CNX Resources closes sale of US gathering system to CNXM

Independent natural gas exploration and production company CNX Resources has closed the sale of its 95% interest in the Shirley-Pennsboro gathering system to CNX Midstream Partners (CNXM) for a consideration of $265m.

The agreement for the transaction was reached between CNX and CNXM.

The Shirley-Pennsboro system gathers and transports gas in the core wet gas region of the Marcellus Shale in West Virginia.

It possesses a flowing production capacity of approximately 180 million cubic feet equivalent per day.

The gathering system covers Doddridge, Tyler, Ritchie and Pleasant counties.

The transaction is expected to provide CNXM with an additional $22m-$24m of 2018 earnings before interest, tax, depreciation and amortisation (EBITDA) on a full-year, pro forma basis.

At the time of signing the deal, CNX and CNXM CEO Nicholas DeIuliis said: “For CNX, the transaction provides significant cash proceeds that effectively return the investment we made for our acquisition of Noble Energy’s general partner interest in CNXM.

“Also, in connection with the acquisition, CNX and CNXM have agreed to amend the existing gathering agreement to provide for a minimum volume commitment (MVC) with respect to the Shirley-Pennsboro System.

“This operating area was the largest growth contributor to CNX’s 2017 Marcellus Shale volumes and will continue to be a growing part of CNX’s future production.”

The transaction represents the transfer of the gas gathering system to CNXM’s wholly owned subsidiary, CNX Midstream DevCo I.