CNX Resources : Q3 2022 Earnings Results & Supplemental Information of CNX Corporation

3Q 2022 Earnings Results &
Supplemental Information of CNX Resources
TABLE OF CONTENTS:	Page:
Production Volumes and Activity Summary........................................................................................................................	2
Hedge Volumes and Pricing…...........................................................................................................................................	3
Gas Hedging Gain/Loss Projections…..............................................................................................................................	4
Consolidated Statements of Income..................................................................................................................................	5
Consolidated Balance Sheets............................................................................................................................................	6
Consolidated Statements of Cash Flows….......................................................................................................................	7
Market Mix and Natural Gas Price Reconciliation…..........................................................................................................	8
Price and Cost Data (Per Mcfe).........................................................................................................................................	9
Guidance…........................................................................................................................................................................	10
Non-GAAP Reconciliations
Definitions..........................................................................................................................................................................	11
Sales of Natural Gas, NGL and Oil, including Cash Settlements and Natural Gas, NGL and Oil Production Costs.........	12
Quarterly Adjusted EBITDAX and Adjusted Net Income....................................................................................................	13
Operating Margin...............................................................................................................................................................	14
Cash Operating Margin......................................................................................................................................................	15
Net Debt and Adjusted EBITDAX TTM..............................................................................................................................	16
Free Cash Flow..................................................................................................................................................................	17

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

PRODUCTION VOLUMES
GAS	Q3-2022		Q2-2022Q1-2022Q4-2021		Q3-2021
Shale Sales Volumes (Bcf)		125.2		122.1		130.5		135.8		130.3
CBM Sales Volumes (Bcf)	10.7	11.0		11.4	12.0	12.2
Other Sales Volumes (Bcf)		0.2		0.1		0.1		0.1		0.1
LIQUIDS*
NGLs Sales Volumes (Bcfe)	10.1	8.8		8.5	9.7	10.1
Oil and Condensate Sales Volumes (Bcfe)		0.2		0.3		0.4		0.6		0.8
TOTAL (Bcfe)		146.4		142.3		150.9		158.2		153.5
Average Daily Production (MMcfe)		1,590.9		1,564.1		1,676.2		1,719.4		1,668.7

• 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.

								Average	Rigs at
Q3 2022 ACTIVITY SUMMARY		TD		Frac		TIL		Lateral	Period
			Length(1)		End
SWPA Central	Marcellus	4	3		5		13,519		2
Utica	-	-		-		-		-
WV Shirley-Pennsboro	Marcellus	-		8		-		-		-
Utica	-	-		-	-		-
CPA South	Marcellus	-		-		-		-		-
Utica	-	-		-	-		-
Total		4		11		5	-		2

(1) Measured in lateral feet from perforation to perforation.

2

HEDGE VOLUMES AND PRICING(1)
NYMEX Hedges(2)	Q4 2022	2022	2023	2024	2025		2026	2027
Volumes (Bcf)	113.2		453.7	387.3	265.7	224.3		229.1	53.8
Average Prices ($/Mcf)	$2.87		$2.91		$3.03		$2.98		$3.23		$3.24		$4.07
Physical Fixed Price Sales and Index
Hedges(2)
Volumes (Bcf)	5.3		21.0	34.6	106.3	129.0		78.7	59.0
Average Prices ($/Mcf)	$2.48		$2.48	$2.14	$2.32	$2.31		$2.50		$3.26
Total Volumes Hedged (Bcf)(3)	118.5		474.7		421.9		372.0		353.3		307.8		112.8
NYMEX + Basis (fully-covered volumes)(4)
Volumes (Bcf)	118.3		474.7	421.2	372.0	353.3		241.3	86.9
Average Prices ($/Mcf)	$2.40		$2.42	$2.47	$2.36	$2.38		$2.43	$3.19
NYMEX Hedges Exposed to Basis
Volumes (Bcf)	0.2		-	0.7		-		-		66.5	25.9
Average Prices ($/Mcf)	$2.87		-	$3.03		-		-		$3.24		$4.07
Total Volumes Hedged (Bcf)(3)	118.5		474.7		421.9		372.0		353.3		307.8		112.8
Estimated Conversion Factor(5)	1.087		1.088	1.081	1.076	1.075		1.072	1.068

1. Hedge positions as of 10/6/2022.
2. During the third quarter of 2022, CNX entered into an agreement with a hedge counterparty to merge certain 2024 and 2025 NYMEX and basis swaps into new Index swaps. Total volumes hedged and net hedge prices were not affected by the transaction.
3. Excludes basis hedges in excess of NYMEX hedges of 11.4 Bcf, 0.3 Bcf, and 11.5 Bcf for 2022, 2024, and 2025,respectively.
   Q4 2022 and 2022 basis hedges and excess basis hedges exclude purchased swaps. See table below.
4. Includes the impact of NYMEX and basis-only hedges as well as physical sales agreements.
5. To convert Bcf to TBtu, multiply by conversion factor; to convert $/Mcf to $/MMBtu, divide by conversion factor.

Purchased Swaps	Q4 2022	2022
Basis Hedges
Volumes (Bcf)	2.3	15.7
Average Fixed Prices ($/Mcf)	($1.13)	($1.13)

For financial hedging, CNX utilizes over-the-counter swaps to manage its exposure to natural gas price fluctuations. Typically, CNX "sells" swaps under which CNX receives a fixed price from and pays a floating price to its hedge counterparties. In order to lock in certain margins while balancing its basis hedges, during the first quarter of 2022, CNX purchased, rather than sold, financial swaps for the period April through October of 2022 under which CNX will pay a fixed price to and receive a floating price from its hedge counterparties. Purchased swaps have the effect of reducing total hedged volumes for the period of the swap.

3

HEDGING GAIN/LOSS PROJECTIONS
		Q4 2022				CY2022				CY2023
		Wtd.	Avg.	Forecasted			Wtd.	Avg.	Forecasted			Wtd.	Avg.	Forecasted
		Avg.			Avg.			Avg.
	Hedged	Hedged	Forward	Gain/		Hedged	Hedged	Forward	Gain/		Hedged	Hedged	Forward	Gain/
	Volumes	(Loss)(2)		Volumes	(Loss)(2)		Volumes	(Loss)(2)
($/MMBtu)	(000	Price	Market(1)	($ in 000s)	(000	Price	Market(1)	($ in 000s)	(000	Price	Market	($ in 000s)
MMBtu)		MMBtu)		MMBtu)
NYMEX	123,050	$2.65	$7.03	($539,245)	493,588	$2.68	$6.84	($2,039,640)	418,613	$2.80	$5.55	($1,099,263)
Index	1,840	$2.06	$5.62	($6,556)	7,300	$2.06	$5.77	($27,105)	36,500	$1.98	$4.53	($93,075)
Basis:
Eastern Gas-South	24,430	($0.60)	($1.36)	$16,212	89,643	($0.57)	($1.02)	$38,231	59,313	($0.66)	($1.02)	$21,361
(DOM)
TCO Pool (TCO)	18,430	($0.57)	($1.18)	$13,409	82,210	($0.60)	($0.87)	$25,615	100,850	($0.64)	($0.81)	$20,752
Michcon (NMC)	12,580	($0.21)	($0.80)	$7,784	52,630	($0.21)	($0.39)	$9,807	43,190	($0.25) ($0.29)	$1,619
TETCO ELA (TEB)	1,380	($0.09)	($0.73)	$886	5,475	($0.09)	($0.45)	$2,012		-	-	($0.22)	-
TETCO WLA (TWB)	1,380	($0.08)	($0.19)	$147	5,475	($0.08)	($0.11)	$200		-	-	($0.11)	-
TETCO M3 (TMT)	2,145	$1.06	($0.01)	$1,921	10,080	$0.35	($0.02)	($197)	7,750	($0.19)	$0.98	($10,822)
TETCO M2 (BM2)	44,620	($0.58)	($1.40)	$37,003	177,025	($0.58)	($1.07)	$87,195	158,775	($0.56)	($1.01)	$70,863
Transco Zone 5	3,220	$1.31	$1.62	($1,045)		12,775	$0.61	$2.04	($18,099)		12,165	$0.62	$2.32	($20,613)
South (DKR)
Total Financial Basis	108,185			$76,317	435,313			$144,764	382,043			$83,160
Hedges
Total Projected				($469,484)					($1,921,981)					($1,109,178)
Realized Loss

Note: Forward market prices, hedged volumes, and hedge prices are as of 10/6/2022. Anticipated hedging activity is not included in projections.

1. January 2022 through October 2022 prices are settled.
2. Forecasted Gain/(Loss) amounts are based on sum of current monthly hedge positions vs. strip.

Actual Change in Derivatives
(Dollars in millions)	Q3 2022		Q2 2022		Q1 2022		Q4 2021		Q3 2021
Realized Loss	($651)		($531)	($270)	($400)	($131)
Unrealized (Loss) Gain	($411)		($122)		($1,456)		$780		($1,376)
(Loss) Gain on Commodity Derivative Instruments	($1,062)		($653)		($1,726)		$380		($1,507)

4

CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Dollars in thousands, except per share data
Revenue and Other Operating Income (Loss):	Q3-2022	Q2-2022	Q1-2022	Q4-2021	Q3-2021
Natural Gas, NGL and Oil Revenue	$1,127,341	$1,003,406	$744,625	$847,340	$585,915
(Loss) Gain on Commodity Derivative Instruments	(1,062,353)	(652,643)	(1,726,394)	379,982	(1,507,270)
Purchased Gas Revenue	31,738	46,552	45,841	33,212	16,311
Other Revenue and Operating Income	20,335	23,103	22,830	30,656	24,783
Total Revenue and Other Operating Income (Loss)	117,061	420,418	(913,098)	1,291,190	(880,261)
Costs and Expenses:
Operating Expense
Lease Operating Expense	19,239	14,282	15,398	15,547	11,193
Transportation, Gathering and Compression	96,632	88,357	88,286	91,754	90,609
Production, Ad Valorem, and Other Fees	13,481	9,958	9,927	11,086	9,552
Depreciation, Depletion and Amortization	114,167	116,180	118,623	133,833	129,734
Exploration and Production Related Other Costs	685	4,712	1,689	12,548	3,073
Purchased Gas Costs	32,309	46,041	44,816	32,622	14,192
Selling, General, and Administrative Costs	27,722	30,454	31,560	35,908	24,851
Other Operating Expense	21,238	20,539	12,170	16,203	21,654
Total Operating Expense	325,473	330,523	322,469	349,501	304,858
Other Expense
Other Expense (Income)	1,922	5,179	(736)	2,340	3,177
Loss (Gain) on Assets Sales and Abandonments, net	12,077	(6,240)	(13,395)	(19,705)	(12,446)
Loss on Debt Extinguishment	9,953	12,981	-	15,084	18,653
Interest Expense	34,351	31,051	27,069	37,264	37,944
Total Other Expense	58,303	42,971	12,938	34,983	47,328
Total Costs and Expenses	383,776	373,494	335,407	384,484	352,186
(Loss) Earnings Before Income Tax	(266,715)	46,924	(1,248,505)	906,706	(1,232,447)
Income Tax Expense (Benefit)	160,357	13,567	(325,564)	276,394	(359,526)
Net (Loss) Income	$(427,072)	$33,357	$(922,941)	$630,312	$(872,921)
(Loss) Earnings per Share
Basic	$(2.28)	$0.17	$(4.62)	$3.02	$(4.05)
Diluted	$(2.28)	$0.15	$(4.62)	$2.90	$(4.05)

Weighted-Average Shares Outstanding	Q3-2022	Q2-2022		Q1-2022		Q4-2021		Q3-2021
Weighted-Average Shares of Common Stock Outstanding	187,511,940		194,021,639		199,854,257		208,454,502		215,738,737
Effect of Diluted Shares*	-	30,387,055		-	8,834,883		-
Weighted-Average Diluted Shares of Common Stock Outstanding	187,511,940		224,408,694		199,854,257		217,289,385		215,738,737

*During periods in which the Company incurs a net loss, diluted weighted average shares outstanding are equal to basic weighted average shares outstanding because the effect of all equity awards and the potential share settlement impact related to CNX's Convertible Notes are antidilutive.

5