CNX Resources to acquire Apex Energy II assets in $505m Appalachian Basin deal

CNX Resources Corporation (NYSE: CNX) has entered a definitive agreement to acquire the natural gas upstream and midstream assets of Apex Energy II, LLC, for approximately $505 million in cash. The deal, effective October 1, 2024, significantly bolsters CNX’s Appalachian Basin operations, with completion anticipated in the first quarter of 2025.

Strategic Acquisition Expands Appalachian Operations

The acquisition strengthens CNX’s natural gas acquisition strategy by adding approximately 36,000 net acres of undeveloped leasehold acreage, primarily in Westmoreland County, Pennsylvania. The assets include 12,600 acres in the Marcellus formation and 8,600 acres in the Utica formation, enhancing opportunities for stacked pay development across CNX’s core region.

CNX Resources President and CEO Nick Deiuliis described the acquisition as a transformative move for its Appalachian Basin operations, noting its alignment with the company’s existing low-emission production focus. He emphasised the unique synergy between the assets and CNX’s ongoing stacked pay development initiatives, driven by technological innovation and operational expertise.

Financially Accretive with Operational Synergies

The acquired assets, which boast 2025 estimated daily production of 180–190 MMcfe/d, are expected to deliver EBITDA of $150–$160 million based on recent strip pricing. These metrics underscore the deal’s value for CNX’s natural gas acquisition strategy, while integrating Apex’s infrastructure ensures significant operational cost efficiencies. The assets’ fully developed midstream network will seamlessly complement CNX’s low-cost strategy, with 2025 operating costs projected at $0.16/Mcfe.

Furthermore, the acquisition is immediately accretive to CNX’s free cash flow per share, aligning with its disciplined approach to financial growth. By funding the transaction through its secured credit facility, CNX Resources preserves substantial flexibility to continue driving value across its Appalachian Basin operations.

Long-Term Value Creation for Stakeholders

The deal reinforces CNX’s focus on operational cost efficiencies while expanding its undeveloped leasehold acreage. With the extended maturities of its credit facilities and minimal leverage impact post-acquisition, CNX Resources is well-positioned to unlock long-term shareholder value. The company’s commitment to sustainable practices and stacked pay development is expected to generate strong financial returns while enhancing its natural gas acquisition portfolio.

Industry Experts Weigh In

Analysts believe CNX’s focus on consolidating assets in the region reflects its broader Appalachian Basin operations strategy. The emphasis on low-emission, cost-efficient production aligns with market trends prioritising sustainability and value creation.

Looking Ahead

As the transaction progresses toward completion, CNX Resources is poised to solidify its leadership in stacked pay development and expand its natural gas acquisition footprint. With a focus on operational cost efficiencies, the company is set to deliver strong performance and growth across its core region.