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Item 1. Business

2024-02-08 compared with 2023-02-09 · 134 added, 123 removed, 397 unchanged (39% of the section changed)

CNX Resources Corporation (“CNX,” the “Company,” or “we,” “us,” or “our”) is a premier independent natural gas and midstream company engaged in the exploration, development, production and acquisition of natural gas properties in the Appalachian Basin.

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.

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.

Additionally, we operate and develop Coalbed 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-operational 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 our existing natural gas assets and the selective acquisition of natural gas acreage leases within our operating footprint.

CNX’s strategy is to use our substantial asset base, leading core operational competencies, technology development and innovation, and astute capital allocation methodologies to responsibly develop our resources and create long-term value for our shareholders.

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.

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

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.

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, employees, and the communities where it operates.

CNX believes that natural gas is central to a low-cost, reliable, secure, lower-carbon energy future that benefits American consumers, workers and the environment.

CNX has the benefit of having its operations centered in the Appalachian Basin, which CNX believes is one of the largest, most efficient, and environmentally sustainable sources of natural gas in the world.

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 natural gas production has grown by approximately 271% to a total of 580.2 net Bcfe in 2022.

• Total average production of 1,589,505 Mcfe per day;

• 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;

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• 99.5% operated.

In 2023, CNX expects capital expenditures of approximately $575 million to $675 million.

In 2024, CNX expects capital expenditures to be between $575 million and $625 million.

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

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Coalbed Methane (CBM)

We have rights to extract CBM in Virginia from approximately 278,000 net CBM acres in Central Appalachia.

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 rights to extract CBM from approximately 1,752,000 net CBM acres in other states including West Virginia, Pennsylvania, Ohio, Illinois, Indiana, and New Mexico;

however the Company has no current plans to drill CBM wells in these areas.

We have 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 1,003,000 net acres at December 31, 2022.

We have rights to extract CBM in Virginia from approximately 278,000 net CBM acres at December 31, 2023.

We extract CBM natural gas primarily from the Pocahontas #3 seam.

CNX also has the right to capture Coal Mine Methane (CMM) from active and abandoned mines in this region.

The CMM we capture would otherwise be vented into the atmosphere as third-party mining operations progress.

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.

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.

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.

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Percent Developed (1)

69 % 64 % 100 % 69 %

Net Producing Wells (including oil and gob wells) 588 3,792 45 4,425

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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.

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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

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(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.

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

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During the years ended December 31, 2023, 2022 and 2021, we drilled 30.8 , 37.0 and 33.0 net d evelopment 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 and represents less than 0.5 net wells for each year.

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.

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There were no net dry development wells in 2023, 2022 or 2021.

As of December 31, 2022, there were 4.0 net completed developmental wells ready to be turned in-line.

As of December 31, 2023, there were no net completed developmental wells ready to be turned in-line.

The following table illustrates the net wells drilled by well classification type:

For the Years

Ended December 31,

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There were no net exploratory wells drilled during the years ended December 31, 2023, 2022 and 2021.

There were 2.0 exploratory wells drilled during the year ended December 31, 2020.

As of December 31, 2023, there are no net exploratory wells in process.

The following table illustrates the exploratory wells drilled by well classification type:

For the Year Ended December 31,

2022 2021 2020

Producing Dry Still Eval.

Producing Dry Still Eval.*

Shale Segment — — — — — — — — 2.0

CBM Segment — — — — — — — — —

Other Gas Segment — — — — — — — — —

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

* Still evaluating in 2020 included 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 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 (Millions of Cubic Feet Equivalent) As of December 31,

Net Reserves (Millions of Cubic Feet Equivalent)

As of December 31,

2023 2022 2021

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Total Proved Developed and Undeveloped Reserves (1)

8,740,742 9,806,890 9,625,730

(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.

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(Dollars in millions)

Future Net Cash Flows (pre-tax) less Undiscounted Income Taxes $ 31,559 $ 16,017 $ 6,313

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

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Average Henry Hub Price ($/MMBtu) (1)

$ 2.637 $ 6.357 $ 3.598

Future Cash Inflows $ 20,281 $ 54,714 $ 31,839

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Future Development Costs (including Abandonments) (2)

(1,903) (2,234) (1,736)

Future Net Cash Flows (pre-tax) 9,863 42,255 21,856

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Standardized GAAP Measure (3)

$ 3,110 $ 10,763 $ 5,882

(1) Based on the average, first day-of-the-month price.

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(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.

Gas Production

Sales Volumes Produced

The following table sets forth net sales volumes produced for the periods indicated:

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“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 2023 annual production volumes to be approximately 555-575 Bcfe.

CNX expects 2024 annual sales volumes to be approximately 570-590 Bcfe (This includes approximately 15-18 Bcfe of coal mine methane.

See New Technologies below for more information).

Average Sales Price and Average Lifting Cost

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Average Sales Price - Gas (per Mcf) $ 2.20 $ 6.27 $ 3.55

(Loss) Gain on Commodity Derivative Instruments - Cash Settlement- Gas (per Mcf)* $ (3.35) $ (0.98) $ 0.78

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

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Average Sales Price - Oil/Condensate (per Bbl) $ 65.88 $ 81.90 $ 56.34

*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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This approach allows us to take advantage of the processors’ transportation efficiencies and diversified markets.

Certain of CNX’s processing contracts provide for the ability to take our NGLs “in-kind” and market them directly if desired.

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

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.

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.

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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 460.3 Bcf of our produced gas 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 470.0 Bcf of our produced natural gas sales volumes for the year ended December 31, 2021 at an average price of $2.51 per Mcf.

As of January 5, 2023, these physical and swap transactions represent approximately 429.7 Bcf of our estimated 2023 production at an average price of $2.47 per Mcf, 381.3 Bcf of our estimated 2024 production at an average price of $2.38 per Mcf, 373.2 Bcf of our estimated 2025 production at an average price of $2.37 per Mcf, approximately 321.7 Bcf of our estimated 2026 production at an average price of $2.61 per Mcf, and approximately 140.4 Bcf of our estimated 2027 production at an average price of $3.35 per Mcf.

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.

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.

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.

CNX's hedging strategy and information regarding derivative instruments used are outlined in Part II.

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Midstream Gas Services

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

CNX designs, builds and operates natural gas gathering systems to move natural 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 owns or operates approximately 2,700 miles of natural gas gathering pipelines as well as a number of natural gas processing facilities.

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.

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.

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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 natural gas out of the region.

These areas are currently served by a large concentration of major pipelines that provide CNX with access to major gas markets without the necessity of transporting our natural gas out of the 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.

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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.

The geographic proximity and interconnected gathering system servicing these wells, however, 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 allows us more flexibility in bringing wells online at qualities that meet interstate pipeline specifications.

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.

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

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

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New Technologies

CNX is currently developing unique, proprietary technology for vertical and horizontal business growth.

This includes using proprietary technology to change manufacturing processes for the extraction and delivery of natural gas through the development and commercialization of emerging technologies.

CNX is also focusing on forging strategic partnerships for the use of low carbon intensity feedstocks and creation of derivative products.

CNX’s New Technologies efforts are rooted in the Company’s extensive legacy asset base and innovative tradition.

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.

The environmental attributes that we generate and sell can include 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.

In the near term, we anticipate the majority of our New Technologies’ earnings to result from CMM capture activities being monetized through the Pennsylvania Alternative Energy Portfolio Standard (AEPS) program, other compliance programs, and sales to various voluntary market counterparties that desire to purchase carbon offsets to be used towards their own emission reduction goals.

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.

These new markets are volatile and have significant risk associated with eligibility, qualification and compliance with applicable programs, changing market conditions, increased competition, as well as political and regulatory risk.

See Item 1A, “Risk Factors - 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.

” for certain risks associated with environmental attributes.

Proprietary Technology.

CNX is actively pursuing the commercialization of internally developed proprietary technologies that seek to reduce both cost and emissions during various natural gas development phases.

The ability to achieve commercial success with these activities is dependent on, among other considerations, successful testing and validation of our technology and future market adoption.

To date, no revenue has been generated associated with these activities.

Derivative Products.

CNX believes that using natural gas as a sustainable fuel source for high-emitting economic sectors like transportation, manufacturing, and other industrial processes could dramatically reduce emissions footprints in those sectors while creating new vertical markets for compressed natural gas (CNG) and liquefied natural gas (LNG), and help fast-track the implementation of downstream products such as hydrogen and ammonia.

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 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.

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.

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

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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.

We also derive value from this surface control by granting rights of way or development rights to third parties.

Human Capital Management

As of December 31, 2022, CNX had 466 employees, which includes 40 employees directly attributable to our midstream operations and 68 employees directly attributable to our Coalbed methane operations in Virginia.

The increase from the previous year was primarily due to additional hires to support our operations which included hiring contractors as full-time employees.

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.

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

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

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.

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

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 help foster a cultural focus on Health, Safety, and Environmental (HSE) awareness, also known as Operational Excellence.

This is accomplished through an evergreen approach, with consistent evaluation and adaptation for workforce, safety, and business objectives.

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.

Accountability is an expectation at all levels of the Company—from individual contributors and service providers to management and executive leadership.

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CNX values diversity throughout the organization.

The Company knows that a diverse, talented team working together in an inclusive culture is key to achieving long-term goals.

In addition to prioritizing diversity within recruiting and hiring practices, CNX also believes in cultivating a culture sensitive to the importance of diversity in the workplace.

In 2022, the Company provided Diversity and Inclusion training which was completed by 100% of its employee population.

This course combined scenarios, personal interviews, discussion and exploration questions, exercises, and instruction content.

Employees were exposed to potential cultural experiences of individuals with identities that may be different from their own and had the opportunity to learn how others may experience the same workplace in very disparate ways.

CNX intends to continue and expand Diversity and Inclusion training in 2023.

Finally, the Company’s Diversity & Inclusion Advisory Council and cross-training rotational program for diverse employees augment the Company’s broader talent management and diversity goals.

The Company believes that a diverse, talented team working together in an inclusive culture is key to achieving long-term goals.

CNX prioritizes diversity within recruiting and hiring practices and believes in cultivating a culture sensitive to the importance of diversity in the workplace.

In addition, the Company’s Diversity & Inclusion Advisory Council (D&I Council) and cross-training rotational program for diverse employees augment the Company’s broader talent management and diversity goals.

The D&I Council hosts/facilitates multiple events throughout the year to create awareness and training opportunities focused on a variety of topics.

These events allow employees to be exposed to cultural experiences of individuals with identities that may be different from their own and gives them the opportunity to learn how others may experience the same workplace in very different ways.

Employee Attraction and Retention .

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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.

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 that provide the basis of accountability for quality and excellence in all aspects of our business.

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 that provide the basis of accountability for quality and excellence in all aspects of our business.

QMS allows for continual identification, development of documentation control, and standardization of all processes and procedures throughout the organization.

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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 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.

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No job or activity is considered a success if CNX compromises the safety of its employees and contractors.

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.

CNX promotes empowerment through new employee on-boarding, CNX Hazard Training compliance, and verification of contractor training and short service employee program.

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.

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.

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.

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

CNX’s hybrid approach, where the traditional safety group is merged with an operational field compliance team, forms the Operational Excellence department.

The Operational Excellence department falls under the direction of the Chief Operating Officer.

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

Additionally, operations executive management is kept up to date on quality, health, safety, and environment (QHSE) related items during weekly scheduled meetings.

The Environmental, Safety and Corporate Responsibility (ESCR) Committee of the Board of Directors is kept apprised of QHSE related matters as needed and with monthly updates and quarterly meetings.

The Environmental, Safety and

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 employs safety, health, compliance, and quality professionals with a variety of certifications such as an Occupational Health Nurse, Emergency Medical Technicians, Certified Safety Professionals, Certified Welding Inspectors, and Certified Piping Inspectors.

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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.

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.

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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:

Our operations are subject to various federal, state and local laws and regulations, with a heavy emphasis placed on compliance with environmental laws and regulations, which cover virtually every aspect of our operations including, among other things:

transportation and use of public roads;

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and gathering of natural gas production.

In addition to a variety of laws and regulations governing our natural gas operations, CNX is 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, which 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.

In addition to various laws and regulations governing our natural gas operations, CNX is also subject to laws and regulations with respect to our employees, including health and safety regulations, those relating to our status as a public company, and those governing our participation in derivative markets.

Further, our customers, including those in the electric power generation industry, are themselves subject to extensive regulation, including environmental impact.

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

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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.

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.

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.

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.

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Our natural gas and midstream operations are also subject to numerous federal 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 transporters and related facilities.

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.

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

Hydraulic Fracturing Activities.

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In December 2016, the EPA released its final report on the impacts of hydraulic fracturing on drinking water.

While the language was changed and included the possibility of

negative impacts from hydraulic fracturing, it also included the guidance to industry and regulators on how the process can be performed.

While the language was changed and included the possibility of negative impacts from hydraulic fracturing, it also included the guidance to industry and regulators on how the process can be performed.

CNX cannot predict whether any other legislation or regulations will be enacted and, if so, what its provisions will be.

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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 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 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, erosion, 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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Endangered Species Act .

The Endangered Species Act and related state laws and regulation protect plant and animal species that are threatened or endangered.

The Endangered Species Act and related state laws and regulations protect plant and animal species that are threatened or endangered.

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.

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On December 28, 2016 the EPA entered into a consent order to resolve outstanding litigation brought by environmental and citizen groups regarding the applicability of RCRA to wastes from oil and gas development activities.

In April 2019, the EPA issued a report pursuant to the consent order concluding that revisions to the federal regulations for the management of exploration and production wastes under RCRA were

not necessary at the time the report was issued.

CNX cannot predict whether the EPA may change its conclusion at some point, or whether any other legislation or regulations will be enacted and if so, what its provisions will be.

Federal Regulation of the Sale and Transportation of Natural Gas

In April 2019, the EPA issued a report pursuant to the consent order concluding that revisions to the federal regulations for the management of exploration and production wastes under RCRA were not necessary at the time the report was issued.

Many state governments have specific regulations and guidance for exploration and production wastes.

CNX cannot predict whether the EPA may change its conclusion at some point, or whether any other legislation or regulations will be enacted at a federal or state level and if so, what its provisions will be.

Other Laws and Regulations

Federal Energy Regulatory Commission .

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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 which the FERC has used to establish a pipeline's status as a gatherer not subject to the FERC jurisdiction.

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.

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.

Health and Safety Laws

Occupational Safety and Health Act .

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Additional regulation could also lead to permitting delays and additional monitoring and administrative requirements, with commensurate impacts on electricity generating operations.

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.

Title to Properties

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.

CNX acquires ownership or leasehold rights to oil and natural gas properties prior to conducting operations on those properties.

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

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.”

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.

This legislation, 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.

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.

See “ Risk Factors- Our hedging activities may prevent us from benefiting from price increases and may expose us to other risks.”

Available Information

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CNX is 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 CNX files with the SEC are available free of charge at our website www.cnx.com when such reports are available on the SEC’s website.

Such reports and other information CNX files with the SEC are available free of charge at our website www.cnx.com as soon as reasonably practicable after such reports and other information are filed with or furnished to the SEC.

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.

CNX periodically provides other information for investors on its 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.

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• 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 our proved natural gas properties.

• 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 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.

• 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, may result in unexpected adverse operating and financial results.

• 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 our Business Operations

• The disruption of capacity constraints in, or proximity to pipeline and processing systems could limit sales of our natural gas and NGLs and cash flows from operations, and any decrease in availability of pipelines or other midstream facilities could adversely affect our operations.

• Uncertainties exist in the estimation of economical recovery of oil and 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.

• 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.

• 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 capital projects 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.

• 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, NGL and oil 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, NGL and oil production levels and reserves.

• 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.

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• 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 gathering facilities.

• 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.

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

• CNX is subject to counterparty performance risk with respect to the capped call transactions.

• 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.

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• 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.

• Provisions of our unsecured debt agreements, including the 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 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 divestitures that CNX plans to engage in, and they may not provide anticipated benefits.

• 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.

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• 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