CNX acquires Apex Energy for $505 million to expand Marcellus, Utica foothold

CNX Resources Corporation has entered into a definitive agreement to acquire the natural gas upstream and associated midstream business of Apex Energy II in the Appalachian Basin for total cash consideration of approximately $505 million. Completion of the transaction, which is subject to the satisfaction of customary closing conditions, is expected to occur in Q1 of 2025.

"This transaction represents a rare opportunity to acquire a highly complementary asset adjacent to our existing operations,” stated CNX president and CEO Nick Deiuliis. “It underscores our confidence in the stacked pay development opportunities that have been unlocked from pioneering the deep Utica in this region."

The acquisition strategically expands CNX's existing stacked Marcellus and Utica undeveloped leasehold in the CPA region and provides an existing infrastructure footprint that can be leveraged for future development. Additionally, CNX expects operational and other development synergies to add incremental value to the core business in the coming years.

The acquisition is expected to be immediately accretive to CNX's key metric of free cash flow per share. The attractive acquisition price and free cash flow profile of the assets allows the company to maintain its strong balance sheet and preserve significant capital allocation flexibility moving forward.

Transaction highlights

• Valuation supported by substantial cash flow from existing production base:
  • Expected 2025 average daily production of 180 - 190 MMcfe/d
  • Expected 2025 EBITDA1 of approximately $150 - $160 million at recent strip
• Fully integrated gathering midstream aligns with CNX's low-cost strategy:
  • Expected 2025 operating costs of approximately $0.16/Mcfe for the acquired assets
  • Significant existing infrastructure can be leveraged for future stacked pay development of the Marcellus and Utica
• Expands core strategic development footprint:
  • Adds approximately 36,000 total net acres (94% held) in Westmoreland County, Pennsylvania
  • Includes approximately 8,600 acres of undeveloped Utica and 12,600 acres of undeveloped Marcellus