XML 31 R20.htm IDEA: XBRL DOCUMENT v3.24.3
Derivative Instruments
 9 Months Ended
Sep. 30, 2024
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Instruments DERIVATIVE INSTRUMENTS:
CNX enters into interest rate swap agreements to manage its exposure to interest rate volatility. These swaps change the variable-rate cash flow exposure on the debt obligations to fixed cash flows. The change in fair value of the interest rate swap agreements is accounted for on a mark-to-market basis with the changes in fair value recorded in current period earnings.

In March 2020, CNX entered into an interest rate swap agreement, inclusive of a put option at zero basis points, related to $160,000 of borrowings under the CNX Credit Facility which had the economic effect of modifying the variable-interest obligation into a fixed-interest obligation over a four-year period. This agreement expired in March 2024.

In March 2020, CNX entered into a four-year interest rate swap related to an additional $250,000 of borrowings under the CNX Credit Facility, inclusive of a put option at zero basis points. In December 2020, CNX executed an offsetting $250,000 interest rate swap. Consistent with the previous interest rate swap agreements, the $250,000 interest rate swaps were entered into to manage CNX's exposure to interest rate volatility. This agreement expired in April 2024.

CNX enters into financial derivative instruments (over-the-counter swaps) to manage its exposure to natural gas and NGL price fluctuations. Commodity hedges are accounted for on a mark-to-market basis with changes in fair value recorded in current period earnings.

CNX is exposed to credit risk in the event of non-performance by counterparties. The creditworthiness of counterparties is subject to continuing review. The Company has not experienced any issues of non-performance by derivative counterparties.
None of the Company's counterparty master agreements currently require CNX to post collateral for any of its positions. However, as stated in the applicable counterparty master agreements, if CNX's obligations with one of its counterparties cease to be secured on the same basis as similar obligations with the other lenders under the CNX Credit Facility, CNX would have to post collateral for instruments in a liability position in excess of defined thresholds. All of the Company's derivative instruments are subject to master netting arrangements with our counterparties. CNX recognizes all financial derivative instruments as either assets or liabilities at fair value in the Consolidated Balance Sheets on a gross basis.
 
Each of the Company's counterparty master agreements allows, in the event of default, the ability to elect early termination of outstanding contracts. If early termination is elected, CNX and the applicable counterparty would net settle all open hedge positions.


The total notional amounts of CNX's derivative instruments were as follows:
September 30,December 31,Forecasted to
20242023Settle Through
Natural Gas Commodity Swaps (Bcf)1,105.6 1,349.2 2028
Natural Gas Basis Swaps (Bcf)621.4 760.3 2028
NGL Commodity Swaps (Mbbls)655.281.02025
Interest Rate Swaps$— $410,000 2024

The gross fair value of CNX's derivative instruments was as follows:
September 30, December 31,
20242023
Current Assets:
  Commodity Derivative Instruments:
     Natural Gas Commodity Swaps$105,075 $168,532 
     NGL Commodity Swaps1,686 1,003 
     Natural Gas Basis Swaps40,259 77,540 
  Interest Rate Swaps— 5,449 
Total Current Assets$147,020 $252,524 
Other Non-Current Assets:
  Commodity Derivative Instruments:
     Natural Gas Commodity Swaps$167,629 $166,701 
     Natural Gas Basis Swaps61,254 113,829 
Total Other Non-Current Assets$228,883 $280,530 
Current Liabilities:
  Commodity Derivative Instruments:
     Natural Gas Commodity Swaps$155,504 $47,279 
     NGL Commodity Swaps336 — 
     Natural Gas Basis Swaps29,955 9,473 
  Interest Rate Swaps— 4,350 
Total Current Liabilities$185,795 $61,102 
Non-Current Liabilities:
  Commodity Derivative Instruments:
     Natural Gas Commodity Swaps$318,108 $484,357 
     Natural Gas Basis Swaps51,461 42,197 
Total Non-Current Liabilities$369,569 $526,554 
The effect of commodity derivative instruments on the Company's Consolidated Statements of Income was as follows:
For the Three Months EndedFor the Nine Months Ended
September 30, September 30,
2024202320242023
Realized Gain on Commodity Derivative Instruments:
Natural Gas Commodity Swaps$85,312 $35,762 $258,096 $69,232 
Natural Gas Basis Swaps8,797 65,514 531 49,952 
NGL Commodity Swaps554 595 770 1,214 
Total Realized Gain on Commodity Derivative Instruments94,663 101,871 259,397 *120,398 **
Unrealized Gain (Loss) on Commodity Derivative Instruments:
Natural Gas Commodity Swaps69,688 1,289 (30,679)1,308,252 
Natural Gas Basis Swaps(77,905)(53,462)(118,190)(77,026)
NGL Commodity Swaps2,518 (1,895)59 818 
Total Unrealized (Loss) Gain on Commodity Derivative Instruments(5,699)(54,068)(148,810)1,232,044 
Gain (Loss) on Commodity Derivative Instruments:
Natural Gas Commodity Swaps155,000 37,051 227,417 1,377,484 
Natural Gas Basis Swaps(69,108)12,052 (117,659)(27,074)
NGL Commodity Swaps3,072 (1,300)829 2,032 
Total Gain on Commodity Derivative Instruments$88,964 $47,803 $110,587 $1,352,442 
*Includes $30,891 of commodity derivatives that have been settled but not received at September 30, 2024, and excludes $6,741 of commodity derivatives that were settled but not received and $900 that were settled but not paid at December 31, 2023.
**Includes $24,215 of commodity derivatives that have been settled but not received at September 30, 2023 and excludes $77,662 of commodity derivatives that were settled but not paid at December 31, 2022.

The effect of interest rate swaps on Interest Expense in the Company's Consolidated Statements of Income was as follows:
For the Three Months EndedFor the Nine Months Ended
September 30, September 30,
2024202320242023
Cash Received in Settlement of Interest Rate Swaps$— $1,173 $1,103 $2,989 
Unrealized Loss on Interest Rate Swaps— (1,094)(1,099)(2,231)
Gain on Interest Rate Swaps$— $79 $4 $758 

The Company also enters into fixed price natural gas sales agreements that are satisfied by physical delivery. These physical commodity contracts qualify for the normal purchases and normal sales exception and are not subject to derivative instrument accounting.