Writer: Joshua Andino
2 min read June 2023 — CNX has sold $125 million of its non-core, mostly Appalachian assets.
The deal is expected to close at the end of the month after CNX quietly filed a form 8-K with the Securities and Exchange Commission to sell “non-operated producing oil and gas assets” late last week. The filing notes the transaction’s effective date as April 1 and reduces CNX’s net production for the year by 9 billion cubic feet equivalent (Bcfe). Markets responded positively to the June 15 announcement, with CNX’s share price closing at 17.35 for the day, up from May’s yearly low of $14.56.
The move comes six months after CNX announced its Appalachia First strategic plan, which aims to transform the Appalachian basin and improve the lives of its residents through a three-pronged approach.
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“The Appalachia First vision is a simple way of describing the utilization of the low cost, clean natural gas produced in Appalachia to develop the Appalachia economy first,” CNX Chief Excellence Officer Yemi Akinkugbe told Invest: earlier this year. “By leveraging these resources, we can establish a new technological hub for the future. This is the essence of Appalachia First, and we are passionate about it because of the potential it brings. The opportunities for transportation, power and new technological innovations are unlimited, not just in the energy sector but across all industries. We are excited about this and believe that it can transform the region.”
The plan includes the provision of low-cost natural gas, the development of new technology in both its operations and the communities the firm operates in, as well as strategic investments to displace higher-carbon fuels in the aviation, plastics, rail, cargo, mass transit, trucking and fleet and passenger vehicle sectors.
“Appalachia can be the launchpad to a more efficient and sustainable future catalyzed by lower carbon intensity natural gas,” said Nick Dellulis, president and CEO of CNX. “This proud region and its people should be the solution to deliver reliable and affordable energy – our region’s abundant energy resources can and must be used more effectively to prioritize the improvement of the human condition, the environment, the nation, and the world.” He added, “We believe the strategic approaches integrated throughout this vision represent a clear roadmap to transform key sectors of our economy and workforce while also changing the world for the better.”
The Canonsburg-based company has made no changes to its 2023 guidance, which pointed to $575 million to $675 million dedicated to capital expenditures and production of 555 Bfce to 575 Bfce for its 2024 outlook. The sale of its non-core assets is unlikely to significantly impact the company’s strategic goals in the region.
“In other words, put our local communities first and watch what happens,” Dellulis said.
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