CNX Midstream Reports First Quarter Results

4/30/19

CNX Midstream Partners LP (NYSE: CNXM) today reported financial and operational results for the three months ended March 31, 2019(1).

First Quarter Results

Highlights of first quarter 2019 results attributable to the Partnership as compared to the first quarter of 2018 include:

  • Net Income of $35.1 million as compared to $27.8 million
  • Adjusted EBITDA(2) of $54.4 million as compared to $34.8 million
  • Distributable cash flow (DCF)(2) of $43.0 million as compared to $29.2 million
  • Cash distribution coverage(2) of 1.49x on an as-declared basis

"CNXM continued to deliver strong results for the first quarter," commented Nicholas J. DeIuliis, CEO of CNX Midstream GP LLC (the "General Partner"). "As compared to the first quarter of 2018, Adjusted EBITDA and distributable cash flow were up by 56% and 47%, respectively. CNXM's focus on operational execution is driving strong financial performance, which supports our plan to continue 15% annual distribution growth through 2023 without drop-down transactions or need to access the equity capital markets."

Operations

During the quarter, the company had zero reportable injuries, making it the eighteenth quarter injury-free, highlighting the company's continued focus on safety and environmental compliance. While winter operations historically result in an uptick in first quarter costs, operating unit cost were consistent with the past few quarters and ranked as the third best quarter in the company's history.

2019 Guidance

Based on current expectations, management updates the following guidance for 2019:

2019E2019E
PreviousUpdated
1,400 - 1,5001,400 - 1,500
$250 - $280$310 - $330
$200 - $220$200 - $220
$150 - $170$150 - $170
1.2x - 1.4x1.2x - 1.4x
15%15%
"The Partnership expects its 2019 capital expenditures to increase to approximately $310-$330 million, compared to the previous guidance of $250-$280 million," continued Mr. DeIuliis. "The expected increase in midstream capital is due the construction of our planned Buckland compressor station and its related discharge lines and interconnect facilities. Buckland Station is a critical component of the system overhaul we described at our 2018 Analyst and Investor Meeting and is supported by CNX's (the "Sponsor") contractual well obligations per the gas gathering agreement. CNX's additional activity, and corresponding increase in volumes and revenues in early 2020, provides the financial justification for building this station in 2019, which was the Partnership's original plan, and further supports our planned distribution growth through 2023."Quarterly Distribution

As previously announced, the Board of Directors of its general partner, CNX Midstream GP LLC, has declared a cash distribution of $0.3732 per unit with respect to the first quarter of 2019. The distribution will be made on May 14, 2019 to unitholders of record as of the close of business on May 6, 2019. The distribution, which equates to an annual rate of $1.4928 per unit, represents an increase of 3.6% over the prior quarter, and an increase of 15% over the distribution paid with respect to the first quarter of 2018.

Capital Investment and Resources

For the first quarter of 2019, CNX Midstream's total capital investment net to the Partnership was $75.9 million, which includes investment in expansion projects of $71.1 million and maintenance capital of $4.8 million.

As of March 31, 2019, CNX Midstream had outstanding borrowings of $136.7 million under its $600 million revolving credit facility.

CNX Midstream is a growth-oriented 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. Our assets include natural gas gathering pipelines and compression and dehydration facilities, as well as condensate gathering, collection, separation and stabilization facilities. More information is available at our website www.cnxmidstream.com.