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What changed in CNX Resources Corp's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of CNX Resources Corp's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+354 added−365 removedSource: 10-K (2025-02-11) vs 10-K (2024-02-08)

Top changes in CNX Resources Corp's 2024 10-K

354 paragraphs added · 365 removed · 297 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

75 edited+11 added−9 removed98 unchanged
Biggest changeLegal, Environmental and Regulatory Risks • Climate change risk, legislation, litigation and regulation of greenhouse gas emissions at the federal or state level may increase our operating costs and reduce the value of our natural gas assets. • Environmental regulations can increase costs and introduce uncertainty that could adversely impact the market for natural gas with potential short and long-term liabilities. • Existing and future governmental laws, regulations, other legal requirements and judicial decisions that govern our business may increase our costs of doing business and may restrict our operations. • CNX may incur significant costs and liabilities as a result of pipeline operations and/or increases in the regulation of natural gas pipelines and midstream facilities. • Changes in federal or state tax laws focused on natural gas exploration and development could cause our financial position and profitability to deteriorate. • Our future tax liability may be greater than expected if our net operating loss carryforwards are limited, CNX does not generate expected deductions, or tax authorities challenge certain of our tax positions. • We may be unable to qualify for existing federal and state level environmental attribute credits and new markets for environmental attributes are currently volatile, and otherwise may not develop as quickly or efficiently as we anticipate or at all. • CNX and its subsidiaries are subject to various legal proceedings and investigations, which may have an adverse effect on our business. 19 Financing, Investment and Indebtedness Risks • Our current long-term debt obligations, the terms of the agreements that govern that debt, and the risks associated therewith, could adversely affect our business, financial condition, liquidity and results of operations. • Our borrowing base under our revolving credit facility could decrease for a variety of reasons including lower natural gas prices, declines in natural gas reserves, asset sales and lending requirements or regulations. • The capped call transactions may affect the value of the Convertible Notes and our common stock, and subject CNX to counterparty performance risk. • Conversion of the Convertible Notes may dilute the ownership interest of existing stockholders or may otherwise depress the price of our common stock. • CNX may be unable to raise the funds necessary to repurchase the Convertible Notes for cash following a fundamental change, or to pay any cash amounts due upon conversion, and our other indebtedness may impact our ability to repurchase the Convertible Notes or pay cash upon their conversion. • The conditional conversion feature of the Convertible Notes, if triggered, may adversely affect our financial condition and operating results. • Provisions of our unsecured debt agreements, including the Convertible Notes, could delay or prevent an otherwise beneficial takeover of us.
Biggest changeLegal, Environmental and Regulatory Risks • Climate change risk, legislation, litigation and regulation of greenhouse gas emissions at the federal or state level may increase our operating costs and reduce the value of our natural gas assets. • Environmental regulations can increase costs and introduce uncertainty that could adversely impact the market for natural gas with potential short and long-term liabilities. • Existing and future governmental laws, regulations, other legal requirements and judicial decisions that govern our business may increase our costs of doing business and may restrict our operations. • CNX may incur significant costs and liabilities as a result of pipeline operations and/or increases in the regulation of natural gas pipelines and midstream facilities. • Changes in federal or state tax laws focused on natural gas exploration and development could cause our financial position and profitability to deteriorate. • Our future tax liability may be greater than expected if our net operating loss carryforwards are limited, CNX does not generate expected deductions, or tax authorities challenge certain of our tax positions. • We may be unable to qualify for existing federal and state level environmental attribute credits and new markets for environmental attributes are currently volatile, and otherwise may not develop as quickly or efficiently as we anticipate or at all. • CNX and its subsidiaries are subject to various legal proceedings and investigations, which may have an adverse effect on our business.
Risks Related to Economic Conditions and our Industry • Prices for natural gas and NGLs are volatile and can fluctuate widely based upon a number of factors beyond our control, including supply and demand for our products. 18 • If natural gas prices decrease or operational efforts are unsuccessful, CNX may be required to record write-downs of the quantity and value of our proved natural gas properties. • Competition and consolidation within the natural gas industry may adversely affect our ability to sell our products and midstream services or other parts of the business. • Deterioration in the economic conditions in any of the industries in which our customers or their customers operate, a domestic or worldwide financial downturn, or negative credit market conditions may have a material adverse effect on our liquidity, results of operations, business and financial condition that CNX cannot predict. • Our hedging activities may prevent us from benefiting from price increases and may expose us to other risks. • Negative public perception regarding our Company or industry could have an adverse effect on our operations, financial results or stock price. • Events beyond our control, including a global or domestic health crisis or global instability and actual and threatened geopolitical conflict, may result in unexpected adverse operating and financial results. • Increasing attention to environmental, social and governance (ESG) matters may adversely impact our business.
Risks Related to Economic Conditions and our Industry • Prices for natural gas and NGLs are volatile and can fluctuate widely based upon a number of factors beyond our control, including supply and demand for our products. • If natural gas prices decrease or operational efforts are unsuccessful, CNX may be required to record write-downs of the quantity and value of our proved natural gas properties. • Competition and consolidation within the natural gas industry may adversely affect our ability to sell our products and midstream services or other parts of the business. • Deterioration in the economic conditions in any of the industries in which our customers or their customers operate, a domestic or worldwide financial downturn, or negative credit market conditions may have a material adverse effect on our liquidity, results of operations, business and financial condition that CNX cannot predict. • Our hedging activities may prevent us from benefiting from price increases and may expose us to other risks. • Negative public perception regarding our Company or industry could have an adverse effect on our operations, financial results or stock price. • Events beyond our control, including a global or domestic health crisis or global instability and actual and threatened geopolitical conflict, may result in unexpected adverse operating and financial results. • Increasing attention to environmental, social and governance (ESG) matters may adversely impact our business.
ITEM 1. Business General CNX Resources Corporation (“CNX,” the “Company,” or “we,” “us,” or “our”) is a premier independent low carbon intensity natural gas development, production, midstream and technology company centered in the Appalachian Basin. The majority of our operations are centered on unconventional shale formations, primarily the Marcellus Shale and Utica Shale, in Pennsylvania, Ohio and West Virginia.
ITEM 1. Business General CNX Resources Corporation (“CNX,” the “Company,” or “we,” “us,” or “our”) is a premier independent ultra-low carbon intensity natural gas development, production, midstream and technology company centered in the Appalachian Basin. The majority of our operations are centered on unconventional shale formations, primarily the Marcellus Shale and Utica Shale, in Pennsylvania, Ohio and West Virginia.
See “ Risk Factors- Our hedging activities may prevent us from benefiting from price increases and may expose us to other risks.” Available Information Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to reports filed pursuant to Sections 13(a) and 15(d) of the Exchange Act, are filed with the Securities and Exchange Commission (the SEC ).
See “ Risk Factors- Our hedging activities may prevent us from benefiting from price increases and may expose us to other risks.” 19 Available Information Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to reports filed pursuant to Sections 13(a) and 15(d) of the Exchange Act, are filed with the Securities and Exchange Commission (the SEC ).
CNX employs a variety of initiatives dedicated to ensuring that our employee and contractor workforce is appropriately trained and aligned on expectations regarding safety and environmental performance. These programs utilize behavior-based techniques, which embrace a collaboration between management, employees, and the service provider workforce to continually focus attention and actions on appropriate daily safety behaviors.
CNX employs a variety of initiatives dedicated to ensuring that our employee and contractor workforce is appropriately trained and aligned on expectations regarding safety and environmental performance. These programs utilize behavior-based techniques, which embrace a collaboration between management, employees, and the service provider workforce to continually focus attention and actions on appropriate daily safety and compliance behaviors.
As an active participant in West Virginia’s pursuit of a regional hydrogen energy hub, CNX joined the Appalachian Regional Clean Hydrogen Hub (ARCH2) coalition in 2022. CNX brings local expertise, low-carbon technology capabilities, infrastructure, and carbon capture and storage (CCS) skill sets to the coalition, which is composed of energy producers, end-users, infrastructure developers and technological experts.
CNX is an active participant in West Virginia’s pursuit of a regional hydrogen energy hub, CNX joined the Appalachian Regional Clean Hydrogen Hub (ARCH2) coalition in 2022. CNX brings local expertise, low-carbon technology capabilities, infrastructure, and carbon capture and storage (CCS) skill sets to the coalition, which is composed of energy producers, end-users, infrastructure developers and technological experts.
Risks Related to our Business Operations • Our dependence on third party pipeline and processing systems could adversely affect our operations and limit sales of our natural gas and NGLs as a result of disruptions, capacity constraints, proximity issues or decreases in availability of pipelines or other midstream facilities. • Uncertainties exist in the estimation of economical recovery of natural gas reserves. • Developing, producing and operating natural gas wells is subject to operating risks and hazards that could increase expenses, decrease our production levels and expose us to losses or liabilities that may not be fully covered under our insurance policies. • Our identified development locations are scheduled over multiple future years, making them susceptible to uncertainties that could materially alter the occurrence or timing of their actual development. • Our exploration and development projects and midstream development require substantial capital expenditures and are subject to regulatory, environmental, political, legal and economic risks and if CNX fails to generate sufficient cash flow, obtain required capital or financing on satisfactory terms or respond to regulatory and political developments, our natural gas reserves may decline, and our operations and financial results may suffer. • CNX may not be able to obtain required personnel, services, equipment, parts and raw materials in a timely manner, in sufficient quantities or at reasonable costs to support our operations. • If CNX cannot find adequate sources of water for our use or if CNX is unable to dispose of or recycle water produced from our operations at a reasonable cost and within applicable environmental rules, our ability to produce natural gas economically and in sufficient quantities could be impaired. • Failure to successfully replace our current natural gas reserves through economic development of our existing or acquired undeveloped assets or through acquisition of additional producing assets, would lead to a decline in our natural gas, NGL and oil production levels and reserves. • CNX may incur losses as a result of title defects in the properties in which CNX invests or the loss of certain leasehold or other rights related to our midstream activities.
Risks Related to our Business Operations • Our dependence on third party pipeline and processing systems could adversely affect our operations and limit sales of our natural gas and NGLs as a result of disruptions, capacity constraints, proximity issues or decreases in availability of pipelines or other midstream facilities. • Uncertainties exist in the estimation of the economic recovery of natural gas reserves. • Developing, producing and operating natural gas wells is subject to operating risks and hazards that could increase expenses, decrease our production levels and expose us to losses or liabilities that may not be fully covered under our insurance policies. • Our identified development locations are scheduled over multiple future years, making them susceptible to uncertainties that could materially alter the occurrence or timing of their actual development. • Our exploration and development projects and midstream development require substantial capital expenditures and are subject to regulatory, environmental, political, legal and economic risks and if CNX fails to generate sufficient cash flow, obtain required capital or financing on satisfactory terms or respond to regulatory and political developments, our natural gas reserves may decline, and our operations and financial results may suffer. 20 • CNX may not be able to obtain the required personnel, services, equipment, parts and raw materials in a timely manner, in sufficient quantities or at reasonable costs to support our operations. • If CNX cannot find adequate sources of water for our use or if CNX is unable to dispose of or recycle water produced from our operations at a reasonable cost and within applicable environmental rules, our ability to produce natural gas economically and in sufficient quantities could be impaired. • Failure to successfully replace our current natural gas reserves through economic development of our existing or acquired undeveloped assets or through acquisition of additional producing assets, would lead to a decline in our natural gas, NGL and oil production levels and reserves. • CNX may incur losses as a result of title defects in the properties in which CNX invests or that it acquires or the loss of certain leasehold or other rights related to our midstream activities.
See “Risk Factors - Climate change risk, legislation, litigation and regulation of greenhouse gas emissions at the federal or state level may increase our operating costs and reduce the value of our natural gas assets” for additional discussion regarding certain laws and regulations related to air emissions and related matters. Clean Water Act .
See “Risk Factors - Climate change risk, legislation, litigation and regulation of greenhouse gas emissions at the federal or state level may increase our operating costs and reduce the value of our natural gas assets” for additional discussion regarding certain laws and regulations related to air emissions and related matters. 17 Clean Water Act .
See “Risk 17 Factors - Climate change risk, legislation, litigation and regulation of greenhouse gas emissions at the federal or state level may increase our operating costs and reduce the value of our natural gas assets” for additional discussion regarding certain laws and regulations related to climate change, greenhouse gas and related matters. Real Estate and Title Regulations.
See “Risk Factors - Climate change risk, legislation, litigation and regulation of greenhouse gas emissions at the federal or state level may increase our operating costs and reduce the value of our natural gas assets” for additional discussion regarding certain laws and regulations related to climate change, greenhouse gas and related matters. Real Estate and Title Regulations.
New or additional species that may be identified as requiring protection or consideration may lead to delays in permits and/or other restrictions on construction and development. 16 Safety of Gas Transmission and Gathering Pipelines . Natural gas pipelines serving our operations are subject to regulation by the U.S.
New or additional species that may be identified as requiring protection or consideration may lead to delays in permits and/or other restrictions on construction and development. Safety of Gas Transmission and Gathering Pipelines . Natural gas pipelines serving our operations are subject to regulation by the U.S.
CNX competes with other large producers, as well as a myriad of smaller producers and marketers. CNX also competes for pipeline capacity and other services to deliver its products to customers. New Technologies CNX’s New Technologies efforts are rooted in the Company’s extensive legacy asset base and innovative tradition.
CNX competes with other large producers, as well as a myriad of smaller producers and marketers. CNX also competes for pipeline capacity and other services to deliver its products to customers. 13 New Technologies CNX’s New Technologies efforts are rooted in the Company’s extensive legacy asset base and innovative tradition.
The evaluation of our health and safety performance is an ongoing, daily discussion, with key performance indicators being regularly monitored and analyzed for trends across operations. As trends are identified, CNX utilizes the information to amend policies, training and company-wide communication.
The evaluation of our health, safety and environmental performance is an ongoing, daily discussion, with key performance indicators being regularly monitored and analyzed for trends across operations. As trends are identified, CNX utilizes the information to amend policies, training and company-wide communication.
(2) Future development costs for 2023 include $535 million of plugging and abandonment costs and $210 million of midstream and water infrastructure capital on an undiscounted pre-tax basis. On a PV-10 pre-tax discounted basis, these amounts equate to $49 million and $173 million, respectively.
Future development costs for 2023 include $535 million of plugging and abandonment costs and $210 million of midstream and water infrastructure capital on an undiscounted pre-tax basis. On a PV-10 pre-tax discounted basis, these amounts equate to $49 million and $173 million, respectively.
They currently represent what CNX views as a unique set of market opportunities in the areas of environmental attributes, proprietary technology and derivative product development. 12 Environmental Attributes. CNX actively explores potential pathways to develop and qualify environmental attributes under various programs.
They currently represent what CNX views as a unique set of market opportunities in the areas of environmental attributes, proprietary technology and derivative product development. Environmental Attributes. CNX actively explores potential pathways to develop and qualify environmental attributes under various programs.
With the benefit of a more than 155-year legacy and a substantial asset base amassed over many generations, the Company deploys a strategy focused on responsibly developing its resources to create long-term per share value for its shareholders, as well as enhancing the communities where it operates.
With the benefit of a more than 160-year legacy and a substantial asset base amassed over many generations, the Company deploys a strategy focused on responsibly developing its resources to create long-term per share value for its shareholders, as well as enhancing the communities where it operates.
As of December 31, 2023, there are no net exploratory wells in process. Reserves The following table shows our estimated proved developed and proved undeveloped reserves. Reserve information is net of royalty interest. Proved developed and proved undeveloped reserves are reserves that could be commercially recovered under current economic conditions, operating methods and government regulations.
As of December 31, 2024, there are no net exploratory wells in process. Reserves The following table shows our estimated proved developed and proved undeveloped reserves. Reserve information is net of royalty interest. Proved developed and proved undeveloped reserves are reserves that could be commercially recovered under current economic conditions, operating methods and government regulations.
CNX owns or operates approximately 2,700 miles of natural gas gathering pipelines as well as a number of natural gas processing facilities. 11 CNX owns substantially all of its Shale gathering systems in Pennsylvania and West Virginia. With respect to CNX’s Shale wells in Ohio, CNX primarily contracts with third-party gathering services.
CNX owns or operates approximately 2,700 miles of natural gas gathering pipelines as well as a number of natural gas processing facilities. 12 CNX owns substantially all of its Shale gathering systems in Pennsylvania and West Virginia. With respect to CNX’s Shale wells in Ohio, CNX primarily contracts with third-party gathering services.
Industry Segments Financial information concerning industry segments, as defined by GAAP, for the years ended December 31, 2023, 2022 and 2021 is included in Note 21 – Segment Information in the Notes to the Audited Consolidated Financial Statements in Item 8 of this Form 10-K and is incorporated herein by reference.
Industry Segments Financial information concerning industry segments, as defined by GAAP, for the years ended December 31, 2024, 2023 and 2022 is included in Note 21 – Segment Information in the Notes to the Audited Consolidated Financial Statements in Item 8 of this Form 10-K and is incorporated herein by reference.
Fundamentally, daily on-site safety meetings, job safety analyses (JSA) and the universal expectation for any employee or contractor to stop work if a risk is identified combine to enforce our cultural focus on Health, Safety, and Environmental (HSE) awareness, also known as Operational Excellence.
Fundamentally, daily on-site safety meetings, job safety analyses and the universal expectation for any employee or contractor to stop work if a risk is identified combine to enforce our cultural focus on health, safety, and environmental awareness, also known as Operational Excellence.
This is accomplished through an evergreen approach, with consistent evaluation and adaptation for workforce, safety, and business objectives.
This is accomplished through an evergreen approach, with consistent evaluation and adaptation for workforce, safety, compliance and business objectives.
See “Risk Factors - CNX may incur losses as a result of title defects in the properties in which CNX invests or the loss of certain leasehold or other rights related to our midstream activities.” Financial and Derivatives Regulations.
See “Risk Factors - CNX may incur losses as a result of title defects in the properties in which CNX invests or that it acquires or the loss of certain leasehold or other rights related to our midstream activities.” Financial and Derivatives Regulations.
The Company includes drilled and uncompleted net development wells in proved undeveloped reserves and the Company intends to complete and turn-in-line the wells within five years of the initial disclosure. There were no net dry development wells in 2023, 2022 or 2021. As of December 31, 2023, there were no net completed developmental wells ready to be turned in-line.
The Company includes drilled and uncompleted net development wells in proved undeveloped reserves and the Company intends to complete and turn-in-line the wells within five years of the initial disclosure. There were no net dry development wells in 2024, 2023 or 2022. As of December 31, 2024, there were 9.0 net completed developmental wells ready to be turned in-line.
We expect the annual volumes of waste methane captured for 2024 that would qualify for these various programs to be approximately 15-18 Bcfe. We continue to focus efforts on opportunities to grow both the volume and value of environmental attributes as a source of future earnings.
We expect the annual volumes of waste methane captured for 2025 that would qualify for these various programs to be approximately 17-18 Bcfe. We continue to focus efforts on opportunities to grow both the volume and value of environmental attributes as a source of future earnings.
Additionally, based on our current drill plans and lease management we do not anticipate any material impact to our consolidated financial statements from the expiration of such leases. Development Wells (Net) During the years ended December 31, 2023, 2022 and 2021, we drilled 30.8 , 37.0 and 33.0 net d evelopment wells, respectively.
Additionally, based on our current drill plans and lease management we do not anticipate any material impact to our consolidated financial statements from the expiration of such leases. Development Wells (Net) During the years ended December 31, 2024, 2023 and 2022, we drilled 25.7 , 30.8 and 37.0 net d evelopment wells, respectively.
Sales of NGLs, condensates and oil enhance our reported natural gas equivalent sales price. Across all volumes, when excluding the impact of hedging, sales of liquids added $ 0.12 per Mcfe, $0.02 per Mcfe, and $0.15 per Mcfe for 2023, 2022, and 2021, respectively, to average gas sales prices.
Sales of NGLs, condensates and oil enhance our reported natural gas equivalent sales price. Across all volumes, when excluding the impact of hedging, sales of liquids added $0.17 per Mcfe, $0.12 per Mcfe, and $0.02 per Mcfe for 2024, 2023, and 2022, respectively, to average gas sales prices.
The Company holds approximately 53,000 acres of incremental Upper Devonian acres; however, these acres have historically not been disclosed separately as they generally coincide with our Marcellus acreage, and we have no current drilling program targeting this formation. Coalbed Methane (CBM) We have rights to extract CBM in Virginia from approximately 278,000 net CBM acres at December 31, 2023.
The Company holds approximately 52,000 acres of incremental Upper Devonian acres; however, these acres have historically not been disclosed separately as they generally coincide with our Marcellus acreage, and we have no current drilling program targeting this formation. Coalbed Methane (CBM) We have rights to extract CBM in Virginia from approximately 283,000 net CBM acres at December 31, 2024.
Other General Risks • Cyber-incidents targeting our systems, oil and natural gas industry systems and infrastructure, or the systems of our third-party service providers could materially adversely affect our business, financial condition or results of operations. • Terrorist activities could materially adversely affect our business and results of operations.
Other General Risks • Cybersecurity incidents targeting our data, systems, oil and natural gas industry systems and infrastructure, or the systems of our third-party service providers or business partners could materially adversely affect our business, financial condition or results of operations. • Terrorist activities could materially adversely affect our business and results of operations.
The following table illustrates the net wells drilled by well classification type: For the Years Ended December 31, 2023 2022 2021 Shale Segment 30.8 37.0 33.0 CBM Segment — — — Other Gas Segment — — — Total Development Wells (Net) 30.8 37.0 33.0 Exploratory Wells (Net) There were no net exploratory wells drilled during the years ended December 31, 2023, 2022 and 2021.
The following table illustrates the net wells drilled by well classification type: For the Years Ended December 31, 2024 2023 2022 Shale Segment 25.7 30.8 37.0 CBM Segment — — — Other Gas Segment — — — Total Development Wells (Net) 25.7 30.8 37.0 Exploratory Wells (Net) There were no net exploratory wells drilled during the years ended December 31, 2024, 2023 and 2022.
CNX defines itself through its corporate values that serve as our road map and guide every aspect of our business as we strive to achieve our corporate mission: • Responsibility: Be a safe and compliant operator; be a trusted community partner and respected corporate citizen; act with pride and integrity; • Ownership: Be accountable for our actions and learn from our outcomes, both positive and negative; be calculated risk-takers and seek creative ways to solve problems; be prudent capital allocators; and • Excellence: Be a lean, efficient, nimble organization; be a disciplined, reliable, performance-driven company; be an inclusive team treating each other with fairness and respect. 5 These values are the foundation of CNX's identity and are the basis for how management defines continued success.
CNX defines itself through its corporate values that serve as our road map and guide every aspect of our business as we strive to achieve our corporate mission: • Responsibility: Be a safe and compliant operator; be a trusted community partner and respected corporate citizen; act with pride and integrity; • Ownership: Be accountable for our actions and learn from our outcomes, both positive and negative; be calculated risk-takers and seek creative ways to solve problems; be prudent capital allocators; and • Excellence: Be a lean, efficient, nimble organization; be a disciplined, reliable, performance-driven company; be an inclusive team treating each other with fairness and respect.
These transactions exist parallel to the underlying physical transactions and represented approximately 420.3 Bcf of our total sales volumes for the year ended December 31, 2023 at an average price of $2.51 per Mcf.
These transactions exist parallel to the underlying physical transactions and represented approximately 420.6 Bcf of our total sales volumes for the year ended December 31, 2024 at an average price of $2.58 per Mcf.
Gob wells and wells drilled by other operators in which we own an interest are excluded from net development wells. As o f December 31, 2023, there were 13.8 net development wells and no exploratory wells drilled but uncompleted.
Gob wells and wells drilled by other operators in which we own an interest are excluded from net development wells. As o f December 31, 2024, there were 4.98 net development wells and no exploratory wells drilled but uncompleted.
For the Year Ended December 31, 2023 2022 2021 Average Sales Price - Gas (per Mcf) $ 2.20 $ 6.27 $ 3.55 Gain (Loss) on Commodity Derivative Instruments - Cash Settlement (per Mcf) $ 0.32 $ (3.35) $ (0.98) Average Sales Price - NGLs (per Mcfe)** $ 3.54 $ 6.36 $ 5.65 Average Sales Price - Oil/Condensate (per Mcfe)** $ 10.98 $ 13.65 $ 9.39 Total Average Sales Price (per Mcfe) Including Effect of Derivative Instruments $ 2.61 $ 3.17 $ 2.79 Total Average Sales Price (per Mcfe) Excluding Effect of Derivative Instruments $ 2.32 $ 6.29 $ 3.70 Average Lifting Costs Excluding Ad Valorem and Severance Taxes (per Mcfe) $ 0.11 $ 0.11 $ 0.08 Average Sales Price - NGLs (per Bbl) $ 21.24 $ 38.16 $ 33.90 Average Sales Price - Oil/Condensate (per Bbl) $ 65.88 $ 81.90 $ 56.34 **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.
For the Year Ended December 31, 2024 2023 2022 Average Sales Price - Gas (per Mcf) $ 1.98 $ 2.20 $ 6.27 Gain (Loss) on Commodity Derivative Instruments - Cash Settlement (per Mcf) $ 0.57 $ 0.32 $ (3.35) Average Sales Price - NGLs (per Mcfe)** $ 3.60 $ 3.54 $ 6.36 Average Sales Price - Oil/Condensate (per Mcfe)** $ 10.26 $ 10.98 $ 13.65 Total Average Sales Price (per Mcfe) Including Effect of Derivative Instruments $ 2.66 $ 2.61 $ 3.17 Total Average Sales Price (per Mcfe) Excluding Effect of Derivative Instruments $ 2.15 $ 2.32 $ 6.29 Average Lifting Costs Excluding Ad Valorem and Severance Taxes (per Mcfe) $ 0.13 $ 0.11 $ 0.11 Average Sales Price - NGLs (per Bbl) $ 21.60 $ 21.24 $ 38.16 Average Sales Price - Oil/Condensate (per Bbl) $ 61.56 $ 65.88 $ 81.90 **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.
CNX also provides the opportunity for all employees to obtain certification in First Aid, CPR, and AED administration. The Company’s safety training content is published on its corporate website to afford service providers ready access to CNX’s expectation of individual empowerment and accountability. Diversity and Inclusion . CNX values diversity throughout the organization.
CNX also provides the opportunity for all employees to obtain certification in First Aid, CPR, and AED administration. The Company’s safety training is available on its corporate website to afford service providers ready access to CNX’s requirements and expectation of individual empowerment and accountability. Diversity .
The notional volumes associated with these gas swaps represented approximately 460.3 Bcf of our total sales volumes for the year ended December 31, 2022 at an average price of $2.43 per Mcf.
The notional volumes associated with these gas swaps represented approximately 420.3 Bcf of our total sales volumes for the year ended December 31, 2023 at an average price of $2.51 per Mcf.
CNX recognizes that our future success depends on the expertise and services of our employees and is firmly committed to the health and safety of not only our employees and service providers, but also the communities in which CNX operates. 13 Training and Education .
CNX is not a party to any collective bargaining agreements. CNX recognizes that our future success depends on the expertise and services of our employees and is firmly committed to the health and safety of not only our employees and service providers, but also the communities in which CNX operates. Training and Education .
CNX has the benefit of having its operations centered in the Appalachian Basin, which the Company believes is one of the largest, most efficient, and environmentally sustainable sources of natural gas in the world. 2023 Operational Highlights and Outlook • Over the past ten years, CNX's total sales volumes have grown by approximately 225% to a total of 560.4 net Bcfe in 2023; • Total average production of 1,535,250 Mcfe per day in 2023; • 92% Natural Gas, 8% Liquids; and • 93% Shale, 7% coalbed methane.
CNX has the benefit of having its operations centered in the Appalachian Basin, which the Company believes is one of the largest, most efficient, and environmentally sustainable sources of natural gas in the world. 2024 Operational Highlights and Outlook • Over the past ten years, CNX's total sales volumes have grown by approximately 134% to a total of 550.8 net Bcfe in 2024; • Total average production of 1,504,956 Mcfe per day in 2024; • 90% Natural Gas, 10% Liquids; and • 93% Shale, 7% coalbed methane.
(2) Net acres include acreage attributable to our working interests in the properties. Additional adjustments (either increases or decreases) may be required as we further develop title to and further confirm our rights with respect to our various 7 properties in anticipation of development. We believe that our assumptions and methodology in this regard are reasonable.
(2) Net acres include acreage attributable to our working interests in the properties. Additional adjustments (either increases or decreases) may be required as we further develop title to and further confirm our rights with respect to our various properties in anticipation of development.
We have rights to extract natural gas from Shale formations in Pennsylvania, West Virginia, and Ohio from approximately 527,000 net Marcellus Shale acres and approximately 607,000 net Utica Shale acres at December 31, 2023. Approximately 341,000 Utica Shale acres coincide with Marcellus Shale acreage in Pennsylvania, West Virginia, and Ohio.
We have rights to extract natural gas from Shale formations in Pennsylvania, West Virginia, and Ohio from approximately 528,000 net Marcellus Shale acres and approximately 606,000 net Utica Shale acres at December 31, 2024. Approximately 339,000 Utica Shale acres coincide with Marcellus Shale acreage in Pennsylvania, West Virginia, and Ohio.
Reconciliation of PV-10 to Standardized GAAP Measure As of December 31, 2023 2022 2021 (Dollars in millions) Average Henry Hub Price ($/MMBtu) (1) $ 2.637 $ 6.357 $ 3.598 Future Cash Inflows $ 20,281 $ 54,714 $ 31,839 Future Production Costs (8,515) (10,225) (8,247) Future Development Costs (including Abandonments) (2) (1,903) (2,234) (1,736) Future Net Cash Flows (pre-tax) 9,863 42,255 21,856 10% Discount Factor (5,662) (27,754) (13,775) PV-10 (Non-GAAP Measure) 4,201 14,501 8,081 Undiscounted Income Taxes (2,507) (10,696) (5,839) 10% Discount Factor 1,416 6,958 3,640 Discounted Income Taxes (1,091) (3,738) (2,199) Standardized GAAP Measure (3) $ 3,110 $ 10,763 $ 5,882 ___________ (1) Based on the average, first day-of-the-month price.
Reconciliation of PV-10 to Standardized GAAP Measure As of December 31, 2024 2023 2022 (Dollars in millions) Average Henry Hub Price ($/MMBtu) (1) $ 2.130 $ 2.637 $ 6.357 Future Cash Inflows $ 17,997 $ 20,281 $ 54,714 Future Production Costs (8,034) (8,515) (10,225) Future Development Costs (including Abandonments) (2) (1,743) (1,903) (2,234) Future Net Cash Flows (pre-tax) 8,220 9,863 42,255 10% Discount Factor (4,393) (5,662) (27,754) PV-10 (Non-GAAP Measure) 3,827 4,201 14,501 Undiscounted Income Taxes (2,084) (2,507) (10,696) 10% Discount Factor 1,096 1,416 6,958 Discounted Income Taxes (988) (1,091) (3,738) Standardized GAAP Measure (3) $ 2,839 $ 3,110 $ 10,763 ___________ (1) Based on the average, first day-of-the-month price.
Future development costs for 2021 include $406 million of plugging and abandonment costs and $235 million of midstream and water infrastructure capital on an undiscounted pre-tax basis. On a PV-10 pre-tax discounted basis, these amounts equate to $7 million and $198 million, respectively.
(2) Future development costs for 2024 include $705 million of plugging and abandonment costs and $161 million of midstream and water infrastructure capital on an undiscounted pre-tax basis. On a PV-10 pre-tax discounted basis, these amounts equate to $94 million and $132 million, respectively.
Natural gas prices are currently unregulated, but Congress historically has been active in the area of natural gas regulation. CNX cannot predict whether new legislation to regulate natural gas sales might be enacted in the future or what effect, if any, any such legislation might have on our operations. Occupational Safety and Health Act .
CNX cannot predict whether new legislation to regulate natural gas sales might be enacted in the future or what effect, if any, any such legislation might have on our operations. Occupational Safety and Health Act .
(3) For additional information on our reserves, see Note 22 – Supplemental Gas Data (unaudited) to the Consolidated Financial Statements in Item 8 of this Form 10-K. 9 Sales Volumes Produced The following table sets forth net sales volumes produced for the periods indicated: For the Year Ended December 31, 2023 2022 2021 Natural Gas Sales Volume (MMcf) Shale 473,828 496,614 502,184 CBM 40,598 43,733 49,570 Other 242 349 234 Total 514,668 540,696 551,988 NGL* Sales Volume (Mbbls) Shale 7,410 6,333 5,976 Total 7,410 6,333 5,976 Oil and Condensate* Sales Volume (Mbbls) Shale 203 240 396 Other 3 6 4 Total 206 246 400 Total Sales Volume (MMcfe) Shale 519,503 536,050 540,413 CBM 40,598 43,733 49,570 Other 265 386 265 Total** 560,366 580,169 590,248 *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. **See Part II.
(3) For additional information on our reserves, see Note 23 – Supplemental Gas Data (unaudited) to the Consolidated Financial Statements in Item 8 of this Form 10-K. 10 Sales Volumes Produced The following table sets forth net sales volumes produced for the periods indicated: For the Year Ended December 31, 2024 2023 2022 Natural Gas Sales Volume (MMcf) Shale 457,531 473,828 496,614 CBM 39,130 40,598 43,733 Other 260 242 349 Total 496,921 514,668 540,696 NGL* Sales Volume (Mbbls) Shale 8,825 7,410 6,333 Total 8,825 7,410 6,333 Sales Volume (MMcfe) Shale 52,949 44,460 37,995 Total 52,949 44,460 37,995 Oil and Condensate* Sales Volume (Mbbls) Shale 155 203 240 Other 3 3 6 Total 158 206 246 Sales Volume (MMcfe) Shale 928 1,215 1,441 Other 16 23 37 Total 944 1,238 1,478 Total Sales Volume (MMcfe) Shale 511,408 519,503 536,050 CBM 39,130 40,598 43,733 Other 276 265 386 Total** 550,814 560,366 580,169 *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. **See Part II.
Our natural gas and midstream operations are also subject to numerous federal environmental laws and regulations. 15 In addition to routine reviews and inspections by regulators to confirm compliance with applicable regulatory and permit requirements, CNX has established protocols for ongoing assessments to identify potential environmental exposures.
In addition to routine reviews and inspections by regulators to confirm compliance with applicable regulatory and permit requirements, CNX has established protocols for ongoing assessments to identify potential environmental exposures.
This empowerment approach is reactive, when necessary, but also includes proactive measures such as procedural enhancements and communication. CNX further promotes empowerment through its CNX Hazard Training compliance, and verification of contractor training and short service employee program. Our safety professionals provide support throughout all phases of operation with education, training, policy development, audits and emergency preparedness and response.
CNX further promotes empowerment through its CNX Hazard Training compliance, and verification of contractor training and short service employee program. Our safety and environmental professionals provide support throughout all phases of operation with education, training, policy development, audits and emergency preparedness and response.
Goal attainment and outstanding achievements contribute to the year-end discretionary incentive pay awarded to employees that perform above expectations. Quality Management Systems. CNX is committed to fostering a culture of accountability and continuous improvement through the utilization of a Quality Management System (QMS), which strengthens accountability across the enterprise, and reinforces our core values of Responsibility, Ownership, and Excellence.
CNX is committed to fostering a culture of accountability and continuous improvement through the utilization of a Quality Management System (QMS), which strengthens accountability across the enterprise, and reinforces our core values of Responsibility, Ownership, and Excellence.
Risks Related to Strategic Transactions • Strategic determinations, including the allocation of capital and other resources to strategic opportunities, are subject to risk and uncertainties, and our failure to appropriately allocate capital and resources among our strategic opportunities may adversely affect our financial condition. • CNX does not completely control the timing of any divestitures that CNX may engage in, and they may not provide anticipated benefits. • There is no guarantee that CNX 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. • CNX may operate a portion of our business with one or more joint venture partners or in circumstances where CNX is not the operator, which may restrict our operational and corporate flexibility. • In connection with the separation of our coal business, CONSOL Energy has agreed to indemnify us for certain liabilities, and we have agreed to indemnify CONSOL Energy for certain liabilities.
Additionally, CNX may be unable to acquire additional properties in the future and any acquired properties may not provide the anticipated benefits. • There is no guarantee that CNX 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. 21 • CNX may operate a portion of our business with one or more joint venture partners or in circumstances where CNX is not the operator, which may restrict our operational and corporate flexibility. • In connection with the separation of our coal business, CONSOL Energy has agreed to indemnify us for certain liabilities, and we have agreed to indemnify CONSOL Energy for certain liabilities.
The plans are reviewed for effectiveness biannually and are communicated to affected employees through safety meetings and training. Drills and mock emergency exercises are conducted to ensure all employees understand their roles and responsibilities during an actual event. These exercises range from tabletop exercises to internal drills, up to and including events involving external resources.
Emergency Preparedness and Response. Emergency response plans are developed for all CNX locations and operations. The plans are reviewed for effectiveness biannually and are communicated to affected employees through safety and environmental meetings and training. Drills and mock emergency exercises are conducted to ensure all employees understand their roles and responsibilities during an actual event.
CNX also has rights to extract CBM from approximately 1,755,000 net CBM acres, and rights to capture CMM from various active and abandoned mines in other states including West Virginia, Pennsylvania, Ohio, Illinois, Indiana, and New Mexico; however, the Company has no current plans to drill CBM wells or capture CMM in these areas. 6 Other Gas We have rights to extract natural gas from other Shale and shallow oil and gas formations primarily in Illinois, Indiana, New York, Ohio, Pennsylvania, Virginia, and West Virginia from approximately 939,000 net acres at December 31, 2023.
CNX also has rights to extract CBM from approximately 1,863,000 net CBM acres, and rights to capture CMM from various active and abandoned mines in other states including West Virginia, Pennsylvania, Ohio, Illinois, Indiana, and New Mexico; however, although the Company has very limited activity in some of these areas, there are no current plans to drill additional CBM wells or capture CMM in these areas.
See “Risk Factors -- Existing and future governmental laws, regulations, other legal requirements and judicial decisions that govern our business may increase our costs of doing business and may restrict our operations ” for additional discussion regarding additional laws and regulations affecting our business, operations and industry.
See “Risk Factors -- Existing and future governmental laws, regulations, other legal requirements and judicial decisions that govern our business may increase our costs of doing business and may restrict our operations ” for additional discussion regarding additional laws and regulations affecting our business, operations and industry. 16 The Company anticipates that compliance with existing laws and regulations governing the Company and its current operations will not have a material adverse effect upon its capital expenditures, earnings or competitive position.
The following table sets forth, at December 31, 2023, the number of producing wells, developed acreage and undeveloped acreage: Gross (1) Net (2) Producing Gas Wells (including gob wells) - Working Interest 4,499 4,425 Producing Oil Wells - Working Interest 2 — Producing Gas Wells - Royalty Interest 320 — Producing Oil Wells - Royalty Interest 126 — Net Acreage Position: Proved Developed Acreage 385,087 385,087 Proved Undeveloped Acreage 40,811 40,811 Unproved Acreage 4,704,922 3,392,132 Total Acreage 5,130,820 3,818,030 _________ (1) All of our acreage identified as proved developed and undeveloped is controlled fully by CNX through ownership of a 100% working interest.
The following table sets forth, at December 31, 2024, the number of producing wells, developed acreage and undeveloped acreage: Gross (1) Net (2) Producing Gas Wells (including gob wells) - Working Interest 4,518 4,447 Producing Oil Wells - Working Interest 2 — Producing Gas Wells - Royalty Interest 350 — Producing Oil Wells - Royalty Interest 127 — Net Acreage Position: Proved Developed Acreage 416,500 416,500 Proved Undeveloped Acreage 27,941 27,941 Unproved Acreage 4,809,670 3,485,900 Total Acreage 5,254,111 3,930,341 _________ (1) All of our acreage identified as proved developed and undeveloped is controlled fully by CNX through ownership of a 100% working interest.
The Company continuously evaluates multiple factors to determine activity throughout the year, and as such, may update guidance accordingly. DETAIL OF OPERATIONS Our operations include the following plays: Shale Our Shale properties represent our primary operating and growth area in terms of reserves, production, and capital investment .
DETAIL OF OPERATIONS Our operations include the following plays: Shale Our Shale properties represent our primary operating and growth area in terms of reserves, production, and capital investment .
To date, no revenue has been generated associated with these activities. Derivative Products.
To date, there has been no material impact to the financial statements associated with these activities. Derivative Products.
CNX actively engages with local municipalities and emergency responders to ensure they are aware of our planned activities. This helps to familiarize emergency response resources with CNX personnel, facilities and operations. This proactive approach gives emergency responders the opportunity to ask questions and understand CNX protocols, so they are prepared in the case of an emergency.
This proactive approach gives emergency responders the opportunity to ask questions and understand CNX protocols, so they are prepared in the case of an emergency.
In 2010, Congress adopted comprehensive financial reform legislation that established federal oversight and regulation of the OTC derivative market and entities, such as the Company, which participate in that market.
In 2010, Congress adopted comprehensive financial reform legislation that established federal oversight and regulation of the OTC derivative market and entities, such as the Company, which participate in that market. This legislation, the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), required the CFTC, the SEC and other regulatory agencies to promulgate rules and regulations implementing this legislation.
This surface acreage is valuable to us in the development of the gathering system for our Shale production. We also derive value from this surface control by granting rights of way or development rights to third parties.
This surface acreage is valuable to us in the development of the gathering system for our Shale production.
However, the distinction between federally unregulated gathering facilities and FERC-regulated transmission facilities is a fact-based determination, and the classification of such facilities may be the subject of dispute and, potentially, litigation. CNX owns certain natural gas pipeline facilities that CNX believes meet the traditional tests used to establish a pipeline's status as a gatherer not subject to FERC jurisdiction.
However, the distinction between federally unregulated gathering facilities and FERC-regulated transmission facilities is a fact-based determination, and the classification of such facilities may be the subject of dispute and, potentially, litigation.
Item 7. “Management's Discussion and Analysis of Financial Condition and Results of Operations” in this Form 10-K for a breakdown of sales volume variances. CNX expects 2024 annual sales volumes to be approximately 570-590 Bcfe (This includes approximately 15-18 Bcfe of coal mine methane.
Item 7. “Management's Discussion and Analysis of Financial Condition and Results of Operations” in this Form 10-K for a breakdown of sales volume variances.
See New Technologies below for more information). 10 Average Sales Price and Average Lifting Cost The following table sets forth the total average sales price and the total average lifting cost for all of our natural gas and NGL production for the periods indicated.
CNX expects 2025 annual sales volumes to be approximately 605-620 Bcfe. 11 Average Sales Price and Average Lifting Cost The following table sets forth the total average sales price and the total average lifting cost for all of our natural gas and NGL production for the periods indicated.
CNX recognizes the importance of attracting and retaining top talent to help drive the Company’s strategy forward. The Company is committed to attracting, developing, engaging, retaining, and rewarding a diverse team of highly skilled individuals dedicated to accountability, fairness, and respect.
The Company is committed to attracting, developing, engaging, retaining, and rewarding a diverse team of highly skilled individuals dedicated to accountability, fairness, and respect. The continued success of CNX is not only contingent upon seeking out the best possible candidates, but, more importantly, retaining and developing the Company’s existing talent.
As such, we do not anticipate any major investments in new capture projects until an alternate monetization pathway improves the economics of these projects. Non-Core Mineral Assets and Surface Properties CNX owns significant natural gas assets that are not in our short-term or medium-term development plans.
Non-Core Mineral Assets and Surface Properties CNX owns significant natural gas assets that are not in our short-term or medium-term development plans.
Each of these potential abatement opportunities represents a stand-alone discrete investment decision. While CNX will make new investments each year to capture some of these unabated sources, currently available incentives do not provide sufficient economic justification to significantly expand our activities.
While CNX will make new investments each year to capture some of these unabated sources, currently available incentives do not provide sufficient economic justification to significantly expand our activities. As such, we do not anticipate any major investments in new capture projects until an alternate monetization pathway improves the economics of these projects.
Net Reserves (Millions of Cubic Feet Equivalent) As of December 31, 2023 2022 2021 Proved Developed Reserves 6,027,762 6,221,422 5,905,611 Proved Undeveloped Reserves 2,712,980 3,585,468 3,720,119 Total Proved Developed and Undeveloped Reserves (1) 8,740,742 9,806,890 9,625,730 8 ___________ (1) For additional information on our reserves, see Note 22 – Supplemental Gas Data (unaudited) to the Consolidated Financial Statements in Item 8 of this Form 10-K.
Net Reserves (Millions of Cubic Feet Equivalent) As of December 31, 2024 2023 2022 Proved Developed Reserves 6,099,654 6,027,762 6,221,422 Proved Undeveloped Reserves 2,438,289 2,712,980 3,585,468 Total Proved Developed and Undeveloped Reserves (1) 8,537,943 8,740,742 9,806,890 ___________ (1) For additional information on our reserves, see Note 23 – Supplemental Gas Data (unaudited) to the Consolidated Financial Statements in Item 8 of this Form 10-K. 9 Discounted Future Net Cash Flows The following table shows our estimated future net cash flows and total standardized measure of discounted future net cash flows at 10%: As of December 31, 2024 2023 2022 (Dollars in millions) Estimated Future Net Cash Flows (pre-tax) less Undiscounted Income Taxes $ 6,136 $ 7,356 $ 31,559 Total PV-10 Non-GAAP Measure of Pre-Tax Discounted Future Net Cash Flows (1) $ 3,827 $ 4,201 $ 14,501 Total Standardized GAAP Measure of After-Tax Discounted Future Net Cash Flows $ 2,839 $ 3,110 $ 10,763 ____________ (1) We calculate our present value at 10% (PV-10) in accordance with the following table.
CNX expects to continue to realize a liquids uplift benefit as additional wells are turned-in-line, primarily in the liquid-rich areas of the Marcellus Shale. We continue to sell the majority of our NGLs through the large midstream companies that process our natural gas. This approach allows us to take advantage of the processors’ transportation efficiencies and diversified markets.
CNX expects to continue to realize a liquids uplift benefit as additional Shale wells are turned-in-line. CNX markets NGLs to major midstream companies that process our natural gas, as well as through direct "in-kind" sales under processing contracts that permit the receipt of NGLs in kind.
The Environmental, Safety and 14 Corporate Responsibility (ESCR) Committee of the Board of Directors is kept apprised of quality, health, safety, and environmental related matters as needed and with monthly updates and quarterly meetings.
CNX’s hybrid approach, where the traditional safety and environmental teams are merged with an operational field compliance team, forms the Operational Excellence department. The Environmental, Safety and Corporate Responsibility (ESCR) Committee of the Board of Directors is kept apprised of quality, health, safety, and environmental related matters on an as needed basis and in ESCR Committee meetings.
The following table represents the terms under which we hold these acres: Gross Unproved Acres Net Unproved Acres Gross Proved Undeveloped Acres Net Proved Undeveloped Acres Held by Production/Fee 4,623,168 3,349,590 29,977 29,977 Expiration Within 2 Years 31,812 17,377 4,319 4,319 Expiration Beyond 2 Years 49,942 25,165 6,515 6,515 Total Acreage 4,704,922 3,392,132 40,811 40,811 The leases reflected above as Gross and Net Unproved Acres with expiration dates are included in our current drill plan or active land program.
We believe that our assumptions and methodology in this regard are reasonable. 8 The following table represents the terms under which we hold these acres: Gross Unproved Acres Net Unproved Acres Gross Proved Undeveloped Acres Net Proved Undeveloped Acres Held by Production/Fee 4,743,731 3,448,289 21,326 21,326 Expiration Within 2 Years 33,601 24,817 2,759 2,759 Expiration Beyond 2 Years 32,338 12,793 3,857 3,857 Total Acreage 4,809,670 3,485,899 27,942 27,942 The leases reflected above as Gross and Net Unproved Acres with expiration dates are included in our current drill plan or active land program.
The Company cannot predict when or whether any such proposals may become effective or the effect that such proposals may have on the Company. Environmental Laws Many of the laws and regulations governing our operations are state-level environmental laws and regulations, which vary according to the state where CNX is operating.
Environmental Laws Many of the laws and regulations governing our operations are state-level environmental laws and regulations, which vary according to the state where CNX is operating. Our natural gas and midstream operations are also subject to numerous federal environmental laws and regulations.
As of January 5, 2024, these physical and swap transactions represent approximately 434.2 Bcf of our estimated 2024 production at an average price of $2.53 per Mcf, 375.1 Bcf of our estimated 2025 production at an average price of $2.41 per Mcf, 339.0 Bcf of our estimated 2026 production at an average price of $2.53 per Mcf, and 216.2 Bcf of our estimated 2027 production at an average price of $3.35 per Mcf.
As of January 15, 2025, these physical and swap transactions represent approximately 478.9 Bcf of our estimated 2025 production at an average price of $2.58 per Mcf, 432.3 Bcf of our estimated 2026 production at an average price of $2.67 per Mcf, 304.4 Bcf of our estimated 2027 production at an average price of $3.28 per Mcf, 51.6 Bcf of our estimated 2028 production at an average price of $3.64 per Mcf, and a nominal amount of our estimated 2029 production.
No job or activity is considered a success if CNX compromises the safety of its employees and contractors. CNX employs stop work empowerment, where every person working at CNX locations is empowered to stop work if they feel there is a safety risk to themselves or others.
CNX employs stop work empowerment, where every person working at CNX locations is empowered to stop work if they feel there is a risk to themselves or others. This empowerment approach is reactive, when necessary, but also includes proactive measures such as procedural enhancements and communication.
CNX expects capital expenditures associated with New Technologies and other emission reduction activities to be between $5 million to $10 million in 2024. As mining progresses, new sources of waste methane are created every year throughout our region, in addition to the currently unabated sources that exist from historical mining activity.
As mining progresses, new sources of waste methane are created every year throughout our region, in addition to the currently unabated sources that exist from historical mining activity. Each of these potential abatement opportunities represents a stand-alone discrete investment decision.
CNX conducts regular internal and external audits to ensure compliance, adherence to best-in-class processes and continuous improvement, as we relentlessly strive to be the most responsible and efficient operator in the industry. CNX’s management expectation is that QMS will serve as the platform through which the senior leadership manages and measures excellence in all operational aspects. Health and Safety.
CNX conducts regular internal and external audits to ensure compliance, adherence to best-in-class processes and continuous improvement, as we relentlessly strive to be the most responsible and efficient operator in the industry. 15 Health, Safety and Environmental. No job or activity is considered a success if CNX compromises the safety of its employees and contractors or adversely impacts the environment.
The Company anticipates that compliance with existing laws and regulations governing the Company and its current operations will not have a material adverse effect upon its capital expenditures, earnings or competitive position. Additional proposals that affect the oil and natural gas industry are regularly considered by Congress, the states, local governments, regulatory agencies and the courts.
Additional proposals that affect the oil and natural gas industry are regularly considered by Congress, the states, local governments, regulatory agencies and the courts. The Company cannot predict when or whether any such proposals may become effective or the effect that such proposals may have on the Company.
The continued success of CNX is not only contingent upon seeking out the best possible candidates, but, more importantly, retaining and developing the Company’s existing talent. CNX is proud to offer opportunities for employees to improve their skills and help achieve individual career goals, including continuing education assistance and professional development for employees pursuing advanced education, certifications, or skill building.
CNX is proud to offer opportunities for employees to improve their skills and help achieve individual career goals, including continuing education assistance and professional development for employees pursuing advanced education, certifications, or skill building. Goal attainment and outstanding achievements contribute to the year-end discretionary incentive pay awarded to employees that perform above expectations. Quality Management Systems.
Human Capital Management As of December 31, 2023, CNX had 470 employees, which includes 47 employees directly attributable to our midstream operations and 63 employees directly attributable to our CBM operations in Virginia. CNX is not a party to any collective bargaining agreements.
We also derive value from this surface control by granting rights of way or development rights to third parties. 14 Human Capital Management As of December 31, 2024, CNX had 458 employees, which includes 63 employees directly attributable to our midstream operations and 60 employees directly attributable to our CBM operations in Virginia.
At December 31, 2023, our proved natural gas, NGL, condensate and oil reserves (collectively, “natural gas reserves”) had the following characteristics: • 8.7 Tcfe of proved reserves; • 90.6% natural gas; • 69.0% proved developed; and • 99.5% operated. In 2024, CNX expects capital expenditures to be between $575 million and $625 million.
At December 31, 2024, our proved natural gas, NGL, condensate and oil reserves (collectively, “natural gas reserves”) had the following characteristics: • 8.5 Tcfe of proved reserves; • 89.4% natural gas; • 71.4% proved developed; and • 99.1% operated. 6 On January 27, 2025, the Company completed the acquisition of the natural gas upstream and associated midstream business of Apex Energy II, LLC (“the Apex Transaction") for total cash consideration of approximately $505 million, subject to certain post-closing adjustments.
Summary of Properties as of December 31, 2023 Shale CBM Other Gas Segment Segment Segment Total Estimated Net Proved Reserves (MMcfe) 7,923,341 812,320 5,081 8,740,742 Percent Developed (1) 69 % 64 % 100 % 69 % Net Producing Wells (including oil and gob wells) 588 3,792 45 4,425 Net Acreage Position: Net Proved Developed Acres 112,282 234,686 38,119 385,087 Net Proved Undeveloped Acres (2) 40,811 — — 40,811 Net Unproved Acres (3) 692,746 1,798,774 900,612 3,392,132 Total Net Acres (4) 845,839 2,033,460 938,731 3,818,030 _________ (1) Percent developed is calculated as net proved developed reserves divided by net proved reserves, measured in MMcfe.
The majority of our shallow oil and gas leasehold position is held by third-party production and all of it is extensively overlain by existing third-party natural gas gathering and transmission infrastructure. 7 Summary of Properties as of December 31, 2024 Shale CBM Other Gas Segment Segment Segment Total Estimated Net Proved Reserves (MMcfe) 7,839,424 693,068 5,451 8,537,943 Percent Developed (1) 73 % 55 % 100 % 71 % Net Producing Wells (including oil and gob wells) 544 3,801 102 4,447 Net Acreage Position: Net Proved Developed Acres 119,691 258,660 38,149 416,500 Net Proved Undeveloped Acres (2) 27,941 — — 27,941 Net Unproved Acres (3) 698,717 1,887,579 899,604 3,485,900 Total Net Acres (4) 846,349 2,146,239 937,753 3,930,341 _________ (1) Percent developed is calculated as net proved developed reserves divided by net proved reserves, measured in MMcfe.
Removed
The majority of our shallow oil and gas leasehold position is held by third-party production and all of it is extensively overlain by existing third-party natural gas gathering and transmission infrastructure.
Added
These values are the foundation of CNX's identity and are the basis for how management defines continued success.
Removed
Discounted Future Net Cash Flows The following table shows our estimated future net cash flows and total standardized measure of discounted future net cash flows at 10%: As of December 31, 2023 2022 2021 (Dollars in millions) Estimated Future Net Cash Flows (pre-tax) less Undiscounted Income Taxes $ 7,356 $ 31,559 $ 16,017 Total PV-10 Non-GAAP Measure of Pre-Tax Discounted Future Net Cash Flows (1) $ 4,201 $ 14,501 $ 8,081 Total Standardized GAAP Measure of After-Tax Discounted Future Net Cash Flows $ 3,110 $ 10,763 $ 5,882 ____________ (1) We calculate our present value at 10% (PV-10) in accordance with the following table.
Added
See Note 22 – Subsequent Event in the Notes to the Audited Consolidated Financial Statements in Item 8 of this Form 10-K for more information. In 2025, CNX expects capital expenditures to be between $450 million and $500 million. The Company continuously evaluates multiple factors to determine activity throughout the year, and as such, may update guidance accordingly.
Removed
CNX directly markets certain NGLs taken “in-kind” pursuant to processing contracts that provide for the ability to take our NGLs “in-kind.” The processed purity products are ultimately sold to industrial, commercial and petrochemical markets.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

87 edited+13 added−17 removed217 unchanged
Biggest changeIn addition, the existence of the Convertible Notes may encourage short selling by market participants because the conversion of the Convertible Notes could be used to satisfy short positions, or anticipated conversion of the Convertible Notes into shares of our common stock could depress the price of our common stock. 35 CNX may be unable to raise the funds necessary to repurchase the Convertible Notes for cash following a fundamental change, or to pay any cash amounts due upon conversion, and our other indebtedness may impact our ability to repurchase the Convertible Notes or pay cash upon their conversion .
Biggest changeCNX may be unable to raise the funds necessary to repurchase the Convertible Notes for cash following a fundamental change, or to pay any cash amounts due upon conversion, and our other indebtedness may impact our ability to repurchase the Convertible Notes or pay cash upon their conversion .
This could lead to negative investor sentiment toward us and to the diversion of their investment away from the fossil fuel industry to other industries. Such diversion could have a negative impact on our stock price and our access to and costs of capital.
This could lead to negative investor sentiment toward us and to the diversion of their investment away from the fossil fuel industry to other industries. Such a diversion could have a negative impact on our stock price and our access to and costs of capital.
An operational issue at any of those stations would materially impact our production, cash flow and results of operation. Uncertainties exist in the estimation of economic recovery of natural gas reserves. Due to these uncertainties, estimates of revenues, operating and development costs and future profitability may prove to be inaccurate.
An operational issue at any of those stations would materially impact our production, cash flow and results of operation. Uncertainties exist in the estimation of the economic recovery of natural gas reserves. Due to these uncertainties, estimates of revenues, operating and development costs and future profitability may prove to be inaccurate.
Various interruptions in our planned transportation of this wastewater, including operational issues and regulatory matters, could increase our operating costs, which would detrimentally affect our cash flows. The risk of pollution also exists while handling, transferring, storing, recycling and disposing wastewater and other wastes, as well as in development or production of a well.
Various interruptions in our planned transportation of this wastewater, including operational issues and regulatory matters, could increase our operating costs, which would detrimentally affect our cash flows. The risk of pollution also exists while handling, transferring, storing, recycling and disposing of wastewater and other wastes, as well as in development or production of a well.
For example: • demand for natural gas and electricity in the United States is impacted by industrial production, which if weakened would negatively impact the revenues, margins and profitability of our natural gas business; • a decrease in international demand for natural gas or NGLs produced in the United States could adversely affect the pricing for such products, which could adversely affect our results of operations and liquidity; • the tightening of credit or lack of credit availability to our customers could adversely affect our liquidity, as our ability to receive payment for our products sold and delivered depends on the continued creditworthiness of our customers; • our ability to refinance our existing senior notes may be limited and the terms on which we are able to do so may be less favorable to us depending on the strength of the capital markets or our credit ratings; • our ability to access the capital markets may be restricted at a time when CNX would like, or need, to raise capital for our business including for exploration and/or development of our natural gas reserves; • increased capital markets scrutiny of E&P companies leading to increased costs of capital or lack of credit availability; 22 • a decline in our creditworthiness may require us to post letters of credit, cash collateral, or surety bonds to secure certain obligations, all of which would have an adverse effect on our liquidity; and • increased inflationary pressure in the broader macro-economic environment may impact our business by increasing costs and tightening the supply of critical goods and services needed to support our operations.
For example: • demand for natural gas and electricity in the United States is impacted by industrial production, which if weakened would negatively impact the revenues, margins and profitability of our natural gas business; • a decrease in international demand for natural gas or NGLs produced in the United States could adversely affect the pricing for such products, which could adversely affect our results of operations and liquidity; • the tightening of credit or lack of credit availability to our customers could adversely affect our liquidity, as our ability to receive payment for our products sold and delivered depends on the continued creditworthiness of our customers; • our ability to refinance our existing senior notes may be limited and the terms on which we are able to do so may be less favorable to us depending on the strength of the capital markets or our credit ratings; • our ability to access the capital markets may be restricted at a time when CNX would like, or need, to raise capital for our business including for exploration and/or development of our natural gas reserves; • increased capital markets scrutiny of E&P companies leading to increased costs of capital or lack of credit availability; • a decline in our creditworthiness may require us to post letters of credit, cash collateral, or surety bonds to secure certain obligations, all of which would have an adverse effect on our liquidity; and • increased inflationary pressure in the broader macro-economic environment may impact our business by increasing costs and tightening the supply of critical goods and services needed to support our operations.
The cost of developing and operating a well is often uncertain, and a number of factors can delay, suspend, or prevent development operations, decrease production and/or increase the cost of our natural gas operations at particular sites for varying lengths of time, including unexpected development and production conditions (such as pressure or irregularities in geologic formations or wells, material and equipment failures, fires, ruptures, loss of well control, landslides, mine subsidence, explosions or other accidents and environmental concerns and adverse weather conditions), which conditions and risks may be amplified as we increase the vertical and horizontal length of drilling endeavors; similar operational or design issues relating to pipelines, compressor stations, pump stations, related equipment and surrounding properties; challenges relating to transportation, pipeline infrastructure and capacity for treatment or disposal of waste water generated in operations and failure to obtain, or delays in the issuance of, permits at the state or local level and the resolution of regulatory concerns.
The cost of developing and operating a well is often uncertain, and a number of factors can delay, suspend, or prevent development operations, decrease production and/or increase the cost of our natural gas operations at particular sites for varying lengths of time, including unexpected development and production conditions (such as pressure or irregularities in geologic formations or wells, 27 material and equipment failures, fires, ruptures, loss of well control, landslides, mine subsidence, explosions or other accidents and environmental concerns and adverse weather conditions), which conditions and risks may be amplified as we increase the vertical and horizontal length of drilling endeavors; similar operational or design issues relating to pipelines, compressor stations, pump stations, related equipment and surrounding properties; challenges relating to transportation, pipeline infrastructure and capacity for treatment or disposal of waste water generated in operations and failure to obtain, or delays in the issuance of, permits at the state or local level and the resolution of regulatory concerns.
The degree to which CNX is leveraged could have important consequences, including, but not limited to: • increasing our vulnerability to general adverse economic and industry conditions; • requiring us to dedicate a substantial portion of our cash flow from operations to the payment of interest and principal due under our outstanding debt, which will limit our ability to obtain additional financing to fund future working capital, capital expenditures, acquisitions, development of our natural gas reserves or other general corporate requirements; • limiting our flexibility in planning for, or reacting to, changes in our business and in the natural gas industry; • placing us at a competitive disadvantage compared to our competitors with lower leverage and better access to capital resources; and • limiting our ability to implement our business strategy.
The degree to which CNX is leveraged could have important consequences, including, but not limited to: • increasing our vulnerability to general adverse economic and industry conditions; • requiring us to dedicate a substantial portion of our cash flow from operations to the payment of interest and principal due under our outstanding debt, which will limit our ability to obtain additional financing to fund future working capital, capital expenditures, acquisitions, development of our natural gas reserves or other general corporate requirements; • limiting our flexibility in planning for, or reacting to, changes in our business and in the natural gas industry; • placing us at a competitive disadvantage compared to our competitors with lower leverage and better access to capital resources; and 35 • limiting our ability to implement our business strategy.
In addition, such transactions may expose us to the risk of financial loss in certain circumstances, including instances in which: • our production is less than expected; • market prices for natural gas rise significantly in excess of our derivative hedge price resulting in significant cash payments to our hedge counterparties; • we are unable to find available counterparties in the future with which to enter into hedges and counterparties able to enter into basis hedge contracts; • the creditworthiness of our counterparties or their guarantors is substantially impaired; and • counterparties have credit limits that may constrain our ability to hedge additional volumes.
In addition, such transactions may expose us to the risk of financial loss in certain circumstances, including instances in which: • our production is less than expected; • market prices for natural gas rise significantly in excess of our derivative hedge price resulting in significant cash payments to our hedge counterparties; 24 • we are unable to find available counterparties in the future with which to enter into hedges and counterparties able to enter into basis hedge contracts; • the creditworthiness of our counterparties or their guarantors is substantially impaired; and • counterparties have credit limits that may constrain our ability to hedge additional volumes.
Any such regulation that may be implemented, as well as uncertainty concerning such regulation and public policy pressures, could adversely impact the market for natural gas, as well as for our securities” (See Note 20 – Commitments and Contingent Liabilities in the Notes to the Audited Consolidated Financial Statements in Item 8 of this Form 10-K for further discussion of pending legal proceedings).
Any such regulation that may be implemented, as well as uncertainty concerning such regulation and public policy pressures, could adversely impact the market for natural gas, 33 as well as for our securities” (See Note 20 – Commitments and Contingent Liabilities in the Notes to the Audited Consolidated Financial Statements in Item 8 of this Form 10-K for further discussion of pending legal proceedings).
The occurrence of an event that is not fully covered by insurance, such as pollution or environmental issues, could materially adversely affect our business, financial condition, results of operations and cash flows. 26 Our identified development locations are scheduled over multiple future years, making them susceptible to uncertainties that could materially alter the occurrence or timing of their actual development.
The occurrence of an event that is not fully covered by insurance, such as pollution or environmental issues, could materially adversely affect our business, financial condition, results of operations and cash flows. Our identified development locations are scheduled over multiple future years, making them susceptible to uncertainties that could materially alter the occurrence or timing of their actual development.
There is also increased competition within the industry as a result of oil-focused drilling, where natural gas is produced as an ancillary byproduct and may be sold at prices below market. Some of such “byproduct” gas could be transported to our key markets, thereby affecting regional supply. The industry also faces competition from alternative energy sources.
There is also increased 23 competition within the industry as a result of oil-focused drilling, where natural gas is produced as an ancillary byproduct and may be sold at prices below market. Some of such “byproduct” gas could be transported to our key markets, thereby affecting regional supply. The industry also faces competition from alternative energy sources.
If our customers fail to develop their properties in the areas covered by these acreage dedications, or otherwise sell, exchange, farm-out or otherwise dispose of all of, or an undivided interest in, the development of the dedicated acreage, the resulting decrease in the development of reserves by our midstream customers could result in reduced volumes serviced by us and a commensurate decline in revenues and cash flows.
If our customers fail to develop their properties in the areas covered by these acreage dedications, or otherwise sell, exchange, farm-out or otherwise dispose of all of, or an undivided interest in, the development of the dedicated acreage, the resulting decrease in the development of reserves by our midstream customers could result in reduced volumes 28 serviced by us and a commensurate decline in revenues and cash flows.
For further discussion of pending legal proceedings, see Note 20 – Commitments and Contingent Liabilities in the Notes to the Audited Consolidated Financial Statements in Item 8 of this Form 10-K. 30 Environmental regulations can increase costs and introduce uncertainty that could adversely impact the market for natural gas with potential short and long-term liabilities.
For further discussion of pending legal proceedings, see Note 20 – Commitments and Contingent Liabilities in the Notes to the Audited Consolidated Financial Statements in Item 8 of this Form 10-K. Environmental regulations can increase costs and introduce uncertainty that could adversely impact the market for natural gas with potential short and long-term liabilities.
Any of these disruptions or outcomes could have a material adverse effect on our business, operations, financial results and liquidity. Increasing attention to environmental, social and governance (ESG) matters may adversely impact our business. Organizations that provide information to investors on corporate governance and related matters have developed ratings processes for evaluating companies on their approach to ESG matters.
Any of these disruptions or outcomes could have a material adverse effect on our business, operations, financial results and liquidity. 25 Increasing attention to environmental, social and governance (ESG) matters may adversely impact our business. Organizations that provide information to investors on corporate governance and related matters have developed ratings processes for evaluating companies on their approach to ESG matters.
A cyber-incident could include gaining unauthorized access to digital systems for purposes of misappropriating assets or sensitive information, corrupting data, or causing operational disruption, or result in denial-of-service on websites. SCADA (supervisory control and data acquisition) based systems are potentially vulnerable to targeted cyber-attacks due to their critical role in operations.
A cybersecurity incident could include gaining unauthorized access to digital systems for purposes of misappropriating assets or sensitive information, corrupting data, or causing operational disruption, or result in denial-of-service on websites. SCADA (supervisory control and data acquisition) based systems are potentially vulnerable to targeted cyber-attacks due to their critical role in operations.
For example, hydraulic fracturing is an important and common practice that is used to stimulate production of hydrocarbons from tight unconventional Shale formations. The process involves the injection of water, sand and chemicals under pressure into formations to fracture the surrounding rock and stimulate production. The process is typically regulated by state environmental or oil and natural gas agencies.
For example, hydraulic fracturing is an important and common practice that is used to stimulate production of hydrocarbons from tight unconventional 32 Shale formations. The process involves the injection of water, sand and chemicals under pressure into formations to fracture the surrounding rock and stimulate production. The process is typically regulated by state environmental or oil and natural gas agencies.
In October 2019, PHMSA published a final rule that significantly modifies existing regulations related to reporting, impact, design, construction, maintenance, operations and integrity management of gas transmission and gathering pipelines. Compliance with the rule could materially adversely affect our operations. In May 2020, PHMSA proposed additional 32 amendments to Federal Pipeline Safety Regulations.
In October 2019, PHMSA published a final rule that significantly modifies existing regulations related to reporting, impact, design, construction, maintenance, operations and integrity management of gas transmission and gathering pipelines. Compliance with the rule could materially adversely affect our operations. In May 2020, PHMSA proposed additional amendments to the Federal Pipeline Safety Regulations.
While CNX expects to be able to utilize our NOL carryforwards and generate deductions to offset our future taxable income, in the event that deductions are not generated as expected, one or more of our tax positions are successfully challenged by the IRS (in a tax audit or otherwise), or our NOL carryforwards are subject to future limitations, our future tax liability may be greater than expected.
While CNX expects to be able to utilize our NOL carryforwards and generate deductions to offset our future taxable income, in the event that deductions are not generated as expected, one or more of our tax positions are successfully challenged by the IRS (in a tax audit or otherwise), or our NOL 34 carryforwards are subject to future limitations, our future tax liability may be greater than expected.
If divestment efforts continue, the price of our common 23 stock or debt securities, and our ability to access capital markets or to otherwise obtain new investment or financing, may be negatively impacted and have a material adverse effect on our business, financial condition, results of operations and cash flows.
If divestment efforts continue, the price of our common stock or debt securities, and our ability to access capital markets or to otherwise obtain new investment or financing, may be negatively impacted and have a material adverse effect on our business, financial condition, results of operations and cash flows.
Moreover, economic or other circumstances may change from those contemplated by our 36 business plan, and our failure to recognize or respond to those changes may limit our ability to achieve our objectives. CNX does not completely control the timing of any divestitures that CNX may engage in, and they may not provide anticipated benefits.
Moreover, economic or other circumstances may change from those contemplated by our business plan, and our failure to recognize or respond to those changes may limit our ability to achieve our objectives. CNX does not completely control the timing of any divestitures that CNX may engage in, and they may not provide anticipated benefits.
Further, if pipeline quality standards change or we cannot meet applicable standards, we might be required to install additional processing equipment which could increase our costs. Pipelines could also curtail our flows until the natural gas delivered to their pipeline is in 24 compliance with predetermined gas quality specifications.
Further, if pipeline quality standards change or we cannot meet applicable standards, we might be required to install additional processing equipment which could increase our costs. Pipelines could also curtail our flows until the natural gas delivered to their pipeline is in compliance with predetermined gas quality specifications.
However, these types of contracts expose us to economic risk during a downturn in demand or during periods of oversupply. Having to pay for services we do not use decreases our cash flow and increases our costs. Global politics can also create additional risk to CNX.
However, these types of contracts expose us to economic risk during a downturn in demand or during periods of oversupply. Having to pay for services we do not use decreases our cash flow and increases our costs. 29 Global politics can also create additional risk to CNX.
These new markets are volatile and have significant risk associated with current market conditions. We have limited experience in marketing and selling environmental attributes and as such, our ability to sell environmental attributes or credits is currently dependent on third parties to market them on our behalf.
These new markets are volatile and have significant risk associated with current policy and market conditions. We have limited experience in marketing and selling environmental attributes and as such, our ability to sell environmental attributes or credits is currently dependent on third parties to market them on our behalf.
In either case, and in other cases, our obligations under the Convertible Notes and the indenture could increase the cost of acquiring us or otherwise discourage a third party from acquiring us, including in a transaction that noteholders or holders of our common stock may view as favorable.
In either case, and in other cases, our obligations under the Convertible Notes and the 37 indenture could increase the cost of acquiring us or otherwise discourage a third party from acquiring us, including in a transaction that noteholders or holders of our common stock may view as favorable.
The gas gathering agreements that we have with third parties may impose obligations on us to invest capital in our midstream systems which are not fully protected against volumetric risks associated with lower-than-forecast volumes flowing through our gathering systems.
The gas gathering agreements that we have with third parties may impose obligations on us to invest capital in our midstream systems that are not fully protected against volumetric risks associated with lower-than-forecast volumes flowing through our gathering systems.
CNX may not be able to obtain required personnel, services, equipment, parts and raw materials in a timely manner, in sufficient quantities or at reasonable costs to support our operations. CNX relies on third-party contractors to provide key services and equipment for our operations.
CNX may not be able to obtain the required personnel, services, equipment, parts and raw materials in a timely manner, in sufficient quantities or at reasonable costs to support our operations. CNX relies on third-party contractors to provide key services and equipment for our operations.
The PV-10 measure of pre-tax discounted future net cash flows and the standardized measure of after-tax discounted future net cash flows from our proved reserves included within this Form 10-K are not necessarily the same as the current market value of our estimated natural gas reserves.
The PV-10 measure of pre-tax discounted future 26 net cash flows and the standardized measure of after-tax discounted future net cash flows from our proved reserves included within this Form 10-K are not necessarily the same as the current market value of our estimated natural gas reserves.
In December 2021, the Pennsylvania Attorney General approved a proposed regulation which would allow Pennsylvania to join RGGI; however, the Pennsylvania General Assembly issued a concurrent regulatory review resolution process disapproving the proposed regulation.
In December 2021, the Pennsylvania Attorney General approved a proposed regulation which would allow Pennsylvania to join RGGI; however, the Pennsylvania 31 General Assembly issued a concurrent regulatory review resolution process disapproving the proposed regulation.
As a result of such examinations, certain curative work may be required to correct defects in the marketability of the title and such curative work entails expense.
As a result of such 30 examinations, certain curative work may be required to correct defects in the marketability of the title and such curative work entails expense.
A significant portion of our natural gas is sold on or through two pipeline systems, Texas Eastern Transmission and Columbia Gas Transmission, which could experience capacity issues, operational disruptions and unexpected downtime, including from cyberattacks, with either no or little alternative transportation options available for our natural gas.
A significant portion of our natural gas is sold on or through two pipeline systems, Texas Eastern Transmission and Columbia Gas Transmission, which could experience capacity issues, operational disruptions and unexpected downtime, including from cybersecurity incidents and cyberattacks, with either no or little alternative transportation options available for our natural gas.
CNX may not be able to consummate those sales or to obtain the proceeds which CNX could realize from them, and those proceeds may not be adequate to meet any debt service obligations then due. The capped call transactions may affect the value of the Convertible Notes and our common stock, and subject CNX to counterparty performance risk.
CNX may not be able to consummate those sales or to obtain the proceeds that CNX could realize from them, and those proceeds may not be adequate to meet any debt service obligations then due. The capped call transactions may affect the value of the Convertible Notes and our common stock, and subject CNX to counterparty performance risk.
Moreover, there can be no assurance that such measures will be sufficient to prevent security breaches or other cyber-incidents from occurring. As cyber threats continue to evolve, CNX may be required to expend significant additional resources to continue to modify or enhance our protective measures or to investigate and remediate any information security vulnerabilities.
Moreover, there can be no assurance that such measures will be sufficient to prevent security breaches or other cybersecurity incidents from occurring. As cybersecurity threats continue to evolve, CNX may be required to expend significant additional resources to continue to modify or enhance our protective measures or to investigate and remediate any information security vulnerabilities.
Further, CNX will be subject to the unsecured risk that the financial institutions might default under the capped call transactions.
Further, 36 CNX will be subject to the unsecured risk that the financial institutions might default under the capped call transactions.
Our technologies, systems, networks, data centers and those of our business partners and suppliers may become the target of cyber-incidents or information security breaches that could result in the unauthorized release, gathering, monitoring, misuse, loss or destruction of proprietary and other information, or other disruption of our business operations.
Our technologies, systems, networks, data centers and those of our business partners and suppliers may become the target of cybersecurity incidents or information systems security breaches that could result in the unauthorized release, gathering, monitoring, misuse, loss or destruction of proprietary and other information, or other disruption of our business operations.
While CNX has not incurred significant disruptions to its operations during the past three fiscal years as a direct result of the COVID-19 pandemic or geopolitical conflict, including the ongoing war in Ukraine, the resulting global instability and any similar disruptions may materially and adversely affect, our business, operating and financial results and liquidity in the future.
While CNX has not incurred significant disruptions to its operations during the past three fiscal years as a direct result of the COVID-19 pandemic or geopolitical conflict, including the ongoing war in Ukraine and the ongoing conflicts in the Middle East, the resulting global instability and any similar disruptions may materially and adversely affect, our business, operating and financial results and liquidity in the future.
Our business partners, including vendors, service providers and financial institutions, are also dependent on digital technology. As dependence on digital technologies has increased the threat of cyber incidents, including deliberate attacks or unintentional events, have also increased.
Our business partners, including vendors, service providers and financial institutions, are also dependent on digital technology. As dependence on digital technologies has increased the threat of cybersecurity incidents, including deliberate attacks or unintentional events, have also increased.
Cyber-incidents, including cybersecurity incidents, data misuse and ransomware attacks, continue to proliferate and become more sophisticated, and could significantly affect us, third party operators on whom we depend, or the operations of our customers and business partners, as well as impact general economic conditions, consumer confidence and spending and market liquidity.
Cybersecurity incidents, including cybersecurity attacks, data misuse and ransomware attacks, continue to proliferate and some may become more sophisticated, and could significantly affect us, third-party operators or business partners on whom we depend, or the operations of our customers and business partners, as well as impact general economic conditions, consumer confidence and spending and market liquidity.
Our implementation of various internal and external controls and processes, including appropriate internal risk assessment and internal policy implementation, incorporating a risk-based cyber security framework to monitor and mitigate security threats and other strategies to increase security for our information, facilities and infrastructure is costly and labor intensive.
Our implementation of various internal and external controls and processes, including internal risk assessment and internal policy implementation, incorporating a risk-based cybersecurity framework to monitor and mitigate security threats and other strategies to increase security for our information, facilities and infrastructure is costly and labor intensive.
CNX may incur losses as a result of title defects in the properties in which CNX invests or the loss of certain leasehold or other rights related to our midstream activities.
CNX may incur losses as a result of title defects in the properties in which CNX invests or that it acquires, or the loss of certain leasehold or other rights related to our midstream activities.
Evidence of volatility was present during 2022 and 2023 as natural gas prices spiked in the first half of 2022 due to lower domestic production, lower storage levels, and 20 increased LNG export demand, but thereafter retreated to the depressed prices that we have witnessed over the past ten years.
Evidence of volatility was present during 2022 and 2023 as natural gas prices spiked in the first half of 2022 due to lower domestic production, lower storage levels, and increased LNG export demand, but thereafter retreated to the depressed prices that we have witnessed over the past ten years. CNX expects continued volatility of natural gas prices in the future.
In the past CNX has had to record an impairment charge related to certain assets and CNX may 21 incur impairment charges in the future, which could have an adverse effect on our results of operations in the period taken. There were no impairments for the years ended December 31, 2023, 2022 and 2021.
In the past CNX has had to record an impairment charge related to certain assets and CNX may incur impairment charges in the future, which could have an adverse effect on our results of operations in the period taken. There were no indicators of impairment for the years ended December 31, 2024, 2023 and 2022.
CNX currently has a repurchase program in place authorized by our board of directors, which is not subject to an expiration date, and for which $1.1 billion remains available for repurchases as of February 6, 2024. The repurchase program does not require us to acquire any specific number of shares.
CNX currently has a repurchase program in place authorized by our board of directors, which is not subject to an expiration date, and for which $1.0 billion remains available for repurchases as of February 4, 2025. The repurchase program does not require us to acquire any specific number of shares.
As of December 31, 2023, CNX has U.S. federal and state NOL carryforwards of $0.8 billion and $1.6 billion, respectively, some of which expire at various dates from 2024 to 2041 while others have no expiration date. CNX expects to be able to utilize these NOL carryforwards and generate deductions to offset our future taxable income.
As of December 31, 2024, CNX has U.S. federal and state NOL carryforwards of $0.7 billion and $1.5 billion, respectively, some of which expire at various dates from 2025 to 2041 while others have no expiration date. CNX expects to be able to utilize these NOL carryforwards and generate deductions to offset our future taxable income.
Other General Risks Cyber-incidents targeting our systems, oil and natural gas industry systems and infrastructure, or the systems of our third-party service providers could materially adversely affect our business, financial condition or results of operations.
Other General Risks Cybersecurity incidents targeting our data, systems, oil and natural gas industry systems and infrastructure, or the systems of our third-party service providers or business partners could materially adversely affect our business, financial condition or results of operations.
In addition, certain cyber incidents, such as surveillance, may remain undetected for an extended period.
In addition, certain cybersecurity incidents, such as surveillance, may remain undetected for an extended period.
Additionally, increased governmental attention to ESG matters, including rules promulgated by the SEC, as well as state actions such as, for example, California’s Climate Corporate Data Accountability Act and its Climate-Related Financial Risk Act, may require the production and public reporting of additional data for investors’ evaluation of investment and voting decisions.
Additionally, increased governmental attention to ESG matters, including state actions such as California’s Climate Corporate Data Accountability Act and its Climate-Related Financial Risk Act, may require the production and public reporting of additional data for investors’ evaluation of investment and voting decisions.
Apart from issues with respect to the supply of products CNX produces, demand can fluctuate widely due to a number of matters beyond our control, including: • weather conditions in our markets that affect the demand for natural gas; • changes in the consumption pattern of industrial consumers, electricity generators and residential users of electricity and natural gas; • with respect to natural gas, the price and availability of alternative fuel sources used by electricity generators; • technological advances affecting energy consumption and conservation measures reducing demand; • the costs, availability and capacity of transportation infrastructure; • proximity and capacity of natural gas pipelines and other transportation facilities; • changes in levels of international demand and tariffs associated with international export; and • the impact of domestic and foreign governmental laws and regulations, including environmental and climate change regulations and delays.
Our results of operations may be adversely affected by a depressed level of, or downward fluctuations in the price for NGLs. 22 Apart from issues with respect to the supply of products CNX produces, demand can fluctuate widely due to a number of matters beyond our control, including: • weather conditions in our markets that affect the demand for natural gas; • changes in the consumption pattern of industrial consumers, electricity generators and residential users of electricity and natural gas; • with respect to natural gas, the price and availability of alternative fuel sources used by electricity generators; • technological advances affecting energy consumption and conservation measures reducing demand; • the costs, availability and capacity of transportation infrastructure; • proximity and capacity of natural gas pipelines and other transportation facilities; • changes in levels of international demand and tariffs associated with international export; and • the impact of domestic and foreign governmental laws and regulations, including environmental and climate change regulations and delays.
Although the Company is able to hedge natural gas benchmarks and local basis differentials, it generally does not hedge its relatively minor quantities of NGLs. In addition, similar to natural gas, increased drilling activity by third parties in formations containing NGLs may lead to a decline in the price CNX receives for our NGLs.
Although the Company is able to hedge natural gas benchmarks and local basis differentials, it maintains only a small hedge position in its relatively minor quantities of NGLs. In addition, similar to natural gas, increased drilling activity by third parties in formations containing NGLs may lead to a decline in the price CNX receives for our NGLs.
We expect environmental attributes (including but not limited to carbon credits, air quality credits, renewable or alternative energy credits, alternate energy credits, methane capture credits, methane performance certificates, emission reductions, differentiated energy attribute tokens, offsets and/or allowances) to continue to grow as a source of future revenue.
We expect environmental attributes (including but not limited to carbon credits, air quality credits, renewable or alternative energy credits, alternate energy credits, methane capture credits, methane performance certificates, emission reductions, differentiated energy attribute tokens, production tax credits, investment tax credits, grants, energy attribute certificates, carbon intensity claims, renewable thermal certificates, offsets and/or allowances) to continue to grow as a source of future revenue.
Deliberate attacks on our assets, or security breaches in our systems or infrastructure, the systems or infrastructure of third-parties or off-premise service providers could lead to corruption or loss of our proprietary data and potentially sensitive data, delays in production or delivery, difficulty in completing and settling transactions, challenges in maintaining our books and records, environmental damage, communication interruptions, damage to our reputation, other operational disruptions and third-party liability, including the following: • a cyber-incident impacting one of our vendors or service providers could result in supply chain disruptions, loss or corruption of our information or other negative consequences, any of which could delay or halt development of additional infrastructure, effectively delaying the start of cash flows from the project; • a cyber-incident related to our facilities may result in equipment damage or failure; • a cyber-incident impacting a communications network or power grid could cause operational disruption resulting in impact to our production; 38 • A cyber-incident affecting an interstate pipeline company could result in an inability to deliver our natural gas to certain markets; • a deliberate corruption of our financial or operational data could result in events of non-compliance which could lead to regulatory fines or penalties; and • business interruptions could result in expensive remediation efforts, distraction of management, damage to our reputation, or a negative impact on the price of our stock.
Deliberate attacks on our assets, or security breaches in our systems or infrastructure, the systems or infrastructure of third parties or off-premise service providers could lead to corruption or loss of our data and potentially sensitive data, delays in production or delivery, difficulty in completing and settling transactions, challenges in maintaining our books and records, environmental damage, communication interruptions, costs related to remediation or the payment of ransom, and litigation, including individual claims or consumer class actions, commercial litigation, administrative, and civil or criminal investigations or actions, regulatory intervention and sanctions or fines, investigation costs, damage to our reputation, other operational disruptions and third-party liability, including the following: • a cybersecurity incident impacting one of our vendors or service providers could result in supply chain disruptions, loss or corruption of our information or other negative consequences, any of which could delay or halt development of additional infrastructure, effectively delaying the start of cash flows from the project; • a cybersecurity incident related to our facilities may result in equipment damage or failure; • a cybersecurity incident impacting a communications network or power grid could cause operational disruption resulting in impact to our production; • A cybersecurity incident affecting an interstate pipeline company could result in an inability to deliver our natural gas to certain markets; • a deliberate corruption of our financial or operational data could result in events of non-compliance which could lead to regulatory fines or penalties; and • business interruptions could result in expensive remediation efforts, distraction of management, damage to our reputation, or a negative impact on the price of our stock.
As of December 31, 2023, CNX’s total long-term indebtedness was approximately $2.2 billion, excluding unamortized debt issuance costs, of which approximately (i) $500 million was under our 7.375% Senior Notes due 2031 less $5 million of unamortized discount, (ii) $500 million of 6.00% Senior Notes due 2029, (iii) $400 million of 4.75% Senior Notes due 2030 issued by our midstream business, less $4 million of unamortized bond discount (CNX is not a guarantor of these notes), (iv) $350 million of 7.25% Senior Notes due 2027 plus $2 million of unamortized bond premium, (v) $331 million of 2.25% Convertible Senior Notes due 2026 less $5 million of unamortized discount and issuance cost, (vi) $105 million in outstanding borrowings under our midstream revolver (CNX is not a guarantor of this revolving credit facility), and (vii) $52 million in outstanding borrowings under our senior secured credit facility (the “Credit Facility”).
As of December 31, 2024, CNX’s total long-term indebtedness was approximately $2.2 billion, excluding unamortized debt issuance costs, of which approximately (i) $500 million of 6.00% Senior Notes due 2029, (ii) $500 million was under our 7.375% Senior Notes due 2031 less $5 million of unamortized discount, (iii) $400 million of 7.25% Senior Notes due 2032 less $4 million of unamortized discount, (iv) $400 million of 4.75% Senior Notes due 2030 issued by our midstream business, less $3 million of unamortized bond discount (CNX is not a guarantor of these notes), (v) $331 million of 2.25% Convertible Senior Notes due 2026 less $3 million of unamortized discount and issuance cost, (vi) $16 million in outstanding borrowings under our midstream revolver (CNX is not a guarantor of this revolving credit facility), and (vii) $43 million in outstanding borrowings under our senior secured credit facility (the “CNX Credit Facility”).
If natural gas prices decline by $0.10 per MMBtu, then the pre-tax present value using a 10% discount rate of our proved natural gas reserves as of December 31, 2023 would decrease from $4.2 billion to $4.0 billion.
If natural gas prices decline by $0.10 per MMBtu, then the pre-tax present value using a 10% discount rate of our proved natural gas reserves as of December 31, 2024 would decrease from $3.8 billion to $3.6 billion.
For example, previous tax law legislation decreased the regular U.S. federal income tax rate, limited the ability of corporations to take certain interest deductions, increased the limitation on deductibility of executive compensation, and eliminated a corporation’s ability to take deductions for income attributable to domestic production activities.
For example, previous tax law legislation decreased the regular U.S. federal income tax rate, limited the ability of corporations to take certain interest deductions, increased the limitation on deductibility of executive compensation, and decreased a corporation’s ability to take deductions for capital expenditures.
Prior to the drilling of a well, however, it is the normal practice in our industry for the operator to obtain a complete title review to ensure there are no obvious defects in title to the underlying property interest.
Prior to the drilling of a well, however, it is the normal practice in our industry for the operator to obtain a complete title review to ensure there are no obvious defects in title to the underlying property interest, including interests acquired through any completed acquisition.
CNX expects continued volatility of natural gas prices in the future. Our producing properties are geographically concentrated in the Appalachian Basin, which exacerbates the impact of regional supply and demand factors on our business, including the pricing of our natural gas.
Our producing properties are geographically concentrated in the Appalachian Basin, which exacerbates the impact of regional supply and demand factors on our business, including the pricing of our natural gas.
Our ability to obtain insurance to mitigate the financial impact of cyber incidents may be challenged by the future prevalence and nature of incidences experienced by companies and insurance markets willingness to underwrite this risk. Terrorist activities could materially adversely affect our business and results of operations.
Our ability to obtain insurance on commercially reasonable terms or at all to mitigate the financial impact of cybersecurity incidents may be challenged by the future prevalence and nature of incidents experienced by companies and insurance markets willingness to underwrite this risk. 40 Terrorist activities could materially adversely affect our business and results of operations.
The natural gas industry, and our business partners have become increasingly dependent upon digital technologies, including information systems, infrastructure and cloud applications and services, and third-party risk management and oversight to operate our businesses, process and record financial and operating data, market our natural gas, arrange transportation, communicate with our employees and business partners, analyze geologic and operational information, estimate quantities of natural gas reserves, monitor and control our field equipment and assets and perform other activities related to our businesses.
Consequently, it is possible that any of these occurrences, or a combination of them, could materially adversely affect our business, financial condition and impact our production. 39 The natural gas industry, and our business partners have become increasingly dependent upon digital technologies, including information systems, infrastructure and cloud applications and services, and third-party risk management and oversight to operate our businesses, process and record financial and operating data, market our natural gas, arrange transportation, communicate with our employees and business partners, analyze geologic and operational information, estimate quantities of natural gas reserves, monitor and control our field equipment and assets and perform other activities related to our businesses.
Cyber-attacks continue to evolve in frequency and complexity. While no industry is immune, industrial networks have come under increased targeted attacks recently (such as, Colonial Pipeline and JBS Foods Group). This has led to increased scrutiny by cyber insurance carriers. As a result, securing a policy with sufficient protection has become more challenging.
Cyber-attacks and cybersecurity incidents may continue to evolve in frequency and complexity. While no industry is immune, industrial networks have come under increased targeted attacks recently (such as Colonial Pipeline and JBS Foods Group). This has led to increased scrutiny by cyber insurance carriers.
In the absence of such operating results and resources, CNX could face substantial liquidity problems and might be required to sell material assets or operations to attempt to meet our debt service and other obligations; however, our existing debt documents restrict our ability to sell assets and the use of the proceeds from the sales, such that we may not be able to consummate those sales or to obtain the proceeds which we could realize from them and these proceeds may not be adequate to meet any debt service obligations then due. 34 Our borrowing base under our senior secured revolving credit facility could decrease for a variety of reasons including lower natural gas prices, declines in natural gas reserves, asset sales and lending requirements or regulations.
In the absence of such operating results and resources, CNX could face substantial liquidity problems and might be required to sell material assets or operations to attempt to meet our debt service and other obligations; however, our existing debt documents restrict our ability to sell assets and the use of the proceeds from the sales, such that we may not be able to consummate those sales or to obtain the proceeds which we could realize from them and these proceeds may not be adequate to meet any debt service obligations then due.
Weather may also play a role with respect to the relative availability of certain materials. 27 In addition, accelerated levels of inflation may lead to price increases beyond CNX’s control that could lead to CNX incurring increased costs for contractors and/or materials. For example, fuel pricing and labor shortages have led to increased ground transportation costs.
In addition, accelerated levels of inflation, including through the introduction of new tariffs, may lead to price increases beyond CNX’s control that could lead to CNX incurring increased costs for contractors and/or materials. For example, fuel pricing and labor shortages have led to increased ground transportation costs.
Our failure to make acquisitions in the future and successfully integrate the acquired businesses or assets into our existing operations could materially adversely affect our financial condition and results of operations.
The process of integrating acquired businesses or assets may involve unforeseen difficulties and may require a disproportionate amount of our managerial and financial resources. Our failure to make acquisitions in the future and successfully integrate the acquired businesses or assets into our existing operations could materially adversely affect our financial condition and results of operations.
The trend of more expansive and stringent environmental legislation and regulations applied to the oil and natural gas industry could continue, potentially resulting in increased costs of doing business and consequently affecting profitability.
The trend of more expansive and stringent environmental legislation and regulations applied to the oil and natural gas industry could continue, potentially resulting in increased costs of doing business and consequently affecting profitability. Please read “Laws and Regulations” under Item 1 of Part I of this Form 10-K.
Our borrowing base is determined by the required number of lenders in good faith calculating a loan value of the Company’s proved natural gas reserves. The borrowing base under our senior secured revolving credit facility is currently $2.3 billion.
Our ability to borrow and have letters of credit issued under our $1.4 billion senior secured revolving credit facility is generally limited to a borrowing base. Our borrowing base is determined by the required number of lenders in good faith calculating a loan value of the Company’s proved natural gas reserves.
Based on an evaluation of these factors, our board of directors may determine not to repurchase shares or to repurchase shares at reduced levels from those anticipated by our shareholders See Note 5 – Stock Repurchase in the Notes to the Audited Consolidated Financial Statements in Item 8 of this Form 10-K for further discussion.
Based on an evaluation of these factors, our Board of Directors may determine not to repurchase shares or to repurchase shares at reduced levels from those anticipated by our shareholders See Note 5 – Stock Repurchase in the Notes to the Audited Consolidated Financial Statements in Item 8 of this Form 10-K for further discussion. 38 CNX may operate a portion of our business with one or more joint venture partners or in circumstances where CNX is not the operator, which may restrict our operational and corporate flexibility.
To manage our exposure to fluctuations in the price of natural gas, CNX enters into hedging arrangements with respect to a portion of our expected production.
Our hedging activities may prevent us from benefiting from price increases and may expose us to other risks. To manage our exposure to fluctuations in the price of natural gas, CNX enters into hedging arrangements with respect to a portion of our expected production.
The costs and delivery times of equipment and supplies are substantially greater in periods of peak demand, including increased demand for plays outside of our area of geographic focus.
The costs and delivery times of equipment and supplies are substantially greater in periods of peak demand, including increased demand for plays outside of our area of geographic focus. Weather may also play a role with respect to the relative availability of certain materials.
Any disruption in those means of transportation could have a further detrimental impact on the price CNX receives for our NGLs. Our results of operations may be adversely affected by a depressed level of, or downward fluctuations in the price for NGLs.
Any disruption in those means of transportation could have a further detrimental impact on the price CNX receives for our NGLs.
Our borrowing base is redetermined by the lenders twice per year, and the next scheduled borrowing base redetermination is expected to occur in the Spring of 2024.
The borrowing base under our senior secured revolving credit facility is currently $2.3 billion. Our borrowing base is redetermined by the lenders twice per year, and the next scheduled borrowing base redetermination is expected to occur in the spring of 2025.
Thereafter in September 2018, the EPA proposed revisions to the 2016 New Source Performance Standards for the oil and natural gas industry. Additional revisions were proposed in August 2019, August 2020 and November 2021.
Thereafter in September 2018, the EPA proposed revisions to the 2016 New Source Performance Standards for the oil and natural gas industry. Additional revisions were proposed in August 2019, August 2020 and November 2021. On December 2, 2023, the EPA finalized New Source Performance Standards to reduce methane and smog-forming volatile organic compounds from new, modified and reconstructed sources.
The regulatory focus has resulted in varying regulatory requirements between governmental administrations. The EPA, in 2013, and under the Climate Action Plan, elected to regulate GHGs under the Clean Air Act (“CAA”) to limit emissions of CO 2 from natural gas-fired power plants.
The regulatory focus has resulted in varying regulatory requirements between governmental administrations. In 2013, the EPA began regulating GHGs under the Clean Air Act to limit emissions of CO 2 from natural gas-fired power plants. Subsequently, the EPA reviewed and proposed repealing the Clean Power Plan in 2017, replacing it with the Affordable Clean Energy Rule (ACER) in 2019.
The methane charge and the incentives for renewable energy infrastructure development could impose additional costs on our operations and further accelerate the transition of the economy away from the use of natural gas towards lower- or zero-carbon emissions alternatives. This could decrease demand for natural gas and consequently adversely affect our business and results of operations.
The methane charge and the incentives for renewable energy infrastructure development could increase operational costs and further accelerate the transition of the economy away from the use of natural gas towards lower carbon emissions alternatives.
Our inability to obtain sufficient amounts of water with respect to our Shale operations or to dispose of or recycle water and other wastes produced from our Shale and our CBM operations in an economically efficient manner, could increase our costs and delay our operations, which will adversely impact our cash flow and results of operations. 28 Failure to successfully replace our current natural gas reserves through economic development of our existing or acquired undeveloped assets or through acquisition of additional producing assets, would lead to a decline in our natural gas, NGL and oil production levels and reserves.
Our inability to obtain sufficient amounts of water with respect to our Shale operations or to dispose of or recycle water and other wastes produced from our Shale and our CBM operations in an economically efficient manner, could increase our costs and delay our operations, which will adversely impact our cash flow and results of operations.
The success of any completed acquisition will depend on our ability to effectively integrate the acquired business into our existing operations and to identify and appropriately manage any liabilities assumed as part of the acquisition. The process of integrating acquired businesses or assets may involve unforeseen difficulties and may require a disproportionate amount of our managerial and financial resources.
The success of any completed acquisition, including the Apex Transaction, will depend on our ability to effectively integrate the acquired business into our existing operations and to identify and appropriately manage any liabilities assumed as part of the acquisition.
Environmental, social and governance (ESG) goals and programs, which typically include extralegal targets related to environmental stewardship, social responsibility, and corporate governance, have become an increasing focus of investors and stakeholders across the industry.
In addition, spurred by increasing concerns regarding climate change, the oil and natural gas industry faces growing demand for corporate transparency and a demonstrated commitment to sustainability goals. ESG goals and programs, which typically include extralegal targets related to environmental stewardship, social responsibility, and corporate governance, have become an increasing focus of investors and stakeholders across the industry.
Circuit on the last day of the Trump administration in January 2021. Accordingly, the Biden administration is taking a different direction than the Trump administration regarding these regulatory actions. For example, the Biden administration re-entered the United States in the Paris Climate Accord, and the EPA adopted a new Climate Adaptation Action Plan in October of 2021.
ACER was vacated on the last day of the Trump administration in January 2021. Adopting an alternative approach, the Biden administration re-entered the United States in the Paris Climate Accord, and the EPA adopted a new Climate Adaptation Action Plan in October of 2021.
The cost of drilling, completing and operating wells is substantial and uncertain, and our operations may be curtailed, delayed or canceled as a result of a variety of factors beyond our control. 25 Our future development activities may not be successful, and if they are unsuccessful, such failure will have an adverse effect on our future results of operations and financial condition.
Our future development activities may not be successful, and if they are unsuccessful, such failure will have an adverse effect on our future results of operations and financial condition.
On January 18, 2023, the EPA and ACOE published the final rule, which became effective on March 20, 2023. While CNX cannot at this time predict how this rule will be enforced by the Biden administration, such rulemaking, its enforcement, and future revisions to, or replacement of, the rulemaking could lead to additional mitigation costs and severely limit CNX’s operations.
Not long after, on May 25, 2023, a United States Supreme Court ruling further modified the definition of “waters of the United States.” While CNX cannot at this time predict how this rule will be enforced, such rulemaking, its enforcement, and future revisions to, or replacement of, the rulemaking could lead to additional mitigation costs and severely limit CNX’s operations.
Please read “Business - Regulation of Environmental and Occupational Safety and Health Matters” under Item 1 of Part I of this Form 10-K. 31 Existing and future governmental laws, regulations, other legal requirements and judicial decisions that govern our business may increase our costs of doing business and may restrict our operations.
Existing and future governmental laws, regulations, other legal requirements and judicial decisions that govern our business may increase our costs of doing business and may restrict our operations.
CNX also does not have control over the availability of environmental attributes, competition for those attributes, markets for those attributes, or pricing and other terms related to 33 such attributes. The value of environmental attributes may also be adversely affected by legislative, agency, or judicial determinations. These and other factors could impact our future results of operations and cash flows.
CNX also does not have control over the availability of environmental attributes, competition for those attributes, markets for those attributes, or pricing and other terms related to such attributes.
Although CONSOL Energy agreed to indemnify us to the extent that we are called upon to pay any of these liabilities, there is no assurance that CONSOL Energy will satisfy its obligations to indemnify us in these situations. 37 Indemnities that CNX may be required to provide CONSOL Energy are not subject to any cap, may be significant and could negatively impact our business.
The estimated value of these guarantees was approximately $103 million as of December 31, 2024. Although CONSOL Energy agreed to indemnify us to the extent that we are called upon to pay any of these liabilities, there is no assurance that CONSOL Energy will satisfy its obligations to indemnify us in these situations.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

9 edited+2 added−2 removed5 unchanged
Biggest changeThe cybersecurity team, led by professionals with deep cybersecurity expertise across multiple industries, takes a cross-functional approach to addressing these risks and engages in discussions with the Board of Directors (The Board) and our executive management team accordingly on an as-needed basis. 39 We have developed a written incident response plan (IRP) that delineates the procedures to be followed for handling a variety of cybersecurity incidents; categorizes potential cybersecurity incidents and the required timeframe for reporting each; establishes cybersecurity incident response levels; provides for the conducting of legally privileged investigations to enable us to meet applicable legal obligations, including possible notification requirements; and outlines the roles and responsibilities for various personnel in the event of a cybersecurity incident.
Biggest changeWe have developed a written incident response plan (IRP) that delineates the procedures to be followed for handling a variety of cybersecurity incidents; categorizes potential cybersecurity incidents and the required timeframe for reporting each; establishes cybersecurity incident response levels; provides for the conducting of legally privileged investigations to enable us to meet applicable legal obligations, including possible notification requirements; and outlines the roles and responsibilities for various personnel in the event of a cybersecurity incident.
Notwithstanding the extensive approach we take to cybersecurity, we may not be successful in preventing or mitigating a cybersecurity incident that could have a material adverse effect on us. While CNX maintains cybersecurity insurance, the costs related to cybersecurity threats or incidents may not be fully insured. For more information on our cybersecurity related risks, see Item 1A.
Notwithstanding the approach we take to cybersecurity, we may not be successful in preventing or mitigating a cybersecurity incident that could have a material adverse effect on us. While CNX maintains cybersecurity insurance, the costs related to cybersecurity threats or incidents may not be fully insured. For more information on our cybersecurity related risks, see Item 1A.
The Company has implemented various internal and external controls and processes, including appropriate internal risk assessment and policy implementation, incorporating a risk-based cybersecurity framework to monitor and mitigate security threats and other strategies to increase security for our information, facilities, and infrastructure.
The Company has implemented various internal and external controls and processes, including appropriate internal risk assessment and policy implementation, incorporating a risk-based cybersecurity framework to monitor and mitigate security threats and other strategies designed to increase security for our information, facilities, and infrastructure.
Risk Management and Strategy The Company recognizes the risk that cybersecurity threats pose to our operations, and cybersecurity is an integral component of our overall risk management strategy. We have adopted the U.S. Department of Commerce’s National Institute of Standards and Technology (NIST) Cybersecurity Framework (the Framework) to guide our cybersecurity program.
Risk Management and Strategy The Company recognizes the risk that cybersecurity threats pose to our operations and considers cybersecurity an integral component of our overall risk management strategy. We have adopted the U.S. Department of Commerce’s National Institute of Standards and Technology (NIST) Cybersecurity Framework to guide our cybersecurity program.
ITEM 1C. Cybersecurity Overview CNX maintains a comprehensive cybersecurity program that aims to provide a robust, dynamic, and secure environment that protects the confidentiality, integrity, and availability of data required by our business to be stored, analyzed, transported, and/or processed.
ITEM 1C. Cybersecurity Overview CNX maintains a comprehensive cybersecurity program that aims to protect the confidentiality, integrity, and availability of data required by our business to be stored, analyzed, transported, and/or processed.
The CNX IRP calls for prompt and timely direct notifications and updates to the Board (or its committees) as necessary in connection with any cybersecurity incidents that may occur. On a periodic basis, the Board and the ESCR Committee discuss our approach to cybersecurity with our CIO and Director of Cybersecurity.
The CNX IRP calls for prompt and timely direct notifications and updates to the Board (or its committees) as necessary in connection with potentially significant cybersecurity incidents that may occur. On a periodic basis, the Board and the ESCR Committee discuss our approach to cybersecurity with our Vice President Information and Technology.
Governance The Board, in coordination with the ESCR Committee, is responsible for the oversight of risks from cybersecurity threats. The responsibilities of the ESCR Committee include overseeing policies and management systems for cybersecurity matters and reviewing CNX’s strategy, objectives, and policies relative to cybersecurity.
The responsibilities of the ESCR Committee include overseeing policies and management systems for cybersecurity matters and reviewing CNX’s strategy, objectives, and policies relative to cybersecurity.
CNX leverages substantial technological tools and partners to augment and enable the efforts of its internal cybersecurity team. Separately, management and oversight of the risks from cybersecurity threats associated with our engagement of third-party service providers is currently included in our internal auditing procedures, however, we have plans to further mature these procedures in the current fiscal year.
Separately, management and oversight of the risks from cybersecurity threats associated with our engagement of third-party service providers is currently included in our internal auditing procedures and we have plans to further mature these procedures in the current fiscal year. 41 Governance The Board, in coordination with the ESCR Committee, is responsible for the oversight of risks from cybersecurity threats.
We hold weekly and monthly vulnerability management meetings with our internal technical and business partners and regularly review these procedures to ensure that this vulnerability management program continues to be effective. Third parties also play a role in the Company’s comprehensive approach to cybersecurity and its associated risk management framework.
We hold vulnerability management meetings with our internal technical and business partners and regularly review these procedures. Third parties also play a role in the Company’s cybersecurity processes and its associated risk management framework. CNX leverages substantial technological tools and partners to augment and enable the efforts of its internal cybersecurity team.
Removed
Developed in 2013, the Framework is a voluntary set of standards, guidelines, and best practices designed to help organizations better manage cybersecurity risks. CNX’s cybersecurity team consists of certain of our executive officers as well as dedicated cybersecurity personnel – including without limitation, our Chief Information Officer (CIO), Director of Cybersecurity, and multiple cybersecurity engineers.
Added
CNX’s cybersecurity team includes executive officers and dedicated cybersecurity personnel, such as our Vice President of Information and Technology, who has approximately 30 years of technical leadership and cybersecurity expertise, and multiple cybersecurity engineers.
Removed
Risk Factors of this Annual Report on Form 10-K.
Added
Led by professionals with deep cybersecurity expertise across multiple industries, the team takes a cross-functional approach to addressing risks and engages in discussions with the Board of Directors and executive management as needed.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

7 edited+0 added−2 removed2 unchanged
Biggest changeAny determination to pay dividends in the future will depend upon, among other things, general business conditions, CNX’s financial results, contractual and legal restrictions regarding the payment of dividends by CNX, planned investments by CNX, and other factors as the Board of Directors deems relevant. 41 The Company's Credit Facility currently limits CNX's ability to pay dividends in excess of an annual rate of $0.10 per share when the Company's net leverage ratio exceeds 3.00 to 1.00 and is subject to availability under the Credit Facility of at least 20% of the aggregate commitments and there being no borrowing base deficiency.
Biggest changeThe determination to pay dividends in the future will depend upon, among other things, general business conditions, CNX's financial results, contractual and legal restrictions regarding the payment of dividends by CNX, planned investments by CNX, and such other factors as CNX’s Board of Directors deems relevant.
(2) Shares repurchased as part of the Company's current $2,900 million share repurchase program authorized by the Board of Directors, which is not subject to an expiration date. See Note 5 – Stock Repurchase in the Notes to the Audited Consolidated Financial Statements in Item 8 of this Form 10-K for additional information. See Part III. Item 12.
(2) Shares repurchased as part of the Company's current $2,900 million share repurchase program authorized by CNX’s Board of Directors, which is not subject to an expiration date. See Note 5 – Stock Repurchase in the Notes to the Audited Consolidated Financial Statements in Item 8 of this Form 10-K for additional information. See Part III. Item 12.
ITEM 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The Company's common stock is listed on the New York Stock Exchange under the symbol “CNX”. As of December 31, 2023, there were 84 holders of record of our common stock.
ITEM 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The Company's common stock is listed on the New York Stock Exchange under the symbol “CNX”. As of December 31, 2024, there were 76 holders of record of our common stock.
The current peer group is comprised of CNX, Antero Resources Corporation, Chesapeake Energy Corporation, EQT Corporation, Gulfport Energy Corporation, Range Resources Corporation and Southwestern Energy Co. The graph assumes that the value of the investment in CNX common stock and each index was $100 at December 31, 2018.
The current peer group is comprised of CNX, Antero Resources Corporation, Expand Energy Corporation, EQT Corporation, Gulfport Energy Corporation and Range Resources Corporation. The graph assumes that the value of the investment in CNX common stock and each index was $100 at December 31, 2019.
The graph also assumes that all dividends were reinvested and that the investments were held through December 31, 2023. 2018 2019 2020 2021 2022 2023 CNX Resources Corporation 100.0 77.5 94.6 120.4 147.4 175.2 Peer Group 100.0 52.5 57.4 128.4 191.9 197.4 S&P 500 Stock Index 100.0 128.9 149.9 190.2 153.3 190.4 Cumulative Total Shareholder Return Among CNX Resources Corporation, Peer Group and S&P 500 Stock Index The above information is being furnished pursuant to Regulation S-K, Item 201(e) (Performance Graph).
The graph also assumes that all dividends were reinvested and that the investments were held through December 31, 2024. 2019 2020 2021 2022 2023 2024 CNX Resources Corporation 100.0 122.0 155.3 190.2 226.0 414.5 Peer Group 100.0 107.2 249.0 382.3 388.0 516.4 S&P 500 Stock Index 100.0 116.3 147.6 119.0 147.7 182.2 Cumulative Total Shareholder Return Among CNX Resources Corporation, Peer Group and S&P 500 Stock Index The above information is being furnished pursuant to Regulation S-K, Item 201(e) (Performance Graph).
The determination to declare and pay dividends is made by CNX's Board of Directors. CNX has not paid dividends on its common stock since 2016.
The declaration and payment of dividends by CNX is subject to the discretion of CNX's Board of Directors, and no assurance can be given that CNX will pay dividends in the future. CNX has not paid dividends on its common stock since 2016.
Unregistered Sales of Equity Securities and Use of Proceeds The following table sets forth repurchases of our common stock during the three months ended December 31, 2023: ISSUER PURCHASES OF EQUITY SECURITIES Period Total Number of Shares Purchased (1) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2) Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs (000's omitted) October 1, 2023- October 31, 2023 2,078,116 $22.33 2,077,174 $1,194,118 November 1, 2023- November 30, 2023 1,553,205 $21.25 1,553,205 $1,161,119 December 1, 2023- December 31, 2023 1,643,117 $20.08 1,643,117 $1,128,119 Total 5,274,438 5,273,496 (1) Includes shares withheld from employees to satisfy minimum tax withholding obligations associated with the vesting of restricted stock during the period.
In addition, CNX’s ability to pay dividends is limited by the covenants governing the CNX Credit Facility and the indentures governing certain of CNX’s Senior Notes. 43 Purchases of Equity Securities by the Issuer The following table sets forth repurchases of our common stock during the three months ended December 31, 2024: ISSUER PURCHASES OF EQUITY SECURITIES Period Total Number of Shares Purchased (1) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2) Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs (000's omitted) October 1, 2024- October 31, 2024 600,064 $34.99 600,064 $951,003 November 1, 2024- November 30, 2024 — — — $951,003 December 1, 2024- December 31, 2024 2,721 $36.25 — $951,003 Total 602,785 600,064 (1) Includes shares of common stock withheld from employees to satisfy minimum tax withholding obligations associated with the vesting of restricted stock during the period.
Removed
The Credit Facility does not permit such dividend payments when an event of default has occurred and is continuing. The indentures to the 7.25% Senior Notes due March 2027, the 6.00% Senior Notes due January 2029, and the 7.375% Senior Notes due January 2031 limit dividends to $0.50 per share annually unless several conditions are met.
Removed
These conditions include no defaults, ability to incur additional debt and other payment limitations under the indentures. There were no defaults under the Company’s Credit Facility or Notes in the year ended December 31, 2023.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

112 edited+29 added−38 removed55 unchanged
Biggest changeThese decreases were offset, in-part, by the impact of the change in the gain (loss) on commodity derivative instruments - cash settlement related to the Company's hedging program. 47 SEGMENT ANALYSIS for the year ended December 31, 2023 compared to the year ended December 31, 2022: For the Year Ended Difference to Year Ended December 31, 2023 December 31, 2022 (in millions) Shale CBM Other Total Shale CBM Other Total Natural Gas, NGLs and Oil Revenue $ 1,170 $ 131 $ 1 $ 1,302 $ (2,165) $ (184) $ (1) $ (2,350) Gain on Commodity Derivative Instruments 151 12 1,765 1,928 1,824 151 2,617 4,592 Purchased Gas Revenue — — 75 75 — — (111) (111) Other Revenue and Operating Income 67 — 63 130 (2) — 45 43 Total Revenue and Other Operating Income 1,388 143 1,904 3,435 (343) (33) 2,550 2,174 Lease Operating Expense 44 19 — 63 (6) 2 — (4) Production, Ad Valorem, and Other Fees 21 7 — 28 (12) (5) — (17) Transportation, Gathering and Compression 316 66 — 382 (3) 17 (2) 12 Depreciation, Depletion and Amortization 365 50 19 434 (24) (4) 1 (27) Exploration and Production Related Other Costs — — 10 10 — — 2 2 Purchased Gas Costs — — 70 70 — — (115) (115) Selling, General and Administrative Costs — — 125 125 — — 3 3 Other Operating Expense — — 80 80 — — 17 17 Total Operating Costs and Expenses 746 142 304 1,192 (45) 10 (94) (129) Other Expense — — 9 9 — — (1) (1) Gain on Asset Sales and Abandonments, net — — (132) (132) — — (123) (123) Loss on Debt Extinguishment — — — — — — (23) (23) Interest Expense — — 143 143 — — 15 15 Total Other Expenses — — 20 20 — — (132) (132) Total Costs and Expenses 746 142 324 1,212 (45) 10 (226) (261) Earnings Before Income Tax $ 642 $ 1 $ 1,580 $ 2,223 $ (298) $ (43) $ 2,776 $ 2,435 48 SHALE SEGMENT The Shale segment had earnings before income tax of $642 million for the year ended December 31, 2023 compared to earnings before income tax of $940 million for the year ended December 31, 2022.
Biggest changeThese increases were offset, in-part, by the $0.22 per Mcf decrease in natural gas sales price, when excluding the impact of hedging, and the 17.7 Bcf decrease in natural gas sales volume. 49 SEGMENT ANALYSIS for the year ended December 31, 2024 compared to the year ended December 31, 2023: For the Year Ended Difference to Year Ended December 31, 2024 December 31, 2023 (in millions) Shale CBM Other Total Shale CBM Other Total Natural Gas, NGLs and Oil Revenue $ 1,080 $ 105 $ 1 $ 1,186 $ (90) $ (26) $ — $ (116) Gain (Loss) on Commodity Derivative Instruments 260 21 (453) (172) 109 9 (2,218) (2,100) Purchased Gas Revenue — — 59 59 — — (16) (16) Other Revenue and Operating Income 68 — 126 194 1 — 63 64 Total Revenue (Loss) and Other Operating Income 1,408 126 (267) 1,267 20 (17) (2,171) (2,168) Lease Operating Expense 48 22 — 70 4 3 — 7 Production, Ad Valorem, and Other Fees 22 6 — 28 1 (1) — — Transportation, Gathering and Compression 316 64 2 382 — (2) 2 — Depreciation, Depletion and Amortization 405 60 21 486 40 10 2 52 Exploration and Production Related Other Costs — — 8 8 — — (2) (2) Purchased Gas Costs — — 57 57 — — (13) (13) Selling, General and Administrative Costs — — 146 146 — — 21 21 Other Operating Expense — — 83 83 — — 3 3 Total Operating Costs and Expenses 791 152 317 1,260 45 10 13 68 Other (Income) Expense — — (6) (6) — — (15) (15) Gain on Asset Sales and Abandonments, net — — (25) (25) — — 107 107 Loss on Debt Extinguishment — — 7 7 — — 7 7 Interest Expense — — 151 151 — — 8 8 Total Other Expenses — — 127 127 — — 107 107 Total Costs and Expenses 791 152 444 1,387 45 10 120 175 Earnings (Loss) Before Income Tax $ 617 $ (26) $ (711) $ (120) $ (25) $ (27) $ (2,291) $ (2,343) 50 SHALE SEGMENT The Shale segment had earnings before income tax of $617 million for the year ended December 31, 2024 compared to earnings before income tax of $642 million for the year ended December 31, 2023.
The determination to pay dividends in the future will depend upon, among other things, general business conditions, CNX's financial results, contractual and legal restrictions regarding the payment of dividends by CNX, planned investments by CNX, and such other factors as the Board of Directors deems relevant.
The determination to pay dividends in the future will depend upon, among other things, general business conditions, CNX's financial results, contractual and legal restrictions regarding the payment of dividends by CNX, planned investments by CNX, and such other factors as CNX’s Board of Directors deems relevant.
This discussion contains forward‑looking statements that are based on the views and beliefs of management, as well as assumptions and estimates made by management. Actual results could differ materially from such forward‑looking statements as a result of various risk factors, including those that may not be in the control of management.
This discussion contains forward‑looking statements that are based on the views and beliefs of management, as well as assumptions and estimates made by management. Actual results could differ materially from any such forward‑looking statements as a result of various risk factors, including those that may not be in the control of management.
Payment of the principal and interest on the notes is guaranteed by most of CNX's subsidiaries but does not include CNXM (or its subsidiaries or general partner). • An aggregate principal amount of $400 million of 4.75% Senior Notes due April 2030 issued by CNXM, less $4 million of unamortized discount.
Payment of the principal and interest on the notes is guaranteed by most of CNX’s subsidiaries but does not include CNXM (or its subsidiaries or general partner). • An aggregate principal amount of $400 million of 4.75% Senior Notes due April 2030 issued by CNXM, less $3 million of unamortized discount.
Critical Accounting Policies The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make judgments, estimates and assumptions that affect reported amounts of assets and liabilities, revenues and expenses and related disclosure of contingent assets and liabilities in the Consolidated Financial Statements and at the date of the financial statements.
Critical Accounting Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make judgments, estimates and assumptions that affect reported amounts of assets and liabilities, revenues and expenses and related disclosure of contingent assets and liabilities in the Consolidated Financial Statements and at the date of the financial statements.
There can be no assurance that additional capital resources, including debt and equity financing, will be available to CNX on terms which CNX finds acceptable, or at all. Factors that may Impact our Liquidity • The Company’s cash on hand and access to additional liquidity.
There can be no assurance that additional capital resources, including debt and equity financing, will be available to CNX on terms which CNX finds acceptable, or at all. 57 Factors that may Impact our Liquidity • The Company’s cash on hand and access to additional liquidity.
Interest on the notes 57 is payable May 1 and November 1 of each year. Payment of the principal and interest on the notes is guaranteed by most of CNX's subsidiaries but does not include CNXM (or its subsidiaries or general partner).
Interest on the notes is payable May 1 and November 1 of each year. Payment of the principal and interest on the notes is guaranteed by most of CNX's subsidiaries but does not include CNXM (or its subsidiaries or general partner).
Changes in assumptions concerning future financial results or other underlying assumptions 60 could have a significant impact on either the fair value of the reporting unit, the amount of any goodwill impairment charge, or both.
Changes in assumptions concerning future financial results or other underlying assumptions could have a significant impact on either the fair value of the reporting unit, the amount of any goodwill impairment charge, or both.
CNX uses a combination of surety bonds, corporate guarantees and letters of credit to secure the Company's financial obligations for employee-related, environmental, performance and various other items which are not reflected in the Consolidated Balance Sheet at December 31, 2023. Management believes these items will expire without being funded.
CNX uses a combination of surety bonds, corporate guarantees and letters of credit to secure the Company's financial obligations for employee-related, environmental, performance and various other items which are not reflected in the Consolidated Balance Sheet at December 31, 2024. Management believes these items will expire without being funded.
Payment of the principal and interest on the notes is guaranteed by most of CNX's subsidiaries but does not include CNXM (or its subsidiaries or general partner). • An aggregate principal amount of $331 million of 2.25% Convertible Senior Notes due May 2026, unless earlier redeemed, repurchased, or converted, less $5 million of unamortized discount and issuance costs.
Payment on the principal and interest on the notes is guaranteed by most of CNX's subsidiaries but does not include CNXM (or its subsidiaries or general partner). • An aggregate principal amount of $331 million of 2.25% Convertible Senior Notes due May 2026, unless earlier redeemed, repurchased, or converted, less $3 million of unamortized discount and issuance costs.
A similar discussion and analysis that compares year ended December 31, 2022 to the fiscal year ended December 31, 2021 is omitted from this Form 10-K and may be found in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” of our Form 10-K for the year ended December 31, 2022, which is incorporated herein by reference.
A similar discussion and analysis that compares year ended December 31, 2023 to the fiscal year ended December 31, 2022 is omitted from this Form 10-K and may be found in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” of our Form 10-K for the year ended December 31, 2023, which is incorporated herein by reference.
The effective tax rates for the years ended December 31, 2023 and 2022 differ from the U.S. federal statutory rate of 21% primarily due to federal tax credits, state income taxes including tax rate changes, equity compensation, and the impact of changes in certain state deferred tax asset valuation allowances.
The effective tax rates for the years ended December 31, 2024 and 2023 differ from the U.S. federal statutory rate of 21% primarily due to federal tax credits, state income taxes including tax rate changes, equity compensation, and the impact of changes in certain state deferred tax asset valuation allowances.
Actual results could differ from those estimates upon the subsequent resolution of identified matters. Management believes that the estimates utilized are reasonable. The following critical accounting policies are materially impacted by judgments, assumptions and estimates used in the preparation of the Consolidated Financial Statements.
Actual results could differ from those estimates upon the subsequent resolution of identified matters. Management believes that the estimates utilized are reasonable. The following critical 60 accounting estimates are materially impacted by judgments, assumptions and estimates used in the preparation of the Consolidated Financial Statements.
For the Company’s annual impairment assessment during the fourth quarter of 2023, the Company elected to perform a qualitative impairment test on its goodwill and concluded that it is more likely than not that the fair value exceeded the carrying value and goodwill was not impaired.
For the Company’s annual impairment assessment during the fourth quarter of 2024, the Company elected to perform a qualitative impairment test on its goodwill and concluded that it is more likely than not that the fair value exceeded the carrying value and goodwill was not impaired.
See Note 12 – Long-Term Debt in the Notes to the Audited Consolidated Financial Statements in Item 8 of this Form 10-K for additional information. No such transactions occurred in the current period.
See Note 12 – Long-Term Debt in the Notes to the Audited Consolidated Financial Statements in Item 8 of this Form 10-K for additional information. No such transactions occurred in the prior period.
If market conditions were to change, for instance due to a significant decline in commodity prices, and our revenue was reduced significantly or operating costs were to increase significantly, our cash flows and liquidity could be reduced. As of December 31, 2023, CNX was in compliance with all of its debt covenants.
If market conditions were to change, for instance due to a significant decline in commodity prices, and our revenue was reduced significantly or operating and capital costs were to increase significantly, our cash flows and liquidity could be reduced. As of December 31, 2024, CNX was in compliance with all of its debt covenants.
Recent Accounting Pronouncements See Note 1 – Significant Accounting Policies in the Notes to the Audited Consolidated Financial Statements in Item 8 of this Form 10-K for a summary of recent accounting pronouncements. 61
Recent Accounting Pronouncements See Note 1 – Significant Accounting Policies in the Notes to the Audited Consolidated Financial Statements in Item 8 of this Form 10-K for a summary of recent accounting pronouncements. 63
Interest on the notes is payable January 15 and July 15 of each year.
Interest on the notes is payable January 15 and July 15 each year.
Total operating costs and expenses for the Shale segment were $746 million for the year ended December 31, 2023 compared to $791 million for the year ended December 31, 2022.
Total operating costs and expenses for the Shale segment were $791 million for the year ended December 31, 2024 compared to $746 million for the year ended December 31, 2023.
Purchased Gas Revenue and Costs Purchased gas volumes represent volumes of natural gas purchased at market prices from third parties and then resold in order to fulfill contracts with certain customers and to balance supply. Purchased gas revenue was $75 million for the year ended December 31, 2023 compared to $186 million for the year ended December 31, 2022.
Purchased Gas Revenue and Costs Purchased gas volumes represent volumes of natural gas purchased at market prices from third parties and then resold in order to fulfill contracts with certain customers and to balance supply. Purchased gas revenue was $59 million for the year ended December 31, 2024 compared to $75 million for the year ended December 31, 2023.
For the year ended December 31, 2023, CNX had production volumes of 560.4 Bcfe. • Prices for natural gas and NGLs are volatile, and an extended decline in the prices we receive for our natural gas and NGLs will adversely affect our financial condition and cash flows. • In order to manage the market risk exposure of volatile natural gas prices in the future, CNX enters into various physical natural gas supply transactions with both gas marketers and end users for terms varying in length.
For the year ended December 31, 2024, CNX had production volumes of 550.8 Bcfe. • Prices for natural gas and NGLs are volatile, and an extended decline in the prices we receive for our natural gas and NGLs will adversely affect our financial condition and cash flows. • In order to manage the market risk exposure of volatile natural gas prices in the future, CNX enters into various physical natural gas supply transactions with both gas marketers and end users for terms varying in length.
Although these are not measures of performance calculated in accordance with generally accepted accounting principles (GAAP), management believes that these financial measures are useful to an investor in evaluating CNX because these metrics are widely used to evaluate a natural gas company’s operating performance.
Although these are not measures of performance calculated in accordance with GAAP, management believes that these financial measures are useful to an investor in evaluating CNX because these metrics are widely used to evaluate a natural gas company’s operating performance.
The decreases in total dollars and unit costs were primarily due to decreased realized prices on natural gas. • CBM transportation, gathering and compression costs were $66 million for the year ended December 31, 2023 compared to $49 million for the year ended December 31, 2022.
The decreases in total dollars and unit costs were primarily due to decreased realized prices on natural gas. • CBM transportation, gathering and compression costs were $64 million for the year ended December 31, 2024 compared to $66 million for the year ended December 31, 2023.
The Company has not experienced any issues of non-performance by derivative counterparties. See Item 7A., “Quantitative and Qualitative Disclosures About Market Risk” for further discussion of our commodity risk management.
The Company has not experienced any issues of non-performance by derivative counterparties. See Item 7A., “Quantitative and Qualitative Disclosures About Market Risk” of this Form 10-K for further discussion of our commodity risk management.
CNX also enters into various financial natural gas and NGL swap transactions to manage the market risk exposure to in-basin and out-of-basin pricing. The fair value of these contracts was a net liability of $56 million at December 31, 2023 and a net liability of $1,905 million at December 31, 2022.
CNX also enters into various financial natural gas and NGL swap transactions to manage the market risk exposure to in-basin and out-of-basin pricing. The fair value of these contracts was a net liability of $536 million at December 31, 2024 and a net liability of $56 million at December 31, 2023.
Risk Factors" of this Form 10-K. 44 Results of Operations: The following discussion and analysis of our Results of Operations and Liquidity and Capital Resources includes a comparison of the year ended December 31, 2023 to the year ended December 31, 2022.
Risk Factors" of this Form 10-K. 46 Results of Operations: The following discussion and analysis of our Results of Operations and Liquidity and Capital Resources includes a comparison of the year ended December 31, 2024 to the year ended December 31, 2023.
Our accounts and notes receivable balance may fluctuate as of any balance sheet date depending on the prices we receive for our natural gas and NGLs and the volumes sold. • Capital expenditures are expected to range between $575 million to $625 million for the year ended December 31, 2024.
Our accounts and notes receivable balance may fluctuate as of any balance sheet date depending on the prices we receive for our natural gas and NGLs and the volumes sold. • Capital expenditures are expected to range between $450 million to $500 million for the year ended December 31, 2025.
Interest on the notes is payable March 14 and September 14 of each year.
Interest on the notes is payable March 1 and September 1 of each year.
The increase in unit costs was due to the decrease in total Shale sales volumes. • Depreciation, depletion and amortization costs attributable to the Shale segment were $365 million for the year ended December 31, 2023 compared to $389 million for the year ended December 31, 2022.
The increase in unit costs was due to the decrease in total Shale sales volumes. 51 • Depreciation, depletion and amortization costs attributable to the Shale segment were $405 million for the year ended December 31, 2024 compared to $365 million for the year ended December 31, 2023.
It also includes the Company's purchased gas activities, unrealized gain or loss on commodity derivative instruments, New Technologies, exploration and production related other costs, as well as various other expenses that are managed outside the Shale and CBM segments such as SG&A, interest expense and income taxes.
It also includes the Company's purchased gas activities, unrealized gain or loss on commodity derivative instruments, New Technologies, exploration and production related other costs, as well as various other expenses that are managed outside the Shale and CBM segments such as selling, general and administrative (“SG&A”), interest expense and income taxes.
Gain on Asset Sales and Abandonments, net A net gain on asset sales of $132 million was recognized in the year ended December 31, 2023 compared to a gain of $9 million in the year ended December 31, 2022.
Gain on Asset Sales and Abandonments, net A net gain on asset sales of $25 million was recognized in the year ended December 31, 2024, compared to a gain of $132 million in the year ended December 31, 2023.
Exploration and Production Related Other Costs For the Years Ended December 31, (in millions) 2023 2022 Variance Percent Change Lease Expiration Costs $ 6 $ 1 $ 5 500.0 % Land Rentals 4 4 — — % Seismic Activity — 3 (3) (100.0) % Total Exploration and Production Related Other Costs $ 10 $ 8 $ 2 25.0 % • Lease expiration costs relate to leases where the primary term expired or will expire within the next 12 months.
Exploration and Production Related Other Costs For the Years Ended December 31, (in millions) 2024 2023 Variance Percent Change Lease Expiration Costs $ 4 $ 6 $ (2) (33.3) % Land Rentals 3 4 (1) (25.0) % Other Expense 1 — 1 100.0 % Total Exploration and Production Related Other Costs $ 8 $ 10 $ (2) (20.0) % • Lease expiration costs relate to leases where the primary term expired or will expire within the next 12 months.
Total operating costs and expenses for the CBM segment were $142 million for the year ended December 31, 2023 compared to $132 million for the year ended December 31, 2022.
Total operating costs and expenses for the CBM segment were $152 million for the year ended December 31, 2024 compared to $142 million for the year ended December 31, 2023.
The Other Segment had earnings before income tax of $1,580 million for the year ended December 31, 2023 compared to a loss before income tax of $1,196 million for the year ended December 31, 2022. The increase in total dollars is discussed below.
The Other Segment had a loss before income tax of $711 million for the year ended December 31, 2024 compared to earnings before income tax of $1,580 million for the year ended December 31, 2023. The decrease in total dollars is discussed below.
The Shale segment had natural gas, NGLs and oil/condensate revenue of $1,170 million for the year ended December 31, 2023 compared to $3,335 million for the year ended December 31, 2022.
The Shale segment had natural gas, NGLs and oil/condensate revenue of $1,080 million for the year ended December 31, 2024 compared to $1,170 million for the year ended December 31, 2023.
Net Income (Loss) CNX reported net income of $1,721 million, or earnings per diluted share of $8.99, for the year ended December 31, 2023, compared to a net loss of $142 million, or a loss per diluted share of $0.75, for the year ended December 31, 2022.
Net (Loss) Income CNX reported a net loss of $90 million, or a loss per diluted share of $0.60, for the year ended December 31, 2024, compared to net income of $1,721 million, or earnings per diluted share of $8.99, for the year ended December 31, 2023.
The notional amounts associated with these financial hedges represented approximately 399.2 Bcf of the Company's produced Shale gas sales volumes for the year ended December 31, 2023 at an average gain of $0.37 per Mcf hedged. For the year ended December 31, 2022, these financial hedges represented approximately 424.7 Bcf at an average loss of $3.94 per Mcf hedged.
The notional amounts associated with these financial hedges represented approximately 389.7 Bcf of the Company's produced Shale gas sales volumes for the year ended December 31, 2024 at an average gain of $0.67 per Mcf hedged. For the year ended December 31, 2023, these financial hedges represented approximately 399.2 Bcf at an average gain of $0.37 per Mcf hedged.
In addition, the Company must determine the estimated undiscounted future cash flows as well as the impact of commodity price outlooks.
In addition, when indicators are identified the Company must determine the estimated undiscounted future cash flows as well as the impact of commodity price outlooks.
For the year ended December 31, 2023, CNX had $41 million of sales of environmental attributes which includes items such as (but is not limited to): carbon credits, air quality credits, renewable or alternative energy credits, methane capture credits, methane performance certificates, emission reductions, offsets and/or allowances.
New Technologies Update For the years ended December 31, 2024 and 2023, CNX recognized $95 million and $41 million of sales of environmental attributes which includes items such as (but is not limited to): carbon credits, air quality credits, renewable or alternative energy credits, methane capture credits, methane performance certificates, emission reductions, offsets and/or allowances.
If it is determined that the properties will not yield proved reserves, the related costs are expensed in the period the determination is made. There were no impairments related to unproved properties in the years ended December 31, 2023 or 2022.
If it is determined that the properties will not yield proved reserves, the related costs are expensed in the period the determination is made. There were no indicators of impairment related to the Company’s unproved properties in the years ended December 31, 2024 or 2023.
The decreases in total dollars and unit costs for the Shale segment were due to the following items: • Shale lease operating expenses were $44 million for the year ended December 31, 2023 compared to $50 million for the year ended December 31, 2022.
The increases in total dollars and unit costs for the Shale segment were due to the following items: • Shale lease operating expenses were $48 million for the year ended December 31, 2024 compared to $44 million for the year ended December 31, 2023.
For the Years Ended December 31, 2023 2022 Variance Percent Change Other Gas Sales Volumes (Bcf) 0.3 0.4 (0.1) (25.0) % Unrealized Gain (Loss) on Commodity Derivative Instruments For the year ended December 31, 2023, the Other Segment recognized an unrealized gain on commodity derivative instruments of $1,765 million.
For the Years Ended December 31, 2024 2023 Variance Percent Change Other Gas Sales Volumes (Bcf) 0.3 0.3 — — % (Loss) Gain on Commodity Derivative Instruments - Unrealized For the year ended December 31, 2024, the Other Segment recognized an unrealized loss on commodity derivative instruments of $453 million.
Included in the loss for the year ended December 31, 2022 was an unrealized loss on commodity derivative instruments of $851 million and a net gain on asset sales and abandonments of $9 million.
Included in the net loss for the year ended December 31, 2024 was an unrealized loss on commodity derivative instruments of $453 million and a net gain on asset sales and abandonments of $25 million.
The $184 million decrease was primarily due to a 55.3% decrease in the average sales price for natural gas in the current period and a 7.1% decrease in CBM gas sales volumes due to normal production declines.
The $26 million decrease was primarily due to a 16.5% decrease in the average sales price for natural gas in the current period and a 3.7% decrease in CBM gas sales volumes due to normal production declines.
The quantities and types of environmental attributes we sell and the associated revenue can vary depending on a number of factors, including the market for these credits, changes to the various voluntary or compliance programs under which the credits are generated and sold, and our ability to strictly comply with the programs under which the attributes can be sold. • Excess firm transportation income represents revenue from the sale of excess firm transportation capacity to third parties.
The quantities and types of environmental attributes we sell and the associated revenue can vary depending on a number of factors, including the market for these credits, changes to the various voluntary or compliance programs under which the credits are generated and sold, and our ability to strictly comply with the programs under which the attributes can be sold.
The net gain during the year ended December 31, 2023 primarily relates to the sale of various non-operated oil and gas assets (See Note 4 – Acquisitions and Dispositions in the Notes to the Audited Consolidated Financial Statements in Item 8 of this Form 10-K for additional information).
The net gain during the year ended December 31, 2023 primarily relates to a $100 million gain on the sale of various non-operated producing oil and gas assets primarily located in the Appalachian Basin to a third party (See Note 4 – Acquisitions and Dispositions in the Notes to the Audited Consolidated Financial Statements in Item 8 of this Form 10-K for additional information).
For the year ended December 31, 2022, the Other Segment recognized an unrealized loss on commodity derivative instruments of $851 million, as well as cash settlements paid of $1 million. The unrealized gain or loss on commodity derivative instruments represents changes in the fair value of all the Company's existing commodity hedges on a mark-to-market basis.
For the year ended December 31, 2023, the Other Segment recognized an unrealized gain on commodity derivative instruments of $1,765 million. The unrealized loss or gain on commodity derivative instruments represents changes in the fair value of all the Company's existing commodity hedges on a mark-to-market basis.
The increases in total dollars and unit costs for the CBM segment were due to the following items: 50 • CBM lease operating expense was $19 million for the year ended December 31, 2023 compared to $17 million for the year ended December 31, 2022.
The increase in total dollars and unit costs for the CBM segment were due to the following items: • CBM lease operating expense was $22 million for the year ended December 31, 2024 compared to $19 million for the year ended December 31, 2023.
However, this market volatility is beyond our control and may adversely impact our business, financial condition, results of operations and future cash flows. Inflation Heightened levels of inflation, primarily related to steel, diesel fuel and labor, continue to present risk for CNX and the broader natural gas industry.
However, this market volatility is beyond our control and may adversely impact our business, financial condition, results of operations and future cash flows. Inflation The inflationary environment over the last few years, primarily related to steel, diesel fuel and labor, continues to present risk for CNX and the broader natural gas industry.
CNX currently believes that cash generated from operations, asset sales and the Company's borrowing capacity will be sufficient to meet the Company's working capital requirements, anticipated capital expenditures (other than major acquisitions), scheduled debt payments, anticipated dividend payments, if any, and to provide required letters of credit for the current fiscal year.
CNX currently believes that cash generated from operations, asset sales and the Company's borrowing capacity will be sufficient to meet the Company's working capital requirements, anticipated capital expenditures (other than major acquisitions), scheduled debt payments, anticipated dividend payments, if any, and to provide required letters of credit for at least the next twelve months and the foreseeable future thereafter.
At December 31, 2023, prior to consideration of valuation allowances on deferred tax assets, CNX had deferred tax liabilities in excess of deferred tax assets of approximately $690 million. At December 31, 2023, CNX had a valuation allowance of $39 million on deferred tax assets.
At December 31, 2024, prior to consideration of valuation allowances on deferred tax assets, CNX had deferred tax liabilities in excess of deferred tax assets of approximately $659 million. At December 31, 2024, CNX had a valuation allowance of $37 million on deferred tax assets.
The Company groups its assets by geological and geographical characteristics. If the carrying amount exceeds the estimated undiscounted future cash flows, a reduction of the carrying amount of the natural gas properties to their estimated fair values is required, which is 59 determined based on discounted cash flow techniques using a market-specific weighted average cost of capital.
If the carrying amount exceeds the estimated undiscounted future cash flows, a reduction of the carrying amount of the natural gas properties to their estimated fair values is required, which is determined based on discounted cash flow techniques using a market-specific weighted average cost of capital.
Interest on the notes is payable April 15 and October 15 of each year. Payment on the principal and interest on the notes is guaranteed by certain of CNXM's subsidiaries. CNX is not a guarantor of these notes. • An aggregate principal amount of $350 million of 7.25% Senior Notes due March 2027 plus $2 million of unamortized premium.
Interest on the notes is payable April 15 and October 15 of each year. Payment on the principal and interest on the notes is guaranteed by certain of CNXM's subsidiaries. CNX is not a guarantor of these notes. • An aggregate principal amount of $400 million of 7.25% Senior Notes due March 2032 less $4 million of unamortized discount.
There were no impairments related to proved properties in the years ended December 31, 2023 or 2022. CNX evaluates capitalized costs of unproved gas properties for recoverability on a prospective basis.
There were no indicators of impairment related to the Company's proved oil and gas properties in the years ended December 31, 2024 or 2023. CNX evaluates capitalized costs of unproved gas properties for recoverability on a prospective basis.
In addition, because all companies do not calculate these measures identically, these measures may not be comparable to similarly titled measures of other companies. 45 Non-GAAP Financial Measures Reconciliation For the Years Ended December 31, (Dollars in millions) 2023 2022 Total Revenue and Other Operating Income $ 3,435 $ 1,261 (Deduct) Add: Purchased Gas Revenue (75) (186) (Gain) Loss on Commodity Derivative Instruments (1,765) 851 Other Revenue and Operating Income (130) (87) Sales of Natural Gas, NGL and Oil, including Cash Settlements, a Non-GAAP Financial Measure $ 1,465 $ 1,839 Total Operating Expense $ 1,192 $ 1,321 (Deduct): Depreciation, Depletion and Amortization (DD&A) - Corporate (14) (13) Exploration and Production Related Other Costs (10) (8) Purchased Gas Costs (70) (185) Selling, General and Administrative Costs (125) (122) Other Operating Expense (80) (63) Natural Gas, NGL and Oil Production Costs, a Non-GAAP Financial Measure 1 $ 893 $ 930 1 Natural Gas, NGL and Oil production costs consists primarily of lease operating expense, production ad valorem and other fees, transportation, gathering and compression and production related depreciation, depletion and amortization.
In addition, because all companies do not calculate these measures identically, these measures may not be comparable to similarly titled measures of other companies. 47 Non-GAAP Financial Measures Reconciliation For the Years Ended December 31, (Dollars in millions) 2024 2023 Total Revenue and Other Operating Income $ 1,267 $ 3,435 (Deduct) Add: Purchased Gas Revenue (59) (75) Loss (Gain) on Commodity Derivative Instruments - Unrealized 453 (1,765) Other Revenue and Operating Income (194) (130) Sales of Natural Gas, NGL and Oil, including Cash Settlements, a Non-GAAP Financial Measure $ 1,467 $ 1,465 Total Operating Expense $ 1,260 $ 1,192 (Deduct): Depreciation, Depletion and Amortization (DD&A) - Corporate (16) (14) Exploration and Production Related Other Costs (8) (10) Purchased Gas Costs (57) (70) Selling, General and Administrative Costs (146) (125) Other Operating Expense (83) (80) Natural Gas, NGL and Oil Production Costs, a Non-GAAP Financial Measure 1 $ 950 $ 893 1 Natural Gas, NGL and Oil production costs consists primarily of lease operating expense, production ad valorem and other fees, transportation, gathering and compression and production related depreciation, depletion and amortization.
The notional amounts associated with these financial hedges represented approximately 31.9 Bcf of the Company's produced CBM gas sales volumes for the year ended December 31, 2023 at an average gain of $0.36 per Mcf hedged. For the year ended December 31, 2022, these financial hedges represented approximately 35.5 Bcf at an average loss of $3.92 per Mcf hedged.
The notional amounts associated with these financial hedges represented approximately 30.6 Bcf of the Company's produced CBM gas sales volumes for the year ended December 31, 2024 at an average gain of $0.67 per Mcf hedged. For the year ended December 31, 2023, these financial hedges represented approximately 31.9 Bcf at an average gain of $0.36 per Mcf hedged.
If inflation continues at its current levels or increases further for any extended period of time, and CNX is unable to successfully mitigate the impact, our costs could increase further, thus having a greater impact on our financial position.
If inflation were to increase materially for any extended period of time, and CNX is unable to successfully mitigate the impact, our costs could increase further, thus having a greater impact on our financial position.
For the Years Ended December 31, 2023 2022 Variance Percent Change Shale Gas Sales Volumes (Bcf) 473.8 496.7 (22.9) (4.6) % NGLs Sales Volumes (Bcfe)* 44.5 38.0 6.5 17.1 % Oil/Condensate Sales Volumes (Bcfe)* 1.2 1.4 (0.2) (14.3) % Total Shale Sales Volumes (Bcfe)* 519.5 536.1 (16.6) (3.1) % Average Sales Price - Gas (per Mcf) $ 2.11 $ 6.19 $ (4.08) (65.9) % Gain (Loss) on Commodity Derivative Instruments - Cash Settlement (per Mcf) $ 0.32 $ (3.37) $ 3.69 109.5 % Average Sales Price - NGLs (per Mcfe)* $ 3.54 $ 6.36 $ (2.82) (44.3) % Average Sales Price - Oil/Condensate (per Mcfe)* $ 10.95 $ 13.63 $ (2.68) (19.7) % Total Average Shale Sales Price (per Mcfe) $ 2.54 $ 3.10 $ (0.56) (18.1) % Average Shale Lease Operating Expenses (per Mcfe) 0.08 0.09 (0.01) (11.1) % Average Shale Production, Ad Valorem and Other Fees (per Mcfe) 0.04 0.07 (0.03) (42.9) % Average Shale Transportation, Gathering and Compression Costs (per Mcfe) 0.61 0.60 0.01 1.7 % Average Shale Depreciation, Depletion and Amortization Costs (per Mcfe) 0.70 0.72 (0.02) (2.8) % Total Average Shale Production Costs (per Mcfe) $ 1.43 $ 1.48 $ (0.05) (3.4) % Total Average Shale Production Margin (per Mcfe) $ 1.11 $ 1.62 $ (0.51) (31.5) % *NGLs and Oil/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.
For the Years Ended December 31, 2024 2023 Variance Percent Change Shale Gas Sales Volumes (Bcf) 457.5 473.8 (16.3) (3.4) % NGLs Sales Volumes (Bcfe)* 53.0 44.5 8.5 19.1 % Oil/Condensate Sales Volumes (Bcfe)* 0.9 1.2 (0.3) (25.0) % Total Shale Sales Volumes (Bcfe)* 511.4 519.5 (8.1) (1.6) % Average Sales Price - Gas (per Mcf) $ 1.92 $ 2.11 $ (0.19) (9.0) % Gain on Commodity Derivative Instruments - Cash Settlement (per Mcf) $ 0.57 $ 0.32 $ 0.25 78.1 % Average Sales Price - NGLs (per Mcfe)* $ 3.60 $ 3.54 $ 0.06 1.7 % Average Sales Price - Oil/Condensate (per Mcfe)* $ 10.23 $ 10.95 $ (0.72) (6.6) % Total Average Shale Sales Price (per Mcfe) $ 2.62 $ 2.54 $ 0.08 3.1 % Average Shale Lease Operating Expenses (per Mcfe) 0.09 0.08 0.01 12.5 % Average Shale Production, Ad Valorem and Other Fees (per Mcfe) 0.04 0.04 — — % Average Shale Transportation, Gathering and Compression Costs (per Mcfe) 0.62 0.61 0.01 1.6 % Average Shale Depreciation, Depletion and Amortization Costs (per Mcfe) 0.80 0.70 0.10 14.3 % Total Average Shale Production Costs (per Mcfe) $ 1.55 $ 1.43 $ 0.12 8.4 % Total Average Shale Production Margin (per Mcfe) $ 1.07 $ 1.11 $ (0.04) (3.6) % *NGLs and Oil/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 total average CBM sales price decreased $0.50 per Mcf due to a $3.98 per Mcf decrease in average gas sales price, offset in part by a $3.46 per Mcf change in the realized gain (loss) on commodity derivative instruments resulting from the Company's hedging program.
The total average CBM sales price decreased $0.30 per Mcf due to a $0.53 per Mcf decrease in average gas sales price, offset, in part, by a $0.25 per Mcf change in the gain on commodity derivative instruments - cash settlement resulting from the Company's hedging program.
See Note 12 – Long-Term Debt in the Notes to the Audited Consolidated Financial Statements in Item 8 of this Form 10-K for additional information. • During the year ended December 31, 2022, CNX paid $359 million to repurchase $350 million of CNX 7.25% Senior Notes due March 2027 at 102.5% of the principal amount.
See Note 12 – Long-Term Debt in the 58 Notes to the Audited Consolidated Financial Statements in Item 8 of this Form 10-K for additional information. • During the year ended December 31, 2024, CNX issued $400 million aggregate principal amount of CNX 7.25% Senior Notes due March 2032 at par.
Purchased gas costs were $70 million for the year ended December 31, 2023 compared to $185 million for the year ended December 31, 2022. The period-to-period decrease in purchased gas revenue was due to a decrease in average sales price, offset in part by an increase in purchased gas sales volumes.
Purchased gas costs were $57 million for the year ended December 31, 2024 compared to $70 million for the year ended December 31, 2023. The period-to-period decrease in purchased gas revenue was due to a decrease in average sales price.
For the Years Ended December 31, 2023 2022 Variance Percent Change Purchased Gas Sales Volumes (in Bcf) 31.1 30.7 0.4 1.3 % Purchased Gas Average Sales Price (per Mcf) $ 2.39 $ 6.04 $ (3.65) (60.4) % Purchased Gas Average Cost (per Mcf) $ 2.25 $ 6.03 $ (3.78) (62.7) % 51 Other Operating Income For the Years Ended December 31, (in millions) 2023 2022 Variance Percent Change Sales of Environmental Attributes $ 41 $ — $ 41 100.0 % Excess Firm Transportation Income 16 12 4 33.3 % Equity Income from Affiliates 3 1 2 200.0 % Water Income 3 5 (2) (40.0) % Total Other Operating Income $ 63 $ 18 $ 45 250.0 % • Sales of environmental attributes includes items such as (but are not limited to): carbon credits, air quality credits, renewable or alternative energy credits, methane capture credits, methane performance certificates, emission reductions, offsets and/or allowances.
For the Years Ended December 31, 2024 2023 Variance Percent Change Purchased Gas Sales Volumes (in Bcf) 31.1 31.1 — — % Purchased Gas Average Sales Price (per Mcf) $ 1.91 $ 2.39 $ (0.48) (20.1) % Purchased Gas Average Cost (per Mcf) $ 1.84 $ 2.25 $ (0.41) (18.2) % 53 Other Revenue and Operating Income For the Years Ended December 31, (in millions) 2024 2023 Variance Percent Change Sales of Environmental Attributes $ 95 $ 41 $ 54 131.7 % Water Income 12 3 9 300.0 % Excess Firm Transportation Income 20 16 4 25.0 % (Loss) Equity Income from Affiliates (1) 3 (4) (133.3) % Total Other Revenue and Operating Income $ 126 $ 63 $ 63 100.0 % • Sales of environmental attributes includes items such as (but are not limited to): carbon credits, air quality credits, renewable or alternative energy credits, methane capture credits, methane performance certificates, emission reductions, offsets and/or allowances.
Cash and cash equivalents were nominal as of December 31, 2023 and $21 million as of December 31, 2022. • Accounts and notes receivable - trade as of December 31, 2023 and 2022 were $116 million and $348 million, respectively.
Cash, cash equivalents and restricted cash were $55 million as of December 31, 2024 and nominal as of December 31, 2023. • Accounts and notes receivable - trade as of December 31, 2024 and 2023 were $180 million and $116 million, respectively.
Selected Natural Gas, NGL and Oil Production Financial Data The following table presents a summary of our total sales volumes, sales of natural gas, NGL and oil including cash settlements, natural gas, NGL and oil production costs and natural gas, NGL and oil production margin related to our production operations on a total company basis (See Non-GAAP Financial Measures Reconciliation above for the reconciliation to the most directly comparable financial measures calculated and presented in accordance with GAAP): For the Years Ended December 31, 2023 2022 Variance in Millions Per Mcfe in Millions Per Mcfe in Millions Per Mcfe Total Sales Volumes (Bcfe)* 560.4 580.2 (19.8) Natural Gas, NGL and Oil Revenue $ 1,302 $ 2.29 $ 3,652 $ 6.52 $ (2,350) $ (4.23) Gain (Loss) on Commodity Derivative Instruments - Cash Settlement 163 0.32 (1,813) (3.35) 1,976 3.67 Sales of Natural Gas, NGL and Oil, including Cash Settlements, a Non-GAAP Financial Measure 1,465 2.61 1,839 3.17 (374) (0.56) Lease Operating Expense 63 0.11 67 0.11 (4) — Production, Ad Valorem, and Other Fees 28 0.05 45 0.08 (17) (0.03) Transportation, Gathering and Compression 382 0.68 370 0.64 12 0.04 Depreciation, Depletion and Amortization (DD&A) 420 0.75 448 0.77 (28) (0.02) Natural Gas, NGL and Oil Production Costs, a Non-GAAP Financial Measure 893 1.59 930 1.60 (37) (0.01) Natural Gas, NGL and Oil Production Margin, a Non-GAAP Financial Measure $ 572 $ 1.02 $ 909 $ 1.57 $ (337) $ (0.55) *NGLs and Oil/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 NGL, condensate, and natural gas prices.
Selected Natural Gas, NGL and Oil Production Financial Data The following table presents a summary of our total sales volumes, sales of natural gas, NGL and oil including cash settlements, natural gas, NGL and oil production costs and natural gas, NGL and oil production margin related to our production operations on a total company basis (See Non-GAAP Financial Measures Reconciliation above for the reconciliation to the most directly comparable financial measures calculated and presented in accordance with GAAP): For the Years Ended December 31, 2024 2023 Variance in Millions Per Mcfe in Millions Per Mcfe in Millions Per Mcfe Total Sales Volumes (Bcfe)* 550.8 560.4 (9.6) Natural Gas, NGL and Oil Revenue $ 1,186 $ 2.09 $ 1,302 $ 2.29 $ (116) $ (0.20) Gain on Commodity Derivative Instruments - Cash Settlement 281 0.57 163 0.32 118 0.25 Sales of Natural Gas, NGL and Oil, including Cash Settlements, a Non-GAAP Financial Measure 1,467 2.66 1,465 2.61 2 0.05 Lease Operating Expense 70 0.13 63 0.11 7 0.02 Production, Ad Valorem, and Other Fees 28 0.05 28 0.05 — — Transportation, Gathering and Compression 382 0.69 382 0.68 — 0.01 Depreciation, Depletion and Amortization (DD&A) 470 0.85 420 0.75 50 0.10 Natural Gas, NGL and Oil Production Costs, a Non-GAAP Financial Measure 950 1.72 893 1.59 57 0.13 Natural Gas, NGL and Oil Production Margin, a Non-GAAP Financial Measure $ 517 $ 0.94 $ 572 $ 1.02 $ (55) $ (0.08) *NGLs and Oil/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 NGL, condensate, and natural gas prices.
See Note 6 – Income Taxes in the Notes to the Audited Consolidated Financial Statements in Item 8 of this Form 10-K for additional information regarding the Company’s uncertain tax liabilities.
Actual results could differ from those estimates upon the subsequent resolution of identified matters. See Note 6 – Income Taxes in the Notes to the Audited Consolidated Financial Statements in Item 8 of this Form 10-K for additional information regarding the Company’s uncertain tax liabilities.
See Note 19 – Derivative Instruments in the Notes to the Audited Consolidated Financial Statements in Item 8 of this Form 10-K for additional information related to the cash settlements.
See Note 10 – Revolving Credit Facilities in the Notes to the Audited Consolidated Financial Statements in Item 8 of this Form 10-K for additional information.
Payment of the principal and interest on the CNXM Credit Facility is guaranteed by certain of CNXM's subsidiaries. CNX is not a guarantor of the CNXM Facility. • An aggregate principal amount of $52 million in outstanding borrowings under the CNX Credit Facility.
Payment of the principal and interest on the CNXM Credit Facility is guaranteed by certain of CNXM's subsidiaries. CNX is not a guarantor of the CNXM Facility.
Future results of operations and strength of the balance sheet for any particular quarterly or annual period could be materially affected by changes in the Company’s assumptions. See “Impairment of Long-Lived Assets” below for additional information regarding the Company’s oil and gas reserves.
Future results of operations and strength of the balance sheet for any particular quarterly or annual period could be materially affected by changes in the Company’s assumptions.
Interest on the notes is payable January 15 and July 15 each year. Payment of the principal and interest on the notes is guaranteed by most of CNX’s subsidiaries but does not include CNXM (or its subsidiaries or general partner). • An aggregate principal amount of $500 million of 6.00% Senior Notes due January 2029.
Payment of the principal and interest on the notes is guaranteed by most of CNX's subsidiaries but does not include CNXM (or its subsidiaries or general partner). • An aggregate principal amount of $500 million of 7.375% Senior Notes due January 2031, less $5 million of unamortized discount.
Cash Flows (in millions) For the Years Ended December 31, 2023 2022 Change Cash Provided by Operating Activities $ 815 $ 1,235 $ (420) Cash Used in Investing Activities $ (509) $ (528) $ 19 Cash Used in Financing Activities $ (326) $ (689) $ 363 Cash provided by operating activities changed in the period-to-period comparison primarily due to the following items: • Net income increased $1,863 million in the period-to-period comparison. • Adjustments to reconcile net income to cash provided by operating activities primarily consisted of a $2,778 million net change in commodity derivative instruments, a $573 million benefit from the change in deferred income taxes, a $123 million increase in gain on asset sales and abandonments, net, and a $45 million net benefit from various other changes in working capital.
Cash Flows (in millions) For the Years Ended December 31, 2024 2023 Change Cash Provided by Operating Activities $ 816 $ 815 $ 1 Cash Used in Investing Activities $ (484) $ (509) $ 25 Cash Used in Financing Activities $ (277) $ (326) $ 49 Cash provided by operating activities changed in the period-to-period comparison primarily due to the following items: • Net income decreased $1,811 million in the period-to-period comparison. • Adjustments to reconcile net income to cash provided by operating activities primarily consisted of a $2,329 million net change in commodity derivative instruments, a $531 million net decrease in deferred income taxes, a $108 million change in the gain on asset sales and abandonments, net, and a $94 million net decrease from various other changes in working capital.
The Company attempts to minimize this expense by releasing (selling) unutilized firm transportation capacity to other parties when possible and when beneficial.
The Company attempts to minimize this expense by releasing (selling) unutilized firm transportation capacity to other parties when possible and when beneficial. The revenue received when this capacity is released (sold) is included in Excess Firm Transportation Income in Other Operating Income.
The evaluation of the sustainability of a tax position and the probable amount that is more likely than not is based on judgment, historical experience and on various other 58 assumptions that we believe are reasonable under the circumstances.
The evaluation of the sustainability of a tax position and the probable amount that is more likely than not is based on judgment, historical experience and on various other assumptions that we believe are reasonable under the circumstances. The results of these estimates, which are not readily apparent from other sources, form the basis for recognizing an uncertain tax liability.
Loss on Debt Extinguishment A loss on debt extinguishment of $23 million was recognized in the year ended December 31, 2022 following CNX’s purchase of a portion of the Convertible Notes due May 2026 and $350 million of the 7.25% Senior Notes due March 2027 at an average price equal to 102.5% of the principal amount.
Loss on Debt Extinguishment A loss on debt extinguishment of $7 million was recognized in the year ended December 31, 2024 in connection with CNX’s repurchase of $350 million of the 7.25% Senior Notes due March 2027 at an average price equal to 101.9% of their principal amount.
The decrease in total average Shale sales price was primarily due to a $4.08 per Mcf decrease in average gas sales price and a $2.82 per Mcfe decrease in the average NGL sales price. These decreases were offset in part by a $3.69 per Mcf change in the realized gain (loss) on commodity derivative instruments.
The increase in total average Shale sales price was primarily due to a $0.25 per Mcf change in the gain on commodity derivative instruments - cash settlement and a $0.06 per Mcfe increase in the average NGL sales price. These increases were offset in part by a $0.19 per Mcf decrease in average gas sales price.
For the Years Ended December 31, 2023 2022 Variance Percent Change CBM Gas Sales Volumes (Bcf) 40.6 43.7 (3.1) (7.1) % Average Sales Price - Gas (per Mcf) $ 3.22 $ 7.20 $ (3.98) (55.3) % Gain (Loss) on Commodity Derivative Instruments - Cash Settlement - Gas (per Mcf) $ 0.28 $ (3.18) $ 3.46 108.8 % Total Average CBM Sales Price (per Mcf) $ 3.51 $ 4.01 $ (0.50) (12.5) % Average CBM Lease Operating Expenses (per Mcf) 0.49 0.40 0.09 22.5 % Average CBM Production, Ad Valorem and Other Fees (per Mcf) 0.16 0.27 (0.11) (40.7) % Average CBM Transportation, Gathering and Compression Costs (per Mcf) 1.61 1.12 0.49 43.8 % Average CBM Depreciation, Depletion and Amortization Costs (per Mcf) 1.23 1.21 0.02 1.7 % Total Average CBM Production Costs (per Mcf) $ 3.49 $ 3.00 $ 0.49 16.3 % Total Average CBM Production Margin (per Mcf) $ 0.02 $ 1.01 $ (0.99) (98.0) % The CBM segment had natural gas revenue of $131 million for the year ended December 31, 2023 compared to $315 million for the year ended December 31, 2022.
For the Years Ended December 31, 2024 2023 Variance Percent Change CBM Gas Sales Volumes (Bcf) 39.1 40.6 (1.5) (3.7) % Average Sales Price - Gas (per Mcf) $ 2.69 $ 3.22 $ (0.53) (16.5) % Gain on Commodity Derivative Instruments - Cash Settlement - Gas (per Mcf) $ 0.53 $ 0.28 $ 0.25 89.3 % Total Average CBM Sales Price (per Mcf) $ 3.21 $ 3.51 $ (0.30) (8.5) % Average CBM Lease Operating Expenses (per Mcf) 0.56 0.49 0.07 14.3 % Average CBM Production, Ad Valorem and Other Fees (per Mcf) 0.14 0.16 (0.02) (12.5) % Average CBM Transportation, Gathering and Compression Costs (per Mcf) 1.65 1.61 0.04 2.5 % Average CBM Depreciation, Depletion and Amortization Costs (per Mcf) 1.52 1.23 0.29 23.6 % Total Average CBM Production Costs (per Mcf) $ 3.87 $ 3.49 $ 0.38 10.9 % Total Average CBM Production Margin (per Mcf) $ (0.66) $ 0.02 $ (0.68) (3,400.0) % The CBM segment had natural gas revenue of $105 million for the year ended December 31, 2024 compared to $131 million for the year ended December 31, 2023.
For the Years Ended December 31, (in millions) 2023 2022 Variance Percent Change Long-Term Equity-Based Compensation (Non-Cash) $ 20 $ 16 $ 4 25.0 % Salaries, Wages and Employee Benefits 31 31 — — % Contributions and Advertising 4 5 (1) (20.0) % Short-Term Incentive Compensation 11 20 (9) (45.0) % Other 59 50 9 18.0 % Total SG&A $ 125 $ 122 $ 3 2.5 % 52 • Long-term equity-based compensation (non-cash) increased in the period-to-period comparison due to an increase in equity awards. • Short-term incentive compensation decreased $9 million due to lower projected payouts for the current period. • Other increased in the period-to-period comparison primarily due to an increase in professional services and consulting fees related to cyber security, legal matters and regulatory reporting.
For the Years Ended December 31, (in millions) 2024 2023 Variance Percent Change Short-Term Incentive Compensation $ 23 $ 11 $ 12 109.1 % Contributions and Advertising 5 4 1 25.0 % Long-Term Equity-Based Compensation (Non-Cash) 20 20 — — % Salaries, Wages and Employee Benefits 30 31 (1) (3.2) % Other 68 59 9 15.3 % Total SG&A $ 146 $ 125 $ 21 16.8 % 54 • Short-term incentive compensation increased $12 million due to higher projected payouts for the current period. • Other increased in the period-to-period comparison primarily due to higher professional services and consulting fees, as well as increased software costs.
See Note 20 – Commitments and Contingent Liabilities in the Notes to the Audited Consolidated Financial Statements in Item 8 of this Form 10-K for additional details of the various financial guarantees that have been issued by CNX.
See Note 20 – Commitments and Contingent Liabilities in the Notes to the Audited Consolidated Financial Statements in Item 8 of this Form 10-K for additional details of the various financial guarantees that have been issued by CNX. 59 Debt At December 31, 2024, CNX had total long-term debt of $2,175 million, including the current portion of long-term debt of $328 million and excluding unamortized debt issuance costs.
These amounts included depletion on a unit of production basis of $0.59 per Mcfe and $0.62 per Mcfe, respectively. The decrease in the units of production depreciation, depletion and amortization rate in the current period is primarily the result of a lower annual depletion rate related to low-cost reserve additions from development in the 2022 period.
These amounts included depletion on a unit of production basis of $0.68 per Mcfe and $0.59 per Mcfe, respectively. The increase in the units of production depreciation, depletion and amortization rate in the current period is primarily due to a higher annual depletion rate for 2024.
The market approach measures the fair value of a reporting unit through the analysis of recent transactions and/or financial multiples of comparable businesses. Consideration is given to the financial conditions and operating performance of the reporting unit being valued relative to those publicly-traded companies operating in the same or similar lines of business.
Consideration is given to the financial conditions and operating performance of the reporting unit being valued relative to those publicly-traded companies operating in the same or similar lines of business. 62 The determination of the fair value requires us to make significant estimates and assumptions.
The decrease in total dollars was primarily related to a decrease in firm transportation expense due to the lower Shale sales volumes. The decrease was offset, in part, by an increase in repairs and maintenance expense and an increase in processing costs due to an increase in ethane extraction and processing rates.
The decrease in total dollars was primarily due to a decrease in repairs and maintenance expense offset, in part, by an increase in electrical compression expense.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeAll of CNX's transactions are denominated in U.S. dollars, and, as a result, it does not have material exposure to currency exchange-rate risks. 62 Natural Gas Hedging Volumes As of January 5, 2024, the Company's hedged volumes for the periods indicated are as follows: For the Three Months Ended March 31, June 30, September 30, December 31, Total Year 2024 Fixed Price Volumes Hedged Bcf 104.8 108.7 107.6 114.8 434.2* Weighted Average Hedge Price per Mcf $ 2.61 $ 2.49 $ 2.48 $ 2.55 $ 2.53 2025 Fixed Price Volumes Hedged Bcf 92.7 95.6 96.7 96.7 375.1* Weighted Average Hedge Price per Mcf $ 2.44 $ 2.43 $ 2.43 $ 2.42 $ 2.41 2026 Fixed Price Volumes Hedged Bcf 80.6 86.9 87.7 87.7 339.0* Weighted Average Hedge Price per Mcf $ 2.51 $ 2.55 $ 2.55 $ 2.54 $ 2.53 2027 Fixed Price Volumes Hedged Bcf 53.3 53.9 54.5 54.5 216.2 Weighted Average Hedge Price per Mcf $ 3.31 $ 3.33 $ 3.33 $ 3.42 $ 3.35 *Quarterly volumes do not add to annual volumes inasmuch as a discrete condition in individual quarters, where basis hedge volumes exceed NYMEX hedge volumes, does not exist for the year taken as a whole. 63
Biggest changeAll of CNX's transactions are denominated in U.S. dollars, and, as a result, it does not have material exposure to currency exchange-rate risks. 64 Natural Gas Hedging Volumes As of January 15, 2025, the Company's hedged volumes for the periods indicated are as follows: For the Three Months Ended March 31, June 30, September 30, December 31, Total Year 2025 Fixed Price Volumes Hedged Bcf 118.2 119.7 121.0 121.0 478.9* Weighted Average Hedge Price per Mcf $ 2.65 $ 2.56 $ 2.56 $ 2.56 $ 2.58 2026 Fixed Price Volumes Hedged Bcf 108.4 107.5 108.5 107.9 432.3 Weighted Average Hedge Price per Mcf $ 2.71 $ 2.67 $ 2.67 $ 2.64 $ 2.67 2027 Fixed Price Volumes Hedged Bcf 77.4 76.6 77.4 73.0 304.4 Weighted Average Hedge Price per Mcf $ 3.28 $ 3.28 $ 3.28 $ 3.29 $ 3.28 2028 Fixed Price Volumes Hedged Bcf 12.8 12.8 13.0 13.0 51.6 Weighted Average Hedge Price per Mcf $ 3.64 $ 3.64 $ 3.64 $ 3.64 $ 3.64 *Quarterly volumes do not add to annual volumes inasmuch as a discrete condition in individual quarters, where basis hedge volumes exceed NYMEX hedge volumes, does not exist for the year taken as a whole.
A hypothetical 100 basis-point increase in the average rate for CNX's variable-rate instruments would decrease pre-tax future earnings as of December 31, 2023 and 2022 by $2 million on an annualized basis.
A hypothetical 100 basis-point increase in the average rate for CNX's variable-rate instruments would decrease pre-tax future earnings as of December 31, 2024 and 2023 by $1 million and $2 million, respectively, on an annualized basis.
At December 31, 2023 and 2022 our open commodity derivative instruments were in a net liability position with fair values of $56 million and $1,905 million, respectively. A sensitivity analysis has been performed to determine the incremental effect on future earnings related to open derivative instruments at December 31, 2023 and 2022.
At December 31, 2024 and 2023, our open commodity derivative instruments were in a net liability position with fair values of $536 million and $56 million, respectively. A sensitivity analysis has been performed to determine the incremental effect on future earnings related to open derivative instruments at December 31, 2024 and 2023.
A hypothetical 10 percent increase in future natural gas prices would have decreased the fair value by $557 million and $816 million at December 31, 2023 and 2022, respectively. A hypothetical 10 percent decrease in future natural gas prices would have increased the fair value by $557 million and $679 million at December 31, 2023 and 2022, respectively.
A hypothetical 10 percent increase in future natural gas prices would have decreased the fair value by $518 million and $557 million at December 31, 2024 and 2023, respectively. A hypothetical 10 percent decrease in future natural gas prices would have increased the fair value by $518 million and $557 million at December 31, 2024 and 2023, respectively.
CNX’s primary exposure to market risk for changes in interest rates relates to CNX’s Credit Facility, under which there was $52 million of borrowings at December 31, 2023 and no borrowings at December 31, 2022, and CNXM's Credit Facility, under which there was $105 million of borrowings at December 31, 2023 and $154 million at December 31, 2022.
CNX’s primary exposure to market risk for changes in interest rates relates to CNX’s Credit Facility, under which there was $43 million of borrowings at December 31, 2024 and $52 million of borrowings at December 31, 2023, and CNXM's Credit Facility, under which there was $16 million of borrowings at December 31, 2024 and $105 million at December 31, 2023.
At December 31, 2023 and 2022, CNX had $2,065 million and $2,055 million, respectively, aggregate principal amount of debt outstanding under fixed-rate instruments, including unamortized debt issuance costs of $12 million and $14 million, respectively. At December 31, 2023 and 2022, CNX had $157 million and $154 million, respectively, of debt outstanding under variable-rate instruments.
At December 31, 2024 and 2023, CNX had $2,132 million and $2,065 million, respectively, aggregate principal amount of debt outstanding under fixed-rate instruments, including unamortized debt issuance costs of $9 million and $12 million, respectively. At December 31, 2024 and 2023, CNX had $59 million and $157 million, respectively, of debt outstanding under variable-rate instruments.
CNX's interest expense is sensitive to changes in the general level of interest rates in the United States. The Company uses derivative instruments to manage risk related to interest rates. These instruments change the variable-rate cash flow exposure on the debt obligations to fixed cash flows.
CNX's interest expense is sensitive to changes in the general level of interest rates in the United States.
Added
The Company has used derivative instruments in the past in order to manage risk related to interest rates, although there are currently no active agreements (see Note 19 – Derivative Instruments in the Notes to the Unaudited Consolidated Financial Statements included in Item 1 of this Form 10-Q for more information).
Added
Note: Table excludes basis only hedges of 17.2 Bcf for 2029. 65

Other CNX 10-K year-over-year comparisons