CNX Resources Corporation has signed a definitive agreement to acquire the natural gas upstream and associated midstream assets of Apex Energy II, LLC, a portfolio company managed by Carnelian Energy Capital Management, L.P. The transaction, valued at approximately $505 million in cash (subject to adjustments), has an effective date of October 1, 2024. The deal is expected to close in the first quarter of 2025, pending customary closing conditions.

CNX President and CEO Nick Deiuliis highlighted the strategic value of the acquisition, calling it a “rare opportunity” to expand CNX’s operations with highly complementary assets in the Appalachian Basin. He emphasized the potential of the deep Utica play in the region, unlocked by pioneering efforts, to drive future development.

The acquisition enhances CNX’s existing Marcellus and Utica holdings in Westmoreland County, Pennsylvania, adding about 36,000 total net acres, 94% of which are held by production. This includes approximately 8,600 acres of undeveloped Utica and 12,600 acres of undeveloped Marcellus assets. The deal also provides CNX with significant infrastructure, supporting its low-cost operational strategy and offering synergies for future development.

Financial and Operational Benefits

The acquisition is expected to be immediately accretive to CNX’s free cash flow per share, maintaining the company’s strong financial position and capital allocation flexibility. The attractive price and cash flow profile align with CNX’s disciplined approach to value-driven growth. Key transaction highlights include:

• Cash Flow and Production: The acquired assets are projected to deliver an average daily production of 180-190 MMcfe/d in 2025, generating $150-$160 million in EBITDA based on recent pricing.

• Operational Efficiency: Operating costs for the acquired assets are estimated at $0.16/Mcfe, supported by an integrated gathering midstream system.

• Strategic Development: The added infrastructure and acreage position CNX to leverage stacked pay development across the Marcellus and Utica formations.

Financing Details

The acquisition will be funded through CNX’s secured credit facility. Earlier this year, CNX amended its credit agreements, extending maturities to May 2029 and increasing total commitments to $2.0 billion. As of September 30, 2024, CNX had $1.8 billion of borrowing capacity available. The company anticipates minimal impact on leverage ratios post-acquisition, preserving its financial flexibility for future growth initiatives.

This acquisition represents a significant step forward for CNX, expanding its strategic footprint in the Appalachian Basin while maintaining its commitment to operational excellence and shareholder value.

CNX Resources Corporation stands out as a leading ultra-low carbon natural gas development, production, midstream, and technology company based in the energy-rich Appalachian region. Building on a 160-year legacy, CNX leverages its substantial asset base, core operational expertise, innovation in technology, and strategic capital allocation to responsibly develop its resources. The company focuses on generating long-term per-share value, benefiting its shareholders, employees, and the communities where it operates.