Stock Monitor: Noble Energy Post Earnings Reporting
LONDON, UK / ACCESSWIRE / December 18, 2017 / Active-Investors issued a free report on CNX Resources Corp. (NYSE: CNX), which is readily accessible upon registration at www.active-investors.com/registration-sg/?symbol=CNX as the Company's latest news hit the wire. On December 15, 2017, the Company announced that it has signed an agreement with Noble Energy (NYSE:NBL) to acquire Noble Energy's 50% membership interest in CONE Gathering LLC. The all-cash transaction is valued $305 million and will make CNX the 100% owner of CONE Gathering. Sign up now for our free research reports at:
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Details of the deal
CONE Gathering owns all interest in CONE Midstream GP, LLC, which in turn owns the general partnership interest in CONE Midstream Partners L.P. (NYSE: CNNX) (CONE). CONE Gathering also holds the complete incentive distribution rights in CONE. On completion of this transaction, CNX will own 100% stake in CONE Gathering and will transform CONE into a single-sponsor master limited partnership.
Noble Energy plans to hold on to the 21.7 million common limited partner units and monetize the value of its holdings by selling these units in the next few years. The agreement between the two companies also calls for the settlement of all legal claims between the two Companies. CNX expects to close this transaction in Q1 2018 subject to regulatory approvals and other closing conditions. However, the deal is not subject to any financing conditions.
Additionally, with the divestment of its stake in CONE Gathering, Noble Energy has said that it would be terminating its earlier agreement with Wheeling Creek Midstream, LLC, a portfolio Company of Quantum Energy Partners. Noble Energy had signed the agreement with Wheeling Creek in May 2018 to divest its complete stake in Marcellus midstream holdings for $765 million.
Management Comments
Commenting on the acquisition of Noble Energy's' 50% stake, Nicholas J. DeIuliis, President and CEO of CNX, said:
"This transaction is expected to create significant value for both CNX and CONE. As the single sponsor of CONE, CNX will benefit from increased flexibility with respect to the scope and timing of midstream development, which will enhance the value of existing development and create future opportunities such as future dropdowns and gathering more CNX volumes including dry Utica."
Kenneth M. Fisher, Executive Vice President and CFO of Noble Energy, added:
"The transaction announced this morning represents strong value realization for the general partner interest and an expeditious path forward to realize the full value of our Marcellus midstream interests. This action further focuses our portfolio and Company on the assets that will drive meaningful margin expansion in the future. For CONE Midstream, a single sponsor and better clarity on activity plans going forward will drive additional value, which we will capture through our retained unit ownership."
Backdrop
Noble Energy and CNX (formerly Consol Energy Inc.) had formed a 50:50 Joint Venture (JV) which was CONE Midstream MLP in 2011. CONE Midstream owned acreage in the Marcellus Shale play in Pennsylvania and West Virginia. The MLP's assets included approximately 250 miles of natural gas gathering pipelines, 91,000 horsepower of compression, and dehydration facilities, as well as condensate gathering, collection, separation and stabilization facilities. The MLP's gathering agreements also include acreage dedications of around 500,000 net acres in the Marcellus Shale.
Consol Energy and Noble Energy announced the ending of this JV in October 2016 after which Noble Energy divested its stake to Wheeling Creek in May 2017. CNX's reasons for ending the JV was to take charge of the growth of the Company's gas business as Consol Energy was contemplating the split of its coal and natural gas businesses. Consol Energy finally split the businesses in November 2017 into two independent, publicly traded Companies. Its gas business was christened as CNX Resources Corporation, while its coal business would operate as CONSOL Energy Inc.
About Noble Energy Inc.
Houston, Texas based Noble Energy was founded more than 85 years ago and is a leading independent oil and gas exploration and production Company. It has an excellent portfolio of high-quality crude oil and natural gas assets. Its operations include liquids-rich US onshore assets and Eastern Mediterranean based high-margin offshore natural gas assets.
About CNX Resources Corp.
Formed on November 28, 2017, Canonsburg, Pennsylvania-based CNX is the gas business based company formed after the splitting of the CONSOL Energy's coal and gas businesses. It is one of the largest independent natural gas exploration, development, and production companies, with operations centered in the major shale formations of the Appalachian basin. CNX had 6.3 trillion cubic feet equivalent of proved natural gas reserves at the end of December 31, 2016.
Stock Performance Snapshot
December 15, 2017 - At Friday's closing bell, CNX Resources's stock fell 3.49%, ending the trading session at $13.81.
Volume traded for the day: 9.53 million shares, which was above the 3-month average volume of 3.79 million shares.
Stock performance in the last month – up 3.87%; previous three-month period – up 4.40%; and past six-month period – up 14.74%
After last Friday's close, CNX Resources's market cap was at $3.19 billion.
The stock is part of the Basic Materials sector, categorized under the Independent Oil & Gas industry.
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