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Item 1. Business

2021-02-09 compared with 2020-02-10 · 266 added, 156 removed, 247 unchanged (63% of the section changed)

CNX Resources Corporation ("CNX," the "Company," or "we," "us," or "our") is a premiere independent oil and gas company focused on the exploration, development, production, gathering, processing and acquisition of natural gas properties primarily in the Appalachian Basin.

Our operations are centered on unconventional shale formations, primarily the Marcellus Shale and Utica Shale.

CNX’s wholly owned subsidiary, CNX Gathering LLC, which holds the general partner interest and limited partner interest (previously incentive distribution rights - See Note 25 - Subsequent Events in the Notes to the Audited Consolidated Financial Statements in Item 8 of this Annual Report on Form 10-K for more information) in CNX Midstream Partners LP (a public master limited partnership), which was formed to own, operate, and develop midstream energy assets to service CNX and third-party production, drilling, and completion activities under long-term service contracts.

CNX’s consolidated financial statements include CNX Gathering LLC’s financial position and results of operations beginning after January 3, 2018 (see Note 6 - Acquisitions and Dispositions in the Notes to the Audited Consolidated Financial Statements in Item 8 of this Annual Report on Form 10-K).

CNX was incorporated in Delaware in 1991, but its predecessors had been mining coal, primarily in the Appalachian Basin, since 1864.

In November 2017, CNX completed the tax-free spin-off of its coal business (see Note 5 - Discontinued Operations in the Notes to the Audited Consolidated Financial Statements in Item 8 of this Annual Report on Form 10-K).

CNX entered the natural gas business in the 1980s initially to increase the safety and efficiency of its Virginia coal mines by capturing methane from coal seams prior to mining, which makes the mining process safer and more efficient.

The natural gas business grew from the coalbed methane production in Virginia into other unconventional production, including hydraulic fracturing in the Marcellus Shale and Utica Shale in the Appalachian Basin.

This growth was accelerated with the 2010 asset acquisition of the Appalachian Exploration & Production business of Dominion Resources, Inc.

CNX currently operates, develops and explores for natural gas in Appalachia (Pennsylvania, West Virginia, Ohio, and Virginia).

Our primary focus is the continued development of our Marcellus Shale acreage and delineation and development of our unique Utica Shale acreage and stacked pay opportunity set.

We believe that our concentrated operating area, legacy surface acreage position, regional operating expertise, extensive data set from development, as well as from non-operated participation wells and our held-by-production acreage position, provides us a significant competitive advantage over our competitors.

Over the past ten years, CNX's natural gas production has grown by approximately 471% to produce a total of 539.1 net Bcfe in 2019.

Our land holdings in the Marcellus and Utica Shale plays cover large areas, provide multi-year drilling opportunities and, collectively, have sustainable lower-risk growth profiles.

We currently control approximately 519,000 net acres in the Marcellus Shale and approximately 608,000 net acres that have Utica Shale potential in Ohio, West Virginia, and Pennsylvania.

We also have approximately 2.4 million net acres in our coalbed methane play.

Highlights of our 2019 production include the following:

Total average production of 1,477,120 Mcfe per day;

94% Natural Gas, 6% Liquids;

69% Marcellus, 21% Utica, and 10% coalbed methane.

At December 31, 2019 , our proved natural gas, NGL, condensate and oil reserves (collectively, "natural gas reserves") had the following characteristics:

8.4 Tcfe of proved reserves;

94.2% natural gas;

57.43% proved developed;

98.6% operated;

A reserve life ratio of 15.63 years (based on 2019 production).

The following map provides the location of CNX's E&P operations by region:

CNX Resources Corporation (“CNX”, the “Company,” or “we,” “us,” or “our”) is an independent oil and natural gas company engaged in the exploration, development, production and acquisition of natural gas properties primarily 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.

Additionally, we operate and develop Coal Bed Methane (“CBM”) properties in Virginia.

We believe that our extensive held-by-production acreage position and development inventory combined with our regional operating expertise, extensive data set from development and non-op participation wells, midstream infrastructure ownership, low-cost operations and legacy surface acreage position provide us with significant competitive advantages that position us for long-term value creation.

CNX's Strategy and Corporate Values

CNX's strategy is to increase shareholder value through the development and growth of its existing natural gas assets and selective acquisition of natural gas acreage leases within its footprint.

CNX's strategy is to increase shareholder value through the development and growth of our existing natural gas assets and the selective acquisition of natural gas acreage leases within our operating footprint.

Our mission is to empower our team to embrace and drive innovative change that creates long-term per share value for our investors, enhances our communities and delivers energy solutions for today and tomorrow.

We will also continue to focus on the monetization of non-core assets to accelerate value creation and to minimize any shortfall between operating cash flows and our capital growth requirements.

CNX defines itself through its corporate values which serve as the compass for our road map and guide every aspect of our business as we strive to achieve our corporate mission:

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:

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be calculated risk-takers and seek creative ways to solve problems;

• Excellence:

Be prudent capital allocators;

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These values are the foundation of CNX's identity and are the basis for how management defines continued success.

We believe CNX's rich resource base, coupled with these core values, allows management to create value for the long-term.

CNX also believes that natural gas is central to a low-cost, reliable, secure, lower-carbon energy future.

We believe CNX's rich resource base, coupled with these core values, allows management to create long-term per share value.

CNX believes that natural gas is central to a low-cost, reliable, secure, lower-carbon energy future.

Widespread and immediate fuel switching to natural gas is the fastest and most cost-effective means to addressing climate concerns, improving air quality in the developing world and meeting the increasing demand for cleaner forms of energy.

More than a short-term “bridge” fuel that is useful in the transition from more carbon-intensive energy sources to renewable, natural gas is inextricably linked to the long-term success of renewable energy.

The EIA forecasts that global natural gas consumption is expected to increase by more than 40% from current levels by the year 2050.

Increasing demand for natural gas comes with a variety of economic, environmental, and social benefits, including:

reduced emissions, improved energy security, industrial applications and reliable heat.

CNX's Capital Expenditure Budget

In 2020, CNX expects capital expenditures of approximately $530-$610 million.

The 2020 budget currently includes $360-$410 million of drilling and completion ("D&C") capital, approximately $95 million of capital associated with land, midstream, and water infrastructure and $80-$100 million of capital for CNX Midstream Partners LP ("CNXM").

The Company continuously evaluates multiple factors to determine incremental activity throughout the year, and as such, may update guidance accordingly.

Natural gas is more than a short-term “bridge” fuel that is useful in the transition from more carbon-intensive energy sources to renewables, it is inextricably linked to the long-term success of renewable energy.

2020 Operational Highlights and Outlook

• Over the past ten years, CNX's natural gas production has grown by approximately 300% to a total of 511.1 net Bcfe in 2020.

• Total average production of 1,396,371 Mcfe per day;

• 94% Natural Gas, 6% Liquids;

• 90% Shale, 10% coalbed methane.

At December 31, 2020, our proved natural gas, NGL, condensate and oil reserves (collectively, "natural gas reserves") had the following characteristics:

• 9.5 Tcfe of proved reserves;

• 94.6% natural gas;

• 54.4% proved developed;

• 98.7% operated;

• A reserve life ratio of 18.69 years (based on 2020 production).

In 2021, CNX expects capital expenditures of approximately $430 million to $470 million.

The Company continuously evaluates multiple factors to determine activity throughout the year, and as such, may update guidance accordingly.

DETAIL OF OPERATIONS

Our operations are located throughout Appalachia and include the following plays:

Marcellus Shale

We have the rights to extract natural gas in Pennsylvania, West Virginia, and Ohio from approximately 519,000 net Marcellus Shale acres at December 31, 2019 .

Our operations include the following plays:

Our Shale properties represent our primary operating and growth area in terms of reserves, production, and capital investment .

We have the rights to extract natural gas from Shale formations in Pennsylvania, West Virginia, and Ohio from approximately 524,000 net Marcellus Shale acres and approximately 610,000 net Utica Shale acres at December 31, 2020.

Approximately 349,000 Utica Shale acres coincide with Marcellus Shale acreage in Pennsylvania, West Virginia, and Ohio.

The Upper Devonian Shale formation, which includes both the Burkett Shale and Rhinestreet Shale, lies above the Marcellus Shale formation in southwestern Pennsylvania and northern West Virginia.

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.

On January 3, 2018, the Company acquired the remaining 50% membership interest in CONE Gathering LLC (which has since been renamed CNX Gathering LLC), which holds the general partner interest and limited partner interests (previously incentive distribution rights - See Note 25 - Subsequent Events in the Notes to the Audited Consolidated Financial Statements in Item 8 of this Annual Report on Form 10-K for more information) in CNXM, the entity that constructs and operates the gathering system for most of our Marcellus shale production.

See "Midstream Gas Services" below for a more detailed explanation.

We have the rights to extract natural gas in Pennsylvania, West Virginia, and Ohio from approximately 608,000 net Utica Shale acres at December 31, 2019 .

Approximately 349,000 Utica acres coincide with Marcellus Shale acreage in Pennsylvania, West Virginia, and Ohio.

During the third quarter of 2018, CNX closed on the sale of substantially all of its Ohio Utica Joint Venture Assets, including approximately 35,000 net acres in the wet gas Utica Shale areas of Belmont, Guernsey, Harrison, and Noble Counties (See Note 6 - Acquisitions and Dispositions in the Notes to the Audited Consolidated Financial Statements in Item 8 of this Form 10-K for more information).

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)

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We produce CBM natural gas primarily from the Pocahontas #3 seam and still have a nominal drilling program.

The CBM natural gas we extract would otherwise be vented into the atmosphere during normal mining operations.

We also have the rights to extract CBM from approximately 1,896,000 net CBM acres in other states including West Virginia, Pennsylvania, Ohio, Illinois, Indiana, and New Mexico with no current plans to drill CBM wells in these areas.

We have the rights to extract natural gas from other shale and shallow oil and gas positions primarily in Illinois, Indiana, New York, Ohio, Pennsylvania, Virginia, and West Virginia from approximately 1,017,000 net acres at December 31, 2020.

The majority of our shallow oil and gas leasehold position is held by production and all of it is extensively overlain by existing third-party gas gathering and transmission infrastructure.

In March 2018, CNX Gas completed the sale of substantially all of its shallow oil and gas assets in Pennsylvania and West Virginia, including approximately 833,000 net acres (See Note 6 - Acquisitions and Dispositions in the Notes to the Audited Consolidated Financial Statements in Item 8 of this Form 10-K for more information).

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.

Summary of Properties as of December 31, 2020

Shale CBM Other Gas

Segment Segment Segment Total

Estimated Net Proved Reserves (MMcfe)

8,443,926 1,099,627 6,205 9,549,758

Percent Developed (1) 52 % 71 % 100 % 54 %

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Total Net Acres(3) 837,663 2,179,059 1,016,510 4,033,232

(1) Percent developed is calculated as net proved developed reserves divided by net proved reserves, measured in MMcfe.

(2) Net acres include acreage attributable to our working interests in the properties.

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We believe that our assumptions and methodology in this regard are reasonable.

Acreage amounts are only included under the target strata CNX expects to produce with the exception of certain CBM acres governed by separate leases, although the reported acres may include rights to multiple gas seams (e.g.

we have rights to the Marcellus segment that are disclosed under the Utica segment and we have rights to Utica segment that are disclosed under the Marcellus segment).

We have reviewed our drilling plans, and our acreage rights and have used our best judgment to reflect the acres in the strata we expect to primarily produce.

As more information is obtained or circumstances change, the acreage classification may change.

(3) Acreage amounts are only included under the target strata CNX expects to produce with the exception of certain CBM acres governed by separate leases.

Producing Wells and Acreage

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The following table sets forth, at December 31, 2020, the number of producing wells, developed acreage and undeveloped acreage:

Producing Gas Wells (including gob wells)

Producing Oil Wells

Gross(1) Net(2)

Producing Gas Wells (including gob wells) - Working Interest 4,712 4,401

Producing Oil Wells - Working Interest — —

Producing Gas Wells - Royalty Interest 1,810 —

Producing Oil Wells - Royalty Interest 152 —

Net Acreage Position:

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Total Acreage 5,381,446 4,033,232

(1) All of our acreage identified as proved developed and undeveloped is controlled fully by CNX through ownership of a 100% working interest.

(2) Net acres include acreage attributable to our working interests in the properties.

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The following table represents the terms under which we hold these acres:

Gross Unproved Acres

Net Unproved Acres

Net Proved Undeveloped Acres

Gross Unproved Acres Net Unproved Acres Gross Proved Undeveloped Acres Net Proved Undeveloped Acres

Held by Production/Fee 4,889,527 3,578,943 30,594 30,594

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During the years ended December 31, 2020, 2019 and 2018, we drilled 29.0, 75.7 and 83.9 net development wells, respectively.

Gob wells and wells drilled by operators other than our primary joint venture partners at that time are excluded from net development wells.

In 2019, there were 35.0 net development wells and 1.0 exploratory well drilled but uncompleted.

There was 1.0 net dry development well in 2019 and no net dry development wells in 2018 or 2017.

Gob wells and wells drilled by operators other than our primary joint venture partners at that time are excluded from net development wells and represents less than 0.5 net wells for each year.

In 2020, there were 17.0 net development wells and no exploratory wells drilled but uncompleted.

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 2020 or 2018 and 1.0 net dry development well in 2019.

As of December 31, 2020, there are 24.0 gross completed developmental wells ready to be turned in-line.

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Ended December 31,

Marcellus Segment

Utica Segment

2020 2019 2018

Shale Segment 25.0 64.7 77.9

CBM Segment 4.0 11.0 6.0

Other Gas Segment — — —

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For the Year Ended December 31,

Marcellus Segment

Utica Segment

2020 2019 2018

Producing Dry Still Eval*.

Producing Dry Still Eval.

Shale Segment — — 2.0 4.0 — 1.0 — — —

CBM Segment — — — — — — — — —

Other Gas Segment — — — — — — — — —

Total Exploratory Wells (Net) — — 2.0 4.0 — 1.0 — — —

* Still evaluating includes wells that were drilled and uncompleted or in the process of being completed at the end of the year.

* Still evaluating in 2020 includes two wells that were drilled, completed, and were in process of being connected to production facilities at the end of the year and were turned in-line in early 2021.

The company is still currently evaluating the partially constructed 2019 well to determine the most economic approach to access the natural gas reserves.

The company expects to make a determination in 2021 to either finalize the well or to access the natural gas reserves from an alternative location.

The following table shows our estimated proved developed and proved undeveloped reserves.

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Proved developed and proved undeveloped reserves are defined by the Securities and Exchange Commission (SEC).

Net Reserves (Million of Cubic Feet Equivalent)

As of December 31,

Net Reserves (Million of Cubic Feet Equivalent) As of December 31,

2020 2019 2018

Proved Developed Reserves 5,199,748 4,838,858 4,494,878

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As of December 31,

2020 2019 2018

(Dollars in millions)

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As of December 31,

2020 2019 2018

(Dollars in millions)

NYMEX Natural Gas Prices (MMbtu) $ 1.985 $ 2.578 $ 3.100

Future Cash Inflows $ 16,578 $ 19,490 $ 26,610

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Standardized GAAP Measure $ 2,636 $ 3,070 $ 4,655

*Future development costs for 2020 include $402 million of plugging and abandonment costs and $287 million of Midstream capital on an undiscounted pre-tax basis.

On a PV-10 pre-tax discounted basis, these amounts equate to $18 million and $232 million, respectively.

The addition of Midstream capital is the result of the Merger that occurred on September 28, 2020 (See Note 4 - Acquisitions and Dispositions in the Notes to the Audited Consolidated Financial Statements in Item 8 of this Form 10-K).

Gas Production

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Ended December 31,

2020 2019 2018

Sales Volume (MMcf)

Shale 428,679 449,669 403,244

CBM 52,609 55,445 60,268

Other 138 241 4,714

Total 481,426 505,355 468,226

Sales Volume (Mbbls)

Shale 4,675 5,428 6,080

Total 4,677 5,428 6,081

Oil and Condensate

Sales Volume (Mbbls)

Shale 250 195 364

Other 14 8 35

Total 264 203 399

Total Sales Volume (MMcfe)

Shale 458,231 483,413 441,907

CBM 52,609 55,445 60,268

Other 232 291 4,929

Total 511,072 539,149 507,104

*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.

2018 production includes approximately 27 Bcfe of production related to assets that were sold during the year.

2018 production includes approximately 27 Bcfe of production related to assets that were sold during that year.

For additional information, see Note 4 - Acquisitions and Dispositions in the Notes to the Audited Consolidated Financial Statements in Item 8 of this Form 10-K, which is incorporated herein by reference.

CNX expects a minimum base for 2020 annual natural gas production volumes of 525-555 Bcfe, which is consistent with 2019 volumes, based on the midpoint of guidance.

CNX expects 2021 annual natural gas production volumes to be approximately 540-570 Bcfe.

Average Sales Price and Average Lifting Cost

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Ended December 31,

2020 2019 2018

Average Sales Price - Gas (Mcf) $ 1.71 $ 2.48 $ 2.97

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Total Average Sales Price (per Mcfe) Excluding Effect of Derivative Instruments

$ 1.75 $ 2.53 $ 3.11

Average Lifting Costs Excluding Ad Valorem and Severance Taxes (per Mcfe)

$ 0.08 $ 0.12 $ 0.19

Average Sales Price - NGLs (Bbl)

$ 13.74 $ 19.20 $ 27.30

Average Sales Price - Oil (Bbl)

$ 39.30 $ 48.78 $ 59.34

Average Sales Price - Condensate (Bbl)

$ 35.10 $ 44.82 $ 50.58

*Excludes the effect of hedge monetizations.

**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.

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The processed purity products are ultimately sold to industrial, commercial and petrochemical markets.

We enter into physical natural gas sales transactions with various counterparties for terms varying in length.

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.

Reserves and production estimates are believed to be sufficient to satisfy these obligations.

In the past, we have delivered quantities required under these contracts.

We also enter into various natural gas swap transactions.

These gas swap transactions exist parallel to the underlying physical transactions and represented approximately 389.2 Bcf of our produced gas sales volumes for the year ended December 31, 2019 at an average price of $2.70 per Mcf.

The notional volumes associated with these gas swaps represented approximately 356.3 Bcf of our produced gas sales volumes for the year ended December 31, 2018 at an average price of $2.76 per Mcf.

CNX also enters into various financial natural gas swap transactions to manage the market risk exposure to in-basin and out-of-basin pricing.

These transactions exist parallel to the underlying physical transactions and represented approximately 461.1 Bcf of our produced gas sales volumes for the year ended December 31, 2020 at an average price of $2.57 per Mcf.

The notional volumes associated with these gas swaps represented approximately 389.2 Bcf of our produced natural gas sales volumes for the year ended December 31, 2019 at an average price of $2.70 per Mcf.

As of January 7, 2021, these physical and swap transactions represent approximately 472.1 Bcf of our estimated 2021 production at an average price of $2.50 per Mcf, 391.3 Bcf of our estimated 2022 production at an average price of $2.34 per Mcf, 284.8 Bcf of our estimated 2023 production at an average price of $2.22 per Mcf, approximately 263.1 Bcf of our estimated 2024 production at an average price of $2.28 per Mcf, and approximately 103.0 Bcf of our estimated 2025 production at an average price of $2.10 per Mcf.

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Midstream Gas Services

E&P Midstream Gas Services

CNX has traditionally designed, built and operated natural gas gathering systems to move gas from the wellhead to interstate pipelines or other local sales points.

In addition, over time CNX has acquired extensive gathering assets.

CNX designs, builds and operates natural gas gathering systems to move gas from the wellhead to interstate pipelines or other local sales points.

In addition, over time CNX has acquired extensive gathering assets through acquisitions.

CNX now owns or operates approximately 2,600 miles of natural gas gathering pipelines as well as a number of natural gas processing facilities.

These assets are part of the E&P Division (See Note 24 - Segment Information in the Notes to the Audited Consolidated Financial Statements in Item 8 of this Form 10-K for more information).

CNX's Midstream Division (see below) owns substantially all of CNX's Marcellus Shale gathering systems which also transports CNX's Utica Shale volumes in Pennsylvania.

With respect to the Utica Shale in Ohio, CNX primarily contracts with third-party gathering services.

CNX has developed a diversified portfolio of firm transportation capacity options to support its production growth plan.

As a result of the Merger that occurred on September 28, 2020 (See Note 4 - Acquisitions and Dispositions in the Notes to the Audited Consolidated Financial Statements in Item 8 of this Form 10-K), 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 also provides natural gas gathering services to third-parties.

CNX has developed a diversified portfolio of firm transportation capacity options to support its production.

CNX plans to selectively acquire firm capacity on an as-needed basis, while minimizing transportation costs and long-term financial obligations.

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CNX also benefits from the strategic location of our primary production areas in southwestern Pennsylvania, northern West Virginia and eastern Ohio.

These areas are currently served by a large concentration of major pipelines that provide us with access to major gas markets without the necessity of transporting our gas out of the region, and it is expected that recently-approved and pending pipeline projects will increase the take-away capacity from our region.

In addition to firm transportation capacity, CNX has developed a processing portfolio to support the projected volumes from its wet gas production areas and has the operational and contractual flexibility to potentially convert a portion of currently processed wet gas volumes to be marketed as dry gas volumes, or vice-versa, as economically appropriate.

CNX has the advantage of having natural gas production from CBM and lower Btu Utica wells in close proximity to higher Btu Marcellus wells.

Separately, the low Btu CBM gas and the high Btu Marcellus gas may need processing in order to meet downstream pipeline specifications.

However, the geographic proximity and interconnected gathering system servicing these wells allow CNX to blend this gas together and in some cases eliminate the need for the costly processing of gas that does not meet pipeline specification.

These different gas types allow us more flexibility in bringing Marcellus and Utica shale wells on-line at qualities that meet interstate pipeline specifications.

Midstream Division

In January 2018, CNX acquired Noble Energy’s ("Noble") 50% membership interest in CNX Gathering LLC (then named CONE Gathering) ("CNX Gathering"), which holds the general partner interest and limited partner interests (previously incentive distribution rights) in CNX Midstream Partners LP (then named CONE Midstream Partners LP) ("CNX Midstream" or "CNXM").

See Note 6 - Acquisitions and Dispositions in the Notes to the Audited Consolidated Financial Statements in Item 8 of this Form 10-K for more information.

As part of the transaction, CNX Midstream amended its gas gathering agreement with CNX Gas Company LLC, a wholly-owned subsidiary of CNX.

CNX Gathering develops, operates and owns substantially all of CNX’s Marcellus Shale gathering systems.

Prior to its acquisition of Noble’s interest, CNX accounted for its interest in CNX Gathering under the equity method of accounting.

Subsequent to the acquisition, CNX is the single sponsor of CNXM, and beginning in the first quarter of 2018 CNX Gathering was consolidated into the Company’s financial statements as the Midstream Division (See Note 24 - Segment Information in the Notes to the Audited Consolidated Financial Statements in Item 8 of this Form 10-K for more information).

We believe that the network of rights-of-way, vast surface holdings, experience in building and operating gathering systems in the Appalachian basin, and increased control and flexibility will give CNX Gathering an advantage in building the midstream assets required to execute our future development plans.

Natural Gas Competition

The United States natural gas industry is highly competitive.

CNX competes with other large producers, as well as a myriad of smaller producers and marketers.

CNX also competes for pipeline and other services to deliver its products to customers.

According to data from the Natural Gas Supply Association and the Energy Information Agency (EIA), the five largest U.S.

producers of natural gas produced about 14% of dry natural gas production during the first ten months of 2019.

The EIA reported 522,631 producing natural gas wells in the United States at December 31, 2018 (the latest year for which government statistics are available), which is approximately 3% lower than 2017.

These areas are currently served by a large concentration of major pipelines that provide us with access to major gas markets without the necessity of transporting our natural gas out of the region, and it is expected that recently-approved and pending pipeline projects will increase the take-away capacity from our region.

In addition to firm transportation capacity, CNX has developed a processing portfolio to support produced volumes from its wet gas production areas and has the operational and contractual flexibility to potentially convert a portion of currently processed wet gas volumes to be marketed as dry gas volumes, or vice-versa, as economically appropriate.

CNX has the advantage of having natural gas production from lower Btu wells in close proximity to higher Btu wells.

Separately, the low Btu natural gas and the high Btu natural gas may need processing in order to meet downstream pipeline specifications.

The geographic proximity and interconnected gathering system servicing these wells, allow CNX to blend this gas together and in some cases eliminate the need for the costly processing of natural gas that does not meet pipeline specification.

This allow us more flexibility in bringing wells online at qualities that meet interstate pipeline specifications.

Substantially all of our natural gas is sold at market prices primarily under short-term sales contracts and is subject to seasonal price swings.

The principal markets for our natural gas are in the Appalachian Basin where we sell natural gas to industrial customers, local distribution companies, gas marketers and power generation facilities.

Our extensive hedge position mitigates unpredictability in pricing on hedged volumes.

We also incur gathering, processing and transportation expenses to move our natural gas production from the wellhead to our principal markets in the United States.

Although we own midstream facilities, we also gather, process and transport our natural gas to market by utilizing pipelines and facilities owned by others where we have long-term contractual capacity arrangements or use purchaser-owned capacity under both long-term and short-term sales contracts.

To date, we have not experienced significant difficulty in transporting or marketing our natural gas production as it becomes available;

however, there is no assurance that we will always be able to transport and market all of our production.

CNX expects natural gas to continue to be a significant contributor to the domestic electric generation mix in the long term, as well as to fuel industrial growth in the U.S.

According to the EIA, natural gas represented 38% of U.S.

electricity generation during the twelve months ended October 31, 2019, up from 35% in 2018.

Estimates from EIA indicate that an average of 31.0 billion cubic feet per day (Bcf/d) was consumed by electric generation in 2019, up 7% from 2018.

EIA also reports that the United States exported 5.3 Bcf/d in 2019 which is up 2.0 Bcf/d, or about 61% from 2018.

EIA expects this trend to persist with estimates pointing towards an increase to 7.3 Bcf/d in 2020 and 8.9 Bcf/d in 2021.

The United States became a net exporter of natural gas on an annual basis in 2016 for the first time in almost 60 years.

natural gas exports have increased primarily with the addition of new LNG export facilities in the Lower 48 states.

EIA reported that in 2019, the United States averaged LNG exports of 5.0 Bcf/d with expectations of steady increases to 6.5 Bcf/d and 7.7 Bcf/d in 2020 and 2021, respectively.

CNX expects the high level of U.S.

gas exports to continue in the future.

In addition, there is potential for natural gas to become a significant contributor to the transportation market.

The EIA currently expects overall demand for U.S.

natural gas in 2020 to increase 1.7% from 2019.

Our increasing gas production will allow CNX to participate in growing markets.

CNX gas operations are primarily located in the eastern United States, specifically the Appalachian Basin.

The gas market is highly fragmented and not dominated by any single producer.

We believe that competition among producers is based primarily on acreage position, low drilling and operating costs as well as pipeline transportation availability to the various markets.

Continued demand for CNX's natural gas and the prices that CNX obtains are affected by natural gas use in the production of electricity, pipeline capacity, weather, U.S.

manufacturing and the overall strength of the economy, environmental and government regulation, technological developments, the availability and price of competing alternative fuel supplies, and national and regional supply/demand dynamics.

Natural Gas Competition

CNX gas operations are primarily located in the eastern United States, specifically the Appalachian Basin, which is highly fragmented and not dominated by any single producer.

We believe that competition among producers is based primarily on acreage position, drilling and operating costs as well as pipeline transportation availability to the various markets.

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.

Non-Core Mineral Assets and Surface Properties

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We also control a significant amount of surface acreage.

This surface acreage is valuable to us in the development of the gathering system for our Marcellus Shale and Utica Shale production.

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 when we are able to derive appropriate value for our shareholders.

Water Division

CNX Water Assets LLC ("CNX Water") is a wholly-owned subsidiary of CNX and supplies turnkey solutions for water sourcing, delivery and disposal for our natural gas operations, and supplies solutions for water sourcing as well as delivery and disposal for third parties.

In coordination with our midstream operations, CNX Water works to develop solutions that coincide with our midstream operations to offer gas gathering and water delivery solutions in one package to third parties.

Employee and Labor Relations

CNX also supplies turn-key solutions for water sourcing, delivery and disposal for our natural gas operations and supplies solutions for water sourcing as well as delivery and disposal for third parties.

In coordination with our midstream operations, CNX works to develop solutions that coincide with our midstream operations to offer gas natural gathering and water delivery solutions in one package to third parties.

Human Capital Management

At December 31, 2020, CNX had 451 employees, none of whom are subject to a collective bargaining agreement.

CNX recognizes that our future success depends on the services of our key employees.

CNX, is emphatic about the health and safety of not only our employees and service providers, but also the communities in which we operate.

Training and Education .

CNX has a variety of programs dedicated to ensuring our employee and contractor workforce are appropriately trained and aligned on expectations regarding safety and environmental performance.

These programs utilize behavior-based techniques which embrace a partnership among management, employees and the service provider workforce to continually focus attention and actions on daily safety behavior.

This is accomplished through an evergreen approach with constant evaluation and adaptation for employee, safety and business needs.

Fundamentally, the daily safety meetings, job safety analyses (JSA) and empowerment to stop work foster a culture of Health, Safety, and Environmental (HSE) awareness and accountability embraced at all levels of CNX;

from individual contributors and service providers to management and executive leadership.

In addition to our culture of continual assessment, CNX expects all employees and service providers to meet HSE expectations and CNX empowers our employees to make adjustments or stop work as needed in order to correct, or prevent, adverse safety or environmental conditions.

CNX expects all of our service providers to meet the training requirements outlined by OSHA and other governing agencies.

The safety training content is published on the corporate website to allow service providers constant access to CNX’s message of empowerment and accountability.

Diversity and Inclusion .

CNX values diversity throughout the organization.

We recognize that a diverse, extensive talent pool provides the best opportunity to acquire unique perspectives, experiences, ideas and solutions that help drive our business forward.

Though no significant hiring occurred during an extraordinary 2020, we replaced a departing Section 16 officer with a diverse candidate, maintaining 30 percent diversity within our executive management team, the highest proportion among our peer group.

Of the limited new hires in 2020, 38 percent were diverse.

Employee Attraction and Retention .

CNX recognizes the importance of attracting and retaining the best employees to make the most of its assets.

While there is great talent in the current pool of industry workers, CNX sees the value in tapping into the potential of recent graduates within the region as well.

In recent years, CNX has gone to great lengths to establish relationships with local colleges and universities, increasing interest in our organization and industry amongst upcoming graduates.

The continued success of CNX is not only contingent upon seeking out the best possible candidates, but retaining and developing the talent that lies within the organization as well.

CNX is proud to offer opportunities for employees to improve their skills to achieve their career goals, including continuing education assistance 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.

Additionally, our Human Resources department retains personalized career development plans for every CNX employee aimed at outlining career goals and paths to reach those goals, as well as career ladders to outline growth paths for each role in the organization.

Quality Management Systems .

CNX is committed to fostering a culture of accountability and continuous improvement.

In 2019, CNX began the implementation of a new Quality Management System (QMS), which strengthens accountability across the enterprise, and reinforces our core values of Responsibility, Ownership, and Excellence.

The QMS provides all employees, visitors, contractors and subcontractors who operate on our behalf with a practical, easily accessible system that defines clear expectations, responsibilities and standards of accountability for quality and excellence in all aspects of our business.

The Quality Management System allows for continual identification, development of documentation control, and standardization of all processes and procedures throughout the organization.

The QMS includes CNX’s robust ISO (International Organization of Standardization) conforming Health and Safety, and Environmental Management Systems.

The elements of health, safety, environmental and quality control are housed in a unified system that allows for widespread utilization and measurement.

By taking ownership of our actions, CNX has formalized our approach in these areas to deliver results that are consistently safe, predictable and environmentally responsible.

CNX will conduct 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 the QMS will serve as the platform through which the senior leadership manages and measures excellence in all operational aspects.

Health and Safety .

No job or activity is considered a success if we compromise the safety of our employees.

Everyone working at CNX locations is empowered to stop work if they feel their safety or that of a coworker is at risk.

CNX’s approach to employee stop work empowerment, while reactive when necessary, includes proactive measures such as procedural enhancements and communication.

We promote empowerment through new employee on-boarding, CNX Hazard Training and reinforcement, including an employee recognition program.

Our safety professionals provide support throughout all phases of operation with education, training, policy development, audits and emergency preparedness and response.

The evaluation of our health and safety performance is an ongoing, daily discussion.

Key performance indicators are constantly monitored and analyzed for trends across operations.

As trends are identified, CNX utilizes the information to amend policies, training and company-wide communication.

The safety department, referred to as Operational Excellence, falls under the direction of the Chief Excellence Officer.

The team takes a hybrid approach where a traditional safety group has been merged with an operation field compliance team to form the Operational Excellence department.

The Vice President Operational Excellence briefs the Chief Excellence Officer on safety related issues, policy updates and performance trends regularly.

Additionally, Operations executive management is kept up to date on safety-related items during weekly scheduled meetings.

The HSE Committee of the Board of Directors is kept apprised of safety related matters as needed and with monthly updates and quarterly meetings.

CNX employs safety and health professionals with a variety of safety certifications such as occupational health nurses, emergency medical technicians and emergency medical responders.

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 meetings and training.

Drills and 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.

CNX works hand-in-hand with local municipalities and emergency responders to ensure they are fluent in our plan and procedures.

CNX provides emergency responder training to volunteer fire departments, and county emergency management, including tours of various phases of operation they may encounter during an event.

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.

Industry Segments

Financial information concerning industry segments, as defined by GAAP, for the years ended December 31, 2020, 2019 and 2018 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.

Financial Information about Geographic Areas

All of the Company's assets and operations are located in the continental United States.

Laws and Regulations

Our natural gas and midstream operations are subject to various federal, state and local (including county and municipal level) laws and regulations.

Our operations are subject to various federal, state and local (including county and municipal level) laws and regulations, with a heavy emphasis placed on compliance with environmental laws and regulations as a result of the nature of our business.

These laws and regulations cover virtually every aspect of our operations including, among other things:

use of public roads;

transportation and use of public roads;

construction of well pads, impoundments, tanks and roads;

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the calculation, reporting and payment of taxes on gas production;

and gathering of natural gas production.

Numerous governmental permits, authorizations and approvals under these laws and regulations are required for natural gas and midstream operations.

These laws and regulations, and the permits, authorizations and approvals issued pursuant to those laws and regulations, are intended to protect, among other things:

ground water and surface water resources, including drinking water supplies;

endangered plants and wildlife;

state natural resources and the health and safety of our employees and the communities in which we operate.

gathering of natural gas production.

In addition to a variety of laws and regulations governing our natural gas operations, we are also subject to laws and regulations with respect to our employees, including health and safety regulations, and various financial and regulatory laws and regulations relating to our status as a public company, and our participation in derivative markets.

Additionally, the electric power generation industry, which consumes significant quantities of natural gas, remains subject to extensive regulation regarding the environmental impact of its power generation activities, which could impact demand for our natural gas.

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, that participate in that market.

The legislation, known as the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act), required the CFTC, the SEC and other regulatory agencies to promulgate rules and regulations implementing this legislation.

The CFTC has adopted and implemented final rules that impose regulatory obligations on all market participants, including the Company, such as recordkeeping, certain reporting obligations and other regulations relevant to natural gas hedging activities.

However, it is still not possible at this time to predict the full extent of the impact of the regulations on the Company's hedging program or regulatory compliance obligations.

We endeavor to conduct our natural gas and midstream operations in compliance with all applicable federal, state and local laws and regulations.

However, because of extensive and comprehensive regulatory requirements against a backdrop of variable geologic and seasonal conditions, permit exceedances and violations during operations can and do occur.

However, because of extensive and comprehensive regulatory requirements against a backdrop of variable geologic and seasonal conditions, exceedances and violations of permits and other regulatory requirements during operations can and do occur.

Such exceedances and violations generally result in fines or penalties but could make it more difficult for us to obtain necessary permits in the future.

The possibility exists that new legislation or regulations may be adopted which would have a significant impact on our natural gas or midstream operations or on our customers' ability to use our natural gas and may require us or our customers to change their operations significantly or incur substantial costs.

The possibility exists that new legislation or regulations may be adopted which would have a significant impact on our operations or on our customers' ability to use our natural gas and may require us or our customers to change our or their operations significantly or incur substantial costs.

See “Risk Factors -- Existing and future governmental laws, regulations and other legal requirements and judicial decisions that govern our business may increase our costs of doing business and may restrict our operations ” for additional discussion regarding additional laws and regulations affecting our business, operations and industry.

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, 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 .

Environmental Laws

Many of the laws and regulations referred to above are state level environmental laws and regulations, which vary according to the state in which we are conducting operations.

However, our natural gas and midstream operations are also subject to numerous federal level environmental laws and regulations.

Many of the laws and regulations referred to above are state-level environmental laws and regulations, which vary according to the state where we are operating.

Our natural gas and midstream operations are also subject to numerous federal level environmental laws and regulations.

In addition to routine reviews and inspections by regulators to confirm compliance with applicable regulatory requirements, CNX has established protocols for ongoing assessments to identify potential environmental exposures.

These assessments take into account industry and internal best management practices and evaluate compliance with laws and regulations and include reviews of our third-party service providers, including, for instance, waste management facilities.

Hydraulic Fracturing Activities.

Hydraulic fracturing is typically regulated by state oil and natural gas commissions and similar agencies, but the U.S.

Environmental Protection Agency (“EPA”) has asserted certain regulatory authority over hydraulic fracturing and has moved forward with various regulatory actions, including the issuance of new regulations requiring green completions for hydraulically fractured wells, and has disclosed its intent to develop regulations to require companies to disclose information regarding the chemicals used in hydraulic fracturing.

Environmental Protection Agency (“EPA”) has asserted certain regulatory authority over hydraulic fracturing and has moved forward with various regulatory actions, including the issuance of regulations requiring green completions for hydraulically fractured wells, and has disclosed its intent to develop regulations to require companies to disclose information regarding the chemicals used in hydraulic fracturing.

Some states, including states in which we operate, have adopted regulations that could impose more stringent disclosure and/or well construction requirements on hydraulic fracturing operations, or otherwise seek to ban some or all of these activities.

Additionally, these federal requirements and proposals may be subject to further review and revision by the EPA.

Additionally, these and other federal requirements and proposals may be subject to further review and revision by the EPA.

Scrutiny of hydraulic fracturing activities also continues in other ways at the federal and local levels.

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This affects natural gas production and processing operations.

Various activities in our operations are subject to air quality regulation, including pipeline compression, venting and flaring of natural gas, and hydraulic fracturing and completion processes, as well as fugitive emissions from operations.

Various activities in our operations are subject to air quality regulation, including pipeline compression, venting and flaring of

natural gas and hydraulic fracturing and completion processes, as well as fugitive emissions from operations.

We obtain permits, typically from state or local authorities, to conduct these activities.

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For example, the EPA sets National Ambient Air Quality Standards for certain pollutants and changes to such standards could cause us to make additional capital expenditures or alter our business operations in some manner.

See “Risk Factors - 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 and such regulation, as well as uncertainty concerning such regulation, could adversely impact the market for natural gas, as well as for our securities.” for additional discussion regarding certain laws and regulations related to air emissions and related matters.

See “Risk Factors - Climate change 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 and such regulation, as well as uncertainty concerning such regulation and public policy pressures that may arise, could adversely impact the market for natural gas, as well as for our securities” for additional discussion regarding certain laws and regulations related to air emissions and related matters.

Clean Water Act .

The federal Clean Water Act (“CWA”) and corresponding state laws affect our natural gas operations by regulating storm water or other regulated substance discharges, including pollutants, sediment, and spills and releases of oil, brine and other substances, into surface waters, and in certain instances imposing requirements to dispose of produced wastes and other oil and gas wastes at approved disposal facilities.

The federal Clean Water Act (“CWA”) and corresponding state laws affect our natural gas operations by regulating storm water or other regulated substance discharges, including pollutants, sediment and spills and releases of oil, brine and other substances, into surface waters (and under some state statutory schemes groundwater) and in certain instances imposing requirements to dispose of produced wastes and other oil and natural gas wastes at approved disposal facilities.

The discharge of pollutants into jurisdictional waters is prohibited, except in accordance with the terms of a permit issued by the EPA, the U.S.

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Some of our operations are located in areas that are or may be designated as protected habitats for endangered or threatened species, including the Northern Long-Eared and Indiana bats, which has a seasonal impact on our construction activities and operations.

New or additional species that may be identified as requiring protection or consideration may lead to delays in permits and/or other restrictions.

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 .

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Additionally, certain states, such as West Virginia, also maintain jurisdiction over intrastate natural gas lines.

See “ Risk Factors -- We may incur significant costs and liabilities as a result of pipeline operations and related increase in the regulation of gas gathering pipelines .” for additional discussion regarding gas transmission and gathering pipelines.

These statutes and related regulations may be revised or amended which may lead to additional safety requirements.

See “ Risk Factors -- CNX may incur significant costs and liabilities as a result of pipeline operations and/or increases in the regulation of gas gathering pipelines ” for additional discussion regarding gas transmission and gathering pipelines.

Resource Conservation and Recovery Act .

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Regulations and orders issued by the Federal Energy Regulatory Commission (FERC) impact our natural gas business to a certain degree.

Although the FERC does not directly regulate our natural gas production activities, the FERC has stated that it intends for certain of its orders to foster increased competition within all phases of the natural gas industry.

Although the FERC does not currently directly regulate our natural gas production activities, the FERC has stated that it intends for certain of its orders to foster increased competition within all phases of the natural gas industry.

Additionally, the FERC has jurisdiction over the transportation of natural gas in interstate commerce, and regulates the terms, conditions of service and rates for the interstate transportation of our natural gas production.

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This summary review is conducted at the time of acquisition or as part of a review of our land records.

Prior to the commencement of development operations on natural gas and coalbed methane properties, we conduct a thorough title examination and perform curative work with respect to significant title defects.

Prior to the commencement of development operations on natural gas and CBM properties, we conduct a thorough title examination and perform curative work with respect to significant title defects.

Our discovering title defects which we are unable to cure may adversely impact our ability to develop those properties and we may have to reduce our estimated gas reserves including our proved undeveloped reserves.

In accordance with the foregoing, we have completed title work on substantially all of our natural gas and coalbed methane properties that are currently producing and believe that we have satisfactory title to our producing properties in accordance with standards generally accepted in the industry.

In accordance with the foregoing, we have completed title work on substantially all of our natural gas and CBM properties that are currently producing and believe that we have satisfactory title to our producing properties in accordance with standards generally accepted in the industry.

See “Risk Factors - We may incur losses as a result of title defects in the properties in which we invest or the loss of certain leasehold or other rights related to our midstream activities.”

Available Information

CNX maintains a website at www.cnx.com.

CNX makes available, free of charge on its website, our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished

pursuant to Section 13(a) or 15(d) of the Exchange Act, as soon as reasonably practicable after such reports are electronically filed with, or furnished to the SEC.

Those reports are also available at the SEC's website www.sec.gov.

Apart from SEC filings, we also use our website to publish information which may be important to investors, such as presentations to analysts.

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 ).

We are subject to the informational requirements of the Exchange Act, and we file or furnish reports, proxy statements and other information with the SEC.

Such reports and other information we file with the SEC are available free of charge at our website www.cnx.com when such reports are available on the SEC’s website.

The SEC maintains a website that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at www.sec.gov.

CNX periodically provides other information for investors on corporate website, including press releases and other information about financial performance, information on corporate governance and presentations.

Our references to website URLs are intended to be inactive textual references only.

The information found on, or that can be accessed from or that is hyperlinked to, our website does not constitute part of, and is not incorporated into, this Form 10-K.

Information About Our Executive Officers

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Item 10 under the caption “Information About Our Executive Officers” (included herein pursuant to Item 401(b) of Regulation S-K).

Risk Factors Summary

The following is a summary of the principal risks that could adversely affect our business, operations and financial results.

Please refer to Item 1A “Risk Factors” of this Form 10-K below for additional discussion of the risks summarized in this Risk Factors Summary.

Risks Related to Economic Conditions and our Industry

• 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 business, operating results, financial condition and cash flows.

• If natural gas prices decrease or drilling efforts are unsuccessful, we may be required to record write-downs 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 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, may result in unexpected adverse operating and financial results.

Risks Related to our Business Operations

• The disruption of, capacity constraints in, or proximity to pipeline systems could limit sales of our natural gas and NGLs and cash flows from operations.

• Uncertainties exist in the estimation of economical recovery of natural gas and natural gas liquid reserves.

• Developing, producing, and operating natural gas wells is a high-risk activity, and is subject to operating risks and hazards that could increase expenses, decrease our production levels and expose us to losses or liabilities.

• Our identified drilling 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 development and exploration projects, as well as our midstream development projects, require substantial capital expenditures and are subject to regulatory, environmental, political, legal and economic risks.

• 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 we are 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 and natural gas liquid reserves through economic development of our existing or acquired assets or through acquisition of additional producing assets, would lead to a decline in our natural gas and natural gas liquid production levels and reserves.

• We may incur losses as a result of title defects in the properties in which we invest or the loss of certain leasehold or other rights related to our midstream activities.

Legal, 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 and such regulation, as well as uncertainty concerning such regulation and public policy pressures that may arise, could adversely impact the market for natural gas, as well as for our securities.

• Environmental regulations can increase costs and introduce uncertainty that could adversely impact the market for natural gas with potential short and long-term liabilities.

• Existing and future governmental laws, regulations and other legal requirements and judicial decisions that govern our business may increase our costs of doing business and may restrict our operations.

• CNX may incur significant costs and liabilities as a result of pipeline operations and/or increases in the regulation of natural gas gathering pipelines.

• Changes in federal or state tax laws focused on natural gas exploration and development could cause our financial position and profitability to deteriorate.

• CNX and its subsidiaries are subject to various legal proceedings and investigations, which may have an adverse effect on our business.

Financing, Investment and Indebtedness Risks

• Our current long-term debt obligations, and 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 senior secured credit facility could decrease for a variety of reasons including lower natural gas prices, declines in natural gas proved reserves, asset sales and lending requirements or regulations.

• The accounting method for convertible debt securities that may be settled in cash, such as the Convertible Notes, could have a material effect on our reported financial results.

• The capped call transactions may affect the value of the Convertible Notes and our common stock.

• We are subject to counterparty performance risk with respect to the capped call transactions.

• Conversion of the Convertible Notes may dilute the ownership interest of existing stockholders or may otherwise depress the price of our common stock.

• We 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.

• The conditional conversion feature of the Convertible Notes, if triggered, may adversely affect our financial condition and operating results.

• Provisions of our Convertible Notes could delay or prevent an otherwise beneficial takeover of us.

Risks Related to Strategic Transactions

• Strategic determinations, including the allocation of capital and other resources to strategic opportunities, are subject to risks and uncertainties.

• We do not completely control the timing of divestitures that we plan to 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 we are 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.

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.

• Our success depends on key members of our management and our ability to attract and retain experienced technical and other professional personnel.

• Terrorist activities could materially adversely affect our business and results of operations.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business