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CNX Resources Closes $200M Notes Offering, Refinances Debts

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CNX Resources Corporation CNX announced the closing of its private placement of $200.0 million aggregate principal amount of its 7.250% senior notes due 2027. The proceeds from the new issue and borrowings under the revolving credit facility will aid the company to redeem all its outstanding 5.875% senior notes due 2022. This arrangement will eliminate any senior note maturities prior to 2026.

The company has been able to maintain a steady performance amid the unprecedented economic crisis by efficiently managing its assets. Earlier this month, the company announced plans to increase 2020 free cash flow, resume previously curtailed production and use funds to further lower outstanding debt levels. 

Efficient Management of Debt

CNX Resources has been managing debts quite efficiently. It has been able to refinance the entire 5.875% series of notes due 2022 with free cash flow, tax refunds and proceeds from new note issues.

At second quarter-end, total debt to capital was 36.1%, down from 36.4% registered in the first quarter of 2020. The company’s total debt to capital was also lower than the industry average of 45.27%.

Oil & Gas Companies Restructure Debt

Decline in oil and gas prices as well as demand due to the pandemic outbreak have forced many oil and gas companies operating in the United States to restructure their debt level to remain viable amid this difficult time period. Near-zero interest rates also allowed some of the companies to refinance old debts with proceeds from much lower interest-bearing debts offering.

Zacks Rank & Stocks to Consider

CNX Resources carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the same industry include Laredo Petroleum LPI, Noble Midstream Partners LP NBLX and Pioneer Natural Resources Company PXD. Laredo Petroleum sports a Zacks Rank of 1 (Strong Buy), while the other two stocks have a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Laredo Petroleum, Noble Midstream Partners and Pioneer Natural Resources delivered average earnings surprise of 12.5%, 52.5% and 7.5%, respectively, in the last four quarters.

The Zacks Consensus Estimate for Laredo Petroleum, Noble Midstream Partners and Pioneer Natural Resources’ 2020 earnings has moved 116.4%, 14.6% and 21.3% upward, respectively, in the past 60 days.

Price Performance

In the past six months’ period, the stock has gained 100.6% compared with the industry’s rally of 52.8%.

 

 

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Pioneer Natural Resources Company (PXD) : Free Stock Analysis Report
 
CNX Resources Corporation. (CNX) : Free Stock Analysis Report
 
Laredo Petroleum, Inc. (LPI) : Free Stock Analysis Report
 
Noble Midstream Partners LP (NBLX) : Free Stock Analysis Report
 
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Zacks Investment Research