments and other non-cash items which should not be included in the calculation of Distributable Cash Flow. EBITDA and Adjusted EBITDA are used as supplemental financial measures by management and by external users of our financial statements, such as investors, industry analysts, lenders and ratings agencies, to assess:
We believe that the presentation of EBITDA and Adjusted EBITDA provides information that is useful to investors in assessing our financial condition and results of operations. The GAAP measures most directly comparable to EBITDA and Adjusted EBITDA are Net Income and Net Cash Provided by Operating Activities. EBITDA and Adjusted EBITDA should not be considered an alternative to Net Income, Net Cash Provided by Operating Activities or any other measure of financial performance or liquidity presented in accordance with GAAP. EBITDA and Adjusted EBITDA exclude some, but not all, items that affect Net Income or Net Cash Provided by Operating Activities, and these measures may vary from those of other companies. As a result, EBITDA and Adjusted EBITDA as presented below may not be comparable to similarly titled measures of other companies.
Distributable Cash Flow
We define Distributable Cash Flow as Adjusted EBITDA less net income attributable to noncontrolling interest, cash interest expense and maintenance capital expenditures, each net to the Partnership. Distributable Cash Flow does not reflect changes in working capital balances.
Distributable Cash Flow is used as a supplemental financial measure by management and by external users of our financial statements, such as investors, industry analysts, lenders and ratings agencies, to assess:
We believe that the presentation of Distributable Cash Flow in this release provides information that is useful to investors in assessing our financial condition and results of operations. The GAAP measures most directly comparable to Distributable Cash Flow are Net Income and Net Cash Provided by Operating Activities. Distributable Cash Flow should not be considered an alternative to Net Income, Net Cash Provided by Operating Activities or any other measure of financial performance or liquidity presented in accordance with GAAP. Distributable Cash Flow excludes some, but not all, items that affect Net Income or Net Cash Provided by Operating Activities, and these measures may vary from those of other companies. As a result, our Distributable Cash Flow may not be comparable to similarly titled measures that other companies may use.
Distribution Coverage Ratio
We define Distributable Coverage Ratio as Distributable Cash Flow divided by cash distributions declared or paid.
Free Cash Flow
We define Free Cash Flow as Distributable Cash Flow less expansion capital expenditures, net to the Partnership.
The following table presents a reconciliation of the non-GAAP measures of Adjusted EBITDA and Distributable Cash Flow to the most directly comparable GAAP financial measures of Net Income and Net Cash Provided by Operating Activities.
Three Months Ended | ||||||||
(Unaudited) | 2020 | 2019 | ||||||
Net Income | $ | 45,790 | $ | 34,976 | ||||
Depreciation expense | 7,578 | 5,650 | ||||||
Interest expense | 8,793 | 7,339 | ||||||
EBITDA | 62,161 | 47,965 | ||||||
Non-cash unit-based compensation expense | 504 | 612 | ||||||
(Gain) loss on asset sales and abandonments | (11) | 7,229 | ||||||
Adjusted EBITDA | 62,654 | 55,806 | ||||||
Less: | ||||||||
Net income (loss) attributable to noncontrolling interest | 571 | (131) | ||||||
Depreciation expense attributable to noncontrolling interest | 480 | 394 | ||||||
Other expenses attributable to noncontrolling interest | 1,173 | 1,120 | ||||||
Adjusted EBITDA Attributable to General and Limited Partner Ownership Interest in CNX | $ | 60,430 | $ | 54,423 | ||||
Less: cash interest expense, net to the Partnership | 7,905 | 6,604 | ||||||
Less: maintenance capital expenditures, net to the Partnership | 5,673 | 4,835 | ||||||
Distributable Cash Flow | $ | 46,852 | $ | 42,984 | ||||
Net Cash Provided by Operating Activities | $ | 40,123 | $ | 49,913 | ||||
Interest expense | 8,793 | 7,339 | ||||||
(Gain) loss on asset sales and abandonments | (11) | 7,229 | ||||||
Other, including changes in working capital | 13,749 | (8,675) | ||||||
Adjusted EBITDA | 62,654 | 55,806 | ||||||
Less: | ||||||||
Net income (loss) attributable to noncontrolling interest | 571 | (131) | ||||||
Depreciation expense attributable to noncontrolling interest | 480 | 394 | ||||||
Other expenses attributable to noncontrolling interest | 1,173 | 1,120 | ||||||
Adjusted EBITDA Attributable to General and Limited Partner Ownership Interest in CNX | $ | 60,430 | $ | 54,423 | ||||
Less: cash interest expense, net to the Partnership | 7,905 | 6,604 | ||||||
Less: maintenance capital expenditures, net to the Partnership | 5,673 | 4,835 | ||||||
Distributable Cash Flow | $ | 46,852 | $ | 42,984 | ||||
Less: expansion capital expenditures, net to the Partnership | 25,703 | 71,102 | ||||||
Free Cash Flow | $ | 21,149 | $ | (28,118) |
The following table presents a reconciliation of the non-GAAP measures Adjusted EBITDA and Distributable Cash Flow by quarter and for the most recently completed twelve month period with the most directly comparable GAAP financial measures, which are Net Income and Net Cash Provided by Operating Activities.
(Unaudited) | Q2 2019 | Q3 2019 | Q4 2019 | Q1 2020 | Twelve | |||||||||||||||
Net Income | $ | 46,463 | $ | 43,665 | $ | 50,196 | $ | 45,790 | $ | 186,114 | ||||||||||
Depreciation expense | 5,860 | 6,184 | 6,677 | 7,578 | 26,299 | |||||||||||||||
Interest expense | 7,685 | 7,601 | 7,668 | 8,793 | 31,747 | |||||||||||||||
EBITDA | 60,008 | 57,450 | 64,541 | 62,161 | 244,160 | |||||||||||||||
Non-cash unit-based compensation expense | 541 | 328 | 399 | 504 | 1,772 | |||||||||||||||
Gain on asset sales and abandonments | — | — | — | (11) | (11) | |||||||||||||||
Adjusted EBITDA | 60,549 | 57,778 | 64,940 | 62,654 | 245,921 | |||||||||||||||
Less: | ||||||||||||||||||||
Net (loss) income attributable to noncontrolling interest | (282) | (298) | 1,700 | 571 | 1,691 | |||||||||||||||
Depreciation expense attributable to noncontrolling interest | 395 | 392 | 399 | 480 | 1,666 | |||||||||||||||
Other expenses attributable to noncontrolling interest | 1,098 | 1,152 | 1,136 | 1,173 | 4,559 | |||||||||||||||
Adjusted EBITDA Attributable to General and Limited | $ | 59,338 | $ | 56,532 | $ | 61,705 | $ | 60,430 | $ | 238,005 | ||||||||||
Less: cash interest expense, net to the Partnership | 7,282 | 7,528 | 7,812 | 7,905 | 30,527 | |||||||||||||||
Less: maintenance capital expenditures, net to the Partnership | 5,168 | 5,388 | 5,494 | 5,673 | 21,723 | |||||||||||||||
Distributable Cash Flow | $ | 46,888 | $ | 43,616 | $ | 48,399 | $ | 46,852 | $ | 185,755 | ||||||||||
Net Cash Provided by Operating Activities | $ | 74,753 | $ | 51,014 | $ | 41,382 | $ | 40,123 | $ | 207,272 | ||||||||||
Interest expense | 7,685 | 7,601 | 7,668 | 8,793 | 31,747 | |||||||||||||||
Gain on asset sales and abandonments | — | — | — | (11) | (11) | |||||||||||||||
Other, including changes in working capital | (21,889) | (837) | 15,890 | 13,749 | 6,913 | |||||||||||||||
Adjusted EBITDA | 60,549 | 57,778 | 64,940 | 62,654 | 245,921 | |||||||||||||||
Less: | ||||||||||||||||||||
Net (loss) income attributable to noncontrolling interest | (282) | (298) | 1,700 | 571 | 1,691 | |||||||||||||||
Depreciation expense attributable to noncontrolling interest | 395 | 392 | 399 | 480 | 1,666 | |||||||||||||||
Other expenses attributable to noncontrolling interest | 1,098 | 1,152 | 1,136 | 1,173 | 4,559 | |||||||||||||||
Adjusted EBITDA Attributable to General and Limited | $ | 59,338 | $ | 56,532 | $ | 61,705 | $ | 60,430 | $ | 238,005 | ||||||||||
Less: cash interest expense, net to the Partnership | 7,282 | 7,528 | 7,812 | 7,905 | 30,527 | |||||||||||||||
Less: maintenance capital expenditures, net to the Partnership | 5,168 | 5,388 | 5,494 | 5,673 | 21,723 | |||||||||||||||
Distributable Cash Flow | $ | 46,888 | $ | 43,616 | $ | 48,399 | $ | 46,852 | $ | 185,755 | ||||||||||
Distributions Declared | $ | 30,637 | $ | 32,371 | $ | 37,201 | $ | 7,444 | $ | 107,653 | ||||||||||
Distribution Coverage Ratio - Declared | 1.53x | 1.35x | 1.30x | 6.29x | 1.73x | |||||||||||||||
Distributable Cash Flow | $ | 46,888 | $ | 43,616 | $ | 48,399 | $ | 46,852 | $ | 185,755 | ||||||||||
Distributions Paid | $ | 28,940 | $ | 30,637 | $ | 32,371 | $ | 37,201 | $ | 129,149 | ||||||||||
Distribution Coverage Ratio - Paid | 1.62x | 1.42x | 1.50x | 1.26x | 1.44x |
The following table presents a reconciliation of the non-GAAP measures of the Partnership's projected Adjusted EBITDA with the most directly comparable GAAP financial measure, which is projected Net Income. The following projections represent the approximate midpoint of the updated announced full year 2020 expected guidance ranges of Adjusted EBITDA (2020: $195-$220 million). CNX Midstream's financial guidance is based on numerous assumptions about future events and conditions and, therefore, could vary materially from actual results. These estimates are meant to provide guidance only and are subject to revision for acquisitions or operating environment changes.
(Unaudited) (Dollars in millions) | 2020 | |||
Net Income | $ | 145 | ||
Depreciation expense | 31 | |||
Interest expense | 37 | |||
EBITDA | 213 | |||
Non-cash unit-based compensation expense | 3 | |||
Adjusted EBITDA | 216 | |||
Less: | ||||
Net income attributable to noncontrolling interest | 7 | |||
Depreciation and other expenses attributable to noncontrolling interest | 2 | |||
Adjusted EBITDA Attributable to General and Limited Partner Ownership Interest in CNX Midstream | $ | 207 |
The Partnership is unable to project Net Cash Provided by Operating Activities or provide the related reconciliation of projected Net Cash Provided by Operating Activities to projected Distributable Cash Flow, the most comparable financial measure calculated in accordance with GAAP, because Net Cash Provided by Operating Activities includes the impact of changes in operating assets and liabilities. Changes in operating assets and liabilities relate to the timing of the Partnership's cash receipts and disbursements that may not relate to the period in which the operating activities occurred, and the Partnership is unable to project these timing differences with any reasonable degree of accuracy.
Development Companies Jointly Owned by CNX Gathering LLC and CNX Midstream Partners LP | |||||||||||
Three Months Ended March 31, 2020 | |||||||||||
Anchor | Additional | Total | |||||||||
Income Summary | |||||||||||
Revenue | $ | 76,546 | $ | 3,650 | $ | 80,196 | |||||
Expenses | 31,356 | 3,050 | 34,406 | ||||||||
Net Income | $ | 45,190 | $ | 600 | $ | 45,790 | |||||
Operating Statistics - Gathered Volumes | |||||||||||
Dry gas (BBtu/d) | 1,037 | 65 | 1,102 | ||||||||
Wet gas (BBtu/d) | 548 | 49 | 597 | ||||||||
Other (BBtu/d)* | 299 | — | 299 | ||||||||
Total Gathered Volumes | 1,884 | 114 | 1,998 | ||||||||
Capital Investment | |||||||||||
Maintenance capital | $ | 5,655 | $ | 346 | $ | 6,001 | |||||
Expansion capital | 25,653 | 1,005 | 26,658 | ||||||||
Total Capital Investment | $ | 31,308 | $ | 1,351 | $ | 32,659 | |||||
Capital Investment Net to CNX Midstream Partners LP | |||||||||||
Maintenance capital | $ | 5,655 | $ | 18 | $ | 5,673 | |||||
Expansion capital | 25,653 | 50 | 25,703 | ||||||||
Total Capital Investment Net to CNX Midstream Partners LP | $ | 31,308 | $ | 68 | $ | 31,376 | |||||
*Includes third-party volumes we gather under high-pressure short-haul agreements (294 BBtu/d) as well as condensate handling. |
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SOURCE CNX Midstream Partners LP
PITTSBURGH, April 22, 2020 /PRNewswire/ -- CNX Resources Corp. (NYSE: CNX) and CNX Midstream Partners LP (NYSE: CNXM) will issue their first quarter earnings releases at 6:45 a.m. Eastern Time on Monday, April 27. These releases will be followed by conference calls and live webcasts, which will be available on the 'Investor Relations' page of the CNX Resources website, and the 'News and Events' page of the CNX Midstream website. Any presentation materials will be available at 6:45 a.m. Eastern Time on Monday, April 27, on each company's website.
Conference Call Information
CNX Resources (NYSE: CNX)
CNX Midstream Partners (NYSE: CNXM)
About CNX Resources
CNX Resources Corporation (NYSE: CNX) is one of the largest independent natural gas exploration, development and production companies, with operations centered in the major shale formations of the Appalachian basin. CNX deploys an organic growth strategy focused on responsibly developing its resource base. As of December 31, 2019, CNX had 8.4 trillion cubic feet equivalent of proved natural gas reserves. CNX is a member of the Standard & Poor's Midcap 400 Index. Additional information may be found at www.cnx.com.
About CNX Midstream Partners
CNX Midstream Partners LP (NYSE: CNXM) is a master limited partnership that owns, operates, develops and acquires gathering and other midstream energy assets to service natural gas production in the Appalachian Basin in Pennsylvania and West Virginia. CNXM's assets include natural gas gathering pipelines and compression and dehydration facilities, as well as condensate gathering, collection, separation and stabilization facilities. More information is available on CNXM's website www.cnxmidstream.com.
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SOURCE CNX Resources Corporation; CNX Midstream Partners LP
PITTSBURGH, March 17, 2020 /PRNewswire/ -- CNX Midstream Partners LP (NYSE: CNXM) ("CNXM" or the "Partnership") announced today that in response to the uncertainty surrounding the global macroeconomic environment, oil and gas markets, debt and equity capital markets, together with the continued impact of the coronavirus, it is re-evaluating its current capital allocation opportunities and will remain flexible based on market conditions and availability of opportunities.
CNXM is well prepared for this scenario as the resilience and strength of our assets and business model are projected to generate significant free cash flow in 2020 and 2021. Combined with our strong balance sheet that reflects a conservative leverage profile and significant liquidity, CNXM is in an advantageous position with the optionality to pursue one or more of the following: debt retirement of the Partnership's revolving credit facility or bonds, opportunistic repurchases of its equity securities, accretive investment or divestment opportunities and/or examination of its existing distribution target. During this period of extreme volatility, CNXM remains focused on continuing its strong track record of delivery on its financial and operating targets, generating free cash flow, preserving liquidity, and maintaining optionality to generate low risk returns through capital market dislocations.
The chief executive officer of CNXM, Nicholas DeIuliis, stated, "With the continued uncertainty and volatility of the markets, CNXM will remain flexible in these challenging times to make the decisions that it believes are in the best interests of our unitholders; as variables continue to change over the coming days, weeks and months, we will remain steadfast in our commitment to react promptly and prudently, and to make decisions that create value for our unitholders." Mr. DeIuliis concluded by stating that "we believe that CNXM will be well positioned to navigate through the current climate to seize opportunities and further the Partnership's strategic vision."
* * * * *
CNX Midstream is a growth-oriented master limited partnership that owns, operates, develops and acquires gathering and other midstream energy assets to service natural gas production in the Appalachian Basin in Pennsylvania and West Virginia. Our assets include natural gas gathering pipelines and compression and dehydration facilities, as well as condensate gathering, collection, separation and stabilization facilities. More information is available at our website www.cnxmidstream.com.
This press release contains forward-looking statements within the meaning of the federal securities laws. Statements that are predictive in nature, that depend upon or refer to future events or conditions or that include the words "will," "believe," "expect," "anticipate," "intend," "estimate" and other expressions that are predictions of or indicate future events and trends and that do not relate to historical matters identify forward-looking statements. You should not place undue reliance on forward-looking statements. Forward-looking statements include, among others, statements regarding our anticipated 2020 and 2021 free cash flow and the expected uses thereof.
Forward-looking statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict, and there can be no assurance that actual outcomes and results will not differ materially from those expected by our management. You should not place undue reliance on forward-looking statements. Although forward-looking statements reflect our good faith beliefs at the time they are made, they involve known and unknown risks, uncertainties and other factors. While our management considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond our control. These risks, contingencies and uncertainties relate to, among other matters, the following: the length and severity of the recent outbreak of the COVID-19 virus and its impact on our business; the performance of our two largest customers, who account for substantially all of our revenue, and the effect of any modifications to their business strategies or other actions that otherwise significantly reduce the volumes of natural gas and condensate transported through our gathering systems; changes in natural gas, oil and NGL prices; general economic conditions, including interest rates; changes in local, regional, national and global demand for natural gas, oil and NGLs; impact of new laws and regulations; and the other risks discussed in the CNXM's periodic filings with the Securities and Exchange Commission, including the Risk Factors section of the CNXM's Annual Report on Form 10-K for the year ended December 31, 2019. CNXM undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, changed circumstances or otherwise, unless required by law.
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SOURCE CNX Midstream Partners LP
PITTSBURGH, Jan. 23, 2020 /PRNewswire/ -- CNX Midstream Partners LP (NYSE: CNXM) ("CNXM" or the "Partnership"), today announced that the Board of Directors of its general partner, CNX Midstream GP LLC, has declared a cash distribution of $0.4143 per unit with respect to the fourth quarter of 2019. The distribution will be made on February 13, 2020 to unitholders of record as of the close of business on February 5, 2020. The distribution, which equates to an annual rate of $1.6572 per unit, represents an increase of 3.6% over the prior quarter, and an increase of 15% over the distribution paid with respect to the fourth quarter of 2018.
CNX Midstream Partners is a growth-oriented master limited partnership that owns, operates, develops and acquires gathering and other midstream energy assets to service natural gas production in the Appalachian Basin in Pennsylvania and West Virginia. Our assets include natural gas gathering pipelines and compression and dehydration facilities, as well as condensate gathering, collection, separation and stabilization facilities. More information is available at our website www.cnxmidstream.com.
This press release is intended to be a qualified notice to nominees as provided for under Treasury Regulation Section 1.1446-4(b). Brokers and nominees should treat one hundred percent (100.0%) of CNX Midstream's distributions to non-U.S. investors as being attributed to income that is effectively connected with a United States trade or business. Accordingly, CNX Midstream's distributions to non-U.S. investors are subject to federal income tax withholding at the highest applicable effective tax rate. Nominees, and not CNX Midstream, are treated as withholding agents responsible for withholding on the distributions received by them on behalf of foreign investors.
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SOURCE CNX Midstream Partners LP
PITTSBURGH, Jan. 2, 2020 /PRNewswire/ -- CNX Resources Corp. (NYSE: CNX) and CNX Midstream Partners LP (NYSE: CNXM) will issue their fourth quarter earnings releases at 6:45 a.m. Eastern Time on Thursday, January 30. These releases will be followed by conference calls and live webcasts, which will be available on the 'Investor Relations' page of the CNX Resources website, and the 'News and Events' page of the CNX Midstream website. Also, earnings call slides will be available at 6:45 a.m. Eastern Time on Thursday, January 30, on each company's website.
Conference Call Information
CNX Resources (NYSE: CNX)
CNX Midstream Partners (NYSE: CNXM)
About CNX Resources
CNX Resources Corporation (NYSE: CNX) is one of the largest independent natural gas exploration, development and production companies, with operations centered in the major shale formations of the Appalachian basin. CNX deploys an organic growth strategy focused on responsibly developing its resource base. As of December 31, 2018, CNX had 7.9 trillion cubic feet equivalent of proved natural gas reserves. CNX is a member of the Standard & Poor's Midcap 400 Index. Additional information may be found at www.cnx.com.
About CNX Midstream Partners
CNX Midstream Partners LP (NYSE: CNXM) is a master limited partnership that owns, operates, develops and acquires gathering and other midstream energy assets to service natural gas production in the Appalachian Basin in Pennsylvania and West Virginia. CNXM's assets include natural gas gathering pipelines and compression and dehydration facilities, as well as condensate gathering, collection, separation and stabilization facilities. More information is available on CNXM's website www.cnxmidstream.com.
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SOURCE CNX Resources Corporation; CNX Midstream Partners LP
PITTSBURGH, Oct. 29, 2019 /PRNewswire/ -- CNX Midstream Partners LP (NYSE: CNXM) ("CNXM", "CNX Midstream" or the "Partnership") today reported financial and operational results for the three and nine months ended September 30, 2019(1).
Third Quarter Results
The Partnership continued its solid financial performance during the three and nine months ended September 30, 2019. Comparative results net to the Partnership, with the exception of net cash provided by operating activities, which is presented on a gross consolidated basis, were as follows:
Three Months Ended | Nine Months Ended | ||||||||||||||
(in millions) | 2019 | 2018 | 2019 | 2018 | |||||||||||
Net income | $ | 44.0 | $ | 33.6 | $ | 125.8 | $ | 91.5 | |||||||
Net cash provided by operating activities | $ | 51.0 | $ | 35.7 | $ | 175.7 | $ | 131.2 | |||||||
Adjusted EBITDA (non-GAAP)(2) | $ | 56.5 | $ | 45.0 | $ | 170.3 | $ | 121.2 | |||||||
Distributable cash flow (non-GAAP)(2) | $ | 43.6 | $ | 35.0 | $ | 133.5 | $ | 95.8 |
The cash distribution coverage(2) of 1.35x is on an as-declared basis for the quarter.
"CNXM delivered another strong quarter," commented Nicholas J. DeIuliis, CEO of CNX Midstream GP LLC, the general partner of the Partnership (the "General Partner"). "As compared to the third quarter of 2018, Adjusted EBITDA and distributable cash flow were up by 26% and 25%, respectively. This marks the 18th consecutive quarterly cash distribution increase at the targeted 15% annual growth rate. The 2019 capital build-out is nearly complete, and CNXM continues to expect capital to decline significantly in 2020, resulting in approximately $130 million in free cash flow(3)."
2019 and 2020 Updated Guidance
Based on current expectations, management provides the following update:
($ in millions) | 2019E | 2019E | 2020E | 2020E | |||||||||||
Previous | Updated | Previous | Updated | ||||||||||||
Throughput (BBtu/d)* | 1,400 | - | 1,500 | 1,500 | - | 1,600 | 1,650 | - | 1,800 | 1,600 | - | 1,750 | |||
Capital Expenditures | $310 | - | $330 | $310 | - | $330 | $80 | - | $100 | $80 | - | $100 | |||
Adjusted EBITDA(2) | $200 | - | $220 | $220 | - | $230 | $250 | - | $270 | $250 | - | $270 | |||
Distributable Cash Flow(2) | $150 | - | $170 | $170 | - | $180 | $185 | - | $205 | $185 | - | $205 | |||
Distribution Coverage(2) | 1.2x | - | 1.4x | 1.4x | - | 1.5x | 1.2x | - | 1.3x | 1.2x | - | 1.3x | |||
LP Distribution Growth Target | 15% | 15% | 15% | 15% | |||||||||||
* Excludes third-party volumes under high-pressure short-haul agreements. |
In 2020, despite a lower volume range compared to the previous guidance, Adjusted EBITDA remains unchanged due primarily to offsetting general and administrative cost reductions.
Quarterly Distribution
As previously announced, the Board of Directors of its general partner, CNX Midstream GP LLC, has declared a cash distribution of $0.4001 per unit with respect to the third quarter of 2019. The distribution will be paid on November 12, 2019 to unitholders of record as of the close of business on November 5, 2019. The distribution, which equates to an annual rate of $1.6004 per unit, represents an increase of 3.5% over the prior quarter, and an increase of 15% over the distribution paid with respect to the third quarter of 2018.
Capital Investment and Resources
For the third quarter of 2019, CNX Midstream's total capital investment net to the Partnership was $63.9 million, which includes investment in expansion projects of $58.5 million and maintenance capital of $5.4 million.
As of September 30, 2019, CNX Midstream had outstanding borrowings of $246.0 million under its $600.0 million revolving credit facility.
Third Quarter Financial and Operational Results Conference Call
A conference call and webcast, during which management will discuss third quarter 2019 financial and operational results, is scheduled for October 29, 2019 at 11:00 a.m. Eastern Time. Prepared remarks by members of management will be followed by a question and answer period. Interested parties may listen via webcast at www.cnxmidstream.com. Participants who would like to ask questions may join the conference by phone by dialing 888-349-0097 (international 412-902-0126) five to ten minutes prior to the scheduled start time (reference the CNX Midstream call). An on-demand replay of the webcast will also be available at www.cnxmidstream.com shortly after the conclusion of the conference call. A telephonic replay will be available through November 12, 2019 by dialing 877-344-7529 (international: 412-317-0088) and using the conference playback number 10135370.
_____________ | |
(1) | Unless otherwise indicated, the reporting measures included in this news release reflect the unallocated total activity of the three development companies that have or had been jointly owned, as applicable, by the Partnership and CNX Gathering LLC ("CNX Gathering") since completion of the Partnership's initial public offering ("IPO") in September 2014. In connection with the transaction with HG Energy, the Partnership distributed its 5% interest in the Growth System to CNX Gathering and has no remaining interests in the Growth Systems. The Partnership's current financial interests in the development companies are: 100% in the Anchor Systems and 5% in the Additional Systems. Because the Partnership owns a controlling interest in each of these two development companies, it fully consolidates their financial results. CNX Gathering, which is wholly owned by CNX Resources Corporation, owns a 95% noncontrolling interest in the Additional Systems of the Partnership. |
(2) | Adjusted EBITDA, distributable cash flow (DCF), and cash distribution coverage are not measures or ratios that are recognized under accounting principles generally accepted in the U.S. ("GAAP"). Definitions and reconciliations of these non-GAAP measures to GAAP reporting measures appear in the financial tables which follow. |
(3) | Free cash flow (FCF) calculated as Adjusted EBITDA of $260 million less interest expense of $40 million less capital expenditures of $90 million. |
* * * * *
CNX Midstream is a growth-oriented master limited partnership that owns, operates, develops and acquires gathering and other midstream energy assets to service natural gas production in the Appalachian Basin in Pennsylvania and West Virginia. Our assets include natural gas gathering pipelines and compression and dehydration facilities, as well as condensate gathering, collection, separation and stabilization facilities. More information is available at our website www.cnxmidstream.com.
* * * * *
This press release is intended to be a qualified notice to nominees as provided for under Treasury Regulation Section 1.1446-4(b). Brokers and nominees should treat one hundred percent (100.0%) of CNX Midstream's distributions to non-U.S. investors as being attributed to income that is effectively connected with a United States trade or business. Accordingly, CNX Midstream's distributions to non-U.S. investors are subject to federal income tax withholding at the highest applicable effective tax rate. Nominees, and not CNX Midstream, are treated as withholding agents responsible for withholding on the distributions received by them on behalf of foreign investors.
* * * * *
This press release contains forward-looking statements within the meaning of the federal securities laws. Statements that are predictive in nature, that depend upon or refer to future events or conditions or that include the words "will," "believe," "expect," "anticipate," "intend," "estimate" and other expressions that are predictions of or indicate future events and trends and that do not relate to historical matters identify forward-looking statements. You should not place undue reliance on forward-looking statements. Forward-looking statements include, among others, statements regarding the payment of our quarterly distribution for the quarter ended September 30, 2019 and our anticipated 2019 and 2020 financial performance. Forward-looking statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict, and there can be no assurance that actual outcomes and results will not differ materially from those expected by our management. You should not place undue reliance on forward-looking statements. Although forward-looking statements reflect our good faith beliefs at the time they are made, they involve known and unknown risks, uncertainties and other factors. While our management considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond our control. These risks, contingencies and uncertainties relate to, among other matters, the following: if either or both of our two largest customers, who account for substantially all of our revenue, change their business strategies, or take actions that otherwise significantly reduce the volumes of natural gas and condensate transported through our gathering systems, our revenue would decline and we could be materially and adversely affected; under our gathering agreements, our customers may transfer their leasehold, working and mineral fee interests in their dedicated acreage; we may not generate sufficient distributable cash flow to make the payment of the minimum quarterly distribution to our unitholders; because of the natural decline in production from existing wells, our success, in part, depends on our ability to maintain or increase natural gas and condensate throughput volumes on our midstream systems, which depends on the level of development and completion activity on acreage dedicated to us; many of our gathering agreements do not include minimum volume commitments; certain of our dedicated acreage is either not held by production by our customers or has not yet been earned by them; the highly competitive nature of our industry may adversely impact our ability to attract dedications of third-party volumes, which could limit our ability to grow and continue our dependence on our existing customers; increased competition from other companies that provide midstream services could have a negative impact on the demand for our services, which could adversely affect our financial results; we may not be able to make attractive offers to CNX on our ROFO acreage; our only assets are controlling ownership interests in our operating subsidiaries, so our cash flow will depend entirely on the performance of our operating subsidiaries and their ability to distribute cash to us; some of our gathering agreements with our customers provide for the release of dedicated acreage or fee credits in certain situations; we are responsible for any mine subsidence costs in the future; our midstream systems are exclusively located in the Appalachian Basin, making us vulnerable to risks associated with operating in a single geographic area; we may be unable to grow by acquiring the noncontrolling interests in, or assets of, our operating subsidiaries owned by CNX Gathering or CNX, which could limit our ability to increase our distributable cash flow; we may be unable to acquire additional properties from third parties in the future and any acquired properties may not provide the anticipated benefits; if third-party pipelines, whether upstream or downstream, or other midstream facilities interconnected to our gathering systems become partially or fully unavailable, our operating margin, cash flow and ability to make cash distributions to our unitholders could be adversely affected; to maintain and grow our business, we will be required to make substantial capital expenditures; if we are unable to obtain needed capital or financing on satisfactory terms, our ability to make cash distributions may be diminished or our financial leverage could increase; the amount of cash we have available for distribution to our unitholders depends primarily on our cash flow and not solely on our profitability, which may prevent us from making distributions, even during periods in which we record net income; our construction of new gathering, compression, dehydration, treating or other midstream assets may not result in revenue increases and may be subject to regulatory, environmental, political, legal and economic risks, which could adversely affect our cash flows, results of operations and financial condition and, as a result, our ability to distribute cash to our unitholders; the provisions and restrictions in our revolving credit facility and other debt agreements, and the risks associated therewith, could adversely affect our business, financial condition, results of operations and ability to make quarterly cash distributions to our unitholders; environmental regulations can increase costs and introduce uncertainty that could adversely impact our or our customers' operations; existing and future governmental 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; we may incur significant costs and liabilities as a result of pipeline operations and related increases in the regulation of gas gathering pipelines; climate change laws and regulations restricting emissions of greenhouse gases at the federal or state level could result in increased operating costs and reduced demand for the natural gas that we gather, while potential physical effects of climate change could disrupt our production and cause us to incur significant costs in preparing for or responding to those effects; our business involves many hazards and operational risks, some of which may not be fully covered by insurance, and the occurrence of a significant accident or other event that is not fully insured could curtail our operations and have a material adverse effect on our ability to distribute cash and, accordingly, the market price for our common units; cyber-incidents could have a material adverse effect on our business, financial condition or results of operations; we may not own in fee the land on which our pipelines and facilities are located, which could result in disruptions to our operations; a shortage of equipment and skilled labor in the Appalachian Basin could reduce equipment availability and labor productivity and increase labor and equipment costs, which could have a material adverse effect on our business and results of operations; we do not have any officers or employees and rely on officers of our general partner and employees of CNX; our success depends on key members of our general partner's senior management team and our ability to attract and retain experienced technical and other professional personnel; increases in interest rates could adversely impact our business, common unit price, our ability to issue equity or incur debt for acquisitions, capital expenditures or other purposes and our ability to make cash distributions at our intended levels; terrorist activities could materially and adversely affect our business and results of operations; negative public perception regarding our industry could have an adverse effect on our operations; our general partner and its affiliates, including CNX, have conflicts of interest with us and limited fiduciary duties to us and our unitholders, and they may favor their own interests to our detriment and that of our unitholders; we have no control over the business decisions and operations of CNX, and CNX is under no obligation to adopt a business strategy that favors us; our general partner's discretion in establishing cash reserves may reduce the amount of cash we have available to distribute to unitholders; affiliates of our general partner, including CNX and CNX Gathering, may compete with us, and neither our general partner nor its affiliates have any obligation to present business opportunities to us except with respect to rights of first offer contained in our omnibus agreement; our tax treatment depends on our status as a partnership for federal income tax purposes; as a result of investing in our common units, you may become subject to state and local taxes and return filing requirements in jurisdictions where we operate or own or acquire properties.
Although forward-looking statements reflect our good faith beliefs at the time they are made, they involve known and unknown risks, uncertainties and other factors. For more information concerning factors that could cause actual results to differ materially from those conveyed in the forward-looking statements, including, among others, that our business plans may change as circumstances warrant, please refer to the "Risk Factors" and "Forward-Looking Statements" sections of our Annual Report on Form 10-K for the year ended December 31, 2018 filed with the Securities and Commission on February 7, 2019 and subsequent Quarterly Reports on Form 10-Q. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, changed circumstances or otherwise, unless required by law.
CNX MIDSTREAM PARTNERS LP CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars in thousands, except per unit data) (Unaudited) | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Revenue | |||||||||||||||
Gathering revenue — related party | $ | 55,453 | $ | 41,022 | $ | 168,434 | $ | 116,328 | |||||||
Gathering revenue — third party | 18,523 | 19,946 | 55,862 | 69,523 | |||||||||||
Total Revenue | 73,976 | 60,968 | 224,296 | 185,851 | |||||||||||
Expenses | |||||||||||||||
Operating expense — related party | 6,105 | 5,131 | 18,167 | 14,645 | |||||||||||
Operating expense — third party | 5,612 | 4,870 | 17,774 | 20,744 | |||||||||||
General and administrative expense — related party | 3,573 | 3,060 | 11,567 | 10,292 | |||||||||||
General and administrative expense — third party | 1,236 | 1,771 | 4,136 | 6,639 | |||||||||||
Loss on asset sales and abandonments | — | — | 7,229 | 2,501 | |||||||||||
Depreciation expense | 6,184 | 5,306 | 17,694 | 16,605 | |||||||||||
Interest expense | 7,601 | 7,255 | 22,625 | 16,863 | |||||||||||
Total Expense | 30,311 | 27,393 | 99,192 | 88,289 | |||||||||||
Net Income | 43,665 | 33,575 | 125,104 | 97,562 | |||||||||||
Less: Net (loss) income attributable to noncontrolling interest | (298) | (64) | (711) | 6,071 | |||||||||||
Net Income Attributable to General and Limited Partner Ownership | $ | 43,963 | $ | 33,639 | $ | 125,815 | $ | 91,491 | |||||||
Calculation of Limited Partner Interest in Net Income: | |||||||||||||||
Net Income Attributable to General and Limited Partner Ownership | $ | 43,963 | $ | 33,639 | $ | 125,815 | $ | 91,491 | |||||||
Less: General partner interest in net income, including incentive | 7,103 | 3,697 | 18,707 | 8,752 | |||||||||||
Limited partner interest in net income | $ | 36,860 | $ | 29,942 | $ | 107,108 | $ | 82,739 | |||||||
Earnings per limited partner unit: | |||||||||||||||
Basic | $ | 0.58 | $ | 0.47 | $ | 1.68 | $ | 1.30 | |||||||
Diluted | $ | 0.58 | $ | 0.47 | $ | 1.68 | $ | 1.30 | |||||||
Weighted average number of limited partner units outstanding | |||||||||||||||
Basic | 63,735 | 63,638 | 63,722 | 63,633 | |||||||||||
Diluted | 63,770 | 63,709 | 63,763 | 63,682 | |||||||||||
Cash distributions declared per unit (*) | $ | 0.4001 | $ | 0.3479 | $ | 1.1598 | $ | 1.0085 |
(*) | Represents the cash distributions declared during the month following the end of each respective quarterly period. |
CNX MIDSTREAM PARTNERS LP CONSOLIDATED BALANCE SHEETS (Dollars in thousands, except number of limited partner units) (Unaudited) | |||||||
September 30, | December 31, | ||||||
ASSETS | |||||||
Current Assets: | |||||||
Cash | $ | 1,735 | $ | 3,966 | |||
Receivables — related party | 17,845 | 17,073 | |||||
Receivables — third party | 6,074 | 7,028 | |||||
Other current assets | 1,646 | 2,383 | |||||
Total Current Assets | 27,300 | 30,450 | |||||
Property and Equipment: | |||||||
Property and equipment | 1,244,472 | 974,394 | |||||
Less — accumulated depreciation | 100,295 | 82,619 | |||||
Property and Equipment — Net | 1,144,177 | 891,775 | |||||
Other Assets: | |||||||
Operating lease right-of-use assets | 6,281 | — | |||||
Other assets | 3,508 | 3,203 | |||||
Total Other Assets | 9,789 | 3,203 | |||||
TOTAL ASSETS | $ | 1,181,266 | $ | 925,428 | |||
LIABILITIES AND PARTNERS' CAPITAL | |||||||
Current Liabilities: | |||||||
Trade accounts payable | $ | 33,414 | $ | 9,401 | |||
Accrued interest payable | 1,237 | 7,761 | |||||
Accrued liabilities | 64,467 | 26,757 | |||||
Due to related party | 3,788 | 4,980 | |||||
Total Current Liabilities | 102,906 | 48,899 | |||||
Other Liabilities: | |||||||
Revolving credit facility | 246,000 | 84,000 | |||||
Long-term debt | 393,925 | 393,215 | |||||
Long-term operating lease liabilities | 40 | — | |||||
Total Other Liabilities | 639,965 | 477,215 | |||||
Total Liabilities | 742,871 | 526,114 | |||||
Partners' Capital and Noncontrolling Interest: | |||||||
Limited partner units (63,735,464 issued and outstanding at September 30, 2019 and | 357,085 | 320,543 | |||||
General partner interest | 14,150 | 10,900 | |||||
Partners' capital attributable to CNX Midstream Partners LP | 371,235 | 331,443 | |||||
Noncontrolling interest | 67,160 | 67,871 | |||||
Total Partners' Capital and Noncontrolling Interest | 438,395 | 399,314 | |||||
TOTAL LIABILITIES AND PARTNERS' CAPITAL | $ | 1,181,266 | $ | 925,428 |
CNX MIDSTREAM PARTNERS LP CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in thousands) (Unaudited) | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Cash Flows from Operating Activities: | |||||||||||||||
Net income | $ | 43,665 | $ | 33,575 | $ | 125,104 | $ | 97,562 | |||||||
Adjustments to reconcile net income to net cash provided by operating | |||||||||||||||
Depreciation expense and amortization of debt issuance costs | 6,658 | 5,857 | 19,107 | 17,729 | |||||||||||
Unit-based compensation | 328 | 506 | 1,481 | 1,775 | |||||||||||
Loss on asset sales and abandonments | — | — | 7,229 | 2,501 | |||||||||||
Other | 8 | 1 | 49 | 388 | |||||||||||
Changes in assets and liabilities: | |||||||||||||||
Due to/from affiliate | 1,647 | (1,764) | (1,622) | 124 | |||||||||||
Receivables — third party | 607 | 361 | 954 | 1,066 | |||||||||||
Other current and non-current assets | 1,738 | (104) | (5,301) | 4 | |||||||||||
Accounts payable and other accrued liabilities | (3,637) | (2,766) | 28,679 | 10,058 | |||||||||||
Net Cash Provided by Operating Activities | 51,014 | 35,666 | 175,680 | 131,207 | |||||||||||
Cash Flows from Investing Activities: | |||||||||||||||
Capital expenditures | (68,289) | (44,241) | (251,156) | (85,828) | |||||||||||
Proceeds from sale of assets | — | — | — | 6,462 | |||||||||||
Net Cash Used in Investing Activities | (68,289) | (44,241) | (251,156) | (79,366) | |||||||||||
Cash Flows from Financing Activities: | |||||||||||||||
Contributions from (distributions to) general partner and noncontrolling | 1 | — | 31 | (3,505) | |||||||||||
Vested units withheld for unitholders taxes | — | (1) | (690) | (348) | |||||||||||
Quarterly distributions to unitholders | (30,637) | (24,176) | (86,845) | (68,365) | |||||||||||
Net payments on unsecured $250.0 million credit facility | — | — | — | (149,500) | |||||||||||
Net borrowings on secured $600.0 million credit facility | 38,000 | 33,000 | 162,000 | 44,000 | |||||||||||
Proceeds from issuance of long-term debt, net of discount | — | — | — | 394,000 | |||||||||||
Debt issuance costs | (31) | (5) | (1,251) | (5,367) | |||||||||||
Acquisition of Shirley-Penns System | — | — | — | (265,000) | |||||||||||
Net Cash Provided by (Used in) Financing Activities | 7,333 | 8,818 | 73,245 | (54,085) | |||||||||||
Net (Decrease) Increase in Cash | (9,942) | 243 | (2,231) | (2,244) | |||||||||||
Cash at Beginning of Period | 11,677 | 707 | 3,966 | 3,194 | |||||||||||
Cash at End of Period | $ | 1,735 | $ | 950 | $ | 1,735 | $ | 950 |
CNX MIDSTREAM PARTNERS LP
RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA AND DISTRIBUTABLE CASH FLOW
(Dollars in thousands)
Definition of Non-GAAP Financial Measures
EBITDA and Adjusted EBITDA
We define EBITDA as net income (loss) before net interest expense, depreciation and amortization, and Adjusted EBITDA as EBITDA adjusted for gains or losses on asset sales and abandonments and other non-cash items which should not be included in the calculation of distributable cash flow. EBITDA and Adjusted EBITDA are used as supplemental financial measures by management and by external users of our financial statements, such as investors, industry analysts, lenders and ratings agencies, to assess:
We believe that the presentation of EBITDA and Adjusted EBITDA provides information that is useful to investors in assessing our financial condition and results of operations. The GAAP measures most directly comparable to EBITDA and Adjusted EBITDA are net income and net cash provided by operating activities. EBITDA and Adjusted EBITDA should not be considered alternatives to net income, net cash provided by operating activities or any other measure of financial performance or liquidity presented in accordance with GAAP. EBITDA and Adjusted EBITDA exclude some, but not all, items that affect net income or net cash, and these measures may vary from those of other companies. As a result, EBITDA and Adjusted EBITDA as presented below may not be comparable to similarly titled measures of other companies.
Distributable Cash Flow
We define distributable cash flow as Adjusted EBITDA less net income attributable to noncontrolling interest, cash interest expense and maintenance capital expenditures, each net to the Partnership. Distributable cash flow does not reflect changes in working capital balances.
Distributable cash flow is used as a supplemental financial measure by management and by external users of our financial statements, such as investors, industry analysts, lenders and ratings agencies, to assess:
We believe that the presentation of distributable cash flow in this release provides information that is useful to investors in assessing our financial condition and results of operations. The GAAP measures most directly comparable to distributable cash flow are net income and net cash provided by operating activities. Distributable cash flow should not be considered an alternative to net income, net cash provided by operating activities or any other measure of financial performance or liquidity presented in accordance with GAAP. Distributable cash flow excludes some, but not all, items that affect net income or net cash, and these measures may vary from those of other companies. As a result, our distributable cash flow may not be comparable to similarly titled measures that other companies may use.
The following table presents a reconciliation of the non-GAAP measures of Adjusted EBITDA and distributable cash flow to the most directly comparable GAAP financial measures of net income and net cash provided by operating activities.
Three Months Ended | Nine Months Ended | |||||||||||||||
(Unaudited) | 2019 | 2018 | 2019 | 2018 | ||||||||||||
Net Income | $ | 43,665 | $ | 33,575 | $ | 125,104 | $ | 97,562 | ||||||||
Depreciation expense | 6,184 | 5,306 | 17,694 | 16,605 | ||||||||||||
Interest expense | 7,601 | 7,255 | 22,625 | 16,863 | ||||||||||||
EBITDA | 57,450 | 46,136 | 165,423 | 131,030 | ||||||||||||
Non-cash unit-based compensation expense | 328 | 506 | 1,481 | 1,775 | ||||||||||||
Loss on asset sales and abandonments | — | — | 7,229 | 2,501 | ||||||||||||
Adjusted EBITDA | 57,778 | 46,642 | 174,133 | 135,306 | ||||||||||||
Less: | ||||||||||||||||
Net (loss) income attributable to noncontrolling interest | (298) | (64) | (711) | 6,071 | ||||||||||||
Depreciation expense attributable to noncontrolling interest | 392 | 396 | 1,181 | 2,735 | ||||||||||||
Other expenses attributable to noncontrolling interest | 1,152 | 1,280 | 3,370 | 2,940 | ||||||||||||
Loss on asset sales attributable to noncontrolling interest | — | — | — | 2,375 | ||||||||||||
Adjusted EBITDA Attributable to General and Limited Partner | $ | 56,532 | $ | 45,030 | $ | 170,293 | $ | 121,185 | ||||||||
Less: cash interest expense, net to the Partnership | 7,528 | 5,593 | 21,414 | 13,181 | ||||||||||||
Less: maintenance capital expenditures, net to the Partnership | 5,388 | 4,449 | 15,391 | 12,157 | ||||||||||||
Distributable Cash Flow | $ | 43,616 | $ | 34,988 | $ | 133,488 | $ | 95,847 | ||||||||
Net Cash Provided by Operating Activities | $ | 51,014 | $ | 35,666 | $ | 175,680 | $ | 131,207 | ||||||||
Interest expense | 7,601 | 7,255 | 22,625 | 16,863 | ||||||||||||
Loss on asset sales and abandonments | — | — | 7,229 | 2,501 | ||||||||||||
Other, including changes in working capital | (837) | 3,721 | (31,401) | (15,265) | ||||||||||||
Adjusted EBITDA | 57,778 | 46,642 | 174,133 | 135,306 | ||||||||||||
Less: | ||||||||||||||||
Net (loss) income attributable to noncontrolling interest | (298) | (64) | (711) | 6,071 | ||||||||||||
Depreciation expense attributable to noncontrolling interest | 392 | 396 | 1,181 | 2,735 | ||||||||||||
Other expenses attributable to noncontrolling interest | 1,152 | 1,280 | 3,370 | 2,940 | ||||||||||||
Loss on asset sales attributable to noncontrolling interest | — | — | — | 2,375 | ||||||||||||
Adjusted EBITDA Attributable to General and Limited Partner | $ | 56,532 | $ | 45,030 | $ | 170,293 | $ | 121,185 | ||||||||
Less: cash interest expense, net to the Partnership | 7,528 | 5,593 | 21,414 | 13,181 | ||||||||||||
Less: maintenance capital expenditures, net to the Partnership | 5,388 | 4,449 | 15,391 | 12,157 | ||||||||||||
Distributable Cash Flow | $ | 43,616 | $ | 34,988 | $ | 133,488 | $ | 95,847 |
The following table presents a reconciliation of the non-GAAP measures Adjusted EBITDA and distributable cash flow by quarter and for the most recently completed twelve month period with the most directly comparable GAAP financial measures, which are net income and net cash provided by operating activities.
(Unaudited) | Q4 2018 | Q1 2019 | Q2 2019 | Q3 2019 | Twelve | |||||||||||||||
Net Income | $ | 41,433 | $ | 34,976 | $ | 46,463 | $ | 43,665 | $ | 166,537 | ||||||||||
Depreciation expense | 5,334 | 5,650 | 5,860 | 6,184 | 23,028 | |||||||||||||||
Interest expense | 6,751 | 7,339 | 7,685 | 7,601 | 29,376 | |||||||||||||||
EBITDA | 53,518 | 47,965 | 60,008 | 57,450 | 218,941 | |||||||||||||||
Non-cash unit-based compensation expense | 636 | 612 | 541 | 328 | 2,117 | |||||||||||||||
Loss on asset sales and abandonments | — | 7,229 | — | — | 7,229 | |||||||||||||||
Adjusted EBITDA | 54,154 | 55,806 | 60,549 | 57,778 | 228,287 | |||||||||||||||
Less: | ||||||||||||||||||||
Net loss attributable to noncontrolling interest | (1,118) | (131) | (282) | (298) | (1,829) | |||||||||||||||
Depreciation expense attributable to noncontrolling interest | 393 | 394 | 395 | 392 | 1,574 | |||||||||||||||
Other expenses attributable to noncontrolling interest | 1,389 | 1,120 | 1,098 | 1,152 | 4,759 | |||||||||||||||
Adjusted EBITDA Attributable to General and Limited | $ | 53,490 | $ | 54,423 | $ | 59,338 | $ | 56,532 | $ | 223,783 | ||||||||||
Less: cash interest expense, net to the Partnership | 6,040 | 6,604 | 7,282 | 7,528 | 27,454 | |||||||||||||||
Less: maintenance capital expenditures, net to the Partnership | 4,735 | 4,835 | 5,168 | 5,388 | 20,126 | |||||||||||||||
Distributable Cash Flow | $ | 42,715 | $ | 42,984 | $ | 46,888 | $ | 43,616 | $ | 176,203 | ||||||||||
Net Cash Provided by Operating Activities | $ | 48,908 | $ | 49,913 | $ | 74,753 | $ | 51,014 | $ | 224,588 | ||||||||||
Interest expense | 6,751 | 7,339 | 7,685 | 7,601 | 29,376 | |||||||||||||||
Loss on asset sales and abandonments | — | 7,229 | — | — | 7,229 | |||||||||||||||
Other, including changes in working capital | (1,505) | (8,675) | (21,889) | (837) | (32,906) | |||||||||||||||
Adjusted EBITDA | 54,154 | 55,806 | 60,549 | 57,778 | 228,287 | |||||||||||||||
Less: | ||||||||||||||||||||
Net loss attributable to noncontrolling interest | (1,118) | (131) | (282) | (298) | (1,829) | |||||||||||||||
Depreciation expense attributable to noncontrolling interest | 393 | 394 | 395 | 392 | 1,574 | |||||||||||||||
Other expenses attributable to noncontrolling interest | 1,389 | 1,120 | 1,098 | 1,152 | 4,759 | |||||||||||||||
Adjusted EBITDA Attributable to General and Limited | $ | 53,490 | $ | 54,423 | $ | 59,338 | $ | 56,532 | $ | 223,783 | ||||||||||
Less: cash interest expense, net to the Partnership | 6,040 | 6,604 | 7,282 | 7,528 | 27,454 | |||||||||||||||
Less: maintenance capital expenditures, net to the Partnership | 4,735 | 4,835 | 5,168 | 5,388 | 20,126 | |||||||||||||||
Distributable Cash Flow | $ | 42,715 | $ | 42,984 | $ | 46,888 | $ | 43,616 | $ | 176,203 | ||||||||||
Distributions Declared | $ | 27,268 | $ | 28,940 | $ | 30,637 | $ | 32,371 | $ | 119,216 | ||||||||||
Distribution Coverage Ratio - Declared | 1.57 | x | 1.49 | x | 1.53 | x | 1.35 | x | 1.48 | x | ||||||||||
Distributable Cash Flow | $ | 42,715 | $ | 42,984 | $ | 46,888 | $ | 43,616 | $ | 176,203 | ||||||||||
Distributions Paid | $ | 25,678 | $ | 27,268 | $ | 28,940 | $ | 30,637 | $ | 112,523 | ||||||||||
Distribution Coverage Ratio - Paid | 1.66 | x | 1.58 | x | 1.62 | x | 1.42 | x | 1.57 | x |
The following table presents a reconciliation of the non-GAAP measures of the Partnership's projected Adjusted EBITDA and projected distributable cash flow with the most directly comparable GAAP financial measure, which is projected net income. The following projections represent the approximate midpoint of the updated announced full year 2019 and 2020 expected guidance ranges of Adjusted EBITDA (2019: $220-$230 million; 2020: $250-$270 million) and full year distributable cash flow (2019: $170-$180 million; 2020: $185-$205 million) attributable to the Partnership. CNX Midstream's financial guidance is based on numerous assumptions about future events and conditions and, therefore, could vary materially from actual results. These estimates are meant to provide guidance only and are subject to revision for acquisitions or operating environment changes.
(Unaudited) (Dollars in millions) | Forecast | Forecast | ||||||
Net Income | $ | 168 | $ | 194 | ||||
Depreciation expense | 26 | 29 | ||||||
Interest expense | 33 | 43 | ||||||
EBITDA | 227 | 266 | ||||||
Non-cash unit-based compensation expense | 3 | 3 | ||||||
Adjusted EBITDA | 230 | 269 | ||||||
Less: | ||||||||
Net income attributable to noncontrolling interest | 3 | 7 | ||||||
Depreciation and other expenses attributable to noncontrolling interest | 2 | 2 | ||||||
Adjusted EBITDA Attributable to General and Limited | $ | 225 | $ | 260 | ||||
Less: cash interest expense, net to the Partnership | 30 | 40 | ||||||
Less: maintenance capital expenditures, net to the Partnership | 20 | 25 | ||||||
Distributable Cash Flow | $ | 175 | $ | 195 |
The Partnership is unable to project net cash provided by operating activities or provide the related reconciliation of projected net cash provided by operating activities to projected distributable cash flow, the most comparable financial measure calculated in accordance with GAAP, because net cash provided by operating activities includes the impact of changes in operating assets and liabilities. Changes in operating assets and liabilities relate to the timing of the Partnership's cash receipts and disbursements that may not relate to the period in which the operating activities occurred, and the Partnership is unable to project these timing differences with any reasonable degree of accuracy.
Development Companies Jointly Owned by CNX Gathering LLC and CNX Midstream Partners LP Operating Income Summary, Selected Operating Statistics and Capital Investment (Dollars in thousands) (Unaudited) | |||||||||||
Three Months Ended September 30, 2019 | |||||||||||
Anchor | Additional | Total | |||||||||
Income Summary | |||||||||||
Revenue | $ | 72,329 | $ | 1,647 | $ | 73,976 | |||||
Expenses | 28,351 | 1,960 | 30,311 | ||||||||
Net Income (Loss) | $ | 43,978 | $ | (313) | $ | 43,665 | |||||
Operating Statistics - Gathered Volumes | |||||||||||
Dry gas (BBtu/d) | 848 | 3 | 851 | ||||||||
Wet gas (BBtu/d) | 630 | 55 | 685 | ||||||||
Other (BBtu/d)* | 273 | — | 273 | ||||||||
Total Gathered Volumes | 1,751 | 58 | 1,809 | ||||||||
Capital Investment | |||||||||||
Maintenance capital | $ | 5,376 | $ | 240 | $ | 5,616 | |||||
Expansion capital | 58,240 | 4,433 | 62,673 | ||||||||
Total Capital Investment | $ | 63,616 | $ | 4,673 | $ | 68,289 | |||||
Capital Investment Net to CNX Midstream Partners LP | |||||||||||
Maintenance capital | $ | 5,376 | $ | 12 | $ | 5,388 | |||||
Expansion capital | 58,240 | 222 | 58,462 | ||||||||
Total Capital Investment Net to CNX Midstream Partners LP | $ | 63,616 | $ | 234 | $ | 63,850 | |||||
*Includes condensate handling and third-party volumes we gather under high-pressure short-haul agreements. |
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SOURCE CNX Midstream Partners LP
PITTSBURGH, Oct. 16, 2019 /PRNewswire/ -- CNX Midstream Partners LP (NYSE: CNXM) ("CNXM" or the "Partnership"), today announced that the Board of Directors of its general partner, CNX Midstream GP LLC, has declared a cash distribution of $0.4001 per unit with respect to the third quarter of 2019. The distribution will be made on November 12, 2019 to unitholders of record as of the close of business on November 5, 2019. The distribution, which equates to an annual rate of $1.6004 per unit, represents an increase of 3.5% over the prior quarter, and an increase of 15% over the distribution paid with respect to the third quarter of 2018.
CNX Midstream Partners is a growth-oriented master limited partnership that owns, operates, develops and acquires gathering and other midstream energy assets to service natural gas production in the Appalachian Basin in Pennsylvania and West Virginia. Our assets include natural gas gathering pipelines and compression and dehydration facilities, as well as condensate gathering, collection, separation and stabilization facilities. More information is available at our website www.cnxmidstream.com.
This press release is intended to be a qualified notice to nominees as provided for under Treasury Regulation Section 1.1446-4(b). Brokers and nominees should treat one hundred percent (100.0%) of CNX Midstream's distributions to non-U.S. investors as being attributed to income that is effectively connected with a United States trade or business. Accordingly, CNX Midstream's distributions to non-U.S. investors are subject to federal income tax withholding at the highest applicable effective tax rate. Nominees, and not CNX Midstream, are treated as withholding agents responsible for withholding on the distributions received by them on behalf of foreign investors.
View original content to download multimedia:http://www.prnewswire.com/news-releases/cnx-midstream-increases-quarterly-cash-distribution-300939937.html
SOURCE CNX Midstream Partners LP
PITTSBURGH, Oct. 1, 2019 /PRNewswire/ -- CNX Resources Corp. (NYSE: CNX) and CNX Midstream Partners LP (NYSE: CNXM) will issue their third quarter earnings releases at 6:45 a.m. Eastern Time on Tuesday, October 29. These releases will be followed by conference calls and live webcasts, which will be available on the 'Investor Relations' page of the CNX Resources website, and the 'News and Events' page of the CNX Midstream website. Also, earnings call slides will be available at 6:45 a.m. Eastern Time on Tuesday, October 29, on each company's website.
Conference Call Information
CNX Resources (NYSE: CNX)
CNX Midstream Partners (NYSE: CNXM)
About CNX Resources
CNX Resources Corporation (NYSE: CNX) is one of the largest independent natural gas exploration, development and production companies, with operations centered in the major shale formations of the Appalachian basin. CNX deploys an organic growth strategy focused on responsibly developing its resource base. As of December 31, 2018, CNX had 7.9 trillion cubic feet equivalent of proved natural gas reserves. CNX is a member of the Standard & Poor's Midcap 400 Index. Additional information may be found at www.cnx.com.
About CNX Midstream Partners
CNX Midstream Partners LP (NYSE: CNXM) is a master limited partnership that owns, operates, develops and acquires gathering and other midstream energy assets to service natural gas production in the Appalachian Basin in Pennsylvania and West Virginia. CNXM's assets include natural gas gathering pipelines and compression and dehydration facilities, as well as condensate gathering, collection, separation and stabilization facilities. More information is available on CNXM's website www.cnxmidstream.com.
View original content to download multimedia:http://www.prnewswire.com/news-releases/cnx-resources-corporation-and-cnx-midstream-partners-lp-announce-third-quarter-2019-earnings-release-and-conference-call-schedule-300928426.html
SOURCE CNX Resources Corporation; CNX Midstream Partners LP
DALLAS, Aug. 9, 2019 /PRNewswire/ -- Alerian reported, as of June 28, 2019, total products directly tied to and tracking the Alerian indices was $13.7 billion.
Exchange traded funds, exchange traded notes, return of capital notes, and variable insurance portfolios represent $12.7 billion of the total $13.7 billion. Below is a list of energy master limited partnership (MLP) positions, as of June 28, 2019, in the $12.7 billion of such assets tracking Alerian's indices.
Ticker | Exposure in Alerian Linked-Products ($) | Exposure in Alerian Linked-Products (Units) | Ticker | Exposure in Alerian Linked-Products ($) | Exposure in Alerian Linked-Products (Units) | |
AM | 2,402,831 | 209,671 | HESM | 7,694,422 | 394,586 | |
AMID | 4,919,211 | 951,492 | MMLP | 5,598,671 | 784,128 | |
ANDX | 403,075,523 | 11,094,840 | MMP | 1,276,581,260 | 19,946,582 | |
BPL | 782,332,474 | 19,058,038 | MPLX | 1,273,711,451 | 39,568,545 | |
BPMP | 18,205,543 | 1,176,069 | NBLX | 89,522,800 | 2,691,606 | |
CEQP | 220,495,699 | 6,164,263 | NGL | 214,053,630 | 14,492,460 | |
CNXM | 14,513,491 | 1,032,989 | NS | 331,580,260 | 12,217,401 | |
CQP | 214,074,794 | 5,075,268 | OMP | 5,663,726 | 263,429 | |
DCP | 329,731,673 | 11,253,641 | PAA | 1,305,749,277 | 53,624,200 | |
DKL | 6,791,101 | 212,222 | PAGP | 7,638,294 | 305,899 | |
ENBL | 153,164,680 | 11,171,749 | PBFX | 16,284,545 | 770,319 | |
ENLC | 327,210,823 | 32,429,219 | PSXP | 342,743,828 | 6,945,164 | |
EPD | 1,277,755,891 | 44,258,950 | SHLX | 319,209,192 | 15,405,849 | |
EQM | 462,044,829 | 10,341,200 | SMLP | 7,589,588 | 1,020,106 | |
ET | 1,262,122,882 | 89,639,409 | TCP | 253,540,259 | 6,739,507 | |
GEL | 298,090,775 | 13,611,451 | TGE | 419,509,147 | 19,872,532 | |
GPP | 3,882,098 | 277,293 | USDP | 3,861,679 | 342,044 | |
HEP | 156,422,759 | 5,688,100 | WES | 773,416,245 | 25,135,400 |
About Alerian
Alerian equips investors to make informed decisions about energy infrastructure and Master Limited Partnerships (MLPs). Its benchmarks are widely used by industry executives, investment professionals, research analysts, and national media to analyze relative performance. As of June 28, 2019, nearly $14 billion of products, including exchange traded funds and notes, are directly tied to and tracking the Alerian Index Series. Visit alerian.com to learn more.
View original content:http://www.prnewswire.com/news-releases/alerian-reports-june-30-2019-index-linked-product-positions-300899499.html
SOURCE Alerian
PITTSBURGH, July 30, 2019 /PRNewswire/ -- CNX Midstream Partners LP (NYSE: CNXM) ("CNXM", "CNX Midstream" or the "Partnership") today reported financial and operational results for the three and six months ended June 30, 2019(1).
Second Quarter Results
The Partnership continued its solid financial performance during the three and six months ended June 30, 2019. Comparative results net to the Partnership, with the exception of operating cash flows, which is presented on a gross consolidated basis, were as follows:
Three Months Ended | Six Months Ended | ||||||||||||||
(in millions) | 2019 | 2018 | 2019 | 2018 | |||||||||||
Net income | $ | 46.7 | $ | 30.0 | $ | 81.9 | $ | 57.9 | |||||||
Net cash provided by operating activities | $ | 74.8 | $ | 53.7 | $ | 124.7 | $ | 95.5 | |||||||
Adjusted EBITDA (non-GAAP)(2) | $ | 59.3 | $ | 41.3 | $ | 113.8 | $ | 76.2 | |||||||
Distributable cash flow (non-GAAP)(2) | $ | 46.9 | $ | 31.6 | $ | 89.9 | $ | 60.9 |
"CNXM continued to deliver strong results as evidenced by the second quarter," commented Nicholas J. DeIuliis, CEO of CNX Midstream GP LLC (the "General Partner"). "As compared to the second quarter of 2018, Adjusted EBITDA and distributable cash flow were up by 44% and 48%, respectively. This marks the 17th consecutive quarterly cash distribution increase at the targeted 15% annual growth rate, and CNXM's focus on operational execution resulting in strong financial performance supports our plan to continue 15% annual distribution growth through 2023 without drop-down transactions or need to access the equity capital markets. The 2019 capital build out is rapidly coming to an end, and we expect that the company will generate approximately $130 million in free cash flow in 2020."
2019 and 2020 Guidance
Based on current expectations, management provides the following update:
($ in millions) | 2019E | 2020E | ||||||||
Reaffirmed | Updated | |||||||||
Throughput (BBtu/d)* | 1,400 | - | 1,500 | 1,650 | - | 1,800 | ||||
Capital Expenditures | $310 | - | $330 | $80 | - | $100 | ||||
Adjusted EBITDA | $200 | - | $220 | $250 | - | $270 | ||||
Distributable Cash Flow | $150 | - | $170 | $185 | - | $205 | ||||
Distribution Coverage | 1.2x | - | 1.4x | 1.2x | - | 1.3x | ||||
LP Distribution Growth Target | 15% | 15% | ||||||||
* Excludes third-party volumes under high-pressure short-haul agreements. |
Quarterly Distribution
As previously announced, the Board of Directors of its general partner, CNX Midstream GP LLC, has declared a cash distribution of $0.3865 per unit with respect to the second quarter of 2019. The distribution will be made on August 14, 2019 to unitholders of record as of the close of business on August 6, 2019. The distribution, which equates to an annual rate of $1.546 per unit, represents an increase of 3.6% over the prior quarter, and an increase of 15% over the distribution paid with respect to the second quarter of 2018.
Capital Investment and Resources
For the second quarter of 2019, CNX Midstream's total capital investment net to the Partnership was $103.4 million, which includes investment in expansion projects of $98.2 million and maintenance capital of $5.2 million.
As of June 30, 2019, CNX Midstream had outstanding borrowings of $208.0 million under its $600.0 million revolving credit facility.
Second Quarter Financial and Operational Results Conference Call
A conference call and webcast, during which management will discuss second quarter 2019 financial and operational results, is scheduled for July 30, 2019 at 11:00 a.m. Eastern Time. Prepared remarks by members of management will be followed by a question and answer period. Interested parties may listen via webcast at www.cnxmidstream.com. Participants who would like to ask questions may join the conference by phone by dialing 888-349-0097 (international 412-902-0126) five to ten minutes prior to the scheduled start time (reference the CNX Midstream call). An on-demand replay of the webcast will also be available at www.cnxmidstream.com shortly after the conclusion of the conference call. A telephonic replay will be available through August 6, 2019 by dialing 877-344-7529 (international: 412-317-0088) and using the conference playback number 10133226.
_____________
(1) | Unless otherwise indicated, the reporting measures included in this news release reflect the unallocated total activity of the three development companies that have or had been jointly owned, as applicable, by the Partnership and CNX Gathering LLC ("CNX Gathering") since completion of the Partnership's initial public offering ("IPO") in September 2014. In connection with the transaction with HG Energy, the Partnership distributed its 5% interest in the Growth System to CNX Gathering and has no remaining interests in the Growth Systems. The Partnership's current financial interests in the development companies are: 100% in the Anchor Systems and 5% in the Additional Systems. Because the Partnership owns a controlling interest in each of these two development companies, it fully consolidates their financial results. CNX Gathering, which is wholly owned by CNX Resources Corporation, owns a 95% noncontrolling interest in the Additional Systems of the Partnership. |
(2) | Adjusted EBITDA, DCF, and cash distribution coverage are not measures or ratios that are recognized under accounting principles generally accepted in the U.S. ("GAAP"). Definitions and reconciliations of these non-GAAP measures to GAAP reporting measures appear in the financial tables which follow. |
* * * * *
CNX Midstream is a growth-oriented master limited partnership that owns, operates, develops and acquires gathering and other midstream energy assets to service natural gas production in the Appalachian Basin in Pennsylvania and West Virginia. Our assets include natural gas gathering pipelines and compression and dehydration facilities, as well as condensate gathering, collection, separation and stabilization facilities. More information is available at our website www.cnxmidstream.com.
* * * * *
This press release is intended to be a qualified notice to nominees as provided for under Treasury Regulation Section 1.1446-4(b). Brokers and nominees should treat one hundred percent (100.0%) of CNX Midstream's distributions to non-U.S. investors as being attributed to income that is effectively connected with a United States trade or business. Accordingly, CNX Midstream's distributions to non-U.S. investors are subject to federal income tax withholding at the highest applicable effective tax rate. Nominees, and not CNX Midstream, are treated as withholding agents responsible for withholding on the distributions received by them on behalf of foreign investors.
* * * * *
This press release contains forward-looking statements within the meaning of the federal securities laws. Statements that are predictive in nature, that depend upon or refer to future events or conditions or that include the words "will," "believe," "expect," "anticipate," "intend," "estimate" and other expressions that are predictions of or indicate future events and trends and that do not relate to historical matters identify forward-looking statements. You should not place undue reliance on forward-looking statements. Forward-looking statements include, among others, statements regarding the payment of our quarterly distribution for the quarter ended March 31, 2019 and our anticipated 2019 financial performance. Forward-looking statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict, and there can be no assurance that actual outcomes and results will not differ materially from those expected by our management. You should not place undue reliance on forward-looking statements. Although forward-looking statements reflect our good faith beliefs at the time they are made, they involve known and unknown risks, uncertainties and other factors. While our management considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond our control. These risks, contingencies and uncertainties relate to, among other matters, the following: if either or both of our two largest customers, who account for substantially all of our revenue, change their business strategies, or take actions that otherwise significantly reduce the volumes of natural gas and condensate transported through our gathering systems, our revenue would decline and we could be materially and adversely affected; under our gathering agreements, our customers may transfer their leasehold, working and mineral fee interests in their dedicated acreage; we may not generate sufficient distributable cash flow to make the payment of the minimum quarterly distribution to our unitholders; because of the natural decline in production from existing wells, our success, in part, depends on our ability to maintain or increase natural gas and condensate throughput volumes on our midstream systems, which depends on the level of development and completion activity on acreage dedicated to us; many of our gathering agreements do not include minimum volume commitments; certain of our dedicated acreage is either not held by production by our customers or has not yet been earned by them; the highly competitive nature of our industry may adversely impact our ability to attract dedications of third-party volumes, which could limit our ability to grow and continue our dependence on our existing customers; increased competition from other companies that provide midstream services could have a negative impact on the demand for our services, which could adversely affect our financial results; we may not be able to make attractive offers to CNX on our ROFO acreage; our only assets are controlling ownership interests in our operating subsidiaries, so our cash flow will depend entirely on the performance of our operating subsidiaries and their ability to distribute cash to us; some of our gathering agreements with our customers provide for the release of dedicated acreage or fee credits in certain situations; we are responsible for any mine subsidence costs in the future; our midstream systems are exclusively located in the Appalachian Basin, making us vulnerable to risks associated with operating in a single geographic area; we may be unable to grow by acquiring the noncontrolling interests in, or assets of, our operating subsidiaries owned by CNX Gathering or CNX, which could limit our ability to increase our distributable cash flow; we may be unable to acquire additional properties from third parties in the future and any acquired properties may not provide the anticipated benefits; if third-party pipelines, whether upstream or downstream, or other midstream facilities interconnected to our gathering systems become partially or fully unavailable, our operating margin, cash flow and ability to make cash distributions to our unitholders could be adversely affected; to maintain and grow our business, we will be required to make substantial capital expenditures; if we are unable to obtain needed capital or financing on satisfactory terms, our ability to make cash distributions may be diminished or our financial leverage could increase; the amount of cash we have available for distribution to our unitholders depends primarily on our cash flow and not solely on our profitability, which may prevent us from making distributions, even during periods in which we record net income; our construction of new gathering, compression, dehydration, treating or other midstream assets may not result in revenue increases and may be subject to regulatory, environmental, political, legal and economic risks, which could adversely affect our cash flows, results of operations and financial condition and, as a result, our ability to distribute cash to our unitholders; the provisions and restrictions in our revolving credit facility and other debt agreements, and the risks associated therewith, could adversely affect our business, financial condition, results of operations and ability to make quarterly cash distributions to our unitholders; environmental regulations can increase costs and introduce uncertainty that could adversely impact our or our customers' operations; existing and future governmental 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; we may incur significant costs and liabilities as a result of pipeline operations and related increases in the regulation of gas gathering pipelines; climate change laws and regulations restricting emissions of greenhouse gases at the federal or state level could result in increased operating costs and reduced demand for the natural gas that we gather, while potential physical effects of climate change could disrupt our production and cause us to incur significant costs in preparing for or responding to those effects; our business involves many hazards and operational risks, some of which may not be fully covered by insurance, and the occurrence of a significant accident or other event that is not fully insured could curtail our operations and have a material adverse effect on our ability to distribute cash and, accordingly, the market price for our common units; cyber-incidents could have a material adverse effect on our business, financial condition or results of operations; we may not own in fee the land on which our pipelines and facilities are located, which could result in disruptions to our operations; a shortage of equipment and skilled labor in the Appalachian Basin could reduce equipment availability and labor productivity and increase labor and equipment costs, which could have a material adverse effect on our business and results of operations; we do not have any officers or employees and rely on officers of our general partner and employees of CNX; our success depends on key members of our general partner's senior management team and our ability to attract and retain experienced technical and other professional personnel; increases in interest rates could adversely impact our business, common unit price, our ability to issue equity or incur debt for acquisitions, capital expenditures or other purposes and our ability to make cash distributions at our intended levels; terrorist activities could materially and adversely affect our business and results of operations; negative public perception regarding our industry could have an adverse effect on our operations; our general partner and its affiliates, including CNX, have conflicts of interest with us and limited fiduciary duties to us and our unitholders, and they may favor their own interests to our detriment and that of our unitholders; we have no control over the business decisions and operations of CNX, and CNX is under no obligation to adopt a business strategy that favors us; our general partner's discretion in establishing cash reserves may reduce the amount of cash we have available to distribute to unitholders; affiliates of our general partner, including CNX and CNX Gathering, may compete with us, and neither our general partner nor its affiliates have any obligation to present business opportunities to us except with respect to rights of first offer contained in our omnibus agreement; our tax treatment depends on our status as a partnership for federal income tax purposes; as a result of investing in our common units, you may become subject to state and local taxes and return filing requirements in jurisdictions where we operate or own or acquire properties.
Although forward-looking statements reflect our good faith beliefs at the time they are made, they involve known and unknown risks, uncertainties and other factors. For more information concerning factors that could cause actual results to differ materially from those conveyed in the forward-looking statements, including, among others, that our business plans may change as circumstances warrant, please refer to the "Risk Factors" and "Forward-Looking Statements" sections of our Annual Report on Form 10-K for the year ended December 31, 2018 filed with the Securities and Commission on February 7, 2019 and subsequent Quarterly Reports on Form 10-Q. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, changed circumstances or otherwise, unless required by law.
CNX MIDSTREAM PARTNERS LP | |||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||
(Dollars in thousands, except per unit data) | |||||||||||||||
(unaudited) | |||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||
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 | |||||||||||
Less: Net (loss) income attributable to noncontrolling interest | (282) | 277 | (413) | 6,135 | |||||||||||
Net Income Attributable to General and Limited Partner Ownership Interest in CNX Midstream Partners LP | $ | 46,745 | $ | 30,005 | $ | 81,852 | $ | 57,852 | |||||||
Calculation of Limited Partner Interest in Net Income: | |||||||||||||||
Net Income Attributable to General and Limited Partner Ownership Interest in CNX Midstream Partners LP | $ | 46,745 | $ | 30,005 | $ | 81,852 | $ | 57,852 | |||||||
Less: General partner interest in net income, including incentive distribution rights | 6,325 | 2,903 | 11,604 | 5,055 | |||||||||||
Limited partner interest in net income | $ | 40,420 | $ | 27,102 | $ | 70,248 | $ | 52,797 | |||||||
Earnings per limited partner unit: | |||||||||||||||
Basic | $ | 0.63 | $ | 0.43 | $ | 1.10 | $ | 0.83 | |||||||
Diluted | $ | 0.63 | $ | 0.43 | $ | 1.10 | $ | 0.83 | |||||||
Weighted average number of limited partner units outstanding: | |||||||||||||||
Basic | 63,732 | 63,638 | 63,715 | 63,630 | |||||||||||
Diluted | 63,755 | 63,677 | 63,759 | 63,670 | |||||||||||
Cash distributions declared per unit (*) | $ | 0.3865 | $ | 0.3361 | $ | 0.7597 | $ | 0.6606 | |||||||
(*) Represents the cash distributions declared during the month following the end of each respective quarterly period. |
CNX MIDSTREAM PARTNERS LP | |||||||
CONSOLIDATED BALANCE SHEETS | |||||||
(Dollars in thousands, except number of units) | |||||||
(unaudited) | |||||||
June 30, | December 31, | ||||||
ASSETS | |||||||
Current 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 | |||||
Total Current Assets | 39,034 | 30,450 | |||||
Property and Equipment: | |||||||
Property and equipment | 1,171,084 | 974,394 | |||||
Less — accumulated depreciation | 94,107 | 82,619 | |||||
Property and Equipment — Net | 1,076,977 | 891,775 | |||||
Other Assets: | |||||||
Operating lease right of use asset | 7,875 | — | |||||
Other assets | 3,731 | 3,203 | |||||
Total Other Assets | 11,606 | 3,203 | |||||
TOTAL ASSETS | $ | 1,127,617 | $ | 925,428 | |||
LIABILITIES AND EQUITY | |||||||
Current Liabilities: | |||||||
Trade accounts payable | $ | 33,299 | $ | 9,401 | |||
Accrued interest payable | 7,901 | 7,761 | |||||
Accrued liabilities | 55,095 | 26,757 | |||||
Due to related party | 3,425 | 4,980 | |||||
Total Current Liabilities | 99,720 | 48,899 | |||||
Other Liabilities: | |||||||
Revolving credit facility | 208,000 | 84,000 | |||||
Long-term debt | 393,688 | 393,215 | |||||
Long-term operating lease liabilities | 1,171 | — | |||||
Total Other Liabilities | 602,859 | 477,215 | |||||
Total Liabilities | 702,579 | 526,114 | |||||
Partners' Capital and Noncontrolling Interest: | |||||||
Limited partner units (63,735,464 issued and outstanding at June 30, 2019 and 63,639,676 issued and outstanding at December 31, 2018) | 344,530 | 320,543 | |||||
General partner interest | 13,050 | 10,900 | |||||
Partners' capital attributable to CNX Midstream Partners LP | 357,580 | 331,443 | |||||
Noncontrolling interest | 67,458 | 67,871 | |||||
Total Partners' Capital and Noncontrolling Interest | 425,038 | 399,314 | |||||
TOTAL LIABILITIES AND PARTNERS' CAPITAL | $ | 1,127,617 | $ | 925,428 |
CNX MIDSTREAM PARTNERS LP | |||||||||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||||||
(Dollars in thousands) | |||||||||||||||
(unaudited) | |||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Cash Flows from Operating Activities: | |||||||||||||||
Net income | $ | 46,463 | $ | 30,282 | $ | 81,439 | $ | 63,987 | |||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||
Depreciation expense and amortization of debt issuance costs | 6,328 | 5,833 | 12,449 | 11,872 | |||||||||||
Unit-based compensation | 541 | 690 | 1,153 | 1,269 | |||||||||||
(Gain) loss on asset sales and abandonments | — | (254) | 7,229 | 2,501 | |||||||||||
Other | 30 | 270 | 41 | 387 | |||||||||||
Changes in assets and liabilities: | |||||||||||||||
Due to/from affiliate | (1,346) | 878 | (3,269) | 1,888 | |||||||||||
Receivables — third party | (101) | 2,099 | 347 | 705 | |||||||||||
Other current and non-current assets | 1,932 | 758 | (7,039) | 108 | |||||||||||
Accounts payable and other accrued liabilities | 20,906 | 13,118 | 32,316 | 12,824 | |||||||||||
Net Cash Provided by Operating Activities | 74,753 | 53,674 | 124,666 | 95,541 | |||||||||||
Cash Flows from Investing Activities: | |||||||||||||||
Capital expenditures | (104,310) | (25,615) | (182,867) | (41,587) | |||||||||||
Proceeds from sale of assets | — | 646 | — | 6,462 | |||||||||||
Net Cash Used in Investing Activities | (104,310) | (24,969) | (182,867) | (35,125) | |||||||||||
Cash Flows from Financing Activities: | |||||||||||||||
Contributions from (distributions to) general partner and noncontrolling interest holders, net | — | 2,004 | 30 | (3,505) | |||||||||||
Vested units withheld for unitholders taxes | (26) | — | (690) | (347) | |||||||||||
Quarterly distributions to unitholders | (28,940) | (22,700) | (56,208) | (44,189) | |||||||||||
Net payments on unsecured $250.0 million credit facility | — | — | — | (149,500) | |||||||||||
Net borrowings on secured $600.0 million credit facility | 71,350 | (9,000) | 124,000 | 11,000 | |||||||||||
Proceeds from issuance of long-term debt, net of discount | — | — | — | 394,000 | |||||||||||
Debt issuance costs | (1,220) | (268) | (1,220) | (5,362) | |||||||||||
Acquisition of Shirley-Penns System | — | — | — | (265,000) | |||||||||||
Net Cash Provided by (Used in) Financing Activities | 41,164 | (29,964) | 65,912 | (62,903) | |||||||||||
Net Increase (Decrease) in Cash | 11,607 | (1,259) | 7,711 | (2,487) | |||||||||||
Cash at Beginning of Period | 70 | 1,966 | 3,966 | 3,194 | |||||||||||
Cash at End of Period | $ | 11,677 | $ | 707 | $ | 11,677 | $ | 707 |
CNX MIDSTREAM PARTNERS LP
RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA AND DISTRIBUTABLE CASH FLOW
(Dollars in thousands)
Definition of Non-GAAP Financial Measures
EBITDA and Adjusted EBITDA
We define EBITDA as net income (loss) before net interest expense, depreciation and amortization, and Adjusted EBITDA as EBITDA adjusted for gains or losses on asset sales and abandonments and other non-cash items which should not be included in the calculation of distributable cash flow. EBITDA and Adjusted EBITDA are used as supplemental financial measures by management and by external users of our financial statements, such as investors, industry analysts, lenders and ratings agencies, to assess:
We believe that the presentation of EBITDA and Adjusted EBITDA provides information that is useful to investors in assessing our financial condition and results of operations. The GAAP measures most directly comparable to EBITDA and Adjusted EBITDA are net income and net cash provided by operating activities. EBITDA and Adjusted EBITDA should not be considered alternatives to net income, net cash provided by operating activities or any other measure of financial performance or liquidity presented in accordance with GAAP. EBITDA and Adjusted EBITDA exclude some, but not all, items that affect net income or net cash, and these measures may vary from those of other companies. As a result, EBITDA and Adjusted EBITDA as presented below may not be comparable to similarly titled measures of other companies.
Distributable Cash Flow
We define distributable cash flow as Adjusted EBITDA less net income attributable to noncontrolling interest, cash interest expense and maintenance capital expenditures, each net to the Partnership. Distributable cash flow does not reflect changes in working capital balances.
Distributable cash flow is used as a supplemental financial measure by management and by external users of our financial statements, such as investors, industry analysts, lenders and ratings agencies, to assess:
We believe that the presentation of distributable cash flow in this release provides information that is useful to investors in assessing our financial condition and results of operations. The GAAP measures most directly comparable to distributable cash flow are net income and net cash provided by operating activities. Distributable cash flow should not be considered an alternative to net income, net cash provided by operating activities or any other measure of financial performance or liquidity presented in accordance with GAAP. Distributable cash flow excludes some, but not all, items that affect net income or net cash, and these measures may vary from those of other companies. As a result, our distributable cash flow may not be comparable to similarly titled measures that other companies may use.
The following table presents a reconciliation of the non-GAAP measures of Adjusted EBITDA and distributable cash flow to the most directly comparable GAAP financial measures of net income and net cash provided by operating activities.
Three Months Ended | Six Months Ended | |||||||||||||||
(unaudited) | 2019 | 2018 | 2019 | 2018 | ||||||||||||
Net Income | $ | 46,463 | $ | 30,282 | $ | 81,439 | $ | 63,987 | ||||||||
Depreciation expense | 5,860 | 5,443 | 11,510 | 11,299 | ||||||||||||
Interest expense | 7,685 | 7,119 | 15,024 | 9,608 | ||||||||||||
EBITDA | 60,008 | 42,844 | 107,973 | 84,894 | ||||||||||||
Non-cash unit-based compensation expense | 541 | 690 | 1,153 | 1,269 | ||||||||||||
(Gain) loss on asset sales and abandonments | — | (254) | 7,229 | 2,501 | ||||||||||||
Adjusted EBITDA | 60,549 | 43,280 | 116,355 | 88,664 | ||||||||||||
Less: | ||||||||||||||||
Net (loss) income attributable to noncontrolling interest | (282) | 277 | (413) | 6,135 | ||||||||||||
Depreciation expense attributable to noncontrolling interest | 395 | 674 | 789 | 2,339 | ||||||||||||
Other expenses attributable to noncontrolling interest | 1,098 | 1,224 | 2,218 | 1,660 | ||||||||||||
(Gain) loss on asset sales attributable to noncontrolling interest | — | (242) | — | 2,375 | ||||||||||||
Adjusted EBITDA Attributable to General and Limited Partner Ownership Interest in CNX Midstream Partners LP | $ | 59,338 | $ | 41,347 | $ | 113,761 | $ | 76,155 | ||||||||
Less: cash interest expense, net to the Partnership | 7,282 | 5,573 | 13,886 | 7,588 | ||||||||||||
Less: maintenance capital expenditures, net to the Partnership | 5,168 | 4,125 | 10,003 | 7,708 | ||||||||||||
Distributable Cash Flow | $ | 46,888 | $ | 31,649 | $ | 89,872 | $ | 60,859 | ||||||||
Net Cash Provided by Operating Activities | $ | 74,753 | $ | 53,674 | $ | 124,666 | $ | 95,541 | ||||||||
Interest expense | 7,685 | 7,119 | 15,024 | 9,608 | ||||||||||||
(Gain) loss on asset sales and abandonments | — | (254) | 7,229 | 2,501 | ||||||||||||
Other, including changes in working capital | (21,889) | (17,259) | (30,564) | (18,986) | ||||||||||||
Adjusted EBITDA | 60,549 | 43,280 | 116,355 | 88,664 | ||||||||||||
Less: | ||||||||||||||||
Net (loss) income attributable to noncontrolling interest | (282) | 277 | (413) | 6,135 | ||||||||||||
Depreciation expense attributable to noncontrolling interest | 395 | 674 | 789 | 2,339 | ||||||||||||
Other expenses attributable to noncontrolling interest | 1,098 | 1,224 | 2,218 | 1,660 | ||||||||||||
(Gain) loss on asset sales attributable to noncontrolling interest | — | (242) | — | 2,375 | ||||||||||||
Adjusted EBITDA Attributable to General and Limited Partner Ownership Interest in CNX Midstream Partners LP | $ | 59,338 | $ | 41,347 | $ | 113,761 | $ | 76,155 | ||||||||
Less: cash interest expense, net to the Partnership | 7,282 | 5,573 | 13,886 | 7,588 | ||||||||||||
Less: maintenance capital expenditures, net to the Partnership | 5,168 | 4,125 | 10,003 | 7,708 | ||||||||||||
Distributable Cash Flow | $ | 46,888 | $ | 31,649 | $ | 89,872 | $ | 60,859 |
The following table presents a reconciliation of the non-GAAP measures Adjusted EBITDA and distributable cash flow by quarter and for the most recently completed twelve month period with the most directly comparable GAAP financial measures, which are net income and net cash provided by operating activities.
(unaudited) | Q3 2018 | Q4 2018 | Q1 2019 | Q2 2019 | Twelve Months Ended June 30, 2019 | |||||||||||||||
Net Income | $ | 33,575 | $ | 41,433 | $ | 34,976 | $ | 46,463 | $ | 156,447 | ||||||||||
Depreciation expense | 5,306 | 5,334 | 5,650 | 5,860 | 22,150 | |||||||||||||||
Interest expense | 7,255 | 6,751 | 7,339 | 7,685 | 29,030 | |||||||||||||||
EBITDA | 46,136 | 53,518 | 47,965 | 60,008 | 207,627 | |||||||||||||||
Non-cash unit-based compensation expense | 506 | 636 | 612 | 541 | 2,295 | |||||||||||||||
Loss on asset sales and abandonments | — | — | 7,229 | — | 7,229 | |||||||||||||||
Adjusted EBITDA | 46,642 | 54,154 | 55,806 | 60,549 | 217,151 | |||||||||||||||
Less: | ||||||||||||||||||||
Net loss attributable to noncontrolling interest | (64) | (1,118) | (131) | (282) | (1,595) | |||||||||||||||
Depreciation expense attributable to noncontrolling interest | 396 | 393 | 394 | 395 | 1,578 | |||||||||||||||
Other expenses attributable to noncontrolling interest | 1,280 | 1,389 | 1,120 | 1,098 | 4,887 | |||||||||||||||
Adjusted EBITDA Attributable to General and Limited Partner Ownership Interest in CNX Midstream Partners LP | $ | 45,030 | $ | 53,490 | $ | 54,423 | $ | 59,338 | $ | 212,281 | ||||||||||
Less: cash interest expense, net to the Partnership | 5,593 | 6,040 | 6,604 | 7,282 | 25,519 | |||||||||||||||
Less: maintenance capital expenditures, net to the Partnership | 4,449 | 4,735 | 4,835 | 5,168 | 19,187 | |||||||||||||||
Distributable Cash Flow | $ | 34,988 | $ | 42,715 | $ | 42,984 | $ | 46,888 | $ | 167,575 | ||||||||||
Net Cash Provided by Operating Activities | $ | 35,666 | $ | 48,908 | $ | 49,913 | $ | 74,753 | $ | 209,240 | ||||||||||
Interest expense | 7,255 | 6,751 | 7,339 | 7,685 | 29,030 | |||||||||||||||
Loss on asset sales and abandonments | — | — | 7,229 | — | 7,229 | |||||||||||||||
Other, including changes in working capital | 3,721 | (1,505) | (8,675) | (21,889) | (28,348) | |||||||||||||||
Adjusted EBITDA | 46,642 | 54,154 | 55,806 | 60,549 | 217,151 | |||||||||||||||
Less: | ||||||||||||||||||||
Net loss attributable to noncontrolling interest | (64) | (1,118) | (131) | (282) | (1,595) | |||||||||||||||
Depreciation expense attributable to noncontrolling interest | 396 | 393 | 394 | 395 | 1,578 | |||||||||||||||
Other expenses attributable to noncontrolling interest | 1,280 | 1,389 | 1,120 | 1,098 | 4,887 | |||||||||||||||
Adjusted EBITDA Attributable to General and Limited Partner Ownership Interest in CNX Midstream Partners LP | $ | 45,030 | $ | 53,490 | $ | 54,423 | $ | 59,338 | $ | 212,281 | ||||||||||
Less: cash interest expense, net to the Partnership | 5,593 | 6,040 | 6,604 | 7,282 | 25,519 | |||||||||||||||
Less: maintenance capital expenditures, net to the Partnership | 4,449 | 4,735 | 4,835 | 5,168 | 19,187 | |||||||||||||||
Distributable Cash Flow | $ | 34,988 | $ | 42,715 | $ | 42,984 | $ | 46,888 | $ | 167,575 | ||||||||||
Distributions Declared | $ | 25,678 | $ | 27,268 | $ | 28,940 | $ | 30,637 | $ | 112,523 | ||||||||||
Distribution Coverage Ratio - Declared | 1.36 | x | 1.57 | x | 1.49 | x | 1.53 | x | 1.49 | x | ||||||||||
Distributable Cash Flow | $ | 34,988 | $ | 42,715 | $ | 42,984 | $ | 46,888 | $ | 167,575 | ||||||||||
Distributions Paid | $ | 24,176 | $ | 25,678 | $ | 27,268 | $ | 28,940 | $ | 106,062 | ||||||||||
Distribution Coverage Ratio - Paid | 1.45 | x | 1.66 | x | 1.58 | x | 1.62 | x | 1.58 | x |
The following table presents a reconciliation of the non-GAAP measures of the Partnership's projected Adjusted EBITDA and projected distributable cash flow with the most directly comparable GAAP financial measure, which is projected net income. The following projections represent the approximate midpoint of the announced full year 2019 and 2020 expected guidance ranges of Adjusted EBITDA (2019: $200-$220 million; 2020: $250-$270 million) and full year distributable cash flow (2019: $150-$170 million; 2020: $185-$205 million) attributable to the Partnership. CNX Midstream's financial guidance is based on numerous assumptions about future events and conditions and, therefore, could vary materially from actual results. These estimates are meant to provide guidance only and are subject to revision for acquisitions or operating environment changes.
(unaudited) (Dollars in millions) | Forecast 2019 Estimate | Forecast 2020 Estimate | ||||||
Net Income | $ | 151 | $ | 194 | ||||
Depreciation expense | 26 | 29 | ||||||
Interest expense | 35 | 43 | ||||||
EBITDA | 212 | 266 | ||||||
Non-cash unit-based compensation expense | 3 | 3 | ||||||
Adjusted EBITDA | 215 | 269 | ||||||
Less: | ||||||||
Net income attributable to noncontrolling interest | 3 | 7 | ||||||
Depreciation and other expenses attributable to noncontrolling interest | 2 | 2 | ||||||
Adjusted EBITDA Attributable to General and Limited Partner Ownership Interest in CNX Midstream Partners LP | $ | 210 | $ | 260 | ||||
Less: cash interest expense, net to the Partnership | 33 | 40 | ||||||
Less: maintenance capital expenditures, net to the Partnership | 17 | 25 | ||||||
Distributable Cash Flow | $ | 160 | $ | 195 |
The Partnership is unable to project net cash provided by operating activities or provide the related reconciliation of projected net cash provided by operating activities to projected distributable cash flow, the most comparable financial measure calculated in accordance with GAAP, because net cash provided by operating activities includes the impact of changes in operating assets and liabilities. Changes in operating assets and liabilities relate to the timing of the Partnership's cash receipts and disbursements that may not relate to the period in which the operating activities occurred, and the Partnership is unable to project these timing differences with any reasonable degree of accuracy.
Development Companies Jointly Owned by CNX Gathering LLC and CNX Midstream Partners LP | |||||||||||
Operating Income Summary, Selected Operating Statistics and Capital Investment | |||||||||||
(Dollars in thousands) | |||||||||||
(unaudited) | |||||||||||
Three Months Ended June 30, 2019 | |||||||||||
Development Company | |||||||||||
Anchor | Additional | Total | |||||||||
Income Summary | |||||||||||
Revenue | $ | 76,298 | $ | 1,803 | $ | 78,101 | |||||
Expenses | 29,538 | 2,100 | 31,638 | ||||||||
Net Income (Loss) | $ | 46,760 | $ | (297) | $ | 46,463 | |||||
Operating Statistics - Gathered Volumes | |||||||||||
Dry gas (BBtu/d) | 879 | 3 | 882 | ||||||||
Wet gas (BBtu/d) | 670 | 61 | 731 | ||||||||
Other (BBtu/d)* | 178 | — | 178 | ||||||||
Total Gathered Volumes | 1,727 | 64 | 1,791 | ||||||||
Capital Investment | |||||||||||
Maintenance capital | $ | 5,155 | $ | 251 | $ | 5,406 | |||||
Expansion capital | 98,167 | 737 | 98,904 | ||||||||
Total Capital Investment | $ | 103,322 | $ | 988 | $ | 104,310 | |||||
Capital Investment Net to CNX Midstream Partners LP | |||||||||||
Maintenance capital | $ | 5,155 | $ | 13 | $ | 5,168 | |||||
Expansion capital | 98,167 | 37 | 98,204 | ||||||||
Total Capital Investment Net to CNX Midstream Partners LP | $ | 103,322 | $ | 50 | $ | 103,372 |
*Includes condensate handling and third-party volumes we gather under high-pressure short-haul agreements. |
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SOURCE CNX Midstream Partners LP
PITTSBURGH, July 19, 2019 /PRNewswire/ -- CNX Midstream Partners LP (NYSE: CNXM) ("CNXM" or the "Partnership"), today announced that the Board of Directors of its general partner, CNX Midstream GP LLC, has declared a cash distribution of $0.3865 per unit with respect to the second quarter of 2019. The distribution will be made on August 14, 2019 to unitholders of record as of the close of business on August 6, 2019. The distribution, which equates to an annual rate of $1.546 per unit, represents an increase of 3.6% over the prior quarter, and an increase of 15% over the distribution paid with respect to the second quarter of 2018.
CNX Midstream Partners is a growth-oriented master limited partnership that owns, operates, develops and acquires gathering and other midstream energy assets to service natural gas production in the Appalachian Basin in Pennsylvania and West Virginia. Our assets include natural gas gathering pipelines and compression and dehydration facilities, as well as condensate gathering, collection, separation and stabilization facilities. More information is available at our website www.cnxmidstream.com.
This press release is intended to be a qualified notice to nominees as provided for under Treasury Regulation Section 1.1446-4(b). Brokers and nominees should treat one hundred percent (100.0%) of CNX Midstream's distributions to non-U.S. investors as being attributed to income that is effectively connected with a United States trade or business. Accordingly, CNX Midstream's distributions to non-U.S. investors are subject to federal income tax withholding at the highest applicable effective tax rate. Nominees, and not CNX Midstream, are treated as withholding agents responsible for withholding on the distributions received by them on behalf of foreign investors.
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SOURCE CNX Midstream Partners LP
PITTSBURGH, July 9, 2019 /PRNewswire/ -- CNX Resources Corp. (NYSE: CNX) and CNX Midstream Partners LP (NYSE: CNXM) will issue their second quarter earnings releases at 6:45 a.m. Eastern Time on Tuesday, July 30. These releases will be followed by conference calls and live webcasts, which will be available on the 'Investor Relations' page of the CNX Resources website, and the 'News and Events' page of the CNX Midstream website. Also, earnings call slides will be available at 6:45 a.m. Eastern Time on Tuesday, July 30, on each company's website.
Conference Call Information
CNX Resources (NYSE: CNX)
CNX Midstream Partners (NYSE: CNXM)
About CNX Resources
CNX Resources Corporation (NYSE: CNX) is one of the largest independent natural gas exploration, development and production companies, with operations centered in the major shale formations of the Appalachian basin. CNX deploys an organic growth strategy focused on responsibly developing its resource base. As of December 31, 2018, CNX had 7.9 trillion cubic feet equivalent of proved natural gas reserves. CNX is a member of the Standard & Poor's Midcap 400 Index. Additional information may be found at www.cnx.com.
About CNX Midstream Partners
CNX Midstream Partners LP (NYSE: CNXM) is a master limited partnership that owns, operates, develops and acquires gathering and other midstream energy assets to service natural gas production in the Appalachian Basin in Pennsylvania and West Virginia. CNXM's assets include natural gas gathering pipelines and compression and dehydration facilities, as well as condensate gathering, collection, separation and stabilization facilities. More information is available on CNXM's website www.cnxmidstream.com.
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SOURCE CNX Resources Corporation; CNX Midstream Partners LP
PITTSBURGH, April 17, 2019 /PRNewswire/ -- CNX Midstream Partners LP (NYSE: CNXM) ("CNXM" or the "Partnership"), today announced that the Board of Directors of its general partner, CNX Midstream GP LLC, has declared a cash distribution of $0.3732 per unit with respect to the first quarter of 2019. The distribution will be made on May 14, 2019 to unitholders of record as of the close of business on May 6, 2019. The distribution, which equates to an annual rate of $1.4928 per unit, represents an increase of 3.6% over the prior quarter, and an increase of 15% over the distribution paid with respect to the first quarter of 2018.
CNX Midstream Partners is a growth-oriented master limited partnership that owns, operates, develops and acquires gathering and other midstream energy assets to service natural gas production in the Appalachian Basin in Pennsylvania and West Virginia. Our assets include natural gas gathering pipelines and compression and dehydration facilities, as well as condensate gathering, collection, separation and stabilization facilities. More information is available at our website www.cnxmidstream.com.
This press release is intended to be a qualified notice to nominees as provided for under Treasury Regulation Section 1.1446-4(b). Brokers and nominees should treat one hundred percent (100.0%) of CNX Midstream's distributions to non-U.S. investors as being attributed to income that is effectively connected with a United States trade or business. Accordingly, CNX Midstream's distributions to non-U.S. investors are subject to federal income tax withholding at the highest applicable effective tax rate. Nominees, and not CNX Midstream, are treated as withholding agents responsible for withholding on the distributions received by them on behalf of foreign investors.
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SOURCE CNX Midstream Partners LP
PITTSBURGH, April 4, 2019 /PRNewswire/ -- CNX Resources Corp. (NYSE: CNX) and CNX Midstream Partners LP (NYSE: CNXM) will issue their first quarter earnings releases at 6:45 a.m. Eastern Time on Tuesday, April 30. These releases will be followed by conference calls and live webcasts, which will be available on the 'Investor Relations' page of the CNX Resources website, and the 'News and Events' page of the CNX Midstream website. Also, earnings call slides will be available at 6:45 a.m. Eastern Time on Tuesday, April 30, on each company's website.
Conference Call Information
CNX Resources (NYSE: CNX)
CNX Midstream Partners (NYSE: CNXM)
About CNX Resources
CNX Resources Corporation (NYSE: CNX) is one of the largest independent natural gas exploration, development and production companies, with operations centered in the major shale formations of the Appalachian basin. CNX deploys an organic growth strategy focused on responsibly developing its resource base. As of December 31, 2018, CNX had 7.9 trillion cubic feet equivalent of proved natural gas reserves. CNX is a member of the Standard & Poor's Midcap 400 Index. Additional information may be found at www.cnx.com.
About CNX Midstream Partners
CNX Midstream Partners LP (NYSE: CNXM) is a master limited partnership that owns, operates, develops and acquires gathering and other midstream energy assets to service natural gas production in the Appalachian Basin in Pennsylvania and West Virginia. CNXM's assets include natural gas gathering pipelines and compression and dehydration facilities, as well as condensate gathering, collection, separation and stabilization facilities. More information is available on CNXM's website www.cnxmidstream.com.
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SOURCE CNX Resources Corporation; CNX Midstream Partners LP
PITTSBURGH, Jan. 31, 2019 /PRNewswire/ -- CNX Resources Corporation (NYSE: CNX) ("CNX" or "the company") reports fourth quarter and full year 2018 results, share buyback update, and provides updated minimum 2019 guidance. Throughout this release, CNX distinguishes between "attributable to CNX shareholders" and "consolidated" results. The metric "attributable to CNX shareholders" excludes from consolidated results interests in CNX Midstream Partners LP (NYSE: CNXM) ("CNXM") not held by CNX, which were approximately 63.91% during the fourth quarter. The metric "consolidated" includes 100% of the results of CNX, CNX Gathering LLC, and CNXM on a consolidated basis.
GAAP - The following financial results are in accordance with generally accepted accounting principles in the U.S.:
During the fourth quarter, the company reported net income attributable to CNX shareholders of $102 million, or earnings of $0.50 per diluted share, compared to net income attributable to CNX shareholders of $277 million, or earnings of $1.21 per diluted share, in the fourth quarter of 2017. During the fourth quarter, the company reported total production costs of $1.89 per Mcfe, including $0.89 per Mcfe of Depreciation, Depletion, and Amortization ("DD&A"), compared to $2.17 per Mcfe, including $1.01 per Mcfe of DD&A, in the year-earlier quarter. For 2018, the company reported total production costs of $1.98 per Mcfe, including $0.89 per Mcfe of DD&A, compared to $2.23 per Mcfe, including $1.00 per Mcfe of DD&A, in the year-earlier quarter. On a consolidated basis, the company reported net income of $129 million for the 2018 fourth quarter, compared to net income of $277 million in the fourth quarter of 2017. During the fourth quarter, capital expenditures were $322 million, compared to $234 million spent in the year-earlier quarter. Also, for the quarter's ended December 31, 2018 and 2017, total weighted-average diluted shares of common stock outstanding were 203,741,408 and 227,827,425, respectively.
Non-GAAP - CNX's management uses non-GAAP financial measures for planning, forecasting and evaluating business and financial performance, and believes that they are useful for investors in analyzing the company. The following tables represent these non-GAAP financial measures:1
Quarter | Quarter | Quarter | Quarter | |||||||||||||||||||
Ended | Ended | Ended | Ended | |||||||||||||||||||
December 31, 2018 | December 31, 2017 | December 31, 2018 | December 31, 2017 | |||||||||||||||||||
(Dollars in millions, except per share data) | Attributable to CNX Shareholders | % Increase/ (Decrease) | Consolidated | % Increase/ (Decrease) | ||||||||||||||||||
Adjusted Net Income | $ | 132 | $ | 217 | (39.2) | % | $ | 160 | $ | 217 | (26.3) | % | ||||||||||
Total Shares Outstanding (in millions)2 | 198.3 | 223.8 | (11.4) | % | — | — | ||||||||||||||||
Adjusted Net Income per Outstanding Share2 | $ | 0.67 | $ | 0.97 | (30.9) | % | — | — | ||||||||||||||
Adjusted EBITDAX | $ | 279 | $ | 187 | 49.2 | % | $ | 314 | $ | 187 | 67.9 | % | ||||||||||
Adjusted EBITDAX per Outstanding Share2 | $ | 1.41 | $ | 0.83 | 69.9 | % | $ | 1.58 | $ | 0.83 | 90.4 | % | ||||||||||
Capital Expenditures3 | $ | 266 | $ | 234 | 13.7 | % | — | — | ||||||||||||||
1The Non-GAAP financial measures in the table above are defined and reconciled to GAAP net income, under the caption "Non-GAAP Financial Measures" below. | ||||||||||||||||||||||
2For the quarter's ended December 31, 2018 and 2017, total weighted-average diluted shares of common stock outstanding were 203,741,408 and 227,827,425, respectively. For the quarter ended December 31, 2018, total shares outstanding of 198,335,252 (Non-GAAP) are as of January 18, 2019. For the quarter ended December 31, 2017, total shares outstanding of 223,758,284 (Non-GAAP) are as of January 22, 2018. | ||||||||||||||||||||||
3Capital expenditures exclude $56.2 million of total capital investment net to CNX Midstream Partners LP in the fourth quarter of 2018, as reported in CNX Midstream Partners LP Fourth Quarter and Full Year 2018 Results. |
The following table highlights operating cash and fully burdened cash margins:
Quarter | Quarter | Year | Year | ||||||||||||
Ended | Ended | Ended | Ended | ||||||||||||
(Per Mcfe) | December 31, 2018 | December 31, 2017 | December 31, 2018 | December 31, 2017 | |||||||||||
Average Sales Price - Total Company | $ | 3.09 | $ | 2.80 | $ | 2.97 | $ | 2.66 | |||||||
Total Production Cash Costs | 1.00 | 1.16 | 1.09 | 1.23 | |||||||||||
Operating Cash Margin | $ | 2.09 | $ | 1.64 | $ | 1.88 | $ | 1.43 | |||||||
Operating Cash Margin (%) | 68 | % | 59 | % | 63 | % | 54 | % | |||||||
Total Fully Burdened Cash Costs1 | $ | 1.46 | $ | 1.97 | $ | 1.63 | $ | 2.10 | |||||||
Fully Burdened Cash Margin | $ | 1.63 | $ | 0.83 | $ | 1.34 | $ | 0.56 | |||||||
Fully Burdened Cash Margin (%) | 53 | % | 30 | % | 45 | % | 21 | % | |||||||
1Fully burdened cash costs, includes production cash costs, selling, general and administrative (SG&A) cash costs, other operating cash expense, other cash (income) expense, and interest expense. |
"The fourth quarter and all of 2018 highlighted our philosophy in action: as a low-cost producer, coupled with a robust hedge book, the company has created tremendous, low-risk cash margins and strong rates of return on our capital," commented Nicholas J. DeIuliis, president and CEO. "The margins we are generating drive cash flow growth and a lower leverage ratio, which allows us to execute incremental drilling activity and/or opportunistic share buybacks at high rates of return. That continuous cycle produced powerful results in the fourth quarter and for the full year 2018, and since the inception of our repurchase program in October of 2017, CNX has bought back approximately 14% of our total shares outstanding at prices we believe are substantially below our internal NAV per share, while finishing the year under our 2.5x leverage ceiling. Moving forward, we will continue to invest into areas that have a strong risk-adjusted rate of return."
Operations Summary:
During the fourth quarter of 2018, CNX sold 136 Bcfe of natural gas, or an increase of 14% from the 119 Bcfe sold in the year-earlier quarter, driven primarily from an increase in Marcellus volumes. The company set a new daily production volume record of 1.64 net Bcfe per day in the quarter. Full year 2018 production was 507 Bcfe, or an increase of approximately 25% from the 407 Bcfe produced in 2017. When excluding production associated with assets divested in the year, 2018 production was 480 Bcfe.
In the fourth quarter of 2018, CNX operated four horizontal rigs and drilled 20 wells, which included: 10 Marcellus Shale wells in Greene County, Pennsylvania; nine Marcellus Shale wells in Washington County, Pennsylvania; and one dry Utica Shale well in Westmoreland County, Pennsylvania. During the quarter, the company drilled its longest ever Marcellus Shale lateral, which was over 15,000 feet and located in the Morris field in Greene County, Pennsylvania. Also, in the quarter, the company drilled a six-well Marcellus Shale pad with an average lateral length of over 12,500 feet in Washington County, Pennsylvania.
During the quarter, the company utilized three frac crews to complete 14 wells, which included: 12 Marcellus Shale wells in Greene County, Pennsylvania; and two dry Utica Shale wells in Monroe County, Ohio. Also, in the quarter, the company reached an all-time high frac efficiency on a pad in Pennsylvania of nearly 1,300 feet per day at 2,500 pounds per foot sand loading.
CNX turned-in-line 16 wells in the fourth quarter, which included: 11 Marcellus Shale wells in Greene County, Pennsylvania; four dry Utica Shale wells in Monroe County, Ohio; and one dry Utica Shale well in Westmoreland County, Pennsylvania.
Marcellus Shale volumes, including liquids, in the 2018 fourth quarter were 87.0 Bcfe, approximately 36% higher than the 64.0 Bcfe produced in the 2017 fourth quarter. Marcellus Shale total production costs were $1.98 per Mcfe in the just-ended quarter, which is a $0.34 per Mcfe decrease from the fourth quarter of 2017 of $2.32 per Mcfe. When excluding DD&A, Marcellus Shale total production cash costs were $1.20 per Mcfe in the just-ended quarter, which is a $0.16 per Mcfe decrease from the fourth quarter of 2017 of $1.36 per Mcfe, driven by decreases to lease operating expense ("LOE"), transportation, gathering, and compression costs, and taxes. During the quarter, water disposal costs improved as the company reused more produced water for fracs, avoiding the need to send that water to disposal. Also, DD&A improved due in part to increased capital efficiencies related to the Shirley-Pennsboro wells, and the production mix benefiting from lower West Virginia rates.
Utica Shale volumes, including liquids, in the 2018 fourth quarter were 34.1 Bcfe, approximately 1% higher than the 33.8 Bcfe in the year-earlier quarter, driven primarily from activity in Monroe County, Ohio, and Pennsylvania deep dry Utica Shale, offset by the sale of the Ohio Utica joint venture assets in the third quarter of 2018. The ramp in Pennsylvania deep dry Utica and Monroe County, Ohio, volumes also benefited Utica Shale total production costs, which were $1.43 per Mcfe in the just-ended quarter, or a $0.16 per Mcfe improvement from the fourth quarter of 2017 total production costs of $1.59 per Mcfe. When excluding DD&A, Utica Shale total production cash costs were $0.42 per Mcfe in the just-ended quarter, or a $0.14 per Mcfe improvement from the fourth quarter of 2017 total production cash costs of $0.56 per Mcfe.
CNX's natural gas production in the quarter came from the following categories:
Quarter | Quarter | Quarter | |||||||||||||
Ended | Ended | Ended | |||||||||||||
December 31, 2018 | December 31, 2017 | % Increase/ (Decrease) | September 30, 2018 | % Increase/ (Decrease) | |||||||||||
GAS | |||||||||||||||
Marcellus Sales Volumes (Bcf) | 79.2 | 53.6 | 47.8 | % | 61.9 | 27.9 | % | ||||||||
Utica Sales Volumes (Bcf) | 34.4 | 30.9 | 11.3 | % | 31.9 | 7.8 | % | ||||||||
CBM Sales Volumes (Bcf) | 14.8 | 16.0 | (7.5) | % | 14.7 | 0.7 | % | ||||||||
Other Sales Volumes (Bcf)1 | 0.1 | 5.0 | (98.0) | % | — | — | % | ||||||||
LIQUIDS2 | |||||||||||||||
NGLs Sales Volumes (Bcfe) | 7.1 | 12.2 | (41.8) | % | 10.0 | (29.0) | % | ||||||||
Oil Sales Volumes (Bcfe) | 0.1 | 0.1 | — | % | 0.1 | — | % | ||||||||
Condensate Sales Volumes (Bcfe) | 0.4 | 1.1 | (63.6) | % | 0.4 | — | % | ||||||||
TOTAL | 136.1 | 118.9 | 14.5 | % | 119.0 | 14.4 | % | ||||||||
Average Daily Production (MMcfe) | 1,479.1 | 1,292.3 | 1,293.0 | ||||||||||||
1Other Sales Volumes: primarily related to shallow oil and gas production. | |||||||||||||||
2NGLs, oil and Condensate are converted to Mcfe at the rate of one barrel equals six Mcf based upon the approximate relative energy content of oil and natural gas, which is not indicative of the relationship of oil, NGLs, condensate, and natural gas prices. |
The following table highlights per Mcfe price and cost data for the quarter:
Quarter | Quarter | Quarter | ||||||||||
Ended | Ended | Ended | ||||||||||
(Per Mcfe) | December 31, 2018 | December 31, 2017 | September 30, 2018 | |||||||||
Average Sales Price - Gas | $ | 3.59 | $ | 2.29 | $ | 2.71 | ||||||
Average (Loss) Gain on Commodity Derivative Instruments - Cash Settlement- Gas | $ | (0.56) | $ | 0.19 | $ | 0.03 | ||||||
Average Sales Price - Oil* | $ | 10.09 | $ | 7.58 | $ | 10.50 | ||||||
Average Sales Price - NGLs* | $ | 4.09 | $ | 5.08 | $ | 4.68 | ||||||
Average Sales Price - Condensate* | $ | 6.39 | $ | 7.68 | $ | 9.76 | ||||||
Average Sales Price - Total Company | $ | 3.09 | $ | 2.80 | $ | 2.92 | ||||||
Average Lease Operating Expense | $ | 0.12 | $ | 0.21 | $ | 0.14 | ||||||
Average Production, Ad Valorem, and Other Fees | 0.06 | 0.08 | 0.06 | |||||||||
Average Transportation, Gathering and Compression | 0.82 | 0.87 | 0.84 | |||||||||
Total Production Cash Costs | $ | 1.00 | $ | 1.16 | $ | 1.04 | ||||||
*Oil, NGLs, and Condensate are converted to Mcfe at the rate of one barrel equals six Mcf based upon the approximate relative energy content of oil and natural gas, which is not indicative of the relationship of oil, NGLs, condensate, and natural gas prices. | ||||||||||||
Note: "Total Production Costs" excludes Selling, General, and Administration and Other Operating Expenses. |
In the fourth quarter of 2018, total production costs improved, compared to the year-earlier quarter, through reductions in LOE, transportation, gathering, and compression costs, taxes, and DD&A. LOE improved due to reduced well tending, well service jobs and repair and maintenance expenses related to the sale of the company's shallow oil and gas ("SOG") assets in the first quarter of 2018, and a reduction in water disposal costs due to increased reuse in well completions. Transportation, gathering, and compression costs improved due in part to a drier production mix resulting in lower processing fees.
During the past week, a subsurface pressure anomaly was observed during frac operations on the Shaw 1G Utica Shale well in Westmoreland County, Pennsylvania. While the cause of this anomaly is under investigation, frac operations on the Shaw pad have been temporarily suspended. The capital cost to complete and production associated with the delayed 4-well Shaw Utica pad are not currently included in 2019 guidance.
Marketing Update:
For the fourth quarter of 2018, CNX's average sales price for natural gas, natural gas liquids (NGLs), oil, and condensate was $3.09 per Mcfe. CNX's average price for natural gas was $3.59 per Mcf for the quarter and, including cash settlements from hedging, was $3.03 per Mcf. The average realized price for all liquids for the fourth quarter of 2018 was $25.61 per barrel.
CNX's weighted average differential from NYMEX in the fourth quarter of 2018 was negative $0.29 per MMBtu. With an improved Henry Hub price coupled with an improved differential, CNX's average sales price for natural gas before hedging increased 32% to $3.59 per Mcf compared with the average sales price of $2.71 per Mcf in the third quarter of 2018. Including the impact of cash settlements from hedging, CNX's average sales price for natural gas was $0.29 per Mcf, or 11%, higher than the third quarter of 2018 and $0.55 per Mcf, or 22%, higher than last year's fourth quarter.
2019 Capital Budget and Guidance:
CNX expects a minimum base of 2019 production volumes of at least 495-515 Bcfe, which equates to an approximately 5% annual increase, based on the midpoint of the minimum guidance, compared to 2018 volumes from retained assets of 480 Bcfe.
The company expects 2019 drilling and completion ("D&C") capital of at least $575-$625 million and approximately $175 million of capital associated with land, midstream, and water infrastructure. On a consolidated basis, the company expects a 2019 capital budget of $1,000-$1,080 million, which includes $250-$280 million of capital that CNXM is responsible for. The company will evaluate multiple factors to determine incremental activity throughout the year, and CNX would expect to update guidance accordingly.
The company expects stand-alone adjusted EBITDAX, which includes approximately $55 million in distributions received from ownership interests in CNXM, of $790-$825 million, based on NYMEX as of January 15, 2019. The company expects 2019 consolidated adjusted EBITDAX of $945-$985 million.
The total cash production costs will be a function of the final activity set and weighting by segment. Current EBITDAX guidance reflects a more heavily weighted Marcellus activity set, similar to the 2018 development program.
"The company remains committed to our philosophy to maximize the long-term per share value through prudent capital allocation and continuous cost management," continued Mr. DeIuliis. "Our 2019 production and capital guidance highlights our minimum level of activity, and we will continue to evaluate this activity throughout the year under the lens of our share price, forward gas prices, Utica data set, and M&A opportunities, to name a few. Depending on those factors and the risk-adjusted returns impact, we will add activity and incremental D&C capital in the year, which could change the current production mix. We have built a plan that has a considerable amount of flexibility to adjust to these ever-changing market conditions. We believe that this flexibility differentiates CNX, as we do not believe that smart production growth and building value and returning it to our shareholders are mutually exclusive goals."
Note: CNX Resources Corporation is unable to provide a reconciliation of projected stand-alone or consolidated adjusted EBITDAX to projected operating income, the most comparable financial measure calculated in accordance with GAAP, due to the unknown effect, timing, and potential significance of certain income statement items.
Total hedged natural gas production in the 2019 first quarter is 88.7 Bcf. The annual gas hedge position is shown in the table below:
2019 | 2020 | ||||
Volumes Hedged (Bcf), as of 1/18/19 | 376.0* | 468.6 | |||
*Includes actual settlements of 28.4 Bcf. |
CNX's hedged gas volumes include a combination of NYMEX financial hedges, index (NYMEX and basis) financial hedges, and physical fixed price sales. In addition, to protect the NYMEX hedge volumes from basis exposure, CNX enters into basis-only financial hedges and physical sales with fixed basis at certain sales points. CNX's gas hedge position as of January 18, 2019 is shown in the table below:
Q1 2019 | 2019 | 2020 | 2021 | 2022 | 2023 | |||||||||||||||||||
NYMEX Only Hedges | ||||||||||||||||||||||||
Volumes (Bcf) | 83.5 | 359.2 | 457.2 | 389.1 | 262.9 | 99.3 | ||||||||||||||||||
Average Prices ($/Mcf) | $ | 3.07 | $ | 3.05 | $ | 2.96 | $ | 2.91 | $ | 2.96 | $ | 2.84 | ||||||||||||
Physical Fixed Price Sales and Index Hedges | ||||||||||||||||||||||||
Volumes (Bcf) | 5.2 | 16.8 | 11.4 | 21.2 | 13.7 | 27.6 | ||||||||||||||||||
Average Prices ($/Mcf) | $ | 2.84 | $ | 2.63 | $ | 2.43 | $ | 2.48 | $ | 2.56 | $ | 2.10 | ||||||||||||
Total Volumes Hedged (Bcf) | 88.7 | 376.0 | 468.6 | 410.3 | 276.6 | 126.9 | ||||||||||||||||||
NYMEX + Basis (fully-covered volumes)1 | ||||||||||||||||||||||||
Volumes (Bcf) | 87.1 | 369.3 | 424.4 | 351.5 | 216.7 | 101.9 | ||||||||||||||||||
Average Prices ($/Mcf) | $ | 2.78 | $ | 2.70 | $ | 2.50 | $ | 2.36 | $ | 2.35 | $ | 2.23 | ||||||||||||
NYMEX Only Hedges Exposed to Basis | ||||||||||||||||||||||||
Volumes (Bcf) | 1.6 | 6.7 | 44.2 | 58.8 | 59.9 | 25.0 | ||||||||||||||||||
Average Prices ($/Mcf) | $ | 3.07 | $ | 3.05 | $ | 2.96 | $ | 2.91 | $ | 2.96 | $ | 2.84 | ||||||||||||
Total Volumes Hedged (Bcf) | 88.7 | 376.0 | 468.6 | 410.3 | 276.6 | 126.9 | ||||||||||||||||||
1Includes physical sales with fixed basis in Q1 2019, 2019, 2020, 2021, 2022, and 2023 of 30.7 Bcf, 119.5 Bcf, 74.4 Bcf, 74.6 Bcf, 34.3 Bcf, and 3.5 Bcf, respectively. |
During the fourth quarter of 2018, CNX added additional NYMEX natural gas hedges of 1.0 Bcf, 10.4 Bcf, 201.4 Bcf, 153.4 Bcf, 63.4 Bcf, and 19.0 for 2018, 2019, 2020, 2021, 2022, and 2023, respectively. To help mitigate basis exposure on NYMEX hedges, in the fourth quarter CNX added 2.2 Bcf, 19.4 Bcf, 157.2 Bcf, 110.2 Bcf, 39.4 Bcf, and 32.8 Bcf of basis hedges for 2018, 2019, 2020, 2021, 2022, and 2023, respectively.
Finance:
At December 31, 2018, CNX's net debt attributable to CNX shareholders to trailing-twelve-months (TTM) adjusted EBITDAX attributable to CNX Shareholders was 2.25x. On a consolidated basis, CNX's net debt to TTM adjusted EBITDAX from continuing operations was 2.29x.
At December 31, 2018, the company's credit facility had $612 million of borrowings outstanding and $198 million of letters of credit outstanding, leaving $1,290 million of unused capacity. In addition, CNX holds 21.7 million CNXM limited partnership units, with a current market value of approximately $381 million as of January 16, 2019, a 2% General Partner interest, and incentive distribution rights.
Since the October 2017 inception of the current repurchase program and as of January 18, 2019, CNX has repurchased a total of approximately 32.6 million shares for approximately $490 million life-to-date, resulting in 198,335,252 shares outstanding, which is an approximately 14% reduction to total shares outstanding. The company has approximately $260 million remaining on its current $750 million share repurchase program, which is not subject to an expiration date.
About CNX
CNX Resources Corporation (NYSE: CNX) is one of the largest independent natural gas exploration, development and production companies, with operations centered in the major shale formations of the Appalachian basin. The company deploys an organic growth strategy focused on responsibly developing its resource base. As of December 31, 2018, CNX had 7.9 trillion cubic feet equivalent of proved natural gas reserves. The company is a member of the Standard & Poor's Midcap 400 Index. Additional information may be found at www.cnx.com.
Non-GAAP Financial Measures
Definitions: EBIT is defined as earnings before deducting net interest expense (interest expense less interest income) and income taxes. EBITDAX is defined as earnings before deducting net interest expense (interest expense less interest income), income taxes, depreciation, depletion and amortization, and exploration. Adjusted EBITDAX is defined as EBITDAX after adjusting for the discrete items listed below. Although EBIT, EBITDAX, and adjusted EBITDAX are not measures of performance calculated in accordance with generally accepted accounting principles, management believes that they are useful to an investor in evaluating CNX Resources because they are widely used to evaluate a company's operating performance. We exclude stock-based compensation from adjusted EBITDAX because we do not believe it accurately reflects the actual operating expense incurred during the relevant period and may vary widely from period to period irrespective of operating results. Investors should not view these metrics as a substitute for measures of performance that are calculated in accordance with generally accepted accounting principles. In addition, because all companies do not calculate EBIT, EBITDAX, or adjusted EBITDAX identically, the presentation here may not be comparable to similarly titled measures of other companies. Adjusted EBITDAX per outstanding share, adjusted net income per outstanding share, and adjusted EBITDAX attributable to CNX Shareholders per outstanding share, with shares measured as of January 18, 2019, are not measures of performance calculated in accordance with generally accepted accounting principles. Management believes that these financial measures are useful to an investor in evaluating CNX Resources because (i) analysts utilize these metrics when evaluating company performance and, (ii) given that we have an active share repurchase program, analysts have requested this information as of a recent practicable date, and we want to provide updated information to investors.
Reconciliation of EBIT, EBITDAX, adjusted EBITDAX, adjusted net income (loss), adjusted net income (loss) attributable to CNX shareholders, net debt attributable to CNX shareholders, and TTM EBITDAX to financial net income attributable to CNX Resources shareholders is as follows (dollars in 000):
Three Months Ended | ||||||||||||||||||||
December 31, | ||||||||||||||||||||
2018 | 2018 | 2018 | 2018 | 2017 | ||||||||||||||||
Dollars in thousands | E&P | Midstream | Unallocated1 | Total Company | Total Company | |||||||||||||||
Net Income (Loss) | $ | 48,250 | $ | 39,309 | $ | 41,856 | $ | 129,415 | $ | 276,643 | ||||||||||
Less: Income from Discontinued Operations | — | — | — | — | 9,391 | |||||||||||||||
Add: Interest Expense | 26,471 | 6,751 | — | 33,222 | 40,319 | |||||||||||||||
Less: Interest Income | 1 | — | — | 1 | (1,198) | |||||||||||||||
Add: Income Taxes | — | — | (23,713) | (23,713) | 71,566 | |||||||||||||||
Add: Income Tax Reform Benefit | — | — | — | — | (269,090) | |||||||||||||||
Earnings Before Interest & Taxes (EBIT) | 74,722 | 46,060 | 18,143 | 138,925 | 127,631 | |||||||||||||||
Add: Depreciation, Depletion & Amortization | 122,315 | 7,770 | (1) | 130,084 | 122,707 | |||||||||||||||
Add: Exploration Expense | $ | 2,633 | $ | — | $ | — | $ | 2,633 | $ | 14,093 | ||||||||||
Earnings Before Interest, Taxes, DD&A and Exploration (EBITDAX) from Continuing Operations | $ | 199,670 | $ | 53,830 | $ | 18,142 | $ | 271,642 | $ | 264,431 | ||||||||||
Adjustments: | ||||||||||||||||||||
Unrealized Loss (Gain) on Commodity Derivative Instruments | 36,727 | — | — | 36,727 | (105,879) | |||||||||||||||
Loss on Certain Asset Sales | — | — | 96 | 96 | — | |||||||||||||||
Severance Expense | (55) | — | — | (55) | 177 | |||||||||||||||
(Gain) Loss on Debt Extinguishment | — | — | (315) | (315) | 896 | |||||||||||||||
Stock-Based Compensation | 4,842 | 636 | — | 5,478 | 3,907 | |||||||||||||||
Fair Value Put Option | — | — | — | — | 3,500 | |||||||||||||||
Settlement Expense | — | — | — | — | 19,787 | |||||||||||||||
Total Pre-tax Adjustments | 41,514 | 636 | (219) | 41,931 | (77,612) | |||||||||||||||
Adjusted EBITDAX from Continuing Operations | $ | 241,184 | $ | 54,466 | $ | 17,923 | $ | 313,573 | $ | 186,819 | ||||||||||
Less: Adjusted EBITDA Attributable to Noncontrolling Interest2 | — | 34,550 | — | 34,550 | — | |||||||||||||||
Adjusted EBITDAX Attributable to CNX Resources Shareholders | $ | 241,184 | $ | 19,916 | $ | 17,923 | $ | 279,023 | $ | 186,819 | ||||||||||
Note: Income tax effect of Total Pre-tax Adjustments was ($11,371) and $17,850 for the three months ended December 31, 2018 and December 31, 2017, respectively. | ||||||||||||||||||||
Adjusted net income attributable to CNX shareholders for the three months ended December 31, 2018 is calculated as GAAP net income attributable to CNX shareholders of $101,927 plus total pre-tax adjustments from the above table of $41,931, less the associated tax expense of $11,371 equals adjusted net income of $132,487. Adjusted net income attributable to CNX shareholders for the three months ended December 31, 2017 is calculated as GAAP net income attributable to CNX shareholders of $276,643 less total pre-tax adjustments from the above table of $77,612, plus the associated tax benefit of $17,850 equals the adjusted net income attributable to CNX shareholders of $216,881. | ||||||||||||||||||||
Adjusted net income consolidated for the three months ended December 31, 2018 is calculated as GAAP net income of $129,415 plus total pre-tax adjustments from the above table of $41,931, less the associated tax expense of $11,371 equals adjusted net income of $159,975. Adjusted net income consolidated for the three months ended December 31, 2017 is calculated as GAAP net income of $276,643 less total pre-tax adjustments from the above table of $77,612, plus the associated tax benefit of $17,850 equals the adjusted net income of $216,881 | ||||||||||||||||||||
1CNX's unallocated expenses include other expense, gain on sale of assets, loss on debt extinguishment, impairment of other intangible asset and income taxes. | ||||||||||||||||||||
2Adjusted EBITDA Attributable to Noncontrolling Interest for the three months ended December 31, 2018 is Net Income Attributable to Noncontrolling interest of $27,488 plus Depreciation, Depletion and Amortization of $3,189, plus Interest Expense of $3,480, plus Stock-based compensation of $393. Calculated by taking an average noncontrolling interest percentage of 63.91%. |
Management uses net debt to determine the company's outstanding debt obligations that would not be readily satisfied by its cash and cash equivalents on hand. Management believes that using net debt attributable to CNX Resources shareholders is useful to investors in determining the company's leverage ratio since the company could choose to use its cash and cash equivalents to retire debt.
Net Debt Attributable to CNX Shareholders | December 31, 2018 | ||||||||
E&P | Midstream | Total | |||||||
Total Debt (GAAP)1 | $ | 1,921,285 | $ | 477,215 | $ | 2,398,500 | |||
Less Cash and Cash Equivalents | 787 | 16,411 | 17,198 | ||||||
Net Debt (Non-GAAP) | 1,920,498 | 460,804 | 2,381,302 | ||||||
Net Debt Attributable to Noncontrolling Interest2 | — | 294,500 | 294,500 | ||||||
Net Debt Attributable to CNX Shareholders | $ | 1,920,498 | $ | 166,304 | $ | 2,086,802 | |||
1Includes current portion. | |||||||||
2Calculated by taking an average noncontrolling interest percentage of 63.91%. |
Trailing-Twelve-Months (TTM) EBITDAX | Three Months Ended | Twelve Months Ended | |||||||||||||||||
March 31, | June 30, | September 30, | December 31, | December 31, | |||||||||||||||
($ in thousands) | 2018 | 2018 | 2018 | 2018 | 2018 | ||||||||||||||
Net Income | $ | 545,546 | $ | 61,394 | $ | 146,756 | $ | 129,415 | $ | 883,111 | |||||||||
Add: Interest Expense | 38,551 | 38,438 | 35,723 | 33,222 | 145,934 | ||||||||||||||
Less: Interest Income | (76) | — | (42) | 1 | (117) | ||||||||||||||
Add: Income Taxes | 213,694 | (31,102) | 56,678 | (23,713) | 215,557 | ||||||||||||||
Earnings Before Interest & Taxes (EBIT) from Continuing Operations | 797,715 | 68,730 | 239,115 | 138,925 | 1,244,485 | ||||||||||||||
Add: Depreciation, Depletion & Amortization | 124,667 | 119,087 | 119,585 | 130,084 | 493,423 | ||||||||||||||
Add: Exploration Expense | 2,380 | 3,699 | 3,321 | 2,633 | 12,033 | ||||||||||||||
Earnings Before Interest, Taxes, DD&A, and Exploration (EBITDAX) from Continuing Operations | $ | 924,762 | $ | 191,516 | $ | 362,021 | $ | 271,642 | $ | 1,749,941 | |||||||||
Adjustments: | |||||||||||||||||||
Unrealized Loss (Gain) on Commodity Derivative Instruments | (52,078) | (8,975) | (15,181) | 36,727 | (39,507) | ||||||||||||||
Settlement Expense | — | — | 2,000 | — | 2,000 | ||||||||||||||
(Gain) Loss on Certain Asset Sales | (9,487) | — | (130,849) | 96 | (140,240) | ||||||||||||||
Gain on Previously Held Equity Interest | (623,663) | — | — | — | (623,663) | ||||||||||||||
Severance Expense | 814 | 257 | 513 | (55) | 1,529 | ||||||||||||||
Fair Value Put Option | (3,500) | — | — | — | (3,500) | ||||||||||||||
Other Transaction Fees | 1,149 | — | — | — | 1,149 | ||||||||||||||
Stock Based Compensation | 4,909 | 5,709 | 5,245 | 5,478 | 21,341 | ||||||||||||||
Loss (Gain) on Debt Extinguishment | 15,635 | 23,413 | 15,385 | (315) | 54,118 | ||||||||||||||
Impairment of Other Intangible Assets | — | 18,650 | — | — | 18,650 | ||||||||||||||
Total Pre-tax Adjustments | $ | (666,221) | $ | 39,054 | $ | (122,887) | $ | 41,931 | $ | (708,123) | |||||||||
Adjusted EBITDAX from Continuing Operations | $ | 258,541 | $ | 230,570 | $ | 239,134 | $ | 313,573 | $ | 1,041,818 | |||||||||
Less: Adjusted EBITDA Attributable to Noncontrolling Interest1 | 22,388 | 26,711 | 29,083 | 34,550 | 112,732 | ||||||||||||||
Adjusted EBITDAX Attributable to CNX Shareholders | $ | 236,153 | $ | 203,859 | $ | 210,051 | $ | 279,023 | $ | 929,086 | |||||||||
1Adjusted EBITDA Attributable to Noncontrolling Interest for the three months ended March 31, 2018 is Net Income Attributable to Noncontrolling interest of $17,983 plus Depreciation, Depletion and Amortization of $2,707, plus Interest Expense of $1,398, plus Stock-based compensation of $300. Calculated by taking an average noncontrolling interest percentage of 63.91%. | |||||||||||||||||||
Adjusted EBITDA Attributable to Noncontrolling Interest for the three months ended June 30, 2018 is Net Income Attributable to Noncontrolling interest of $19,380 plus Depreciation, Depletion and Amortization of $3,078, plus Interest Expense of $3,836, plus Stock-based compensation of $417. Calculated by taking an average noncontrolling interest percentage of 63.91%. | |||||||||||||||||||
Adjusted EBITDA Attributable to Noncontrolling Interest for the three months ended September 30, 2018 is Net Income Attributable to Noncontrolling interest of $21,727 plus Depreciation, Depletion and Amortization of $3,171, plus Interest Expense of $3,877, plus Stock-based compensation of $308. Calculated by taking an average noncontrolling interest percentage of 63.91%. | |||||||||||||||||||
Adjusted EBITDA Attributable to Noncontrolling Interest for the three months ended December 31, 2018 is reconciled above. |
Cautionary Statements
We are including the following cautionary statement in this press release to make applicable and take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 for any forward-looking statements made by, or on behalf of us. With the exception of historical matters, the matters discussed in this press release are forward-looking statements (as defined in 21E of the Securities Exchange Act of 1934 (the "Exchange Act")) that involve risks and uncertainties that could cause actual results to differ materially from projected results. Accordingly, investors should not place undue reliance on forward-looking statements as a prediction of actual results. These forward-looking statements may include projections and estimates concerning the timing and success of specific projects and our future production, revenues, income and capital spending. When we use the words "believe," "intend," "expect," "may," "should," "anticipate," "could," "estimate," "plan," "predict," "project," "will," or their negatives, or other similar expressions, the statements which include those words are usually forward-looking statements. When we describe a strategy that involves risks or uncertainties, we are making forward-looking statements. The forward-looking statements in this press release speak only as of the date of this press release; we disclaim any obligation to update these statements. We have based these forward-looking statements on our current expectations and assumptions about future events. While our management considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond our control. These risks, contingencies and uncertainties relate to, among other matters, the following: 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; an extended decline in the prices we receive for our natural gas and natural gas liquids affecting our operating results and cash flows; our dependence on gathering, processing and transportation facilities and other midstream facilities owned by CNXM and others; disruption of, capacity constraints in, or proximity to pipeline systems that could limit sales of our natural gas and natural gas liquids, and decreases in availability of third-party pipelines or other midstream facilities interconnected to CNXM's gathering systems; uncertainties in estimating our economically recoverable natural gas reserves, and inaccuracies in our estimates; the high-risk nature of drilling natural gas wells; our identified drilling locations are scheduled out over multiple years, making them susceptible to uncertainties that could materially alter the occurrence or timing of their drilling; 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 operations. 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 the Company's 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; our borrowing base 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 fail to perform under various transaction agreements that were executed as part of the separation, including with respect to indemnification obligations; 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 has been allocated responsibility; and the separation could result in substantial tax liability.. Additional factors are described in detail under the captions "Forward Looking Statements" and "Risk Factors" in our annual report on Form 10-K for the year ended December 31, 2017 filed with the Securities and Exchange Commission, as supplemented by our quarterly reports on Form 10-Q.
CNX RESOURCES CORPORATION AND SUBSIDIARIES | |||||||||||||||
CONSOLIDATED STATEMENTS OF INCOME | |||||||||||||||
Three Months Ended | Year Ended | ||||||||||||||
(Dollars in thousands, except per share data) | December 31, | December 31, | |||||||||||||
(Unaudited) | 2018 | 2017 | 2018 | 2017 | |||||||||||
Revenue and Other Operating Income: | |||||||||||||||
Natural Gas, NGLs and Oil Revenue | $ | 493,085 | $ | 312,714 | $ | 1,577,937 | $ | 1,125,224 | |||||||
(Loss) Gain on Commodity Derivative Instruments | (108,964) | 126,422 | (30,212) | 206,930 | |||||||||||
Purchased Gas Revenue | 27,441 | 21,117 | 65,986 | 53,795 | |||||||||||
Midstream Revenue | 20,098 | — | 89,781 | — | |||||||||||
Other Operating Income | 3,795 | 16,698 | 26,942 | 69,182 | |||||||||||
Total Revenue and Other Operating Income | 435,455 | 476,951 | 1,730,434 | 1,455,131 | |||||||||||
Costs and Expenses: | |||||||||||||||
Operating Expense | |||||||||||||||
Lease Operating Expense | 16,789 | 24,473 | 95,139 | 88,932 | |||||||||||
Transportation, Gathering and Compression | 71,998 | 103,165 | 302,933 | 382,865 | |||||||||||
Production, Ad Valorem, and Other Fees | 8,472 | 9,413 | 32,750 | 29,267 | |||||||||||
Depreciation, Depletion and Amortization | 130,084 | 122,707 | 493,423 | 412,036 | |||||||||||
Exploration and Production Related Other Costs | 2,633 | 14,093 | 12,033 | 48,074 | |||||||||||
Purchased Gas Costs | 27,414 | 20,366 | 64,817 | 52,597 | |||||||||||
Impairment of Exploration and Production Properties | — | — | — | 137,865 | |||||||||||
Impairment of Other Intangible Assets | — | — | 18,650 | — | |||||||||||
Selling, General and Administrative Costs | 36,113 | 28,221 | 134,806 | 93,211 | |||||||||||
Other Operating Expense | 21,174 | 42,510 | 72,412 | 112,369 | |||||||||||
Total Operating Expense | 314,677 | 364,948 | 1,226,963 | 1,357,216 | |||||||||||
Other Expense (Income) | |||||||||||||||
Other (Income) Expense | (9,758) | (13,978) | (14,571) | 3,825 | |||||||||||
Gain on Sale of Assets | (8,073) | (3,744) | (157,015) | (188,063) | |||||||||||
Gain on Previously Held Equity Interest | — | — | (623,663) | — | |||||||||||
(Gain) Loss on Debt Extinguishment | (315) | 896 | 54,118 | 2,129 | |||||||||||
Interest Expense | 33,222 | 40,319 | 145,934 | 161,443 | |||||||||||
Total Other Expense (Income) | 15,076 | 23,493 | (595,197) | (20,666) | |||||||||||
Total Costs And Expenses | 329,753 | 388,441 | 631,766 | 1,336,550 | |||||||||||
Income from Continuing Operations Before Income Tax | 105,702 | 88,510 | 1,098,668 | 118,581 | |||||||||||
Income Tax (Benefit) Expense | (23,713) | (197,524) | 215,557 | (176,458) | |||||||||||
Income From Continuing Operations | 129,415 | 286,034 | 883,111 | 295,039 | |||||||||||
(Loss) Income From Discontinued Operations, net | — | (9,391) | — | 85,708 | |||||||||||
Net Income | 129,415 | 276,643 | 883,111 | 380,747 | |||||||||||
Less: Net Income Attributable to Noncontrolling Interests | 27,488 | — | 86,578 | — | |||||||||||
Net Income Attributable to CNX Resources Shareholders | $ | 101,927 | $ | 276,643 | $ | 796,533 | $ | 380,747 |
CNX RESOURCES CORPORATION AND SUBSIDIARIES | |||||||||||||||
CONSOLIDATED STATEMENTS OF INCOME | |||||||||||||||
(CONTINUED) | |||||||||||||||
Three Months Ended | Year Ended | ||||||||||||||
(Dollars in thousands, except per share data) | December 31, | December 31, | |||||||||||||
(Unaudited) | 2018 | 2017 | 2018 | 2017 | |||||||||||
Earnings Per Share | |||||||||||||||
Basic | |||||||||||||||
Income from Continuing Operations | $ | 0.51 | $ | 1.27 | $ | 3.75 | $ | 1.29 | |||||||
(Loss) Income from Discontinued Operations | — | (0.04) | — | 0.37 | |||||||||||
Total Basic Earnings Per Share | $ | 0.51 | $ | 1.23 | $ | 3.75 | $ | 1.66 | |||||||
Diluted | |||||||||||||||
Income from Continuing Operations | $ | 0.50 | $ | 1.26 | $ | 3.71 | $ | 1.28 | |||||||
(Loss) Income from Discontinued Operations | — | (0.05) | — | 0.37 | |||||||||||
Total Diluted Earnings Per Share | $ | 0.50 | $ | 1.21 | $ | 3.71 | $ | 1.65 |
CNX RESOURCES CORPORATION AND SUBSIDIARIES | |||||||||||||||
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||||||||||||||
Three Months Ended | Year Ended | ||||||||||||||
(Dollars in thousands) | December 31, | December 31, | |||||||||||||
(Unaudited) | 2018 | 2017 | 2018 | 2017 | |||||||||||
Net Income | $ | 129,415 | $ | 276,643 | $ | 883,111 | $ | 380,747 | |||||||
Other Comprehensive (Loss) Income: | |||||||||||||||
Actuarially Determined Long-Term Liability Adjustments (Net of tax: $2, ($1,244), ($792), ($7,365)) | (332) | 1,798 | 1,672 | 12,228 | |||||||||||
Comprehensive Income | 129,083 | 278,441 | 884,783 | 392,975 | |||||||||||
Less: Comprehensive Income Attributable to Noncontrolling Interest | 27,488 | — | 86,578 | — | |||||||||||
Comprehensive Income Attributable to CNX Resources Shareholders | $ | 101,595 | $ | 278,441 | $ | 798,205 | $ | 392,975 |
CNX RESOURCES CORPORATION AND SUBSIDIARIES | |||||||
CONSOLIDATED BALANCE SHEETS | |||||||
(Unaudited) | |||||||
(Dollars in thousands) | December 31, 2018 | December 31, 2017 | |||||
ASSETS | |||||||
Current Assets: | |||||||
Cash and Cash Equivalents | $ | 17,198 | $ | 509,167 | |||
Accounts and Notes Receivable: | |||||||
Trade | 252,424 | 156,817 | |||||
Other Receivables | 11,077 | 48,908 | |||||
Supplies Inventories | 9,715 | 10,742 | |||||
Recoverable Income Taxes | 149,481 | 31,523 | |||||
Prepaid Expenses | 61,791 | 95,347 | |||||
Total Current Assets | 501,686 | 852,504 | |||||
Property, Plant and Equipment: | |||||||
Property, Plant and Equipment | 9,567,428 | 9,316,495 | |||||
Less—Accumulated Depreciation, Depletion and Amortization | 2,624,984 | 3,526,742 | |||||
Total Property, Plant and Equipment—Net | 6,942,444 | 5,789,753 | |||||
Other Assets: | |||||||
Investment in Affiliates | 18,663 | 197,921 | |||||
Goodwill | 796,359 | — | |||||
Other Intangible Assets | 103,200 | — | |||||
Other | 229,818 | 91,735 | |||||
Total Other Assets | 1,148,040 | 289,656 | |||||
TOTAL ASSETS | $ | 8,592,170 | $ | 6,931,913 |
CNX RESOURCES CORPORATION AND SUBSIDIARIES | |||||||
CONSOLIDATED BALANCE SHEETS | |||||||
(Unaudited) | |||||||
(Dollars in thousands, except per share data) | December 31, 2018 | December 31, 2017 | |||||
LIABILITIES AND EQUITY | |||||||
Current Liabilities: | |||||||
Accounts Payable | $ | 229,806 | $ | 211,161 | |||
Current Portion of Long-Term Debt | 6,997 | 7,111 | |||||
Other Accrued Liabilities | 286,172 | 223,407 | |||||
Total Current Liabilities | 522,975 | 441,679 | |||||
Long-Term Debt: | |||||||
Long-Term Debt | 2,378,205 | 2,187,026 | |||||
Capital Lease Obligations | 13,299 | 20,347 | |||||
Total Long-Term Debt | 2,391,504 | 2,207,373 | |||||
Deferred Credits and Other Liabilities: | |||||||
Deferred Income Taxes | 398,682 | 44,373 | |||||
Asset Retirement Obligations | 37,479 | 198,768 | |||||
Other | 159,787 | 139,821 | |||||
Total Deferred Credits and Other Liabilities | 595,948 | 382,962 | |||||
TOTAL LIABILITIES | 3,510,427 | 3,032,014 | |||||
Stockholders' Equity: | |||||||
Common Stock, $0.01 Par Value; 500,000,000 Shares Authorized, 198,663,342 Issued and Outstanding at December 31, 2018; 223,743,322 Issued and Outstanding at December 31, 2017 | 1,990 | 2,241 | |||||
Capital in Excess of Par Value | 2,264,063 | 2,450,323 | |||||
Preferred Stock, 15,000,000 Shares Authorized, None Issued and Outstanding | — | — | |||||
Retained Earnings | 2,071,809 | 1,455,811 | |||||
Accumulated Other Comprehensive Loss | (7,904) | (8,476) | |||||
Total CNX Resources Stockholders' Equity | 4,329,958 | 3,899,899 | |||||
Noncontrolling Interest | 751,785 | — | |||||
TOTAL STOCKHOLDERS' EQUITY | 5,081,743 | 3,899,899 | |||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 8,592,170 | $ | 6,931,913 |
CNX RESOURCES CORPORATION AND SUBSIDIARIES | |||||||||||||||||||||||||||
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY | |||||||||||||||||||||||||||
(Dollars in thousands) | Common Stock | Capital in Excess of Par Value | Retained Earnings | Accumulated Other Comprehensive Loss | Total CNX Resources Corporation Stockholders' Equity | Non- Controlling Interest | Total Stockholders' Equity | ||||||||||||||||||||
December 31, 2017 | $ | 2,241 | $ | 2,450,323 | $ | 1,455,811 | $ | (8,476) | $ | 3,899,899 | $ | — | $ | 3,899,899 | |||||||||||||
(Unaudited) | |||||||||||||||||||||||||||
Net Income | — | — | 796,533 | — | 796,533 | 86,578 | 883,111 | ||||||||||||||||||||
Actuarially Determined Long-Term Liability Adjustments (Net of ($792) Tax) | — | — | — | 1,672 | 1,672 | — | 1,672 | ||||||||||||||||||||
Comprehensive Income | — | — | 796,533 | 1,672 | 798,205 | 86,578 | 884,783 | ||||||||||||||||||||
Issuance of Common Stock | 8 | 1,705 | — | — | 1,713 | — | 1,713 | ||||||||||||||||||||
Purchase and Retirement of Common Stock (25,894,324 shares) | (259) | (206,895) | (176,598) | — | (383,752) | — | (383,752) | ||||||||||||||||||||
Shares Withheld for Taxes | — | — | (5,037) | — | (5,037) | (348) | (5,385) | ||||||||||||||||||||
Acquisition of CNX Gathering, LLC | — | — | — | — | — | 718,577 | 718,577 | ||||||||||||||||||||
Amortization of Stock-Based Compensation Awards | — | 18,930 | — | — | 18,930 | 2,411 | 21,341 | ||||||||||||||||||||
Distributions to CNXM Noncontrolling Interest Holders | — | — | — | — | — | (55,433) | (55,433) | ||||||||||||||||||||
ASU 2018-02 Reclassification | $ | — | $ | — | $ | 1,100 | $ | (1,100) | $ | — | $ | — | $ | — | |||||||||||||
December 31, 2018 | $ | 1,990 | $ | 2,264,063 | $ | 2,071,809 | $ | (7,904) | $ | 4,329,958 | $ | 751,785 | $ | 5,081,743 |
CNX RESOURCES AND SUBSIDIARIES | |||||||||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||||||
(Dollars in thousands) | Three Months Ended | Year-Ended | |||||||||||||
(Unaudited) | December 31 | December 31 | |||||||||||||
Cash Flows from Operating Activities: | 2018 | 2017 | 2018 | 2017 | |||||||||||
Net Income | $ | 129,416 | $ | 276,643 | $ | 883,111 | $ | 380,747 | |||||||
Adjustments to Reconcile Net Income (Loss) to Net Cash Provided By Continuing Operating Activities: | |||||||||||||||
Net Loss (Income) from Discontinued Operations | — | 9,391 | — | (85,708) | |||||||||||
Depreciation, Depletion and Amortization | 130,084 | 122,707 | 493,423 | 412,036 | |||||||||||
Amortization of Deferred Financing Costs | 1,722 | 3,994 | 8,361 | 10,630 | |||||||||||
Impairment of Exploration and Production Properties | — | — | — | 137,865 | |||||||||||
Impairment of Other Intangible Assets | — | — | 18,650 | — | |||||||||||
Stock-Based Compensation | 5,480 | 3,912 | 21,341 | 16,983 | |||||||||||
Gain on Sale of Assets | (8,073) | (3,744) | (157,015) | (188,063) | |||||||||||
Gain on Previously Held Equity Interest | — | — | (623,663) | — | |||||||||||
(Gain) Loss on Debt Extinguishment | (316) | 896 | 54,118 | 2,129 | |||||||||||
Loss (Gain) on Commodity Derivative Instruments | 108,964 | (126,422) | 30,212 | (206,930) | |||||||||||
Net Cash (Paid) Received in Settlement of Commodity Derivative Instruments | (72,237) | 20,543 | (69,720) | (41,174) | |||||||||||
Deferred Income Taxes | 86,444 | (163,895) | 345,560 | (142,829) | |||||||||||
Equity in Earnings of Affiliates | (675) | (15,020) | (5,363) | (49,830) | |||||||||||
Changes in Operating Assets: | |||||||||||||||
Accounts and Notes Receivable | (107,859) | (45,534) | (57,734) | (32,792) | |||||||||||
Supplies Inventories | 11 | 10,418 | 1,027 | 4,254 | |||||||||||
Recoverable Income Tax | (109,997) | 60,288 | (118,498) | 76,196 | |||||||||||
Prepaid Expenses | (1,054) | (5,496) | (1,391) | 631 | |||||||||||
Changes in Other Assets | 4,221 | (10,772) | 4,904 | 22,018 | |||||||||||
Changes in Operating Liabilities: | |||||||||||||||
Accounts Payable | 10,228 | 30,310 | 12,760 | 45,669 | |||||||||||
Accrued Interest | (11,650) | (35,456) | (5,839) | (2,955) | |||||||||||
Other Operating Liabilities | 22,716 | 49,246 | 53,135 | 81,969 | |||||||||||
Changes in Other Liabilities | 8,179 | (24,693) | (1,556) | (7,778) | |||||||||||
Net Cash Provided by Continuing Operating Activities | 195,604 | 157,316 | 885,823 | 433,068 | |||||||||||
Net Cash Provided by Discontinued Operating Activities | — | 9,521 | — | 215,619 | |||||||||||
Net Cash Provided by Operating Activities | 195,604 | 166,837 | 885,823 | 648,687 | |||||||||||
Cash Flows from Investing Activities: | |||||||||||||||
Capital Expenditures | (322,273) | (233,585) | (1,116,397) | (632,846) | |||||||||||
CNX Gathering LLC Acquisition, Net of Cash Acquired | — | — | (299,272) | — | |||||||||||
Proceeds from Asset Sales | 10,956 | 5,228 | 511,767 | 414,185 | |||||||||||
Net Distributions from Equity Affiliates | 1,500 | 7,253 | 9,250 | 42,873 | |||||||||||
Net Cash Used in Continuing Investing Activities | (309,817) | (221,104) | (894,652) | (175,788) | |||||||||||
Net Cash Used in Discontinued Investing Activities | — | (12,695) | — | (46,133) | |||||||||||
Net Cash Used in Investing Activities | (309,817) | (233,799) | (894,652) | (221,921) | |||||||||||
Cash Flows from Financing Activities: | |||||||||||||||
Proceeds from CNX Revolving Credit Facility | 173,000 | — | 612,000 | — | |||||||||||
Payments on Miscellaneous Borrowings | (1,709) | (2,013) | (7,165) | (8,037) | |||||||||||
Payments on Long-Term Notes | (19,600) | (25,988) | (955,019) | (239,716) | |||||||||||
Proceeds from Issuance of CNXM Senior Notes | — | — | 394,000 | — | |||||||||||
Net Proceeds from (Payments on) CNXM Revolving Credit Facility | 40,000 | — | (65,500) | — | |||||||||||
Distributions to CNXM Noncontrolling Interest Holders | (14,594) | — | (55,433) | — | |||||||||||
Proceeds from Spin-Off of CONSOL Energy Inc. | — | 425,000 | — | 425,000 | |||||||||||
Proceeds from Issuance of Common Stock | 23 | 150 | 1,713 | 1,009 | |||||||||||
Shares Withheld for Taxes | (51) | (335) | (5,385) | (6,681) | |||||||||||
Purchases of Common Stock | (87,387) | (103,209) | (381,752) | (103,209) | |||||||||||
Debt Issuance and Financing Fees | (943) | (63) | (20,599) | (361) | |||||||||||
Net Cash Provided by (Used in) Continuing Financing Activities | 88,739 | 293,542 | (483,140) | 68,005 | |||||||||||
Net Cash Provided by (Used in) Discontinued Financing Activities | — | 1,429 | — | (31,903) | |||||||||||
Net Cash Provided by (Used in) Financing Activities | 88,739 | 294,971 | (483,140) | 36,102 | |||||||||||
Net (Decrease) Increase in Cash and Cash Equivalents | (25,474) | 228,009 | (491,969) | 462,868 | |||||||||||
Cash and Cash Equivalents at Beginning of Period | 42,672 | 281,158 | 509,167 | 46,299 | |||||||||||
Cash and Cash Equivalents at End of Period | $ | 17,198 | $ | 509,167 | $ | 17,198 | $ | 509,167 |
View original content to download multimedia:http://www.prnewswire.com/news-releases/cnx-reports-fourth-quarter-and-full-year-2018-results-and-provides-updated-2019-guidance-300787135.html
SOURCE CNX Resources Corporation
PITTSBURGH, Jan. 31, 2019 /PRNewswire/ -- CNX Midstream Partners LP (NYSE: CNXM) ("CNXM", "CNX Midstream" or the "Partnership") today reported financial and operational results for the three months and the full year ended December 31, 2018.(1) The Partnership also reported updated financial guidance for 2019.
Fourth Quarter Results
Highlights of fourth quarter 2018 results attributable to the Partnership as compared to the fourth quarter of 2017 include:
Full Year 2018 Results
Highlights of full year 2018 results attributable to the Partnership as compared to full year 2017 include:
Full year 2018 adjusted EBITDA and distributable cash flow exceeded the high-end of the company's previously stated guidance of $160-$170 million and $125-$135 million, respectively. For 2018, total gross capital was $145.3 million, and total capital investment net to the Partnership was $137.1 million, which was at the low-end of the previously stated guidance of $135-$145 million.
Management Comment
"The team finished the year with a strong quarter, capping another year of growth and strong financial and operating performance for CNX Midstream," said Nicholas J. DeIuliis , Chief Executive Officer of CNX Midstream GP LLC (the "General Partner"). "For the full year 2018, CNXM reported a 17% increase in net income, a 28% increase in Adjusted EBITDA , and distributable cash flow grew by 18% over 2017 results."
Operations
During the quarter, the company had zero reportable injuries, making it the seventeenth quarter injury-free, highlighting the company's continued focus on safety and environmental compliance. Also, during the quarter, CNXM had record throughput. Operating expenses continued to improve during the quarter, driven largely by reductions to labor costs and continued system optimization.
Quarterly Distribution
As previously announced, the Board of Directors of its general partner, CNX Midstream GP LLC, has declared a cash distribution of $0.3603 per unit with respect to the fourth quarter of 2018. The distribution will be made on February 13, 2019 to unitholders of record as of the close of business on February 5, 2019. The distribution, which equates to an annual rate of $1.4412 per unit, represents an increase of 3.6% over the prior quarter, and an increase of 15% over the distribution paid with respect to the fourth quarter of 2017.
Capital Investment and Resources
For full year 2018, CNX Midstream's total capital investment net to the Partnership was $137.1 million, which includes investment in expansion projects of $119.8 million and maintenance capital of $17.3 million.
As of December 31, 2018, CNX Midstream had outstanding borrowings of $84 million under its $600 million revolving credit facility.
2019 Guidance
Based on current expectations, management is providing the following guidance for 2019:
($ in millions) | 2019E | ||||
Throughput (Bbtu/d) | 1,400 - 1,500 | ||||
Capital Expenditures | $250 - $280 | ||||
Adjusted EBITDA | $200 - $220 | ||||
Distributable Cash Flow | $150 - $170 | ||||
Distribution Coverage | 1.2x - 1.4x | ||||
LP Distribution Growth Target | 15% |
The 2019 capital budget is driven primarily by the expansion of CNXM's Southwest Pennsylvania gathering system, which includes the commissioning of one new compressor station, beginning work on two additional compressor stations, expanding an existing station and the installation of several long-life, large diameter high-pressure trunklines. This expansion is critical to the long-term development of the Partnership's Marcellus and Utica dedications and will allow the Partnership to handle increased year-over-year development activity of its customers, deliver lower line pressures, and minimize system constraints. The Partnership's guidance is a function of CNX's minimum base 2019 capital and production guidance, and as stated in their earnings release, they will continue to evaluate activity throughout the year and the Partnership would also increase capital in order to facilitate such activity and would update guidance accordingly.
CNX Midstream's financial guidance is based on numerous assumptions about future events and conditions and, therefore, could vary materially from actual results. These estimates, including capital expenditure plans, are meant to provide guidance only and are subject to revision for acquisitions or operating environment changes.
Fourth Quarter and Full Year 2018 Financial and Operational Results Conference Call
A conference call and webcast, during which management will discuss fourth quarter and full year 2018 financial and operational results and guidance for 2019, is scheduled for January 31, 2019 at 11:00 a.m. Eastern Time. Prepared remarks by members of management will be followed by a question and answer period. Interested parties may listen via webcast at www.cnxmidstream.com. Participants who would like to ask questions may join the conference by phone at 888-349-0097 (international 412-902-0126) five to ten minutes prior to the scheduled start time (reference the CNX Midstream call). An on-demand replay of the webcast will be also be available at www.cnxmidstream.com shortly after the conclusion of the conference call. A telephonic replay will be available through February 7, 2019 by dialing 877-344-7529 (international: 412-317-0088) and using the conference playback number 10127626.
______________ | |
(1) | Unless otherwise indicated, the reporting measures included in this news release reflect the unallocated total activity of the three development companies that have been jointly owned by the Partnership and CNX Gathering LLC ("CNX Gathering") since completion of the Partnership's initial public offering ("IPO") in September 2014. Effective November 16, 2016, the Partnership acquired the remaining 25% controlling interest in the Anchor Systems, which brought its controlling interest in that system to 100%. In connection with the transaction with HG Energy, the Partnership distributed its 5% interest in the Growth System to CNX Gathering. The Partnership's current financial interests in the development companies are: 100% in the Anchor Systems and 5% in the Additional Systems. Because the Partnership owns a controlling interest in each of these development companies, it fully consolidates their financial results. CNX Gathering, which is wholly owned by CNX Resources Corporation, owns a 95% noncontrolling interest in the Additional Systems of the Partnership. |
(2) | Adjusted EBITDA and DCF are not measures that are recognized under accounting principles generally accepted in the U.S. ("GAAP"). Definitions and reconciliations of these non-GAAP measures to GAAP reporting measures appear in the financial tables which follow. |
* * * * *
CNX Midstream is a growth-oriented master limited partnership that owns, operates, develops and acquires gathering and other midstream energy assets to service natural gas production in the Appalachian Basin in Pennsylvania and West Virginia. Our assets include natural gas gathering pipelines and compression and dehydration facilities, as well as condensate gathering, collection, separation and stabilization facilities. More information is available at our website www.cnxmidstream.com.
* * * * *
This press release is intended to be a qualified notice to nominees as provided for under Treasury Regulation Section 1.1446-4(b). Brokers and nominees should treat one hundred percent (100.0%) of CNX Midstream's distributions to non-U.S. investors as being attributed to income that is effectively connected with a United States trade or business. Accordingly, CNX Midstream's distributions to non-U.S. investors are subject to federal income tax withholding at the highest applicable effective tax rate. Nominees, and not CNX Midstream, are treated as withholding agents responsible for withholding on the distributions received by them on behalf of foreign investors.
* * * * *
This press release contains forward-looking statements within the meaning of the federal securities laws. Statements that are predictive in nature, that depend upon or refer to future events or conditions or that include the words "will," "believe," "expect," "anticipate," "intend," "estimate" and other expressions that are predictions of or indicate future events and trends and that do not relate to historical matters identify forward-looking statements. You should not place undue reliance on forward-looking statements. Forward-looking statements include, among others, statements regarding the payment of our quarterly distribution for the quarter ended December 31, 2018 and our anticipated 2019 financial performance. Forward-looking statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict, and there can be no assurance that actual outcomes and results will not differ materially from those expected by our management. You should not place undue reliance on forward-looking statements. Although forward-looking statements reflect our good faith beliefs at the time they are made, they involve known and unknown risks, uncertainties and other factors. While our management considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond our control. These risks, contingencies and uncertainties relate to, among other matters, the following: if either or both of our two largest customers, who account for substantially all of our revenue, change their business strategies, or take actions that otherwise significantly reduce the volumes of natural gas and condensate transported through our gathering systems, our revenue would decline and we could be materially and adversely affected; under our gathering agreements, our customers may transfer their leasehold, working and mineral fee interests in their dedicated acreage; we may not generate sufficient distributable cash flow to make the payment of the minimum quarterly distribution to our unitholders; because of the natural decline in production from existing wells, our success, in part, depends on our ability to maintain or increase natural gas and condensate throughput volumes on our midstream systems, which depends on the level of development and completion activity on acreage dedicated to us; many of our gathering agreements do not include minimum volume commitments; certain of our dedicated acreage is either not held by production by our customers or has not yet been earned by them; the highly competitive nature of our industry may adversely impact our ability to attract dedications of third-party volumes, which could limit our ability to grow and continue our dependence on our existing customers; increased competition from other companies that provide midstream services could have a negative impact on the demand for our services, which could adversely affect our financial results; we may not be able to make attractive offers to CNX on our ROFO acreage; our only assets are controlling ownership interests in our operating subsidiaries, so our cash flow will depend entirely on the performance of our operating subsidiaries and their ability to distribute cash to us; some of our gathering agreements with our customers provide for the release of dedicated acreage or fee credits in certain situations; we are responsible for any mine subsidence costs in the future; our midstream systems are exclusively located in the Appalachian Basin, making us vulnerable to risks associated with operating in a single geographic area; we may be unable to grow by acquiring the noncontrolling interests in, or assets of, our operating subsidiaries owned by CNX Gathering or CNX, which could limit our ability to increase our distributable cash flow; we may be unable to acquire additional properties from third parties in the future and any acquired properties may not provide the anticipated benefits; if third-party pipelines, whether upstream or downstream, or other midstream facilities interconnected to our gathering systems become partially or fully unavailable, our operating margin, cash flow and ability to make cash distributions to our unitholders could be adversely affected; to maintain and grow our business, we will be required to make substantial capital expenditures; if we are unable to obtain needed capital or financing on satisfactory terms, our ability to make cash distributions may be diminished or our financial leverage could increase; the amount of cash we have available for distribution to our unitholders depends primarily on our cash flow and not solely on our profitability, which may prevent us from making distributions, even during periods in which we record net income; our construction of new gathering, compression, dehydration, treating or other midstream assets may not result in revenue increases and may be subject to regulatory, environmental, political, legal and economic risks, which could adversely affect our cash flows, results of operations and financial condition and, as a result, our ability to distribute cash to our unitholders; the provisions and restrictions in our revolving credit facility and other debt agreements, and the risks associated therewith, could adversely affect our business, financial condition, results of operations and ability to make quarterly cash distributions to our unitholders; environmental regulations can increase costs and introduce uncertainty that could adversely impact our or our customers' operations; existing and future governmental 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; we may incur significant costs and liabilities as a result of pipeline operations and related increases in the regulation of gas gathering pipelines; climate change laws and regulations restricting emissions of greenhouse gases at the federal or state level could result in increased operating costs and reduced demand for the natural gas that we gather, while potential physical effects of climate change could disrupt our production and cause us to incur significant costs in preparing for or responding to those effects; our business involves many hazards and operational risks, some of which may not be fully covered by insurance, and the occurrence of a significant accident or other event that is not fully insured could curtail our operations and have a material adverse effect on our ability to distribute cash and, accordingly, the market price for our common units; cyber-incidents could have a material adverse effect on our business, financial condition or results of operations; we may not own in fee the land on which our pipelines and facilities are located, which could result in disruptions to our operations; a shortage of equipment and skilled labor in the Appalachian Basin could reduce equipment availability and labor productivity and increase labor and equipment costs, which could have a material adverse effect on our business and results of operations; we do not have any officers or employees and rely on officers of our general partner and employees of CNX; our success depends on key members of our general partner's senior management team and our ability to attract and retain experienced technical and other professional personnel; increases in interest rates could adversely impact our business, common unit price, our ability to issue equity or incur debt for acquisitions, capital expenditures or other purposes and our ability to make cash distributions at our intended levels; terrorist activities could materially and adversely affect our business and results of operations; negative public perception regarding our industry could have an adverse effect on our operations; our general partner and its affiliates, including CNX, have conflicts of interest with us and limited fiduciary duties to us and our unitholders, and they may favor their own interests to our detriment and that of our unitholders; we have no control over the business decisions and operations of CNX, and CNX is under no obligation to adopt a business strategy that favors us; our general partner's discretion in establishing cash reserves may reduce the amount of cash we have available to distribute to unitholders; affiliates of our general partner, including CNX and CNX Gathering, may compete with us, and neither our general partner nor its affiliates have any obligation to present business opportunities to us except with respect to rights of first offer contained in our omnibus agreement; our tax treatment depends on our status as a partnership for federal income tax purposes; as a result of investing in our common units, you may become subject to state and local taxes and return filing requirements in jurisdictions where we operate or own or acquire properties.
Although forward-looking statements reflect our good faith beliefs at the time they are made, they involve known and unknown risks, uncertainties and other factors. For more information concerning factors that could cause actual results to differ materially from those conveyed in the forward-looking statements, including, among others, that our business plans may change as circumstances warrant, please refer to the "Risk Factors" and "Forward-Looking Statements" sections of our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, changed circumstances or otherwise, unless required by law.
CNX MIDSTREAM PARTNERS LP CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars in thousands, except per unit data) (unaudited) | |||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Revenue | |||||||||||||||
Gathering revenue — related party | $ | 50,720 | $ | 37,369 | $ | 167,048 | $ | 184,693 | |||||||
Gathering revenue — third party | 20,097 | 24,329 | 89,620 | 49,155 | |||||||||||
Total Revenue | 70,817 | 61,698 | 256,668 | 233,848 | |||||||||||
Expenses | |||||||||||||||
Operating expense — related party | 5,169 | 4,472 | 19,814 | 25,513 | |||||||||||
Operating expense — third party | 6,599 | 7,718 | 27,343 | 26,640 | |||||||||||
General and administrative expense — related party | 3,575 | 2,538 | 13,867 | 10,750 | |||||||||||
General and administrative expense — third party | 1,956 | 2,450 | 8,595 | 5,717 | |||||||||||
Loss on asset sales | — | — | 2,501 | 3,914 | |||||||||||
Depreciation expense | 5,334 | 5,717 | 21,939 | 22,692 | |||||||||||
Interest expense | 6,751 | 1,201 | 23,614 | 4,560 | |||||||||||
Total Expense | 29,384 | 24,096 | 117,673 | 99,786 | |||||||||||
Net Income | 41,433 | 37,602 | 138,995 | 134,062 | |||||||||||
Less: Net (loss) income attributable to noncontrolling interest | (1,118) | 10,581 | 4,953 | 19,069 | |||||||||||
Net Income Attributable to General and Limited Partner | $ | 42,551 | $ | 27,021 | $ | 134,042 | $ | 114,993 | |||||||
Calculation of Limited Partner Interest in Net Income: | |||||||||||||||
Net Income Attributable to General and Limited Partner | $ | 42,551 | $ | 27,021 | $ | 134,042 | $ | 114,993 | |||||||
Less: General partner interest in net income, including incentive | 4,635 | 1,676 | 13,387 | 5,614 | |||||||||||
Limited partner interest in net income | $ | 37,916 | $ | 25,345 | $ | 120,655 | $ | 109,379 | |||||||
Net income per limited partner unit - basic | $ | 0.60 | $ | 0.40 | $ | 1.90 | $ | 1.72 | |||||||
Net Income per limited partner unit - diluted | $ | 0.59 | $ | 0.40 | $ | 1.89 | $ | 1.72 | |||||||
Weighted average limited partner units outstanding - basic | 63,640 | 63,588 | 63,635 | 63,582 | |||||||||||
Weighted average limited partner units outstanding - diluted | 63,732 | 63,660 | 63,694 | 63,634 |
CNX MIDSTREAM PARTNERS LP CONSOLIDATED BALANCE SHEETS (Dollars in thousands, except number of units) | |||||||
(Unaudited) | |||||||
December 31, | December 31, | ||||||
ASSETS | |||||||
Current Assets: | |||||||
Cash | $ | 3,966 | $ | 3,194 | |||
Receivables — related party | 17,073 | 13,104 | |||||
Receivables — third party | 7,028 | 8,251 | |||||
Other current assets | 2,383 | 2,169 | |||||
Total Current Assets | 30,450 | 26,718 | |||||
Property and Equipment: | |||||||
Property and equipment | 974,394 | 972,841 | |||||
Less — accumulated depreciation | 82,619 | 73,563 | |||||
Property and Equipment — Net | 891,775 | 899,278 | |||||
Other assets | 3,203 | 593 | |||||
TOTAL ASSETS | $ | 925,428 | $ | 926,589 | |||
LIABILITIES AND EQUITY | |||||||
Current Liabilities: | |||||||
Trade accounts payable | $ | 9,401 | $ | 6,925 | |||
Accrued interest payable | 7,761 | 87 | |||||
Accrued liabilities | 26,757 | 16,590 | |||||
Due to related party | 4,980 | 2,376 | |||||
Total Current Liabilities | 48,899 | 25,978 | |||||
Other Liabilities: | |||||||
Revolving credit facility | 84,000 | 149,500 | |||||
Long-term debt | 393,215 | — | |||||
Total Other Liabilities | 477,215 | 149,500 | |||||
Total Liabilities | 526,114 | 175,478 | |||||
Partners' Capital and Noncontrolling Interest: | |||||||
Common units (63,639,676 units issued and outstanding at December 31, 2018 and | 320,543 | 389,427 | |||||
General partner interest | 10,900 | 4,328 | |||||
Partners' capital attributable to CNX Midstream Partners LP | 331,443 | 393,755 | |||||
Noncontrolling interest | 67,871 | 357,356 | |||||
Total Partners' Capital and Noncontrolling Interest | 399,314 | 751,111 | |||||
TOTAL LIABILITIES AND PARTNERS' CAPITAL | $ | 925,428 | $ | 926,589 |
CNX MIDSTREAM PARTNERS LP CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in thousands) | |||||||
Year Ended December 31, | |||||||
2018 | 2017 | ||||||
(Unaudited) | |||||||
Cash Flows from Operating Activities: | |||||||
Net Income | $ | 138,995 | $ | 134,062 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation expense and amortization of debt issuance costs | 23,540 | 22,860 | |||||
Unit-based compensation | 2,411 | 1,176 | |||||
Loss on long-term asset sales | 2,501 | 3,914 | |||||
Other | 388 | 771 | |||||
Changes in assets and liabilities: | |||||||
Due to/from affiliate | (1,580) | 3,376 | |||||
Receivables — third party | 1,223 | (8,251) | |||||
Other current and non-current assets | 475 | 162 | |||||
Accounts payable and other accrued liabilities | 12,162 | (2,520) | |||||
Net Cash Provided by Operating Activities | 180,115 | 155,550 | |||||
Cash Flows from Investing Activities: | |||||||
Capital expenditures | (145,331) | (48,366) | |||||
Proceeds from sale of assets | 6,462 | 21,531 | |||||
Net Cash Used in Investing Activities | (138,869) | (26,835) | |||||
Cash Flows from Financing Activities: | |||||||
Distributions to general partner and noncontrolling interest holders, net | (3,505) | (36,889) | |||||
Quarterly distributions to unitholders | (94,044) | (77,117) | |||||
Net payments on unsecured $250.0 million credit facility | (149,500) | (17,500) | |||||
Net borrowings on secured $600.0 million credit facility | 84,000 | — | |||||
Proceeds from issuance of long-term debt, net of discount | 394,000 | — | |||||
Debt issuance costs | (6,077) | — | |||||
Vested units withheld for unitholder taxes | (348) | (436) | |||||
Acquisition of Shirley-Penns System | (265,000) | — | |||||
Net Cash Used In Financing Activities | (40,474) | (131,942) | |||||
Net Increase (Decrease) in Cash | 772 | (3,227) | |||||
Cash at Beginning of Period | 3,194 | 6,421 | |||||
Cash at End of Period | $ | 3,966 | $ | 3,194 |
CNX MIDSTREAM PARTNERS LP | |||||||
Three Months Ended | |||||||
2018 | 2017 | ||||||
Cash Flows from Operating Activities: | |||||||
Net income | $ | 41,433 | $ | 37,602 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation expense and amortization of debt issuance costs | 5,811 | 5,759 | |||||
Unit-based compensation | 636 | 277 | |||||
Other | — | 91 | |||||
Changes in assets and liabilities: | |||||||
Due to/from affiliate | (1,704) | (1,252) | |||||
Receivables — third party | 157 | (492) | |||||
Other current and non-current assets | 471 | (426) | |||||
Accounts payable and other accrued liabilities | 2,104 | (646) | |||||
Net Cash Provided by Operating Activities | 48,908 | 40,913 | |||||
Cash Flows from Investing Activities: | |||||||
Capital expenditures | (59,503) | (13,461) | |||||
Net Cash Used in Investing Activities | (59,503) | (13,461) | |||||
Cash Flows from Financing Activities: | |||||||
Contributions from general partner | — | 1 | |||||
Quarterly distributions to unitholders | (25,679) | (20,573) | |||||
Net payments on unsecured $250.0 million credit facility | — | (7,500) | |||||
Net borrowings on secured $600.0 million credit facility | 40,000 | — | |||||
Debt issuance costs | (710) | — | |||||
Vested units withheld for unitholder taxes | — | (25) | |||||
Net Cash Provided by (Used in) Financing Activities | 13,611 | (28,097) | |||||
Net Increase (Decrease) in Cash | 3,016 | (645) | |||||
Cash at Beginning of Period | 950 | 3,839 | |||||
Cash at End of Period | $ | 3,966 | $ | 3,194 |
CNX MIDSTREAM PARTNERS LP
RECONCILIATION OF NET INCOME TO EBITDA AND DISTRIBUTABLE CASH FLOW
(Dollars in thousands)
(unaudited)
Definition of Non-GAAP Financial Measures
EBITDA and Adjusted EBITDA
We define EBITDA as net income (loss) before net interest expense, depreciation and amortization, and Adjusted EBITDA as EBITDA adjusted for non-cash items which should not be included in the calculation of distributable cash flow. EBITDA and Adjusted EBITDA are used as supplemental financial measures by management and by external users of our financial statements, such as investors, industry analysts, lenders and ratings agencies, to assess:
We believe that the presentation of EBITDA and Adjusted EBITDA provides information that is useful to investors in assessing our financial condition and results of operations. The GAAP measures most directly comparable to EBITDA and Adjusted EBITDA are net income and net cash provided by operating activities. EBITDA and Adjusted EBITDA should not be considered an alternative to net income, net cash provided by operating activities or any other measure of financial performance or liquidity presented in accordance with GAAP. EBITDA and Adjusted EBITDA exclude some, but not all, items that affect net income or net cash, and these measures may vary from those of other companies. As a result, EBITDA and Adjusted EBITDA as presented herein may not be comparable to similarly titled measures of other companies.
Distributable Cash Flow
We define distributable cash flow as Adjusted EBITDA less net income attributable to noncontrolling interest, cash interest expense and maintenance capital expenditures, each net to the Partnership. Distributable cash flow does not reflect changes in working capital balances.
Distributable cash flow is used as a supplemental financial measure by management and by external users of our financial statements, such as investors, industry analysts, lenders and ratings agencies, to assess:
We believe that the presentation of distributable cash flow in this release provides information useful to investors in assessing our financial condition and results of operations. The GAAP measures most directly comparable to distributable cash flow are net income and net cash provided by operating activities. Distributable cash flow should not be considered an alternative to net income, net cash provided by operating activities or any other measure of financial performance or liquidity presented in accordance with GAAP. Distributable cash flow excludes some, but not all, items that affect net income or net cash, and these measures may vary from those of other companies. As a result, our distributable cash flow may not be comparable to similarly titled measures that other companies may use.
Distribution Coverage Ratio
We define distributable coverage ratio as distributable cash flow divided by cash distributions declared or paid.
CNX MIDSTREAM PARTNERS LP
RECONCILIATION OF NET INCOME AND NET CASH PROVIDED BY OPERATING ACTIVITIES TO ADJUSTED EBITDA AND DISTRIBUTABLE CASH FLOW
(Dollars in thousands)
(unaudited)
The following table presents a reconciliation of the non-GAAP measures Adjusted EBITDA and distributable cash flow with the most directly comparable GAAP financial measures of net income and net cash provided by operating activities.
Three Months Ended | Twelve Months Ended | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Net Income | $ | 41,433 | $ | 37,602 | $ | 138,995 | $ | 134,062 | |||||||
Depreciation expense | 5,334 | 5,717 | 21,939 | 22,692 | |||||||||||
Interest expense | 6,751 | 1,201 | 23,614 | 4,560 | |||||||||||
EBITDA | 53,518 | 44,520 | 184,548 | 161,314 | |||||||||||
Non-cash unit-based compensation expense | 636 | 277 | 2,411 | 1,176 | |||||||||||
Loss on asset sales | — | — | 2,501 | 3,914 | |||||||||||
Adjusted EBITDA | 54,154 | 44,797 | 189,460 | 166,404 | |||||||||||
Less: | |||||||||||||||
Net (loss) income attributable to noncontrolling interest | (1,118) | 10,581 | 4,953 | 19,069 | |||||||||||
Depreciation expense attributable to noncontrolling interest | 393 | 1,748 | 3,128 | 7,147 | |||||||||||
Other expenses attributable to noncontrolling interest | 1,389 | 108 | 4,329 | 394 | |||||||||||
Loss on asset sales attributable to noncontrolling interest | — | — | 2,375 | 3,718 | |||||||||||
Adjusted EBITDA Attributable to General and Limited Partner | $ | 53,490 | $ | 32,360 | $ | 174,675 | $ | 136,076 | |||||||
Less: cash interest expense, net to the Partnership | 6,040 | 1,154 | 19,221 | 4,387 | |||||||||||
Less: maintenance capital expenditures, net to the Partnership | 4,735 | 3,483 | 16,892 | 14,658 | |||||||||||
Distributable Cash Flow | $ | 42,715 | $ | 27,723 | $ | 138,562 | $ | 117,031 | |||||||
Net Cash Provided by Operating Activities | $ | 48,908 | $ | 40,913 | $ | 180,115 | $ | 155,550 | |||||||
Interest expense | 6,751 | 1,201 | 23,614 | 4,560 | |||||||||||
Loss on asset sales | — | — | 2,501 | 3,914 | |||||||||||
Other, including changes in working capital | (1,505) | 2,683 | (16,770) | 2,380 | |||||||||||
Adjusted EBITDA | 54,154 | 44,797 | 189,460 | 166,404 | |||||||||||
Less: | |||||||||||||||
Net (loss) income attributable to noncontrolling interest | (1,118) | 10,581 | 4,953 | 19,069 | |||||||||||
Depreciation expense attributable to noncontrolling interest | 393 | 1,748 | 3,128 | 7,147 | |||||||||||
Other expenses attributable to noncontrolling interest | 1,389 | 108 | 4,329 | 394 | |||||||||||
Loss on asset sales attributable to noncontrolling interest | — | — | 2,375 | 3,718 | |||||||||||
Adjusted EBITDA Attributable to General and Limited Partner | $ | 53,490 | $ | 32,360 | $ | 174,675 | $ | 136,076 | |||||||
Less: cash interest expense, net to the Partnership | 6,040 | 1,154 | 19,221 | 4,387 | |||||||||||
Less: maintenance capital expenditures, net to the Partnership | 4,735 | 3,483 | 16,892 | 14,658 | |||||||||||
Distributable Cash Flow | $ | 42,715 | $ | 27,723 | $ | 138,562 | $ | 117,031 |
The following table presents a reconciliation of the non-GAAP measures Adjusted EBITDA and distributable cash flow by quarter and for the most recently completed twelve month period with the most directly comparable GAAP financial measures, which are net income and net cash provided by operating activities.
(unaudited) | Q1 2018 | Q2 2018 | Q3 2018 | Q4 2018 | Twelve | ||||||||||||||
Net Income | $ | 33,705 | $ | 30,282 | $ | 33,575 | $ | 41,433 | $ | 138,995 | |||||||||
Depreciation expense | 5,856 | 5,443 | 5,306 | 5,334 | 21,939 | ||||||||||||||
Interest expense | 2,489 | 7,119 | 7,255 | 6,751 | 23,614 | ||||||||||||||
EBITDA | 42,050 | 42,844 | 46,136 | 53,518 | 184,548 | ||||||||||||||
Non-cash unit-based compensation expense | 579 | 690 | 506 | 636 | 2,411 | ||||||||||||||
Loss (gain) on asset sales | 2,755 | (254) | — | — | 2,501 | ||||||||||||||
Adjusted EBITDA | 45,384 | 43,280 | 46,642 | 54,154 | 189,460 | ||||||||||||||
Less: | |||||||||||||||||||
Net income (loss) attributable to noncontrolling interest | 5,858 | 277 | (64) | (1,118) | 4,953 | ||||||||||||||
Depreciation expense attributable to noncontrolling interest | 1,665 | 674 | 396 | 393 | 3,128 | ||||||||||||||
Other expenses attributable to noncontrolling interest | 436 | 1,224 | 1,280 | 1,389 | 4,329 | ||||||||||||||
Loss (gain) on asset sales attributable to noncontrolling interest | 2,617 | (242) | — | — | 2,375 | ||||||||||||||
Adjusted EBITDA Attributable to General and Limited Partner | $ | 34,808 | $ | 41,347 | $ | 45,030 | $ | 53,490 | $ | 174,675 | |||||||||
Less: cash interest expense, net to the Partnership | 2,015 | 5,573 | 5,593 | 6,040 | 19,221 | ||||||||||||||
Less: maintenance capital expenditures, net to the Partnership | 3,583 | 4,125 | 4,449 | 4,735 | 16,892 | ||||||||||||||
Distributable Cash Flow | $ | 29,210 | $ | 31,649 | $ | 34,988 | $ | 42,715 | $ | 138,562 | |||||||||
Net Cash Provided by Operating Activities | $ | 41,867 | $ | 53,674 | $ | 35,666 | $ | 48,908 | $ | 180,115 | |||||||||
Interest expense | 2,489 | 7,119 | 7,255 | 6,751 | 23,614 | ||||||||||||||
Loss (gain) on asset sales | 2,755 | (254) | — | — | 2,501 | ||||||||||||||
Other, including changes in working capital | (1,727) | (17,259) | 3,721 | (1,505) | (16,770) | ||||||||||||||
Adjusted EBITDA | 45,384 | 43,280 | 46,642 | 54,154 | 189,460 | ||||||||||||||
Less: | |||||||||||||||||||
Net income (loss) attributable to noncontrolling interest | 5,858 | 277 | (64) | (1,118) | 4,953 | ||||||||||||||
Depreciation expense attributable to noncontrolling interest | 1,665 | 674 | 396 | 393 | 3,128 | ||||||||||||||
Other expenses attributable to noncontrolling interest | 436 | 1,224 | 1,280 | 1,389 | 4,329 | ||||||||||||||
Loss (gain) on asset sales attributable to noncontrolling interest | 2,617 | (242) | — | — | 2,375 | ||||||||||||||
Adjusted EBITDA Attributable to General and Limited Partner | $ | 34,808 | $ | 41,347 | $ | 45,030 | $ | 53,490 | $ | 174,675 | |||||||||
Less: cash interest expense, net to the Partnership | 2,015 | 5,573 | 5,593 | 6,040 | 19,221 | ||||||||||||||
Less: maintenance capital expenditures, net to the Partnership | 3,583 | 4,125 | 4,449 | 4,735 | 16,892 | ||||||||||||||
Distributable Cash Flow | $ | 29,210 | $ | 31,649 | $ | 34,988 | $ | 42,715 | $ | 138,562 | |||||||||
Distributions Declared | $ | 22,699 | $ | 24,176 | $ | 25,678 | $ | 27,267 | $ | 99,820 | |||||||||
Distribution Coverage Ratio - Declared | 1.29x | 1.31x | 1.36x | 1.57x | 1.39x | ||||||||||||||
Distributable Cash Flow | $ | 29,210 | $ | 31,649 | $ | 34,988 | $ | 42,715 | $ | 138,562 | |||||||||
Distributions Paid | $ | 21,489 | $ | 22,699 | $ | 24,176 | $ | 25,678 | $ | 94,042 | |||||||||
Distribution Coverage Ratio - Paid | 1.36x | 1.39x | 1.45x | 1.66x | 1.47x |
The following table presents a reconciliation of the non-GAAP measures of the Partnership's projected adjusted EBITDA and projected distributable cash flow with the most directly comparable GAAP financial measure, which is projected net income. The following projections represent the approximate midpoint of the announced full year 2019 expected guidance ranges of adjusted EBITDA ($200-$220 million) and full year distributable cash flow ($150-$170 million) attributable to the Partnership. CNX Midstream's financial guidance is based on numerous assumptions about future events and conditions and, therefore, could vary materially from actual results. These estimates are meant to provide guidance only and are subject to revision for acquisitions or operating environment changes.
(unaudited) (in millions) | 2019 Guidance | ||
Net Income | $ | 151 | |
Depreciation expense | 26 | ||
Interest expense | 35 | ||
EBITDA | 212 | ||
Non-cash unit-based compensation expense | 3 | ||
Adjusted EBITDA | 215 | ||
Less: | |||
Net income attributable to noncontrolling interest | 3 | ||
Depreciation and other expenses attributable to noncontrolling interest | 2 | ||
Adjusted EBITDA Attributable to General and Limited Partner Ownership Interest in CNX Midstream Partners LP | $ | 210 | |
Less: cash interest expense, net to the Partnership | 33 | ||
Less: maintenance capital expenditures, net to the Partnership | 17 | ||
Distributable Cash Flow | $ | 160 |
The Partnership is unable to project net cash provided by operating activities or provide the related reconciliation of projected net cash provided by operating activities to projected distributable cash flow, the most comparable financial measure calculated in accordance with GAAP, because net cash provided by operating activities includes the impact of changes in operating assets and liabilities. Changes in operating assets and liabilities relate to the timing of the Partnership's cash receipts and disbursements that may not relate to the period in which the operating activities occurred, and the Partnership is unable to project these timing differences with any reasonable degree of accuracy.
Development Companies Jointly Owned by CNX Gathering LLC and CNX Midstream Partners LP Operating Income Summary, Selected Operating Statistics and Capital Investment (Dollars in thousands) (unaudited) | |||||||||||
Year Ended December 31, 2018 | |||||||||||
Development Company | |||||||||||
Anchor | Other | Total* | |||||||||
Income Summary | |||||||||||
Revenue | $ | 240,445 | $ | 16,223 | $ | 256,668 | |||||
Expenses | 101,059 | 16,614 | 117,673 | ||||||||
Net Income | $ | 139,386 | $ | (391) | $ | 138,995 | |||||
Operating Statistics - Gathered Volumes | |||||||||||
Dry gas (BBtu/d) | 716 | 24 | 740 | ||||||||
Wet gas (BBtu/d) | 554 | 107 | 661 | ||||||||
Other (Bcfe/d) | 66 | 7 | 73 | ||||||||
Total Gathered Volumes | 1,336 | 138 | 1,474 | ||||||||
Capital Investment | |||||||||||
Maintenance capital | $ | 17,167 | $ | 1,803 | $ | 18,970 | |||||
Expansion capital | 119,448 | 6,913 | 126,361 | ||||||||
Total Capital Investment | $ | 136,615 | $ | 8,716 | $ | 145,331 | |||||
Capital Investment Net to CNX Midstream Partners LP | |||||||||||
Maintenance capital | $ | 17,167 | $ | 90 | $ | 17,257 | |||||
Expansion capital | 119,448 | 346 | 119,794 | ||||||||
Total Capital Investment Net to CNX Midstream Partners LP | $ | 136,615 | $ | 436 | $ | 137,051 | |||||
(*) On March 16, 2018, the Partnership, through its 100% interest in the Anchor Systems, consummated the Shirley-Penns Acquisition. Although the Partnership only held a 5% controlling interest in the Shirley-Penns System prior to March 16, 2018, consolidated activity is reflected in the table above as if the Shirley-Penns Acquisition occurred on January 1, 2018. |
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SOURCE CNX Midstream Partners LP
PITTSBURGH, Jan. 16, 2019 /PRNewswire/ -- CNX Midstream Partners LP (NYSE: CNXM) ("CNXM" or the "Partnership"), today announced that the Board of Directors of its general partner, CNX Midstream GP LLC, has declared a cash distribution of $0.3603 per unit with respect to the fourth quarter of 2018. The distribution will be made on February 13, 2019 to unitholders of record as of the close of business on February 5, 2019. The distribution, which equates to an annual rate of $1.4412 per unit, represents an increase of 3.6% over the prior quarter, and an increase of 15% over the distribution paid with respect to the fourth quarter of 2017.
CNX Midstream Partners is a growth-oriented master limited partnership that owns, operates, develops and acquires gathering and other midstream energy assets to service natural gas production in the Appalachian Basin in Pennsylvania and West Virginia. Our assets include natural gas gathering pipelines and compression and dehydration facilities, as well as condensate gathering, collection, separation and stabilization facilities. More information is available at our website www.cnxmidstream.com.
This press release is intended to be a qualified notice to nominees as provided for under Treasury Regulation Section 1.1446-4(b). Brokers and nominees should treat one hundred percent (100.0%) of CNX Midstream's distributions to non-U.S. investors as being attributed to income that is effectively connected with a United States trade or business. Accordingly, CNX Midstream's distributions to non-U.S. investors are subject to federal income tax withholding at the highest applicable effective tax rate. Nominees, and not CNX Midstream, are treated as withholding agents responsible for withholding on the distributions received by them on behalf of foreign investors.
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SOURCE CNX Midstream Partners LP
PITTSBURGH, Jan. 8, 2019 /PRNewswire/ -- CNX Resources Corp. (NYSE: CNX) and CNX Midstream Partners LP (NYSE: CNXM) will issue their fourth quarter earnings releases at 6:45 a.m. Eastern Time on Thursday, January 31. These releases will be followed by conference calls and live webcasts, which will be available on the 'Investor Relations' page of the CNX Resources website, and the 'News and Events' page of the CNX Midstream website. Also, earnings call slides will be available at 6:45 a.m. Eastern Time on Thursday, January 31, on each company's websites.
Conference Call Information
CNX Resources (NYSE: CNX)
CNX Midstream Partners (NYSE: CNXM)
About CNX Resources
CNX Resources Corporation (NYSE: CNX) is one of the largest independent natural gas exploration, development and production companies, with operations centered in the major shale formations of the Appalachian basin. CNX deploys an organic growth strategy focused on responsibly developing its resource base. As of December 31, 2017, CNX had 7.6 trillion cubic feet equivalent of proved natural gas reserves. CNX is a member of the Standard & Poor's Midcap 400 Index. Additional information may be found at www.cnx.com.
About CNX Midstream Partners
CNX Midstream Partners LP (NYSE: CNXM) is a master limited partnership that owns, operates, develops and acquires gathering and other midstream energy assets to service natural gas production in the Appalachian Basin in Pennsylvania and West Virginia. CNXM's assets include natural gas gathering pipelines and compression and dehydration facilities, as well as condensate gathering, collection, separation and stabilization facilities. More information is available on CNXM's website www.cnxmidstream.com.
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SOURCE CNX Resources Corporation; CNX Midstream Partners LP
DALLAS, Dec. 21, 2018 /PRNewswire/ -- Cushing® Asset Management, LP, and Swank Capital, LLC, announce today the upcoming rebalancing of The Cushing® Energy Index (the "Index") as part of normal index operations. After the markets close on December 31, 2018, the constituents of the Index will be rebalanced, and the following changes will become effective on January 2, 2019:
Constituents added:
CNX Midstream Partners LP (NYSE: CNXM)
Crestwood Equity Partners LP (NYSE: CEQP)
Shell Midstream Partners, L.P. (NYSE: SHLX)
Cimarex Energy Co. (NYSE: XEC)
Constituents removed:
AmeriGas Partners, L.P. (NYSE: APU)
Dominion Energy Midstream Partners, LP (NYSE: DM)
EnLink Midstream Partners, LP (NYSE: ENLK)
ABOUT THE CUSHING® ENERGY INDEX
The Cushing® Energy Index tracks the performance of widely held companies engaged in exploration and production, refining and marketing, and storage and transportation of oil, natural gas, coal and consumable fuels, as well as oil and natural gas equipment and services companies. Constituents of the Index are weighted based on current yield. The Index price level is calculated by S&P Dow Jones Indices and reported on a real-time basis under the Bloomberg ticker "CENI".
ABOUT CUSHING® ASSET MANAGEMENT AND SWANK CAPITAL
Cushing® Asset Management, LP ("Cushing"), a subsidiary of Swank Capital, LLC, is an SEC-registered investment adviser headquartered in Dallas, Texas. Cushing serves as investment adviser to affiliated funds and managed accounts which invest primarily in securities of midstream energy infrastructure companies and other natural resource companies.
Cushing is also dedicated to serving the needs of investors by sponsoring a variety of benchmarks, including The Cushing® 30 MLP Index (Bloomberg Ticker: MLPX), The Cushing® 30 MLP Market Cap Index (Bloomberg Ticker: CMCI), The Cushing® MLP High Income Index (Bloomberg Ticker: MLPY), The Cushing® Energy Supply Chain Index (Bloomberg Ticker: CSCI), The Cushing® Transportation Index (Bloomberg Ticker: CTRI) and The Cushing® Utility Index (Bloomberg Ticker: CUTI). For more information, please visit http://www.cushingasset.com/indices.
Contact:
Judson Redmond
214-692-6334
www.cushingasset.com
Source: Cushing® Asset Management, LP, and Swank Capital, LLC
The Cushing® Energy Index (the "Index") is the exclusive property of Swank Capital, LLC, and Cushing Asset Management, LP, which have contracted with S&P Opco, LLC (a subsidiary of S&P Dow Jones Indices LLC) ("S&P Dow Jones Indices") to calculate and maintain the Index. S&P® is a registered trademark of Standard & Poor's Financial Services LLC ("SPFS"); Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC ("Dow Jones"); and, these trademarks have been licensed to S&P Dow Jones Indices. "Calculated by S&P Dow Jones Indices" and its related stylized mark(s) have been licensed for use by Cushing Asset Management, LP. Neither S&P Dow Jones Indices, SPFS, Dow Jones nor any of their affiliates sponsor and promote the Index and none shall be liable for any errors or omissions in calculating the Index.
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SOURCE Cushing Asset Management, LP; Swank Capital, LLC
DALLAS, Dec. 21, 2018 /PRNewswire/ -- Swank Capital, LLC, and Cushing® Asset Management, LP, announce today the upcoming rebalancing of The Cushing® Energy Supply Chain Index (the "Index") as part of normal index operations. After the markets close on December 31, 2018, the constituents of the Index will be rebalanced, and the following changes will become effective on January 2, 2019:
Constituents added:
CNX Midstream Partners LP (NYSE: CNXM)
Crestwood Equity Partners LP (NYSE: CEQP)
Shell Midstream Partners, L.P. (NYSE: SHLX)
FMC Corporation (NYSE: FMC)
Noble Energy, Inc. (NYSE: NBL)
Hess Corporation (NYSE: HES)
Constituents removed:
AmeriGas Partners, L.P. (NYSE: APU)
Dominion Energy Midstream Partners, LP (NYSE: DM)
EnLink Midstream Partners, LP (NYSE: ENLK)
ConocoPhillips (NYSE: COP)
Ecolab Inc. (NYSE: ECL)
ABOUT THE CUSHING® ENERGY SUPPLY CHAIN INDEX
The Cushing® Energy Supply Chain Index tracks the performance of widely held companies engaged in exploration and production, refining and marketing, or storage and transportation of oil, natural gas, coal and consumable fuels; oil and natural gas equipment and services companies; and companies that extract and/or manufacture materials. Constituents of the Index are weighted based on current yield. The Index price level is calculated by S&P Dow Jones Indices and reported on a real-time basis under the Bloomberg ticker "CSCI".
ABOUT CUSHING® ASSET MANAGEMENT AND SWANK CAPITAL
Cushing® Asset Management, LP ("Cushing"), a subsidiary of Swank Capital, LLC, is an SEC-registered investment adviser headquartered in Dallas, Texas. Cushing serves as investment adviser to affiliated funds and managed accounts which invest primarily in securities of midstream energy infrastructure companies and other natural resource companies.
Cushing is also dedicated to serving the needs of investors by sponsoring a variety of benchmarks, including The Cushing® 30 MLP Index (Bloomberg Ticker: MLPX), The Cushing® 30 MLP Market Cap Index (Bloomberg Ticker: CMCI), The Cushing® MLP High Income Index (Bloomberg Ticker: MLPY), The Cushing® Energy Index (Bloomberg Ticker: CENI), The Cushing® Transportation Index (Bloomberg Ticker: CTRI) and The Cushing® Utility Index (Bloomberg Ticker: CUTI). For more information, please visit http://www.cushingasset.com/indices.
Contact:
Judson Redmond
214-692-6334
www.cushingasset.com
The Cushing® Energy Supply Chain Index (the "Index") is the exclusive property of Swank Capital, LLC, and Cushing Asset Management, LP, which have contracted with S&P Opco, LLC (a subsidiary of S&P Dow Jones Indices LLC) ("S&P Dow Jones Indices") to calculate and maintain the Index. S&P® is a registered trademark of Standard & Poor's Financial Services LLC ("SPFS"); Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC ("Dow Jones"); and, these trademarks have been licensed to S&P Dow Jones Indices. "Calculated by S&P Dow Jones Indices" and its related stylized mark(s) have been licensed for use by Cushing Asset Management, LP. Neither S&P Dow Jones Indices, SPFS, Dow Jones nor any of their affiliates sponsor and promote the Index and none shall be liable for any errors or omissions in calculating the Index.
CUSH-CSCI
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SOURCE Cushing Asset Management, LP; Swank Capital, LLC
DALLAS, Dec. 21, 2018 /PRNewswire/ -- Swank Capital, LLC, and Cushing® Asset Management, LP, announce today the upcoming rebalancing of The Cushing® Utility Index (the "Index") as part of normal index operations. After the markets close on December 31, 2018, the constituents of the Index will be rebalanced, and the following changes will become effective on January 2, 2019:
Constituents added:
CNX Midstream Partners LP (NYSE: CNXM)
Crestwood Equity Partners LP (NYSE: CEQP)
Shell Midstream Partners, L.P. (NYSE: SHLX)
Constituents removed:
AmeriGas Partners, L.P. (NYSE: APU)
Dominion Energy Midstream Partners, LP (NYSE: DM)
EnLink Midstream Partners, LP (NYSE: ENLK)
SCANA Corporation (NYSE: SCG)
ABOUT THE CUSHING® UTILITY INDEX
The Cushing® Utility Index tracks the performance of widely held companies engaged in electric, gas and water utility services as well as master limited partnerships (MLPs) engaged in storage and transportation of oil, natural gas, coal and consumable fuels. Constituents of the Index are weighted based on current yield. The Index price level is calculated by S&P Dow Jones Indices and reported on a real-time basis under the Bloomberg ticker "CUTI".
ABOUT CUSHING® ASSET MANAGEMENT AND SWANK CAPITAL
Cushing® Asset Management, LP ("Cushing"), a subsidiary of Swank Capital, LLC, is an SEC-registered investment adviser headquartered in Dallas, Texas. Cushing serves as investment adviser to affiliated funds and managed accounts which invest primarily in securities of midstream energy infrastructure companies and other natural resource companies.
Cushing is also dedicated to serving the needs of investors by sponsoring a variety of benchmarks, including The Cushing® 30 MLP Index (Bloomberg Ticker: MLPX), The Cushing® 30 MLP Market Cap Index (Bloomberg Ticker: CMCI), The Cushing® MLP High Income Index (Bloomberg Ticker: MLPY), The Cushing® Energy Index (Bloomberg Ticker: CENI), The Cushing® Energy Supply Chain Index (Bloomberg Ticker: CSCI) and The Cushing® Transportation Index (Bloomberg Ticker: CTRI). For more information, please visit http://www.cushingasset.com/indices.
Contact:
Judson Redmond
214-692-6334
www.cushingasset.com
The Cushing® Utility Index (the "Index") is the exclusive property of Swank Capital, LLC, and Cushing Asset Management, LP, which have contracted with S&P Opco, LLC (a subsidiary of S&P Dow Jones Indices LLC) ("S&P Dow Jones Indices") to calculate and maintain the Index. S&P® is a registered trademark of Standard & Poor's Financial Services LLC ("SPFS"); Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC ("Dow Jones"); and, these trademarks have been licensed to S&P Dow Jones Indices. "Calculated by S&P Dow Jones Indices" and its related stylized mark(s) have been licensed for use by Cushing Asset Management, LP. Neither S&P Dow Jones Indices, SPFS, Dow Jones nor any of their affiliates sponsor and promote the Index and none shall be liable for any errors or omissions in calculating the Index.
CUSH-CUTI
View original content:http://www.prnewswire.com/news-releases/cushing-asset-management-and-swank-capital-announce-rebalancing-of-the-cushing-utility-index-300770022.html
SOURCE Cushing Asset Management, LP; Swank Capital, LLC
DALLAS, Dec. 14, 2018 /PRNewswire/ -- Alerian announced the results of the December quarterly review for the Alerian Index Series. All changes will be implemented as of the close of business on Friday, December 21, 2018.
AmeriGas Partners (NYSE: APU), Alliance Resource Partners (NASDAQ: ARLP), GasLog Partners (NYSE: GLOP), Golar LNG Partners (NASDAQ: GMLP), Hi-Crush Partners (NYSE: HCLP), Suburban Propane Partners (NYSE: SPH), Sunoco (NYSE: SUN), Teekay LNG Partners (NYSE: TGP), USA Compression Partners (NYSE: USAC), and Viper Energy Partners (NASDAQ: VNOM) will be removed.
There are no constituent changes to the Alerian MLP Infrastructure Index (AMZI) or the Alerian Natural Gas MLP Index (ANGI).
In addition, each index will be rebalanced in accordance with its existing methodology. Constituent additions to and deletions from an index do not reflect an opinion by Alerian on the investment merits of the respective securities.
About Alerian
Alerian equips investors to make informed decisions about energy infrastructure and Master Limited Partnerships (MLPs). Its benchmarks are widely used by industry executives, investment professionals, research analysts, and national media to analyze relative performance. As of November 30, 2018, over $13 billion is directly tied to the Alerian Index Series through exchange-traded funds and notes, separately managed accounts, and structured products. Visit alerian.com to learn more.
View original content:http://www.prnewswire.com/news-releases/alerian-index-series-december-2018-index-review-300765593.html
SOURCE Alerian
PITTSBURGH, Oct. 18, 2018 /PRNewswire/ -- CNX Midstream Partners LP (NYSE: CNXM) ("CNXM" or the "Partnership"), today announced that the Board of Directors of its general partner, CNX Midstream GP LLC, has declared a cash distribution of $0.3479 per unit with respect to the third quarter of 2018. The distribution will be made on November 13, 2018 to unitholders of record as of the close of business on November 5, 2018. The distribution, which equates to an annual rate of $1.3916 per unit, represents an increase of 3.5% over the prior quarter, and an increase of 15% over the distribution paid with respect to the third quarter of 2017.
CNX Midstream Partners is a growth-oriented master limited partnership that owns, operates, develops and acquires gathering and other midstream energy assets to service natural gas production in the Appalachian Basin in Pennsylvania and West Virginia. Our assets include natural gas gathering pipelines and compression and dehydration facilities, as well as condensate gathering, collection, separation and stabilization facilities. More information is available at our website www.cnxmidstream.com.
This press release is intended to be a qualified notice to nominees as provided for under Treasury Regulation Section 1.1446-4(b). Brokers and nominees should treat one hundred percent (100.0%) of CNX Midstream's distributions to non-U.S. investors as being attributed to income that is effectively connected with a United States trade or business. Accordingly, CNX Midstream's distributions to non-U.S. investors are subject to federal income tax withholding at the highest applicable effective tax rate. Nominees, and not CNX Midstream, are treated as withholding agents responsible for withholding on the distributions received by them on behalf of foreign investors.
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SOURCE CNX Midstream Partners LP
PITTSBURGH, Oct. 8, 2018 /PRNewswire/ -- CNX Resources Corp. (NYSE: CNX) and CNX Midstream Partners LP (NYSE: CNXM) will issue their third quarter earnings releases at 6:45 a.m. Eastern Time on Tuesday, October 30. These releases will be followed by conference calls and live webcasts, which will be available on the 'Investor Relations' page of the CNX Resources website, and the 'News and Events' page of the CNX Midstream website. Also, earnings call slides will be available at 6:45 a.m. Eastern Time on Tuesday, October 30, on each companies' websites.
Conference Call Information
CNX Resources (NYSE: CNX)
CNX Midstream Partners (NYSE: CNXM)
About CNX Resources
CNX Resources Corporation (NYSE: CNX) is one of the largest independent natural gas exploration, development and production companies, with operations centered in the major shale formations of the Appalachian basin. CNX deploys an organic growth strategy focused on responsibly developing its resource base. As of December 31, 2017, CNX had 7.6 trillion cubic feet equivalent of proved natural gas reserves. CNX is a member of the Standard & Poor's Midcap 400 Index. Additional information may be found at www.cnx.com.
About CNX Midstream Partners
CNX Midstream Partners LP (NYSE: CNXM) is a master limited partnership that owns, operates, develops and acquires gathering and other midstream energy assets to service natural gas production in the Appalachian Basin in Pennsylvania and West Virginia. CNXM's assets include natural gas gathering pipelines and compression and dehydration facilities, as well as condensate gathering, collection, separation and stabilization facilities. More information is available on CNXM's website www.cnxmidstream.com.
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SOURCE CNX Resources Corporation; CNX Midstream Partners LP
PITTSBURGH, Aug. 2, 2018 /PRNewswire/ -- CNX Resources Corporation (NYSE: CNX) ("CNX" or the company) reports second quarter results. Throughout this release, CNX distinguishes between "attributable to CNX shareholders" and "consolidated" results.
Attributable to CNX shareholders: Excludes from consolidated results interests in CNX Midstream Partners LP (NYSE: CNXM) ("CNXM") not held by CNX, which was approximately 63.91% during the second quarter. The following results are reported on an attributable to CNX shareholders basis:
CNX reported net income attributable to CNX shareholders of $42 million, or earnings of $0.19 per diluted share, compared to net income attributable to CNX shareholders of $170 million, or earnings of $0.73 per diluted share, in the second quarter of 2017. Earnings before deducting net interest expense (interest expense less interest income), income taxes, depreciation, depletion and amortization, and exploration (EBITDAX) attributable to CNX shareholders1 was $165 million for the 2018 second quarter, compared to $326 million in the year-earlier quarter.
The company had adjusted net income attributable to CNX shareholders1 in the 2018 second quarter of $70 million, or $0.33 per diluted share, compared to $19 million, or $0.08 in the year-earlier quarter, after adjusting for certain items, which are highlighted in the EBITDAX reconciliation table. Adjusted EBITDAX attributable to CNX shareholders1 was $204 million for the 2018 second quarter, compared to $87 million in the year-earlier quarter.
Consolidated: Includes 100% of the results of CNX, CNX Gathering LLC, and CNXM on a consolidated basis. The following results are reported on a consolidated basis:
The company reported net income of $61 million for the 2018 second quarter, compared to net income of $170 million in the second quarter of 2017. EBITDAX from continuing operations1 was $192 million for the 2018 second quarter, compared to $326 million in the year-earlier quarter.
The company had adjusted net income in the 2018 second quarter of $90 million, or $0.42 per diluted share, compared to $19 million, or $0.08 in the year-earlier quarter, after adjusting for certain items, which are highlighted in the EBITDAX reconciliation table. Adjusted EBITDAX from continuing operations1 was $231 million for the 2018 second quarter, compared to $87 million in the year-earlier quarter.
During the second quarter of 2018, CNX sold 122.6 Bcfe of natural gas, or an increase of 33% from the 92.2 Bcfe sold in the year-earlier quarter, driven primarily from a substantial increase in Utica Shale volumes. Total quarterly production costs decreased to $2.00 per Mcfe, compared to the year-earlier quarter of $2.20 per Mcfe, driven primarily by reductions in transportation, gathering, and compression costs, and depreciation, depletion and amortization (DD&A). On a consolidated basis, capital expenditures were $264 million, compared to $146 million spent in the year-earlier quarter.
"With our continued focus on capital allocation, we had another successful quarter highlighted by the repurchase of an additional 5.3 million shares; redeeming $300 million of the outstanding 8.0% senior notes due in 2023; entering into an agreement to sell approximately $400 million in additional assets, and closing on the previously announced Asset Exchange Agreement with HG Energy," commented Nicholas J. DeIuliis, president and CEO. "Also, the dry Utica delineation program continued to see success with strong ongoing performance of the Richhill 11E well in Southwest Pennsylvania, which is currently flowing above our guided type curve, along with exciting initial drilling cost results of our Shaw 1H well currently underway in Westmoreland County, Pennsylvania. Our internal rate of returns on our core drilling and completion capital program continue to drive our NAV per share."
On May 2, 2018, CNX closed on an Asset Exchange Agreement with HG Energy and received approximately $7 million in cash proceeds and certain undeveloped Marcellus and Utica acreage in its Southwest and Central Pennsylvania operating areas. In connection with the transaction, CNX also agreed to certain transactions with CNXM, including the amendment of the existing gas gathering agreement between CNX and CNXM to include an incremental well commitment of forty wells.
As previously announced, during the quarter, CNX entered into an agreement with Ascent Resources-Utica, LLC to sell substantially all of its Ohio Utica joint venture ("JV") assets for net cash proceeds of approximately $400 million, of which CNX received a deposit from the buyer of approximately $40 million in the second quarter. CNX did not have any additional activity associated with the divested assets in its future development plans. The company continues to evaluate the use of cash proceeds across further reducing debt and share count, investing in drilling and completion activities, and acquiring bolt-on acreage, as it becomes available. CNX will retain all related production and EBITDAX generated prior to closing, which the company expects to be in the third quarter of 2018, subject to customary closing conditions and adjustments.
Also, since the inception of the current repurchase program in October 2017, CNX has repurchased approximately 17.9 million shares, which includes 5.3 million shares repurchased within the second quarter, for $278 million. As of July 17, 2018, CNX's shares outstanding were 213,059,169. The company has approximately $172 million remaining on its $450 million share repurchase program. On July 30, 2018, the Board of Directors extended the share repurchase program to now end on December 31, 2018.
1The terms "adjusted net income attributable to CNX shareholders," "adjusted net income on consolidated basis," "EBITDAX attributable to CNX shareholder," " EBITDAX from continuing operations," "adjusted EBITDAX attributable to CNX shareholders," and " adjusted EBITDAX from continuing operations" are non-GAAP financial measures, which are defined and reconciled to the GAAP net income below, under the caption "Non-GAAP Financial Measures."
Second Quarter Operations Summary:
In the second quarter of 2018, CNX continued to operate three horizontal rigs and deployed a fourth in late June. The horizontal rigs drilled 16 wells including three dry Utica Shale wells in Monroe County, Ohio; four Marcellus Shale wells in Greene County, Pennsylvania; six Marcellus Shale wells in Washington County, Pennsylvania; and three Marcellus Shale wells in Tyler County, West Virginia. Drilling efficiencies continued to improve during the quarter, and the company successfully drilled a Marcellus Shale well in Greene County, Pennsylvania, in 10.8 days from spud to rig release.
During the quarter, the company utilized three frac crews to complete 18 wells including eight Marcellus Shale wells in Greene County, Pennsylvania; five Marcellus Shale wells in Washington County, Pennsylvania; and five Utica Shale wells in Harrison County, Ohio. CNX set a company record of completing 78,877 feet, or 394 stages, in the month of May. During the quarter, the company signed a three-year engagement with Evolution Well Services for an all-electric, natural gas-powered frac fleet. The company expects this new technology to provide longer-term visibility for predictive completion costs, while increasing frac efficiency and reducing fuel costs by approximately 30% and 80%, respectively.
CNX turned-in-line three Marcellus Shale wells in Washington County, Pennsylvania. The company expects to turn-in-line (TIL) approximately 30 wells in the third quarter, of which the company expects approximately 10 to get turned-in-line in late September, resulting in production peaking in the fourth quarter of 2018.
Marcellus Shale volumes, including liquids, in the 2018 second quarter were 64.7 Bcfe, approximately 14% higher than the 56.9 Bcfe produced in the 2017 second quarter. Marcellus total production costs were $2.17 per Mcfe in the just-ended quarter, which is a $0.12 per Mcfe increase from the second quarter of 2017 of $2.05 per Mcfe, driven by increases to water disposal costs and processing costs associated with the Shirley-Pennsboro wells that were turned-in-line during the third and fourth quarters of 2017. During the second quarter of 2018 water disposal costs improved, compared to the previous quarter, as the company reused more produced water for fracs, avoiding the need to send that water to disposal.
Utica Shale volumes, including liquids, in the 2018 second quarter were 42.6 Bcfe, approximately 209% higher than the 13.8 Bcfe in the year-earlier quarter, driven primarily from Monroe County, Ohio, volumes. The ramp in Monroe County, Ohio, volumes also benefited overall Utica Shale total production costs, which were $1.57 per Mcfe in the just-ended quarter, or a $0.47 per Mcfe improvement from the second quarter of 2017 total production costs of $2.04 per Mcfe.
CNX's natural gas production in the quarter came from the following categories:
Quarter |
Quarter |
Quarter |
|||||||||||||
Ended |
Ended |
Ended |
|||||||||||||
June 30, 2018 |
June 30, 2017 |
% Increase/ |
March 31, 2018 |
% Increase/ | |||||||||||
GAS |
|||||||||||||||
Marcellus Sales Volumes (Bcf) |
58.0 |
51.1 |
13.5 |
% |
56.1 |
3.4 |
% | ||||||||
Utica Sales Volumes (Bcf) |
40.4 |
10.7 |
277.6 |
% |
41.4 |
(2.4) |
% | ||||||||
CBM Sales Volumes (Bcf) |
14.8 |
16.5 |
(10.3) |
% |
15.9 |
(6.9) |
% | ||||||||
Other Sales Volumes (Bcf)1 |
0.4 |
4.9 |
(91.8) |
% |
4.1 |
(90.2) |
% | ||||||||
LIQUIDS2 |
|||||||||||||||
NGLs Sales Volumes (Bcfe) |
8.4 |
8.1 |
3.7 |
% |
11.1 |
(24.3) |
% | ||||||||
Oil Sales Volumes (Bcfe) |
0.1 |
0.2 |
(50.0) |
% |
0.1 |
— |
% | ||||||||
Condensate Sales Volumes (Bcfe) |
0.5 |
0.7 |
(28.6) |
% |
0.8 |
(37.5) |
% | ||||||||
TOTAL (Bcfe) |
122.6 |
92.2 |
33.0 |
% |
129.5 |
(5.3) |
% | ||||||||
Average Daily Production (MMcfe) |
1,346.8 |
1,013.4 |
1,439.0 |
||||||||||||
1Other Sales Volumes: primarily related to shallow oil and gas production that was sold at the end of the first quarter of 2018. | |||||||||||||||
2NGLs, Oil and Condensate are converted to Mcfe at the rate of one barrel equals six Mcf based upon the approximate relative energy content of oil and natural gas, which is not indicative of the relationship of oil, NGLs, condensate, and natural gas prices. |
PRICE AND COST DATA PER MCFE — Quarter-to-Quarter Comparison: | ||||||||||||
Quarter |
Quarter |
Quarter | ||||||||||
Ended |
Ended |
Ended | ||||||||||
(Per Mcfe) |
June 30, |
June 30, |
March 31, | |||||||||
Average Sales Price - Gas |
$ |
2.55 |
$ |
2.81 |
$ |
2.96 |
||||||
Average Gain (Loss) on Commodity Derivative Instruments - Cash Settlement- Gas |
$ |
0.15 |
$ |
(0.39) |
$ |
(0.14) |
||||||
Average Sales Price - Oil* |
$ |
9.72 |
$ |
8.03 |
$ |
9.41 |
||||||
Average Sales Price - NGLs* |
$ |
4.73 |
$ |
2.66 |
$ |
4.58 |
||||||
Average Sales Price - Condensate* |
$ |
9.47 |
$ |
5.69 |
$ |
8.22 |
||||||
Average Sales Price - Total Company |
$ |
2.87 |
$ |
2.47 |
$ |
3.00 |
||||||
Lease Operating Expense |
$ |
0.21 |
$ |
0.23 |
$ |
0.28 |
||||||
Production, Ad Valorem, and Other Fees |
0.06 |
0.05 |
0.07 |
|||||||||
Transportation, Gathering and Compression |
0.82 |
0.94 |
0.86 |
|||||||||
Depreciation, Depletion and Amortization (DD&A) |
0.91 |
0.98 |
0.89 |
|||||||||
Total Production Costs |
$ |
2.00 |
$ |
2.20 |
$ |
2.10 |
||||||
Margin |
$ |
0.87 |
$ |
0.27 |
$ |
0.90 |
||||||
Addback: DD&A |
$ |
0.91 |
$ |
0.98 |
$ |
0.89 |
||||||
Margin, before DD&A |
$ |
1.78 |
$ |
1.25 |
$ |
1.79 |
||||||
*NGLs, Oil, and Condensate are converted to Mcfe at the rate of one barrel equals six Mcf based upon the approximate relative energy content of oil and natural gas, which is not indicative of the relationship of oil, NGLs, condensate, and natural gas prices. | ||||||||||||
Note: "Total Production Costs" excludes Selling, General, and Administration and Other Operating Expenses. |
The average sales price of $2.87 per Mcfe, when combined with unit costs of $2.00 per Mcfe, resulted in a margin of $0.87 per Mcfe. This was an increase when compared to the year-earlier quarter, due to improvements in average sales price and total production costs.
Marketing Update:
For the second quarter of 2018, CNX's average sales price for natural gas, natural gas liquids (NGLs), oil, and condensate was $2.87 per Mcfe. CNX's average price for natural gas was $2.55 per Mcf for the quarter and, including cash settlements from hedging, was $2.70 per Mcf. The average realized price for all liquids for the second quarter of 2018 was $30.28 per barrel.
CNX's weighted average differential from NYMEX in the second quarter of 2018 was negative $0.40 per MMBtu. CNX's average sales price for natural gas before hedging decreased 14% to $2.55 per Mcf compared with the average sales price of $2.96 per Mcf in the first quarter of 2018. This decrease results primarily from a lower Henry Hub price coupled with a wider differential. Including the impact of cash settlements from hedging, CNX's average sales price for natural gas was $0.12 per Mcf, or 4%, lower than the first quarter of 2018 and $0.28 per Mcf, or 12%, higher than last year's second quarter.
Guidance Update:
CNX reaffirms 2018 production guidance of 490-515 Bcfe. Due to the increase in gas prices, CNX expects 2018 EBITDAX attributable to CNX shareholders to improve to $835-$860 million, or $945-$970 million on a consolidated basis.
The company expects 2018 net capital expenditures, which is the capital that CNX is responsible for to include midstream capital outside of CNXM, to increase to approximately $900-$950 million, compared to the previous guidance of $790-$915 million. More than half of the total capital increase is driven by well remediations and increased flowback volumes, which resulted in higher percentages of produced water getting trucked to the company's completions operations, versus lower cost fresh water that is piped. The remainder of the capital increase was due to inflation and steel tariffs and a prepayment related to the three-year agreement with Evolution Well Services, which is expected to drive future fuel savings and cycle time reductions.
Note: CNX is unable to provide a reconciliation of projected 2018 EBITDAX to projected net income, the most comparable financial measure calculated in accordance with GAAP, due to the unknown effect, timing, and potential significance of certain income statement items.
Total hedged natural gas production in the 2018 third quarter is 93.1 Bcf. The annual gas hedge position is shown in the table below:
2018 |
2019 | ||||
Volumes Hedged (Bcf), as of 7/11/18 |
370.9* |
333.7 |
*Includes actual settlements of 206.8 Bcf. |
CNX's hedged gas volumes include a combination of NYMEX financial hedges and physical fixed price sales. In addition, to protect the NYMEX hedge volumes from basis exposure, CNX enters into basis-only financial hedges and physical sales with fixed basis at certain sales points. CNX's gas hedge position through 2021 is shown in the table below:
Q3 2018 |
2018 |
2019 |
2020 |
2021 | ||||||||||||||||
NYMEX Only Hedges |
||||||||||||||||||||
Volumes (Bcf) |
88.8 |
353.8 |
320.9 |
223.9 |
172.8 |
|||||||||||||||
Average Prices ($/Mcf) |
$ |
3.19 |
$ |
3.18 |
$ |
3.05 |
$ |
3.09 |
$ |
3.02 |
||||||||||
Physical Fixed Price Sales |
||||||||||||||||||||
Volumes (Bcf) |
4.3 |
17.1 |
12.8 |
11.0 |
21.3 |
|||||||||||||||
Average Prices ($/Mcf) |
$ |
2.65 |
$ |
2.64 |
$ |
2.51 |
$ |
2.44 |
$ |
2.47 |
||||||||||
Total Volumes Hedged (Bcf)1 |
93.1 |
370.9 |
333.7 |
234.9 |
194.1 |
|||||||||||||||
NYMEX + Basis (fully-covered volumes)2 |
||||||||||||||||||||
Volumes (Bcf) |
93.1 |
370.9 |
326.2 |
224.2 |
194.1 |
|||||||||||||||
Average Prices ($/Mcf) |
$ |
2.80 |
$ |
2.79 |
$ |
2.71 |
$ |
2.71 |
$ |
2.55 |
||||||||||
NYMEX Only Hedges Exposed to Basis |
||||||||||||||||||||
Volumes (Bcf) |
— |
— |
7.5 |
10.7 |
— |
|||||||||||||||
Average Prices ($/Mcf) |
$ |
— |
$ |
— |
$ |
3.05 |
$ |
3.09 |
$ |
— |
||||||||||
Total Volumes Hedged (Bcf)1 |
93.1 |
370.9 |
333.7 |
234.9 |
194.1 |
|||||||||||||||
1Q3 2018, 2018, and 2021 exclude 2.3 Bcf, 14.1 Bcf, and 3.9 Bcf, respectively of physical basis sales not matched with NYMEX hedges. | ||||||||||||||||||||
2Includes physical sales with fixed basis in Q3 2018, 2018, 2019, 2020, and 2021 of 23.8 Bcf, 91.7 Bcf, 109.9 Bcf, 67.2 Bcf, and 67.5 Bcf, respectively. |
During the second quarter of 2018, CNX added additional NYMEX natural gas hedges of 15.6 Bcf for 2023. To help mitigate basis exposure on NYMEX hedges, in the second quarter CNX added 14.7 Bcf, 13.6 Bcf, 44.7 Bcf, and 17.3 Bcf of basis hedges for 2019, 2020, 2022, and 2023, respectively.
Finance:
At June 30, 2018, the company's credit facility had $422 million of borrowings outstanding and $251 million of letters of credit outstanding, leaving $1,427 million of unused capacity. In addition, CNX holds 21.7 million CNXM limited partnership units with a current market value of approximately $416 million as of July 17, 2018.
During the second quarter, CNX purchased $300 million of its outstanding 8.0% senior notes due in April 2023. As part of this transaction, a loss of $23 million was included in Loss on Debt Extinguishment on the Consolidated Statements of Income. The company expects the transaction to result in approximately $14 million in annual interest savings.
About CNX
CNX Resources Corporation (NYSE: CNX) is one of the largest independent natural gas exploration, development and production companies, with operations centered in the major shale formations of the Appalachian basin. The company deploys an organic growth strategy focused on responsibly developing its resource base. As of December 31, 2017, CNX had 7.6 trillion cubic feet equivalent of proved natural gas reserves. The company is a member of the Standard & Poor's Midcap 400 Index. Additional information may be found at www.cnx.com.
Non-GAAP Financial Measures
Definitions: EBIT is defined as earnings before deducting net interest expense (interest expense less interest income) and income taxes. EBITDAX is defined as earnings before deducting net interest expense (interest expense less interest income), income taxes, depreciation, depletion and amortization, and exploration. Adjusted EBITDAX is defined as EBITDAX after adjusting for the discrete items listed below. Although EBIT, EBITDAX, and Adjusted EBITDAX are not measures of performance calculated in accordance with generally accepted accounting principles, management believes that they are useful to an investor in evaluating CNX Resources because they are widely used to evaluate a company's operating performance. We exclude stock-based compensation from Adjusted EBITDAX because we do not believe it accurately reflects the actual operating expense incurred during the relevant period and may vary widely from period to period irrespective of operating results. Investors should not view these metrics as a substitute for measures of performance that are calculated in accordance with generally accepted accounting principles. In addition, because all companies do not calculate EBIT, EBITDAX, or Adjusted EBITDAX identically, the presentation here may not be comparable to similarly titled measures of other companies.
Reconciliation of EBIT, EBITDAX, Adjusted EBITDAX and Adjusted Net Income to financial net income attributable to CNX Resources shareholders is as follows (dollars in 000):
Three Months Ended | ||||||||||||||||||||
June 30, | ||||||||||||||||||||
2018 |
2018 |
2018 |
2018 |
2017 | ||||||||||||||||
Dollars in thousands |
E&P |
Midstream |
Unallocated1 |
Total Company |
Total Company | |||||||||||||||
Net Income (Loss) |
$ |
42,124 |
$ |
27,780 |
$ |
(8,510) |
$ |
61,394 |
$ |
169,510 |
||||||||||
Less: Income from Discontinued Operations |
— |
— |
— |
— |
(47,703) |
|||||||||||||||
Add: Interest Expense |
31,320 |
7,118 |
— |
38,438 |
40,683 |
|||||||||||||||
Less: Interest Income |
— |
— |
— |
— |
(6,077) |
|||||||||||||||
Add: Income Taxes (Benefit) |
— |
— |
(31,102) |
(31,102) |
57,958 |
|||||||||||||||
Earnings Before Interest & Taxes (EBIT) |
73,444 |
34,898 |
(39,612) |
68,730 |
214,371 |
|||||||||||||||
Add: Depreciation, Depletion & Amortization |
111,125 |
7,962 |
— |
119,087 |
91,640 |
|||||||||||||||
Add: Exploration Expense |
$ |
3,699 |
$ |
— |
$ |
— |
$ |
3,699 |
$ |
19,717 |
||||||||||
Earnings Before Interest, Taxes, DD&A and Exploration (EBITDAX) from Continuing Operations |
$ |
188,268 |
$ |
42,860 |
$ |
(39,612) |
$ |
191,516 |
$ |
325,728 |
||||||||||
Adjustments: |
||||||||||||||||||||
Unrealized Gain on Commodity Derivative Instruments |
(8,975) |
— |
— |
(8,975) |
(116,073) |
|||||||||||||||
Gain on Certain Asset Sales |
— |
— |
— |
— |
(126,707) |
|||||||||||||||
Severance Expense |
257 |
— |
— |
257 |
73 |
|||||||||||||||
Loss on Debt Extinguishment |
— |
— |
23,413 |
23,413 |
36 |
|||||||||||||||
Stock-Based Compensation |
5,018 |
691 |
— |
5,709 |
4,163 |
|||||||||||||||
Impairment of Other Intangible Assets |
— |
— |
18,650 |
18,650 |
— |
|||||||||||||||
Total Pre-tax Adjustments |
(3,700) |
691 |
42,063 |
39,054 |
(238,508) |
|||||||||||||||
Adjusted EBITDAX from Continuing Operations |
$ |
184,568 |
$ |
43,551 |
$ |
2,451 |
$ |
230,570 |
$ |
87,220 |
||||||||||
Less: Adjusted EBITDA Attributable to Noncontrolling Interest2 |
— |
26,711 |
— |
26,711 |
— |
|||||||||||||||
Adjusted EBITDAX Attributable to CNX Resources Shareholders |
$ |
184,568 |
$ |
16,840 |
$ |
2,451 |
$ |
203,859 |
$ |
87,220 |
||||||||||
Note: Income tax effect of Total Pre-tax Adjustments was $10,592 and ($88,332) for the three months ended June 30, 2018 and June 30, 2017, respectively. | ||||||||||||||||||||
EBITDAX Attributable to CNX Resources shareholders of $165,221 is calculated as EBTIDAX from continuing operations of $191,516 less Adjusted EBITDA Attributable to Noncontrolling interest of $26,711, plus Stock-based compensation of $416. | ||||||||||||||||||||
Adjusted net income for the three months ended June 30, 2018 is calculated as GAAP net income of $61,394 plus total pre-tax adjustments from the above table of $39,054, less the associated tax expense of $10,592 equals adjusted net income of $89,856. Adjusted net income for the three months ended June 30, 2017 is calculated as GAAP net income of $169,510 less total pre-tax adjustments from the above table of $238,508, plus the associated tax expense of $88,332 equals adjusted net income of $19,334 | ||||||||||||||||||||
Adjusted net income attributable to CNX Resources shareholders for the three months ended June 30, 2018 is calculated as GAAP net income attributable to CNX shareholders of $42,014 plus total pre-tax adjustments from the above table of $39,054, less the associated tax expense of $10,592 equals adjusted net income attributable to CNX shareholders of $70,476. Adjusted net income attributable to CNX Resources shareholders for the three months ended June 30, 2017 is calculated as GAAP net income attributable to CNX shareholders of $169,510 less total pre-tax adjustments from the above table of $238,508, plus the associated tax expense of $88,332 equals adjusted net income attributable to CNX shareholders of $19,334. | ||||||||||||||||||||
1CNX's unallocated expenses include other expense, gain on sale of assets, loss on debt extinguishment, impairment of other intangible asset and income taxes. | ||||||||||||||||||||
2Adjusted EBITDA Attributable to Noncontrolling Interest for the three months ended June 30, 2018 is Net Income Attributable to Noncontrolling interest of $19,380 plus Depreciation, Depletion and Amortization of $3,078, plus Interest Expense of $3,835, plus Stock-based compensation of $416. Calculated by taking an average noncontrolling interest percentage of 63.91%. |
Management uses net debt to determine the company's outstanding debt obligations that would not be readily satisfied by its cash and cash equivalents on hand. Management believes that using net debt attributable to CNX Resources shareholders is useful to investors in determining the company's leverage ratio since the company could choose to use its cash and cash equivalents to retire debt.
Net Debt Attributable to CNX Resources Shareholders |
June 30, 2018 | ||||||||
E&P |
Midstream |
Total | |||||||
Total Debt (GAAP)1 |
$ |
1,950,372 |
$ |
404,169 |
$ |
2,354,541 |
|||
Less Cash and Cash Equivalents |
48,620 |
6,226 |
54,846 |
||||||
Net Debt (Non-GAAP) |
1,901,752 |
397,943 |
2,299,695 |
||||||
Net Debt Attributable to Noncontrolling Interest2 |
— |
254,325 |
254,325 |
||||||
Net Debt Attributable to CNX Resources Shareholders |
$ |
1,901,752 |
$ |
143,618 |
$ |
2,045,370 |
|||
1Includes current portion. | |||||||||
2Calculated by taking an average noncontrolling interest percentage of 63.91% |
Cautionary Statements
We are including the following cautionary statement in this press release to make applicable and take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 for any forward-looking statements made by, or on behalf of us. With the exception of historical matters, the matters discussed in this press release are forward-looking statements (as defined in 21E of the Securities Exchange Act of 1934 (the "Exchange Act")) that involve risks and uncertainties that could cause actual results to differ materially from projected results. Accordingly, investors should not place undue reliance on forward-looking statements as a prediction of actual results. These forward-looking statements may include projections and estimates concerning the timing and success of specific projects and our future production, revenues, income and capital spending. When we use the words "believe," "intend," "expect," "may," "should," "anticipate," "could," "estimate," "plan," "predict," "project," "will," or their negatives, or other similar expressions, the statements which include those words are usually forward-looking statements. When we describe a strategy that involves risks or uncertainties, we are making forward-looking statements. The forward-looking statements in this press release speak only as of the date of this press release; we disclaim any obligation to update these statements. We have based these forward-looking statements on our current expectations and assumptions about future events. While our management considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond our control. These risks, contingencies and uncertainties relate to, among other matters, the following: 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; an extended decline in the prices we receive for our natural gas and natural gas liquids affecting our operating results and cash flows; our dependence on gathering, processing and transportation facilities and other midstream facilities owned by CNXM and others; disruption of, capacity constraints in, or proximity to pipeline systems that could limit sales of our natural gas and natural gas liquids, and decreases in availability of third-party pipelines or other midstream facilities interconnected to CNXM's gathering systems; uncertainties in estimating our economically recoverable natural gas reserves, and inaccuracies in our estimates; the high-risk nature of drilling natural gas wells; our identified drilling locations are scheduled out over multiple years, making them susceptible to uncertainties that could materially alter the occurrence or timing of their drilling; the impact of potential, as well as any adopted environmental regulations including any relating to greenhouse gas emissions on our operating costs as well as on the market for natural gas and for our securities; environmental regulations introduce uncertainty that could adversely impact the market for natural gas with potential short and long-term liabilities; the risks inherent in natural gas operations, including our reliance upon third party contractors, being subject to unexpected disruptions, including geological conditions, equipment failure, timing of completion of significant construction or repair of equipment, fires, explosions, accidents and weather conditions that could impact financial results; decreases in the availability of, or increases in the price of, required personnel, services, equipment, parts and raw materials to support our operations; if natural gas prices remain depressed or drilling efforts are unsuccessful, we may be required to record write-downs of our proved natural gas properties; a loss of our competitive position because of the competitive nature of the natural gas industry or overcapacity in this industry impairing our profitability; deterioration in the economic conditions in any of the industries in which our customers operate, a domestic or worldwide financial downturn, or negative credit market conditions; hedging activities may prevent us from benefiting from price increases and may expose us to other risks; our inability to collect payments from customers if their creditworthiness declines or if they fail to honor their contracts; existing and future government laws, regulations and other legal requirements that govern our business may increase our costs of doing business and may restrict our operations; significant costs and liabilities may be incurred as a result of pipeline and related facility integrity management program testing and any related pipeline repair or preventative or remedial measures; our ability to find adequate water sources for our use in natural gas drilling, or our ability to dispose of or recycle water used or removed from strata in connection with our gas operations at a reasonable cost and within applicable environmental rules; the outcomes of various legal proceedings, including those which are more fully described in our reports filed under the Exchange Act; acquisitions and divestitures we anticipate may not occur or produce anticipated benefits; risks associated with our debt; failure to find or acquire economically recoverable natural gas reserves to replace our current natural gas reserves; decrease in our borrowing base, which could decrease for a variety of reasons including lower natural gas prices, declines in natural gas proved reserves, and lending requirements or regulations; we may operate a portion of our business with one or more joint venture partners or in circumstances where we are not the operator, which may restrict our operational and corporate flexibility and we may not realize the benefits we expect to realize from a joint venture; changes in federal or state income tax laws, particularly in the area of intangible drilling costs; challenges associated with strategic determinations, including the allocation of capital and other resources to strategic opportunities; our development and exploration projects, as well as CNXM's midstream system development, require substantial capital expenditures; terrorist attacks or cyber-attacks could have a material adverse effect on our business, financial condition or results of operations; construction of new gathering, compression, dehydration, treating or other midstream assets by CNXM may not result in revenue increases and may be subject to regulatory, environmental, political, legal and economic risks; our success depends on key members of our management and our ability to attract and retain experienced technical and other professional personnel; we may not achieve some or all of the expected benefits of the separation of CONSOL Energy; CONSOL Energy may fail to perform under various transaction agreements that were executed as part of the separation, including with respect to indemnification obligations; 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 has been allocated responsibility; and the separation could result in substantial tax liability; and, with respect to the sale of the Ohio Joint Venture Utica assets, disruption to our business, including customer, employee and supplier relationships resulting from this transaction, risks that the conditions to closing may not be satisfied and the sale may not occur, and the impact of the transaction on our future operating and financial results. Additional factors are described in detail under the captions "Forward Looking Statements" and "Risk Factors" in our annual report on Form 10-K for the year ended December 31, 2017 filed with the Securities and Exchange Commission, as supplemented by our quarterly reports on Form 10-Q.
CNX RESOURCES CORPORATION AND SUBSIDIARIES | |||||||||||||||
CONSOLIDATED STATEMENTS OF INCOME | |||||||||||||||
(Dollars in thousands, except per share data) |
Three Months Ended |
Six Months Ended | |||||||||||||
(Unaudited) |
June 30, |
June 30, | |||||||||||||
Revenues and Other Operating Income: |
2018 |
2017 |
2018 |
2017 | |||||||||||
Natural Gas, NGLs and Oil Revenue |
$ |
334,517 |
$ |
260,306 |
$ |
740,140 |
$ |
578,069 |
|||||||
Gain on Commodity Derivative Instruments |
25,660 |
83,788 |
60,747 |
61,325 |
|||||||||||
Purchased Gas Revenue |
9,930 |
10,316 |
27,985 |
19,294 |
|||||||||||
Midstream Revenue |
23,483 |
— |
49,737 |
— |
|||||||||||
Other Operating Income |
8,534 |
16,658 |
19,244 |
32,308 |
|||||||||||
Total Revenue and Other Operating Income |
402,124 |
371,068 |
897,853 |
690,996 |
|||||||||||
Costs and Expenses: |
|||||||||||||||
Operating Expense |
|||||||||||||||
Lease Operating Expense |
25,338 |
21,074 |
62,148 |
42,705 |
|||||||||||
Transportation, Gathering and Compression |
75,767 |
86,599 |
162,028 |
180,931 |
|||||||||||
Production, Ad Valorem, and Other Fees |
7,703 |
4,606 |
16,936 |
13,935 |
|||||||||||
Depreciation, Depletion and Amortization |
119,087 |
91,640 |
243,754 |
187,318 |
|||||||||||
Exploration and Production Related Other Costs |
3,699 |
19,717 |
6,079 |
29,502 |
|||||||||||
Purchased Gas Costs |
9,747 |
10,194 |
26,801 |
19,089 |
|||||||||||
Impairment of Exploration and Production Properties |
— |
— |
— |
137,865 |
|||||||||||
Impairment of Other Intangible Assets |
18,650 |
— |
18,650 |
— |
|||||||||||
Selling, General, and Administrative Costs |
34,909 |
21,754 |
66,258 |
43,556 |
|||||||||||
Other Operating Expense |
17,786 |
24,106 |
33,832 |
42,282 |
|||||||||||
Total Operating Expense |
312,686 |
279,690 |
636,486 |
697,183 |
|||||||||||
Other (Income) Expense |
|||||||||||||||
Other Expense (Income) |
575 |
5,475 |
(5,917) |
9,550 |
|||||||||||
Gain on Asset Sales |
(3,280) |
(134,581) |
(14,622) |
(138,577) |
|||||||||||
Gain on Previously Held Equity Interest |
— |
— |
(623,663) |
— |
|||||||||||
Loss (Gain) on Debt Extinguishment |
23,413 |
36 |
39,048 |
(786) |
|||||||||||
Interest Expense |
38,438 |
40,683 |
76,989 |
82,289 |
|||||||||||
Total Other Expense (Income) |
59,146 |
(88,387) |
(528,165) |
(47,524) |
|||||||||||
Total Costs And Expenses |
371,832 |
191,303 |
108,321 |
649,659 |
|||||||||||
Earnings From Continuing Operations Before Income Tax |
30,292 |
179,765 |
789,532 |
41,337 |
|||||||||||
Income Tax (Benefit) Expense |
(31,102) |
57,958 |
182,592 |
10,536 |
|||||||||||
Income From Continuing Operations |
61,394 |
121,807 |
606,940 |
30,801 |
|||||||||||
Income From Discontinued Operations, net |
— |
47,703 |
— |
99,743 |
|||||||||||
Net Income |
61,394 |
169,510 |
606,940 |
130,544 |
|||||||||||
Less: Net Income Attributable to Noncontrolling Interest |
19,380 |
— |
37,363 |
— |
|||||||||||
Net Income Attributable to CNX Resources Shareholders |
$ |
42,014 |
$ |
169,510 |
$ |
569,577 |
$ |
130,544 |
CNX RESOURCES CORPORATION AND SUBSIDIARIES | |||||||||||||||
CONSOLIDATED STATEMENTS OF INCOME (CONTINUED) | |||||||||||||||
(Dollars in thousands, except per share data) |
Three Months Ended |
Six Months Ended | |||||||||||||
(Unaudited) |
June 30, |
June 30, | |||||||||||||
Earnings Per Share |
2018 |
2017 |
2018 |
2017 | |||||||||||
Basic |
|||||||||||||||
Income from Continuing Operations |
$ |
0.19 |
$ |
0.53 |
$ |
2.60 |
$ |
0.13 |
|||||||
Income from Discontinued Operations |
— |
0.21 |
— |
0.44 |
|||||||||||
Total Basic Earnings Per Share |
$ |
0.19 |
$ |
0.74 |
$ |
2.60 |
$ |
0.57 |
|||||||
Dilutive |
|||||||||||||||
Income from Continuing Operations |
$ |
0.19 |
$ |
0.52 |
$ |
2.57 |
$ |
0.13 |
|||||||
Income from Discontinued Operations |
— |
0.21 |
— |
0.43 |
|||||||||||
Total Dilutive Earnings Per Share |
$ |
0.19 |
$ |
0.73 |
$ |
2.57 |
$ |
0.56 |
|||||||
Dividends Declared Per Share |
$ |
— |
$ |
— |
$ |
— |
$ |
— |
CNX RESOURCES CORPORATION AND SUBSIDIARIES | |||||||||||||||
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||||||||||||||
Three Months Ended |
Six Months Ended | ||||||||||||||
(Dollars in thousands) |
June 30, |
June 30, | |||||||||||||
(Unaudited) |
2018 |
2017 |
2018 |
2017 | |||||||||||
Net Income |
$ |
61,394 |
$ |
169,510 |
$ |
606,940 |
$ |
130,544 |
|||||||
Other Comprehensive Income: |
|||||||||||||||
Actuarially Determined Long-Term Liability Adjustments (Net of tax: ($687), ($2,034), ($781), ($4,086)) |
1,812 |
3,464 |
1,982 |
6,966 |
|||||||||||
Comprehensive Income |
63,206 |
172,974 |
608,922 |
137,510 |
|||||||||||
Less: Comprehensive Income Attributable to Noncontrolling Interest |
19,380 |
— |
37,363 |
— |
|||||||||||
Comprehensive Income Attributable to CNX Resources Shareholders |
$ |
43,826 |
$ |
172,974 |
$ |
571,559 |
$ |
137,510 |
CNX RESOURCES CORPORATION AND SUBSIDIARIES | |||||||
CONSOLIDATED BALANCE SHEETS | |||||||
(Unaudited) |
|||||||
(Dollars in thousands) |
June 30, |
December 31, | |||||
ASSETS |
|||||||
Current Assets: |
|||||||
Cash and Cash Equivalents |
$ |
54,846 |
$ |
509,167 |
|||
Accounts and Notes Receivable: |
|||||||
Trade |
132,016 |
156,817 |
|||||
Other Receivables |
17,421 |
48,908 |
|||||
Supplies Inventories |
10,499 |
10,742 |
|||||
Recoverable Income Taxes |
27,780 |
31,523 |
|||||
Prepaid Expenses |
56,431 |
95,347 |
|||||
Current Assets Held for Sale |
20,153 |
— |
|||||
Total Current Assets |
319,146 |
852,504 |
|||||
Property, Plant and Equipment: |
|||||||
Property, Plant and Equipment |
8,941,426 |
9,316,495 |
|||||
Less—Accumulated Depreciation, Depletion and Amortization |
2,399,555 |
3,526,742 |
|||||
Property, Plant and Equipment of Assets Held for Sale, Net |
230,593 |
— |
|||||
Total Property, Plant and Equipment—Net |
6,772,464 |
5,789,753 |
|||||
Other Assets: |
|||||||
Investment in Affiliates |
22,347 |
197,921 |
|||||
Goodwill |
796,359 |
— |
|||||
Other Intangible Assets |
106,476 |
— |
|||||
Other |
190,966 |
91,735 |
|||||
Total Other Assets |
1,116,148 |
289,656 |
|||||
TOTAL ASSETS |
$ |
8,207,758 |
$ |
6,931,913 |
CNX RESOURCES CORPORATION AND SUBSIDIARIES | |||||||
CONSOLIDATED BALANCE SHEETS | |||||||
(Unaudited) |
|||||||
(Dollars in thousands, except per share data) |
June 30, |
December 31, | |||||
LIABILITIES AND EQUITY |
|||||||
Current Liabilities: |
|||||||
Accounts Payable |
$ |
186,397 |
$ |
211,161 |
|||
Current Portion of Long-Term Debt |
6,915 |
7,111 |
|||||
Other Accrued Liabilities |
227,871 |
223,407 |
|||||
Current Liabilities Held for Sale |
53,808 |
— |
|||||
Total Current Liabilities |
474,991 |
441,679 |
|||||
Long-Term Debt: |
|||||||
Long-Term Debt |
2,330,780 |
2,187,026 |
|||||
Capital Lease Obligations |
16,846 |
20,347 |
|||||
Total Long-Term Debt |
2,347,626 |
2,207,373 |
|||||
Deferred Credits and Other Liabilities: |
|||||||
Deferred Income Taxes |
235,407 |
44,373 |
|||||
Asset Retirement Obligations |
7,606 |
198,768 |
|||||
Other |
103,205 |
139,821 |
|||||
Total Deferred Credits and Other Liabilities |
346,218 |
382,962 |
|||||
TOTAL LIABILITIES |
3,168,835 |
3,032,014 |
|||||
Stockholders' Equity: |
|||||||
Common Stock, $.01 Par Value; 500,000,000 Shares Authorized, 213,420,535 Issued and Outstanding at June 30, 2018; 223,743,322 Issued and Outstanding at December 31, 2017 |
2,138 |
2,241 |
|||||
Capital in Excess of Par Value |
2,372,650 |
2,450,323 |
|||||
Preferred Stock, 15,000,000 shares authorized, None issued and outstanding |
— |
— |
|||||
Retained Earnings |
1,940,507 |
1,455,811 |
|||||
Accumulated Other Comprehensive Loss |
(6,494) |
(8,476) |
|||||
Total CNX Resources Stockholders' Equity |
4,308,801 |
3,899,899 |
|||||
Noncontrolling Interest |
730,122 |
— |
|||||
TOTAL STOCKHOLDERS' EQUITY |
5,038,923 |
3,899,899 |
|||||
TOTAL LIABILITIES AND EQUITY |
$ |
8,207,758 |
$ |
6,931,913 |
CNX RESOURCES CORPORATION AND SUBSIDIARIES | |||||||||||||||||||||||||||
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY | |||||||||||||||||||||||||||
(Dollars in thousands) |
Common Stock |
Capital in Excess of Par Value |
Retained Earnings |
Accumulated Other Comprehensive Loss |
Total CNX Resources Corporation Stockholders' |
Non- Controlling Interest |
Total Stockholders' Equity | ||||||||||||||||||||
Balance at December 31, 2017 |
$ |
2,241 |
$ |
2,450,323 |
$ |
1,455,811 |
$ |
(8,476) |
$ |
3,899,899 |
$ |
— |
$ |
3,899,899 |
|||||||||||||
(Unaudited) |
|||||||||||||||||||||||||||
Net Income |
— |
— |
569,577 |
— |
569,577 |
37,363 |
606,940 |
||||||||||||||||||||
Other Comprehensive Income (Net of ($781) Tax) |
— |
— |
— |
1,982 |
1,982 |
— |
1,982 |
||||||||||||||||||||
Comprehensive Income |
— |
— |
569,577 |
1,982 |
571,559 |
37,363 |
608,922 |
||||||||||||||||||||
Issuance of Common Stock |
7 |
1,556 |
— |
— |
1,563 |
— |
1,563 |
||||||||||||||||||||
Purchase and Retirement of Common Stock (11,086,082 shares) |
(110) |
(88,578) |
(80,031) |
— |
(168,719) |
— |
(168,719) |
||||||||||||||||||||
Shares Withheld for Taxes |
— |
— |
(4,850) |
— |
(4,850) |
(347) |
(5,197) |
||||||||||||||||||||
Acquisition of CNX Gathering, LLC |
— |
— |
— |
— |
— |
718,577 |
718,577 |
||||||||||||||||||||
Amortization of Stock-Based Compensation Awards |
— |
9,349 |
— |
— |
9,349 |
1,269 |
10,618 |
||||||||||||||||||||
Distributions to CNXM Noncontrolling Interest Holders |
— |
— |
— |
— |
— |
(26,740) |
(26,740) |
||||||||||||||||||||
Balance at June 30, 2018 |
$ |
2,138 |
$ |
2,372,650 |
$ |
1,940,507 |
$ |
(6,494) |
$ |
4,308,801 |
$ |
730,122 |
$ |
5,038,923 |
CNX RESOURCES AND SUBSIDIARIES | |||||||||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||||||
(Dollars in thousands) |
Three Months Ended |
Six Months Ended | |||||||||||||
(Unaudited) |
June 30, |
June 30, | |||||||||||||
Cash Flows from Operating Activities: |
2018 |
2017 |
2018 |
2017 | |||||||||||
Net Income (Loss) |
$ |
61,394 |
$ |
169,510 |
$ |
606,940 |
$ |
130,544 |
|||||||
Adjustments to Reconcile Net Income (Loss) to Net Cash Provided By Operating Activities: |
|||||||||||||||
Net Income from Discontinued Operations |
— |
(47,703) |
— |
(99,743) |
|||||||||||
Depreciation, Depletion and Amortization |
119,087 |
91,640 |
243,754 |
187,318 |
|||||||||||
Amortization of Deferred Financing Costs |
1,778 |
— |
4,821 |
— |
|||||||||||
Impairment of Exploration and Production Properties |
— |
— |
— |
137,865 |
|||||||||||
Impairment of Other Intangible Assets |
18,650 |
— |
18,650 |
— |
|||||||||||
Stock-Based Compensation |
5,708 |
4,163 |
10,618 |
7,917 |
|||||||||||
Gain on Sale of Assets |
(3,280) |
(134,581) |
(14,622) |
(138,577) |
|||||||||||
Gain on Previously Held Equity Interest |
— |
— |
(623,663) |
— |
|||||||||||
Loss (Gain) on Debt Extinguishment |
23,413 |
36 |
39,048 |
(786) |
|||||||||||
(Gain) Loss on Commodity Derivative Instruments |
(25,660) |
(83,788) |
(60,747) |
(61,325) |
|||||||||||
Net Cash Received (Paid) in Settlement of Commodity Derivative Instruments |
16,684 |
(32,285) |
(307) |
(79,388) |
|||||||||||
Deferred Income Taxes |
(23,500) |
34,857 |
190,194 |
10,536 |
|||||||||||
Equity in Earnings of Affiliates |
(1,669) |
(10,055) |
(3,447) |
(22,385) |
|||||||||||
Changes in Operating Assets: |
|||||||||||||||
Accounts and Notes Receivable |
29,651 |
(3,308) |
44,156 |
6,661 |
|||||||||||
Recoverable Income Taxes |
(7,602) |
14,196 |
3,743 |
6,492 |
|||||||||||
Supplies Inventories |
177 |
(264) |
243 |
328 |
|||||||||||
Prepaid Expenses |
2,382 |
6,043 |
1,327 |
6,480 |
|||||||||||
Changes in Other Assets |
— |
— |
|||||||||||||
Changes in Operating Liabilities: |
|||||||||||||||
Accounts Payable |
(5,350) |
(4,141) |
(3,198) |
20,813 |
|||||||||||
Accrued Interest |
(28,263) |
(34,974) |
(3,358) |
795 |
|||||||||||
Other Operating Liabilities |
6,755 |
(11,298) |
1,504 |
699 |
|||||||||||
Changes in Other Liabilities |
126 |
17,567 |
(5,374) |
13,516 |
|||||||||||
Other |
1,108 |
33,642 |
648 |
44,572 |
|||||||||||
Net Cash Provided by Continuing Operating Activities |
191,589 |
9,257 |
450,930 |
172,332 |
|||||||||||
Net Cash Provided by Discontinued Operating Activities |
— |
79,420 |
— |
128,140 |
|||||||||||
Net Cash Provided by Operating Activities |
191,589 |
88,677 |
450,930 |
300,472 |
|||||||||||
Cash Flows from Investing Activities: |
|||||||||||||||
Capital Expenditures |
(264,174) |
(145,839) |
(496,659) |
(249,962) |
|||||||||||
CNX Gathering LLC Acquisition, Net of Cash Acquired |
— |
— |
(299,272) |
— |
|||||||||||
Proceeds from Asset Sales |
51,657 |
318,299 |
153,420 |
328,167 |
|||||||||||
Net Distributions from Equity Affiliates |
— |
18,791 |
3,650 |
24,700 |
|||||||||||
Net Cash Provided by Continuing Investing Activities |
(212,517) |
191,251 |
(638,861) |
102,905 |
|||||||||||
Net Cash Provided by Discontinued Investing Activities |
— |
(7,084) |
— |
(6,380) |
|||||||||||
Net Cash Provided by Investing Activities |
(212,517) |
184,167 |
(638,861) |
96,525 |
|||||||||||
Cash Flows from Financing Activities: |
|||||||||||||||
Payments on Short-Term Borrowings |
— |
— |
— |
— |
|||||||||||
Payments on Miscellaneous Borrowings |
(1,705) |
(4,020) |
(3,748) |
(5,973) |
|||||||||||
Payments on Long-Term Notes |
(318,000) |
(18,942) |
(723,419) |
(117,185) |
|||||||||||
Proceeds from CNX Revolving Credit Facility |
422,000 |
422,000 |
|||||||||||||
Net Payments on CNXM Revolving Credit Facility |
(9,000) |
— |
(138,500) |
— |
|||||||||||
Distributions to CNXM Noncontrolling Interest Holders |
(13,614) |
— |
(26,740) |
— |
|||||||||||
Proceeds from Issuance of CNXM Senior Notes |
— |
— |
394,000 |
— |
|||||||||||
Proceeds from Issuance of Common Stock |
507 |
229 |
1,563 |
723 |
|||||||||||
Shares Withheld for Taxes |
(35) |
(815) |
(5,197) |
(7,093) |
|||||||||||
Purchases of Common Stock |
(85,841) |
— |
(166,720) |
— |
|||||||||||
Debt Repurchase and Financing Fees |
(1,028) |
(48) |
(19,629) |
(298) |
|||||||||||
Net Cash Used in Continuing Financing Activities |
(6,716) |
(23,596) |
(266,390) |
(129,826) |
|||||||||||
Net Cash Used in Discontinued Financing Activities |
— |
(11,479) |
— |
(21,935) |
|||||||||||
Net Cash Used in Financing Activities |
(6,716) |
(35,075) |
(266,390) |
(151,761) |
|||||||||||
Net (Decrease) Increase in Cash and Cash Equivalents |
(27,644) |
237,769 |
(454,321) |
245,236 |
|||||||||||
Cash and Cash Equivalents at Beginning of Period |
82,490 |
53,766 |
509,167 |
46,299 |
|||||||||||
Cash and Cash Equivalents at End of Period |
$ |
54,846 |
$ |
291,535 |
$ |
54,846 |
$ |
291,535 |
View original content with multimedia:http://www.prnewswire.com/news-releases/cnx-reports-second-quarter-results-quarterly-production-of-122-6-bcfe-total-production-costs-fall-to-2-00-per-mcfe-reduces-total-shares-outstanding-by-8-since-october-2017--300690506.html
SOURCE CNX Resources Corporation
PITTSBURGH, Aug. 2, 2018 /PRNewswire/ -- CNX Midstream Partners LP (NYSE: CNXM) ("CNXM", "CNX Midstream" or the "Partnership") today reported financial and operational results for the three months ended June 30, 2018(1).
Second Quarter Results
Highlights of second quarter 2018 results attributable to the Partnership as compared to the second quarter of 2017 include:
"CNXM delivered strong results for the second quarter," commented Nicholas J. DeIuliis, CEO of CNX Midstream GP LLC (the "General Partner"). "In addition to steady operational execution, we closed on the previously announced transaction with our Sponsor and HG Energy, which resulted in additional dedicated Utica acres in the Anchor Systems; increased minimum well commitments from our Sponsor and HG Energy; the contribution of a 20" high-pressure pipeline; and $2.0 million in cash. This transaction, which also included amending the gas gathering agreements with our Sponsor and HG Energy that resulted in more operational and strategic control, further de-risked the 15% distribution growth target through 2023."
Operations
During the quarter, CNXM continued to set new milestones in operational excellence and cost reductions. The CNXM team achieved one million man hours with zero lost time and zero injuries. At the same time, the Partnership experienced its highest-ever quarterly throughput of 1,208 Bbtu/d and lowest-ever gross unit operating cost. The reduction in operating costs is the result of continued initiatives to reduce contract workforce, leverage automation, and minimize lost time.
Updated Guidance
($ in millions) |
2018E | |||||||
Previous |
Update | |||||||
Capital Expenditures |
$80 - $90 |
$100 - $110 | ||||||
The Partnership expects its 2018 capital expenditures range to increase to approximately $100-$110 million, compared to the previous guidance of $80-$90 million, due primarily to the acceleration of activity from 2019 into 2018 and adding new high rate of return projects.
Reaffirmed Guidance
($ in millions) |
2018E | ||||
Throughput (MMcfe/d) |
1,150 - 1,240 | ||||
EBITDA |
$150 - $165 | ||||
Distributable Cash Flow |
$120 - $135 | ||||
Distributable Coverage |
1.2x - 1.4x | ||||
LP Distribution Growth Target |
15% |
Quarterly Distribution
As previously announced, the Board of Directors of the General Partner declared a quarterly cash distribution of $0.3361 per unit with respect to the second quarter of 2018. The distribution payment will be made on August 14, 2018 to unitholders of record at the close of business on August 7, 2018. The distribution, which equates to an annual rate of $1.3444 per unit, represents an increase of 3.6% over the prior quarter and an increase of 15% over the distribution paid with respect to the second quarter of 2017.
Capital Investment and Resources
CNX Midstream's allocated second quarter 2018 share of investment in expansion projects was $20.4 million. Total expansion capital investment at the development companies in which CNX Midstream holds controlling interests was $20.9 million. CNX Midstream's respective share of maintenance capital expenditures for the development companies for second quarter 2018 was $4.1 million. Maintenance capital expenditures in the aggregate for the development companies in which CNX Midstream holds controlling interests totaled $4.7 million.
As of June 30, 2018, CNX Midstream had outstanding borrowings of $11 million under its $600 million revolving credit facility.
Second Quarter Financial and Operational Results Conference Call
A conference call and webcast, during which management will discuss second quarter 2018 financial and operational results, is scheduled for August 2, 2018 at 11:00 a.m. Eastern Time. Prepared remarks by members of management will be followed by a question and answer period. Interested parties may listen via webcast at www.cnxmidstream.com. Participants who would like to ask questions may join the conference by phone by dialing 888-349-0097 (international 412-902-0126) five to ten minutes prior to the scheduled start time (reference the CNX Midstream call). An on-demand replay of the webcast will also be available at www.cnxmidstream.com shortly after the conclusion of the conference call. A telephonic replay will be available through August 9, 2018 by dialing 877-344-7529 (international: 412-317-0088) and using the conference playback number 10122240.
_____________ | |
(1) |
Unless otherwise indicated, the reporting measures included in this news release reflect the unallocated total activity of the three development companies that have been jointly owned by the Partnership and CNX Gathering LLC ("CNX Gathering") since completion of the Partnership's initial public offering ("IPO") in September 2014. Effective November 16, 2016, the Partnership acquired the remaining 25% controlling interest in the Anchor Systems, which brought its controlling interest in that system to 100%. In connection with the transaction with HG Energy, the Partnership agreed to relinquish its 5% interest in the Growth System to CNX Gathering. The Partnership's current financial interests in the development companies are: 100% in the Anchor Systems and 5% in the Additional Systems. Because the Partnership owns a controlling interest in each of these development companies, it fully consolidates their financial results. CNX Gathering is an entity 100% owned by CNX Resources Corporation that owns a noncontrolling interests in the Additional Systems and a controlling interest in the Growth Systems of the Partnership. |
(2) |
Adjusted EBITDA and DCF are not measures that are recognized under accounting principles generally accepted in the U.S. ("GAAP"). Definitions and reconciliations of these non-GAAP measures to GAAP reporting measures appear in the financial tables which follow. |
* * * * *
CNX Midstream is a growth-oriented master limited partnership that owns, operates, develops and acquires gathering and other midstream energy assets to service natural gas production in the Appalachian Basin in Pennsylvania and West Virginia. Our assets include natural gas gathering pipelines and compression and dehydration facilities, as well as condensate gathering, collection, separation and stabilization facilities. More information is available at our website www.cnxmidstream.com.
* * * * *
This press release is intended to be a qualified notice to nominees as provided for under Treasury Regulation Section 1.1446-4(b). Brokers and nominees should treat one hundred percent (100.0%) of CNX Midstream's distributions to non-U.S. investors as being attributed to income that is effectively connected with a United States trade or business. Accordingly, CNX Midstream's distributions to non-U.S. investors are subject to federal income tax withholding at the highest applicable effective tax rate. Nominees, and not CNX Midstream, are treated as withholding agents responsible for withholding on the distributions received by them on behalf of foreign investors.
* * * * *
This press release contains forward-looking statements within the meaning of the federal securities laws. Statements that are predictive in nature, that depend upon or refer to future events or conditions or that include the words "will," "believe," "expect," "anticipate," "intend," "estimate" and other expressions that are predictions of or indicate future events and trends and that do not relate to historical matters identify forward-looking statements. You should not place undue reliance on forward-looking statements. Forward-looking statements include, among others, statements regarding the payment of our quarterly distribution for the quarter ended March 31, 2018 and our anticipated 2018 financial performance. Forward-looking statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict, and there can be no assurance that actual outcomes and results will not differ materially from those expected by our management. You should not place undue reliance on forward-looking statements. Although forward-looking statements reflect our good faith beliefs at the time they are made, they involve known and unknown risks, uncertainties and other factors. While our management considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond our control. These risks, contingencies and uncertainties relate to, among other matters, the following: CNX and HG Energy II Appalachia, LLC currently account for substantially all of our revenue; if either or both of them change their business strategies, or otherwise significantly reduce the volumes of natural gas and condensate transported through our gathering systems, we could be materially and adversely affected; under our gathering agreements, our customers may transfer their leasehold, working and mineral fee interests in their dedicated acreage, and provide for the release of dedicated acreage in certain situations; we may not generate sufficient distributable cash flow to make the payment of the minimum quarterly distribution to our unitholders; our cash flow will depend entirely on the performance of our operating subsidiaries and their ability to distribute cash to us; our midstream systems are exclusively located in the Appalachian Basin, making us vulnerable to risks associated with operating in a single geographic area; we may be unable to grow by acquiring the noncontrolling interests in, or assets of, our operating subsidiaries owned by CNX Gathering, which could limit our ability to increase our distributable cash flow; to maintain and grow our business, we will be required to make substantial capital expenditures and these capital expenditures may not result in revenue increases and may be subject to regulatory, environmental, political, legal and economic risks, which could adversely affect our business and our ability to distribute cash to our unitholders; if we are unable to obtain needed capital or financing on satisfactory terms, our ability to make cash distributions may be diminished or our financial leverage could increase; our exposure to commodity price risk may change over time and we cannot guarantee the terms of any existing or future agreements for our midstream services with third parties or with CNX; restrictions in our revolving credit facility, and other debt agreements that we may enter into in the future, could adversely affect our business, financial condition, liquidity and results of operations, and ability to make quarterly cash distributions to our unitholders; we and our customers may incur significant liability under, or costs and expenditures to comply with, environmental and worker health and safety regulations, which are complex and subject to frequent change; we may not own in fee the land on which our pipelines and facilities are located, which could result in disruptions to our operations; a shortage of equipment and skilled labor could reduce equipment availability and labor productivity and increase labor and equipment costs, which could have a material adverse effect on our business and results of operations; we do not have any officers or employees and rely on officers of our general partner and employees of CNX; terrorist attacks or cyber-attacks could have a material adverse effect on our business, financial condition or results of operations; our general partner and its affiliates, including CNX, have conflicts of interest with us and limited fiduciary duties to us and our unitholders, and they may favor their own interests to our detriment and that of our unitholders; our general partner's discretion in establishing cash reserves may reduce the amount of cash we have available to distribute to unitholders; affiliates of our general partner, including CNX and CNX Gathering, may compete with us, and neither our general partner nor its affiliates have any obligation to present business opportunities to us except with respect to rights of first offer contained in our omnibus agreement; our tax treatment depends on our status as a partnership for federal income tax purposes; as a result of investing in our common units, you may become subject to state and local taxes and return filing requirements in jurisdictions where we operate or own or acquire properties.
Although forward-looking statements reflect our good faith beliefs at the time they are made, they involve known and unknown risks, uncertainties and other factors. For more information concerning factors that could cause actual results to differ materially from those conveyed in the forward-looking statements, including, among others, that our business plans may change as circumstances warrant, please refer to the "Risk Factors" and "Forward-Looking Statements" sections of our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, changed circumstances or otherwise, unless required by law.
CNX MIDSTREAM PARTNERS LP | |||||||||||||||
Three Months Ended June 30, |
Six Months Ended June 30, | ||||||||||||||
2018 |
2017 |
2018 |
2017 | ||||||||||||
Revenue |
|||||||||||||||
Gathering revenue — related party |
$ |
37,576 |
$ |
55,667 |
$ |
75,306 |
$ |
114,625 |
|||||||
Gathering revenue — third party |
23,438 |
867 |
49,577 |
867 |
|||||||||||
Total Revenue |
61,014 |
56,534 |
124,883 |
115,492 |
|||||||||||
Expenses |
|||||||||||||||
Operating expense — related party |
5,079 |
7,089 |
9,514 |
14,717 |
|||||||||||
Operating expense — third party |
7,406 |
5,957 |
15,874 |
12,590 |
|||||||||||
General and administrative expense — related party |
3,620 |
2,663 |
7,232 |
5,546 |
|||||||||||
General and administrative expense — third party |
2,319 |
1,033 |
4,868 |
2,225 |
|||||||||||
(Gain) loss on asset sales |
(254) |
3,241 |
2,501 |
3,914 |
|||||||||||
Depreciation expense |
5,443 |
5,675 |
11,299 |
11,346 |
|||||||||||
Interest expense |
7,119 |
1,124 |
9,608 |
2,162 |
|||||||||||
Total Expense |
30,732 |
26,782 |
60,896 |
52,500 |
|||||||||||
Net Income |
30,282 |
29,752 |
63,987 |
62,992 |
|||||||||||
Less: Net income attributable to noncontrolling interest |
277 |
761 |
6,135 |
3,934 |
|||||||||||
Net Income Attributable to General and Limited Partner Ownership Interest in CNX Midstream Partners LP |
$ |
30,005 |
$ |
28,991 |
$ |
57,852 |
$ |
59,058 |
|||||||
Calculation of Limited Partner Interest in Net Income: |
|||||||||||||||
Net Income Attributable to General and Limited Partner Ownership Interest in CNX Midstream Partners LP |
$ |
30,005 |
$ |
28,991 |
$ |
57,852 |
$ |
59,058 |
|||||||
Less: General partner interest in net income, including incentive distribution rights |
2,903 |
1,305 |
5,055 |
2,434 |
|||||||||||
Limited partner interest in net income |
$ |
27,102 |
$ |
27,686 |
$ |
52,797 |
$ |
56,624 |
|||||||
Net income per Limited Partner unit - basic |
$ |
0.43 |
$ |
0.44 |
$ |
0.83 |
$ |
0.89 |
|||||||
Net Income per Limited Partner unit - diluted |
$ |
0.43 |
$ |
0.44 |
$ |
0.83 |
$ |
0.89 |
|||||||
Limited Partner units outstanding - basic |
63,638 |
63,585 |
63,630 |
63,575 |
|||||||||||
Limited Partner unit outstanding - diluted |
63,677 |
63,644 |
63,670 |
63,630 |
|||||||||||
Cash distributions declared per unit (*) |
$ |
0.3361 |
$ |
0.2922 |
$ |
0.6606 |
$ |
0.5743 |
|||||||
(*) Represents the cash distributions declared during the month following the end of each respective quarterly period. |
CNX MIDSTREAM PARTNERS LP | |||||||
June 30, |
December 31, | ||||||
ASSETS |
|||||||
Current Assets: |
|||||||
Cash |
$ |
707 |
$ |
3,194 |
|||
Receivables — related party |
12,072 |
13,104 |
|||||
Receivables — third party |
7,546 |
8,251 |
|||||
Other current assets |
2,726 |
2,169 |
|||||
Total Current Assets |
23,051 |
26,718 |
|||||
Property and Equipment: |
|||||||
Property and equipment |
864,611 |
972,841 |
|||||
Less — accumulated depreciation |
72,098 |
73,563 |
|||||
Property and Equipment — Net |
792,513 |
899,278 |
|||||
Other assets |
3,494 |
593 |
|||||
TOTAL ASSETS |
$ |
819,058 |
$ |
926,589 |
|||
LIABILITIES AND EQUITY |
|||||||
Current Liabilities: |
|||||||
Accounts payable and other accrued liabilities |
$ |
38,327 |
$ |
23,602 |
|||
Accounts payable — related party |
3,211 |
2,376 |
|||||
Total Current Liabilities |
41,538 |
25,978 |
|||||
Other Liabilities: |
|||||||
Revolving credit facility |
11,000 |
149,500 |
|||||
Long-term debt |
393,169 |
— |
|||||
Total Liabilities |
445,707 |
175,478 |
|||||
Partners' Capital: |
|||||||
Common units (63,638,165 units issued and outstanding at June 30, 2018 and 63,588,152 units issued and outstanding at December 31, 2017) |
295,405 |
389,427 |
|||||
General partner interest |
8,893 |
4,328 |
|||||
Partners' capital attributable to CNX Midstream Partners LP |
304,298 |
393,755 |
|||||
Noncontrolling interest |
69,053 |
357,356 |
|||||
Total Partners' Capital |
373,351 |
751,111 |
|||||
TOTAL LIABILITIES AND PARTNERS' CAPITAL |
$ |
819,058 |
$ |
926,589 |
CNX MIDSTREAM PARTNERS LP | |||||||
Three Months Ended | |||||||
2018 |
2017 | ||||||
Cash Flows from Operating Activities: |
|||||||
Net Income |
$ |
30,282 |
$ |
29,752 |
|||
Adjustments to reconcile net income to net cash provided by operating activities: |
|||||||
Depreciation expense and amortization of debt issuance costs |
5,833 |
5,717 |
|||||
Unit-based compensation |
690 |
367 |
|||||
(Gain) loss on long-term asset sales |
(254) |
3,241 |
|||||
Other |
270 |
84 |
|||||
Changes in assets and liabilities: |
|||||||
Receivables — related party |
579 |
4,467 |
|||||
Receivables — third party |
2,099 |
(867) |
|||||
Other current and non-current assets |
758 |
3,571 |
|||||
Accounts payable and other accrued liabilities |
13,118 |
(1,259) |
|||||
Accounts payable — related party |
299 |
(2,815) |
|||||
Net Cash Provided by Operating Activities |
53,674 |
42,258 |
|||||
Cash Flows from Investing Activities: |
|||||||
Capital expenditures |
(25,615) |
(12,223) |
|||||
Proceeds from sale of assets |
646 |
14,000 |
|||||
Net Cash (Used in) Provided by Investing Activities |
(24,969) |
1,777 |
|||||
Cash Flows from Financing Activities: |
|||||||
Distributions (to) from general partner and noncontrolling interest holders, net |
2,004 |
(25,345) |
|||||
Quarterly distributions to unitholders |
(22,700) |
(18,842) |
|||||
Net payment on unsecured $250.0 million credit facility |
— |
(1,000) |
|||||
Net borrowings on secured $600.0 million credit facility |
(9,000) |
— |
|||||
Debt issuance costs |
(268) |
— |
|||||
Net Cash Used in Financing Activities |
(29,964) |
(45,187) |
|||||
Net Decrease in Cash |
(1,259) |
(1,152) |
|||||
Cash at Beginning of Period |
1,966 |
6,018 |
|||||
Cash at End of Period |
$ |
707 |
$ |
4,866 |
CNX MIDSTREAM PARTNERS LP
RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA AND DISTRIBUTABLE CASH FLOW
(in thousands)
Definition of Non-GAAP Financial Measures
EBITDA and Adjusted EBITDA
We define EBITDA as net income (loss) before net interest expense, depreciation and amortization, and Adjusted EBITDA as EBITDA adjusted for non-cash items which should not be included in the calculation of distributable cash flow. EBITDA and Adjusted EBITDA are used as supplemental financial measures by management and by external users of our financial statements, such as investors, industry analysts, lenders and ratings agencies, to assess:
We believe that the presentation of EBITDA and Adjusted EBITDA provides information that is useful to investors in assessing our financial condition and results of operations. The GAAP measures most directly comparable to EBITDA and Adjusted EBITDA are net income and net cash provided by operating activities. EBITDA and Adjusted EBITDA should not be considered alternatives to net income, net cash provided by operating activities or any other measure of financial performance or liquidity presented in accordance with GAAP. EBITDA and Adjusted EBITDA exclude some, but not all, items that affect net income or net cash, and these measures may vary from those of other companies. As a result, EBITDA and Adjusted EBITDA as presented below may not be comparable to similarly titled measures of other companies.
Distributable Cash Flow
We define distributable cash flow as Adjusted EBITDA less net income attributable to noncontrolling interest, cash interest paid and maintenance capital expenditures, each net to the Partnership. Distributable cash flow does not reflect changes in working capital balances.
Distributable cash flow is used as a supplemental financial measure by management and by external users of our financial statements, such as investors, industry analysts, lenders and ratings agencies, to assess:
We believe that the presentation of distributable cash flow in this release provides information useful to investors in assessing our financial condition and results of operations. The GAAP measures most directly comparable to distributable cash flow are net income and net cash provided by operating activities. Distributable cash flow should not be considered an alternative to net income, net cash provided by operating activities or any other measure of financial performance or liquidity presented in accordance with GAAP. Distributable cash flow excludes some, but not all, items that affect net income or net cash, and these measures may vary from those of other companies. As a result, our distributable cash flow may not be comparable to similarly titled measures that other companies may use.
The following table presents a reconciliation of the non-GAAP measures of adjusted EBITDA and distributable cash flow to the most directly comparable GAAP financial measures of net income and net cash provided by operating activities.
Three Months Ended June 30, |
Six Months Ended June 30, | |||||||||||||||
(unaudited) |
2018 |
2017 |
2018 |
2017 | ||||||||||||
Net Income |
$ |
30,282 |
$ |
29,752 |
$ |
63,987 |
$ |
62,992 |
||||||||
Depreciation expense |
5,443 |
5,675 |
11,299 |
11,346 |
||||||||||||
Interest expense |
7,119 |
1,124 |
9,608 |
2,162 |
||||||||||||
EBITDA |
42,844 |
36,551 |
84,894 |
76,500 |
||||||||||||
Non-cash unit-based compensation expense |
690 |
367 |
1,269 |
650 |
||||||||||||
(Gain) loss on asset sales |
(254) |
3,241 |
2,501 |
3,914 |
||||||||||||
Adjusted EBITDA |
43,280 |
40,159 |
88,664 |
81,064 |
||||||||||||
Less: |
||||||||||||||||
Net income attributable to noncontrolling interest |
277 |
761 |
6,135 |
3,934 |
||||||||||||
Depreciation expense attributable to noncontrolling interest |
674 |
1,833 |
2,339 |
3,663 |
||||||||||||
Other expenses attributable to noncontrolling interest |
1,224 |
112 |
1,660 |
194 |
||||||||||||
(Gain) loss on asset sales attributable to noncontrolling interest |
(242) |
3,079 |
2,375 |
3,718 |
||||||||||||
Adjusted EBITDA Attributable to General and Limited Partner Ownership Interest in CNX Midstream Partners LP |
$ |
41,347 |
$ |
34,374 |
$ |
76,155 |
$ |
69,555 |
||||||||
Less: cash interest paid, net |
5,573 |
1,079 |
7,588 |
2,079 |
||||||||||||
Less: maintenance capital expenditures, net of reimbursements |
4,125 |
3,715 |
7,708 |
7,596 |
||||||||||||
Distributable Cash Flow |
$ |
31,649 |
$ |
29,580 |
$ |
60,859 |
$ |
59,880 |
||||||||
Net Cash Provided by Operating Activities |
$ |
53,674 |
$ |
42,258 |
$ |
95,541 |
$ |
76,434 |
||||||||
Interest expense |
7,119 |
1,124 |
9,608 |
2,162 |
||||||||||||
(Gain) loss on asset sales |
(254) |
3,241 |
2,501 |
3,914 |
||||||||||||
Other, including changes in working capital |
(17,259) |
(6,464) |
(18,986) |
(1,446) |
||||||||||||
Adjusted EBITDA |
43,280 |
40,159 |
88,664 |
81,064 |
||||||||||||
Less: |
||||||||||||||||
Net income attributable to noncontrolling interest |
277 |
761 |
6,135 |
3,934 |
||||||||||||
Depreciation expense attributable to noncontrolling interest |
674 |
1,833 |
2,339 |
3,663 |
||||||||||||
Other expenses attributable to noncontrolling interest |
1,224 |
112 |
1,660 |
194 |
||||||||||||
(Gain) loss on asset sales attributable to noncontrolling interest |
(242) |
3,079 |
2,375 |
3,718 |
||||||||||||
Adjusted EBITDA Attributable to General and Limited Partner Ownership Interest in CNX Midstream Partners LP |
$ |
41,347 |
$ |
34,374 |
$ |
76,155 |
$ |
69,555 |
||||||||
Less: cash interest paid, net |
5,573 |
1,079 |
7,588 |
2,079 |
||||||||||||
Less: maintenance capital expenditures, net of reimbursements |
4,125 |
3,715 |
7,708 |
7,596 |
||||||||||||
Distributable Cash Flow |
$ |
31,649 |
$ |
29,580 |
$ |
60,859 |
$ |
59,880 |
The following table presents a reconciliation of the non-GAAP measures adjusted EBITDA and distributable cash flow by quarter and for the most recently completed twelve month period with the most directly comparable GAAP financial measures, which are net income and net cash provided by operating activities.
(unaudited) |
Q3 2017 |
Q4 2017 |
Q1 2018 |
Q2 2018 |
Twelve Months Ended June 30, 2018 | |||||||||||||||
Net Income |
$ |
33,468 |
$ |
37,602 |
$ |
33,705 |
$ |
30,282 |
$ |
135,057 |
||||||||||
Depreciation expense |
5,629 |
5,717 |
5,856 |
5,443 |
22,645 |
|||||||||||||||
Interest expense |
1,197 |
1,201 |
2,489 |
7,119 |
12,006 |
|||||||||||||||
EBITDA |
40,294 |
44,520 |
42,050 |
42,844 |
169,708 |
|||||||||||||||
Non-cash unit-based compensation expense |
249 |
277 |
579 |
690 |
1,795 |
|||||||||||||||
(Gain) loss on asset sales |
— |
— |
2,755 |
(254) |
2,501 |
|||||||||||||||
Adjusted EBITDA |
40,543 |
44,797 |
45,384 |
43,280 |
174,004 |
|||||||||||||||
Less: |
||||||||||||||||||||
Net income attributable to noncontrolling interest |
4,554 |
10,581 |
5,858 |
277 |
21,270 |
|||||||||||||||
Depreciation expense attributable to noncontrolling interest |
1,736 |
1,748 |
1,665 |
674 |
5,823 |
|||||||||||||||
Other expenses attributable to noncontrolling interest |
92 |
108 |
436 |
1,224 |
1,860 |
|||||||||||||||
(Gain) loss on asset sales attributable to noncontrolling interest |
— |
— |
2,617 |
(242) |
2,375 |
|||||||||||||||
Adjusted EBITDA Attributable to General and Limited Partner Ownership Interest in CNX Midstream Partners LP |
$ |
34,161 |
$ |
32,360 |
$ |
34,808 |
$ |
41,347 |
$ |
142,676 |
||||||||||
Less: cash interest paid, net |
1,154 |
1,154 |
2,015 |
5,573 |
9,896 |
|||||||||||||||
Less: maintenance capital expenditures, net of reimbursements |
3,579 |
3,483 |
3,583 |
4,125 |
14,770 |
|||||||||||||||
Distributable Cash Flow |
$ |
29,428 |
$ |
27,723 |
$ |
29,210 |
$ |
31,649 |
$ |
118,010 |
||||||||||
Net Cash Provided by Operating Activities |
$ |
38,203 |
$ |
40,913 |
$ |
41,867 |
$ |
53,674 |
$ |
174,657 |
||||||||||
Interest expense |
1,197 |
1,201 |
2,489 |
7,119 |
12,006 |
|||||||||||||||
(Gain) loss on asset sales |
— |
— |
2,755 |
(254) |
2,501 |
|||||||||||||||
Other, including changes in working capital |
1,143 |
2,683 |
(1,727) |
(17,259) |
(15,160) |
|||||||||||||||
Adjusted EBITDA |
40,543 |
44,797 |
45,384 |
43,280 |
174,004 |
|||||||||||||||
Less: |
||||||||||||||||||||
Net income attributable to noncontrolling interest |
4,554 |
10,581 |
5,858 |
277 |
21,270 |
|||||||||||||||
Depreciation expense attributable to noncontrolling interest |
1,736 |
1,748 |
1,665 |
674 |
5,823 |
|||||||||||||||
Other expenses attributable to noncontrolling interest |
92 |
108 |
436 |
1,224 |
1,860 |
|||||||||||||||
(Gain) loss on asset sales attributable to noncontrolling interest |
— |
— |
2,617 |
(242) |
2,375 |
|||||||||||||||
Adjusted EBITDA Attributable to General and Limited Partner Ownership Interest in CNX Midstream Partners LP |
$ |
34,161 |
$ |
32,360 |
$ |
34,808 |
$ |
41,347 |
$ |
142,676 |
||||||||||
Less: cash interest paid, net |
1,154 |
1,154 |
2,015 |
5,573 |
9,896 |
|||||||||||||||
Less: maintenance capital expenditures, net of reimbursements |
3,579 |
3,483 |
3,583 |
4,125 |
14,770 |
|||||||||||||||
Distributable Cash Flow |
$ |
29,428 |
$ |
27,723 |
$ |
29,210 |
$ |
31,649 |
$ |
118,010 |
||||||||||
Distributions Declared |
$ |
20,573 |
$ |
21,489 |
$ |
22,699 |
$ |
24,176 |
$ |
88,937 |
||||||||||
Distribution Coverage Ratio - Declared |
1.43 |
x |
1.29 |
x |
1.29 |
x |
1.31 |
x |
1.33 |
x | ||||||||||
Distributable Cash Flow |
$ |
29,428 |
$ |
27,723 |
$ |
29,210 |
$ |
31,649 |
$ |
118,010 |
||||||||||
Distributions Paid |
$ |
19,698 |
$ |
20,573 |
$ |
21,489 |
$ |
22,699 |
$ |
84,459 |
||||||||||
Distribution Coverage Ratio - Paid |
1.49 |
x |
1.35 |
x |
1.36 |
x |
1.39 |
x |
1.40 |
x |
The following table presents a reconciliation of the non-GAAP measures of the Partnership's projected adjusted EBITDA and projected distributable cash flow with the most directly comparable GAAP financial measure, which is projected net income. The following projections represent the approximate midpoint of the announced full year 2018 expected guidance ranges of adjusted EBITDA ($150-$165 million) and full year distributable cash flow ($120-$135 million) attributable to the Partnership. CNX Midstream's financial guidance is based on numerous assumptions about future events and conditions and, therefore, could vary materially from actual results. These estimates are meant to provide guidance only and are subject to revision for acquisitions or operating environment changes.
(unaudited) (in millions) |
Forecast 2018 Estimate | |||
Net Income |
$ |
132 | ||
Depreciation expense |
24 | |||
Interest expense |
22 | |||
EBITDA |
178 | |||
Non-cash unit-based compensation expense |
1 | |||
Adjusted EBITDA |
179 | |||
Less: |
||||
Net income attributable to noncontrolling interest |
13 | |||
Depreciation and other expenses attributable to noncontrolling interest |
6 | |||
Adjusted EBITDA Attributable to General and Limited Partner Ownership Interest in CNX Midstream Partners LP |
$ |
160 | ||
Less: cash interest paid, net |
22 | |||
Less: maintenance capital expenditures, net of reimbursements |
13 | |||
Distributable Cash Flow |
$ |
125 |
The Partnership is unable to project net cash provided by operating activities or provide the related reconciliation of projected net cash provided by operating activities to projected distributable cash flow, the most comparable financial measure calculated in accordance with GAAP, because net cash provided by operating activities includes the impact of changes in operating assets and liabilities. Changes in operating assets and liabilities relate to the timing of the Partnership's cash receipts and disbursements that may not relate to the period in which the operating activities occurred, and the Partnership is unable to project these timing differences with any reasonable degree of accuracy.
Development Companies Jointly Owned by CNX Gathering LLC and CNX Midstream Partners LP | |||||||||||||||
Three Months Ended June 30, 2018 | |||||||||||||||
Development Company | |||||||||||||||
Anchor |
Growth |
Additional |
TOTAL(*) | ||||||||||||
Income Summary |
|||||||||||||||
Revenue |
$ |
56,584 |
$ |
668 |
$ |
3,762 |
$ |
61,014 |
|||||||
Expenses |
26,593 |
482 |
3,657 |
30,732 |
|||||||||||
Net Income |
$ |
29,991 |
$ |
186 |
$ |
105 |
$ |
30,282 |
|||||||
Operating Statistics - Gathered Volumes |
|||||||||||||||
Dry gas (BBtu/d) |
667 |
15 |
9 |
691 |
|||||||||||
Wet gas (BBtu/d) |
530 |
1 |
121 |
652 |
|||||||||||
Condensate (MMcfe/d) |
3 |
— |
5 |
8 |
|||||||||||
Total Gathered Volumes |
1,200 |
16 |
135 |
1,351 |
|||||||||||
Capital Investment |
|||||||||||||||
Maintenance capital |
$ |
4,094 |
$ |
42 |
$ |
589 |
$ |
4,725 |
|||||||
Expansion capital |
20,408 |
— |
482 |
20,890 |
|||||||||||
Total Capital Investment |
$ |
24,502 |
$ |
42 |
$ |
1,071 |
$ |
25,615 |
|||||||
Capital Investment Net to CNX Midstream Partners LP |
|||||||||||||||
Maintenance capital |
$ |
4,094 |
$ |
2 |
$ |
29 |
$ |
4,125 |
|||||||
Expansion capital |
20,408 |
— |
24 |
20,432 |
|||||||||||
Total Capital Investment Net to CNX Midstream Partners LP |
$ |
24,502 |
$ |
2 |
$ |
53 |
$ |
24,557 |
|||||||
(*) On March 16, 2018, the Partnership, through its 100% interest in the Anchor Systems, consummated the Shirley-Penns Acquisition. Although the Partnership only held a 5% controlling interest in the earnings and production related to the Shirley-Penns System prior to March 16, 2018, consolidated activity is reflected in the tables above as if the Shirley-Penns Acquisition occurred on January 1, 2017 for comparability purposes. |
Development Companies Jointly Owned by CNX Gathering LLC and CNX Midstream Partners LP | |||||||||||||||
Three Months Ended June 30, 2017 | |||||||||||||||
Development Company | |||||||||||||||
Anchor |
Growth |
Additional |
TOTAL(*) | ||||||||||||
Income Summary |
|||||||||||||||
Revenue |
$ |
50,195 |
$ |
2,018 |
$ |
4,321 |
$ |
56,534 |
|||||||
Expenses |
19,431 |
1,512 |
5,839 |
26,782 |
|||||||||||
Net Income |
$ |
30,764 |
$ |
506 |
$ |
(1,518) |
$ |
29,752 |
|||||||
Operating Statistics - Gathered Volumes |
|||||||||||||||
Dry gas (BBtu/d) |
589 |
47 |
11 |
647 |
|||||||||||
Wet gas (BBtu/d) |
437 |
4 |
126 |
567 |
|||||||||||
Condensate (MMcfe/d) |
6 |
— |
3 |
9 |
|||||||||||
Total Gathered Volumes |
1,032 |
51 |
140 |
1,223 |
|||||||||||
Capital Investment |
|||||||||||||||
Maintenance capital |
$ |
4,460 |
$ |
215 |
$ |
— |
$ |
4,675 |
|||||||
Expansion capital |
7,381 |
167 |
— |
7,548 |
|||||||||||
Total Capital Investment |
$ |
11,841 |
$ |
382 |
$ |
— |
$ |
12,223 |
|||||||
Capital Investment Net to CNX Midstream Partners LP |
|||||||||||||||
Maintenance capital |
$ |
4,460 |
$ |
11 |
$ |
— |
$ |
4,471 |
|||||||
Expansion capital |
7,381 |
8 |
— |
7,389 |
|||||||||||
Total Capital Investment Net to CNX Midstream Partners LP |
$ |
11,841 |
$ |
19 |
$ |
— |
$ |
11,860 |
|||||||
(*) On March 16, 2018, the Partnership, through its 100% interest in the Anchor Systems, consummated the Shirley-Penns Acquisition. Although the Partnership only held a 5% controlling interest in the earnings and production related to the Shirley-Penns System prior to March 16, 2018, consolidated activity is reflected in the tables above as if the Shirley-Penns Acquisition occurred on January 1, 2017 for comparability purposes. |
View original content with multimedia:http://www.prnewswire.com/news-releases/cnx-midstream-reports-second-quarter-results-300690507.html
SOURCE CNX Midstream Partners LP
PITTSBURGH, July 27, 2018 /PRNewswire/ -- CNX Midstream Partners LP (NYSE: CNXM) ("CNXM" or the "Partnership"), today announced that the Board of Directors of its general partner, CNX Midstream GP LLC, has declared a cash distribution of $0.3361 per unit with respect to the second quarter of 2018. The distribution will be made on August 14, 2018 to unitholders of record as of the close of business on August 7, 2018. The distribution, which equates to an annual rate of $1.3444 per unit, represents an increase of 3.6% over the prior quarter, and an increase of 15% over the distribution paid with respect to the second quarter of 2017.
CNX Midstream Partners is a growth-oriented master limited partnership that owns, operates, develops and acquires gathering and other midstream energy assets to service natural gas production in the Appalachian Basin in Pennsylvania and West Virginia. Our assets include natural gas gathering pipelines and compression and dehydration facilities, as well as condensate gathering, collection, separation and stabilization facilities. More information is available at our website www.cnxmidstream.com.
This press release is intended to be a qualified notice to nominees as provided for under Treasury Regulation Section 1.1446-4(b). Brokers and nominees should treat one hundred percent (100.0%) of CNX Midstream's distributions to non-U.S. investors as being attributed to income that is effectively connected with a United States trade or business. Accordingly, CNX Midstream's distributions to non-U.S. investors are subject to federal income tax withholding at the highest applicable effective tax rate. Nominees, and not CNX Midstream, are treated as withholding agents responsible for withholding on the distributions received by them on behalf of foreign investors.
View original content with multimedia:http://www.prnewswire.com/news-releases/cnx-midstream-increases-quarterly-cash-distribution-300687978.html
SOURCE CNX Midstream Partners LP
DALLAS, July 13, 2018 /PRNewswire/ -- Swank Capital, LLC and Cushing® Asset Management, LP announce an upcoming interim change to the constituents of The Cushing® 30 MLP Index (the "Index"). On April 25, 2018, Index constituents EQT Midstream Partners, LP (NYSE: EQM) and Rice Midstream Partners LP (NYSE: RMP) entered into an agreement and plan of merger wherein EQM would acquire RMP, subject to the approval of RMP unitholders. A special meeting of RMP unitholders is scheduled for July 20, 2018, for the purpose of considering and voting on the proposed transaction. Per the Index's methodology guide, after the market closes on July 20, 2018, and effective on July 23, 2018, CNX Midstream Partners LP (NYSE: CNXM) will replace RMP as a constituent of the Index at RMP's then-current weight.
There will be no changes to the remaining constituents of the Index on that date.
ABOUT THE CUSHING® 30 MLP INDEX
The Cushing® 30 MLP Index tracks the performance of 30 publicly traded MLP securities that hold midstream energy infrastructure assets in North America, chosen according to a formula-based proprietary valuation model developed by Cushing® Asset Management, LP to rank MLPs for potential inclusion in the Index. The Index price level is calculated by S&P Dow Jones Indices and reported on a real-time basis under the Bloomberg ticker "MLPX".
ABOUT SWANK CAPITAL AND CUSHING® ASSET MANAGEMENT
Cushing® Asset Management, LP ("Cushing"), a subsidiary of Swank Capital, LLC, is an SEC-registered investment adviser headquartered in Dallas, Texas. Cushing serves as investment adviser to affiliated funds and managed accounts which invest primarily in securities of MLPs and other natural resource companies.
Cushing is also dedicated to serving the needs of MLP and energy income investors by sponsoring a variety of industry benchmarks, including The Cushing® MLP Market Cap Index (Bloomberg Ticker: CMCI), The Cushing® MLP High Income Index (Bloomberg Ticker: MLPY), The Cushing® Energy Index (Bloomberg Ticker: CENI), The Cushing® Energy Supply Chain Index (Bloomberg Ticker: CSCI), The Cushing® Transportation Index (Bloomberg Ticker: CTRI) and The Cushing® Utility Index (Bloomberg Ticker: CUTI). For more information, please visit http://www.cushingasset.com/indices.
Contact:
Judson Redmond
214-692-6334
www.cushingasset.com
The Cushing® 30 MLP Index (the "Index") is the exclusive property of Swank Capital, LLC, and Cushing Asset Management, LP, which have contracted with S&P Opco, LLC (a subsidiary of S&P Dow Jones Indices LLC) ("S&P Dow Jones Indices") to calculate and maintain the Index. S&P® is a registered trademark of Standard & Poor's Financial Services LLC ("SPFS"); Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC ("Dow Jones"); and, these trademarks have been licensed to S&P Dow Jones Indices. "Calculated by S&P Dow Jones Indices" and its related stylized mark(s) have been licensed for use by Swank Capital, LLC, and Cushing Asset Management, LP. Neither S&P Dow Jones Indices, SPFS, Dow Jones nor any of their affiliates sponsor and promote the Index and none shall be liable for any errors or omissions in calculating the Index.
CUSH-MLPX
View original content:http://www.prnewswire.com/news-releases/swank-capital-and-cushing-asset-management-announce-a-constituent-change-to-the-cushing-30-mlp-index-300680506.html
SOURCE Cushing Asset Management, LP; Swank Capital, LLC
PITTSBURGH, July 11, 2018 /PRNewswire/ -- CNX Resources Corp. (NYSE: CNX) and CNX Midstream Partners LP (NYSE: CNXM) will issue their second quarter earnings releases at 6:45 a.m. Eastern Time on Thursday, August 2. These releases will be followed by conference calls and live webcasts, which will be available on the 'Investor Relations' page of the CNX Resources website, and the 'News and Events' page of the CNX Midstream website. Also, earnings call slides will be available at 6:45 a.m. Eastern Time on Thursday, August 2, on each companies' websites.
Conference Call Information
CNX Resources (NYSE: CNX)
CNX Midstream Partners (NYSE: CNXM)
About CNX Resources
CNX Resources Corporation (NYSE: CNX) is one of the largest independent natural gas exploration, development and production companies, with operations centered in the major shale formations of the Appalachian basin. CNX deploys an organic growth strategy focused on responsibly developing its resource base. As of December 31, 2017, CNX had 7.6 trillion cubic feet equivalent of proved natural gas reserves. CNX is a member of the Standard & Poor's Midcap 400 Index. Additional information may be found at www.cnx.com.
About CNX Midstream Partners
CNX Midstream Partners LP (NYSE: CNXM) is a master limited partnership that owns, operates, develops and acquires gathering and other midstream energy assets to service natural gas production in the Appalachian Basin in Pennsylvania and West Virginia. CNXM's assets include natural gas gathering pipelines and compression and dehydration facilities, as well as condensate gathering, collection, separation and stabilization facilities. More information is available on CNXM's website www.cnxmidstream.com.
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SOURCE CNX Resources Corporation; CNX Midstream Partners LP
PITTSBURGH, June 29, 2018 /PRNewswire/ -- CNX Resources Corporation (NYSE: CNX) ("CNX" or "the company") today announced that it has reached an agreement to sell its Ohio Utica joint venture ("JV") assets to Ascent Resources-Utica, LLC for net cash proceeds of approximately $400 million. The divestiture includes 50 net producing wells with an average net revenue interest ("NRI") of 48%; five 50% working interest wells the company recently completed and expects to turn-in-line in July; two 50% working interest wells for which the company has drilled the top hole; and approximately 26,000 net undeveloped acres. The divested assets, which are owned in conjunction with Hess Corporation ("Hess"), are located in the wet gas Utica Shale areas of Belmont, Guernsey, Harrison, and Noble counties. The divested acres were not dedicated to CNX Midstream Partners LP (NYSE: CNXM) ("CNXM") and do not impact future dropdown opportunities.
Aside from the five recently completed wells, CNX did not have any additional activity associated with the divested assets in its future development plans. Starting on the effective date of the transaction of April 1, 2018, for the next twelve months, the company expects net production associated with these assets to be approximately 85 MMcfe per day, or 31 Bcfe, resulting in EBITDAX of approximately $50 million. The company expects full-year 2019 EBITDAX of approximately $25-$35 million. CNX will retain all related production and EBITDAX generated between the effective date and closing, which the company expects to be in the third quarter of 2018, subject to customary closing conditions and adjustments.
Cash proceeds from the transaction are expected to be used to:
"The sale of the Ohio Utica JV assets is only the most recent example of the disciplined capital allocation process that CNX has employed over the past several years," commented Nicholas J. DeIuliis, president and CEO. "This transaction is immediately accretive and brings forward the value of assets that were simply outranked by other options in CNX's opportunity set. We will evaluate the use of proceeds through the same capital allocation filter and be methodical in our decision-making. CNX remains committed to the share repurchase program and a healthy balance sheet, both of which we expect to be beneficiaries of this transaction."
As a result of the transaction, CNX expects to record a non-cash gain of approximately $135 million in the third quarter 2018, subject to post-closing adjustments. CNX does not expect to pay taxes on the transaction due to the utilization of existing net operating losses (NOLs).
Guidance Update
The company expects the divestiture to result in a 10 Bcfe reduction to 2018 production guidance based on Ohio wet Utica volumes previously planned between the expected third quarter 2018 close date and the end of the year. As a result, full-year 2018 production guidance is expected to be 490-515 Bcfe, compared to previous guidance of 500-525 Bcfe. Also, CNX expects a reduction of approximately $15 million to 2018 EBITAX attributable to CNX shareholders, or $810-$835 million, compared to the previous guidance of $825-$850 million.
For 2019 and 2020, the divestiture is expected to reduce total production volumes by 20-25 Bcfe and adjusted EBITDAX to CNX shareholders by $25-$35 million, for each year.
Non-GAAP Financial Measures
"EBITDAX," "EBITDAX attributable to CNX shareholders," and "adjusted EBITDAX attributable to CNX shareholders" are non-GAAP financial measures.
EBITDAX is defined as earnings before deducting net interest expense (interest expense less interest income), income taxes and depreciation, depletion and amortization and exploration expense. Adjusted EBITDAX is defined as EBITDAX after adjusting for certain discrete, non-recurring items. Adjusted EBITDAX attributable to CNX shareholders is defined as adjusted EBITDAX less adjusted EBITDAX attributable to noncontrolling interests. Although EBITDAX, adjusted EBITDAX, and adjusted EBITDAX attributable to CNX shareholders are not measures of performance calculated in accordance with generally accepted accounting principles, management believes that they are useful to an investor in evaluating CNX because they are widely used to evaluate a company's operating performance. We exclude stock-based compensation from adjusted EBITDAX because we do not believe it accurately reflects the actual operating expense incurred during the relevant period and may vary widely from period to period irrespective of operating results. Investors should not view these metrics as a substitute for measures of performance that are calculated in accordance with generally accepted accounting principles. In addition, because all companies do not calculate these measures identically, the definitions here may not be comparable to similarly titled measures of other companies.
Further, CNX is unable to provide a reconciliation of projected EBITDAX, adjusted EBITDAX or adjusted EBITDAX attributable to CNX shareholders to projected operating income, the most comparable financial measure calculated in accordance with GAAP, due to the unknown effect, timing, and potential significance of certain income statement items.
About CNX Resources
CNX Resources Corporation (NYSE: CNX) is one of the largest independent natural gas exploration, development and production companies, with operations centered in the major shale formations of the Appalachian basin. The company deploys an organic growth strategy focused on responsibly developing its resource base. As of December 31, 2017, CNX had 7.6 trillion cubic feet equivalent of proved natural gas reserves. The company is a member of the Standard & Poor's Midcap 400 Index. Additional information may be found at www.cnx.com.
Cautionary Statements
We are including the following cautionary statement in this press release to make applicable and take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 for any forward-looking statements made by, or on behalf of us. With the exception of historical matters, the matters discussed in this press release are forward-looking statements (as defined in 21E of the Securities Exchange Act of 1934 (the "Exchange Act")) that involve risks and uncertainties that could cause actual results to differ materially from projected results. Accordingly, investors should not place undue reliance on forward-looking statements as a prediction of actual results. These forward-looking statements may include projections and estimates concerning the timing and success of specific projects and our future production, revenues, income and capital spending. When we use the words "believe," "intend," "expect," "may," "should," "anticipate," "could," "estimate," "plan," "predict," "project," "will," or their negatives, or other similar expressions, the statements which include those words are usually forward-looking statements. When we describe a strategy that involves risks or uncertainties, we are making forward-looking statements. The forward-looking statements in this press release speak only as of the date of this press release; we disclaim any obligation to update these statements. We have based these forward-looking statements on our current expectations and assumptions about future events. While our management considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond our control. These risks, contingencies and uncertainties relate to, among other matters, the following: 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; an extended decline in the prices we receive for our natural gas and natural gas liquids affecting our operating results and cash flows; our dependence on gathering, processing and transportation facilities and other midstream facilities owned by CNXM and others; disruption of, capacity constraints in, or proximity to pipeline systems that could limit sales of our natural gas and natural gas liquids, and decreases in availability of third-party pipelines or other midstream facilities interconnected to CNXM's gathering systems; uncertainties in estimating our economically recoverable natural gas reserves, and inaccuracies in our estimates; the high-risk nature of drilling natural gas wells; our identified drilling locations are scheduled out over multiple years, making them susceptible to uncertainties that could materially alter the occurrence or timing of their drilling; the impact of potential, as well as any adopted environmental regulations including any relating to greenhouse gas emissions on our operating costs as well as on the market for natural gas and for our securities; environmental regulations introduce uncertainty that could adversely impact the market for natural gas with potential short and long-term liabilities; the risks inherent in natural gas operations, including our reliance upon third party contractors, being subject to unexpected disruptions, including geological conditions, equipment failure, timing of completion of significant construction or repair of equipment, fires, explosions, accidents and weather conditions that could impact financial results; decreases in the availability of, or increases in the price of, required personnel, services, equipment, parts and raw materials to support our operations; if natural gas prices remain depressed or drilling efforts are unsuccessful, we may be required to record write-downs of our proved natural gas properties; a loss of our competitive position because of the competitive nature of the natural gas industry or overcapacity in this industry impairing our profitability; deterioration in the economic conditions in any of the industries in which our customers operate, a domestic or worldwide financial downturn, or negative credit market conditions; hedging activities may prevent us from benefiting from price increases and may expose us to other risks; our inability to collect payments from customers if their creditworthiness declines or if they fail to honor their contracts; existing and future government laws, regulations and other legal requirements that govern our business may increase our costs of doing business and may restrict our operations; significant costs and liabilities may be incurred as a result of pipeline and related facility integrity management program testing and any related pipeline repair or preventative or remedial measures; our ability to find adequate water sources for our use in natural gas drilling, or our ability to dispose of or recycle water used or removed from strata in connection with our gas operations at a reasonable cost and within applicable environmental rules; the outcomes of various legal proceedings, including those which are more fully described in our reports filed under the Exchange Act; acquisitions and divestitures we anticipate may not occur or produce anticipated benefits; risks associated with our debt; failure to find or acquire economically recoverable natural gas reserves to replace our current natural gas reserves; decrease in our borrowing base, which could decrease for a variety of reasons including lower natural gas prices, declines in natural gas proved reserves, and lending requirements or regulations; we may operate a portion of our business with one or more joint venture partners or in circumstances where we are not the operator, which may restrict our operational and corporate flexibility and we may not realize the benefits we expect to realize from a joint venture; changes in federal or state income tax laws, particularly in the area of intangible drilling costs; challenges associated with strategic determinations, including the allocation of capital and other resources to strategic opportunities; our development and exploration projects, as well as CNXM's midstream system development, require substantial capital expenditures; terrorist attacks or cyber-attacks could have a material adverse effect on our business, financial condition or results of operations; construction of new gathering, compression, dehydration, treating or other midstream assets by CNXM may not result in revenue increases and may be subject to regulatory, environmental, political, legal and economic risks; our success depends on key members of our management and our ability to attract and retain experienced technical and other professional personnel; we may not achieve some or all of the expected benefits of the separation of CONSOL Energy; CONSOL Energy may fail to perform under various transaction agreements that were executed as part of the separation, including with respect to indemnification obligations; 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 has been allocated responsibility; the separation could result in substantial tax liability; and, with respect to the sale of the Ohio Joint Venture Utica assets, disruption to our business, including customer, employee and supplier relationships resulting from this transaction, risks that the conditions to closing may not be satisfied and the sale may not occur, and the impact of the transaction on our future operating and financial results. Additional factors are described in detail under the captions "Forward Looking Statements" and "Risk Factors" in our annual report on Form 10-K for the year ended December 31, 2017 filed with the Securities and Exchange Commission, as supplemented by our quarterly reports on Form 10-Q.
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SOURCE CNX Resources Corporation
PITTSBURGH, June 26, 2018 /PRNewswire/ -- CNX Midstream Partners LP (NYSE: CNXM) ("CNXM" or the "Partnership") today announced the pricing of an upsized underwritten public offering of an aggregate of 6,500,000 common units representing limited partner interests in the Partnership by NBL Midstream, LLC, a subsidiary of Noble Energy, Inc. (NYSE: NBL) (the "Selling Unitholder"), at a public offering price of $18.30 per common unit. The Selling Unitholder has granted the underwriters a 30-day option to purchase up to 975,000 additional common units at the public offering price, less the underwriting discount. The Partnership will not receive any proceeds from the sale of common units in the offering and the number of outstanding common units will remain unchanged. The offering is scheduled to close on June 29, 2018, subject to customary closing conditions.
Citigroup and Barclays are acting as joint book-running managers for the offering.
The offering of these securities is being made only by means of the prospectus supplement and accompanying base prospectus as filed with the Securities and Exchange Commission (the "SEC"). When available, copies of the preliminary prospectus supplement and accompanying base prospectus relating to the offering may be obtained free of charge on the SEC's website at www.sec.gov under the Partnership's name or from the underwriters of the offering as follows:
Citigroup Global Markets Inc.
c/o Broadridge Financial Solutions
1155 Long Island Avenue
Edgewood, NY 11717
Telephone: 800-831-9146
Barclays Capital Inc.
c/o Broadridge Financial Solutions
1155 Long Island Avenue
Edgewood, NY 11717
Telephone: (888) 603-5847
Email: Barclaysprospectus@broadridge.com
The common units are being offered and will be sold pursuant to an effective shelf registration statement that was previously filed with the SEC. This press release shall not constitute an offer to sell or a solicitation of an offer to buy the securities described above, nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction. The offering may be made only by means of a prospectus and related prospectus supplement meeting the requirements of Section 10 of the Securities Act of 1933, as amended.
About CNX Midstream Partners LP
CNXM is a growth-oriented master limited partnership that owns, operates, develops and acquires gathering and other midstream energy assets to service natural gas production in the Appalachian Basin in Pennsylvania and West Virginia. CNXM's assets include natural gas gathering pipelines and compression and dehydration facilities, as well as condensate gathering, collection, separation and stabilization facilities.
Cautionary Note Regarding Forward-Looking Statements
Various statements in this release, including those that express a belief, expectation or intention, may be considered forward-looking statements (within the meaning of the federal securities laws) that involve risks and uncertainties that could cause actual results to differ materially from projected results. Accordingly, investors should not place undue reliance on forward-looking statements as a prediction of actual results. These forward-looking statements include statements relating to the proposed offering. When we use the words "believe," "intend," "expect," "may," "should," "anticipate," "could," "estimate," "plan," "predict," "project," or their negatives, or other similar expressions, the statements which include those words are usually forward-looking statements. When we describe strategy that involves risks or uncertainties, we are making forward-looking statements. The forward-looking statements in this press release, if any, speak only as of the date of this press release; we disclaim any obligation to update these statements. We have based these forward-looking statements on our current expectations and assumptions about future events. While our management considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond our control. These risks, contingencies and uncertainties relate to, among other matters, the factors discussed in our 2017 Form 10-K under "Risk Factors," as updated by any subsequent Form 10-Qs, which are on file with the SEC.
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SOURCE CNX Midstream Partners LP
PITTSBURGH, June 26, 2018 /PRNewswire/ -- CNX Midstream Partners LP (NYSE: CNXM) ("CNXM" or the "Partnership") today announced the commencement of an underwritten public offering of an aggregate of 5,000,000 common units representing limited partner interests in the Partnership by NBL Midstream, LLC, a subsidiary of Noble Energy, Inc. (NYSE: NBL) (the "Selling Unitholder"). The Selling Unitholder intends to grant the underwriters a 30-day option to purchase up to 750,000 additional common units. The Partnership will not receive any proceeds from the sale of the common units in this offering and the number of outstanding common units will remain unchanged.
Citigroup and Barclays are acting as joint book-running managers for the offering.
The offering of these securities is being made only by means of the prospectus supplement and accompanying base prospectus as filed with the Securities and Exchange Commission (the "SEC"). When available, copies of the preliminary prospectus supplement and accompanying base prospectus relating to the offering may be obtained free of charge on the SEC's website at www.sec.gov under the Partnership's name or from the underwriters of the offering as follows:
Citigroup Global Markets Inc.
c/o Broadridge Financial Solutions
1155 Long Island Avenue
Edgewood, NY 11717
Telephone: 800-831-9146
Barclays Capital Inc.
c/o Broadridge Financial Solutions
1155 Long Island Avenue
Edgewood, NY 11717
Telephone: (888) 603-5847
Email: Barclaysprospectus@broadridge.com
The common units are being offered and will be sold pursuant to an effective shelf registration statement that was previously filed with the SEC. This press release shall not constitute an offer to sell or a solicitation of an offer to buy the securities described above, nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction. The offering may be made only by means of a prospectus and related prospectus supplement meeting the requirements of Section 10 of the Securities Act of 1933, as amended.
About CNX Midstream Partners LP
CNXM is a growth-oriented master limited partnership that owns, operates, develops and acquires gathering and other midstream energy assets to service natural gas production in the Appalachian Basin in Pennsylvania and West Virginia. CNXM's assets include natural gas gathering pipelines and compression and dehydration facilities, as well as condensate gathering, collection, separation and stabilization facilities.
Cautionary Note Regarding Forward-Looking Statements
Various statements in this release, including those that express a belief, expectation or intention, may be considered forward-looking statements (within the meaning of the federal securities laws) that involve risks and uncertainties that could cause actual results to differ materially from projected results. Accordingly, investors should not place undue reliance on forward-looking statements as a prediction of actual results. These forward-looking statements include statements relating to the proposed offering. When we use the words "believe," "intend," "expect," "may," "should," "anticipate," "could," "estimate," "plan," "predict," "project," or their negatives, or other similar expressions, the statements which include those words are usually forward-looking statements. When we describe strategy that involves risks or uncertainties, we are making forward-looking statements. The forward-looking statements in this press release, if any, speak only as of the date of this press release; we disclaim any obligation to update these statements. We have based these forward-looking statements on our current expectations and assumptions about future events. While our management considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond our control. These risks, contingencies and uncertainties relate to, among other matters, the factors discussed in our 2017 Form 10-K under "Risk Factors," as updated by any subsequent Form 10-Qs, which are on file with the SEC.
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SOURCE CNX Midstream Partners LP
PITTSBURGH, May 3, 2018 /PRNewswire/ -- CNX Resources Corporation (NYSE: CNX) ("CNX" or the company) reported net income attributable to CNX shareholders of $528 million, or earnings of $2.35 per diluted share, compared to a net loss attributable to CNX shareholders of $39 million, or a loss of $0.17 per diluted share, in the first quarter of 2017.
Prior to the company's previously announced acquisition on January 3, 2018, of the remaining 50% membership interest of CNX Gathering LLC ("CNX Gathering") (the "Midstream Acquisition"), the company accounted for its 50% interest in CNX Gathering LLC as an equity method investment. The Midstream Acquisition gave the company controlling interest in CNX Gathering and, through its ownership of the general partner, CNX Midstream Partners LP (NYSE: CNXM) ("CNXM"). As a result, commencing on January 3, 2018, the company's consolidated results include 100% of the results of CNX, CNX Gathering, CNX Midstream GP LLC, and CNXM.
Throughout this release, CNX distinguishes between these consolidated numbers and what is attributable to CNX shareholders, as follows:
Consolidated: Includes 100% of the results of CNX, CNX Gathering, CNX Midstream GP LLC, and CNXM.
Attributable to CNX shareholders: Subtracts out CNX's noncontrolling interest in CNXM, which is approximately 63.91% and is comprised of the limited partner units in CNXM, which were not acquired by CNX.
On a consolidated basis, earnings before deducting net interest expense (interest expense less interest income), income taxes and depreciation, depletion and amortization (EBITDA) from continuing operations1 were $922 million for the 2018 first quarter, compared to negative $2 million in the year-earlier quarter.
On a GAAP basis, the first quarter earnings included the following pre-tax items attributable to continuing operations:
After adjusting for these and certain other items, which are described in the footnote to the EBITDA reconciliation table, the company had adjusted net income attributable to CNX shareholders1 in the 2018 first quarter of $42 million, or $0.19 per diluted share. Adjusted EBITDAX attributable to CNX shareholders1 was $236 million for the 2018 first quarter, compared to $124 million in the year-earlier quarter. On a consolidated basis, adjusted EBITDAX from continuing operations1 was $259 million for the 2018 first quarter.
During the first quarter of 2018, CNX sold 129.5 Bcfe of natural gas, or an increase of 36% from the 95.0 Bcfe sold in the year-earlier quarter, driven primarily from Utica Shale volumes. Total quarterly production costs decreased to $2.10 per Mcfe, compared to the year-earlier quarter of $2.32 per Mcfe, driven primarily by reductions in transportation, gathering, and compression costs, and depreciation, depletion and amortization (DD&A), offset in part by an increase in lease operating expense (LOE). On a consolidated basis, capital expenditures were $232 million, of which $216 million was related to E&P, compared to $104 million spent in the year-earlier quarter.
"Our first full quarter, post spin, was a successful quarter highlighted by strong operational execution; cash flows growing materially; approximately $102 million in asset sales; closing on the previously announced acquisition of the remaining 50% membership interest in CNX Gathering; selling the West Virginia Shirley-Pennsboro gathering system to CNXM for $265 million; additional stacked pay delineation; and the continuation of the share repurchase program," commented Nicholas J. DeIuliis, president and CEO.
During the quarter, CNX received approximately $102 million in proceeds from the sale of assets, which included approximately $88 million for the sale of CNX's shallow oil and gas (SOG) assets, as well as proceeds for the sale of scattered acreage and other miscellaneous assets. In connection with the SOG sale, the buyer assumed approximately $200 million of liabilities primarily associated with asset retirement obligations, which CNX had on its balance sheet.
Also during the quarter, CNX sold its 95% interest in the Shirley-Pennsboro gathering system to CNXM for total cash consideration of $265 million, which substantially returned the investment the company made in the Midstream Acquisition. A sale under common control doesn't allow for a gain or loss, and as a result this transaction is not reflected under proceeds from asset sales in the cash flow statement due to consolidated accounting rules. In total, however, including the sale of the Shirley-Pennsboro gathering system, CNX sold approximately $367 million of assets during the first quarter of 2018.
The company has continued to utilize cash on the balance sheet to repurchase common stock under its one-year $450 million share repurchase program and has repurchased over 13 million shares for a total price of $200 million since October 2017. The company continues to focus on the capital allocation opportunity to repurchase additional shares using both cash on hand, as well as balance sheet capacity up to its 2.5x leverage ratio target, which the company de-risks through its programmatic hedging strategy incorporating both NYMEX and basis hedges.
1The terms "EBITDA from continuing operations," "adjusted net income attributable to CNX shareholders," "adjusted EBITDAX attributable to CNX shareholders," and " adjusted EBITDAX from continuing operations" are non-GAAP financial measures, which are defined and reconciled to the GAAP net income below, under the caption "Non-GAAP Financial Measures." |
First Quarter Operations Summary:
In the first quarter of 2018, CNX operated three horizontal rigs and drilled 19 wells: two Utica Shale wells in Monroe County, Ohio; seven Marcellus Shale wells in Greene County, Pennsylvania; and 10 Marcellus Shale wells in Washington County, Pennsylvania.
Also, CNX completed five wells during the quarter: three Marcellus Shale wells in Washington County, Pennsylvania and two deep dry Utica Shale wells, the RHL 11 and Marchand 3M. The RHL 11 is located in Greene County, Pennsylvania, and the Marchand 3M is located in Indiana County, Pennsylvania. These two deep dry Utica Shale wells are still in the early days of their producing lives. Both wells are flowing using managed pressure drawdown production methods and are valuable data points in delineating the Pennsylvania dry Utica Shale and are providing further confidence in understanding the play, as the company moves into commercial stacked pay development.
Marcellus Shale volumes, including liquids, in the 2018 first quarter were 65.9 Bcfe, approximately 14% higher than the 58.0 Bcfe produced in the 2017 first quarter. The increased production is due to new Marcellus Shale wells coming on line late in 2017 and during the first quarter of 2018. Marcellus total production costs were $2.30 per Mcfe in the just-ended quarter, which is a $0.12 per Mcfe increase from the first quarter of 2017 of $2.18 per Mcfe, driven by increases to water disposal costs and processing costs associated with the Shirley-Pennsboro wells that were turned-in-line (TIL) during the third and fourth quarters of 2017.
Utica Shale volumes, including liquids, in the 2018 first quarter were 43.5 Bcfe, approximately 184% higher than the 15.3 Bcfe in the year-earlier quarter, and which is consistent with the company's previously stated expectations that Utica Shale volumes would ramp in the fourth quarter of 2017 and the first quarter of 2018, driven primarily from TIL activity in Monroe County, Ohio. In addition to the production, the ramp in Monroe County volumes also benefited overall Utica Shale total production costs, which were $1.60 per Mcfe in the just-ended quarter, or a $0.56 per Mcfe improvement from the first quarter of 2017 total production costs of $2.16 per Mcfe.
CNX's natural gas production in the quarter came from the following categories:
Quarter |
Quarter |
Quarter |
|||||||||||||
Ended |
Ended |
Ended |
|||||||||||||
March 31, |
March 31, |
% Increase/ |
December 31, |
% Increase/ | |||||||||||
GAS |
|||||||||||||||
Marcellus Sales Volumes (Bcf) |
56.1 |
52.9 |
6.0 |
% |
53.6 |
4.7 |
% | ||||||||
Utica Sales Volumes (Bcf) |
41.4 |
11.6 |
256.9 |
% |
30.9 |
34.0 |
% | ||||||||
CBM Sales Volumes (Bcf) |
15.9 |
16.7 |
(4.8) |
% |
16.0 |
(0.6) |
% | ||||||||
Other Sales Volumes (Bcf)1 |
4.1 |
4.9 |
(16.3) |
% |
5.0 |
(18.0) |
% | ||||||||
LIQUIDS2 |
|||||||||||||||
NGLs Sales Volumes (Bcfe) |
11.1 |
8.1 |
37.0 |
% |
12.2 |
(9.0) |
% | ||||||||
Oil Sales Volumes (Bcfe) |
0.1 |
0.1 |
— |
% |
0.1 |
— |
% | ||||||||
Condensate Sales Volumes (Bcfe) |
0.8 |
0.7 |
14.3 |
% |
1.1 |
(27.3) |
% | ||||||||
TOTAL |
129.5 |
95.0 |
36.3 |
% |
118.9 |
8.9 |
% | ||||||||
Average Daily Production (MMcfe) |
1,439.0 |
1,055.8 |
1,292.3 |
||||||||||||
1Other Sales Volumes: primarily related to shallow oil and gas production. | |||||||||||||||
2NGLs, Oil and Condensate are converted to Mcfe at the rate of one barrel equals six Mcf based upon the approximate relative energy content of oil and natural gas, which is not indicative of the relationship of oil, NGLs, condensate, and natural gas prices. |
PRICE AND COST DATA PER MCFE — Quarter-to-Quarter Comparison: | ||||||||||||
Quarter |
Quarter |
Quarter | ||||||||||
Ended |
Ended |
Ended | ||||||||||
(Per Mcfe) |
March 31, |
March 31, |
December 31, | |||||||||
Average Sales Price - Gas |
$ |
2.96 |
$ |
3.18 |
$ |
2.29 |
||||||
Average (Loss) Gain on Commodity Derivative Instruments - Cash Settlement- Gas |
$ |
(0.14) |
$ |
(0.55) |
$ |
0.19 |
||||||
Average Sales Price - Oil* |
$ |
9.41 |
$ |
7.40 |
$ |
7.58 |
||||||
Average Sales Price - NGLs* |
$ |
4.58 |
$ |
4.86 |
$ |
5.08 |
||||||
Average Sales Price - Condensate* |
$ |
8.22 |
$ |
5.64 |
$ |
7.68 |
||||||
Average Sales Price - Total Company |
$ |
3.00 |
$ |
2.85 |
$ |
2.80 |
||||||
Lease Operating Expense |
$ |
0.28 |
$ |
0.23 |
$ |
0.21 |
||||||
Production, Ad Valorem, and Other Fees |
0.07 |
0.09 |
0.08 |
|||||||||
Transportation, Gathering and Compression |
0.86 |
0.99 |
0.87 |
|||||||||
Depreciation, Depletion and Amortization (DD&A) |
0.89 |
1.01 |
1.01 |
|||||||||
Total Production Costs |
$ |
2.10 |
$ |
2.32 |
$ |
2.17 |
||||||
Margin |
$ |
0.90 |
$ |
0.53 |
$ |
0.63 |
||||||
Addback: DD&A |
$ |
0.89 |
$ |
1.01 |
$ |
1.01 |
||||||
Margin, before DD&A |
$ |
1.79 |
$ |
1.54 |
$ |
1.64 |
||||||
*NGLs, Oil, and Condensate are converted to Mcfe at the rate of one barrel equals six Mcf based upon the approximate relative energy content of oil and natural gas, which is not indicative of the relationship of oil, NGLs, condensate, and natural gas prices. | ||||||||||||
Note: "Total Production Costs" excludes Selling, General, and Administration and Other Operating Expenses. |
The average sales price of $3.00 per Mcfe, when combined with unit costs of $2.10 per Mcfe, resulted in a margin of $0.90 per Mcfe. This was an increase when compared to the year-earlier quarter, due to improvements in average sales price and total production costs.
Marketing Update:
For the first quarter of 2018, CNX's average sales price for natural gas, natural gas liquids (NGLs), oil, and condensate was $3.00 per Mcfe. CNX's average price for natural gas was $2.96 per Mcf for the quarter and, including cash settlements from hedging, was $2.82 per Mcf. The average realized price for all liquids for the first quarter of 2018 was $29.15 per barrel.
CNX's weighted average differential from NYMEX in the first quarter of 2018 was negative $0.21 per MMBtu. With an improved Henry Hub price coupled with an improved differential, CNX's average sales price for natural gas before hedging improved 29% to $2.96 per Mcf compared to the average sales price of $2.29 per Mcf in the fourth quarter of 2017. Including the impact of cash settlements from hedging, the average sales price for natural gas was $0.34 per Mcf higher than the fourth quarter of 2017.
Guidance:
CNX reaffirms its 2018 production guidance of approximately 500-525 Bcfe and total 2018 capital expenditures attributable to CNX of approximately $790-$915 million.
The company also reaffirms adjusted 2018 EBITDAX attributable to CNX of $825-$850 million, which includes approximately $60-$90 million of EBITDA attributable to CNX's ownership in CNXM.
Total hedged natural gas production in the 2018 second quarter is 93.8 Bcf. The annual gas hedge position is shown in the table below:
2018 |
2019 | ||||
Volumes Hedged (Bcf), as of 4/23/18 |
374.5* |
335.8 | |||
*Includes actual settlements of 117.5 Bcf. |
CNX's hedged gas volumes include a combination of NYMEX financial hedges and physical fixed price sales. In addition, to protect the NYMEX hedge volumes from basis exposure, CNX enters into basis-only financial hedges and physical sales with fixed basis at certain sales points. CNX's gas hedge position through 2021 is shown in the table below:
Q2 2018 |
2018 |
2019 |
2020 |
2021 | ||||||||||||||||
NYMEX Only Hedges |
||||||||||||||||||||
Volumes (Bcf) |
89.5 |
357.2 |
323.0 |
223.9 |
173.3 |
|||||||||||||||
Average Prices ($/Mcf) |
$ |
3.13 |
$ |
3.15 |
$ |
3.03 |
$ |
3.09 |
$ |
3.01 |
||||||||||
Physical Fixed Price Sales |
||||||||||||||||||||
Volumes (Bcf) |
4.3 |
17.3 |
12.8 |
11.0 |
21.3 |
|||||||||||||||
Average Prices ($/Mcf) |
$ |
2.60 |
$ |
2.62 |
$ |
2.49 |
$ |
2.44 |
$ |
2.46 |
||||||||||
Total Volumes Hedged (Bcf)1 |
93.8 |
374.5 |
335.8 |
234.9 |
194.6 |
|||||||||||||||
NYMEX + Basis (fully-covered volumes)2 |
||||||||||||||||||||
Volumes (Bcf) |
93.8 |
374.5 |
312.8 |
205.6 |
194.6 |
|||||||||||||||
Average Prices ($/Mcf) |
$ |
2.75 |
$ |
2.77 |
$ |
2.68 |
$ |
2.72 |
$ |
2.54 |
||||||||||
NYMEX Only Hedges Exposed to Basis |
||||||||||||||||||||
Volumes (Bcf) |
— |
— |
23.0 |
29.3 |
— |
|||||||||||||||
Average Prices ($/Mcf) |
$ |
— |
$ |
— |
$ |
3.03 |
$ |
3.09 |
$ |
— |
||||||||||
Total Volumes Hedged (Bcf)1 |
93.8 |
374.5 |
335.8 |
234.9 |
194.6 |
|||||||||||||||
1Q2 2018, 2018, and 2021 exclude 2.3 Bcf, 14.2 Bcf, and 4.0 Bcf, respectively, of physical basis sales not matched with NYMEX hedges. | ||||||||||||||||||||
2Includes physical sales with fixed basis in Q2 2018, 2018, 2019, 2020, and 2021 of 24.0 Bcf, 92.6 Bcf, 102.1 Bcf, 67.2 Bcf, and 67.5 Bcf, respectively. |
During the first quarter of 2018, CNX added additional NYMEX natural gas hedges of 80.5 Bcf, 41.6 Bcf, 25.6 Bcf, and 19.8 Bcf for 2019, 2020, 2021, and 2022 respectively. To help mitigate basis exposure on NYMEX hedges, in the first quarter CNX added 0.4 Bcf, 54.3 Bcf, 27.3 Bcf, 54.4 Bcf, and 56.8 Bcf of basis hedges for 2018, 2019, 2020, 2021, and 2022, respectively.
Note: CNX is unable to provide a reconciliation of projected Adjusted EBITDAX to projected operating income, the most comparable financial measure calculated in accordance with GAAP, due to the unknown effect, timing, and potential significance of certain income statement items. |
Finance:
At March 31, 2018, the company's credit facility had no borrowings outstanding and $253 million of letters of credit outstanding, leaving $1,847 million of unused capacity. In addition, CNX holds 21.7 million CNXM limited partnership units with a current market value of approximately $400 million as of April 19, 2018.
During the quarter, CNX amended and restated its senior secured revolving credit facility, which expires on March 8, 2023. The credit facility increased lenders' commitments from $1.5 billion to $2.1 billion with an accordion feature that allows the company to increase the commitments to $3.0 billion. The initial borrowing base increased from $2.0 billion to $2.5 billion.
During the quarter, CNX purchased $391 million of its outstanding 5.875% senior notes due in April 2022. As part of this transaction, a loss of $16 million was included in Loss on Debt Extinguishment on the Consolidated Statements of Income.
Also during the first quarter, the company bought back 5.8 million additional shares bringing the total amount of shares repurchased since the inception of the program in October 2017 to over 13 million shares for $200 million. As of April 16, 2018, CNX's shares outstanding were 217,910,959. The company has approximately $250 million remaining on its one-year $450 million share repurchase program, which expires in September 2018.
About CNX
CNX Resources Corporation (NYSE: CNX) is one of the largest independent natural gas exploration, development and production companies, with operations centered in the major shale formations of the Appalachian basin. The company deploys an organic growth strategy focused on responsibly developing its resource base. As of December 31, 2017, CNX had 7.6 trillion cubic feet equivalent of proved natural gas reserves. The company is a member of the Standard & Poor's Midcap 400 Index. Additional information may be found at www.cnx.com.
Non-GAAP Financial Measures
Definition: EBIT is defined as earnings before deducting net interest expense (interest expense less interest income) and income taxes. EBITDA is defined as earnings before deducting net interest expense (interest expense less interest income), income taxes and depreciation, depletion and amortization. Adjusted EBITDAX is defined as EBITDA after adjusting for the discrete items listed below, including exploration expense. Although EBIT, EBITDA, and Adjusted EBITDAX are not measures of performance calculated in accordance with generally accepted accounting principles, management believes that they are useful to an investor in evaluating CNX Resources because they are widely used to evaluate a company's operating performance. We exclude stock-based compensation from Adjusted EBITDAX because we do not believe it accurately reflects the actual operating expense incurred during the relevant period and may vary widely from period to period irrespective of operating results. Investors should not view these metrics as a substitute for measures of performance that are calculated in accordance with generally accepted accounting principles. In addition, because all companies do not calculate EBIT, EBITDA, or Adjusted EBITDAX identically, the presentation here may not be comparable to similarly titled measures of other companies.
Reconciliation of EBIT, EBITDA and Adjusted EBITDAX to financial net income attributable to CNX Resources Shareholders is as follows (dollars in 000):
Three Months Ended | ||||||||||||||||||||
March 31, | ||||||||||||||||||||
2018 |
2018 |
2018 |
2018 |
2017 | ||||||||||||||||
Dollars in thousands |
E&P |
Midstream |
Unallocated1 |
Total |
Total | |||||||||||||||
Net Income (Loss) |
$ |
99,809 |
$ |
35,534 |
$ |
410,203 |
$ |
545,546 |
$ |
(38,966) |
||||||||||
Less: Income from Discontinued Operations |
— |
— |
— |
— |
(52,041) |
|||||||||||||||
Add: Interest Expense |
36,062 |
2,489 |
— |
38,551 |
41,606 |
|||||||||||||||
Less: Interest Income |
(76) |
— |
— |
(76) |
(953) |
|||||||||||||||
Add: Income Taxes (Benefit) |
— |
— |
213,694 |
213,694 |
(47,422) |
|||||||||||||||
Earnings Before Interest & Taxes (EBIT) |
135,795 |
38,023 |
623,897 |
797,715 |
(97,776) |
|||||||||||||||
Add: Depreciation, Depletion & Amortization |
115,866 |
8,801 |
— |
124,667 |
95,678 |
|||||||||||||||
Earnings Before Interest, Taxes and DD&A (EBITDA) from Continuing Operations |
$ |
251,661 |
$ |
46,824 |
$ |
623,897 |
$ |
922,382 |
$ |
(2,098) |
||||||||||
Adjustments: |
||||||||||||||||||||
Unrealized Gain on Commodity Derivative Instruments |
(52,078) |
— |
— |
(52,078) |
(24,640) |
|||||||||||||||
Gain on Certain Asset Sales |
— |
(4,737) |
(4,750) |
(9,487) |
— |
|||||||||||||||
Gain on Previously Held Equity Interest |
— |
— |
(623,663) |
(623,663) |
— |
|||||||||||||||
Severance Expense |
749 |
65 |
— |
814 |
230 |
|||||||||||||||
Put Option Fair Value - Reversal from Prior Year |
— |
— |
(3,500) |
(3,500) |
— |
|||||||||||||||
Other Transaction Fees |
1,149 |
— |
— |
1,149 |
— |
|||||||||||||||
Loss (Gain) on Debt Extinguishment |
— |
— |
15,635 |
15,635 |
(822) |
|||||||||||||||
Stock-Based Compensation |
4,330 |
579 |
— |
4,909 |
3,754 |
|||||||||||||||
Impairment of E&P Properties |
— |
— |
— |
— |
137,865 |
|||||||||||||||
Exploration Expense |
2,380 |
— |
— |
2,380 |
9,785 |
|||||||||||||||
Total Pre-tax Adjustments |
(43,470) |
(4,093) |
(616,278) |
(663,841) |
126,172 |
|||||||||||||||
Adjusted EBITDAX from Continuing Operations |
$ |
208,191 |
$ |
42,731 |
$ |
7,619 |
$ |
258,541 |
$ |
124,074 |
||||||||||
Less: Adjusted EBITDA Attributable to Noncontrolling Interest2 |
— |
22,763 |
— |
22,763 |
— |
|||||||||||||||
Adjusted EBITDAX Attributable to CNX Resources Shareholders |
$ |
208,191 |
$ |
19,968 |
$ |
7,619 |
$ |
235,778 |
$ |
124,074 |
||||||||||
Note: Income tax effect of Total Pre-tax Adjustments (excluding exploration expense) was ($180,679) and $40,306 for the three months ended March 31, 2018 and March 31, 2017, respectively. Adjusted net income attributable to CNX Resources Shareholders for the three months ended March 31, 2018 is calculated as GAAP net income attributable to CNX shareholders of $527,563 less total pre-tax adjustments from the above table of ($666,221), plus the associated tax expense of ($180,679) equals the adjusted net income attributable to CNX shareholders of $42,021. | ||||||||||||||||||||
1CNX's unallocated expenses include other expense, gain on sale of assets, loss on debt extinguishment and income taxes. | ||||||||||||||||||||
2Adjusted EBITDA Attributable to Noncontrolling Interest for the three months ended March 31, 2018 is Net Income Attributable to Noncontrolling interest of $17,983 plus Depreciation, Depletion and Amortization of $2,707, plus Interest Expense of $1,699, plus Stock-based compensation of $374. Calculated by taking an average noncontrolling interest percentage of 63.91%. |
Management uses net debt to determine the company's outstanding debt obligations that would not be readily satisfied by its cash and cash equivalents on hand. Management believes that using net debt attributable to CNX Resources shareholders is useful to investors in determining the company's leverage ratio since the company could choose to use its cash and cash equivalents to retire debt.
Net Debt Attributable to CNX Resources Shareholders |
March 31, 2018 | ||||||||
E&P |
Midstream |
Total | |||||||
Total Debt (GAAP)1 |
$ |
1,824,020 |
$ |
412,647 |
$ |
2,236,667 |
|||
Less Cash and Cash Equivalents |
76,608 |
5,882 |
82,490 |
||||||
Net Debt (Non-GAAP) |
1,747,412 |
406,765 |
2,154,177 |
||||||
Net Debt Attributable to Noncontrolling Interest2 |
— |
260,867 |
260,867 |
||||||
Net Debt Attributable to CNX Resources Shareholders |
$ |
1,747,412 |
$ |
145,898 |
$ |
1,893,310 |
|||
1Includes current portion. | |||||||||
2Calculated by taking an average noncontrolling interest percentage of 63.91% |
Cautionary Statements
We are including the following cautionary statement in this press release to make applicable and take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 for any forward-looking statements made by, or on behalf of us. With the exception of historical matters, the matters discussed in this press release are forward-looking statements (as defined in 21E of the Securities Exchange Act of 1934 (the "Exchange Act")) that involve risks and uncertainties that could cause actual results to differ materially from projected results. Accordingly, investors should not place undue reliance on forward-looking statements as a prediction of actual results. These forward-looking statements may include projections and estimates concerning the timing and success of specific projects and our future production, revenues, income and capital spending. When we use the words "believe," "intend," "expect," "may," "should," "anticipate," "could," "estimate," "plan," "predict," "project," "will," or their negatives, or other similar expressions, the statements which include those words are usually forward-looking statements. When we describe a strategy that involves risks or uncertainties, we are making forward-looking statements. The forward-looking statements in this press release speak only as of the date of this press release; we disclaim any obligation to update these statements. We have based these forward-looking statements on our current expectations and assumptions about future events. While our management considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond our control. These risks, contingencies and uncertainties relate to, among other matters, the following: 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; an extended decline in the prices we receive for our natural gas and natural gas liquids affecting our operating results and cash flows; our dependence on gathering, processing and transportation facilities and other midstream facilities owned by CNXM and others; disruption of, capacity constraints in, or proximity to pipeline systems that could limit sales of our natural gas and natural gas liquids, and decreases in availability of third-party pipelines or other midstream facilities interconnected to CNXM's gathering systems; uncertainties in estimating our economically recoverable natural gas reserves, and inaccuracies in our estimates; the high-risk nature of drilling natural gas wells; our identified drilling locations are scheduled out over multiple years, making them susceptible to uncertainties that could materially alter the occurrence or timing of their drilling; the impact of potential, as well as any adopted environmental regulations including any relating to greenhouse gas emissions on our operating costs as well as on the market for natural gas and for our securities; environmental regulations introduce uncertainty that could adversely impact the market for natural gas with potential short and long-term liabilities; the risks inherent in natural gas operations, including our reliance upon third party contractors, being subject to unexpected disruptions, including geological conditions, equipment failure, timing of completion of significant construction or repair of equipment, fires, explosions, accidents and weather conditions that could impact financial results; decreases in the availability of, or increases in the price of, required personnel, services, equipment, parts and raw materials to support our operations; if natural gas prices remain depressed or drilling efforts are unsuccessful, we may be required to record write-downs of our proved natural gas properties; a loss of our competitive position because of the competitive nature of the natural gas industry or overcapacity in this industry impairing our profitability; deterioration in the economic conditions in any of the industries in which our customers operate, a domestic or worldwide financial downturn, or negative credit market conditions; hedging activities may prevent us from benefiting from price increases and may expose us to other risks; our inability to collect payments from customers if their creditworthiness declines or if they fail to honor their contracts; existing and future government laws, regulations and other legal requirements that govern our business may increase our costs of doing business and may restrict our operations; significant costs and liabilities may be incurred as a result of pipeline and related facility integrity management program testing and any related pipeline repair or preventative or remedial measures; our ability to find adequate water sources for our use in natural gas drilling, or our ability to dispose of or recycle water used or removed from strata in connection with our gas operations at a reasonable cost and within applicable environmental rules; the outcomes of various legal proceedings, including those which are more fully described in our reports filed under the Exchange Act; acquisitions and divestitures we anticipate may not occur or produce anticipated benefits; risks associated with our debt; failure to find or acquire economically recoverable natural gas reserves to replace our current natural gas reserves; decrease in our borrowing base, which could decrease for a variety of reasons including lower natural gas prices, declines in natural gas proved reserves, and lending requirements or regulations; we may operate a portion of our business with one or more joint venture partners or in circumstances where we are not the operator, which may restrict our operational and corporate flexibility and we may not realize the benefits we expect to realize from a joint venture; changes in federal or state income tax laws, particularly in the area of intangible drilling costs; challenges associated with strategic determinations, including the allocation of capital and other resources to strategic opportunities; our development and exploration projects, as well as CNXM's midstream system development, require substantial capital expenditures; terrorist attacks or cyber-attacks could have a material adverse effect on our business, financial condition or results of operations; construction of new gathering, compression, dehydration, treating or other midstream assets by CNXM may not result in revenue increases and may be subject to regulatory, environmental, political, legal and economic risks; our success depends on key members of our management and our ability to attract and retain experienced technical and other professional personnel; we may not achieve some or all of the expected benefits of the separation of CONSOL Energy; CONSOL Energy may fail to perform under various transaction agreements that were executed as part of the separation, including with respect to indemnification obligations; 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 has been allocated responsibility; and the separation could result in substantial tax liability. Additional factors are described in detail under the captions "Forward Looking Statements" and "Risk Factors" in our annual report on Form 10-K for the year ended December 31, 2017 filed with the Securities and Exchange Commission, as supplemented by our quarterly reports on Form 10-Q.
CNX RESOURCES CORPORATION AND SUBSIDIARIES | |||||||
CONSOLIDATED STATEMENTS OF INCOME | |||||||
(Dollars in thousands, except per share data) |
Three Months Ended | ||||||
(Unaudited) |
March 31, | ||||||
Revenues and Other Operating Income: |
2018 |
2017 | |||||
Natural Gas, NGLs and Oil Revenue |
$ |
405,623 |
$ |
317,763 |
|||
Gain (Loss) on Commodity Derivative Instruments |
35,087 |
(22,463) |
|||||
Purchased Gas Revenue |
18,055 |
8,979 |
|||||
Midstream Revenue |
26,254 |
— |
|||||
Other Operating Income |
10,710 |
15,650 |
|||||
Total Revenue and Other Operating Income |
495,729 |
319,929 |
|||||
Costs and Expenses: |
|||||||
Operating Expense |
|||||||
Lease Operating Expense |
36,810 |
21,633 |
|||||
Transportation, Gathering and Compression |
86,261 |
94,332 |
|||||
Production, Ad Valorem, and Other Fees |
9,233 |
9,329 |
|||||
Depreciation, Depletion and Amortization |
124,667 |
95,678 |
|||||
Exploration and Production Related Other Costs |
2,380 |
9,785 |
|||||
Purchased Gas Costs |
17,054 |
8,895 |
|||||
Impairment of Exploration and Production Properties |
— |
137,865 |
|||||
Selling, General, and Administrative Costs |
31,349 |
21,802 |
|||||
Other Operating Expense |
16,047 |
18,176 |
|||||
Total Operating Expense |
323,801 |
417,495 |
|||||
Other (Income) Expense |
|||||||
Other (Income) Expense |
(6,493) |
4,075 |
|||||
Gain on Asset Sales |
(11,342) |
(3,996) |
|||||
Gain on Previously Held Equity Interest |
(623,663) |
— |
|||||
Loss (Gain) on Debt Extinguishment |
15,635 |
(822) |
|||||
Interest Expense |
38,551 |
41,606 |
|||||
Total Other (Income) Expense |
(587,312) |
40,863 |
|||||
Total Costs And Expenses |
(263,511) |
458,358 |
|||||
Earnings (Loss) From Continuing Operations Before Income Tax |
759,240 |
(138,429) |
|||||
Income Tax Expense (Benefit) |
213,694 |
(47,422) |
|||||
Income (Loss) From Continuing Operations |
545,546 |
(91,007) |
|||||
Income From Discontinued Operations, net |
— |
52,041 |
|||||
Net Income (Loss) |
545,546 |
(38,966) |
|||||
Less: Net Income Attributable to Noncontrolling Interest |
17,983 |
— |
|||||
Net Income (Loss) Attributable to CNX Resources Shareholders |
$ |
527,563 |
$ |
(38,966) |
CNX RESOURCES CORPORATION AND SUBSIDIARIES | |||||||
CONSOLIDATED STATEMENTS OF INCOME (CONTINUED) | |||||||
(Dollars in thousands, except per share data) |
Three Months Ended | ||||||
(Unaudited) |
March 31, | ||||||
Earnings (Loss) Per Share |
2018 |
2017 | |||||
Basic |
|||||||
Income (Loss) from Continuing Operations |
$ |
2.38 |
$ |
(0.40) |
|||
Income from Discontinued Operations |
— |
0.23 |
|||||
Total Basic Earnings (Loss) Per Share |
$ |
2.38 |
$ |
(0.17) |
|||
Dilutive |
|||||||
Income (Loss) from Continuing Operations |
$ |
2.35 |
$ |
(0.40) |
|||
Income from Discontinued Operations |
— |
0.23 |
|||||
Total Dilutive Earnings (Loss) Per Share |
$ |
2.35 |
$ |
(0.17) |
|||
Dividends Declared Per Share |
$ |
— |
$ |
— |
CNX RESOURCES CORPORATION AND SUBSIDIARIES | |||||||
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||||||
Three Months Ended | |||||||
(Dollars in thousands) |
March 31, | ||||||
(Unaudited) |
2018 |
2017 | |||||
Net Income (Loss) |
$ |
545,546 |
$ |
(38,966) |
|||
Other Comprehensive Income: |
|||||||
Actuarially Determined Long-Term Liability Adjustments (Net of tax: ($94), ($2,052)) |
170 |
3,502 |
|||||
Comprehensive Income (Loss) |
545,716 |
(35,464) |
|||||
Less: Comprehensive Income Attributable to Noncontrolling Interest |
17,983 |
— |
|||||
Comprehensive Income (Loss) Attributable to CNX Resources Shareholders |
$ |
527,733 |
$ |
(35,464) |
CNX RESOURCES CORPORATION AND SUBSIDIARIES | ||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||
(Unaudited) |
||||||||
(Dollars in thousands) |
March 31, |
December 31, | ||||||
ASSETS |
||||||||
Current Assets: |
||||||||
Cash and Cash Equivalents |
$ |
82,490 |
$ |
509,167 |
||||
Accounts and Notes Receivable: |
||||||||
Trade |
157,605 |
156,817 |
||||||
Other Receivables |
43,344 |
48,908 |
||||||
Supplies Inventories |
10,676 |
10,742 |
||||||
Recoverable Income Taxes |
20,178 |
31,523 |
||||||
Prepaid Expenses |
92,651 |
95,347 |
||||||
Total Current Assets |
406,944 |
852,504 |
||||||
Property, Plant and Equipment: |
||||||||
Property, Plant and Equipment |
9,103,351 |
9,316,495 |
||||||
Less—Accumulated Depreciation, Depletion and Amortization |
2,481,535 |
3,526,742 |
||||||
Total Property, Plant and Equipment—Net |
6,621,816 |
5,789,753 |
||||||
Other Assets: |
||||||||
Investment in Affiliates |
20,678 |
197,921 |
||||||
Goodwill |
796,359 |
— |
||||||
Other Intangible Assets |
126,859 |
— |
||||||
Other |
149,573 |
91,735 |
||||||
Total Other Assets |
1,093,469 |
289,656 |
||||||
TOTAL ASSETS |
$ |
8,122,229 |
$ |
6,931,913 |
CNX RESOURCES CORPORATION AND SUBSIDIARIES | |||||||
CONSOLIDATED BALANCE SHEETS | |||||||
(Unaudited) |
|||||||
(Dollars in thousands, except per share data) |
March 31, |
December 31, | |||||
LIABILITIES AND EQUITY |
|||||||
Current Liabilities: |
|||||||
Accounts Payable |
$ |
193,901 |
$ |
211,161 |
|||
Current Portion of Long-Term Debt |
6,891 |
7,111 |
|||||
Other Accrued Liabilities |
236,879 |
223,407 |
|||||
Total Current Liabilities |
437,671 |
441,679 |
|||||
Long-Term Debt: |
|||||||
Long-Term Debt |
2,211,165 |
2,187,026 |
|||||
Capital Lease Obligations |
18,611 |
20,347 |
|||||
Total Long-Term Debt |
2,229,776 |
2,207,373 |
|||||
Deferred Credits and Other Liabilities: |
|||||||
Deferred Income Taxes |
258,220 |
44,373 |
|||||
Asset Retirement Obligations |
7,985 |
198,768 |
|||||
Other |
120,671 |
139,821 |
|||||
Total Deferred Credits and Other Liabilities |
386,876 |
382,962 |
|||||
TOTAL LIABILITIES |
3,054,323 |
3,032,014 |
|||||
Stockholders' Equity: |
|||||||
Common Stock, $.01 Par Value; 500,000,000 Shares Authorized, 218,639,873 Issued and Outstanding at March 31, 2018; 223,743,322 Issued and Outstanding at December 31, 2017 |
2,190 |
2,241 |
|||||
Capital in Excess of Par Value |
2,409,475 |
2,450,323 |
|||||
Preferred Stock, 15,000,000 shares authorized, None issued and outstanding |
— |
— |
|||||
Retained Earnings |
1,940,882 |
1,455,811 |
|||||
Accumulated Other Comprehensive Loss |
(8,306) |
(8,476) |
|||||
Total CNX Resources Stockholders' Equity |
4,344,241 |
3,899,899 |
|||||
Noncontrolling Interest |
723,665 |
— |
|||||
TOTAL STOCKHOLDERS' EQUITY |
5,067,906 |
3,899,899 |
|||||
TOTAL LIABILITIES AND EQUITY |
$ |
8,122,229 |
$ |
6,931,913 |
CNX RESOURCES CORPORATION AND SUBSIDIARIES | |||||||||||||||||||||||||||
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY | |||||||||||||||||||||||||||
(Dollars in thousands) |
Common Stock |
Capital in Excess of Par Value |
Retained Earnings |
Accumulated Other Comprehensive Loss |
Total CNX |
Non- Controlling Interest |
Total Equity | ||||||||||||||||||||
Balance at December 31, 2017 |
$ |
2,241 |
$ |
2,450,323 |
$ |
1,455,811 |
$ |
(8,476) |
$ |
3,899,899 |
$ |
— |
$ |
3,899,899 |
|||||||||||||
(Unaudited) |
|||||||||||||||||||||||||||
Net Income |
— |
527,563 |
— |
527,563 |
17,983 |
545,546 |
|||||||||||||||||||||
Other Comprehensive Income (Net of ($94) Tax) |
— |
— |
170 |
170 |
— |
170 |
|||||||||||||||||||||
Comprehensive Income |
— |
527,563 |
170 |
527,733 |
17,983 |
545,716 |
|||||||||||||||||||||
Issuance of Common Stock |
6 |
1,050 |
— |
— |
1,056 |
— |
1,056 |
||||||||||||||||||||
Purchase and Retirement of Common Stock (5,785,900 shares) |
(57) |
(46,229) |
(37,677) |
— |
(83,963) |
— |
(83,963) |
||||||||||||||||||||
Shares Withheld for Taxes |
— |
— |
(4,815) |
— |
(4,815) |
(347) |
(5,162) |
||||||||||||||||||||
Acquisition of CNX Gathering, LLC |
— |
— |
— |
— |
— |
718,577 |
718,577 |
||||||||||||||||||||
Amortization of Stock-Based Compensation Awards |
— |
4,331 |
— |
— |
4,331 |
579 |
4,910 |
||||||||||||||||||||
Distributions to CNXM Noncontrolling Interest Holders |
— |
— |
— |
— |
— |
(13,127) |
(13,127) |
||||||||||||||||||||
Balance at March 31, 2018 |
$ |
2,190 |
$ |
2,409,475 |
$ |
1,940,882 |
$ |
(8,306) |
$ |
4,344,241 |
$ |
723,665 |
$ |
5,067,906 |
CNX RESOURCES AND SUBSIDIARIES | |||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||
(Dollars in thousands) |
Three Months Ended | ||||||
(Unaudited) |
March 31, | ||||||
Cash Flows from Operating Activities: |
2018 |
2017 | |||||
Net Income (Loss) |
$ |
545,546 |
$ |
(38,966) |
|||
Adjustments to Reconcile Net Income (Loss) to Net Cash Provided By Operating Activities: |
|||||||
Net Income from Discontinued Operations |
— |
(52,041) |
|||||
Depreciation, Depletion and Amortization |
124,667 |
95,678 |
|||||
Amortization of Deferred Financing Costs |
3,043 |
— |
|||||
Impairment of Exploration and Production Properties |
— |
137,865 |
|||||
Stock-Based Compensation |
4,910 |
3,754 |
|||||
Gain on Sale of Assets |
(11,342) |
(3,996) |
|||||
Gain on Previously Held Equity Interest |
(623,663) |
— |
|||||
Loss (Gain) on Debt Extinguishment |
15,635 |
(822) |
|||||
(Gain) Loss on Commodity Derivative Instruments |
(35,087) |
22,463 |
|||||
Net Cash Paid in Settlement of Commodity Derivative Instruments |
(16,991) |
(47,103) |
|||||
Deferred Income Taxes |
213,694 |
(24,321) |
|||||
Equity in Earnings of Affiliates |
(1,778) |
(12,330) |
|||||
Changes in Operating Assets: |
|||||||
Accounts and Notes Receivable |
14,505 |
9,969 |
|||||
Recoverable Income Taxes |
11,345 |
(7,704) |
|||||
Supplies Inventories |
66 |
592 |
|||||
Prepaid Expenses |
(1,055) |
437 |
|||||
Changes in Operating Liabilities: |
|||||||
Accounts Payable |
2,152 |
24,954 |
|||||
Accrued Interest |
24,905 |
35,769 |
|||||
Other Operating Liabilities |
(5,251) |
11,997 |
|||||
Changes in Other Liabilities |
(5,500) |
(4,051) |
|||||
Other |
(461) |
10,930 |
|||||
Net Cash Provided by Continuing Operating Activities |
259,340 |
163,074 |
|||||
Net Cash Provided by Discontinued Operating Activities |
— |
48,721 |
|||||
Net Cash Provided by Operating Activities |
259,340 |
211,795 |
|||||
Cash Flows from Investing Activities: |
|||||||
Capital Expenditures |
(232,485) |
(103,922) |
|||||
CNX Gathering, LLC Acquisition, Net of Cash Acquired |
(299,272) |
— |
|||||
Proceeds from Asset Sales |
101,763 |
9,868 |
|||||
Net Distributions from Equity Affiliates |
3,650 |
5,909 |
|||||
Net Cash Used in Continuing Investing Activities |
(426,344) |
(88,145) |
|||||
Net Cash Provided by Discontinued Investing Activities |
— |
503 |
|||||
Net Cash Used in Investing Activities |
(426,344) |
(87,642) |
|||||
Cash Flows from Financing Activities: |
|||||||
Payments on Miscellaneous Borrowings |
(2,042) |
(1,953) |
|||||
Payments on Long-Term Notes |
(405,419) |
(98,243) |
|||||
Net Payments on CNXM Revolving Credit Facility |
(129,500) |
— |
|||||
Proceeds from Issuance of CNXM Senior Notes |
394,000 |
— |
|||||
Distributions to CNXM Noncontrolling Interest Holders |
(13,127) |
— |
|||||
Proceeds from Issuance of Common Stock |
1,056 |
494 |
|||||
Shares Withheld for Taxes |
(5,162) |
(6,278) |
|||||
Purchases of Common Stock |
(80,879) |
— |
|||||
Debt Repurchase and Financing Fees |
(18,600) |
(250) |
|||||
Net Cash Used in Continuing Financing Activities |
(259,673) |
(106,230) |
|||||
Net Cash Used in Discontinued Financing Activities |
— |
(10,456) |
|||||
Net Cash Used in Financing Activities |
(259,673) |
(116,686) |
|||||
Net (Decrease) Increase in Cash and Cash Equivalents |
(426,677) |
7,467 |
|||||
Cash and Cash Equivalents at Beginning of Period |
509,167 |
46,299 |
|||||
Cash and Cash Equivalents at End of Period |
$ |
82,490 |
$ |
53,766 |
View original content with multimedia:http://www.prnewswire.com/news-releases/cnx-reports-first-quarter-results-record-quarterly-production-of-129-5-bcfe-total-production-costs-fall-to-2-10-per-mcfe-repurchases-200-million-of-common-stock-since-october-2017--300641549.html
SOURCE CNX Resources Corporation
PITTSBURGH, May 3, 2018 /PRNewswire/ -- CNX Midstream Partners LP (NYSE: CNXM) ("CNXM" or the "Partnership") today reported financial and operational results for the three months ended March 31, 2018(1).
First Quarter Results
Highlights of first quarter 2018 results attributable to the Partnership as compared to the first quarter of 2017 include:
"Our first quarter financial and operating results were in line with expectations," commented Nicholas J. DeIuliis, CEO of CNX Midstream GP LLC (the "General Partner"). "We continue to deliver strong operational execution that is driving our organic base program, which in combination with yesterday's executed strategic transaction, is resulting in five plus years of de-risked 15% distribution growth. Coupling this de-risked distribution growth with a significant roster of drops that are getting larger over time; a strong balance sheet; an economically aligned sponsor with a rich asset base; and pipes that are in the best part of the Appalachian basin, you can see why we are so excited for the future of this great company."
Operations
During the quarter, the Partnership turned-in-line (TIL) 12 wells in DevCo I, compared to 10 wells in the first quarter of 2017, which included two wells in DevCo I and eight wells in DevCo III.
Also during the quarter, CNXM continued to see cost reductions, in a period which historically is a higher cost period typically driven by seasonal conditions. The company continues to implement several changes that are driving costs lower, and these efforts resulted in the lowest realized costs in a first quarter since the company's initial public offering (IPO) for both total dollars spent and on a per unit basis. During the quarter, operating expenses, excluding electrically-powered compression, attributable to CNXM were $6.5 million or $0.068 per MMBtu, compared to $7.1 million or $0.075 per MMBtu for the first quarter of 2017.
Leveraging the remote-control capabilities of the company's supervisory control and data acquisition (SCADA), CNXM continues to optimize facility and pipeline staffing levels and coverage, along with methanol usage. CNXM is also now fully utilizing 100% of the company's compression and has realigned workforce incentives with company financial goals.
Strategic Transaction with CNX and HG Energy
CNXM also announced today a strategic transaction in connection with its sponsor, CNX Resources Corporation (NYSE: CNX) ("CNX"), which closed yesterday on an exchange transaction with HG Energy II Appalachia, LLC ("HG"). The transaction includes the amendment of CNXM's gas gathering agreements with both HG and CNX.
This transaction strengthens CNXM's asset portfolio and outlook, resulting in the following:
In exchange for the incremental Utica acreage dedication, MWCs, and high-pressure pipeline with third-party revenue, CNXM has agreed to relinquish its 5% interest in the midstream assets of DevCo II and the Moundsville midstream assets located in DevCo III. CNX and CNXM have also released from dedication approximately 275,000 acres in DevCo's II and III, in which CNXM has a 5% interest, or approximately 14,000 net acres, and in which CNX has a 95% interest, or approximately 261,000 net acres. Most of these previously dedicated acres were located in DevCo II across Lewis, Upshur, Harrison, Taylor, and Barbour counties, West Virginia. The amendment to the gathering agreement with HG also provides for the release from dedication of approximately 4,200 scattered acres located in DevCo I. HG continues to be a significant customer of CNXM, which will continue to gather HG's existing production in DevCo I as well as potential new wells on acreage that is within the revised acreage commitment boundary. The transaction includes an amended gas gathering agreement with HG in the DevCo I area, providing CNXM more control over the DevCo I expansion and operating strategy.
Nicholas J. DeIuliis, CEO of CNXM commented: "This transaction delivers an array of benefits for CNXM. The deal further de-risks CNXM's planned 15% distribution growth through 2022 based solely on additional MWCs; it extends the 15% distribution growth target to six years, through 2023; it increases expected future distributable cash flow above MWCs based off of sponsor projected activity set; it adds 16,100 dedicated Utica acres in SWPA and CPA; and it provides incremental third-party revenue, with upside potential. Perhaps most importantly, the transaction ensures that midstream capital is focused on the highest IRR opportunities. In summary, this transaction has further aligned the interests of CNXM and its sole sponsor, CNX, as both entities are now able to prioritize development of the core stacked pay assets through capital allocation that is accretive to unitholders."
The transaction was approved by the CNXM's Board of Directors' Conflicts Committee, which consists entirely of independent directors. The Conflicts Committee was advised by Evercore on financial matters and Baker Botts L.L.P. on legal matters.
Latham & Watkins LLP served as the legal advisor and CIBC Capital Markets served as the financial advisor to CNX.
Kirkland & Ellis LLP served as the legal advisor to HG.
Note: CNXM is unable to provide a reconciliation of projected EBITDA to projected operating income, the most comparable financial measure calculated in accordance with GAAP, due to the unknown effect, timing, and potential significance of certain income statement items.
CNXM is reaffirming full-year 2018 guidance in the table below:
2018 Outlook | |||||
($ in millions) |
2018E | ||||
Throughput (MMcfe/d) |
1,150 |
- |
1,240 | ||
Capital Expenditures |
$80 |
- |
$90 | ||
EBITDA |
$150 |
- |
$165 | ||
Distributable Cash Flow |
$120 |
- |
$135 | ||
Distributable Coverage |
1.2x |
- |
1.4x | ||
LP Distribution Growth Target |
15% |
Quarterly Distribution
As previously announced, the Board of Directors of the General Partner declared a quarterly cash distribution of $0.3245 per unit with respect to the first quarter of 2018. The distribution payment will be made on May 15, 2018 to unitholders of record at the close of business on May 4, 2018. The distribution, which equates to an annual rate of $1.298 per unit, represents an increase of 3.6% over the prior quarter and an increase of 15% over the distribution paid with respect to the first quarter of 2017.
Capital Investment and Resources
CNX Midstream's allocated first quarter 2018 share of investment in expansion projects was $9.9 million. Total expansion capital investment at the three development companies in which CNX Midstream holds controlling interests was $11.3 million. CNX Midstream's respective share of maintenance capital expenditures for the three development companies for first quarter 2018 was $4.0 million. Maintenance capital expenditures in the aggregate for the development companies in which CNX Midstream holds controlling interests totaled $4.6 million.
As of March 31, 2018, CNX Midstream had outstanding borrowings of $20 million under its $600 million revolving credit facility.
First Quarter Financial and Operational Results Conference Call
A conference call and webcast, during which management will discuss first quarter 2018 financial and operational results, is scheduled for May 3, 2018 at 11:30 a.m. Eastern Time. Prepared remarks by members of management will be followed by a question and answer period. Interested parties may listen via webcast at www.cnxmidstream.com. Participants who would like to ask questions may join the conference by phone by dialing 888-349-0097 (international 412-902-0126) five to ten minutes prior to the scheduled start time (reference the CNX Midstream call). An on-demand replay of the webcast will also be available at www.cnxmidstream.com shortly after the conclusion of the conference call. A telephonic replay will be available through May 10, 2018 by dialing 877-344-7529 (international: 412-317-0088) and using the conference playback number 10119147.
(1) |
Unless otherwise indicated, the reporting measures included in this news release reflect the unallocated total activity of the three development companies that have been jointly owned by the Partnership and CNX Gathering LLC ("CNX Gathering") since completion of the Partnership's initial public offering ("IPO") in September 2014. Effective November 16, 2016, the Partnership acquired the remaining 25% controlling interest in the Anchor Systems, which brought its controlling interest in that system to 100%. The Partnership's current financial interests in the development companies are: 100% in the Anchor Systems, 5% in the Growth Systems, and 5% in the Additional Systems. Because the Partnership owns a controlling interest in each of the three development companies, it fully consolidates their financial results. CNX Gathering is an entity 100% owned by CNX Resources Corporation that owns noncontrolling interests in two of the Partnership's development companies. | |||
(2) |
Adjusted EBITDA and DCF are not measures that are recognized under accounting principles generally accepted in the U.S. ("GAAP"). Definitions and reconciliations of these non-GAAP measures to GAAP reporting measures appear in the financial tables which follow. |
* * * * *
CNX Midstream Partners is a growth-oriented master limited partnership that owns, operates, develops and acquires gathering and other midstream energy assets to service natural gas production in the Appalachian Basin in Pennsylvania and West Virginia. Our assets include natural gas gathering pipelines and compression and dehydration facilities, as well as condensate gathering, collection, separation and stabilization facilities. More information is available at our website www.cnxmidstream.com.
* * * * *
This press release is intended to be a qualified notice to nominees as provided for under Treasury Regulation Section 1.1446-4(b). Brokers and nominees should treat one hundred percent (100.0%) of CNX Midstream's distributions to non-U.S. investors as being attributed to income that is effectively connected with a United States trade or business. Accordingly, CNX Midstream's distributions to non-U.S. investors are subject to federal income tax withholding at the highest applicable effective tax rate. Nominees, and not CNX Midstream, are treated as withholding agents responsible for withholding on the distributions received by them on behalf of foreign investors.
* * * * *
This press release contains forward-looking statements within the meaning of the federal securities laws. Statements that are predictive in nature, that depend upon or refer to future events or conditions or that include the words "will," "believe," "expect," "anticipate," "intend," "estimate" and other expressions that are predictions of or indicate future events and trends and that do not relate to historical matters identify forward-looking statements. You should not place undue reliance on forward-looking statements. Forward-looking statements include, among others, statements regarding the payment of our quarterly distribution for the quarter ended March 31, 2018 and our anticipated 2018 financial performance. Forward-looking statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict, and there can be no assurance that actual outcomes and results will not differ materially from those expected by our management. You should not place undue reliance on forward-looking statements. Although forward-looking statements reflect our good faith beliefs at the time they are made, they involve known and unknown risks, uncertainties and other factors. While our management considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond our control. These risks, contingencies and uncertainties relate to, among other matters, the following: CNX and HG Energy II Appalachia, LLC currently account for substantially all of our revenue; if either or both of them change their business strategies, or otherwise significantly reduce the volumes of natural gas and condensate transported through our gathering systems, we could be materially and adversely affected; under our gathering agreements, our customers may transfer their leasehold, working and mineral fee interests in their dedicated acreage, and provide for the release of dedicated acreage in certain situations; we may not generate sufficient distributable cash flow to make the payment of the minimum quarterly distribution to our unitholders; our cash flow will depend entirely on the performance of our operating subsidiaries and their ability to distribute cash to us; our midstream systems are exclusively located in the Appalachian Basin, making us vulnerable to risks associated with operating in a single geographic area; we may be unable to grow by acquiring the noncontrolling interests in, or assets of, our operating subsidiaries owned by CNX Gathering, which could limit our ability to increase our distributable cash flow; to maintain and grow our business, we will be required to make substantial capital expenditures and these capital expenditures may not result in revenue increases and may be subject to regulatory, environmental, political, legal and economic risks, which could adversely affect our business and our ability to distribute cash to our unitholders; if we are unable to obtain needed capital or financing on satisfactory terms, our ability to make cash distributions may be diminished or our financial leverage could increase; our exposure to commodity price risk may change over time and we cannot guarantee the terms of any existing or future agreements for our midstream services with third parties or with CNX; restrictions in our revolving credit facility, and other debt agreements that we may enter into in the future, could adversely affect our business, and ability to make quarterly cash distributions to our unitholders; we and our customers may incur significant liability under, or costs and expenditures to comply with, environmental and worker health and safety regulations, which are complex and subject to frequent change; we may not own in fee the land on which our pipelines and facilities are located, which could result in disruptions to our operations; a shortage of equipment and skilled labor could reduce equipment availability and labor productivity and increase labor and equipment costs, which could have a material adverse effect on our business and results of operations; we do not have any officers or employees and rely on officers of our general partner and employees of CNX; terrorist attacks or cyber-attacks could have a material adverse effect on our business, financial condition or results of operations; our general partner and its affiliates, including CNX, have conflicts of interest with us and limited fiduciary duties to us and our unitholders, and they may favor their own interests to our detriment and that of our unitholders; our general partner's discretion in establishing cash reserves may reduce the amount of cash we have available to distribute to unitholders; affiliates of our general partner, including CNX and CNX Gathering, may compete with us, and neither our general partner nor its affiliates have any obligation to present business opportunities to us except with respect to rights of first offer contained in our omnibus agreement; our tax treatment depends on our status as a partnership for federal income tax purposes; as a result of investing in our common units, you may become subject to state and local taxes and return filing requirements in jurisdictions where we operate or own or acquire properties.
Although forward-looking statements reflect our good faith beliefs at the time they are made, they involve known and unknown risks, uncertainties and other factors. For more information concerning factors that could cause actual results to differ materially from those conveyed in the forward-looking statements, including, among others, that our business plans may change as circumstances warrant, please refer to the "Risk Factors" and "Forward-Looking Statements" sections of our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, changed circumstances or otherwise, unless required by law.
CNX MIDSTREAM PARTNERS LP | |||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||
(in thousands, except per unit data) | |||||||
(unaudited) | |||||||
Three Months Ended | |||||||
2018 |
2017 | ||||||
Revenue |
|||||||
Gathering revenue — related party |
$ |
37,730 |
$ |
58,958 |
|||
Gathering revenue — third party |
26,139 |
— |
|||||
Total Revenue |
63,869 |
58,958 |
|||||
Expenses |
|||||||
Operating expense — related party |
4,435 |
7,628 |
|||||
Operating expense — third party |
8,468 |
6,633 |
|||||
General and administrative expense — related party |
3,612 |
2,883 |
|||||
General and administrative expense — third party |
2,549 |
1,192 |
|||||
Loss on asset sales |
2,755 |
673 |
|||||
Depreciation expense |
5,856 |
5,671 |
|||||
Interest expense |
2,489 |
1,038 |
|||||
Total Expense |
30,164 |
25,718 |
|||||
Net Income |
33,705 |
33,240 |
|||||
Less: Net income attributable to noncontrolling interest |
5,858 |
3,173 |
|||||
Net Income Attributable to General and Limited Partner Ownership Interest in CNX |
$ |
27,847 |
$ |
30,067 |
|||
Calculation of Limited Partner Interest in Net Income: |
|||||||
Net Income Attributable to General and Limited Partner Ownership Interest in CNX Midstream |
$ |
27,847 |
$ |
30,067 |
|||
Less: General partner interest in net income, including incentive distribution rights |
2,152 |
1,129 |
|||||
Limited partner interest in net income |
$ |
25,695 |
$ |
28,938 |
|||
Net income per Limited Partner unit - Basic |
$ |
0.40 |
$ |
0.46 |
|||
Net Income per Limited Partner unit - Diluted |
$ |
0.40 |
$ |
0.45 |
|||
Limited Partner units outstanding - Basic |
63,623 |
63,566 |
|||||
Limited Partner unit outstanding - Diluted |
63,659 |
63,617 |
|||||
Cash distributions declared per unit (*) |
$ |
0.3245 |
$ |
0.2821 |
|||
(*) Represents the cash distributions declared during the month following the end of each respective quarterly period. |
CNX MIDSTREAM PARTNERS LP | |||||||
CONSOLIDATED BALANCE SHEETS | |||||||
(in thousands, except number of units) | |||||||
(unaudited) | |||||||
March 31, |
December 31, | ||||||
ASSETS |
|||||||
Current Assets: |
|||||||
Cash |
$ |
1,966 |
$ |
3,194 |
|||
Receivables — related party |
13,411 |
13,104 |
|||||
Receivables — third party |
9,645 |
8,251 |
|||||
Other current assets |
3,242 |
2,169 |
|||||
Total Current Assets |
28,264 |
26,718 |
|||||
Property and Equipment: |
|||||||
Property and equipment |
978,890 |
972,841 |
|||||
Less — accumulated depreciation |
79,332 |
73,563 |
|||||
Property and Equipment — Net |
899,558 |
899,278 |
|||||
Other assets |
4,294 |
593 |
|||||
TOTAL ASSETS |
$ |
932,116 |
$ |
926,589 |
|||
LIABILITIES AND EQUITY |
|||||||
Current Liabilities: |
|||||||
Accounts payable |
$ |
23,363 |
$ |
23,602 |
|||
Accounts payable — related party |
3,056 |
2,376 |
|||||
Total Current Liabilities |
26,419 |
25,978 |
|||||
Other Liabilities: |
|||||||
Revolving credit facility |
20,000 |
149,500 |
|||||
Long-term debt |
392,647 |
— |
|||||
Total Liabilities |
439,066 |
175,478 |
|||||
Partners' Capital: |
|||||||
Common units (63,638,165 units issued and outstanding at March 31, 2018 and |
241,844 |
389,427 |
|||||
General partner interest |
4,930 |
4,328 |
|||||
Partners' capital attributable to CNX Midstream Partners LP |
246,774 |
393,755 |
|||||
Noncontrolling interest |
246,276 |
357,356 |
|||||
Total Partners' Capital |
493,050 |
751,111 |
|||||
TOTAL LIABILITIES AND PARTNERS' CAPITAL |
$ |
932,116 |
$ |
926,589 |
CNX MIDSTREAM PARTNERS LP | |||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||
(in thousands) | |||||||
(unaudited) | |||||||
Three Months Ended | |||||||
2018 |
2017 | ||||||
Cash Flows from Operating Activities: |
|||||||
Net Income |
$ |
33,705 |
$ |
33,240 |
|||
Adjustments to reconcile net income to net cash provided by operating activities: |
|||||||
Depreciation expense and amortization of debt issuance costs |
6,039 |
5,713 |
|||||
Unit-based compensation |
579 |
283 |
|||||
Loss on asset sales |
2,755 |
673 |
|||||
Other |
117 |
83 |
|||||
Changes in assets and liabilities: |
|||||||
Receivables — related party |
453 |
(458) |
|||||
Receivables — third party |
(1,394) |
— |
|||||
Other current and non-current assets |
(650) |
3 |
|||||
Accounts payable |
(294) |
(2,386) |
|||||
Accounts payable — related party |
557 |
(2,975) |
|||||
Net Cash Provided by Operating Activities |
41,867 |
34,176 |
|||||
Cash Flows from Investing Activities: |
|||||||
Capital expenditures |
(15,972) |
(11,192) |
|||||
Proceeds from sale of assets |
5,816 |
— |
|||||
Net Cash Used in Investing Activities |
(10,156) |
(11,192) |
|||||
Cash Flows from Financing Activities: |
|||||||
Distributions (to) from partners and noncontrolling interest holders, net |
(5,509) |
28 |
|||||
Vested units withheld for unitholders taxes |
(347) |
(411) |
|||||
Quarterly distributions to unitholders |
(21,489) |
(18,004) |
|||||
Net payment on $250.0 million credit facility |
(149,500) |
(5,000) |
|||||
Net borrowings on $600.0 million credit facility |
20,000 |
— |
|||||
Proceeds from issuance of long-term debt, net of discount |
394,000 |
— |
|||||
Debt issuance costs |
(5,094) |
— |
|||||
Acquisition of Shirley-Penns System |
(265,000) |
— |
|||||
Net Cash Used In Financing Activities |
(32,939) |
(23,387) |
|||||
Net Decrease in Cash |
(1,228) |
(403) |
|||||
Cash at Beginning of Period |
3,194 |
6,421 |
|||||
Cash at End of Period |
$ |
1,966 |
$ |
6,018 |
CNX MIDSTREAM PARTNERS LP
RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA AND DISTRIBUTABLE CASH FLOW
(in thousands)
Definition of Non-GAAP Financial Measures
EBITDA and Adjusted EBITDA
We define EBITDA as net income (loss) before net interest expense, depreciation and amortization, and Adjusted EBITDA as EBITDA adjusted for non-cash items which should not be included in the calculation of distributable cash flow. EBITDA and Adjusted EBITDA are used as supplemental financial measures by management and by external users of our financial statements, such as investors, industry analysts, lenders and ratings agencies, to assess:
We believe that the presentation of EBITDA and Adjusted EBITDA provides information that is useful to investors in assessing our financial condition and results of operations. The GAAP measures most directly comparable to EBITDA and Adjusted EBITDA are net income and net cash provided by operating activities. EBITDA and Adjusted EBITDA should not be considered alternatives to net income, net cash provided by operating activities or any other measure of financial performance or liquidity presented in accordance with GAAP. EBITDA and Adjusted EBITDA exclude some, but not all, items that affect net income or net cash, and these measures may vary from those of other companies. As a result, EBITDA and Adjusted EBITDA as presented below may not be comparable to similarly titled measures of other companies.
Distributable Cash Flow
We define distributable cash flow as Adjusted EBITDA less net income attributable to noncontrolling interest, cash interest paid and maintenance capital expenditures, each net to the Partnership. Distributable cash flow does not reflect changes in working capital balances.
Distributable cash flow is used as a supplemental financial measure by management and by external users of our financial statements, such as investors, industry analysts, lenders and ratings agencies, to assess:
We believe that the presentation of distributable cash flow in this release provides information useful to investors in assessing our financial condition and results of operations. The GAAP measures most directly comparable to distributable cash flow are net income and net cash provided by operating activities. Distributable cash flow should not be considered an alternative to net income, net cash provided by operating activities or any other measure of financial performance or liquidity presented in accordance with GAAP. Distributable cash flow excludes some, but not all, items that affect net income or net cash, and these measures may vary from those of other companies. As a result, our distributable cash flow may not be comparable to similarly titled measures that other companies may use.
The following table presents a reconciliation of the non-GAAP measures of adjusted EBITDA and distributable cash flow to the most directly comparable GAAP financial measures of net income and net cash provided by operating activities.
Three Months Ended | ||||||||
(unaudited) |
2018 |
2017 | ||||||
Net Income |
$ |
33,705 |
$ |
33,240 |
||||
Depreciation expense |
5,856 |
5,671 |
||||||
Interest expense |
2,489 |
1,038 |
||||||
EBITDA |
42,050 |
39,949 |
||||||
Non-cash unit-based compensation expense |
579 |
283 |
||||||
Loss on asset sales |
2,755 |
673 |
||||||
Adjusted EBITDA |
45,384 |
40,905 |
||||||
Less: |
||||||||
Net income attributable to noncontrolling interest |
5,858 |
3,173 |
||||||
Depreciation expense attributable to noncontrolling interest |
1,665 |
1,830 |
||||||
Other expenses attributable to noncontrolling interest |
436 |
82 |
||||||
Loss on asset sales attributable to noncontrolling interest |
2,617 |
639 |
||||||
Adjusted EBITDA Attributable to General and Limited Partner Ownership Interest in CNX Midstream Partners LP |
$ |
34,808 |
$ |
35,181 |
||||
Less: cash interest paid, net |
2,015 |
1,000 |
||||||
Less: maintenance capital expenditures, net of reimbursements |
3,583 |
3,881 |
||||||
Distributable Cash Flow |
$ |
29,210 |
$ |
30,300 |
||||
Net Cash Provided by Operating Activities |
$ |
41,867 |
$ |
34,176 |
||||
Interest expense |
2,489 |
1,038 |
||||||
Loss on asset sales |
2,755 |
673 |
||||||
Other, including changes in working capital |
(1,727) |
5,018 |
||||||
Adjusted EBITDA |
45,384 |
40,905 |
||||||
Less: |
||||||||
Net income attributable to noncontrolling interest |
5,858 |
3,173 |
||||||
Depreciation expense attributable to noncontrolling interest |
1,665 |
1,830 |
||||||
Other expenses attributable to noncontrolling interest |
436 |
82 |
||||||
Loss on asset sales attributable to noncontrolling interest |
2,617 |
639 |
||||||
Adjusted EBITDA Attributable to General and Limited Partner Ownership Interest in CNX Midstream Partners LP |
$ |
34,808 |
$ |
35,181 |
||||
Less: cash interest paid, net |
2,015 |
1,000 |
||||||
Less: maintenance capital expenditures, net of reimbursements |
3,583 |
3,881 |
||||||
Distributable Cash Flow |
$ |
29,210 |
$ |
30,300 |
The following table presents a reconciliation of the non-GAAP measures adjusted EBITDA and distributable cash flow by quarter and for the most recently completed twelve month period with the most directly comparable GAAP financial measures, which are net income and net cash provided by operating activities.
(unaudited) |
Q2 2017 |
Q3 2017 |
Q4 2017 |
Q1 2018 |
Twelve | |||||||||||||||
Net Income |
$ |
29,752 |
$ |
33,468 |
$ |
37,602 |
$ |
33,705 |
$ |
134,527 |
||||||||||
Depreciation expense |
5,675 |
5,629 |
5,717 |
5,856 |
22,877 |
|||||||||||||||
Interest expense |
1,124 |
1,197 |
1,201 |
2,489 |
6,011 |
|||||||||||||||
EBITDA |
36,551 |
40,294 |
44,520 |
42,050 |
163,415 |
|||||||||||||||
Non-cash unit-based compensation expense |
367 |
249 |
277 |
579 |
1,472 |
|||||||||||||||
Loss on asset sales |
3,241 |
— |
— |
2,755 |
5,996 |
|||||||||||||||
Adjusted EBITDA |
40,159 |
40,543 |
44,797 |
45,384 |
170,883 |
|||||||||||||||
Less: |
||||||||||||||||||||
Net income attributable to noncontrolling interest |
761 |
4,554 |
10,581 |
5,858 |
21,754 |
|||||||||||||||
Depreciation expense attributable to noncontrolling |
1,833 |
1,736 |
1,748 |
1,665 |
6,982 |
|||||||||||||||
Other expenses attributable to noncontrolling interest |
112 |
92 |
108 |
436 |
748 |
|||||||||||||||
Loss on asset sales attributable to noncontrolling |
3,079 |
— |
— |
2,617 |
5,696 |
|||||||||||||||
Adjusted EBITDA Attributable to General and Limited |
$ |
34,374 |
$ |
34,161 |
$ |
32,360 |
$ |
34,808 |
$ |
135,703 |
||||||||||
Less: cash interest paid, net |
1,079 |
1,154 |
1,154 |
2,015 |
5,402 |
|||||||||||||||
Less: maintenance capital expenditures, net of |
3,715 |
3,579 |
3,483 |
3,583 |
14,360 |
|||||||||||||||
Distributable Cash Flow |
$ |
29,580 |
$ |
29,428 |
$ |
27,723 |
$ |
29,210 |
$ |
115,941 |
||||||||||
Net Cash Provided by Operating Activities |
$ |
42,258 |
$ |
38,203 |
$ |
40,913 |
$ |
41,867 |
$ |
163,241 |
||||||||||
Interest expense |
1,124 |
1,197 |
1,201 |
2,489 |
6,011 |
|||||||||||||||
Loss on asset sales |
3,241 |
— |
— |
2,755 |
5,996 |
|||||||||||||||
Other, including changes in working capital |
(6,464) |
1,143 |
2,683 |
(1,727) |
(4,365) |
|||||||||||||||
Adjusted EBITDA |
40,159 |
40,543 |
44,797 |
45,384 |
170,883 |
|||||||||||||||
Less: |
||||||||||||||||||||
Net income attributable to noncontrolling interest |
761 |
4,554 |
10,581 |
5,858 |
21,754 |
|||||||||||||||
Depreciation expense attributable to noncontrolling |
1,833 |
1,736 |
1,748 |
1,665 |
6,982 |
|||||||||||||||
Other expenses attributable to noncontrolling interest |
112 |
92 |
108 |
436 |
748 |
|||||||||||||||
Loss on asset sales attributable to noncontrolling |
3,079 |
— |
— |
2,617 |
5,696 |
|||||||||||||||
Adjusted EBITDA Attributable to General and Limited |
$ |
34,374 |
$ |
34,161 |
$ |
32,360 |
$ |
34,808 |
$ |
135,703 |
||||||||||
Less: cash interest paid, net |
1,079 |
1,154 |
1,154 |
2,015 |
5,402 |
|||||||||||||||
Less: maintenance capital expenditures, net of |
3,715 |
3,579 |
3,483 |
3,583 |
14,360 |
|||||||||||||||
Distributable Cash Flow |
$ |
29,580 |
$ |
29,428 |
$ |
27,723 |
$ |
29,210 |
$ |
115,941 |
||||||||||
Distributions Declared |
$ |
19,698 |
$ |
20,573 |
$ |
21,489 |
$ |
22,699 |
$ |
84,459 |
||||||||||
Distribution Coverage Ratio - Declared |
1.50 |
x |
1.43 |
x |
1.29 |
x |
1.29 |
x |
1.37 |
x | ||||||||||
Distributable Cash Flow |
$ |
29,580 |
$ |
29,428 |
$ |
27,723 |
$ |
29,210 |
$ |
115,941 |
||||||||||
Distributions Paid |
$ |
18,842 |
$ |
19,698 |
$ |
20,573 |
$ |
21,489 |
$ |
80,602 |
||||||||||
Distribution Coverage Ratio - Paid |
1.57 |
x |
1.49 |
x |
1.35 |
x |
1.36 |
x |
1.44 |
x |
The following table presents a reconciliation of the non-GAAP measures of the Partnership's projected adjusted EBITDA and projected distributable cash flow with the most directly comparable GAAP financial measure, which is projected net income. The following projections represent the approximate midpoint of the announced full year 2018 expected guidance ranges of adjusted EBITDA ($150-$165 million) and full year distributable cash flow ($120-$135 million) attributable to the Partnership. CNX Midstream's financial guidance is based on numerous assumptions about future events and conditions and, therefore, could vary materially from actual results. These estimates are meant to provide guidance only and are subject to revision for acquisitions or operating environment changes.
(unaudited) (in millions) |
Forecast 2018 Estimate | |||
Net Income |
$ |
132 |
||
Depreciation expense |
24 |
|||
Interest expense |
22 |
|||
EBITDA |
178 |
|||
Non-cash unit-based compensation expense |
1 |
|||
Adjusted EBITDA |
179 |
|||
Less: |
||||
Net income attributable to noncontrolling interest |
13 |
|||
Depreciation and other expenses attributable to noncontrolling interest |
6 |
|||
Adjusted EBITDA Attributable to General and Limited Partner Ownership Interest in CNX Midstream |
$ |
160 |
||
Less: cash interest paid, net |
22 |
|||
Less: maintenance capital expenditures, net of reimbursements |
13 |
|||
Distributable Cash Flow |
$ |
125 |
The Partnership is unable to project net cash provided by operating activities or provide the related reconciliation of projected net cash provided by operating activities to projected distributable cash flow, the most comparable financial measure calculated in accordance with GAAP, because net cash provided by operating activities includes the impact of changes in operating assets and liabilities. Changes in operating assets and liabilities relate to the timing of the Partnership's cash receipts and disbursements that may not relate to the period in which the operating activities occurred, and the Partnership is unable to project these timing differences with any reasonable degree of accuracy.
Development Companies Jointly Owned by CNX Gathering LLC and CNX Midstream Partners LP | |||||||||||||||
Operating Income Summary, Selected Operating Statistics and Capital Investment | |||||||||||||||
(in thousands) | |||||||||||||||
(unaudited) | |||||||||||||||
Three Months Ended March 31, 2018 | |||||||||||||||
Development Company | |||||||||||||||
Anchor |
Growth |
Additional |
TOTAL(*) | ||||||||||||
Income Summary |
|||||||||||||||
Revenue |
$ |
56,190 |
$ |
1,904 |
$ |
5,775 |
$ |
63,869 |
|||||||
Expenses |
23,047 |
1,711 |
5,406 |
30,164 |
|||||||||||
Net Income |
$ |
33,143 |
$ |
193 |
$ |
369 |
$ |
33,705 |
|||||||
Operating Statistics - Gathered Volumes |
|||||||||||||||
Dry gas (BBtu/d) |
636 |
44 |
23 |
703 |
|||||||||||
Wet gas (BBtu/d) |
546 |
4 |
160 |
710 |
|||||||||||
Condensate (MMcfe/d) |
5 |
— |
21 |
26 |
|||||||||||
Total Gathered Volumes |
1,187 |
48 |
204 |
1,439 |
|||||||||||
Capital Investment |
|||||||||||||||
Maintenance capital |
$ |
3,939 |
$ |
176 |
$ |
526 |
$ |
4,641 |
|||||||
Expansion capital |
9,849 |
(98) |
1,580 |
11,331 |
|||||||||||
Total Capital Investment |
$ |
13,788 |
$ |
78 |
$ |
2,106 |
$ |
15,972 |
|||||||
Capital Investment Net to CNX Midstream Partners LP |
|||||||||||||||
Maintenance capital |
$ |
3,939 |
$ |
9 |
$ |
26 |
$ |
3,974 |
|||||||
Expansion capital |
9,849 |
(5) |
79 |
9,923 |
|||||||||||
Total Capital Investment Net to CNX Midstream |
$ |
13,788 |
$ |
4 |
$ |
105 |
$ |
13,897 |
|||||||
(*) On March 16, 2018, the Partnership, through its 100% interest in the Anchor Systems, consummated the Shirley-Penns Acquisition. Although the Partnership only held a 5% controlling interest in the earnings and production related to the Shirley-Penns System prior to March 16, 2018, consolidated activity is reflected in the tables above as if the Shirley-Penns Acquisition occurred on January 1, 2017 for comparability purposes. |
Development Companies Jointly Owned by CNX Gathering LLC and CNX Midstream Partners LP | |||||||||||||||
Operating Income Summary, Selected Operating Statistics and Capital Investment | |||||||||||||||
(in thousands) | |||||||||||||||
(unaudited) | |||||||||||||||
Three Months Ended March 31, 2017 | |||||||||||||||
Development Company | |||||||||||||||
Anchor |
Growth |
Additional |
TOTAL(*) | ||||||||||||
Income Summary |
|||||||||||||||
Revenue |
$ |
52,699 |
$ |
2,225 |
$ |
4,034 |
$ |
58,958 |
|||||||
Expenses |
21,083 |
2,278 |
2,357 |
25,718 |
|||||||||||
Net Income |
$ |
31,616 |
$ |
(53) |
$ |
1,677 |
$ |
33,240 |
|||||||
Operating Statistics - Gathered Volumes |
|||||||||||||||
Dry gas (BBtu/d) |
662 |
52 |
29 |
743 |
|||||||||||
Wet gas (BBtu/d) |
443 |
5 |
95 |
543 |
|||||||||||
Condensate (MMcfe/d) |
4 |
— |
4 |
8 |
|||||||||||
Total Gathered Volumes |
1,109 |
57 |
128 |
1,294 |
|||||||||||
Capital Investment |
|||||||||||||||
Maintenance capital |
$ |
4,104 |
$ |
227 |
$ |
367 |
$ |
4,698 |
|||||||
Expansion capital |
6,429 |
212 |
(147) |
6,494 |
|||||||||||
Total Capital Investment |
$ |
10,533 |
$ |
439 |
$ |
220 |
$ |
11,192 |
|||||||
Capital Investment Net to CNX Midstream Partners LP |
|||||||||||||||
Maintenance capital |
$ |
4,104 |
$ |
11 |
$ |
18 |
$ |
4,133 |
|||||||
Expansion capital |
6,429 |
11 |
(7) |
6,433 |
|||||||||||
Total Capital Investment Net to CNX Midstream |
$ |
10,533 |
$ |
22 |
$ |
11 |
$ |
10,566 |
|||||||
(*) On March 16, 2018, the Partnership, through its 100% interest in the Anchor Systems, consummated the Shirley-Penns Acquisition. Although the Partnership only held a 5% controlling interest in the earnings and production related to the Shirley-Penns System prior to March 16, 2018, consolidated activity is reflected in the tables above as if the Shirley-Penns Acquisition occurred on January 1, 2017 for comparability purposes. |
View original content with multimedia:http://www.prnewswire.com/news-releases/cnx-midstream-reports-first-quarter-results-announces-strategic-transaction-with-cnx-and-hg-energy-300641578.html
SOURCE CNX Midstream Partners LP
PITTSBURGH, April 19, 2018 /PRNewswire/ -- CNX Midstream Partners LP (NYSE: CNXM) ("CNXM" or the "Partnership"), today announced that the Board of Directors of its general partner, CNX Midstream GP LLC, has declared a cash distribution of $0.3245 per unit with respect to the first quarter of 2018. The distribution will be made on May 15, 2018 to unitholders of record as of the close of business on May 4, 2018. The distribution, which equates to an annual rate of $1.298 per unit, represents an increase of 3.6% over the prior quarter, and an increase of 15% over the distribution paid with respect to the first quarter of 2017.
CNX Midstream Partners is a growth-oriented master limited partnership that owns, operates, develops and acquires gathering and other midstream energy assets to service natural gas production in the Appalachian Basin in Pennsylvania and West Virginia. Our assets include natural gas gathering pipelines and compression and dehydration facilities, as well as condensate gathering, collection, separation and stabilization facilities. More information is available at our website www.cnxmidstream.com.
This press release is intended to be a qualified notice to nominees as provided for under Treasury Regulation Section 1.1446-4(b). Brokers and nominees should treat one hundred percent (100.0%) of CNX Midstream's distributions to non-U.S. investors as being attributed to income that is effectively connected with a United States trade or business. Accordingly, CNX Midstream's distributions to non-U.S. investors are subject to federal income tax withholding at the highest applicable effective tax rate. Nominees, and not CNX Midstream, are treated as withholding agents responsible for withholding on the distributions received by them on behalf of foreign investors.
View original content with multimedia:http://www.prnewswire.com/news-releases/cnx-midstream-increases-quarterly-cash-distribution-300632677.html
SOURCE CNX Midstream Partners LP
PITTSBURGH, March 16, 2018 /PRNewswire/ -- CNX Resources Corporation (NYSE: CNX) ("CNX" or the company) and CNX Midstream Partners LP (NYSE: CNXM) ("CNXM") jointly announced today that CNXM has completed its previously announced acquisition of a 95% interest in the Shirley-Pennsboro gathering system ("Shirley-Pennsboro System") from CNX.
The Shirley-Pennsboro System gathers and transports gas in the core wet gas region of the Marcellus Shale in West Virginia across Doddridge, Tyler, Ritchie, and Pleasant counties and currently has approximately 180 million cubic feet equivalent per day of flowing production. At the closing, the Shirley-Pennsboro System, which was previously held in CNX's 95% owned subsidiary, CNX Midstream DevCo III, was transferred to CNXM's 100% owned subsidiary, CNX Midstream DevCo I.
CNXM financed the transaction with a portion of the proceeds from the sale of $400 million aggregate principal amount of their 6.500% senior notes due 2026, which also closed on March 16, 2018.
About CNX Resources
CNX Resources Corporation (NYSE: CNX) is one of the largest independent natural gas exploration, development and production companies, with operations centered in the major shale formations of the Appalachian basin. CNX deploys an organic growth strategy focused on responsibly developing its resource base. As of December 31, 2017, CNX had 7.6 trillion cubic feet equivalent of proved natural gas reserves. CNX is a member of the Standard & Poor's Midcap 400 Index. Additional information may be found at www.cnx.com.
About CNX Midstream Partners
CNX Midstream Partners LP (NYSE: CNXM) is a master limited partnership that owns, operates, develops and acquires gathering and other midstream energy assets to service natural gas production in the Appalachian Basin in Pennsylvania and West Virginia. CNXM's assets include natural gas gathering pipelines and compression and dehydration facilities, as well as condensate gathering, collection, separation and stabilization facilities. More information is available on CNXM's website www.cnxmidstream.com.
* * * * *
This press release serves as a qualified notice to nominees as provided for under Treasury Regulation Section 1.1446-4(b). Nominees should treat one hundred percent (100.0%) of CNX Midstream's distributions to non-U.S. investors as being attributed to income that is effectively connected with a United States trade or business. Accordingly, CNX Midstream's distributions to non-U.S. investors are subject to federal income tax withholding at the highest applicable effective tax rate. Nominees, and not CNX Midstream, are treated as withholding agents responsible for withholding on the distributions received by them on behalf of non-U.S. investors.
Important Information about Company Names and Stock Trading Symbols
Effective November 28, 2017, the company known as CONSOL Energy Inc. (NYSE: CNX) separated its gas business (GasCo or RemainCo) and its coal business (CoalCo or SpinCo) into two independent, publicly traded companies by means of a separation of CoalCo from RemainCo.
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SOURCE CNX Resources Corporation; CNX Midstream Partners LP
PITTSBURGH, March 8, 2018 /PRNewswire/ -- CNX Midstream Partners LP (NYSE: CNXM) ("CNX Midstream" or the "Company") today announced that it has entered into a new senior secured revolving credit facility (the "Credit Facility"), which replaces the Company's prior facility. The Credit Facility expands CNX Midstream's borrowing capacity by $350 million to $600 million, with an accordion feature allowing the Company to further expand its borrowing capacity to $850 million, and matures on March 8, 2023. Outstanding borrowings under the Credit Facility bear interest, at CNX Midstream's option, at either the base rate plus a margin ranging from 0.75% to 1.75% or LIBOR plus a margin ranging from 1.75% to 2.75%.
PNC Capital Markets LLC, JPMorgan Chase Bank, N.A., Credit Suisse Securities (USA) LLC and MUFG Union Bank, N.A. acted as the joint lead arrangers and joint book runners for the Credit Facility. PNC Bank, National Association will serve as administrative agent and collateral agent, and JPMorgan Chase Bank, N.A. will serve as syndication agent.
About CNX Midstream Partners
CNX Midstream Partners LP (NYSE: CNXM) is a master limited partnership that owns, operates, develops and acquires gathering and other midstream energy assets to service natural gas production in the Appalachian Basin in Pennsylvania and West Virginia. CNXM's assets include natural gas gathering pipelines and compression and dehydration facilities, as well as condensate gathering, collection, separation and stabilization facilities. More information is available on CNXM's website www.cnxmidstream.com.
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SOURCE CNX Midstream Partners LP
PITTSBURGH, March 5, 2018 /PRNewswire/ -- CNX Midstream Partners LP (NYSE: CNXM) ("CNX Midstream" or "we") today announced that it intends, subject to market and other conditions, to offer and sell to eligible purchasers $400 million aggregate principal amount of senior notes due 2026 (the "Notes"). CNX Midstream Finance Corp., a wholly owned subsidiary of CNX Midstream, will serve as co-issuer of the Notes. CNX Midstream intends to use the net proceeds of the sale of the Notes to fund the previously-announced acquisition of CNX Resource Corporation's 95% interest in the Shirley-Pennsboro gathering system, repay existing indebtedness under its revolving credit facility and for general partnership purposes. The Notes will be subject to a special mandatory redemption at 100% of the issue price thereof if the Shirley-Pennsboro transaction is not completed on or before June 1, 2018.
The Notes have not been registered under the Securities Act of 1933, as amended (the "Securities Act"), or any state securities laws and, unless so registered, may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and the rules promulgated thereunder and applicable state securities laws. The Notes will be offered only to qualified institutional buyers in reliance on Rule 144A under the Securities Act and non-U.S. persons in transactions outside the United States in reliance on Regulation S under the Securities Act.
CNX Midstream is a growth-oriented master limited partnership that owns, operates, develops and acquires gathering and other midstream energy assets to service natural gas production in the Appalachian Basin in Pennsylvania and West Virginia. Our assets include natural gas gathering pipelines and compression and dehydration facilities, as well as condensate gathering, collection, separation and stabilization facilities.
Cautionary Statements:
This press release does not constitute an offer to sell or the solicitation of an offer to buy any Notes nor shall there be any sale of Notes in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state. The offering may be made only by means of an offering memorandum.
Various statements in this release, including those that express a belief, expectation or intention, may be considered forward-looking statements (within the meaning of the federal securities laws) that involve risks and uncertainties that could cause actual results to differ materially from projected results. Accordingly, investors should not place undue reliance on forward-looking statements as a prediction of actual results. These forward-looking statements include statements relating to the proposed Notes offering and the anticipated use of proceeds therefrom and the completion of the Shirley-Pennsboro transaction. When we use the words "believe," "intend," "expect," "may," "should," "anticipate," "could," "estimate," "plan," "predict," "project," or their negatives, or other similar expressions, the statements which include those words are usually forward-looking statements. When we describe strategy that involves risks or uncertainties, we are making forward-looking statements. The forward-looking statements in this press release, if any, speak only as of the date of this press release; we disclaim any obligation to update these statements. We have based these forward-looking statements on our current expectations and assumptions about future events. While our management considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond our control. These risks, contingencies and uncertainties relate to, among other matters, the factors discussed in our 2017 Form 10-K under "Risk Factors," as updated by any subsequent Form 10-Qs, which are on file with the Securities and Exchange Commission.
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SOURCE CNX Midstream Partners LP
PITTSBURGH, Feb. 7, 2018 /PRNewswire/ -- CNX Resources Corporation (NYSE: CNX) ("CNX" or the company) and CNX Midstream Partners LP (NYSE: CNXM) ("CNXM") jointly announced today that they have entered into a definitive agreement ("Purchase Agreement") pursuant to which CNX will sell its 95% interest in the Shirley-Pennsboro gathering system ("Shirley-Pennsboro System") to CNXM for total cash consideration of $265 million ("Purchase Price").
The Shirley-Pennsboro System gathers and transports gas in the core wet gas region of the Marcellus Shale in West Virginia across Doddridge, Tyler, Ritchie, and Pleasant counties and currently has approximately 180 million cubic feet equivalent per day of flowing production.
"This transaction is a win-win for both CNX and CNXM," commented Nicholas J. DeIuliis, CEO of CNX and CNXM. "For CNX, the transaction provides significant cash proceeds that effectively return the investment we made for our acquisition of Noble Energy's general partner interest in CNXM. Also, in connection with the acquisition, CNX and CNXM have agreed to amend the existing gathering agreement to provide for a minimum volume commitment (MVC) with respect to the Shirley-Pennsboro System. This operating area was the largest growth contributor to CNX's 2017 Marcellus Shale volumes and will continue to be a growing part of CNX's future production."
"For CNXM, this transaction complements the MLP's growth outlook, as previously highlighted, and demonstrates the commitment and value-creation opportunities under the new single-sponsor ownership structure," continued Mr. DeIuliis. "The Shirley-Pennsboro System is already well-capitalized, and the timing of the transaction is ideal for CNXM as it is able to capture the volume growth as it executes near-term capacity expansion projects, with CNX volumes rapidly filling that capacity. The transaction is substantially de-risked through the MVC, which covers approximately 70% of CNX's planned production in the Shirley-Pennsboro operating area, resulting in approximately $400 million in revenue for CNXM through 2031. Additionally, this transaction is expected to add $22 million to $24 million of 2018 EBITDA for CNXM on a full year pro forma basis, with substantial EBITDA growth expected beyond 2018. CNX expects a negligible impact to 2018 EBITDA guidance since a transaction was contemplated in its prior guidance numbers."
At the closing, the Shirley-Pennsboro System, which is currently held in CNX's 95% owned CNX Midstream DevCo III, will be transferred to CNXM's 100% owned subsidiary, CNX Midstream DevCo I. CNXM currently intends to finance the transaction with cash on hand and through debt financing. Following closing of the transaction, which is expected to occur prior to the end of the first quarter of 2018, CNX Resources will continue to own 95% interests in each of CNX Midstream DevCo II LP and CNX Midstream DevCo III LP, with CNXM owning the remaining 5% in each.
The transaction represents the initial dropdown of assets by CNX to CNXM following CNX acquiring Noble Energy's GP and DevCo interests in CNXM, which closed on January 3, 2018. CNX continues to hold approximately 21.7 million common units, or 34.2%, of the common units of CNXM, along with 100% of the general partner interest, and the incentive distribution rights in CNXM.
The transaction was approved by the CNXM's Board of Directors' Conflicts Committee, which consists entirely of independent directors.
Latham & Watkins LLP served as the legal advisor to CNX. The Conflicts Committee of the Board of Directors of CNXM was advised by Evercore on financial matters and Baker Botts L.L.P. on legal matters.
Lastly, CNX and CNXM will provide additional guidance information in conjunction with the upcoming Analyst and Investor Meeting.
Note: CNX Midstream Partners LP is unable to provide a reconciliation of projected Adjusted EBITDA to projected operating income, the most comparable financial measure calculated in accordance with GAAP, due to the unknown effect, timing, and potential significance of certain income statement items.
Analyst and Investor Meeting:
CNX and CNXM will host a joint Analyst and Investor Meeting in Pittsburgh, Pennsylvania on Tuesday, March 13, 2018.
The Analyst and Investor Meeting, which is expected to last approximately four hours, will feature presentations from members of CNX's and CNXM's senior leadership teams followed by a question and answer session.
Following the conclusion of CNX's portion of the Analyst and Investor Meeting, which the company expects to be approximately three hours, certain members of the senior leadership team from CNXM will make a presentation followed by a question and answer session.
A live audio webcast of the Analyst and Investor Meeting will begin at 8:30 a.m. Eastern Time and can be accessed by visiting the investor relations portion at each company's website, at www.cnx.com and www.cnxmidstream.com. The replay of the webcast will be available for approximately 30 days. Additionally, a comprehensive slide deck will be posted to each company's website (under the "Events" tab) to coincide with the onset of the meeting.
About CNX Resources
CNX Resources Corporation (NYSE: CNX) is one of the largest independent natural gas exploration, development and production companies, with operations centered in the major shale formations of the Appalachian basin. CNX deploys an organic growth strategy focused on responsibly developing its resource base. As of December 31, 2017, CNX had 7.6 trillion cubic feet equivalent of proved natural gas reserves. CNX is a member of the Standard & Poor's Midcap 400 Index. Additional information may be found at www.cnx.com.
About CNX Midstream Partners
CNX Midstream Partners LP (NYSE: CNXM) is a master limited partnership that owns, operates, develops and acquires gathering and other midstream energy assets to service natural gas production in the Appalachian Basin in Pennsylvania and West Virginia. CNXM's assets include natural gas gathering pipelines and compression and dehydration facilities, as well as condensate gathering, collection, separation and stabilization facilities. More information is available on CNXM's website www.cnxmidstream.com.
* * * * *
This press release serves as a qualified notice to nominees as provided for under Treasury Regulation Section 1.1446-4(b). Nominees should treat one hundred percent (100.0%) of CNX Midstream's distributions to non-U.S. investors as being attributed to income that is effectively connected with a United States trade or business. Accordingly, CNX Midstream's distributions to non-U.S. investors are subject to federal income tax withholding at the highest applicable effective tax rate. Nominees, and not CNX Midstream, are treated as withholding agents responsible for withholding on the distributions received by them on behalf of non-U.S. investors.
Important Information about Company Names and Stock Trading Symbols
Effective November 28, 2017, the company known as CONSOL Energy Inc. (NYSE: CNX) separated its gas business (GasCo or RemainCo) and its coal business (CoalCo or SpinCo) into two independent, publicly traded companies by means of a separation of CoalCo from RemainCo.
Cautionary Statements
CNX and CNXM are including the following cautionary statement in this press release to make applicable and take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 for any forward-looking statements made by, or on behalf of us. With the exception of historical matters, the matters discussed in this press release are forward-looking statements (as defined in 21E of the Securities Exchange Act of 1934 (the "Exchange Act")) that involve risks and uncertainties that could cause actual results to differ materially from projected results. Accordingly, investors should not place undue reliance on forward-looking statements as a prediction of actual results. These forward-looking statements may include projections and estimates concerning the timing and success of specific projects, including the Shirley-Pennsboro transaction, and our future production, revenues, income and capital spending. When we use the words "believe," "intend," "expect," "may," "should," "anticipate," "could," "estimate," "plan," "predict," "project," "will," or their negatives, or other similar expressions, the statements which include those words are usually forward-looking statements. When we describe a strategy that involves risks or uncertainties, we are making forward-looking statements. The forward-looking statements in this press release speak only as of the date of this press release; we disclaim any obligation to update these statements. We have based these forward-looking statements on our current expectations and assumptions about future events. While our management considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond our control. These risks, contingencies and uncertainties relate to, among other matters, the following: the Shirley-Pennsboro transaction may not be consummated or the benefits contemplated therefrom may not be realized; the effects of changes in market prices of natural gas, NGLs and crude oil on CNX's drilling and development plans and the volumes of natural gas and condensate that are produced on CNXM's dedicated acreage; changes in CNX's drilling and development plans in the Marcellus Shale and Utica Shale; CNX's ability to meet its drilling and development plans in the Marcellus Shale and Utica Shale; the demand for natural gas and condensate gathering services; changes in general economic conditions; competitive conditions in our industry; actions taken by third-party operators, gatherers, processors and transporters; our ability to successfully implement our respective business plans; and our ability to complete internal growth projects on time and on budget. You should not place undue reliance on our forward-looking statements. Although forward-looking statements reflect our good faith beliefs at the time they are made, forward-looking statements involve known and unknown risks, uncertainties and other factors, including the factors described in detail under the captions "Forward-Looking Statements" and "Risk Factors" in our annual report on Form 10-K for the year ended December 31, 2017 filed with the Securities and Exchange Commission, as supplemented by our quarterly reports on Form 10-Q. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, changed circumstances or otherwise, unless required by law.
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SOURCE CNX Resources Corporation; CNX Midstream Partners LP
PITTSBURGH, Jan. 9, 2018 /PRNewswire/ -- CNX Resources Corporation (NYSE: CNX) ("CNX" or the company) announced today an updated 2018 capital expenditure forecast of $790-$880 million, excluding the recent acquisition of the general partner interest of CNX Midstream Partners LP (NYSE: CNXM) ("CNXM"). The 2018 budget includes $515-$580 million of drilling and completion ("D&C") capital and approximately $275-$300 million of capital associated with land, midstream, and water infrastructure. The 2018 D&C capital budget is allocated approximately 65% to the Marcellus Shale and 35% to the Utica Shale.
"CNX's updated 2018 capital plan reflects an industry leading balance sheet and the company's commitment to invest in high rate of return projects, which will result in substantial value creation in 2018 and beyond," commented Nicholas J. DeIuliis, president and CEO. "Our development program in 2018 is largely supported by our robust hedge book, which, as of December 31, 2017, has fully-covered volumes with both NYMEX and basis hedges of approximately 375 Bcfe, or 70% of 2018 production volumes, based on the midpoint of guidance. This de-risking of our revenue allows us to lock in attractive rates of return and confidently execute our development plans."
The company expects 2018 non-D&C capital for midstream, water, and land to drive future stacked pay development and further differentiate CNX's unique asset base. With CNX recently closing the acquisition to now control 100% of CNXM, stacked pay development has begun to directly impact the capital budgeting process and 2018 represents the initial investment required. This non-D&C capital is primarily driving production over the course of 2019, 2020 and beyond. The new stacked pay development lifecycle allows CNX to develop a single formation first and then come back on a pad to take advantage of existing, first formation, infrastructure. This development sequencing is essentially doubling the life and value of a field. As a result, rates of return on future development should benefit meaningfully from this infrastructure build-out as CNX capitalizes on the sequencing of dual formation development.
With the company's recent purchase of Noble Energy's general partner interest in CNXM, CNX has absorbed Noble Energy's 50% of capital contributions that they previously made to CNXM. As a result, CNX expects midstream capital in 2018 to be approximately $100 million. Much of the 2018 midstream capital will go towards building out development companies (DevCo's) outside of DevCo I, which will create future dropdown opportunities.
The company is increasing water capital in 2018 to approximately $75-$100 million, which includes building water infrastructure for two major stacked pay project areas that the company expects to be ready in the fourth quarter of 2019. This additional infrastructure will increase completion efficiencies by improving cycle times, resulting in additional production, lower costs per barrel, and lower future capital costs. Overall, the company estimates material cost savings by building out water infrastructure, compared to the alternative of trucking water. This water capital investment will benefit the company through future dropdowns of ownership interest into CNXM.
The company's 2018 land capital is approximately $100 million, which includes title, land acquisition, and permitting, in order to maximize future development. Land capital in 2018 will help CNX build out its core Marcellus and extensional stacked pay Utica areas that are part of the company's 5-year development plan. A negligible amount of land capital is associated with 2018 development, but instead, the capital that the company is spending in the current year is driving net asset value per share growth by securing future development beyond 2018.
CNX is maintaining its 2018 expected production volumes of 520-550 Bcfe, which equates to an approximately 30% annual increase, compared to 2017 expected volumes, based on the midpoint of guidance. CNX plans to run three rigs through the first half of 2018 and will add a fourth rig starting in July.
2018 Development Program:
TD |
Frac |
Turn-in-line | |
Marcellus |
|||
Southwest Pennsylvania |
55 |
37 |
41 |
West Virginia |
5 |
5 |
5 |
Total Marcellus |
60 |
42 |
46 |
Utica |
|||
Ohio dry Utica (Monroe |
7 |
4 |
10 |
Southwest Pennsylvania |
4 |
1 |
1 |
Central Pennsylvania |
4 |
4 |
2 |
Total Utica |
15 |
9 |
13 |
Total Marcellus and Utica |
75 |
51 |
59 |
In addition to the table above: CNX expects to drill and TIL 26 and 25 CBM wells in 2018, respectively.
Financial Guidance:
Based on current NYMEX natural gas prices, as of January 3, 2018 the company expects Adjusted 2018 EBITDA attributable to CNX of $845-$895 million. Also, CNX expects to continue its previously announced share buyback program, of which the company has bought back approximately $100 million to-date under the one-year $450 million authorization. The company continues to focus on maintaining a solid balance sheet and expects to finish the year under a 2.5x net debt to EBITDA leverage ratio.
Note: CNX Resources Corporation is unable to provide a reconciliation of projected Adjusted EBITDA to projected operating income, the most comparable financial measure calculated in accordance with GAAP, due to the unknown effect, timing, and potential significance of certain income statement items.
Dry Utica Results:
In late November 2017, CNX turned-in-line the Aiken's 5J and 5M dry Utica wells located in Westmoreland County, Pennsylvania, which had an average lateral length of 7,500 feet. Similar to the Gaut 4IH dry Utica well, which is offset to the Aikens wells, the company is utilizing managed pressure drawdown. Each well averaged approximately 25 MMcf per day for a period of 35-days under restricted choke, with an average flowing casing pressure of 8,830 psi. Cumulative production for both wells combined is 1.74 Bcf over the same period. The company believes that the pressure data provides a positive indication for production volumes and an estimated ultimate recovery (EUR). Total costs for the Aikens wells averaged $15 million each, which is a reduction of $13.7 million, or 48%, compared to the CNX's initial Gaut 4IH well. Based on these capital costs, strip pricing, and assuming the same 3.5 Bcfe per 1,000 feet of lateral EUR of the Gaut 4IH, the company expects average after-tax rates of return from the Aikens wells of approximately 50%.
"Given the continuation of extraordinary results of these dry Utica wells, at substantially lower capital costs, compared to our initial well, we have successfully proven the commercial viability of developing the deep dry Utica Shale in Pennsylvania," stated Timothy C. Dugan, Chief Operating Officer. "The future of dry Utica development is on the immediate horizon, and CNX will significantly benefit from stacked pay opportunities through leveraging existing pads, gathering and water infrastructure, and takeaway capacity. Also, stacked pays will give us the flexibility to toggle between accelerating and decelerating activity based on varying market conditions. Our dry Utica and stacked pay opportunity-set cannot be replicated and it gives CNX a tremendous competitive advantage."
Earnings call information:
CNX Resources Corporation will report financial results for the quarter ended December 31, 2017 at 6:45 a.m. ET on Tuesday, January 30, followed by a conference call at 10:00 a.m. ET. The call can be accessed at the investor relations section of the company's website, at www.cnx.com.
About CNX Resources
CNX Resources Corporation is one of the largest independent natural gas exploration, development and production companies, with operations centered in the major shale formations of the Appalachian basin. The company deploys an organic growth strategy focused on responsibly developing its resource base. As of December 31, 2016, CNX had 6.3 trillion cubic feet equivalent of proved natural gas reserves. The company is a member of the Standard & Poor's Midcap 400 Index. Additional information may be found at www.cnx.com.
Important Information about Company Names and Stock Trading Symbols
Effective November 28, 2017, the company known as CONSOL Energy Inc. (NYSE: CNX) separated its gas business (GasCo or RemainCo) and its coal business (CoalCo or SpinCo) into two independent, publicly traded companies by means of a separation of CoalCo from RemainCo.
Cautionary Statements
We are including the following cautionary statement in this press release to make applicable and take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 for any forward-looking statements made by, or on behalf of us. With the exception of historical matters, the matters discussed in this press release are forward-looking statements (as defined in 21E of the Securities Exchange Act of 1934 (the "Exchange Act")) that involve risks and uncertainties that could cause actual results to differ materially from projected results. Accordingly, investors should not place undue reliance on forward-looking statements as a prediction of actual results. These forward-looking statements may include projections and estimates concerning the timing and success of specific projects and our future production, revenues, income and capital spending. When we use the words "believe," "intend," "expect," "may," "should," "anticipate," "could," "estimate," "plan," "predict," "project," "will," or their negatives, or other similar expressions, the statements which include those words are usually forward-looking statements. When we describe a strategy that involves risks or uncertainties, we are making forward-looking statements. The forward-looking statements in this press release speak only as of the date of this press release; we disclaim any obligation to update these statements. We have based these forward-looking statements on our current expectations and assumptions about future events. While our management considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond our control. These risks, contingencies and uncertainties relate to, among other matters, the following: the impact of the separation of the natural gas exploration and production company from the coal company on our business; the expected tax treatment of the separation; competitive responses to the separation; deterioration in economic conditions in any of the industries in which our customers operate which may decrease demand for our products, impair our ability to collect customer receivables and impair our ability to access capital; 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 available for our products, weather and the price and availability of alternative fuels; an extended decline in the prices we receive for our natural gas and natural gas liquids affecting our operating results and cash flows; foreign currency fluctuations could adversely affect the competitiveness of our natural gas liquids abroad; our reliance on major customers; our inability to collect payments from customers if their creditworthiness declines or if they fail to honor their contracts; the disruption of gathering, processing and transportation facilities and other systems that deliver our natural gas and natural gas liquids to market; a loss of our competitive position because of the competitive nature of the natural gas industry or overcapacity in this industry impairing our profitability; 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; the risks inherent in natural gas operations, including our reliance upon third party contractors, being subject to unexpected disruptions, including geological conditions, equipment failure, timing of completion of significant construction or repair of equipment, fires, explosions, accidents and weather conditions that could impact financial results; decreases in the availability of, or increases in, the price of commodities or capital equipment used in our natural gas operations; obtaining and renewing governmental permits and approvals for our natural gas; the effects of government regulation on the discharge into the water or air, and the disposal and clean-up of, hazardous substances and wastes generated during our natural gas operations; our ability to find adequate water sources for our use in natural gas drilling, or our ability to dispose of water used or removed from strata in connection with our gas operations at a reasonable cost and within applicable environmental rules; the effects of stringent federal and state employee health and safety regulations, including the ability of regulators to shut down our operations; the potential for liabilities arising from environmental contamination or alleged environmental contamination in connection with our past or current gas operations; the effects gas well closing and certain other liabilities; uncertainties in estimating our economically recoverable natural gas and oil reserves; defects may exist in our chain of title and we may incur additional costs associated with perfecting title for natural gas rights on some of our properties or failing to acquire these additional rights may result in a reduction of our estimated reserves; the outcomes of various legal proceedings, including those which are more fully described in our reports filed under the Exchange Act; exposure to employee-related long-term liabilities; acquisitions and divestitures we anticipate may not occur or produce anticipated benefits; our participation in joint ventures may restrict our operational and corporate flexibility, and actions taken by a joint venture partner may impact our financial position and operational results; risks associated with our debt; replacing our natural gas and oil reserves, which if not replaced, will cause our natural gas and oil reserves and production to decline; declines in our borrowing base could occur for a variety of reasons, including lower natural gas or oil prices, declines in natural gas and oil proved reserves, and lending regulations requirements or regulations; our hedging activities may prevent us from benefiting from near-term price increases and may expose us to other risks; changes in federal or state income tax laws, particularly in the area of percentage depletion and intangible drilling costs, could cause our financial position and profitability to deteriorate; failure to appropriately allocate capital and other resources among our strategic opportunities may adversely affect our financial condition; failure by CONSOL Energy to satisfy liabilities it acquired from us in connection with the separation, or failure to perform its obligations under various arrangements, which we guaranteed, could materially or adversely affect our results of operations, financial position, and cash flows; information theft, data corruption, operational disruption and/or financial loss resulting from a terrorist attack or cyber incident; operating in a single geographic area; with respect to the termination of the joint venture with Noble - disruption to our business, including customer and supplier relationships resulting from this transaction, and the impact of the transaction on our future operating and financial results and liquidity; and, with respect to our acquisition of the 50% interest in CONE Gathering LLC from Noble, disruption to our business, including customer, employee and supplier relationships resulting from this transaction and the impact of the transaction on our future operating and financial results. Additional factors are described in detail under the captions "Forward Looking Statements" and "Risk Factors" in our annual report on Form 10-K for the year ended December 31, 2016 filed with the Securities and Exchange Commission, as supplemented by our quarterly reports on Form 10-Q.
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SOURCE CNX Resources Corporation
PITTSBURGH, Jan. 3, 2018 /PRNewswire/ -- CNX Resources Corporation (NYSE: CNX) ("CNX") and CNX Midstream Partners LP (NYSE: CNXM) ("CNXM") jointly announced today that CNX has closed its previously announced acquisition of Noble Energy, Inc.'s (NYSE: NBL) ("Noble") 50% membership interest in CONE Gathering LLC, which holds the general partner interest and incentive distribution rights in CONE Midstream Partners LP. In conjunction with the closing, CONE Midstream Partners LP was renamed CNX Midstream Partners LP and will commence trading on the New York Stock Exchange under the ticker "CNXM" effective January 4, 2018.
Separately, CNXM announced today that its board of directors, following prior approval by the Board of Director's Conflicts Committee, which consists entirely of independent directors, has authorized CNXM to enter into an amendment to its gas gathering agreement (the "GGA") with CNX Gas Company LLC, a wholly-owned subsidiary of CNX. As part of the amendment to the GGA:
This amendment is expected to help CNX unlock the stacked pay potential of the core of southwest Pennsylvania and capitalize on economies of scale, which would support accelerating drilling activity and production moving forward. CNXM believes this will result in a higher level of confidence to support sustainable distribution growth into the future, which in turn will benefit CNX, which owns 21.7 million common units, the general partner interest, and the incentive distribution rights in CNXM. In addition, CNX and Noble have agreed to divide equitably their jointly owned water assets so that either CNX or Noble will own all of the formerly jointly owned water assets within agreed upon areas.
"Owning 100% of the general partner of CNXM, while simultaneously amending the existing GGA, is very significant for CNX," commented Nicholas J. DeIuliis, president and CEO. "CNX will benefit from increased control and flexibility with respect to the scope and timing of midstream development, which in turn will give CNX a greater level of optionality in its development plans and future drop opportunities. Ultimately, this GGA allows CNX to lock in our multi-year development plan under mutually beneficial terms for both CNX and CNXM. The single sponsor MLP model is the first key step in unlocking the value potential of CNX Midstream."
"For CNXM," Mr. DeIuliis said, "the amended GGA is expected to lock in distributable cash flow growth, enabling CNXM to maintain its strong distribution growth policy for the next several years."
As part of the change in ownership, effective immediately, Nicholas J. DeIuliis will serve as the chief executive officer (CEO) of CNXM, in addition to his current role as president and CEO of CNX. Also, effective immediately, Donald W. Rush will serve as the chief financial officer (CFO) of CNXM in addition to his current role as CFO of CNX.
Following the closing of the acquisition, Nicholas J. DeIuliis, Donald W. Rush, and Timothy C. Dugan will join Stephen W. Johnson and the three existing independent directors to constitute the board of directors of CNXM.
The changes to CNXM's management team and board of directors illustrate CNX's intent to better align the strategic initiatives of CNX and CNXM to unlock the growth potential for both companies.
Goldman Sachs & Co. LLC served as the financial advisor and Latham & Watkins LLP served as the legal advisor to CNX. The conflicts committee was advised by Evercore on financial matters and Baker Botts L.L.P. on legal matters.
Conference Call
A conference call and webcast, during which management will discuss these announcements, is scheduled for January 4, 2018 at 10:00 a.m. Eastern Time. Reference material for the call will be available on the "Events" page of the new CNX Midstream website, www.cnxmidstream.com, shortly before the start of the call. Prepared remarks by members of management will be followed by a question and answer period. Interested parties may listen via webcast by using the link posted on the "Events" page of our website or at https://services.choruscall.com/links/cnxm180104.html. Participants who would like to ask questions may join the conference by phone at 888-349-0097 (international 412-902-0126) five to ten minutes prior to the scheduled start time (reference the CNX Midstream call). An on-demand replay of the webcast will be also be available at https://services.choruscall.com/ccforms/replay.html shortly after the conclusion of the conference call. A telephonic replay will be available through January 18, 2018 by dialing 877-344-7529 (international: 412-317-0088) and using the conference playback number 10115469.
About CNX Resources
CNX Resources Corporation (NYSE: CNX) is one of the largest independent natural gas exploration, development and production companies, with operations centered in the major shale formations of the Appalachian basin. The company deploys an organic growth strategy focused on responsibly developing its resource base. As of December 31, 2016, CNX had 6.3 trillion cubic feet equivalent of proved natural gas reserves. The company is a member of the Standard & Poor's Midcap 400 Index. Additional information may be found at www.cnx.com.
About CNX Midstream Partners
CNX Midstream Partners LP (NYSE: CNXM) is a master limited partnership that owns, operates, develops and acquires gathering and other midstream energy assets to service natural gas production in the Appalachian Basin in Pennsylvania and West Virginia. Our assets include natural gas gathering pipelines and compression and dehydration facilities, as well as condensate gathering, collection, separation and stabilization facilities. More information is available on our website www.cnxmidstream.com.
This press release serves a qualified notice to nominees as provided for under Treasury Regulation Section 1.1446-4(b). Nominees should treat one hundred percent (100.0%) of CNX Midstream's distributions to non-U.S. investors as being attributed to income that is effectively connected with a United States trade or business. Accordingly, CNX Midstream's distributions to non-U.S. investors are subject to federal income tax withholding at the highest applicable effective tax rate. Nominees, and not CNX Midstream, are treated as withholding agents responsible for withholding on the distributions received by them on behalf of non-U.S. investors.
Important Information about Company Names and Stock Trading Symbols
Effective November 28, 2017, the company known as CONSOL Energy Inc. (NYSE: CNX) separated its gas business (GasCo or RemainCo) and its coal business (CoalCo or SpinCo) into two independent, publicly traded companies by means of a separation of CoalCo from RemainCo.
Cautionary Statements
We are including the following cautionary statement in this press release to make applicable and take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 for any forward-looking statements made by, or on behalf of us. With the exception of historical matters, the matters discussed in this press release are forward-looking statements (as defined in 21E of the Securities Exchange Act of 1934 (the "Exchange Act") that involve risks and uncertainties that could cause actual results to differ materially from projected results. Accordingly, investors should not place undue reliance on forward-looking statements as a prediction of actual results. The forward-looking statements may include statements regarding benefits of the acquisition and the plans, objectives, and strategies of CNX and CNXM following the acquisition, projections and estimates concerning the timing and success of specific projects and our future production, revenues, income and capital spending. When we use the words "believe," "intend," "expect," "may," "should," "anticipate," "could," "estimate," "plan," "predict," "project," "will," or their negatives, or other similar expressions, the statements which include those words are usually forward-looking statements. When we describe a strategy that involves risks or uncertainties, we are making forward-looking statements. The forward-looking statements in this press release speak only as of the date of this press release; we disclaim any obligation to update these statements. We have based these forward-looking statements on our current expectations and assumptions about future events. While our management considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond our control. These risks, contingencies and uncertainties relate to, among other matters, the following: the impact of the separation of the natural gas exploration and production company from the coal company on our business; the expected tax treatment of the separation; competitive responses to the separation; deterioration in economic conditions in any of the industries in which our customers operate which may decrease demand for our products, impair our ability to collect customer receivables and impair our ability to access capital; 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 available for our products, weather and the price and availability of alternative fuels; an extended decline in the prices we receive for our natural gas and natural gas liquids affecting our operating results and cash flows; foreign currency fluctuations could adversely affect the competitiveness of our natural gas liquids abroad; our reliance on major customers; our inability to collect payments from customers if their creditworthiness declines or if they fail to honor their contracts; the disruption of gathering, processing and transportation facilities and other systems that deliver our natural gas and natural gas liquids to market; a loss of our competitive position because of the competitive nature of the natural gas industry overcapacity in this industry impairing our profitability; 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; the risks inherent in natural gas operations, including our reliance upon third party contractors, being subject to unexpected disruptions, including geological conditions, equipment failure, timing of completion of significant construction or repair of equipment, fires, explosions, accidents and weather conditions that could impact financial results; decreases in the availability of, or increases in, the price of commodities or capital equipment used in our natural gas operations; obtaining and renewing governmental permits and approvals for our natural gas; the effects of government regulation on the discharge into the water or air, and the disposal and clean-up of, hazardous substances and wastes generated during our natural gas operations; our ability to find adequate water sources for our use in natural gas drilling, or our ability to dispose of water used or removed from strata in connection with our gas operations at a reasonable cost and within applicable environmental rules; the effects of stringent federal and state employee health and safety regulations, including the ability of regulators to shut down our operations; the potential for liabilities arising from environmental contamination or alleged environmental contamination in connection with our past or current gas operations; the effects gas well closing and certain other liabilities; uncertainties in estimating our economically recoverable natural gas and oil reserves; defects may exist in our chain of title and we may incur additional costs associated with perfecting title for natural gas rights on some of our properties or failing to acquire these additional rights may result in a reduction of our estimated reserves; the outcomes of various legal proceedings, including those which are more fully described in our reports filed under the Exchange Act; exposure to employee-related long-term liabilities; acquisitions and divestitures we anticipate may not occur or produce anticipated benefits; our participation in joint ventures may restrict our operational and corporate flexibility, and actions taken by a joint venture partner may impact our financial position and operational results; risks associated with our debt; replacing our natural gas and oil reserves, which if not replaced, will cause our natural gas and oil reserves and production to decline; declines in our borrowing base could occur for a variety of reasons, including lower natural gas or oil prices, declines in natural gas and oil proved reserves, and lending regulations requirements or regulations; our hedging activities may prevent us from benefiting from near-term price increases and may expose us to other risks; changes in federal or state income tax laws, particularly in the area of percentage depletion and intangible drilling costs, could cause our financial position and profitability to deteriorate; failure to appropriately allocate capital and other resources among our strategic opportunities may adversely affect our financial condition; failure by CONSOL Energy to satisfy liabilities it acquired from us in connection with the separation, or failure to perform its obligations under various arrangements, which we guaranteed, could materially or adversely affect our results of operations, financial position, and cash flows; information theft, data corruption, operational disruption and/or financial loss resulting from a terrorist attack or cyber incident; operating in a single geographic area; with respect to the termination of the joint venture with Noble - disruption to our business, including customer and supplier relationships resulting from this transaction, and the impact of the transaction on our future operating and financial results and liquidity; and, with respect to our acquisition of the 50% interest in CONE Gathering LLC from Noble, disruption to our business, including customer, employee and supplier relationships resulting from this transaction, risks that the conditions to closing may not be satisfied and the purchase may not occur, and the impact of the transaction on our future operating and financial results. Additional factors are described in detail under the captions "Forward Looking Statements" and "Risk Factors" in CNX's and CNXM's Annual Report on Form 10-K for the year ended December 31, 2016 filed with the Securities and Exchange Commission, as supplemented by their respective Quarterly Reports on Form 10-Q.
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SOURCE CNX Resources Corporation; CNX Midstream Partners LP
PITTSBURGH, Jan. 3, 2018 /PRNewswire/ -- CNX Resources Corporation (NYSE: CNX) ("CNX") and CNX Midstream Partners LP (NYSE: CNXM) ("CNXM") jointly announced today that CNX has closed its previously announced acquisition of Noble Energy, Inc.'s (NYSE: NBL) ("Noble") 50% membership interest in CONE Gathering LLC, which holds the general partner interest and incentive distribution rights in CONE Midstream Partners LP. In conjunction with the closing, CONE Midstream Partners LP was renamed CNX Midstream Partners LP and will commence trading on the New York Stock Exchange under the ticker "CNXM" effective January 4, 2018.
Separately, CNXM announced today that its board of directors, following prior approval by the Board of Director's Conflicts Committee, which consists entirely of independent directors, has authorized CNXM to enter into an amendment to its gas gathering agreement (the "GGA") with CNX Gas Company LLC, a wholly-owned subsidiary of CNX. As part of the amendment to the GGA:
This amendment is expected to help CNX unlock the stacked pay potential of the core of southwest Pennsylvania and capitalize on economies of scale, which would support accelerating drilling activity and production moving forward. CNXM believes this will result in a higher level of confidence to support sustainable distribution growth into the future, which in turn will benefit CNX, which owns 21.7 million common units, the general partner interest, and the incentive distribution rights in CNXM. In addition, CNX and Noble have agreed to divide equitably their jointly owned water assets so that either CNX or Noble will own all of the formerly jointly owned water assets within agreed upon areas.
"Owning 100% of the general partner of CNXM, while simultaneously amending the existing GGA, is very significant for CNX," commented Nicholas J. DeIuliis, president and CEO. "CNX will benefit from increased control and flexibility with respect to the scope and timing of midstream development, which in turn will give CNX a greater level of optionality in its development plans and future drop opportunities. Ultimately, this GGA allows CNX to lock in our multi-year development plan under mutually beneficial terms for both CNX and CNXM. The single sponsor MLP model is the first key step in unlocking the value potential of CNX Midstream."
"For CNXM," Mr. DeIuliis said, "the amended GGA is expected to lock in distributable cash flow growth, enabling CNXM to maintain its strong distribution growth policy for the next several years."
As part of the change in ownership, effective immediately, Nicholas J. DeIuliis will serve as the chief executive officer (CEO) of CNXM, in addition to his current role as president and CEO of CNX. Also, effective immediately, Donald W. Rush will serve as the chief financial officer (CFO) of CNXM in addition to his current role as CFO of CNX.
Following the closing of the acquisition, Nicholas J. DeIuliis, Donald W. Rush, and Timothy C. Dugan will join Stephen W. Johnson and the three existing independent directors to constitute the board of directors of CNXM.
The changes to CNXM's management team and board of directors illustrate CNX's intent to better align the strategic initiatives of CNX and CNXM to unlock the growth potential for both companies.
Goldman Sachs & Co. LLC served as the financial advisor and Latham & Watkins LLP served as the legal advisor to CNX. The conflicts committee was advised by Evercore on financial matters and Baker Botts L.L.P. on legal matters.
Conference Call
A conference call and webcast, during which management will discuss these announcements, is scheduled for January 4, 2018 at 10:00 a.m. Eastern Time. Reference material for the call will be available on the "Events" page of the new CNX Midstream website, www.cnxmidstream.com, shortly before the start of the call. Prepared remarks by members of management will be followed by a question and answer period. Interested parties may listen via webcast by using the link posted on the "Events" page of our website or at https://services.choruscall.com/links/cnxm180104.html. Participants who would like to ask questions may join the conference by phone at 888-349-0097 (international 412-902-0126) five to ten minutes prior to the scheduled start time (reference the CNX Midstream call). An on-demand replay of the webcast will be also be available at https://services.choruscall.com/ccforms/replay.html shortly after the conclusion of the conference call. A telephonic replay will be available through January 18, 2018 by dialing 877-344-7529 (international: 412-317-0088) and using the conference playback number 10115469.
About CNX Resources
CNX Resources Corporation (NYSE: CNX) is one of the largest independent natural gas exploration, development and production companies, with operations centered in the major shale formations of the Appalachian basin. The company deploys an organic growth strategy focused on responsibly developing its resource base. As of December 31, 2016, CNX had 6.3 trillion cubic feet equivalent of proved natural gas reserves. The company is a member of the Standard & Poor's Midcap 400 Index. Additional information may be found at www.cnx.com.
About CNX Midstream Partners
CNX Midstream Partners LP (NYSE: CNXM) is a master limited partnership that owns, operates, develops and acquires gathering and other midstream energy assets to service natural gas production in the Appalachian Basin in Pennsylvania and West Virginia. Our assets include natural gas gathering pipelines and compression and dehydration facilities, as well as condensate gathering, collection, separation and stabilization facilities. More information is available on our website www.cnxmidstream.com.
This press release serves a qualified notice to nominees as provided for under Treasury Regulation Section 1.1446-4(b). Nominees should treat one hundred percent (100.0%) of CNX Midstream's distributions to non-U.S. investors as being attributed to income that is effectively connected with a United States trade or business. Accordingly, CNX Midstream's distributions to non-U.S. investors are subject to federal income tax withholding at the highest applicable effective tax rate. Nominees, and not CNX Midstream, are treated as withholding agents responsible for withholding on the distributions received by them on behalf of non-U.S. investors.
Important Information about Company Names and Stock Trading Symbols
Effective November 28, 2017, the company known as CONSOL Energy Inc. (NYSE: CNX) separated its gas business (GasCo or RemainCo) and its coal business (CoalCo or SpinCo) into two independent, publicly traded companies by means of a separation of CoalCo from RemainCo.
Cautionary Statements
We are including the following cautionary statement in this press release to make applicable and take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 for any forward-looking statements made by, or on behalf of us. With the exception of historical matters, the matters discussed in this press release are forward-looking statements (as defined in 21E of the Securities Exchange Act of 1934 (the "Exchange Act") that involve risks and uncertainties that could cause actual results to differ materially from projected results. Accordingly, investors should not place undue reliance on forward-looking statements as a prediction of actual results. The forward-looking statements may include statements regarding benefits of the acquisition and the plans, objectives, and strategies of CNX and CNXM following the acquisition, projections and estimates concerning the timing and success of specific projects and our future production, revenues, income and capital spending. When we use the words "believe," "intend," "expect," "may," "should," "anticipate," "could," "estimate," "plan," "predict," "project," "will," or their negatives, or other similar expressions, the statements which include those words are usually forward-looking statements. When we describe a strategy that involves risks or uncertainties, we are making forward-looking statements. The forward-looking statements in this press release speak only as of the date of this press release; we disclaim any obligation to update these statements. We have based these forward-looking statements on our current expectations and assumptions about future events. While our management considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond our control. These risks, contingencies and uncertainties relate to, among other matters, the following: the impact of the separation of the natural gas exploration and production company from the coal company on our business; the expected tax treatment of the separation; competitive responses to the separation; deterioration in economic conditions in any of the industries in which our customers operate which may decrease demand for our products, impair our ability to collect customer receivables and impair our ability to access capital; 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 available for our products, weather and the price and availability of alternative fuels; an extended decline in the prices we receive for our natural gas and natural gas liquids affecting our operating results and cash flows; foreign currency fluctuations could adversely affect the competitiveness of our natural gas liquids abroad; our reliance on major customers; our inability to collect payments from customers if their creditworthiness declines or if they fail to honor their contracts; the disruption of gathering, processing and transportation facilities and other systems that deliver our natural gas and natural gas liquids to market; a loss of our competitive position because of the competitive nature of the natural gas industry overcapacity in this industry impairing our profitability; 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; the risks inherent in natural gas operations, including our reliance upon third party contractors, being subject to unexpected disruptions, including geological conditions, equipment failure, timing of completion of significant construction or repair of equipment, fires, explosions, accidents and weather conditions that could impact financial results; decreases in the availability of, or increases in, the price of commodities or capital equipment used in our natural gas operations; obtaining and renewing governmental permits and approvals for our natural gas; the effects of government regulation on the discharge into the water or air, and the disposal and clean-up of, hazardous substances and wastes generated during our natural gas operations; our ability to find adequate water sources for our use in natural gas drilling, or our ability to dispose of water used or removed from strata in connection with our gas operations at a reasonable cost and within applicable environmental rules; the effects of stringent federal and state employee health and safety regulations, including the ability of regulators to shut down our operations; the potential for liabilities arising from environmental contamination or alleged environmental contamination in connection with our past or current gas operations; the effects gas well closing and certain other liabilities; uncertainties in estimating our economically recoverable natural gas and oil reserves; defects may exist in our chain of title and we may incur additional costs associated with perfecting title for natural gas rights on some of our properties or failing to acquire these additional rights may result in a reduction of our estimated reserves; the outcomes of various legal proceedings, including those which are more fully described in our reports filed under the Exchange Act; exposure to employee-related long-term liabilities; acquisitions and divestitures we anticipate may not occur or produce anticipated benefits; our participation in joint ventures may restrict our operational and corporate flexibility, and actions taken by a joint venture partner may impact our financial position and operational results; risks associated with our debt; replacing our natural gas and oil reserves, which if not replaced, will cause our natural gas and oil reserves and production to decline; declines in our borrowing base could occur for a variety of reasons, including lower natural gas or oil prices, declines in natural gas and oil proved reserves, and lending regulations requirements or regulations; our hedging activities may prevent us from benefiting from near-term price increases and may expose us to other risks; changes in federal or state income tax laws, particularly in the area of percentage depletion and intangible drilling costs, could cause our financial position and profitability to deteriorate; failure to appropriately allocate capital and other resources among our strategic opportunities may adversely affect our financial condition; failure by CONSOL Energy to satisfy liabilities it acquired from us in connection with the separation, or failure to perform its obligations under various arrangements, which we guaranteed, could materially or adversely affect our results of operations, financial position, and cash flows; information theft, data corruption, operational disruption and/or financial loss resulting from a terrorist attack or cyber incident; operating in a single geographic area; with respect to the termination of the joint venture with Noble - disruption to our business, including customer and supplier relationships resulting from this transaction, and the impact of the transaction on our future operating and financial results and liquidity; and, with respect to our acquisition of the 50% interest in CONE Gathering LLC from Noble, disruption to our business, including customer, employee and supplier relationships resulting from this transaction, risks that the conditions to closing may not be satisfied and the purchase may not occur, and the impact of the transaction on our future operating and financial results. Additional factors are described in detail under the captions "Forward Looking Statements" and "Risk Factors" in CNX's and CNXM's Annual Report on Form 10-K for the year ended December 31, 2016 filed with the Securities and Exchange Commission, as supplemented by their respective Quarterly Reports on Form 10-Q.
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SOURCE CNX Resources Corporation; CNX Midstream Partners LP
PITTSBURGH, Dec. 26, 2017 /PRNewswire/ -- CNX Resources Corporation (NYSE: CNX) ("CNX") announced that, upon the closing of the transaction contemplated by the agreement to purchase Noble Energy, Inc.'s (NYSE: NBL) ("Noble") 50% membership interest in CONE Gathering LLC (the "Agreement"), CNX expects to rebrand CONE Gathering and its subsidiaries, including CONE Midstream Partners, LP (NYSE: CNNX) ("CONE"), to conform to the CNX brand identity.
This rebranding initiative includes changing the name of CONE to "CNX Midstream Partners LP" and changing the ticker symbol from "CNNX" to "CNXM".
About CNX Resources
CNX Resources Corporation is one of the largest independent natural gas exploration, development and production companies, with operations centered in the major shale formations of the Appalachian basin. The company deploys an organic growth strategy focused on responsibly developing its resource base. As of December 31, 2016, CNX had 6.3 trillion cubic feet equivalent of proved natural gas reserves. The company is a member of the Standard & Poor's Midcap 400 Index. Additional information may be found at www.cnx.com.
Important Information about Company Names and Stock Trading Symbols
Effective November 28, 2017, the company known as CONSOL Energy Inc. (NYSE: CNX) separated its gas business (GasCo or RemainCo) and its coal business (CoalCo or SpinCo) into two independent, publicly traded companies by means of a separation of CoalCo from RemainCo.
Cautionary Statements
We are including the following cautionary statement in this press release to make applicable and take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 for any forward-looking statements made by, or on behalf of us. With the exception of historical matters, the matters discussed in this press release are forward-looking statements (as defined in 21E of the Securities Exchange Act of 1934 (the "Exchange Act") that involve risks and uncertainties that could cause actual results to differ materially from projected results. Accordingly, investors should not place undue reliance on forward-looking statements as a prediction of actual results. The forward-looking statements may include projections and estimates concerning the timing and success of specific projects and our future production, revenues, income and capital spending. When we use the words "believe," "intend," "expect," "may," "should," "anticipate," "could," "estimate," "plan," "predict," "project," "will," or their negatives, or other similar expressions, the statements which include those words are usually forward-looking statements. When we describe strategy that involves risks or uncertainties, we are making forward-looking statements. The forward-looking statements in this press release speak only as of the date of this press release; we disclaim any obligation to update these statements. We have based these forward-looking statements on our current expectations and assumptions about future events. While our management considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond our control. These risks, contingencies and uncertainties relate to, among other matters, the following: the impact of the separation of the natural gas exploration and production company from the coal company on our business; the expected tax treatment of the separation; competitive responses to the separation; deterioration in economic conditions in any of the industries in which our customers operate may decrease demand for our products, impair our ability to collect customer receivables and impair our ability to access capital; 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 available for our products, weather and the price and availability of alternative fuels; an extended decline in the prices we receive for our natural gas and natural gas liquids affecting our operating results and cash flows; foreign currency fluctuations could adversely affect the competitiveness of our natural gas liquids abroad; our reliance on major customers; our inability to collect payments from customers if their creditworthiness declines or if they fail to honor their contracts; the disruption of gathering, processing and transportation facilities and other systems that deliver our natural gas and natural gas liquids to market; a loss of our competitive position because of the competitive nature of the natural gas industry or a loss of our competitive position because of overcapacity in this industry impairing our profitability; 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; the risks inherent in natural gas operations, including our reliance upon third party contractors, being subject to unexpected disruptions, including geological conditions, equipment failure, timing of completion of significant construction or repair of equipment, fires, explosions, accidents and weather conditions that could impact financial results; decreases in the availability of, or increases in, the price of commodities or capital equipment used in our natural gas operations; obtaining and renewing governmental permits and approvals for our natural gas; the effects of government regulation on the discharge into the water or air, and the disposal and clean-up of, hazardous substances and wastes generated during our natural gas operations; our ability to find adequate water sources for our use in natural gas drilling, or our ability to dispose of water used or removed from strata in connection with our gas operations at a reasonable cost and within applicable environmental rules; the effects of stringent federal and state employee health and safety regulations, including the ability of regulators to shut down our operations; the potential for liabilities arising from environmental contamination or alleged environmental contamination in connection with our past or current gas operations; the effects gas well closing and certain other liabilities; uncertainties in estimating our economically recoverable natural gas and oil reserves; defects may exist in our chain of title and we may incur additional costs associated with perfecting title for natural gas rights on some of our properties or failing to acquire these additional rights may result in a reduction of our estimated reserves; the outcomes of various legal proceedings, including those which are more fully described in our reports filed under the Exchange Act; exposure to employee-related long-term liabilities; acquisitions and divestitures we anticipate may not occur or produce anticipated benefits; our participation in joint ventures may restrict our operational and corporate flexibility, and actions taken by a joint venture partner may impact our financial position and operational results; risks associated with our debt; replacing our natural gas and oil reserves, which if not replaced, will cause our natural gas and oil reserves and production to decline; declines in our borrowing base could occur for a variety of reasons, including lower natural gas or oil prices, declines in natural gas and oil proved reserves, and lending regulations requirements or regulations; our hedging activities may prevent us from benefiting from near-term price increases and may expose us to other risks; changes in federal or state income tax laws, particularly in the area of percentage depletion and intangible drilling costs, could cause our financial position and profitability to deteriorate; failure to appropriately allocate capital and other resources among our strategic opportunities may adversely affect our financial condition; failure by CONSOL Energy to satisfy liabilities it acquired from us in connection with the separation, or failure to perform its obligations under various arrangements, which we guaranteed, could materially or adversely affect our results of operations, financial position, and cash flows; information theft, data corruption, operational disruption and/or financial loss resulting from a terrorist attack or cyber incident; operating in a single geographic area; with respect to the termination of the joint venture with Noble - disruption to our business, including customer and supplier relationships resulting from this transaction, and the impact of the transaction on our future operating and financial results and liquidity; with respect to our proposed purchase of the 50% interest in CONE Gathering LLC from Noble Energy, - the disruption to our business, including customer, employee and supplier relationships resulting from this transaction, risks that the conditions to closing may not be satisfied and the purchase may not occur, and the impact of the transaction on our future operating and financial results. Additional factors are described in detail under the captions "Forward Looking Statements" and "Risk Factors" in our annual report on Form 10-K for the year ended December 31, 2016 filed with the SEC, as supplemented by our quarterly reports on Form 10-Q.
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SOURCE CNX Resources Corporation
PITTSBURGH, Dec. 15, 2017 /PRNewswire/ -- CNX Resources Corporation (NYSE: CNX) ("CNX") announced that it has entered into an agreement to purchase Noble Energy, Inc.'s (NYSE: NBL) ("Noble") 50% membership interest in CONE Gathering LLC ("CONE Gathering") for $305 million in cash and the mutual release of all outstanding claims. CONE Gathering holds all of the interests in CONE Midstream GP, LLC, which in turn holds the general partnership interest in CONE Midstream Partners, LP (NYSE: CNNX) ("CONE") and all of the incentive distribution rights in CONE. As a result of this transaction, CNX will own 100% of CONE Gathering, making CONE a single-sponsor master limited partnership.
"This transaction is expected to create significant value for both CNX and CONE," commented Nicholas J. DeIuliis, president and CEO. "As the single sponsor of CONE, CNX will benefit from increased flexibility with respect to the scope and timing of midstream development, which will enhance the value of existing development and create future opportunities such as future dropdowns and gathering more CNX volumes including dry Utica."
Completion of the Purchase Agreement is subject to customary closing conditions. The closing of the Purchase Agreement is not subject to a financing condition and is expected to close in the first quarter of 2018.
About CNX Resources
CNX Resources Corporation is one of the largest independent natural gas exploration, development and production companies, with operations centered in the major shale formations of the Appalachian basin. The company deploys an organic growth strategy focused on responsibly developing its resource base. As of December 31, 2016, CNX had 6.3 trillion cubic feet equivalent of proved natural gas reserves. The company is a member of the Standard & Poor's Midcap 400 Index. Additional information may be found at www.cnx.com.
Important Information about Company Names and Stock Trading Symbols
Effective November 28, 2017, the company known as CONSOL Energy Inc. (NYSE: CNX) separated its gas business (GasCo or RemainCo) and its coal business (CoalCo or SpinCo) into two independent, publicly traded companies by means of a separation of CoalCo from RemainCo.
Cautionary Statements
We are including the following cautionary statement in this press release to make applicable and take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 for any forward-looking statements made by, or on behalf of us. With the exception of historical matters, the matters discussed in this press release are forward-looking statements (as defined in 21E of the Securities Exchange Act of 1934 (the "Exchange Act") that involve risks and uncertainties that could cause actual results to differ materially from projected results. Accordingly, investors should not place undue reliance on forward-looking statements as a prediction of actual results. The forward-looking statements may include projections and estimates concerning the timing and success of specific projects and our future production, revenues, income and capital spending. When we use the words "believe," "intend," "expect," "may," "should," "anticipate," "could," "estimate," "plan," "predict," "project," "will," or their negatives, or other similar expressions, the statements which include those words are usually forward-looking statements. When we describe strategy that involves risks or uncertainties, we are making forward-looking statements. The forward-looking statements in this press release speak only as of the date of this press release; we disclaim any obligation to update these statements. We have based these forward-looking statements on our current expectations and assumptions about future events. While our management considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond our control. These risks, contingencies and uncertainties relate to, among other matters, the following: the impact of the separation of the natural gas exploration and production company from the coal company on our business; the expected tax treatment of the separation; competitive responses to the separation; deterioration in economic conditions in any of the industries in which our customers operate may decrease demand for our products, impair our ability to collect customer receivables and impair our ability to access capital; 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 available for our products, weather and the price and availability of alternative fuels; an extended decline in the prices we receive for our natural gas and natural gas liquids affecting our operating results and cash flows; foreign currency fluctuations could adversely affect the competitiveness of our natural gas liquids abroad; our reliance on major customers; our inability to collect payments from customers if their creditworthiness declines or if they fail to honor their contracts; the disruption of gathering, processing and transportation facilities and other systems that deliver our natural gas and natural gas liquids to market; a loss of our competitive position because of the competitive nature of the natural gas industry or a loss of our competitive position because of overcapacity in this industry impairing our profitability; 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; the risks inherent in natural gas operations, including our reliance upon third party contractors, being subject to unexpected disruptions, including geological conditions, equipment failure, timing of completion of significant construction or repair of equipment, fires, explosions, accidents and weather conditions that could impact financial results; decreases in the availability of, or increases in, the price of commodities or capital equipment used in our natural gas operations; obtaining and renewing governmental permits and approvals for our natural gas; the effects of government regulation on the discharge into the water or air, and the disposal and clean-up of, hazardous substances and wastes generated during our natural gas operations; our ability to find adequate water sources for our use in natural gas drilling, or our ability to dispose of water used or removed from strata in connection with our gas operations at a reasonable cost and within applicable environmental rules; the effects of stringent federal and state employee health and safety regulations, including the ability of regulators to shut down our operations; the potential for liabilities arising from environmental contamination or alleged environmental contamination in connection with our past or current gas operations; the effects gas well closing and certain other liabilities; uncertainties in estimating our economically recoverable natural gas and oil reserves; defects may exist in our chain of title and we may incur additional costs associated with perfecting title for natural gas rights on some of our properties or failing to acquire these additional rights may result in a reduction of our estimated reserves; the outcomes of various legal proceedings, including those which are more fully described in our reports filed under the Exchange Act; exposure to employee-related long-term liabilities; acquisitions and divestitures we anticipate may not occur or produce anticipated benefits; our participation in joint ventures may restrict our operational and corporate flexibility, and actions taken by a joint venture partner may impact our financial position and operational results; risks associated with our debt; replacing our natural gas and oil reserves, which if not replaced, will cause our natural gas and oil reserves and production to decline; declines in our borrowing base could occur for a variety of reasons, including lower natural gas or oil prices, declines in natural gas and oil proved reserves, and lending regulations requirements or regulations; our hedging activities may prevent us from benefiting from near-term price increases and may expose us to other risks; changes in federal or state income tax laws, particularly in the area of percentage depletion and intangible drilling costs, could cause our financial position and profitability to deteriorate; failure to appropriately allocate capital and other resources among our strategic opportunities may adversely affect our financial condition; failure by CONSOL Energy to satisfy liabilities it acquired from us in connection with the separation, or failure to perform its obligations under various arrangements, which we guaranteed, could materially or adversely affect our results of operations, financial position, and cash flows; information theft, data corruption, operational disruption and/or financial loss resulting from a terrorist attack or cyber incident; operating in a single geographic area; with respect to the termination of the joint venture with Noble - disruption to our business, including customer and supplier relationships resulting from this transaction, and the impact of the transaction on our future operating and financial results and liquidity. Additional factors are described in detail under the captions "Forward Looking Statements" and "Risk Factors" in our annual report on Form 10-K for the year ended December 31, 2016 filed with the SEC, as supplemented by our quarterly reports on Form 10-Q.
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SOURCE CNX Resources Corporation
PITTSBURGH, Nov. 16, 2016 /PRNewswire/ -- CONSOL Energy Inc. (NYSE: CNX) today announced that it will host an Analyst and Investor Day in Pittsburgh, Pennsylvania on Tuesday, December 13, 2016.
The Analyst and Investor Day, which is expected to last approximately three hours, will feature presentations from members of CONSOL Energy's senior leadership team followed by a question and answer session.
A live audio webcast of CONSOL Energy's Analyst and Investor Day will begin at 8:30 a.m. Eastern Time and can be accessed by visiting the investor relations portion of the company's website, at www.consolenergy.com. The replay of the webcast will be available on the company's website for approximately 30 days. Additionally, a comprehensive slide deck will be posted to the website (under Presentations to Analysts tab) to coincide with the onset of the meeting.
Following the conclusion of CONSOL Energy's Analyst and Investor Day, certain members of the management teams from CNX Coal Resources (NYSE: CNXC) and CONE Midstream Partners LP (NYSE: CNNX), CONSOL Energy's affiliates, will hold separate breakout sessions to answer questions related to each respective entity. The breakout sessions will not be webcast.
About CONSOL Energy
CONSOL Energy Inc. (NYSE: CNX) is a Pittsburgh-based energy producer, and one of the largest independent natural gas exploration, development and production companies, with operations centered in the major shale formations of the Appalachian basin. The company deploys an organic growth strategy focused on developing its substantial resource base. As of December 31, 2015, CONSOL Energy had 5.6 trillion cubic feet equivalent of proved natural gas reserves. CONSOL Energy is a member of the Standard & Poor's Midcap 400 Index. Additional information may be found at www.consolenergy.com.
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SOURCE CONSOL Energy Inc.
PITTSBURGH and HOUSTON, Oct. 31, 2016 /PRNewswire/ -- CONSOL Energy Inc. (NYSE: CNX) and Noble Energy, Inc. (NYSE: NBL) (the "Joint Venture") jointly announced today that the two companies have entered into a definitive agreement to separate their Marcellus Shale 50-50 Joint Venture (the "Exchange Agreement"). The two companies have negotiated a separation of the Joint Venture that was formed in 2011 for the exploration, development, and operation of primarily Marcellus Shale properties in Pennsylvania and West Virginia. Highlights of the Exchange Agreement include:
"This agreement with Noble Energy to separate our Joint Venture is bitter sweet for CONSOL Energy," commented Nicholas J. DeIuliis, president and CEO. "Noble has been a top-notch partner, and we have enjoyed the collaborative relationship that we have shared over the past five years. Even though we have seen much success together, we have agreed that we must both have the ability to adapt to a changing energy landscape. The separation of the Joint Venture is consistent with CONSOL's transitional journey to a pure-play exploration and development company, and the company's commitment to future growth, in what is now a more robust and actionable stacked pay opportunity set. As the parties work towards closing, CONSOL will remain focused on conducting operations in a safe and environmentally compliant manner to maximize value to our shareholders."
David L. Stover, Chairman, President and CEO of Noble Energy, Inc., added, "The accomplishments of our Joint Venture over the last five years are outstanding, including significant increases in combined production and recoverable resources. These outcomes are a direct result of the high-quality nature of the acreage, but even more so a result of the combined technical leadership and coordination between our two companies. Today's agreement between CONSOL Energy and Noble sets a clear path for both companies into the future. It provides us with greater control and flexibility over the future pace of development in the Marcellus. I'd like to personally thank all of the CONSOL Energy team for their hard work and congratulate them on the successes we have had together."
Prior to the Exchange Agreement, the Joint Venture collectively operated approximately 669,000 Marcellus acres. CONSOL Energy and Noble Energy, Inc. each held 50% working interest. As of the effective date of the Exchange Agreement on October 1, 2016, total flowing production to the Joint Venture was 1.07 billion cubic feet per day of natural gas equivalents.
Subsequent to closing of the Exchange Agreement, the acreage and production of the prior Joint Venture will be as follows:
Maps reflecting the new acreage positions for each company are available on each Company's website.
In addition to the acreage and production realignment between the two companies, Noble Energy, Inc. will also remit a cash payment of approximately $205 million to CONSOL Energy at closing. The exchange of properties and cash result in the elimination of the remaining outstanding carry cost obligation due from Noble Energy, Inc. to CONSOL Energy.
While the Exchange Agreement creates independent ownership interests in the acreage and production currently gathered by CONE, it does not change the total acreage dedicated to CONE, the gathering rates, or other fundamental terms for the services provided by CONE. CONSOL Energy and Noble Energy, Inc. remain as co-sponsors of CONE and shippers on CONE's gathering systems, while retaining their respective general partnership and limited partner ownership interests in CONE.
Completion of the Exchange Agreement is subject to a number of conditions, including expiration of the Hart Scott Rodino Antitrust Improvements Act waiting period and other customary conditions. The closing of the Exchange Agreement is not subject to a financing condition and is expected to close in the fourth quarter of 2016.
Conference Call Information
CONSOL Energy will host a conference call today at 10:00am ET. A live webcast of the conference call can be accessed at the investor relations section of the company's website, at www.consolenergy.com. Security analysts and institutional investors may also listen by dialing (US) 800-230-1074 or (Intl.) 612-234-9960, with access code 405600. A slide presentation summarizing the transaction may be accessed at www.consolenergy.com.
Third Quarter Earnings Call Information
CONSOL Energy will hold its third quarter earnings webcast on November 1, 2016, at 10:00am ET (9:00 a.m. CT), which can be accessed through its website.
Noble Energy, Inc. will hold its third quarter earnings webcast on November 2, 2016, at 9:00am ET (8:00 a.m. CT), which can be accessed through its website.
About CONSOL Energy
CONSOL Energy Inc. (NYSE: CNX) is a Pittsburgh-based energy producer, and one of the largest independent natural gas exploration, development and production companies, with operations centered in the major shale formations of the Appalachian basin. The company deploys an organic growth strategy focused on developing its substantial resource base. As of December 31, 2015, CONSOL Energy had 5.6 trillion cubic feet equivalent of proved natural gas reserves. CONSOL Energy is a member of the Standard & Poor's Midcap 400 Index. Additional information may be found at www.consolenergy.com.
About Noble Energy
Noble Energy (NYSE: NBL) is an independent oil and natural gas exploration and production company with a diversified high-quality portfolio of both U.S. unconventional and global offshore conventional assets spanning three continents. Founded more than 80 years ago, the company is committed to safely and responsibly delivering its purpose: Energizing the World, Bettering People's Lives®. For more information, visit www.nobleenergyinc.com.
Cautionary Statements
This press release contains certain "forward-looking statements" within the meaning of federal securities laws. Words such as "anticipates", "believes," "expects", "intends", "will", "should", "may", and similar expressions may be used to identify forward-looking statements. Forward-looking statements are not statements of historical fact and reflect CONSOL Energy's and Noble Energy's current views about future events. Such forward-looking statements include, but are not limited to, statements about CONSOL Energy's and Noble Energy's plans, objectives, expectations and intentions, the expected timing of completion of the transaction, and other statements that are not historical facts, including business strategy and other plans and objectives for future operations. No assurances can be given that the forward-looking statements contained in this press release will occur as projected and actual results may differ materially from those projected. Forward-looking statements are based on current expectations, estimates and assumptions that involve a number of risks and uncertainties that could cause actual results to differ materially from those projected. These risks and uncertainties include, without limitation, the risk that CONSOL Energy or Noble Energy may be unable to obtain regulatory approvals required for the transaction, the risk that regulatory approvals or restructuring of arrangements with third parties may delay the transaction or result in the imposition of conditions that could cause the parties to abandon the transaction, the risk that a condition to closing of the transaction may not be satisfied, the timing to complete the transaction, disruption from the transaction making it more difficult to maintain relationships with customers, employees or suppliers, the diversion of management time on transaction-related issues, the volatility in commodity prices for natural gas and crude oil, the presence or recoverability of estimated reserves, the ability to replace reserves, environmental risks, drilling and operating risks, exploration and development risks, competition, government regulation or other actions, the ability of management to execute its plans to meet its goals and other risks inherent in CONSOL Energy's and Noble Energy's businesses that are discussed in CONSOL Energy's and Noble Energy's most recent annual reports on Form 10-K, respectively, and in other CONSOL Energy and Noble Energy reports on file with the Securities and Exchange Commission . Forward-looking statements are based on the estimates and opinions of management at the time the statements are made. Neither CONSOL Energy nor Noble Energy undertakes any obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise.
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SOURCE CONSOL Energy Inc.; Noble Energy, Inc.
CANONSBURG, Pa., Oct. 12, 2016 /PRNewswire/ -- CONE Midstream Partners LP (NYSE: CNNX) today announced that it will release financial results for the third quarter 2016 before market opening on Friday, November 4, 2016 and hold a conference call to discuss those results on the same day at 10:00 a.m. Eastern Time. The conference call will be publicly available via webcast on a live and replay basis.
Interested parties are invited to listen to the conference call, during which prepared remarks by John T. Lewis, Chairman and Chief Executive Officer, and other members of management will be followed by a question and answer session. Participants who would like to ask questions during the conference call may join by phone. Individuals who intend to listen only are encouraged to join the conference via the Internet.
Event: |
Conference call to discuss third quarter 2016 financial and operating results. |
Time: |
November 4, 2016 at 10:00 a.m. Eastern Time. |
Internet: |
The webcast may be accessed directly at http://services.choruscall.com/links/cnnx161104.html or from the link posted on the "Events" page of our website, www.conemidstream.com. |
Phone: |
Dial 888-317-6016 (international 412-317-6016) five to ten minutes before the scheduled start of the conference call and reference the CONE Midstream Partners call. |
Replay: |
An on-demand replay of the webcast will also be available shortly after the webcast at http://services.choruscall.com/links/cnnx161104.html. A telephonic replay of the call will be available through November 11, 2016. The replay can be accessed by dialing toll free |
CONE Midstream Partners is a growth-oriented master limited partnership formed by CONSOL Energy Inc. (NYSE:CNX) and Noble Energy Inc. (NYSE: NBL), referred to as our Sponsors, to own, operate, develop and acquire natural gas gathering and other midstream energy assets to service our Sponsors' production in the Marcellus Shale in Pennsylvania and West Virginia. Our assets include natural gas gathering pipelines and compression and dehydration facilities, as well as condensate gathering, collection, separation and stabilization facilities. More information is available at our website www.conemidstream.com.
Contact: |
Stephen R. Milbourne |
CONE Midstream Partners Investor Relations | |
Phone: 724-485-4408 | |
Email: smilbourne@conemidstream.com |
SOURCE CONE Midstream Partners LP
CANONSBURG, Pa., Aug. 4, 2016 /PRNewswire/ -- CONE Midstream Partners LP (NYSE: CNNX) ("CONE Midstream" or the "Partnership") today reported financial and operational results for the three months ended June 30, 2016.(1) The Partnership also increased guidance for full year 2016 financial results.
Second Quarter Results
Highlights of second quarter 2016 results attributable to the Partnership as compared to the second quarter of 2015 include:
Management Comment
"CONE Midstream is pleased to report another strong quarter of financial and operational results," said John T. Lewis, Chairman of the Board and Chief Executive Officer of CONE Midstream GP LLC (the "General Partner"). "Our net throughput volumes grew by 51% from the second quarter of 2015. This volume increase, combined with our operating team's continued success in reducing unit operating costs, resulted in a 56% increase in net income attributable to the partnership from a year ago. Adjusted EBITDA and Distributable Cash Flow both increased by approximately 58% as compared to second quarter last year.
"We were free-cash-flow positive again during the second quarter, with cash from operations exceeding our total capital investments and cash distribution payments," continued Mr. Lewis. "We paid down $27 million of debt, which reduced our debt to trailing-twelve months EBITDA ratio to under 0.5x.
Mr. Lewis concluded, "Based on our solid performance for the first six months and our current outlook for the remainder of the year, we have increased our guidance for our full year 2016 results."
Quarterly Distribution
As previously announced, the Board of Directors of the General Partner declared a quarterly cash distribution of $0.254 per unit with respect to the second quarter of 2016. The distribution payment will be made on August 12, 2016 to unitholders of record at the close of business on August 4, 2016. The distribution, which equates to an annual rate of $1.016 per unit, represents an increase of 3.7% over the prior quarter and an increase of 15.5% over the distribution paid with respect to the second quarter of 2015.
Capital Investment and Resources
CONE Midstream's allocated second quarter 2016 share of investment in expansion projects was $2.3 million. Total expansion capital investment at the three development companies in which CONE Midstream holds controlling interests was $4.2 million. CONE Midstream's respective share of maintenance capital expenditures for the three development companies for the second quarter 2016 was $3.1 million. Maintenance capital expenditures in the aggregate for the development companies in which CONE Midstream holds controlling interests totaled $5.1 million.
As of June 30, 2016, CONE Midstream had outstanding borrowings of $47.0 million under its $250 million revolving credit facility and a cash balance of $5.1 million.
2016 Guidance Update
Based on current expectations, management is providing the following updated guidance for 2016. Full year 2016 Adjusted EBITDA attributable to the Partnership, previously projected to be in the range of $93 - $103 million, is now expected to be in the range of $96 - $106 million. Full year Distributable Cash Flow attributable to the Partnership, previously projected to be in the range of $79 - $89 million, is now expected to be in the range of $82 - $92 million. CONE Midstream's financial guidance is based on numerous assumptions about future events and conditions and, therefore, could vary materially from actual results. These estimates are meant to provide guidance only and are subject to revision for acquisitions or operating environment changes.
Second Quarter Financial and Operational Results Conference Call
A conference call and webcast, during which management will discuss second quarter 2016 financial and operational results, is scheduled for August 4, 2016 at 11:00 a.m. Eastern Time. Reference material for the call will be available on the "Events" page of our website, www.conemidstream.com, shortly before the start of the call. Prepared remarks by members of management will be followed by a question and answer period. Interested parties may listen via webcast by using the link posted on the "Events" page of our website or at www.webcaster4.com/Webcast/Page/998/16154. Participants who would like to ask questions may join the conference by phone at 888-349-0097 (international 412-902-0126) five to ten minutes prior to the scheduled start time (reference the CONE Midstream call). An on-demand replay of the webcast will be also be available at www.webcaster4.com/Webcast/Page/998/16154 shortly after the conclusion of the conference call. A telephonic replay will be available through August 11, 2016 by dialing 877-344-7529 (international: 412-317-0088) and using the conference playback number 10089549.
_______________
(1) Unless otherwise indicated, the reporting measures included in this news release reflect the unallocated total activity of the three development companies jointly owned by the Partnership and CONE Gathering LLC ("CONE Gathering"). Because the Partnership owns a controlling interest in each of the three development companies, it fully consolidates their financial results. The Partnership's current economic interests in the development companies are: 75% in the Anchor Systems, 5% in the Growth Systems, and 5% in the Additional Systems. CONE Gathering is a midstream joint venture formed by CONSOL Energy Inc. and Noble Energy, Inc. and owns non-controlling interests in the Partnership's development companies.
(2) Adjusted EBITDA and DCF are not measures that are recognized under accounting principles generally accepted in the U.S. ("GAAP"). Definitions and reconciliations of these non-GAAP measures to GAAP reporting measures appear in the financial tables which follow.
Contact: |
Stephen R. Milbourne |
CONE Investor Relations | |
Phone: |
724-485-4408 |
Email: |
smilbourne@conemidstream.com |
* * * * *
CONE Midstream Partners is a master limited partnership formed by CONSOL Energy Inc. (NYSE: CNX) and Noble Energy, Inc. (NYSE: NBL), referred to as our Sponsors, to own, operate, develop and acquire natural gas gathering and other midstream energy assets to service our Sponsors' production in the Marcellus Shale in Pennsylvania and West Virginia. Our assets include natural gas gathering pipelines and compression and dehydration facilities, as well as condensate gathering, collection, separation and stabilization facilities. More information is available on our website www.conemidstream.com.
* * * * *
This press release is intended to be a qualified notice to nominees as provided for under Treasury Regulation Section 1.1446-4(b). Brokers and nominees should treat one hundred percent (100.0%) of CONE Midstream's distributions to non-U.S. investors as being attributed to income that is effectively connected with a United States trade or business. Accordingly, CONE Midstream's distributions to non-U.S. investors are subject to federal income tax withholding at the highest applicable effective tax rate. Nominees, and not CONE Midstream, are treated as withholding agents responsible for withholding on the distributions received by them on behalf of foreign investors.
* * * * *
This press release contains forward-looking statements within the meaning of the federal securities laws. Statements that are predictive in nature, that depend upon or refer to future events or conditions or that include the words "believe," "expect," "anticipate," "intend," "estimate" and other expressions that are predictions of or indicate future events and trends and that do not relate to historical matters identify forward-looking statements. Forward-looking statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict, and there can be no assurance that actual outcomes and results will not differ materially from those expected by our management. Factors that could cause our actual results to differ materially from the results contemplated by such forward-looking statements include, among others: the effects of changes in market prices of natural gas, NGLs and crude oil on our Sponsors' drilling and development plan on our dedicated acreage and the volumes of natural gas and condensate that are produced on our dedicated acreage; changes in our Sponsors' drilling and development plan in the Marcellus Shale and Utica Shale; our Sponsors' ability to meet their drilling and development plan in the Marcellus Shale and Utica Shale; the demand for natural gas and condensate gathering services; changes in general economic conditions; competitive conditions in our industry; actions taken by third-party operators, gatherers, processors and transporters; our ability to successfully implement our business plan; and our ability to complete internal growth projects on time and on budget. You should not place undue reliance on our forward-looking statements. Although forward-looking statements reflect our good faith beliefs at the time they are made, forward-looking statements involve known and unknown risks, uncertainties and other factors, including the factors described under "Risk Factors" and "Forward-Looking Statements" in our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, which may cause our actual results, performance or achievements to differ materially from anticipated future results, performance or achievements expressed or implied by such forward-looking statements. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, changed circumstances or otherwise, unless required by law.
CONE MIDSTREAM PARTNERS LP CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per unit data) (unaudited) | |||||||||||||||
Three Months Ended |
Six Months Ended | ||||||||||||||
2016 |
2015 |
2016 |
2015 | ||||||||||||
Revenue |
|||||||||||||||
Gathering revenue — related party |
$ |
58,407 |
$ |
47,717 |
$ |
120,655 |
$ |
90,885 |
|||||||
Total Revenue |
58,407 |
47,717 |
120,655 |
90,885 |
|||||||||||
Expenses |
|||||||||||||||
Operating expense — third party |
7,879 |
8,940 |
16,553 |
17,470 |
|||||||||||
Operating expense — related party |
7,078 |
6,940 |
15,422 |
13,984 |
|||||||||||
General and administrative expense — third party |
1,153 |
1,223 |
2,147 |
2,565 |
|||||||||||
General and administrative expense — related party |
2,213 |
1,995 |
3,897 |
3,972 |
|||||||||||
Inventory revaluation |
10,083 |
— |
10,083 |
— |
|||||||||||
Depreciation expense |
5,152 |
3,667 |
9,992 |
6,661 |
|||||||||||
Interest expense |
381 |
47 |
800 |
112 |
|||||||||||
Total Expense |
33,939 |
22,812 |
58,894 |
44,764 |
|||||||||||
Net Income |
24,468 |
24,905 |
61,761 |
46,121 |
|||||||||||
Less: Net income attributable to noncontrolling interest |
1,251 |
9,993 |
13,755 |
16,997 |
|||||||||||
Net Income Attributable to General and Limited Partner Ownership Interest in CONE Midstream Partners LP |
$ |
23,217 |
$ |
14,912 |
$ |
48,006 |
$ |
29,124 |
|||||||
Calculation of Limited Partner Interest in Net Income: |
|||||||||||||||
Net Income Attributable to General and Limited Partner Ownership Interest in CONE Midstream Partners LP |
$ |
23,217 |
$ |
14,912 |
$ |
48,006 |
$ |
29,124 |
|||||||
Less: General partner interest in net income |
464 |
298 |
960 |
582 |
|||||||||||
Limited partner interest in net income |
$ |
22,753 |
$ |
14,614 |
$ |
47,046 |
$ |
28,542 |
|||||||
Net income per Limited Partner unit - Basic |
$ |
0.39 |
$ |
0.25 |
$ |
0.81 |
$ |
0.49 |
|||||||
Net Income per Limited Partner unit - Diluted |
$ |
0.39 |
$ |
0.25 |
$ |
0.81 |
$ |
0.49 |
|||||||
Limited Partner units outstanding - Basic |
58,343 |
58,326 |
58,343 |
58,326 |
|||||||||||
Limited Partner unit outstanding - Diluted |
58,415 |
58,364 |
58,397 |
58,365 |
|||||||||||
Cash distributions declared per unit (*) |
$ |
0.2540 |
$ |
0.2200 |
$ |
0.4990 |
$ |
0.4325 |
(*) Represents the cash distributions declared during the month following the respective quarterly reporting period ends.
CONE MIDSTREAM PARTNERS LP CONSOLIDATED BALANCE SHEETS (in thousands, except number of units) (unaudited) | |||||||
June 30, |
December 31, | ||||||
ASSETS |
|||||||
Current Assets: |
|||||||
Cash |
$ |
5,096 |
$ |
217 |
|||
Receivables — related party |
17,422 |
36,418 |
|||||
Inventory |
— |
18,916 |
|||||
Other current assets |
1,215 |
2,037 |
|||||
Total Current Assets |
23,733 |
57,588 |
|||||
Property and Equipment: |
|||||||
Property and equipment |
921,420 |
897,918 |
|||||
Less — accumulated depreciation |
41,398 |
31,609 |
|||||
Property and Equipment — Net |
880,022 |
866,309 |
|||||
Other assets |
9,280 |
528 |
|||||
TOTAL ASSETS |
$ |
913,035 |
$ |
924,425 |
|||
LIABILITIES AND EQUITY |
|||||||
Current Liabilities: |
|||||||
Accounts payable |
$ |
23,889 |
$ |
46,155 |
|||
Accounts payable — related party |
1,461 |
1,628 |
|||||
Total Current Liabilities |
25,350 |
47,783 |
|||||
Other Liabilities: |
|||||||
Revolving credit facility |
47,000 |
73,500 |
|||||
Total Liabilities |
72,350 |
121,283 |
|||||
Partners' Capital: |
|||||||
Common units (29,180,217 units issued and outstanding at June 30, 2016 and 29,163,121 |
409,219 |
399,399 |
|||||
Subordinated units (29,163,121 units issued and outstanding at June 30, 2016 and |
(73,417) |
(82,900) |
|||||
General partner interest |
(3,005) |
(3,389) |
|||||
Partners' capital attributable to CONE Midstream Partners LP |
332,797 |
313,110 |
|||||
Noncontrolling interest |
507,888 |
490,032 |
|||||
Total Partners' Capital |
840,685 |
803,142 |
|||||
TOTAL LIABILITIES AND PARTNERS' CAPITAL |
$ |
913,035 |
$ |
924,425 |
CONE MIDSTREAM PARTNERS LP CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (unaudited) | |||||||
Three Months Ended June 30, | |||||||
2016 |
2015 | ||||||
Cash Flows from Operating Activities: |
|||||||
Net Income |
$ |
24,468 |
$ |
24,905 |
|||
Adjustments to reconcile net income to net cash provided by operating activities: |
|||||||
Depreciation expense and amortization of debt issuance costs |
5,193 |
3,708 |
|||||
Unit-based compensation |
219 |
96 |
|||||
Inventory revaluation |
10,083 |
— |
|||||
Other |
151 |
— |
|||||
Changes in assets and liabilities: |
|||||||
Receivables — related party |
4,434 |
6,330 |
|||||
Other current and non-current assets |
453 |
310 |
|||||
Accounts payable |
(3,347) |
14,291 |
|||||
Accounts payable — related party |
123 |
614 |
|||||
Net Cash Provided by Operating Activities |
41,777 |
50,254 |
|||||
Cash Flows from Investing Activities: |
|||||||
Capital expenditures |
(9,338) |
(76,363) |
|||||
Net Cash Used in Investing Activities |
(9,338) |
(76,363) |
|||||
Cash Flows from Financing Activities: |
|||||||
Contributions by partners and noncontrolling interest holders |
— |
22,957 |
|||||
Distributions to unitholders |
(14,593) |
(12,647) |
|||||
Net payment on revolver |
(27,000) |
15,500 |
|||||
Issuance of common units |
(23) |
— |
|||||
Net Cash (Used In) Provided By Financing Activities |
(41,616) |
25,810 |
|||||
Net Decrease in Cash |
(9,177) |
(299) |
|||||
Cash at Beginning of Period |
14,273 |
460 |
|||||
Cash at End of Period |
$ |
5,096 |
$ |
161 |
CONE MIDSTREAM PARTNERS LP
RECONCILIATION OF NET INCOME TO EBITDA AND DISTRIBUTABLE CASH FLOW
(in thousands)
Non-GAAP Financial Measures
EBITDA and Adjusted EBITDA
We define EBITDA as net income (loss) before net interest expense, depreciation and amortization, and Adjusted EBITDA as EBITDA adjusted for non-cash items which should not be included in the calculation of distributable cash flow. EBITDA and Adjusted EBITDA are used as supplemental financial measures by management and by external users of our financial statements, such as investors, industry analysts, lenders and ratings agencies, to assess:
We believe that the presentation of EBITDA and Adjusted EBITDA provides information that is useful to investors in assessing our financial condition and results of operations. The GAAP measures most directly comparable to EBITDA and Adjusted EBITDA are net income and net cash provided by operating activities. EBITDA and Adjusted EBITDA should not be considered an alternative to net income, net cash provided by (used in) operating activities or any other measure of financial performance or liquidity presented in accordance with GAAP. EBITDA and Adjusted EBITDA exclude some, but not all, items that affect net income or net cash, and these measures may vary from those of other companies. As a result, EBITDA and Adjusted EBITDA as presented below may not be comparable to similarly titled measures of other companies.
Distributable Cash Flow
We define distributable cash flow as Adjusted EBITDA less net income attributable to noncontrolling interest, net cash interest paid and maintenance capital expenditures. Distributable cash flow does not reflect changes in working capital balances.
Distributable cash flow is used as a supplemental financial measure by management and by external users of our financial statements, such as investors, industry analysts, lenders and ratings agencies, to assess:
We believe that the presentation of distributable cash flow in this report provides information useful to investors in assessing our financial condition and results of operations. The GAAP measures most directly comparable to distributable cash flow are net income and net cash provided by operating activities. Distributable cash flow should not be considered an alternative to net income, net cash provided by operating activities or any other measure of financial performance or liquidity presented in accordance with GAAP. Distributable cash flow excludes some, but not all, items that affect net income or net cash, and these measures may vary from those of other companies. As a result, our distributable cash flow may not be comparable to similarly titled measures of other companies.
The following table presents a reconciliation of the non-GAAP measures of EBITDA, Adjusted EBITDA and distributable cash flow to the most directly comparable GAAP financial measures of net income and net cash provided by operating activities.
Three Months Ended |
Six Months Ended | |||||||||||||||
(unaudited) |
2016 |
2015 |
2016 |
2015 | ||||||||||||
Net Income |
$ |
24,468 |
$ |
24,905 |
$ |
61,761 |
$ |
46,121 |
||||||||
Interest expense |
381 |
47 |
800 |
112 |
||||||||||||
Depreciation expense |
5,152 |
3,667 |
9,992 |
6,661 |
||||||||||||
EBITDA |
30,001 |
28,619 |
72,553 |
52,894 |
||||||||||||
Non-cash unit-based compensation expense |
219 |
96 |
355 |
192 |
||||||||||||
Inventory revaluation |
10,083 |
— |
10,083 |
— |
||||||||||||
Adjusted EBITDA |
40,303 |
28,715 |
82,991 |
53,086 |
||||||||||||
Less: |
||||||||||||||||
Net income attributable to noncontrolling interest |
1,251 |
9,993 |
13,755 |
16,997 |
||||||||||||
Interest expense attributable to noncontrolling interest |
127 |
14 |
316 |
33 |
||||||||||||
Depreciation expense attributable to noncontrolling interest |
2,409 |
1,659 |
4,694 |
2,825 |
||||||||||||
Inventory revaluation attributable to noncontrolling interest |
9,579 |
— |
9,579 |
— |
||||||||||||
Adjusted EBITDA Attributable to General and Limited Partner Ownership Interest in CONE Midstream Partners LP |
$ |
26,937 |
$ |
17,049 |
$ |
54,647 |
$ |
33,231 |
||||||||
Less: cash interest paid, net |
254 |
33 |
484 |
78 |
||||||||||||
Less: ongoing maintenance capital expenditures, net of expected reimbursements |
3,112 |
2,148 |
5,951 |
4,139 |
||||||||||||
Distributable Cash Flow |
$ |
23,571 |
$ |
14,868 |
$ |
48,212 |
$ |
29,014 |
||||||||
Net Cash Provided by Operating Activities |
$ |
41,777 |
$ |
50,254 |
$ |
82,957 |
$ |
60,460 |
||||||||
Interest expense |
381 |
47 |
800 |
112 |
||||||||||||
Inventory revaluation |
10,083 |
— |
10,083 |
— |
||||||||||||
Other, including changes in working capital |
(11,938) |
(21,586) |
(10,849) |
(7,486) |
||||||||||||
Adjusted EBITDA |
40,303 |
28,715 |
82,991 |
53,086 |
||||||||||||
Less: |
||||||||||||||||
Net income attributable to noncontrolling interest |
1,251 |
9,993 |
13,755 |
16,997 |
||||||||||||
Interest expense attributable to noncontrolling interest |
127 |
14 |
316 |
33 |
||||||||||||
Depreciation expense attributable to noncontrolling interest |
2,409 |
1,659 |
4,694 |
2,825 |
||||||||||||
Inventory revaluation attributable to noncontrolling interest |
9,579 |
— |
9,579 |
— |
||||||||||||
Adjusted EBITDA Attributable to General and Limited Partner Ownership Interest in CONE Midstream Partners LP |
$ |
26,937 |
$ |
17,049 |
$ |
54,647 |
$ |
33,231 |
||||||||
Less: cash interest paid, net |
254 |
33 |
484 |
78 |
||||||||||||
Less: ongoing maintenance capital expenditures, net of expected reimbursements |
3,112 |
2,148 |
5,951 |
4,139 |
||||||||||||
Distributable Cash Flow |
$ |
23,571 |
$ |
14,868 |
$ |
48,212 |
$ |
29,014 |
The following table presents a reconciliation of the non-GAAP measures adjusted EBITDA and distributable cash flow by quarter and for the most recently completed twelve month period with the most directly comparable GAAP financial measures, which are net income and net cash provided by operating activities.
(unaudited) |
Q3 2015 |
Q4 2015 |
Q1 2016 |
Q2 2016 |
Twelve | |||||||||||||||
Net Income |
$ |
33,614 |
$ |
35,796 |
$ |
37,295 |
$ |
24,468 |
$ |
131,173 |
||||||||||
Interest expense |
158 |
565 |
419 |
381 |
1,523 |
|||||||||||||||
Depreciation expense |
3,769 |
4,623 |
4,839 |
5,152 |
18,383 |
|||||||||||||||
EBITDA |
37,541 |
40,984 |
42,553 |
30,001 |
151,079 |
|||||||||||||||
Non-cash unit-based compensation expense |
118 |
92 |
136 |
219 |
565 |
|||||||||||||||
Inventory revaluation |
— |
— |
— |
10,083 |
10,083 |
|||||||||||||||
Adjusted EBITDA |
37,659 |
41,076 |
42,689 |
40,303 |
161,727 |
|||||||||||||||
Less: |
||||||||||||||||||||
Net income attributable to noncontrolling interest |
13,957 |
13,330 |
12,505 |
1,251 |
41,043 |
|||||||||||||||
Interest expense attributable to noncontrolling interest |
63 |
331 |
189 |
127 |
710 |
|||||||||||||||
Depreciation expense attributable to noncontrolling interest |
1,728 |
2,246 |
2,286 |
2,409 |
8,669 |
|||||||||||||||
Inventory revaluation attributable to noncontrolling interest |
— |
— |
— |
9,579 |
9,579 |
|||||||||||||||
Adjusted EBITDA Attributable to General and Limited Partner |
$ |
21,911 |
$ |
25,169 |
$ |
27,709 |
$ |
26,937 |
$ |
101,726 |
||||||||||
Less: cash interest paid, net |
95 |
234 |
230 |
254 |
813 |
|||||||||||||||
Less: ongoing maintenance capital expenditures, net of expected reimbursements |
2,291 |
2,554 |
2,839 |
3,112 |
10,796 |
|||||||||||||||
Distributable Cash Flow |
$ |
19,525 |
$ |
22,381 |
$ |
24,640 |
$ |
23,571 |
$ |
90,117 |
||||||||||
Net Cash Provided by Operating Activities |
$ |
38,808 |
$ |
16,749 |
$ |
41,180 |
$ |
41,777 |
$ |
138,514 |
||||||||||
Interest expense |
158 |
565 |
419 |
381 |
1,523 |
|||||||||||||||
Inventory revaluation |
— |
— |
— |
10,083 |
10,083 |
|||||||||||||||
Other, including changes in working capital |
(1,307) |
23,762 |
1,090 |
(11,938) |
11,607 |
|||||||||||||||
Adjusted EBITDA |
37,659 |
41,076 |
42,689 |
40,303 |
161,727 |
|||||||||||||||
Less: |
||||||||||||||||||||
Net income attributable to noncontrolling interest |
13,957 |
13,330 |
12,505 |
1,251 |
41,043 |
|||||||||||||||
Interest expense attributable to noncontrolling interest |
63 |
331 |
189 |
127 |
710 |
|||||||||||||||
Depreciation expense attributable to noncontrolling interest |
1,728 |
2,246 |
2,286 |
2,409 |
8,669 |
|||||||||||||||
Inventory revaluation attributable to noncontrolling interest |
— |
— |
— |
9,579 |
9,579 |
|||||||||||||||
Adjusted EBITDA Attributable to General and Limited Partner |
$ |
21,911 |
$ |
25,169 |
$ |
27,709 |
$ |
26,937 |
$ |
101,726 |
||||||||||
Less: cash interest paid, net |
95 |
234 |
230 |
254 |
813 |
|||||||||||||||
Less: ongoing maintenance capital expenditures, net of expected reimbursements |
2,291 |
2,554 |
2,839 |
3,112 |
10,796 |
|||||||||||||||
Distributable Cash Flow |
$ |
19,525 |
$ |
22,381 |
$ |
24,640 |
$ |
23,571 |
$ |
90,117 |
||||||||||
Distributions Declared |
$ |
13,570 |
$ |
14,062 |
$ |
14,591 |
$ |
15,209 |
$ |
57,432 |
||||||||||
Distribution Coverage Ratio - Declared |
1.44 |
x |
1.59 |
x |
1.69 |
x |
1.55 |
x |
1.57 |
x | ||||||||||
Distributable Cash Flow |
$ |
19,525 |
$ |
22,381 |
$ |
24,640 |
$ |
23,571 |
$ |
90,117 |
||||||||||
Distributions Paid |
$ |
13,094 |
$ |
13,570 |
$ |
14,062 |
$ |
14,591 |
$ |
55,317 |
||||||||||
Distribution Coverage Ratio - Paid |
1.49 |
x |
1.65 |
x |
1.75 |
x |
1.62 |
x |
1.63 |
x |
Development Companies Jointly Owned by CONE Midstream Partners LP Operating Income Summary, Selected Operating Statistics and Capital Investment (in thousands) (unaudited) | |||||||||||||||
Three Months Ended June 30, 2016 | |||||||||||||||
Development Company | |||||||||||||||
Anchor |
Growth |
Additional |
TOTAL | ||||||||||||
Income Summary |
|||||||||||||||
Revenue |
$ |
48,855 |
$ |
2,708 |
$ |
6,844 |
$ |
58,407 |
|||||||
Expenses |
17,437 |
11,959 |
4,543 |
33,939 |
|||||||||||
Net Income |
31,418 |
(9,251) |
2,301 |
24,468 |
|||||||||||
Less: Net income attributable to noncontrolling interest |
7,854 |
(8,789) |
2,186 |
1,251 |
|||||||||||
Net Income Attributable to General and Limited Partner Ownership Interest in CONE Midstream Partners LP |
$ |
23,564 |
$ |
(462) |
$ |
115 |
$ |
23,217 |
|||||||
Operating Statistics - Gathered Volumes |
|||||||||||||||
Dry gas (BBtu/d) |
775 |
64 |
16 |
855 |
|||||||||||
Wet gas (BBtu/d) |
347 |
6 |
132 |
485 |
|||||||||||
Condensate (MMcfe/d) |
6 |
— |
6 |
12 |
|||||||||||
Total Gathered Volumes |
1,128 |
70 |
154 |
1,352 |
|||||||||||
Total Volumes Net to CONE Midstream Partners LP |
846 |
4 |
8 |
857 |
|||||||||||
Capital Investment |
|||||||||||||||
Maintenance capital |
$ |
4,080 |
$ |
159 |
$ |
898 |
$ |
5,137 |
|||||||
Expansion capital |
2,990 |
— |
1,211 |
4,201 |
|||||||||||
Total Capital Investment |
$ |
7,070 |
$ |
159 |
$ |
2,109 |
$ |
9,338 |
|||||||
Capital Investment Net to CONE Midstream Partners LP |
|||||||||||||||
Maintenance capital |
$ |
3,059 |
$ |
8 |
$ |
45 |
$ |
3,112 |
|||||||
Expansion capital |
2,243 |
— |
61 |
2,304 |
|||||||||||
Total Capital Investment Net to CONE Midstream Partners LP |
$ |
5,302 |
$ |
8 |
$ |
106 |
$ |
5,416 |
Development Companies Jointly Owned by CONE Midstream Partners LP Operating Income Summary, Selected Operating Statistics and Capital Investment (in thousands) (unaudited) | |||||||||||||||
Three Months Ended June 30, 2015 | |||||||||||||||
Development Company | |||||||||||||||
Anchor |
Growth |
Additional |
TOTAL | ||||||||||||
Income Summary |
|||||||||||||||
Revenue |
$ |
35,351 |
$ |
3,913 |
$ |
8,453 |
$ |
47,717 |
|||||||
Expenses |
15,827 |
2,980 |
4,005 |
22,812 |
|||||||||||
Net Income |
19,524 |
933 |
4,448 |
24,905 |
|||||||||||
Less: Net income attributable to noncontrolling interest |
4,881 |
886 |
4,226 |
9,993 |
|||||||||||
Net Income Attributable to General and Limited Partner Ownership Interest in CONE Midstream Partners LP |
$ |
14,643 |
$ |
47 |
$ |
222 |
$ |
14,912 |
|||||||
Operating Statistics - Gathered Volumes |
|||||||||||||||
Dry gas (BBtu/d) |
395 |
92 |
8 |
495 |
|||||||||||
Wet gas (BBtu/d) |
334 |
11 |
163 |
508 |
|||||||||||
Condensate (MMcfe/d) |
9 |
— |
14 |
23 |
|||||||||||
Total Gathered Volumes |
738 |
103 |
185 |
1,026 |
|||||||||||
Total Volumes Net to CONE Midstream Partners LP |
554 |
5 |
9 |
568 |
|||||||||||
Capital Investment |
|||||||||||||||
Maintenance capital |
$ |
2,813 |
$ |
319 |
$ |
448 |
$ |
3,580 |
|||||||
Expansion capital |
36,941 |
7,014 |
28,828 |
72,783 |
|||||||||||
Total Capital Investment |
$ |
39,754 |
$ |
7,333 |
$ |
29,276 |
$ |
76,363 |
|||||||
Capital Investment Net to CONE Midstream Partners LP |
|||||||||||||||
Maintenance capital |
$ |
2,110 |
$ |
16 |
$ |
22 |
$ |
2,148 |
|||||||
Expansion capital |
27,706 |
351 |
1,441 |
29,498 |
|||||||||||
Total Capital Investment Net to CONE Midstream Partners LP |
$ |
29,816 |
$ |
367 |
$ |
1,463 |
$ |
31,646 |
SOURCE CONE Midstream Partners LP
CANONSBURG, Pa., July 22, 2016 /PRNewswire/ -- The Board of Directors of CONE Midstream GP LLC, the general partner of CONE Midstream Partners LP (NYSE: CNNX), today announced the declaration of a cash distribution of $0.254 per unit with respect to the second quarter of 2016. The distribution will be made on August 12, 2016 to unitholders of record as of the close of business on August 4, 2016. The distribution, which equates to an annual rate of $1.016 per unit, represents an increase of 3.7% over the prior quarter, and an increase of 15.5% over the distribution paid with respect to the second quarter of 2015.
CONE Midstream Partners is a growth-oriented master limited partnership formed by CONSOL Energy Inc. (NYSE: CNX) and Noble Energy, Inc. (NYSE: NBL), whom we refer to as our Sponsors, to own, operate, develop and acquire natural gas gathering and other midstream energy assets to service our Sponsors' production in the Marcellus Shale in Pennsylvania and West Virginia. Our assets include natural gas gathering pipelines and compression and dehydration facilities, as well as condensate gathering, collection, separation and stabilization facilities. More information is available at our website www.conemidstream.com.
This press release is intended to be a qualified notice to nominees as provided for under Treasury Regulation Section 1.1446-4(b). Brokers and nominees should treat one hundred percent (100.0%) of CONE Midstream's distributions to non-U.S. investors as being attributed to income that is effectively connected with a United States trade or business. Accordingly, CONE Midstream's distributions to non-U.S. investors are subject to federal income tax withholding at the highest applicable effective tax rate. Nominees, and not CONE Midstream, are treated as withholding agents responsible for withholding on the distributions received by them on behalf of foreign investors.
Contact:
Stephen R. Milbourne
CONE Midstream Partners Investor Relations
Phone: 724-485-4408
Email: smilbourne@conemidstream.com
SOURCE CONE Midstream Partners LP
CANONSBURG, Pa., June 20, 2016 /PRNewswire/ -- CONE Midstream Partners LP (NYSE: CNNX) today announced that members of its executive management team will participate in the Credit Suisse MLP & Energy Logistics Conference.
John T. Lewis, Chairman of the Board and Chief Executive Officer of CONE Midstream GP LLC (the "General Partner"), will give a presentation of the company's operations and recent activities on Tuesday, June 21, at 11:45 a.m. Eastern Time. An audio webcast of the presentation will be available at https://cc.talkpoint.com/cred001/062116a_ae/?entity=4_WV3PUST. A link to the webcast and the slides used in the presentation will be posted on the "Events and Presentations" page of the CNNX website, www.conemidstream.com, prior to the start of the conference.
* * * * *
CONE Midstream Partners is a master limited partnership formed by CONSOL Energy, Inc. (NYSE: CNX) and Noble Energy, Inc. (NYSE: NBL), referred to as our Sponsors, to own, operate, develop and acquire natural gas gathering and other midstream energy assets to service our Sponsors' production in the Marcellus Shale in Pennsylvania and West Virginia. Our assets include natural gas gathering pipelines and compression and dehydration facilities, as well as condensate gathering, collection, separation and stabilization facilities. More information is available on our website www.conemidstream.com.
Contact:
Stephen R. Milbourne
CONE Investor Relations
Phone: 724-485-4408
Email: smilbourne@conemidstream.com
SOURCE CONE Midstream Partners LP
CANONSBURG, Pa., May 31, 2016 /PRNewswire/ -- CONE Midstream Partners LP (NYSE: CNNX) today announced that members of its executive management team will participate in the 2016 Master Limited Partnership Association ("MLPA") Investor Conference on June 1-3.
David M. Khani, Chief Financial Officer of CONE Midstream GP LLC (the "General Partner") will give a presentation of the company's operations and recent activities on Wednesday, June 1, at 3:00 p.m. Eastern Time. An audio webcast of the presentation will be available at http://wsw.com/webcast/naptp9/cnnx. A link to the webcast and the slides used in the presentation will be posted on the "Events and Presentations" page of the CNNX website, www.conemidstream.com, prior to the start of the conference.
CONE Midstream Partners is a master limited partnership formed by CONSOL Energy, Inc. (NYSE: CNX) and Noble Energy, Inc. (NYSE: NBL), referred to as our Sponsors, to own, operate, develop and acquire natural gas gathering and other midstream energy assets to service our Sponsors' production in the Marcellus Shale in Pennsylvania and West Virginia. Our assets include natural gas gathering pipelines and compression and dehydration facilities, as well as condensate gathering, collection, separation and stabilization facilities. More information is available on our website www.conemidstream.com.
Contact: |
Stephen R. Milbourne |
CONE Investor Relations | |
Phone: 724-485-4408 | |
Email: smilbourne@conemidstream.com | |
SOURCE CONE Midstream Partners LP
CANONSBURG, Pa., May 5, 2016 /PRNewswire/ -- CONE Midstream Partners LP (NYSE: CNNX) ("CONE Midstream" or the "Partnership") today reported financial and operational results for the three months ended March 31, 2016.(1)
First Quarter Results
Highlights of first quarter 2016 results attributable to the Partnership as compared to the first quarter of 2015 include:
Management Comment
"CONE Midstream is pleased to report very strong financial and operational results for the first quarter," said John T. Lewis, Chairman of the Board and Chief Executive Officer of CONE Midstream GP LLC (the "General Partner"). "Net throughput volumes increased by 55% from the first quarter of 2015, and net income attributable to the partnership grew by 75% from a year ago. Adjusted EBITDA and distributable cash flow increased by 71% and 74%, respectively, as compared to first quarter last year.
"We view our strong balance sheet and distribution coverage as positive differentiators for CNNX," continued Mr. Lewis. "With a debt to trailing-twelve months EBITDA ratio of 0.8x, we have the financial capacity to sustain our growth through an appropriate combination of investment in organic projects, third party business development, and asset dropdowns or acquisitions. I'd also like to point out that we were free-cash-flow positive during the first quarter, as cash from operations exceeded our total capital investments and cash distribution payments. Our balance sheet and robust distribution coverage have us well positioned for the future."
Quarterly Distribution
As previously announced, the Board of Directors of the General Partner declared a quarterly cash distribution of $0.245 per unit with respect to the first quarter of 2016. The distribution payment will be made on May 13, 2016 to unitholders of record at the close of business on May 4, 2016. The distribution, which equates to an annual rate of $0.98 per unit, represents an increase of 3.7% over the prior quarter and an increase of 15.3% over the distribution paid with respect to the first quarter of 2015.
Capital Investment and Resources
CONE Midstream's allocated first quarter 2016 share of investment in expansion projects was $9.0 million. Total expansion capital investment at the three development companies in which CONE Midstream holds controlling interests was $19.6 million. CONE Midstream's respective share of maintenance capital expenditures for the three development companies for the first quarter 2016 was $2.8 million. Maintenance capital expenditures in the aggregate for the development companies in which CONE Midstream holds controlling interests totaled $4.8 million.
As of March 31, 2016, CONE Midstream had outstanding borrowings of $74.0 million under its $250 million revolving credit facility and a cash balance of $14.3 million.
First Quarter Financial and Operational Results Conference Call
A conference call and webcast, during which management will discuss first quarter 2016 financial and operational results, is scheduled for May 5, 2016 at 11:00 a.m. Eastern Time. Reference material for the call will be available on the "Events" page of our website, www.conemidstream.com, shortly before the start of the call. Prepared remarks by members of management will be followed by a question and answer period. Interested parties may listen via webcast by using the link posted on the "Events" page of our website or at www.webcaster4.com/Webcast/Page/998/14490. Participants who would like to ask questions may join the conference by phone at 888-349-0097 (international 412-902-0126) five to ten minutes prior to the scheduled start time (reference the CONE Midstream call). An on-demand replay of the webcast will be also be available at www.webcaster4.com/Webcast/Page/998/14490 shortly after the conclusion of the conference call. A telephonic replay will be available through May 12, 2016 by dialing 877-344-7529 (international: 412-317-0088) and using the conference playback number 10084060.
_______________
(1) |
Unless otherwise indicated, the reporting measures included in this news release reflect the unallocated total activity of the three development companies jointly owned by the Partnership and CONE Gathering LLC ("CONE Gathering"). Because the Partnership owns a controlling interest in each of the three development companies, it fully consolidates their financial results. The Partnership's current economic interests in the development companies are: 75% in the Anchor Systems, 5% in the Growth Systems, and 5% in the Additional Systems. CONE Gathering is a midstream joint venture formed by CONSOL Energy Inc. and Noble Energy, Inc. and owns non-controlling interests in the Partnership's development companies. |
(2) |
Adjusted EBITDA and DCF are not measures that are recognized under accounting principles generally accepted in the U.S. ("GAAP"). Definitions and reconciliations of these non-GAAP measures to GAAP reporting measures appear in the financial tables which follow. |
Contact: |
Stephen R. Milbourne |
CONE Investor Relations | |
Phone: |
724-485-4408 |
Email: |
smilbourne@conemidstream.com |
* * * * *
CONE Midstream Partners is a master limited partnership formed by CONSOL Energy Inc. (NYSE: CNX) and Noble Energy, Inc. (NYSE: NBL), referred to as our Sponsors, to own, operate, develop and acquire natural gas gathering and other midstream energy assets to service our Sponsors' production in the Marcellus Shale in Pennsylvania and West Virginia. Our assets include natural gas gathering pipelines and compression and dehydration facilities, as well as condensate gathering, collection, separation and stabilization facilities. More information is available on our website www.conemidstream.com.
* * * * *
This press release is intended to be a qualified notice to nominees as provided for under Treasury Regulation Section 1.1446-4(b). Brokers and nominees should treat one hundred percent (100.0%) of CONE Midstream's distributions to non-U.S. investors as being attributed to income that is effectively connected with a United States trade or business. Accordingly, CONE Midstream's distributions to non-U.S. investors are subject to federal income tax withholding at the highest applicable effective tax rate. Nominees, and not CONE Midstream, are treated as withholding agents responsible for withholding on the distributions received by them on behalf of foreign investors.
* * * * *
This press release contains forward-looking statements within the meaning of the federal securities laws. Statements that are predictive in nature, that depend upon or refer to future events or conditions or that include the words "believe," "expect," "anticipate," "intend," "estimate" and other expressions that are predictions of or indicate future events and trends and that do not relate to historical matters identify forward-looking statements. Forward-looking statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict, and there can be no assurance that actual outcomes and results will not differ materially from those expected by our management. Factors that could cause our actual results to differ materially from the results contemplated by such forward-looking statements include, among others: the effects of changes in market prices of natural gas, NGLs and crude oil on our Sponsors' drilling and development plan on our dedicated acreage and the volumes of natural gas and condensate that are produced on our dedicated acreage; changes in our Sponsors' drilling and development plan in the Marcellus Shale and Utica Shale; our Sponsors' ability to meet their drilling and development plan in the Marcellus Shale and Utica Shale; the demand for natural gas and condensate gathering services; changes in general economic conditions; competitive conditions in our industry; actions taken by third-party operators, gatherers, processors and transporters; our ability to successfully implement our business plan; and our ability to complete internal growth projects on time and on budget. You should not place undue reliance on our forward-looking statements. Although forward-looking statements reflect our good faith beliefs at the time they are made, forward-looking statements involve known and unknown risks, uncertainties and other factors, including the factors described under "Risk Factors" and "Forward-Looking Statements" in our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, which may cause our actual results, performance or achievements to differ materially from anticipated future results, performance or achievements expressed or implied by such forward-looking statements. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, changed circumstances or otherwise, unless required by law.
CONE MIDSTREAM PARTNERS LP | |||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||
(in thousands, except per unit data) | |||||||
(unaudited) | |||||||
Three Months Ended | |||||||
2016 |
2015 | ||||||
Revenue |
|||||||
Gathering revenue — related party |
$ |
62,248 |
$ |
43,168 |
|||
Total Revenue |
62,248 |
43,168 |
|||||
Expenses |
|||||||
Operating expense — third party |
8,674 |
8,530 |
|||||
Operating expense — related party |
8,344 |
7,044 |
|||||
General and administrative expense — third party |
993 |
1,342 |
|||||
General and administrative expense — related party |
1,684 |
1,977 |
|||||
Depreciation expense |
4,839 |
2,994 |
|||||
Interest expense |
419 |
65 |
|||||
Total Expense |
24,953 |
21,952 |
|||||
Net Income |
37,295 |
21,216 |
|||||
Less: Net income attributable to noncontrolling interest |
12,505 |
7,004 |
|||||
Net Income Attributable to General and Limited Partner Ownership Interest in CONE Midstream Partners LP |
$ |
24,790 |
$ |
14,212 |
|||
Calculation of Limited Partner Interest in Net Income: |
|||||||
Net Income Attributable to General and Limited Partner Ownership Interest in CONE Midstream Partners LP |
$ |
24,790 |
$ |
14,212 |
|||
Less: General partner interest in net income |
496 |
284 |
|||||
Limited partner interest in net income |
$ |
24,294 |
$ |
13,928 |
|||
Net income per Limited Partner unit - Basic |
$ |
0.42 |
$ |
0.24 |
|||
Net Income per Limited Partner unit - Diluted |
$ |
0.42 |
$ |
0.24 |
|||
Limited Partner units outstanding - Basic |
58,343 |
58,326 |
|||||
Limited Partner unit outstanding - Diluted |
58,365 |
58,360 |
|||||
Cash distributions declared per unit (*) |
$ |
0.2450 |
$ |
0.2125 |
|||
(*) Represents the cash distributions declared in April of each year relating to the period presented. |
CONE MIDSTREAM PARTNERS LP
RECONCILIATION OF NET INCOME TO EBITDA AND DISTRIBUTABLE CASH FLOW
(in thousands)
Non-GAAP Financial Measures
EBITDA and Adjusted EBITDA
We define EBITDA as net income (loss) before net interest expense, depreciation and amortization, and Adjusted EBITDA as EBITDA adjusted for non-cash items which should not be included in the calculation of distributable cash flow. EBITDA and Adjusted EBITDA are used as supplemental financial measures by management and by external users of our financial statements, such as investors, industry analysts, lenders and ratings agencies, to assess:
We believe that the presentation of EBITDA and Adjusted EBITDA provides information that is useful to investors in assessing our financial condition and results of operations. The GAAP measures most directly comparable to EBITDA and Adjusted EBITDA are net income and net cash provided by operating activities. EBITDA and Adjusted EBITDA should not be considered an alternative to net income, net cash provided by (used in) operating activities or any other measure of financial performance or liquidity presented in accordance with GAAP. EBITDA and Adjusted EBITDA exclude some, but not all, items that affect net income or net cash, and these measures may vary from those of other companies. As a result, EBITDA and Adjusted EBITDA as presented below may not be comparable to similarly titled measures of other companies.
Distributable Cash Flow
We define distributable cash flow as Adjusted EBITDA less net income attributable to noncontrolling interest, net cash interest paid and maintenance capital expenditures. Distributable cash flow does not reflect changes in working capital balances.
Distributable cash flow is used as a supplemental financial measure by management and by external users of our financial statements, such as investors, industry analysts, lenders and ratings agencies, to assess:
We believe that the presentation of distributable cash flow in this report provides information useful to investors in assessing our financial condition and results of operations. The GAAP measures most directly comparable to distributable cash flow are net income and net cash provided by operating activities. Distributable cash flow should not be considered an alternative to net income, net cash provided by operating activities or any other measure of financial performance or liquidity presented in accordance with GAAP. Distributable cash flow excludes some, but not all, items that affect net income or net cash, and these measures may vary from those of other companies. As a result, our distributable cash flow may not be comparable to similarly titled measures of other companies.
The following table presents a reconciliation of the non-GAAP measures of EBITDA, Adjusted EBITDA and distributable cash flow to the most directly comparable GAAP financial measures of net income and net cash provided by operating activities.
Three Months Ended | ||||||||
(unaudited) |
2016 |
2015 | ||||||
Net Income |
$ |
37,295 |
$ |
21,216 |
||||
Interest expense |
419 |
65 |
||||||
Depreciation expense |
4,839 |
2,994 |
||||||
EBITDA |
42,553 |
24,275 |
||||||
Non-cash unit-based compensation expense |
136 |
96 |
||||||
Adjusted EBITDA |
42,689 |
24,371 |
||||||
Less: |
||||||||
Net income attributable to noncontrolling interest |
12,505 |
7,004 |
||||||
Interest expense attributable to noncontrolling interest |
189 |
20 |
||||||
Depreciation expense attributable to noncontrolling interest |
2,286 |
1,166 |
||||||
Adjusted EBITDA Attributable to General and Limited Partner Ownership Interest in CONE Midstream Partners LP |
$ |
27,709 |
$ |
16,181 |
||||
Less: cash interest paid, net |
230 |
45 |
||||||
Less: ongoing maintenance capital expenditures, net of expected reimbursements |
2,839 |
1,991 |
||||||
Distributable Cash Flow |
$ |
24,640 |
$ |
14,145 |
||||
Net Cash Provided by Operating Activities |
$ |
41,180 |
$ |
10,206 |
||||
Interest expense |
419 |
65 |
||||||
Other, including changes in working capital |
1,090 |
14,100 |
||||||
Adjusted EBITDA |
42,689 |
24,371 |
||||||
Less: |
||||||||
Net income attributable to noncontrolling interest |
12,505 |
7,004 |
||||||
Interest expense attributable to noncontrolling interest |
189 |
20 |
||||||
Depreciation expense attributable to noncontrolling interest |
2,286 |
1,166 |
||||||
Adjusted EBITDA Attributable to General and Limited Partner Ownership Interest in CONE Midstream Partners LP |
$ |
27,709 |
$ |
16,181 |
||||
Less: cash interest paid, net |
230 |
45 |
||||||
Less: ongoing maintenance capital expenditures, net of expected reimbursements |
2,839 |
1,991 |
||||||
Distributable Cash Flow |
$ |
24,640 |
$ |
14,145 |
The following table presents a reconciliation of the non-GAAP measures adjusted EBITDA and distributable cash flow by quarter and for the most recently completed twelve month period with the most directly comparable GAAP financial measures, which are net income and net cash provided by operating activities.
(unaudited) |
Q2 2015 |
Q3 2015 |
Q4 2015 |
Q1 2016 |
Twelve | |||||||||||||||
Net Income |
$ |
24,905 |
$ |
33,614 |
$ |
35,796 |
$ |
37,295 |
$ |
131,610 |
||||||||||
Interest expense |
47 |
158 |
565 |
419 |
1,189 |
|||||||||||||||
Depreciation expense |
3,667 |
3,769 |
4,623 |
4,839 |
16,898 |
|||||||||||||||
EBITDA |
28,619 |
37,541 |
40,984 |
42,553 |
149,697 |
|||||||||||||||
Non-cash unit-based compensation expense |
96 |
118 |
92 |
136 |
442 |
|||||||||||||||
Adjusted EBITDA |
28,715 |
37,659 |
41,076 |
42,689 |
150,139 |
|||||||||||||||
Less: |
||||||||||||||||||||
Net income attributable to noncontrolling interest |
9,993 |
13,957 |
13,330 |
12,505 |
49,785 |
|||||||||||||||
Interest expense attributable to noncontrolling interest |
14 |
63 |
331 |
189 |
597 |
|||||||||||||||
Depreciation expense attributable to noncontrolling interest |
1,659 |
1,728 |
2,246 |
2,286 |
7,919 |
|||||||||||||||
Adjusted EBITDA Attributable to General and Limited |
$ |
17,049 |
$ |
21,911 |
$ |
25,169 |
$ |
27,709 |
$ |
91,838 |
||||||||||
Less: cash interest paid, net |
33 |
95 |
234 |
230 |
592 |
|||||||||||||||
Less: ongoing maintenance capital expenditures, net of |
2,148 |
2,291 |
2,554 |
2,839 |
9,832 |
|||||||||||||||
Distributable Cash Flow |
$ |
14,868 |
$ |
19,525 |
$ |
22,381 |
$ |
24,640 |
$ |
81,414 |
||||||||||
Net Cash Provided by Operating Activities |
$ |
50,254 |
$ |
38,808 |
$ |
16,749 |
$ |
41,180 |
$ |
146,991 |
||||||||||
Interest expense |
47 |
158 |
565 |
419 |
1,189 |
|||||||||||||||
Other, including changes in working capital |
(21,586) |
(1,307) |
23,762 |
1,090 |
1,959 |
|||||||||||||||
Adjusted EBITDA |
28,715 |
37,659 |
41,076 |
42,689 |
150,139 |
|||||||||||||||
Less: |
||||||||||||||||||||
Net income attributable to noncontrolling interest |
9,993 |
13,957 |
13,330 |
12,505 |
49,785 |
|||||||||||||||
Interest expense attributable to noncontrolling interest |
14 |
63 |
331 |
189 |
597 |
|||||||||||||||
Depreciation expense attributable to noncontrolling interest |
1,659 |
1,728 |
2,246 |
2,286 |
7,919 |
|||||||||||||||
Adjusted EBITDA Attributable to General and Limited |
$ |
17,049 |
$ |
21,911 |
$ |
25,169 |
$ |
27,709 |
$ |
91,838 |
||||||||||
Less: cash interest paid, net |
33 |
95 |
234 |
230 |
592 |
|||||||||||||||
Less: ongoing maintenance capital expenditures, net of |
2,148 |
2,291 |
2,554 |
2,839 |
9,832 |
|||||||||||||||
Distributable Cash Flow |
$ |
14,868 |
$ |
19,525 |
$ |
22,381 |
$ |
24,640 |
$ |
81,414 |
||||||||||
Distributions Declared |
$ |
13,094 |
$ |
13,570 |
$ |
14,062 |
$ |
14,591 |
$ |
55,317 |
||||||||||
Distribution Coverage Ratio - Declared |
1.14 |
x |
1.44 |
x |
1.59 |
x |
1.69 |
x |
1.47 |
x | ||||||||||
Distributable Cash Flow |
$ |
14,868 |
$ |
19,525 |
$ |
22,381 |
$ |
24,640 |
$ |
81,414 |
||||||||||
Distributions Paid |
$ |
12,647 |
$ |
13,094 |
$ |
13,570 |
$ |
14,062 |
$ |
53,373 |
||||||||||
Distribution Coverage Ratio - Paid |
1.18 |
x |
1.49 |
x |
1.65 |
x |
1.75 |
x |
1.53 |
x |
CONE MIDSTREAM PARTNERS LP | |||||||
CONSOLIDATED BALANCE SHEETS | |||||||
(in thousands, except number of units) | |||||||
(unaudited) |
|||||||
March 31, |
December 31, | ||||||
ASSETS |
|||||||
Current Assets: |
|||||||
Cash |
$ |
14,273 |
$ |
217 |
|||
Receivables — related party |
21,847 |
36,418 |
|||||
Inventory |
18,916 |
18,916 |
|||||
Other current assets |
1,669 |
2,037 |
|||||
Total Current Assets |
56,705 |
57,588 |
|||||
Property and Equipment: |
|||||||
Property and equipment |
914,470 |
897,918 |
|||||
Less — accumulated depreciation |
36,337 |
31,609 |
|||||
Property and Equipment — Net |
878,133 |
866,309 |
|||||
Other non-current assets |
487 |
528 |
|||||
TOTAL ASSETS |
$ |
935,325 |
$ |
924,425 |
|||
LIABILITIES AND EQUITY |
|||||||
Current Liabilities: |
|||||||
Accounts payable |
$ |
29,158 |
$ |
46,155 |
|||
Accounts payable — related party |
1,574 |
1,628 |
|||||
Total Current Liabilities |
30,732 |
47,783 |
|||||
Other Liabilities: |
|||||||
Revolving credit facility |
74,000 |
73,500 |
|||||
Total Liabilities |
104,732 |
121,283 |
|||||
Partners' Capital: |
|||||||
Common units (29,180,217 units issued and outstanding at March 31, 2016 and |
404,767 |
399,399 |
|||||
Subordinated units (29,163,121 units issued and outstanding at March 31, 2016 and December 31, 2015) |
(77,641) |
(82,900) |
|||||
General partner interest |
(3,171) |
(3,389) |
|||||
Partners' capital attributable to CONE Midstream Partners LP |
323,955 |
313,110 |
|||||
Noncontrolling interest |
506,638 |
490,032 |
|||||
Total Partners' Capital |
830,593 |
803,142 |
|||||
TOTAL LIABILITIES AND PARTNERS' CAPITAL |
$ |
935,325 |
$ |
924,425 |
CONE MIDSTREAM PARTNERS LP | |||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||
(in thousands) | |||||||
(unaudited) | |||||||
Three Months Ended March 31, | |||||||
2016 |
2015 | ||||||
Cash Flows from Operating Activities: |
|||||||
Net Income |
$ |
37,295 |
$ |
21,216 |
|||
Adjustments to reconcile net income to net cash provided by operating activities: |
|||||||
Depreciation expense and amortization of debt issuance costs |
4,880 |
2,994 |
|||||
Unit-based compensation |
136 |
96 |
|||||
Changes in operating assets: |
|||||||
Receivables — related party |
7,851 |
3,462 |
|||||
Other current and non-current assets |
369 |
253 |
|||||
Changes in operating liabilities: |
|||||||
Accounts payable |
(9,188) |
(17,616) |
|||||
Accounts payable — related party |
(163) |
(199) |
|||||
Net Cash Provided by Operating Activities |
41,180 |
10,206 |
|||||
Cash Flows from Investing Activities: |
|||||||
Capital expenditures |
(24,386) |
(61,806) |
|||||
Net Cash Used in Investing Activities |
(24,386) |
(61,806) |
|||||
Cash Flows from Financing Activities: |
|||||||
Contributions by general & limited partners and noncontrolling interest holders |
10,823 |
85,392 |
|||||
Distributions to unitholders |
(14,061) |
(12,784) |
|||||
Net proceeds from (payment on) revolver |
500 |
(23,800) |
|||||
Net Cash Provided By Financing Activities |
(2,738) |
48,808 |
|||||
Net Increase (Decrease) in Cash |
14,056 |
(2,792) |
|||||
Cash at Beginning of Period |
217 |
3,252 |
|||||
Cash at End of Period |
$ |
14,273 |
$ |
460 |
Development Companies Jointly Owned by CONE Midstream Partners LP and CONE Gathering LLC | |||||||||||||||
Operating Income Summary, Selected Operating Statistics and Capital Investment | |||||||||||||||
(in thousands) | |||||||||||||||
(unaudited) | |||||||||||||||
Three Months Ended March 31, 2016 | |||||||||||||||
Development Company | |||||||||||||||
Anchor |
Growth |
Additional |
TOTAL | ||||||||||||
Income Summary |
|||||||||||||||
Revenue |
$ |
50,290 |
$ |
2,891 |
$ |
9,067 |
$ |
62,248 |
|||||||
Expenses |
17,539 |
1,954 |
5,460 |
24,953 |
|||||||||||
Net Income |
32,751 |
937 |
3,607 |
37,295 |
|||||||||||
Less: Net income attributable to noncontrolling interest |
8,188 |
890 |
3,427 |
12,505 |
|||||||||||
Net Income Attributable to General and Limited |
$ |
24,563 |
$ |
47 |
$ |
180 |
$ |
24,790 |
|||||||
Operating Statistics - Gathered Volumes |
|||||||||||||||
Dry gas (BBtu/d) |
650 |
68 |
24 |
742 |
|||||||||||
Wet gas (BBtu/d) |
457 |
6 |
176 |
639 |
|||||||||||
Condensate (MMcfe/d) |
7 |
— |
7 |
14 |
|||||||||||
Total Gathered Volumes |
1,114 |
74 |
207 |
1,395 |
|||||||||||
Total Volumes Net to CONE Midstream Partners LP |
836 |
4 |
10 |
850 |
|||||||||||
Capital Investment |
|||||||||||||||
Maintenance capital |
$ |
3,710 |
$ |
69 |
$ |
1,057 |
$ |
4,836 |
|||||||
Expansion capital |
11,461 |
— |
8,089 |
19,550 |
|||||||||||
Total Capital Investment |
$ |
15,171 |
$ |
69 |
$ |
9,146 |
$ |
24,386 |
|||||||
Capital Investment Net to CONE Midstream Partners LP |
|||||||||||||||
Maintenance capital |
$ |
2,783 |
$ |
3 |
$ |
53 |
$ |
2,839 |
|||||||
Expansion capital |
8,596 |
— |
404 |
9,000 |
|||||||||||
Total Capital Investment Net to CONE Midstream |
$ |
11,379 |
$ |
3 |
$ |
457 |
$ |
11,839 |
Development Companies Jointly Owned by CONE Midstream Partners LP and CONE Gathering LLC | |||||||||||||||
Operating Income Summary, Selected Operating Statistics and Capital Investment | |||||||||||||||
(in thousands) | |||||||||||||||
(unaudited) | |||||||||||||||
Three Months Ended March 31, 2015 | |||||||||||||||
Development Company | |||||||||||||||
Anchor |
Growth |
Additional |
TOTAL | ||||||||||||
Income Summary |
|||||||||||||||
Revenue |
$ |
34,533 |
$ |
2,975 |
$ |
5,660 |
$ |
43,168 |
|||||||
Expenses |
15,746 |
2,174 |
4,032 |
21,952 |
|||||||||||
Net Income |
18,787 |
801 |
1,628 |
21,216 |
|||||||||||
Less: Net income attributable to noncontrolling interest |
4,697 |
761 |
1,546 |
7,004 |
|||||||||||
Net Income Attributable to General and Limited |
$ |
14,090 |
$ |
40 |
$ |
82 |
$ |
14,212 |
|||||||
Operating Statistics - Gathered Volumes |
|||||||||||||||
Dry gas (BBtu/d) |
381 |
77 |
12 |
470 |
|||||||||||
Wet gas (BBtu/d) |
326 |
3 |
109 |
438 |
|||||||||||
Condensate (MMcfe/d) |
11 |
— |
2 |
13 |
|||||||||||
Total Gathered Volumes |
718 |
80 |
123 |
921 |
|||||||||||
Total Volumes Net to CONE Midstream Partners LP |
539 |
4 |
6 |
549 |
|||||||||||
Capital Investment |
|||||||||||||||
Maintenance capital |
$ |
2,619 |
$ |
258 |
$ |
273 |
$ |
3,150 |
|||||||
Expansion capital |
26,680 |
11,379 |
20,597 |
58,656 |
|||||||||||
Total Capital Investment |
$ |
29,299 |
$ |
11,637 |
$ |
20,870 |
$ |
61,806 |
|||||||
Capital Investment Net to CONE Midstream Partners LP |
|||||||||||||||
Maintenance capital |
$ |
1,964 |
$ |
13 |
$ |
14 |
$ |
1,991 |
|||||||
Expansion capital |
20,010 |
569 |
1,030 |
21,609 |
|||||||||||
Total Capital Investment Net to CONE Midstream |
$ |
21,974 |
$ |
582 |
$ |
1,044 |
$ |
23,600 |
SOURCE CONE Midstream Partners LP
CANONSBURG, Pa., April 11, 2016 /PRNewswire/ -- CONE Midstream Partners LP (NYSE: CNNX) today announced that it will release financial results for the first quarter 2016 before market opening on Thursday, May 5, 2016 and hold a conference call to discuss those results on the same day at 11:00 a.m. Eastern Time. The conference call will be publicly available via webcast on a live and replay basis.
Interested parties are invited to listen to the conference call, during which prepared remarks by John T. Lewis, Chairman and Chief Executive Officer, and other members of management will be followed by a question and answer session. Participants who would like to ask questions during the conference call may join by phone. Individuals who intend to listen only are encouraged to join the conference via the Internet.
Event: |
Conference call to discuss first quarter 2016 financial and operating results. |
Time: |
May 5, 2016 at 11:00 a.m. Eastern Time. |
Internet: |
The webcast may be accessed directly at https://www.webcaster4.com/Webcast/Page/998/14490 or from the link posted on the "Events" page of our website, www.conemidstream.com. |
Phone: |
Dial 888-349-0097 (international 412-902-0126) five to ten minutes before the scheduled start of the conference call and reference the CONE Midstream Partners call. |
Replay: |
An on-demand replay of the webcast will also be available shortly after the webcast at https://www.webcaster4.com/Webcast/Page/998/14490. A telephonic replay of the call will be available through May 12, 2016. The replay can be accessed by dialing toll free 877-344-7529 (international: 412-317-0088) and using the replay code 10084060. |
CONE Midstream Partners is a growth-oriented master limited partnership formed by CONSOL Energy Inc. (NYSE:CNX) and Noble Energy Inc. (NYSE: NBL), referred to as our Sponsors, to own, operate, develop and acquire natural gas gathering and other midstream energy assets to service our Sponsors' production in the Marcellus Shale in Pennsylvania and West Virginia. Our assets include natural gas gathering pipelines and compression and dehydration facilities, as well as condensate gathering, collection, separation and stabilization facilities. More information is available at our website www.conemidstream.com.
Contact: |
Stephen R. Milbourne |
CONE Midstream Partners Investor Relations | |
Phone: 724-485-4408 | |
Email: smilbourne@conemidstream.com |
SOURCE CONE Midstream Partners LP
CANONSBURG, Pa., Feb. 29, 2016 /PRNewswire/ -- CONE Midstream Partners LP (NYSE: CNNX) today announced that members of its executive management team will being participating in four upcoming investor conferences:
March 1 – Morgan Stanley's MLP/Diversified Natural Gas, Utilities & Clean Tech Conference |
March 2 – Barclays' MLP Corporate Access Day |
March 3 – Capital Link 3rd Annual Master Limited Partnership Investing Forum |
March 31 – J.P. Morgan's Energy Infrastructure/MLP Forum |
A slide presentation, which may be referenced during investor meetings at these conferences, has been posted on the "Events and Presentations" page of the CNNX website, www.conemidstream.com.
CONE Midstream Partners is a master limited partnership formed by CONSOL Energy Inc. (NYSE: CNX) and Noble Energy, Inc. (NYSE: NBL), referred to as our Sponsors, to own, operate, develop and acquire natural gas gathering and other midstream energy assets to service our Sponsors' production in the Marcellus Shale in Pennsylvania and West Virginia. Our assets include natural gas gathering pipelines and compression and dehydration facilities, as well as condensate gathering, collection, separation and stabilization facilities. More information is available on our website www.conemidstream.com.
Contact: |
Stephen R. Milbourne |
CONE Investor Relations | |
Phone: 724-485-4408 | |
Email: smilbourne@conemidstream.com |
SOURCE CONE Midstream Partners LP
CANONSBURG, Pa., Feb. 19, 2016 /PRNewswire/ -- CONE Midstream Partners LP (NYSE: CNNX) (the "Partnership") today announced the filing of its Annual Report on Form 10-K for the fiscal year ending December 31, 2015 with the Securities and Exchange Commission (SEC).
A copy of the Annual Report on Form 10-K, which contains the Partnership's audited financial statements, is available for download at www.conemidstream.com and on the SEC website at www.sec.gov.
The Partnership's unitholders may receive, free of charge, printed copies of our Annual Report on Form 10-K by writing to Investor Relations, CONE Midstream Partners, 1000 CONSOL Energy Drive, Canonsburg, PA 15317.
CONE Midstream Partners LP is a master limited partnership formed by CONSOL Energy Inc. (NYSE: CNX) and Noble Energy, Inc. (NYSE: NBL), referred to as our Sponsors, to own, operate, develop and acquire natural gas gathering and other midstream energy assets to service our Sponsors' production in the Marcellus Shale in Pennsylvania and West Virginia. Our assets include natural gas gathering pipelines and compression and dehydration facilities, as well as condensate gathering, collection, separation and stabilization facilities. More information is available on our website www.conemidstream.com.
Contact: Stephen R. Milbourne
CONE Investor Relations
Phone: 724-485-4408
Email: smilbourne@conemidstream.com
SOURCE CONE Midstream Partners LP
CANONSBURG, Pa., Feb. 17, 2016 /PRNewswire/ -- CONE Midstream Partners LP (NYSE: CNNX) ("CONE Midstream" or the "Partnership") today reported financial and operational results for the three months and the full year ending December 31, 2015.(1) The Partnership also announced financial guidance for 2016.
Fourth Quarter Results
Highlights of fourth quarter 2015 results attributable to the Partnership as compared to the fourth quarter of 2014 include:
Full Year 2015 Results
Highlights of full year 2015 results attributable to the Partnership include:
Management Comment
"We are pleased to report another quarter of excellent financial and operational results for CONE Midstream," said John T. Lewis, Chairman of the Board and Chief Executive Officer of CONE Midstream GP LLC (the "General Partner"). "Our throughput volume, net income, adjusted EBITDA and DCF all exhibited strong and steady growth during each consecutive quarter of 2015. Fourth quarter average throughput increased by 215 BBtu/d which equates to volume growth of 39% over fourth quarter 2014. Our focus on operational efficiencies and cost control boosted our financial results, with net income for the quarter increasing by 47% over last year, and fourth quarter adjusted EBITDA and DCF each growing by more than 50% from a year ago.
Mr. Lewis continued, "Based on these strong results and our current outlook, the Partnership paid a quarterly cash distribution of $0.2362 per unit on February 12th. The distribution rate represents a sequential quarterly increase of 3.6% which equates to an annual growth rate of 15.2%. Our distribution coverage during 2015 also increased steadily each quarter and reached 1.59x for the fourth quarter on an as declared basis.
"We have maintained our strong financial position during 2015," concluded Mr. Lewis. "Our business model was built for measured growth driven by a strong balance sheet, underlying organic growth with stacked pays, and potentially supplemented by the drop down of additional interests in our three different development companies. In addition, CONE's business development function should help supplement sponsor driven revenues. While commodity prices have receded and the MLP space faces various challenges, our robust balance sheet and distribution coverage ratio has CONE Midstream Partners advantageously positioned."
Quarterly Distribution
As previously announced, the Board of Directors of the General Partner declared a quarterly cash distribution of $0.2362 per unit with respect to the fourth quarter of 2015. The distribution payment was made on February 12, 2016 to unitholders of record on February 4, 2016. The distribution, which equates to an annual rate of $0.9448 per unit, represents an increase of 3.6% over the prior quarter and an increase of 11.2% over the Minimum Quarterly Distribution as defined in our Partnership Agreement.
Capital Investment and Resources
CONE Midstream's allocated fourth quarter 2015 share of investment in expansion projects was $23.0 million. Total expansion capital investment at the three development companies in which CONE Midstream holds controlling interests was $53.9 million,(3) with individual development company totals as follows:
CONE Midstream's respective share of maintenance capital expenditures for the three development companies for fourth quarter 2015 was $2.6 million. Maintenance capital expenditures in the aggregate for the development companies in which CONE Midstream holds controlling interests totaled $4.4 million.
As of December 31, 2015, CONE Midstream had outstanding borrowings of $73.5 million under its $250.0 million revolving credit facility.
2016 Guidance
Based on current expectations, management is providing the following guidance for 2016. Full year 2016 adjusted EBITDA attributable to the Partnership is expected to be in the range of $93 - $103 million and full year Distributable Cash Flow attributable to the Partnership is expected to be in the range of $79 - $89 million. Management currently anticipates that total 2016 capital expenditures attributable to the Partnership will be in the range of $30 to $35 million, of which approximately $10 to $12 million will be for maintenance capital.
CONE Midstream's financial guidance is based on numerous assumptions about future events and conditions and, therefore, could vary materially from actual results. These estimates, including capital expenditure plans, are meant to provide guidance only and are subject to revision for acquisitions or operating environment changes.
Fourth Quarter Financial and Operational Results Conference Call
A conference call and webcast, during which management will discuss fourth quarter 2015 financial and operational results, is scheduled for February 17, 2016 at 1:00 p.m. Eastern Time. Prepared remarks by members of management will be followed by a question and answer period. Interested parties may listen via webcast at https://www.webcaster4.com/webcast/page/998/12905. Participants who would like to ask questions may join the conference by phone at 888-349-0097 (international 412-902-0126) five to ten minutes prior to the scheduled start time (reference the CONE Midstream call). An on-demand replay of the webcast will be also be available at https://www.webcaster4.com/webcast/page/998/12905 shortly after the conclusion of the conference. A telephonic replay will be available through February 24, 2016 by dialing 877-344-7529 (international: 412-317-0088) and using the conference playback number 10079438.
_______________ | |
(1) |
Unless otherwise indicated, the reporting measures included in this news release reflect the unallocated total activity of the three development companies jointly owned by the Partnership and CONE Gathering LLC ("CONE Gathering"). Because the Partnership owns a controlling interest in each of the three development companies, it fully consolidates their financial results. The Partnership's current financial interests in the development companies are: 75% in the Anchor Systems, 5% in the Growth Systems, and 5% in the Additional Systems. CONE Gathering is a midstream joint venture formed by CONSOL Energy Inc. and Noble Energy, Inc. and owns non-controlling interests in the Partnership's development companies. |
(2) |
Adjusted EBITDA and DCF are not Generally Accepted Accounting Principles ("GAAP") measures. Definitions and reconciliations of these non-GAAP measures to GAAP reporting measures appear in the financial tables which follow. |
(3) |
Detail may not foot due to rounding. |
Contact: |
Stephen R. Milbourne |
CONE Investor Relations | |
Phone: |
724-485-4408 |
Email: |
|
* * * * *
CONE Midstream Partners is a master limited partnership formed by CONSOL Energy Inc. (NYSE: CNX) and Noble Energy, Inc. (NYSE: NBL), referred to as our Sponsors, to own, operate, develop and acquire natural gas gathering and other midstream energy assets to service our Sponsors' production in the Marcellus Shale in Pennsylvania and West Virginia. Our assets include natural gas gathering pipelines and compression and dehydration facilities, as well as condensate gathering, collection, separation and stabilization facilities.
* * * * *
This press release is intended to be a qualified notice to nominees as provided for under Treasury Regulation Section 1.1446-4(b). Brokers and nominees should treat one hundred percent (100.0%) of CONE Midstream's distributions to non-U.S. investors as being attributed to income that is effectively connected with a United States trade or business. Accordingly, CONE Midstream's distributions to non-U.S. investors are subject to federal income tax withholding at the highest applicable effective tax rate. Nominees, and not CONE Midstream, are treated as withholding agents responsible for withholding on the distributions received by them on behalf of foreign investors.
* * * * *
This press release contains forward-looking statements within the meaning of the federal securities laws. Statements that are predictive in nature, that depend upon or refer to future events or conditions or that include the words "believe," "expect," "anticipate," "intend," "estimate" and other expressions that are predictions of or indicate future events and trends and that do not relate to historical matters identify forward-looking statements. Forward-looking statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict, and there can be no assurance that actual outcomes and results will not differ materially from those expected by our management. These forward-looking statements involve certain risks and uncertainties, including, among others, that our business plans may change as circumstances warrant. For more information concerning factors that could cause actual results to differ materially from those conveyed in the forward-looking statements, please refer to the "Risk Factors" section of our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, changed circumstances or otherwise, unless required by law.
CONE MIDSTREAM PARTNERS LP CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per unit data) (unaudited) | ||||||||||||||||
Three Months Ended |
Twelve Months Ended | |||||||||||||||
2015 |
2014 |
2015 |
2014 | |||||||||||||
Revenue |
||||||||||||||||
Gathering Revenue — Related Party |
$ |
58,785 |
$ |
42,400 |
$ |
203,423 |
$ |
130,087 |
||||||||
Other Income |
— |
85 |
— |
85 |
||||||||||||
Total Revenue |
58,785 |
42,485 |
203,423 |
130,172 |
||||||||||||
Expenses |
||||||||||||||||
Operating Expense — Third Party |
6,781 |
9,035 |
28,987 |
27,371 |
||||||||||||
Operating Expense — Related Party |
7,858 |
5,519 |
29,937 |
24,072 |
||||||||||||
General and Administrative Expense — Third Party |
911 |
886 |
4,444 |
1,822 |
||||||||||||
General and Administrative Expense — Related Party |
2,251 |
1,769 |
8,636 |
4,726 |
||||||||||||
Depreciation Expense |
4,623 |
2,225 |
15,053 |
7,330 |
||||||||||||
Interest Expense |
565 |
24 |
835 |
24 |
||||||||||||
Total Expense |
22,989 |
19,458 |
87,892 |
65,345 |
||||||||||||
Net Income |
35,796 |
23,027 |
115,531 |
64,827 |
||||||||||||
Less: Net Income Attributable to Noncontrolling Interest |
13,330 |
7,776 |
44,284 |
7,858 |
||||||||||||
Net Income Attributable to General and Limited Partner Ownership Interest in CONE Midstream Partners LP |
$ |
22,466 |
$ |
15,251 |
$ |
71,247 |
$ |
56,969 |
||||||||
Calculation of Limited Partner Interest in Net Income: |
||||||||||||||||
Net Income Attributable to General and Limited Partner Ownership Interest in CONE Midstream Partners LP (1) |
$ |
22,466 |
$ |
15,251 |
$ |
71,247 |
$ |
15,378 |
||||||||
Less: General Partner Interest in Net Income |
449 |
305 |
1,425 |
308 |
||||||||||||
Limited Partner Interest in Net Income |
$ |
22,017 |
$ |
14,946 |
$ |
69,822 |
$ |
15,070 |
||||||||
Net Income per Limited Partner Unit - Basic |
$ |
0.38 |
$ |
0.26 |
$ |
1.20 |
$ |
0.26 |
||||||||
Net Income per Limited Partner Unit - Diluted |
$ |
0.38 |
$ |
0.26 |
$ |
1.20 |
$ |
0.26 |
||||||||
Limited Partner Units Outstanding - Basic |
58,326 |
58,326 |
58,326 |
58,326 |
||||||||||||
Limited Partner Unit Outstanding - Diluted |
58,337 |
58,326 |
58,340 |
58,326 |
||||||||||||
(1) |
Reflective of general and limited partner interest in net income since closing of the IPO. |
CONE MIDSTREAM PARTNERS LP
RECONCILIATION OF NET INCOME TO EBITDA AND DISTRIBUTABLE CASH FLOW
(in thousands)
(unaudited)
Definition of Non-GAAP Financial Measures
Adjusted EBITDA
We define adjusted EBITDA as net income (loss) before net interest expense, depreciation and amortization, as adjusted for non-cash items which should not be included in the calculation of distributable cash flow. Adjusted EBITDA is used as a supplemental financial measure by management and by external users of our financial statements, such as investors, industry analysts, lenders and ratings agencies, to assess:
We believe that the presentation of adjusted EBITDA provides information that is useful to investors in assessing our financial condition and results of operations. The GAAP measures most directly comparable to adjusted EBITDA are net income and net cash provided by operating activities. Adjusted EBITDA should not be considered an alternative to net income, net cash provided by (used in) operating activities or any other measure of financial performance or liquidity presented in accordance with GAAP. Adjusted EBITDA excludes some, but not all, items that affect net income or net cash, and these measures may vary from those of other companies. As a result, adjusted EBITDA as presented below may not be comparable to similarly titled measures of other companies.
Distributable Cash Flow
We define distributable cash flow as adjusted EBITDA less net income attributable to noncontrolling interest, net cash interest paid and maintenance capital expenditures. Distributable cash flow does not reflect changes in working capital balances.
Distributable cash flow is used as a supplemental financial measure by management and by external users of our financial statements, such as investors, industry analysts, lenders and ratings agencies, to assess:
We believe that the presentation of distributable cash flow in this report provides information useful to investors in assessing our financial condition and results of operations. The GAAP measures most directly comparable to distributable cash flow are net income and net cash provided by operating activities. Distributable cash flow should not be considered an alternative to net income, net cash provided by operating activities or any other measure of financial performance or liquidity presented in accordance with GAAP. Distributable cash flow excludes some, but not all, items that affect net income or net cash, and these measures may vary from those of other companies. As a result, our distributable cash flow may not be comparable to similarly titled measures of other companies.
CONE MIDSTREAM PARTNERS LP | |||||||||||||||||
The following table presents a reconciliation of the non-GAAP measures adjusted EBITDA and distributable cash flow with the most directly comparable GAAP financial measures of net income and net cash provided by operating activities. | |||||||||||||||||
Three Months Ended |
Twelve Months Ended | ||||||||||||||||
2015 |
2014 |
2015 |
2014 | ||||||||||||||
Net Income |
$ |
35,796 |
$ |
23,027 |
$ |
115,531 |
$ |
64,827 |
|||||||||
Interest Expense |
565 |
24 |
835 |
24 |
|||||||||||||
Depreciation Expense |
4,623 |
2,225 |
15,053 |
7,330 |
|||||||||||||
EBITDA |
40,984 |
25,276 |
131,419 |
72,181 |
|||||||||||||
Non-Cash Unit-Based Compensation |
92 |
— |
402 |
— |
|||||||||||||
Adjusted EBITDA |
41,076 |
25,276 |
131,821 |
72,181 |
|||||||||||||
Less: |
|||||||||||||||||
Net Income Attributable to Noncontrolling Interest |
13,330 |
7,776 |
44,284 |
7,858 |
|||||||||||||
Interest Expense Attributable to Noncontrolling Interest |
331 |
— |
428 |
— |
|||||||||||||
Depreciation Expense Attributable to Noncontrolling Interest |
2,246 |
857 |
6,799 |
863 |
|||||||||||||
Adjusted EBITDA Attributable to General and Limited Partner Ownership Interest in CONE Midstream Partners LP |
$ |
25,169 |
$ |
16,643 |
$ |
80,310 |
$ |
63,460 |
|||||||||
Less: Cash Interest Paid, net |
234 |
— |
407 |
— |
|||||||||||||
Less: Ongoing Maintenance Capital Expenditures, Net of Expected Reimbursements |
2,554 |
1,799 |
8,984 |
6,008 |
|||||||||||||
Distributable Cash Flow |
$ |
22,381 |
$ |
14,844 |
$ |
70,919 |
$ |
57,452 |
|||||||||
Net Cash Provided by Operating Activities |
$ |
16,749 |
$ |
22,331 |
$ |
116,017 |
$ |
84,694 |
|||||||||
Interest Expense |
565 |
24 |
835 |
24 |
|||||||||||||
Other, Including Changes in Working Capital |
23,762 |
2,921 |
14,969 |
(12,537) |
|||||||||||||
Adjusted EBITDA |
41,076 |
25,276 |
131,821 |
72,181 |
|||||||||||||
Less: |
|||||||||||||||||
Net Income Attributable to Noncontrolling Interest |
13,330 |
7,776 |
44,284 |
7,858 |
|||||||||||||
Interest Expense Attributable to Noncontrolling Interest |
331 |
— |
428 |
— |
|||||||||||||
Depreciation Expense Attributable to Noncontrolling Interest |
2,246 |
857 |
6,799 |
863 |
|||||||||||||
Adjusted EBITDA Attributable to General and Limited Partner Ownership Interest in CONE Midstream Partners LP |
$ |
25,169 |
$ |
16,643 |
$ |
80,310 |
$ |
63,460 |
|||||||||
Less: Cash Interest Paid, net |
234 |
— |
407 |
— |
|||||||||||||
Less: Ongoing Maintenance Capital Expenditures, Net of Expected Reimbursements |
2,554 |
1,799 |
8,984 |
6,008 |
|||||||||||||
Distributable Cash Flow |
$ |
22,381 |
$ |
14,844 |
$ |
70,919 |
$ |
57,452 |
|||||||||
The following table presents a reconciliation of the non-GAAP measures adjusted EBITDA and distributable cash flow by quarter and for the most recently completed twelve month period with the most directly comparable GAAP financial measures, which are net income and net cash provided by operating activities. | |||||||||||||||||||
(unaudited) |
Q1 2015 |
Q2 2015 |
Q3 2015 |
Q4 2015 |
Twelve | ||||||||||||||
Net Income |
$ |
21,216 |
$ |
24,905 |
$ |
33,614 |
$ |
35,796 |
$ |
115,531 |
|||||||||
Interest Expense |
65 |
47 |
158 |
565 |
835 |
||||||||||||||
Depreciation Expense |
2,994 |
3,667 |
3,769 |
4,623 |
15,053 |
||||||||||||||
EBITDA |
24,275 |
28,619 |
37,541 |
40,984 |
131,419 |
||||||||||||||
Non-Cash Unit-Based Compensation Expense |
96 |
96 |
118 |
92 |
402 |
||||||||||||||
Adjusted EBITDA |
24,371 |
28,715 |
37,659 |
41,076 |
131,821 |
||||||||||||||
Less: |
|||||||||||||||||||
Net Income Attributable to Noncontrolling Interest |
7,004 |
9,993 |
13,957 |
13,330 |
44,284 |
||||||||||||||
Interest Expense Attributable to Noncontrolling Interest |
20 |
14 |
63 |
331 |
428 |
||||||||||||||
Depreciation Expense Attributable to Noncontrolling Interest |
1,166 |
1,659 |
1,728 |
2,246 |
6,799 |
||||||||||||||
Adjusted EBITDA Attributable to General and Limited Partner Ownership Interest in CONE Midstream Partners LP |
$ |
16,181 |
$ |
17,049 |
$ |
21,911 |
$ |
25,169 |
$ |
80,310 |
|||||||||
Less: Cash Interest Paid, net |
45 |
33 |
95 |
234 |
407 |
||||||||||||||
Less: Ongoing Maintenance Capital Expenditures, Net of |
1,991 |
2,148 |
2,291 |
2,554 |
8,984 |
||||||||||||||
Distributable Cash Flow |
$ |
14,145 |
$ |
14,868 |
$ |
19,525 |
$ |
22,381 |
$ |
70,919 |
|||||||||
Net Cash Provided by Operating Activities |
$ |
10,206 |
$ |
50,254 |
$ |
38,808 |
$ |
16,749 |
$ |
116,017 |
|||||||||
Interest Expense |
65 |
47 |
158 |
565 |
835 |
||||||||||||||
Other, Including Changes in Working Capital |
14,100 |
(21,586) |
(1,307) |
23,762 |
14,969 |
||||||||||||||
Adjusted EBITDA |
24,371 |
28,715 |
37,659 |
41,076 |
131,821 |
||||||||||||||
Less: |
|||||||||||||||||||
Net Income Attributable to Noncontrolling Interest |
7,004 |
9,993 |
13,957 |
13,330 |
44,284 |
||||||||||||||
Interest Expense Attributable to Noncontrolling Interest |
20 |
14 |
63 |
331 |
428 |
||||||||||||||
Depreciation Expense Attributable to Noncontrolling Interest |
1,166 |
1,659 |
1,728 |
2,246 |
6,799 |
||||||||||||||
Adjusted EBITDA Attributable to General and Limited Partner Ownership Interest in CONE Midstream Partners LP |
$ |
16,181 |
$ |
17,049 |
$ |
21,911 |
$ |
25,169 |
$ |
80,310 |
|||||||||
Less: Cash Interest Paid, net |
45 |
33 |
95 |
234 |
407 |
||||||||||||||
Less: Ongoing Maintenance Capital Expenditures, Net of |
1,991 |
2,148 |
2,291 |
2,554 |
8,984 |
||||||||||||||
Distributable Cash Flow |
$ |
14,145 |
$ |
14,868 |
$ |
19,525 |
$ |
22,381 |
$ |
70,919 |
|||||||||
Distributions Declared |
$ |
12,647 |
$ |
13,094 |
$ |
13,570 |
$ |
14,062 |
$ |
53,373 |
|||||||||
Distribution Coverage Ratio - Declared |
1.12 |
x |
1.14 |
x |
1.44 |
x |
1.59 |
x |
1.33 |
x | |||||||||
Distributable Cash Flow |
$ |
14,145 |
$ |
14,868 |
$ |
19,525 |
$ |
22,381 |
$ |
70,919 |
|||||||||
Distributions Paid |
$ |
12,784 |
$ |
12,647 |
$ |
13,094 |
$ |
13,570 |
$ |
52,095 |
|||||||||
Distribution Coverage Ratio - Paid |
1.11 |
x |
1.18 |
x |
1.49 |
x |
1.65 |
x |
1.36 |
x |
CONE MIDSTREAM PARTNERS LP CONSOLIDATED BALANCE SHEETS (in thousands, except number of units) (Unaudited) | |||||||
December 31, |
December 31, | ||||||
ASSETS |
|||||||
Current Assets: |
|||||||
Cash |
$ |
217 |
$ |
3,252 |
|||
Receivables — Related Party |
36,418 |
58,749 |
|||||
Inventory |
18,916 |
— |
|||||
Prepaid Expenses |
1,873 |
1,280 |
|||||
Other Current Assets |
164 |
164 |
|||||
Total Current Assets |
57,588 |
63,445 |
|||||
Property and Equipment: |
|||||||
Property and Equipment |
897,918 |
639,735 |
|||||
Less — Accumulated Depreciation |
31,609 |
16,989 |
|||||
Property and Equipment — Net |
866,309 |
622,746 |
|||||
Other Non-Current Assets |
528 |
613 |
|||||
TOTAL ASSETS |
$ |
924,425 |
$ |
686,804 |
|||
LIABILITIES AND EQUITY |
|||||||
Current Liabilities: |
|||||||
Accounts Payable |
$ |
46,155 |
$ |
70,635 |
|||
Accounts Payable — Related Party |
1,628 |
2,106 |
|||||
Total Current Liabilities |
47,783 |
72,741 |
|||||
Other Liabilities: |
|||||||
Revolving Credit Facility |
73,500 |
31,300 |
|||||
Total Liabilities |
121,283 |
104,041 |
|||||
Partners' Capital: |
|||||||
Common Units - (29,163,121 Units Issued and Outstanding at December 31, 2015 and 2014) |
399,399 |
389,612 |
|||||
Subordinated Units (29,163,121 Units Issued and Outstanding at December 31, 2015 and 2014) |
(82,900) |
(92,285) |
|||||
General Partner Interest |
(3,389) |
(3,772) |
|||||
Capital Attributable to CONE Midstream Partners LP |
313,110 |
293,555 |
|||||
Noncontrolling Interest |
490,032 |
289,208 |
|||||
Total Partners' Capital |
803,142 |
582,763 |
|||||
TOTAL LIABILITIES AND PARTNERS' CAPITAL |
$ |
924,425 |
$ |
686,804 |
CONE MIDSTREAM PARTNERS LP CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (Unaudited) | |||||||
Twelve Months Ended | |||||||
2015 |
2014 | ||||||
Cash Flows from Operating Activities: |
|||||||
Net Income |
$ |
115,531 |
$ |
64,827 |
|||
Adjustments to Reconcile Net Income to Net Cash Provided By Operating Activities: |
|||||||
Depreciation Expense and Amortization of Debt Issuance Costs |
15,217 |
7,330 |
|||||
Gain on Disposition of Equipment |
— |
(85) |
|||||
Unit Based Compensation |
402 |
— |
|||||
Changes in Operating Assets: |
|||||||
Receivables — Related Party |
(3,148) |
(9,029) |
|||||
Inventory |
(2,284) |
— |
|||||
Prepaid Expenses |
(663) |
(1,280) |
|||||
Non-Current Assets |
(10) |
— |
|||||
Changes in Operating Liabilities: |
|||||||
Accounts Payable |
(8,670) |
23,806 |
|||||
Accounts Payable — Related Party |
(358) |
(875) |
|||||
Net Cash Provided by Operating Activities |
116,017 |
84,694 |
|||||
Cash Flows from Investing Activities: |
|||||||
Capital Expenditures |
(291,211) |
(269,686) |
|||||
Proceeds on Sale of Equipment |
— |
85 |
|||||
Net Cash Used in Investing Activities |
(291,211) |
(269,601) |
|||||
Cash Flows from Financing Activities: |
|||||||
Investments by Partners and Noncontrolling Interest Holders |
182,053 |
146,626 |
|||||
Proceeds from Issuance of Common Units, Net of Offering Costs |
— |
413,005 |
|||||
Distribution of Proceeds |
— |
(407,971) |
|||||
Distributions to Unitholders |
(52,094) |
— |
|||||
Payment of Revolver Fees |
— |
(777) |
|||||
Proceeds from Revolver |
42,200 |
31,300 |
|||||
Net Cash Provided by Financing Activities |
172,159 |
182,183 |
|||||
Net Decrease in Cash |
(3,035) |
(2,724) |
|||||
Cash at Beginning of Period |
3,252 |
5,976 |
|||||
Cash at End of Period |
$ |
217 |
$ |
3,252 |
CONE MIDSTREAM PARTNERS LP SUPPLEMENTAL STATEMENTS OF CASH FLOWS (in thousands) (unaudited) | |||||||
Three Months Ended | |||||||
2015 |
2014 | ||||||
Cash Flows from Operating Activities: |
|||||||
Net Income |
$ |
35,796 |
$ |
23,027 |
|||
Adjustments to Reconcile Net Income to Net Cash Provided By Operating Activities: |
|||||||
Depreciation Expense and Amortization of Debt Issuance Costs |
4,664 |
2,225 |
|||||
Gain on Disposition of Equipment |
— |
(85) |
|||||
Unit Based Compensation |
92 |
— |
|||||
Changes in Operating Assets: |
|||||||
Receivables — Related Party |
(2,046) |
(9,344) |
|||||
Prepaid Expenses |
(1,133) |
(798) |
|||||
Non-Current Assets |
— |
168 |
|||||
Changes in Operating Liabilities: |
|||||||
Accounts Payable |
(15,482) |
9,404 |
|||||
Accounts Payable — Related Party |
(5,142) |
(2,266) |
|||||
Net Cash Provided by Operating Activities |
16,749 |
22,331 |
|||||
Cash Flows from Investing Activities: |
|||||||
Capital Expenditures |
(58,261) |
(83,985) |
|||||
Proceeds on Sale of Equipment |
— |
85 |
|||||
Net Cash Used in Investing Activities |
(58,261) |
(83,900) |
|||||
Cash Flows from Financing Activities: |
|||||||
Investments by Partners and Noncontrolling Interest Holders |
37,093 |
26,000 |
|||||
Proceeds from Issuance of Common Units, Net of Offering Costs |
— |
264 |
|||||
Distribution to Unitholders |
(13,569) |
— |
|||||
Payment of Revolver Fees |
— |
(91) |
|||||
Proceeds from Revolver |
17,000 |
31,300 |
|||||
Net Cash Provided by Financing Activities |
40,524 |
57,473 |
|||||
Net Decrease in Cash |
(988) |
(4,096) |
|||||
Cash at Beginning of Period |
1,205 |
7,348 |
|||||
Cash at End of Period |
$ |
217 |
$ |
3,252 |
Development Companies Jointly Owned by CONE Gathering LLC and CONE Midstream Partners LP Operating Income Summary, Selected Operating Statistics and Capital Investment (in thousands) (unaudited) | |||||||||||||||
Three Months Ended December 31, 2015 | |||||||||||||||
Development Company | |||||||||||||||
Anchor |
Growth |
Additional |
TOTAL | ||||||||||||
Income Summary |
|||||||||||||||
Revenue |
$ |
46,063 |
$ |
3,080 |
$ |
9,642 |
$ |
58,785 |
|||||||
Expenses |
16,525 |
1,546 |
4,918 |
22,989 |
|||||||||||
Net Income |
29,538 |
1,534 |
4,724 |
35,796 |
|||||||||||
Less: Net Income Attributable to Noncontrolling Interest |
7,385 |
1,457 |
4,488 |
13,330 |
|||||||||||
Net Income Attributable to General and Limited Partner Ownership Interest in CONE Midstream Partners LP |
$ |
22,153 |
$ |
77 |
$ |
236 |
$ |
22,466 |
|||||||
Operating Statistics - Gathered Volumes |
|||||||||||||||
Dry Gas (BBtu/d) |
614 |
73 |
11 |
698 |
|||||||||||
Wet Gas (BBtu/d) |
372 |
8 |
196 |
576 |
|||||||||||
Condensate (Bcfe/d) |
7 |
— |
10 |
17 |
|||||||||||
Total Gathered Volumes |
993 |
81 |
217 |
1,291 |
|||||||||||
Total Volumes Net to CONE Midstream Partners LP |
745 |
4 |
11 |
760 |
|||||||||||
Capital Investment |
|||||||||||||||
Maintenance Capital |
$ |
3,333 |
$ |
352 |
$ |
725 |
$ |
4,410 |
|||||||
Expansion Capital |
29,034 |
188 |
24,629 |
53,851 |
|||||||||||
Total Capital Investment |
$ |
32,367 |
$ |
540 |
$ |
25,354 |
$ |
58,261 |
|||||||
Capital Investment Net to CNNX |
|||||||||||||||
Maintenance Capital |
$ |
2,500 |
$ |
18 |
$ |
36 |
$ |
2,554 |
|||||||
Expansion Capital |
21,776 |
9 |
1,231 |
23,016 |
|||||||||||
Total Capital Investment Net to CNNX |
$ |
24,276 |
$ |
27 |
$ |
1,267 |
$ |
25,570 |
Development Companies Jointly Owned by CONE Gathering LLC and CONE Midstream Partners LP Operating Income Summary, Selected Operating Statistics and Capital Investment (in thousands) (unaudited) | |||||||||||||||
Three Months Ended December 31, 2014 | |||||||||||||||
Development Company | |||||||||||||||
Anchor |
Growth |
Additional |
TOTAL | ||||||||||||
Income Summary |
|||||||||||||||
Revenue |
$ |
35,166 |
$ |
2,464 |
$ |
4,855 |
$ |
42,485 |
|||||||
Expenses |
15,025 |
1,847 |
2,586 |
19,458 |
|||||||||||
Net Income |
20,141 |
617 |
2,269 |
23,027 |
|||||||||||
Less: Net Income Attributable to Noncontrolling Interest |
5,035 |
586 |
2,155 |
7,776 |
|||||||||||
Net Income Attributable to General and Limited Partner Ownership Interest in CONE Midstream Partners LP |
$ |
15,106 |
$ |
31 |
$ |
114 |
$ |
15,251 |
|||||||
Operating Statistics - Gathered Volumes |
|||||||||||||||
Dry Gas (BBtu/d) |
389 |
71 |
17 |
477 |
|||||||||||
Wet Gas (BBtu/d) |
313 |
— |
81 |
394 |
|||||||||||
Condensate (Bcfe/d) |
12 |
— |
— |
12 |
|||||||||||
Total Gathered Volumes |
714 |
71 |
98 |
883 |
|||||||||||
Total Volumes Net to CONE Midstream Partners LP |
536 |
4 |
5 |
545 |
|||||||||||
Capital Investment |
|||||||||||||||
Maintenance Capital |
$ |
2,372 |
$ |
230 |
$ |
157 |
$ |
2,759 |
|||||||
Expansion Capital |
18,465 |
22,296 |
40,465 |
81,226 |
|||||||||||
Total Capital Investment |
$ |
20,837 |
$ |
22,526 |
$ |
40,622 |
$ |
83,985 |
|||||||
Capital Investment Net to CNNX |
|||||||||||||||
Maintenance Capital |
$ |
1,779 |
$ |
12 |
$ |
8 |
$ |
1,799 |
|||||||
Expansion Capital |
13,849 |
1,114 |
2,023 |
16,986 |
|||||||||||
Total Capital Investment Net to CNNX |
$ |
15,628 |
$ |
1,126 |
$ |
2,031 |
$ |
18,785 |
SOURCE CONE Midstream Partners LP
CANONSBURG, Pa., Jan. 25, 2016 /PRNewswire/ -- The Board of Directors of CONE Midstream GP LLC, the general partner of CONE Midstream Partners LP (NYSE: CNNX), today announced the declaration of a cash distribution of $0.2362 per unit with respect to the fourth quarter of 2015. The distribution will be made on February 12, 2016 to unitholders of record as of the close of business on February 4, 2016. The distribution, which equates to an annual rate of $0.9448 per unit, represents an increase of 3.6% over the prior quarter, and an increase of 11.2% over the Minimum Quarterly Distribution as defined in CNNX's partnership agreement.
CONE Midstream Partners is a growth-oriented master limited partnership formed by CONSOL Energy Inc.(NYSE:CNX) and Noble Energy, Inc. (NYSE:NBL), whom we refer to as our Sponsors, to own, operate, develop and acquire natural gas gathering and other midstream energy assets to service our Sponsors' production in the Marcellus Shale in Pennsylvania and West Virginia. Our assets include natural gas gathering pipelines and compression and dehydration facilities, as well as condensate gathering, collection, separation and stabilization facilities. More information is available at our website www.conemidstream.com.
This press release is intended to be a qualified notice to nominees as provided for under Treasury Regulation Section 1.1446-4(b). Brokers and nominees should treat one hundred percent (100.0%) of CONE Midstream's distributions to non-U.S. investors as being attributed to income that is effectively connected with a United States trade or business. Accordingly, CONE Midstream's distributions to non-U.S. investors are subject to federal income tax withholding at the highest applicable effective tax rate. Nominees, and not CONE Midstream, are treated as withholding agents responsible for withholding on the distributions received by them on behalf of foreign investors.
Contact: |
Stephen R. Milbourne |
CONE Midstream Partners Investor Relations | |
Phone: 724-485-4408 | |
Email: smilbourne@conemidstream.com |
SOURCE CONE Midstream Partners LP
CANONSBURG, Pa., Jan. 19, 2016 /PRNewswire/ -- CONE Midstream Partners LP (NYSE: CNNX) today announced that it will release financial results for the fourth quarter and full year 2015 before market opening on Wednesday, February 17, 2016 and hold a conference call to discuss those results on the same day at 1:00 p.m. Eastern Time. The conference call will be publicly available via webcast on a live and replay basis.
Interested parties are invited to listen to the conference call, during which prepared remarks by John T. Lewis, Chairman and Chief Executive Officer, and other members of management will be followed by a question and answer session. Participants who would like to ask questions during the conference call may join by phone. Individuals who intend to listen only are encouraged to join the conference via the Internet.
Event: |
Conference call to discuss fourth quarter and full year 2015 financial and operating results. |
Time: |
February 17, 2016 at 1:00 p.m. Eastern Time. |
Internet: |
The webcast may be accessed directly at https://www.webcaster4.com/Webcast/Page/998/12905 or from the link posted on the "Events" page of our website, www.conemidstream.com. |
Phone: |
Dial 888-349-0097 (international 412-902-0126) five to ten minutes before the scheduled start of the conference call and reference the CONE Midstream Partners call. |
Replay: |
An on-demand replay of the webcast will also be available shortly after the webcast at https://www.webcaster4.com/Webcast/Page/998/12905. A telephonic replay of the call will be available through February 24, 2016. The replay can be accessed by dialing toll free |
CONE Midstream Partners is a growth-oriented master limited partnership formed by CONSOL Energy Inc. (NYSE:CNX) and Noble Energy Inc. (NYSE: NBL), referred to as our Sponsors, to own, operate, develop and acquire natural gas gathering and other midstream energy assets to service our Sponsors' production in the Marcellus Shale in Pennsylvania and West Virginia. Our assets include natural gas gathering pipelines and compression and dehydration facilities, as well as condensate gathering, collection, separation and stabilization facilities. More information is available at our website www.conemidstream.com.
Contact: Stephen R. Milbourne
CONE Midstream Partners Investor Relations
Phone: 724-485-4408
Email: smilbourne@conemidstream.com
SOURCE CONE Midstream Partners LP
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