CNX Resources has entered into a definitive agreement to sell various non-operated oil and gas assets in the Appalachian Basin for $125 million, according to June 15 regulatory filings. (Source: Shutterstock.com)
CNX Resources has entered into a definitive agreement to sell various non-operated oil and gas assets in the Appalachian Basin for $125 million, according to June 15 regulatory filings.
The agreement, with an undisclosed third party, includes average equivalent production of 50 MMcf/d, CNX said in the Securities and Exchange Commission (SEC) report. The deal is expected to close by the end of second-quarter 2023.
The E&P expects to allocate proceeds from the sale “consistent with its capital allocation framework which has been to pay down debt and buy back stock of late,” according to the SEC filings.
The transaction has an effective date of April 1, 2023, and reduces CNX’s expected 2023 net production by 9 Bcfe.
In a June 15 analyst report, Roth MKM Managing Director Leo Mariani said the sale price is roughly $15,000 per flowing barrel of oil equivalent, which he called “reasonable for non-core gas focused assets.”
CNX made no changes to its 2023 guidance, which stands at $575 million to $675 million for capex and production of 555 Bfce to 575 Bcfe or its 2024 outlook. “We would expect the company to tweak its guidance for both years with 2Q23 earnings in late July.”
As a result of the sale, Mariani said Roth MKM cut CNX’s 2023 estimated cash flow per share estimate by 1.7% and by 3.6% for 2024.
“The asset sale has no real impact on our 2024 Net Debt/EBITDA estimate as it remains right around 2.0x,” he said.
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