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CNX Resources Acquires Noble Energy´s General Partner Interest in Cone Midstream Partners
Friday 05 January 2018

5 January 2018 - US-based natural gas CNX Resources Corp. (NYSE: CNX) has closed its acquisition of Noble Energy, Inc.'s (NYSE: NBL) 50% membership interest in Cone Gathering LLC, which holds the general partner interest and incentive distribution rights in Cone Midstream Partners LP, the company said.

CNX acquired the interest for USD 305m in cash.

In conjunction with the closing, Cone Midstream Partners LP was renamed CNX Midstream Partners LP and will commence trading on the New York Stock Exchange under the ticker "CNXM" effective January 4, 2018.

Separately, and CNX Midstream Partners LP (NYSE: CNXM) said that CNX's board of directors, following prior approval by the board of director's conflicts committee, which consists entirely of independent directors, has authorised CNXM to enter into an amendment to its gas gathering agreement with CNX Gas Company LLC, a wholly-owned subsidiary of CNX.

As part of the amendment to the GGA CNX will dedicate approximately 63,000 dry Utica acres to CNXM, of which approximately 51,000 will be located in the development company I, or DevCo I, area, which is 100% owned by CNXM.

CNX has provided a minimum well commitment of 140 wells over the next four years in the DevCo I area that provides CNXM with downside protection and continued cash flows to support distribution growth.

CNXM has agreed to a major system expansion to support production from the newly dedicated Utica areas.

This amendment is expected to help CNX unlock the stacked pay potential of the core of southwest Pennsylvania and capitalize on economies of scale, which would support accelerating drilling activity and production moving forward.

CNXM believes this will result in a higher level of confidence to support sustainable distribution growth into the future, which in turn will benefit CNX, which owns 21.7m common units, the general partner interest, and the incentive distribution rights in CNXM.

In addition, CNX and Noble have agreed to divide equitably their jointly owned water assets so that either CNX or Noble will own all of the formerly jointly owned water assets within agreed upon areas.

As part of the change in ownership, effective immediately, Nicholas J. DeIuliis will serve as the chief executive officer of CNXM, in addition to his current role as president and CEO of CNX.

Also, effective immediately, Donald W. Rush will serve as the chief financial officer of CNXM in addition to his current role as CFO of CNX.

Following the closing of the acquisition, Nicholas J. DeIuliis, Donald W. Rush, and Timothy C. Duganwill join Stephen W. Johnson and the three existing independent directors to constitute the board of directors of CNXM.

The changes to CNXM's management team and board of directors illustrate CNX's intent to better align the strategic initiatives of CNX and CNXM to unlock the growth potential for both companies.

CNX Resources Corp. (NYSE: CNX) is one of the largest independent natural gas exploration, development and production companies, with operations centred in the major shale formations of the Appalachian basin.

The company deploys an organic growth strategy focused on responsibly developing its resource base.

As of December 31, 2016, CNX had 6.3tn cubic feet equivalent of proved natural gas reserves. The company is a member of the Standard and Poor's Midcap 400 Index.

CNX Midstream Partners LP (NYSE: CNXM) is a master limited partnership that owns, operates, develops and acquires gathering and other midstream energy assets to service natural gas production in the Appalachian Basin in Pennsylvania and West Virginia.

Its assets include natural gas gathering pipelines and compression and dehydration facilities, as well as condensate gathering, collection, separation and stabilization facilities.

Goldman Sachs and Co. LLC served as the financial advisor and Latham and Watkins LLP served as the legal advisor to CNX. The conflicts committee was advised by Evercore on financial matters and Baker Botts L.L.P. on legal matters.
Details
Date Published: 05/01/2018
Target: Cone Gathering/50% stake
Country: USA
Deal Size: 305m (USD)
Sector: Petroleum/Natural Gas/Coal
Type: Stakebuilding
Financing: Cash
Status: Closed
Vendor: Noble Energy
Buyer: CNX Resources Corp
Buyer Advisor: Goldman Sachs and Co , Latham and Watkins , Evercore , Botts L.L.P.
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