- The Company reported 2023 total proved reserves of 8,741 Bcfe, comprised of 6,028 Bcfe of proved developed reserves and 2,713 Bcfe of proved undeveloped reserves.
- Development activity in 2023 converted 819 Bcfe of proved undeveloped reserves, achieving a 1.46x proved developed replacement ratio.
- Future finding and development costs for proved undeveloped reserves of
$0.43 per Mcfe and$0.50 per Mcfe when including midstream and water infrastructure investments. - Average EUR of proved undeveloped reserves in Marcellus and
Utica shales of 2.57 Bcfe and 2.73 Bcfe per thousand feet of completed lateral, respectively. - Upward proved reserves adjustments of 467 Bcfe due to positive well performance and other changes, primarily offset by downward adjustments of 709 Bcfe due to the
SEC five-year booking rule and 465 Bcfe due to lower commodity prices.
"The 2023 year-end reserve update highlights the company's continued replacement of production with capital-efficient development of highly productive reserves against a challenging commodity pricing backdrop," commented
Proved Developed Reserves
Summary of Changes in Proved Developed Reserves (Bcfe) |
|
Balance at |
6,221 |
Production |
(560) |
Sale of Reserves |
(168) |
Price Revisions |
(283) |
Transferred from Undeveloped |
819 |
Extensions and Discoveries |
42 |
Other Revisions |
(43) |
Balance at December 31, 2023 |
6,028 |
Proved developed reserves reported at 6,028 Bcfe, or a decrease of 193 Bcfe, compared to 2022. This decrease was driven by production, asset sales during the year, and commodity price adjustments affecting the long-term tail production economics; offset in part, by the conversion of undeveloped reserves.
Proved Undeveloped
Summary of Changes in Proved Undeveloped Reserves (Bcfe) |
|
Balance at |
3,585 |
Undeveloped Reserves Transferred to Developed |
(819) |
Price Revisions |
(182) |
Revisions Due to Plan Changes |
(169) |
Revisions Due to |
(709) |
Revisions Due to Well Performance and Other |
467 |
Extensions and Discoveries |
540 |
Balance at December 31, 2023 |
2,713 |
Proved undeveloped reserves reported at 2,713 Bcfe, a decrease of 872 Bcfe compared to 2022. The decline was primarily driven by a 709 Bcfe SEC 5-Year booking rule adjustment due to changes in the development schedule that shifted previously proved undeveloped reserves outside the
Proved undeveloped reserves finding and development cost (PUD F&D) are
The following table presents the summary of proved reserves by category:
Bcfe |
Years Ended |
|
|
2023 |
2022 |
PDP Reserves |
6,028 |
6,118 |
PDNP Reserves |
- |
104 |
PUD Reserves |
2,713 |
3,585 |
Total Proved Reserves |
8,741 |
9,807 |
|
Note: The proved reserve estimate as of |
Total Reserves: Proved, Probable, and Possible Reserves (3P) and Other Resource Potential
As of
The following table shows the breakdown of reserves and resource, in Bcfe, from the company's current development and exploration plays:
|
Proved |
Proved |
Proved |
Total |
Probable |
Possible |
Total 3P |
Other |
Total |
|
5,166 |
- |
1,814 |
6,980 |
1,164 |
536 |
8,680 |
62,223 |
70,903 |
Coalbed Methane |
522 |
- |
290 |
812 |
- |
- |
812 |
956 |
1,768 |
|
335 |
- |
608 |
943 |
611 |
104 |
1,658 |
35,084 |
36,742 |
Other (1) |
5 |
- |
- |
5 |
- |
- |
5 |
9,218 |
9,223 |
Total, Year End 2023 |
6,028 |
- |
2,713 |
8,741 |
1,775 |
640 |
11,156 |
107,480 |
118,636 |
Total, Year End 2022 |
6,118 |
104 |
3,585 |
9,807 |
1,227 |
654 |
11,687 |
109,629 |
121,317 |
Totals may not add due to rounding. |
Note: (1) Other includes Conventional and |
|
Definition: Total Reserve & Resource includes total 3P and other resource potential outside of 3P. |
The estimates of reserves and future revenue were prepared in accordance with the definitions and guidelines of the SEC Regulation S-X Rule 4.10(a). |
Standardized Measure of Discounted Future Net Cash Flows
The following information was prepared in accordance with the provisions of the
The projections should not be viewed as realistic estimates of future cash flows, nor should the "standardized measure" be interpreted as representing current value to CNX. Material revisions to estimates of proved reserves may occur in the future; development and production of the reserves may not occur in the periods assumed; actual prices realized are expected to vary significantly from those used and actual costs may vary. CNX's investment and operating decisions are not based on the information presented, but on a wide range of reserve estimates that include probable as well as proved reserves and on different price and cost assumptions.
The standardized measure is intended to provide a better means for comparing the value of CNX's proved reserves at a given time with those of other gas producing companies than is provided by a comparison of raw proved reserve quantities.
Reconciliation of PV-10 to Standardized Measure |
|
|
||||
|
|
|
||||
(Dollars in millions, except gas price/MMBtu) |
|
2023 |
|
2022 |
|
2021 |
Average |
|
$ 2.637 |
|
$ 6.357 |
|
$ 3.598 |
Future cash inflows |
|
$ 20,281 |
|
$ 54,714 |
|
$ 31,839 |
Future production costs |
|
(8,515) |
|
(10,225) |
|
(8,247) |
Future development costs (including abandonments) |
|
(1,903) |
|
(2,234) |
|
(1,736) |
Future net cash flows (pre-tax) |
|
9,863 |
|
42,255 |
|
21,856 |
10% discount factor |
|
(5,662) |
|
(27,754) |
|
(13,775) |
PV-10 (Non-GAAP measure) (1) |
|
4,201 |
|
14,501 |
|
8,081 |
Undiscounted income taxes |
|
(2,507) |
|
(10,696) |
|
(5,839) |
10% discount factor |
|
1,416 |
|
6,958 |
|
3,640 |
Discounted income taxes |
|
(1,091) |
|
(3,738) |
|
(2,199) |
Standardized GAAP measure |
|
$ 3,110 |
|
$ 10,763 |
|
$ 5,882 |
|
|
(1) |
We calculate our present value at 10% (PV-10) in accordance with the following table. Management believes that the presentation of the non-Generally Accepted Accounting Principle (GAAP) financial measure of PV-10 provides useful information to investors because it is widely used by professional analysts and sophisticated investors in evaluating oil and gas companies. Because many factors that are unique to each individual company impact the amount of future income taxes estimated to be paid, the use of a pre-tax measure is valuable when comparing companies based on reserves. PV-10 is not a measure of the financial or operating performance under GAAP. PV-10 should not be considered as an alternative to the standardized measure as defined under GAAP. We have included a reconciliation of the most directly comparable GAAP measure-after-tax discounted future net cash flows. |
Supplemental Reserves Information
|
|
Adjusted |
|
Pricing (1) |
Pricing (2) |
Benchmark Pricing: |
|
|
WTI Oil Price ($/Bbl) |
|
|
Average |
|
|
C2+ Natural Gas Liquids ($/Bbl) |
|
|
Condensate ($/Bbl) |
|
|
|
|
(1) |
The |
(2) |
The SEC Pricing is adjusted for quality, hedges, transportation costs, and basis differentials in the calculation of future net cash flows. |
Summary of Changes in Proved Reserves:
Summary of Changes in Proved Reserves (Bcfe) |
|
Balance at |
9,807 |
Extensions and Discoveries |
582 |
Revisions |
(455) |
Production |
(560) |
Price Adjustments |
(465) |
Sales of Reserves |
(168) |
Balance at December 31, 2023 |
8,741 |
|
Note: The proved reserve estimate as of |
Future Capital Costs for Proved Reserves:
$ millions |
|
Drilling and Completions Capital |
|
Midstream and Water Infrastructure Capital |
|
Plugging and Abandonment Costs |
|
|
Note: Represents the development costs for wells the company expects to turn-in-line over the next five years and plugging and abandonment costs for all proved reserve wells. |
About
Cautionary Statements
We are including the following cautionary statement in this press release to make applicable and take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 for any forward-looking statements made by, or on behalf of us. With the exception of historical matters, the matters discussed in this press release are forward-looking statements (as defined in 21E of the Securities Exchange Act of 1934 (the "Exchange Act")) that involve risks and uncertainties that could cause actual results to differ materially from projected results. Accordingly, investors should not place undue reliance on forward-looking statements as a prediction of actual results. These forward-looking statements may include projections and estimates concerning the timing and success of specific projects and our future production, revenues, income, and capital spending. When we use the words "believe," "intend," "expect," "may," "should," "anticipate," "could," "estimate," "plan," "predict," "project," "will," or their negatives, or other similar expressions, the statements which include those words are usually forward-looking statements. When we describe a strategy that involves risks or uncertainties, we are making forward-looking statements. The forward-looking statements in this press release speak only as of the date of this press release; we disclaim any obligation to update these statements. We have based these forward-looking statements on our current expectations and assumptions about future events. While our management considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies, and uncertainties, most of which are difficult to predict and many of which are beyond our control. These risks, contingencies and uncertainties relate to, among other matters, the following: prices for natural gas and natural gas liquids are volatile and can fluctuate widely based upon a number of factors beyond our control including oversupply relative to the demand for our products, weather and the price and availability of alternative fuels; unsuccessful drilling efforts or continued natural gas price decreases requiring write downs of our proved natural gas properties, or changes in assumptions impacting management's estimates of future financial results as well as other assumptions such as movement in our stock price, weighted-average cost of capital, terminal growth rates and industry multiples, could cause goodwill and other intangible assets we hold to become impaired and result in material non-cash charges to earnings; a loss of our competitive position because of the competitive nature of the natural gas industry, consolidation within the industry or overcapacity in the industry adversely affecting our ability to sell our products and midstream services; 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; hedging activities may prevent us from benefiting from price increases and may expose us to other risks; negative public perception regarding our industry could have an adverse effect on our operations; events beyond our control, including a global or domestic health crisis; dependence on gathering, processing and transportation facilities and other midstream facilities owned by others, and disruption of, capacity constraints in, or proximity to pipeline, and any decrease in availability of pipelines or other midstream facilities; uncertainties in estimating our economically recoverable natural gas reserves, and inaccuracies in our estimates; the high-risk nature of drilling, developing and operating natural gas wells; our identified drilling locations are scheduled out over multiple years, making them susceptible to uncertainties that could materially alter the occurrence or timing of their development or drilling; the substantial capital expenditures required for our development and exploration projects, as well as midstream system development; decreases in the availability of, or increases in the price of, required personnel, services, equipment, parts and raw materials in sufficient quantities or at reasonable costs to support our operations; our ability to find adequate water sources for our use in shale gas drilling and production operations, or our ability to dispose of, transport or recycle water used or removed in connection with our gas operations at a reasonable cost and within applicable environmental rules; failure to successfully estimate the rate of decline or existing reserves or to find or acquire economically recoverable natural gas reserves to replace our current natural gas reserves; losses incurred 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; the impact of climate change legislation, litigation and potential, as well as any adopted, environmental regulations, including those relating to greenhouse gas emissions; 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 government 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; significant costs and liabilities may be incurred as a result of pipeline operations and related increase in the regulation of gas gathering pipelines; changes in federal or state income tax laws; the outcomes of various legal proceedings, including those which are more fully described in our reports filed under the Exchange Act; risks associated with our current long-term debt obligations; a decrease in our borrowing base, which 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; Risks associated with our convertible senior notes due
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