10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 __________________________________________________

FORM 10-Q

  __________________________________________________ 

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the quarterly period ended June 30, 2020

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission file number: 001-36635

__________________________________________________

 

CNX MIDSTREAM PARTNERS LP

(Exact name of registrant as specified in its charter)

Delaware	47-1054194
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

1000 CONSOL Energy Drive

Canonsburg, PA 15317-6506

(724) 485-4000

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

Securities registered pursuant to Section 12(b) of the Act:
Title of each class	Trading Symbol(s)	Name of exchange on which registered
Common Units Representing Limited Partner Interests	CNXM	New York Stock Exchange

__________________________________________________

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No   ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer  ☒    Accelerated filer  ☐   Non-accelerated filer ☐ Smaller Reporting Company  ☐ Emerging Growth Company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  ☐    No  ☒

As of July 30, 2020, CNX Midstream Partners LP had 89,799,224 common units outstanding.

TABLE OF CONTENTS

		Page
PART I FINANCIAL INFORMATION
ITEM 1.	Unaudited Consolidated Financial Statements
	Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2020 and 2019	3
	Consolidated Balance Sheets at June 30, 2020 and December 31, 2019	4
	Consolidated Statements of Partners’ Capital and Noncontrolling Interest for the Three and Six Months Ended June 30, 2020 and 2019	5
	Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2020 and 2019	7
	Notes to Unaudited Consolidated Financial Statements	8
ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	35
ITEM 4.	Controls and Procedures	35
PART II OTHER INFORMATION
ITEM 1.	Legal Proceedings	36
ITEM 1A.	Risk Factors	36
ITEM 6.	Exhibits	38

PART I: FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

CNX MIDSTREAM PARTNERS LP

CONSOLIDATED STATEMENTS OF OPERATIONS

(Dollars in thousands, except per unit data)

(Unaudited)

	Three Months Ended   June 30,				Six Months Ended   June 30,
	2020		2019		2020		2019
Revenue
Gathering revenue — related party	$	54,203	$	59,205	$	116,381	$	112,981
Gathering revenue — third party	11,749		18,896		29,702		37,339
Miscellaneous income	86		—		151		—
Total Revenue	66,038		78,101		146,234		150,320
Expenses
Operating expense — related party (Note 4)	4,367		6,514		8,195		12,062
Operating expense — third party	6,049		6,188		14,645		12,162
General and administrative expense — related party (Note 4)	2,748		4,027		5,605		7,994
General and administrative expense — third party	1,585		1,364		4,350		2,900
Loss on asset sales and abandonments	1,663		—		1,652		7,229
Depreciation expense	8,209		5,860		15,787		11,510
Interest expense	8,617		7,685		17,410		15,024
Total Expense	33,238		31,638		67,644		68,881
Net Income	32,800		46,463		78,590		81,439
Less: Net income (loss) income attributable to noncontrolling interest	250		(282)		821		(413)
Net Income Attributable to General and Limited Partner Ownership Interest in CNX Midstream Partners LP	$	32,550	$	46,745	$	77,769	$	81,852
Calculation of Limited Partner Interest in Net Income:
Net Income Attributable to General and Limited Partner Ownership Interest in CNX Midstream Partners LP	$	32,550	$	46,745	$	77,769	$	81,852
Less: General partner interest in net income, including incentive distribution rights	—		6,325		—		11,604
Limited partner interest in net income	$	32,550	$	40,420	$	77,769	$	70,248
Earnings per limited partner unit:
Basic	$	0.36	$	0.63	$	0.87	$	1.10
Diluted	$	0.35	$	0.63	$	0.84	$	1.10
Weighted average number of limited partner units outstanding (in thousands):
Basic	89,799		63,732		89,798		63,715
Diluted	92,817		63,755		92,820		63,759
Cash distributions declared per unit (*)	$	0.5000	$	0.3865	$	0.5829	$	0.7597

(*) Represents the cash distributions declared during the month following the end of each respective quarterly period. See Note 10.

The accompanying notes are an integral part of these unaudited financial statements.

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CNX MIDSTREAM PARTNERS LP

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands, except number of limited partner units)

	(Unaudited)
	June 30, 2020		December 31, 2019
ASSETS
Current Assets:
Cash	$	989	$	31
Receivables — related party	16,583		21,076
Receivables — third party, net (Note 2)	8,615		7,935
Other current assets	1,672		1,976
Total Current Assets	27,859		31,018
Property and Equipment (Note 5):
Property and equipment	1,329,543		1,302,566
Less — accumulated depreciation	122,804		106,975
Property and Equipment — Net	1,206,739		1,195,591
Other Assets:
Operating lease right-of-use assets	1,594		4,731
Other assets	2,698		3,262
Total Other Assets	4,292		7,993
TOTAL ASSETS	$	1,238,890	$	1,234,602
LIABILITIES AND PARTNERS’ CAPITAL
Current Liabilities:
Trade accounts payable	$	9,312	$	15,683
Accrued interest payable	7,794		7,973
Accrued liabilities	14,825		43,634
Due to related party (Note 4)	52,191		4,787
Total Current Liabilities	84,122		72,077
Other Liabilities:
Long-term liabilities — related party (Note 4)	85,000		—
Long-Term Debt:
Revolving credit facility (Note 6)	319,000		311,750
Senior Notes (Note 6)	394,635		394,162
Total Long-Term Debt	713,635		705,912
TOTAL LIABILITIES	882,757		777,989
Partners’ Capital and Noncontrolling Interest:
Limited partner units (89,799,224 issued and outstanding at June 30, 2020 and 63,736,622 issued and outstanding at December 31, 2019)	251,862		380,473
Class B units (3,000,000 issued and outstanding at June 30, 2020 and none issued and outstanding at December 31, 2019)	34,590		—
General partner interest	—		7,280
Partners’ capital attributable to CNX Midstream Partners LP	286,452		387,753
Noncontrolling interest	69,681		68,860
Total Partners’ Capital and Noncontrolling Interest	356,133		456,613
TOTAL LIABILITIES AND PARTNERS’ CAPITAL	$	1,238,890	$	1,234,602

The accompanying notes are an integral part of these unaudited financial statements.

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CNX MIDSTREAM PARTNERS LP

CONSOLIDATED STATEMENTS OF PARTNERS’ CAPITAL AND NONCONTROLLING INTEREST

(Dollars in thousands)

(Unaudited)

	Three Months Ended June 30, 2020
	Partners’ Capital				Total
					Capital
	Limited		Class B		Attributable		Noncontrolling
	Partners		Units		to Partners		Interest		Total
Balance at March 31, 2020	$	226,376	$	34,590	$	260,966	$	69,431	$	330,397
Net income	32,550		—		32,550		250		32,800
Quarterly distributions to unitholders	(7,444)		—		(7,444)		—		(7,444)
Unit-based compensation	380		—		380		—		380
Balance at June 30, 2020	$	251,862	$	34,590	$	286,452	$	69,681	$	356,133

	Three Months Ended June 30, 2019
	Partners’ Capital				Total
					Capital
	Limited		General		Attributable		Noncontrolling
	Partners		Partner		to Partners		Interest		Total
Balance at March 31, 2019	$	327,380	$	11,880	$	339,260	$	67,740	$	407,000
Net income (loss)	40,420		6,325		46,745		(282)		46,463
Quarterly distributions to unitholders	(23,785)		(5,155)		(28,940)		—		(28,940)
Unit-based compensation	541		—		541		—		541
Vested units withheld for taxes	(26)		—		(26)		—		(26)
Balance at June 30, 2019	$	344,530	$	13,050	$	357,580	$	67,458	$	425,038

The accompanying notes are an integral part of these unaudited financial statements.

5

CNX MIDSTREAM PARTNERS LP

CONSOLIDATED STATEMENTS OF PARTNERS’ CAPITAL AND NONCONTROLLING INTEREST

(Dollars in thousands)

(Unaudited)

	Six Months Ended June 30, 2020
	Partners’ Capital						Total
							Capital
	Limited		Class B		General		Attributable		Noncontrolling
	Partners		Units		Partner		to Partners		Interest		Total
Balance at December 31, 2019	$	380,473	$	—	$	7,280	$	387,753	$	68,860	$	456,613
Net income	77,769		—		—		77,769		821		78,590
Quarterly distributions to unitholders	(44,645)		—		—		(44,645)		—		(44,645)
IDR Elimination Transaction	(162,310)		34,590		(7,280)		(135,000)		—		(135,000)
Unit-based compensation	884		—		—		884		—		884
Vested units withheld for taxes	(309)		—		—		(309)		—		(309)
Balance at June 30, 2020	$	251,862	$	34,590	$	—	$	286,452	$	69,681	$	356,133

	Six Months Ended June 30, 2019
	Partners’ Capital				Total
					Capital
	Limited		General		Attributable		Noncontrolling
	Partners		Partner		to Partners		Interest		Total
Balance at December 31, 2018	$	320,543	$	10,900	$	331,443	$	67,871	$	399,314
Net income (loss)	70,248		11,604		81,852		(413)		81,439
Contributions from general partner and noncontrolling interest holders, net	—		30		30		—		30
Quarterly distributions to unitholders	(46,724)		(9,484)		(56,208)		—		(56,208)
Unit-based compensation	1,153		—		1,153		—		1,153
Vested units withheld for taxes	(690)		—		(690)		—		(690)
Balance at June 30, 2019	$	344,530	$	13,050	$	357,580	$	67,458	$	425,038

The accompanying notes are an integral part of these unaudited financial statements.

6

CNX MIDSTREAM PARTNERS LP

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands)

(Unaudited)

	Six Months Ended   June 30,
	2020		2019
Cash Flows from Operating Activities:
Net income	$	78,590	$	81,439
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation expense and amortization of debt issuance costs	16,730		12,449
Unit-based compensation	884		1,153
Loss on asset sales and abandonments	1,652		7,229
Other	144		41
Changes in assets and liabilities:
Due to/from affiliate	2,256		(3,269)
Receivables — third party	(680)		347
Other current and non-current assets	3,535		(7,039)
Accounts payable and other accrued liabilities	(17,493)		32,316
Net Cash Provided by Operating Activities	85,618		124,666
Cash Flows from Investing Activities:
Capital expenditures	(47,036)		(182,867)
Proceeds from sale of assets	80		—
Net Cash Used in Investing Activities	(46,956)		(182,867)
Cash Flows from Financing Activities:
Contributions from general partner and noncontrolling interest holders, net	—		30
Vested units withheld for unitholder taxes	(309)		(690)
Quarterly distributions to unitholders	(44,645)		(56,208)
Net borrowings on secured $600.0 million credit facility	7,250		124,000
Debt issuance costs	—		(1,220)
Net Cash (Used in) Provided by Financing Activities	(37,704)		65,912
Net Increase in Cash	958		7,711
Cash at Beginning of Period	31		3,966
Cash at End of Period	$	989	$	11,677
Cash paid during the period for:
Interest	$	17,602	$	15,892
Noncash investing activities:
Accrued capital expenditures	$	10,552	$	36,266

The accompanying notes are an integral part of these unaudited financial statements.

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CNX MIDSTREAM PARTNERS LP

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 — DESCRIPTION OF BUSINESS

CNX Midstream Partners LP (the “Partnership”, or “we”, “us”, or “our”) is a growth-oriented master limited partnership focused on the ownership, operation, development and acquisition of midstream energy infrastructure in the Appalachian Basin. We currently provide midstream services to our customers’ production in the Marcellus Shale and Utica Shale in Pennsylvania and West Virginia under long-term, fixed-fee contracts. Our assets include natural gas gathering pipelines and compression and dehydration facilities, as well as condensate gathering, collection, separation and stabilization facilities. We are managed by our general partner, CNX Midstream GP LLC (our “general partner”), a wholly owned subsidiary of CNX Gathering LLC (“CNX Gathering”). CNX Gathering is a wholly owned subsidiary of CNX Gas Company LLC (“CNX Gas”), which is a wholly owned subsidiary of CNX Resources Corporation (NYSE: CNX) (“CNX Resources”). Accordingly, CNX Resources is the sole Sponsor of the Partnership, and we may refer to CNX Resources as the “Sponsor” throughout this Quarterly Report on Form 10-Q.

Description of Business

Our midstream assets consist of two operating segments that we refer to as our “Anchor Systems” and “Additional Systems” based on their relative current cash flows, growth profiles, capital expenditure requirements and the timing of their development.

•Our Anchor Systems, in which the Partnership owns a 100% controlling interest, include our most developed midstream systems that generate the largest portion of our current cash flows, including our five primary midstream systems (the McQuay, Majorsville, Dry Ridge, Mamont and Shirley-Penns Systems), a 20” high-pressure pipeline and related assets.

•Our Additional Systems, in which the Partnership owns a 5% controlling interest, include several gathering systems throughout our dedicated acreage. Revenues from our Additional Systems are currently derived primarily from the Pittsburgh Airport area, which is within the wet gas region of our dedicated acreage, and the Wadestown area in the dry gas region. Currently, the substantial majority of capital investment in these systems would be funded directly by CNX Resources in proportion to CNX Gathering’s 95% retained ownership interest.

In order to maintain operational flexibility, our operations are conducted through, and our operating assets are owned by, our operating subsidiaries. However, neither we nor our operating subsidiaries have any employees. Our general partner has the sole responsibility for providing the personnel necessary to conduct our operations, whether through directly hiring employees or by obtaining the services of others, which may include personnel of CNX Resources as provided through contractual relationships with the Partnership. All of the personnel who conduct our business are employed or contracted by our general partner and its affiliates, including our Sponsor, but we sometimes refer to these individuals as our employees because they provide services directly to us. See Note 4–Related Party Transactions for additional information.

Merger Agreement

On July 26, 2020, we entered into an Agreement and Plan of Merger (the “Merger Agreement”). See Note 10–Subsequent Events for more information.

IDR Elimination Transaction

On January 29, 2020, CNX and CNXM entered into agreements and consummated a transaction that eliminated CNXM’s incentive distribution rights (“IDRs”) held by its general partner and converted the 2.0% general partner interest in CNXM into a non-economic general partnership interest (collectively, the "IDR Elimination Transaction"). 

CNX received the following under the IDR Elimination Transaction in exchange for the cancellation of the IDRs and conversion of the 2.0% general partner interest:

•26 million CNXM common units;

•3 million new CNXM Class B units, which will not receive or accrue distributions until January 1, 2022, at which time they will automatically convert into CNXM common units on a one-for-one basis; and

•$135.0 million, to be paid in three installments of $50.0 million due December 31, 2020, $50.0 million due December 31, 2021 and $35.0 million due December 31, 2022.

As a result of the IDR Elimination Transaction, CNX now owns 47.7 million CNXM common units, or approximately 53.1%, of the outstanding limited partner interests in CNXM, excluding the CNXM Class B units. Following the conversion of the

8

CNXM Class B units into CNXM common units on January 1, 2022, CNX’s ownership will increase to 50.7 million CNXM units, or approximately 54.6% of the outstanding limited partner interests in CNXM, on a proforma basis.

NOTE 2 — SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation and Use of Estimates

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and various disclosures. Actual results could differ from those estimates, which are evaluated on an ongoing basis, utilizing historical experience and other methods considered reasonable under the particular circumstances. Although these estimates are based on management’s best available knowledge at the time, changes in facts and circumstances or discovery of new facts or circumstances may result in revised estimates and actual results may differ from these estimates. Effects on the Partnership’s business, financial position and results of operations resulting from revisions to estimates are recognized when the facts that give rise to the revision become known. In the opinion of management, all adjustments considered necessary for a fair presentation of the accompanying consolidated financial statements have been included.

The balance sheet at December 31, 2019 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by GAAP for complete financial statements. For further information, refer to the Consolidated Financial Statements and related notes for the year ended December 31, 2019 included in CNX Midstream Partners LP’s (the “Partnership”, or “we”, “us”, or “our”) Annual Report on Form 10-K as filed with the Securities and Exchange Commission (SEC) on February 10, 2020.

Principles of Consolidation

The consolidated financial statements include the accounts of the Partnership and all of its controlled subsidiaries, including 100% of each of the Anchor Systems and Additional Systems in the applicable periods presented within this Quarterly Report on Form 10-Q. Although the Partnership has less than a 100% economic interest in the Additional Systems, it has been consolidated fully with the results of the Partnership in the applicable periods as the Partnership is considered to be the primary beneficiary and has a controlling financial interest and the power through its ownership to direct the activities of the Additional Systems. After adjusting for noncontrolling interests, net income attributable to general and limited partner ownership interests in the Partnership reflect only that portion of net income that is attributable to the Partnership’s unitholders.

Transactions between the Partnership and CNX Resources have been identified in the consolidated financial statements as transactions between related parties and are disclosed in Note 4–Related Party Transactions.

Revenue Recognition

We record revenue when obligations under the terms of the contracts with our shippers are satisfied; generally, this occurs on a daily basis as we gather natural gas at the wellhead. Revenue is measured as the amount of consideration we expect to receive in exchange for providing the natural gas gathering services.

Nature of performance obligations

At contract inception, we assess the services promised in our contracts with customers and identify a performance obligation for each promised service that is distinct. To identify the performance obligations, we consider all of the services promised in the contract, regardless of whether they are explicitly stated or are implied by customary business practices.

Our revenue is generated from natural gas gathering activities. The gas gathering services are interruptible in nature and include charges for the volume of gas actually gathered and do not guarantee access to the system. Volumetric-based fees relate to actual volumes gathered. In general, the interruptible gathering of each unit one million British Thermal Units (MMBtu) of natural gas represents a separate performance obligation. Payment terms for these contracts require payment within 25 days of the end of the calendar month in which the hydrocarbons are gathered.

Transaction price allocated to remaining performance obligations

We are required to disclose the aggregate amount of transaction price that is allocated to performance obligations that have not yet been satisfied. However, the guidance provides certain practical expedients that limit this requirement. Substantially all of our revenues are derived from contracts that have terms of greater than one year. Under these contracts, the interruptible gathering of each unit of natural gas represents a separate performance obligation.

For revenue associated with the Shirley-Penns System, for which we have remaining contractual performance obligations, the aggregate amount of the transaction price allocated to those remaining performance obligations was $346.2 million at June 30, 2020. See Note 4–Related Party Transactions for a detailed breakout of the minimum revenue by year.

9

The amount of revenue associated with this contract up to the minimum volume commitment (“MVC”) is fixed in nature, and volumes that we may gather above the MVC will be variable in nature. As of June 30, 2020, no future performance obligations exist relative to volumes to be gathered in excess of the MVC as the related volumes have not yet been nominated for gathering. Therefore, we have not disclosed the value of unsatisfied performance obligations for the variable aspect of this agreement, nor have we disclosed the value of other unsatisfied performance obligations that are variable in nature.

Prior-period performance obligations

We record revenue when obligations under the terms of the contracts with our shippers are satisfied; generally this occurs on a daily basis when we gather gas at the wellhead. In some cases, we are required to estimate the amount of natural gas that we have gathered during an accounting period and record any differences between our estimates and the actual units of natural gas that we gathered in the following month. We have existing internal controls for our revenue estimation process and related accruals; historically, any identified differences between our revenue estimates and actual revenue received have not been significant. For the quarters ended June 30, 2020 and 2019, revenue recognized in the reporting period related to performance obligations satisfied in prior reporting periods was not material.

Disaggregation of revenue

See Note 8–Segment Information for additional information.

Contract balances

We invoice customers once our performance obligations have been satisfied, at which point payment becomes unconditional. Accordingly, our contracts with customers do not give rise to contract assets or liabilities. We also have no contract assets recognized from the costs to obtain or fulfill a contract with a customer.

Classification

The fees we charge our affiliates, including our Sponsor, are recorded in gathering revenue — related party in our consolidated statements of operations. Fees from midstream services we perform for third-party shippers are recorded in gathering revenue — third-party in our consolidated statements of operations.

Cash

Cash includes cash on hand and on deposit at banking institutions.

Receivables

On January 1, 2020, the Partnership adopted the guidance under the Financial Accounting Standards Board (the “FASB”) Accounting Standard Update (“ASU”) 2016-13 Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which replaces the incurred loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. The Partnership adopted Topic 326 using the prospective transition method.

Prior to adopting Topic 326, the Partnership reserved for specific accounts receivable when it was probable that all or a part of an outstanding balance would not be collected, such as customer bankruptcies. Collectability was determined based on terms of sale, credit status of customers and various other circumstances. We regularly reviewed collectability and established or adjusted the reserve as necessary using the specific identification method. Account balances were charged off against the reserve after all means of collection had been exhausted and the potential for recovery was considered remote.

Under Topic 326, management recorded an allowance for credit losses related to the collectability of third-party customers receivables using the historical aging of the customer receivable balance. Related party receivables between entities under common control are excluded from Topic 326. The collectibility was determined based on past events, including historical experience, customer credit rating, as well as current market conditions. We will continue to monitor customer ratings and collectability on a quarterly basis. Account balances will be charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The allowance for credit losses was as follows:

(in thousands)	June 30, 2020
Receivables — Third-Party	$	8,691
Allowance for Credit Losses	(76)
Receivables — Third-Party, Net	$	8,615

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Fair Value Measurement

The FASB Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurements and Disclosures, clarifies the definition of fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. This guidance also relates to all nonfinancial assets and liabilities that are not recognized or disclosed on a recurring basis (e.g., the initial recognition of asset retirement obligations and impairments of long-lived assets). The fair value is the price that we estimate we would receive upon selling an asset or that we would pay to transfer a liability in an orderly transaction between market participants at the measurement date. A fair value hierarchy is used to prioritize input to valuation techniques used to estimate fair value. An asset or liability subject to the fair value requirements is categorized within the hierarchy based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. The highest priority (Level 1) is given to unadjusted quoted market prices in active markets for identical assets or liabilities, and the lowest priority (Level 3) is given to unobservable inputs. Level 2 inputs are data, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly.

The carrying values on our balance sheets of our current assets, current liabilities and revolving credit facility approximate fair values due to their short maturities. We estimate the fair value of our long-term debt, which is not actively traded, using an income approach model that utilizes a discount rate based on market rates for other debt with similar remaining time to maturity and credit risk (Level 2). The estimated fair value of our long-term debt was approximately $369.0 million and $370.5 million on June 30, 2020 and December 31, 2019, respectively.

Property and Equipment

Property and equipment is recorded at cost upon acquisition and is depreciated on a straight-line basis over the assets’ estimated useful lives or over the lease terms of the assets. Expenditures which extend the useful lives of existing property and equipment are capitalized. When properties are retired or otherwise disposed, the related cost and accumulated depreciation are removed from the respective accounts and any gain or loss on disposition is recognized.

The Partnership evaluates whether long-lived assets have been impaired during any given quarter and has processes in place to ensure that we become aware of such indicators. Impairment indicators may include, but are not limited to, sustained decreases in commodity prices, a decline in customer well results and lower throughput forecasts, and increases in construction or operating costs. For such long-lived assets, impairment exists when the carrying amount of an asset or group of assets exceeds our estimates of the undiscounted cash flows expected to result from the use and eventual disposition of the asset or group of assets. If the carrying amount of the long-lived asset(s) is not recoverable, based on the estimated future undiscounted cash flows, the impairment loss would be measured as the excess of the asset’s carrying amount over its estimated fair value. In the event that impairment indicators exist, we conduct an impairment test.

Fair value represents the estimated price between market participants to sell an asset in the principal or most advantageous market for the asset, based on assumptions a market participant would make. When warranted, management assesses the fair value of long-lived assets using commonly accepted techniques and may use more than one source in making such assessments. Sources used to determine fair value include, but are not limited to, recent third-party comparable sales, internally developed discounted cash flow analyses and analyses from outside advisors. Significant changes, such as the condition of an asset or management’s intent to utilize the asset, generally require management to reassess the cash flows related to long-lived assets. No property and equipment impairments were identified during the periods presented in the accompanying consolidated financial statements.

Leases

In February 2016, the FASB issued ASU 2016-02–Leases (Topic 842), which increases transparency and comparability among organizations by recognizing right-of-use (“ROU”) lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The ASU maintains a distinction between finance leases and operating leases, which is substantially similar to the classification criteria for distinguishing between capital leases and operating leases in the previous lease guidance. Retaining this distinction allows the recognition, measurement and presentation of expenses and cash flows arising from a lease to remain similar to the previous accounting treatment. A lessee is permitted to make an accounting policy election by class of underlying asset to exclude from balance sheet recognition any lease assets and lease liabilities with a term of 12 months or less, and instead to recognize lease expense on a straight-line basis over the lease term. For both financing and operating leases, the ROU asset and lease liability are initially measured at the present value of the lease payments. In July 2018, the FASB issued ASU 2018-11 which provides entities with the option to initially apply the new lease standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption, if necessary.

We determine if an arrangement is a lease at inception. Operating leases are included in operating lease ROU assets and accrued liabilities on our consolidated balance sheets. Operating lease ROU assets and operating lease liabilities are recognized

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based on the present value of the future minimum lease payments over the lease term at the commencement date. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at the commencement date of the lease in determining the present value of future payments. The operating lease ROU asset also includes any lease payments made and excludes lease incentives and initial direct costs incurred. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term.

Environmental Matters

We are subject to various federal, state and local laws and regulations relating to the protection of the environment. Environmental expenditures that relate to current operations are expensed or capitalized as appropriate. Expenditures that relate to an existing condition caused by past operations, and do not contribute to current or future revenue generation, are expensed. Liabilities are recorded when environmental assessments and/or clean-ups are probable, and the costs can be reasonably estimated. At this time, we are unable to assess the timing and/or effect of potential liabilities related to greenhouse gas emissions or other environmental issues. As of June 30, 2020 and December 31, 2019, we had no material environmental matters that required the recognition of a separate liability or specific disclosure.

Asset Retirement Obligations

Our gathering pipelines and compressor stations have an indeterminate life. If properly maintained, they should operate for an indeterminate period as long as supply and demand for natural gas exists, which we expect for the foreseeable future. We are under no legal or contractual obligation to restore or dismantle our gathering system upon abandonment. Therefore, we have not recorded any liabilities for asset retirement obligations at June 30, 2020 or December 31, 2019.

Variable Interest Entities

Each of the Anchor and Additional Systems is structured as a limited partnership (the “Limited Partnerships”) and a variable interest entity (“VIE”). These VIEs correspond with the manner in which we report our segment information in Note 8–Segment Information, which also includes information regarding the Partnership’s involvement with each of these VIEs and their relative contributions to our financial position, operating results and cash flows.

The Partnership fully consolidates each of the Limited Partnerships through its ownership of CNX Midstream Operating Company LLC (the “Operating Company”). The Operating Company, through its general partner ownership interest in each of the Limited Partnerships during the period in which any ownership interest exists, is considered to be the primary beneficiary for accounting purposes and has the power to direct all substantive strategic and day-to-day operational decisions of the Limited Partnerships.

Income Taxes

We are treated as a partnership for federal and state income tax purposes, with each partner being separately taxed on its share of the Partnership’s taxable income. Accordingly, no provision for federal or state income taxes has been recorded in the Partnership’s consolidated financial statements for any period presented in the accompanying consolidated financial statements.

Equity Compensation

Equity compensation expense for all unit-based compensation awards is based on the grant date fair value estimated in accordance with the provisions of ASC 718–Compensation–Stock Compensation. We recognize unit-based compensation costs on a straight-line basis over the requisite service period of an award, which is generally the same as the award’s vesting term. See Note 9–Long-Term Incentive Plan for further discussion.

Net Income Per Limited Partner Unit and General Partner Interest

Net income per limited partner unit is calculated using the two-class method, under which income is allocated to participating securities in accordance with the terms of our partnership agreement. The two-class method uses an earnings allocation method under which earnings per limited partner unit are calculated for each class of common unit and any participating security considering all distributions declared and participation rights in undistributed earnings as if all earnings had been distributed during the period. Diluted net income per limited partner unit reflects the potential dilution that could occur if securities or agreements to issue common units were exercised, settled or converted into common units.

Prior to the IDR Elimination Transaction on January 29, 2020, we allocated net income between our general partner and limited partners, which included allocations of net income to our limited partners, our general partner and the holders of our IDRs in accordance with the terms of our partnership agreement. We also allocated any distributions in excess of earnings for the period to our general partner and our limited partners based on their respective proportionate ownership interests in us, after taking into account distributions to be paid with respect to the IDRs, as set forth in our partnership agreement. Following the IDR Elimination Transaction, the Partnership’s common unitholders are entitled to all distributions until the Class B units are

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converted to common units on January 1, 2022. Class B unitholders have no rights to distributions until they are converted into common units.

Historical Earnings per Unit

The Partnership calculates historical earnings per unit under the two-class method and allocates the earnings or losses of a transferred business before the date of a dropdown transaction entirely to the general partner. If applicable, the previously reported earnings per unit of the limited partners would not change as a result of a dropdown transaction.

Diluted net income per limited partner unit reflects the potential dilution that could occur if securities or agreements to issue common units, such as awards under the long-term incentive plan, were exercised, settled or converted into common units. When it is determined that potential common units resulting from an award subject to performance or market conditions should be included in the diluted net income per limited partner unit calculation, the impact is calculated by applying the treasury stock method. There were 193,016 phantom units that were not included in the calculation for the three and six months ended June 30, 2020 because the effect would have been antidilutive. There were also 41,819 and 41,644 phantom units that were not included in the calculation for the three and six months ended June 30, 2019, respectively, because the effect would have been antidilutive.

Recent Accounting Pronouncements

In March 2020, the FASB issued ASU 2020-04 - Reference Rate Reform - Facilitation of the Effects of Reference Rate Reform on Financial Reporting (Topic 848). This ASU provides optional expedient and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. In response to the concerns about structural risks of interbank offered rates and, particularly, the risk of cessation of the London Interbank Offered Rate (LIBOR), regulators in several jurisdictions around the world have undertaken reference rate reform initiatives to identify alternative reference rates that are more observable or transaction based and less susceptible to manipulation. The ASU provides companies with optional guidance to ease the potential accounting burden associated with transitioning away from reference rates that are expected to be discontinued. The amendments in this ASU are effective for all entities as of March 12, 2020 through December 31, 2022. The Partnership is still evaluating the effect of adopting this guidance.

In March 2020, the FASB issued ASU 2020-03 - Codification Improvements to Financial Instruments. This ASU improves and clarifies various financial instruments topics, including the Current Expected Credit Loss standard. The ASU includes seven different issues that describe the areas of improvement and the related amendments to GAAP, intended to make the standards easier to understand and apply by eliminating inconsistencies and providing clarifications. The amendments in this ASU have different effective dates. The adoption of this guidance is not expected to have a material impact on the Partnership's financial statements.

NOTE 3 — CASH DISTRIBUTIONS

Our partnership agreement requires that we distribute an amount equal to 100% of Available Cash from Operating Surplus, as those terms are defined in the partnership agreement, within 45 days after the end of each quarter to unitholders of record on the applicable record date, in accordance with the terms below.

Allocations of Available Cash from Operating Surplus and Incentive Distribution Rights

Prior to the IDR Elimination Transaction on January 29, 2020 (See Note 1–Description of Business), the percentage allocations of available cash from operating surplus between the unitholders and our general partner was based on the specified target distribution levels. IDRs represented the right to receive an increasing percentage, up to a maximum of 48% (which did not include the 2% general partner interest), of quarterly distributions of available cash from operating surplus after the minimum quarterly distribution and the target distribution levels had been achieved.

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Cash Distributions

The Board of Directors declared the following cash distributions to the Partnership’s common unitholders and to the general partner for the periods presented:

(in thousands, except per unit information)
Quarters Ended	Quarterly Distribution Per Unit		Total Cash Distribution		Date of Distribution
Year ending December 31, 2019
March 31, 2019	$	0.3732	$	28,940	May 14, 2019
June 30, 2019	$	0.3865	$	30,637	August 14, 2019
September 30, 2019	$	0.4001	$	32,371	November 12, 2019
December 31, 2019	$	0.4143	$	37,201	February 13, 2020
Year ending December 31, 2020
March 31, 2020	$	0.0829	$	7,444	May 15, 2020

See Note 10–Subsequent Events for information regarding the distribution that was approved by the Board of Directors with respect to the quarter ended June 30, 2020.

NOTE 4 — RELATED PARTY TRANSACTIONS

In the ordinary course of business, we engage in related party transactions with CNX Resources (and certain of its subsidiaries) and CNX Gathering, which include the fees we charge and revenues we receive under a fixed fee gathering agreement (including fees associated with electrically-powered compression that CNX Resources reimburses to us) and our reimbursement of certain expenses to CNX Resources under several agreements, discussed below. In addition, we may waive or modify certain terms under these arrangements in the ordinary course of business, including the provisions of the fixed fee gathering agreement, when we determine it is in the best interests of the Partnership to do so. Any material transactions are reviewed by the Board of Directors or the Audit Committee, together with oversight by our conflicts committee, as deemed appropriate.

Operating expense and general and administrative expense – related party were derived from CNX Resources and consisted of the following:

	Three Months Ended   June 30,				Six Months Ended   June 30,
(in thousands)	2020		2019		2020		2019
Operational services	$	2,327	$	3,851	$	4,236	$	7,484
Electrical compression	2,040		2,663		3,959		4,578
Total Operating Expense — Related Party	$	4,367	$	6,514	$	8,195	$	12,062

Total General and Administrative Expense — Related Party $ 2,748  $ 4,027  $ 5,605  $ 7,994 

Related party liabilities due to CNX Resources consisted of the following:

(in thousands)	June 30, 2020		December 31, 2019
Expense reimbursements	$	679	$	489
Capital expenditures reimbursements	50		—
General and administrative services	1,462		4,298
IDR Transaction - current portion	50,000		—
Total Due to Related Party - Current Portion	52,191		4,787
IDR Transaction - long-term portion	85,000		—
Total Due to Related Party - Current and Long-Term	$	137,191	$	4,787

All related party receivables were due from CNX Resources at June 30, 2020 and December 31, 2019.

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Merger Agreement

On July 26, 2020, we entered into an Agreement and Plan of Merger (the “Merger Agreement”). See Note 10–Subsequent Events for more information.

Operational Services Agreement

Upon the closing of the initial public offering of our common units (our “IPO”), we entered into an operational services agreement with CNX Resources, which was amended and restated on December 1, 2016. Under the agreement, CNX Resources provides certain operational services to us in support of our gathering pipelines and dehydration, treating and compressor stations and facilities, including routine and emergency maintenance and repair services, routine operational activities, routine administrative services, construction and related services and such other services as we and CNX Resources may mutually agree upon from time to time. CNX Resources prepares and submits for our approval a maintenance, operating and capital budget on an annual basis. CNX Resources submits actual expenditures for reimbursement on a monthly basis, and we reimburse CNX Resources for any direct third-party costs incurred by CNX Resources in providing these services.

Omnibus Agreement

We are party to an omnibus agreement with CNX Resources, CNX Gathering and our general partner that addresses the following matters:

• our payment of an annually-determined administrative support fee (approximately $7.3 million for the year ending December 31, 2020 and $7.9 million for the year ended December 31, 2019) for the provision of certain services by CNX Resources and its affiliates, including executive costs. Such costs may not necessarily reflect the actual expenses that the Partnership would incur on a stand-alone basis, and we are unable to estimate what those expenses would be on a stand-alone basis;

• our obligation to reimburse CNX Resources for all other direct or allocated costs and expenses incurred by CNX Resources in providing general and administrative services (which reimbursement is in addition to certain expenses of our general partner and its affiliates that are reimbursed under our partnership agreement);

• our right of first offer to acquire (i) CNX Gathering’s retained interests in our Additional Systems, (ii) CNX Gathering’s other ancillary midstream assets and (iii) any additional midstream assets that CNX Gathering develops; and

• our obligation to indemnify CNX Gathering for events and conditions associated with the use, ownership or operation of our assets that occur after the closing of the IPO, including environmental liabilities.

The omnibus agreement will remain in full force and effect throughout the period in which CNX Gathering controls our general partner. If CNX Gathering ceases to control our general partner, either party may terminate the omnibus agreement, provided that the indemnification obligations will remain in full force and effect in accordance with their terms.

Gathering Agreements

On January 3, 2018, we entered into the Second Amended and Restated gas gathering agreement (“GGA”) with CNX Gas, which is a 20-year, fixed-fee gathering agreement. Under the Second Amended and Restated GGA, we continue to gather, compress, dehydrate and deliver all of CNX Gas’ dedicated natural gas in the Marcellus Shale on a first-priority basis and gather, inject, stabilize and store all of CNX Gas’ dedicated condensate on a first-priority basis. Under this agreement, during the year ending December 31, 2020, we will receive a fee based on the type and scope of the midstream services we provide, summarized as follows:

•For the services we provide with respect to natural gas from the Marcellus Shale formation that does not require downstream processing, or dry gas, we will receive a fee of $0.4531 per MMBtu.

•For the services we provide with respect to natural gas from the Marcellus Shale formation that requires downstream processing, or wet gas, we will receive:

◦a fee of $0.3116 per MMBtu in the Pittsburgh International Airport area; and

◦a fee of $0.6222 per MMBtu for all other areas in the dedication area.

•Our fees for condensate services will be $5.6580 per Bbl in the Majorsville area and in the Shirley-Penns area.

Each of the foregoing fees escalates by 2.5% on January 1 each year through the end of the initial term. Commencing on January 1, 2035, and as of January 1 thereafter, each of the applicable fees will be adjusted pursuant to the percentage change in CPI-U, but such fees will never escalate or decrease by more than 3% per year.

The Second Amended and Restated GGA also dedicated an additional 63,000 acres in the Utica Shale in and around the McQuay and Wadestown areas and introduced the following gas gathering and compression rates (rates shown effective January 1, 2020):

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•Gas Gathering:

◦McQuay area Utica - a fee of $0.2368 per MMBtu; and

◦Wadestown Marcellus and Utica - a fee of $0.3678 per MMBtu.

•Compression:

◦For areas not benefiting from system expansion pursuant to the Second Amended and Restated GGA, compression services are included in the base fees; and

◦In the McQuay and Wadestown areas, for wells turned in line beginning January 1, 2018 and beyond, we will receive additional fees of $0.0683 per MMBtu for Tier 1 pressure services (maximum receipt point of pressure of 600 psi) and $0.1366 per MMBtu for Tier 2 pressure services (maximum receipt point of pressure of 300 psi).

In addition, the Second Amended and Restated GGA committed CNX Gas to drill and complete 140 total wells in the McQuay area within the Anchor Systems, provided that if 125 wells have been drilled and completed in the Marcellus Shale, then the remainder of such planned wells must be drilled in the Utica Shale. To the extent the requisite number of wells are not drilled and completed by CNX Gas in a given period, we will be entitled to a deficiency payment per shortfall well as set forth below:

•January 1, 2018 to December 31, 2018 - 30 wells (CNX Gas exceeded this requirement by eight wells)

•January 1, 2019 to April 30, 2020 - 40 wells (CNX Gas exceeded this requirement by two wells)

•May 1, 2020 to April 30, 2021 - 40 wells (deficiency payment of $2.0 million per well)

•May 1, 2021 to April 30, 2022 - 30 wells (deficiency payment of $2.0 million per well)

In the event that CNX Gas drills wells and completes a number of wells in excess of the number of wells required to be drilled and completed in such period, (i) the number of excess wells drilled and completed during such period will be applied to the minimum well requirement in the succeeding period or (ii) to the extent CNX Gas was required to make deficiency payments for shortfalls in the preceding period, CNX Gas may elect to cause the Partnership to pay a refund in an amount equal to (x) the number of excess wells drilled and completed during the period, multiplied by (y) the deficiency payment paid per well during the period in which the shortfall occurred.

On March 16, 2018, we entered into the First Amendment to the Second Amended and Restated GGA, which added the MVC on volumes associated with the Shirley-Penns System through December 31, 2031. The MVC commits CNX Gas to pay the Partnership the wet gas fee under the GGA for all natural gas we gather up to a specified amount per day through December 31, 2031. During the MVC period, if CNX Gas actually delivers volumes in a given quarter in excess of the volume commitment for such quarter, CNX Gas is entitled to credit such excess volumes against amounts otherwise payable under the MVC in the future.

We will recognize minimum revenue on volumes throughout the term of the GGA, as set forth below:

(in millions)	Minimum Revenue per MVC
Remainder of year ending December 31, 2020	$	1.4
Year ending December 31, 2021	40.7
Year ending December 31, 2022	47.7
Year ending December 31, 2023	42.8
Year ending December 31, 2024	39.6
Remainder of term	174.0
Total minimum revenue to be recognized pursuant to Shirley-Penns MVC	$	346.2

For all natural gas the Partnership gathers in excess of the MVC, the Partnership will receive a fee of $0.3678 per MMBtu in 2020, which escalates by 2.5% on January 1 of each year. Since the Shirley-Penns acquisition in 2018, CNX Gas has exceeded the required MVC calculation each quarter. For the quarter ended June 30, 2020, the MVC calculation was met by a combination of actual volumes and a prior period credit for excess volumes of 4.5 BBtu. This leaves a remaining credit for excess volumes of 30.0 BBtu.

On May 2, 2018, we completed a transaction with our Sponsor, pursuant to which we entered into the Second Amendment to the Second Amended and Restated GGA, which committed CNX Gas to drill and complete an additional 40 wells in the Majorsville/Mamont area within the Anchor Systems by the end of 2023. To the extent the requisite number of wells are not drilled and completed by CNX Gas in a given period, we will be entitled to a deficiency payment per shortfall well as set forth below:

•July 1, 2018 to December 31, 2020 - 15 wells (As of June 30, 2020, CNX Gas has exceeded the minimum well commitment by six wells)

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•January 1, 2021 to December 31, 2023 - 25 wells (deficiency payment of $2.8 million per well)

CNX Gas provides us with quarterly updates on its drilling and development operations, which include detailed descriptions of the drilling plans, production details and well locations for periods that range from up to 24-48 months, as well as more general development plans that may extend as far as ten years. In addition, we regularly meet with CNX Gas to discuss our current plans to timely construct the necessary facilities to be able to provide midstream services to them on our dedicated acreage. In the event that we do not perform our obligations under our GGA, CNX Gas will be entitled to certain rights and procedural remedies thereunder, including the temporary and/or permanent release from dedication and indemnification from us.

There are no restrictions under our GGAs with CNX Gas on the ability of CNX Gas to transfer acreage in the right of first offer (“ROFO”) area, and any such transfer of acreage in the ROFO area will not be subject to our right of first offer. 

Upon completion of its 20-year term in 2037, our GGA with CNX Gas will continue in effect from year to year until such time as the agreement is terminated by either us or CNX Gas on or before 180 days prior written notice.

NOTE 5 — PROPERTY AND EQUIPMENT

Property and equipment consisted of the following:

(in thousands)	June 30, 2020		December 31, 2019		Estimated Useful Lives in Years
Land	$	79,617	$	79,829	N/A
Gathering equipment	767,532		717,277		25 — 40
Compression equipment	404,128		332,358		30 — 40
Processing equipment	30,979		30,979		40
Assets under construction	47,287		142,123		N/A
Total Property and Equipment	$	1,329,543	$	1,302,566
Less: Accumulated depreciation
Gathering equipment	$	85,783	$	75,879
Compression equipment	29,823		24,311
Processing equipment	7,198		6,785
Total Accumulated Depreciation	$	122,804	$	106,975
Property and Equipment — Net	$	1,206,739	$	1,195,591

The Partnership capitalized approximately $0.2 million and $0.9 million of interest on assets under construction during the three and six months ended June 30, 2020, respectively. The Partnership capitalized approximately $1.3 million and $2.1 million of interest on assets under construction during the three and six months ended June 30, 2019, respectively.

During the six months ended June 30, 2020, the Partnership abandoned the construction of a pipeline project that was designed to support additional production within certain areas of the Anchor System as well as land rights-of-way in both the Anchor and Additional Systems, resulting in a loss of $1.7 million.

During the six months ended June 30, 2019, the Partnership abandoned the construction of a compressor station that was designed to support additional production within certain areas of the Anchor System, resulting in a loss of $7.2 million.

NOTE 6 — LONG-TERM DEBT

Revolving Credit Facility

In March 2018, we entered into a five-year $600.0 million secured revolving credit facility with an accordion feature that allows, subject to certain terms and conditions, the Partnership to increase the available borrowings under the revolving credit facility by up to an additional $250.0 million. The revolving credit facility includes the ability to issue letters of credit up to $100.0 million in the aggregate. The available borrowing capacity is limited by certain financial covenants pertaining to leverage and interest coverage ratios as defined in the revolving credit facility agreement.

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On April 24, 2019, the Partnership amended its revolving credit facility and extended its maturity to April 2024. Among other things, we received an annual interest rate reduction of 0.25% on borrowings compared to the original agreement. Under the terms of the amended agreement, borrowings under the revolving credit facility will bear interest at our option at either:

•the base rate, which is the highest of (i) the federal funds open rate plus 0.50%, (ii) PNC Bank, N.A.’s prime rate, or (iii) the one-month LIBOR rate plus 1.00%, in each case, plus a margin ranging from 0.50% to 1.50%; or

•the LIBOR rate plus a margin ranging from 1.50% to 2.50%.

Following the amendment, the revolving credit facility now includes (i) the addition of a restricted payment basket permitting cash repurchases of IDRs subject to a pro forma secured leverage ratio of 3.00 to 1.00, a pro forma total leverage ratio of 4.00 to 1.00 and pro forma availability of 20% of commitments and (ii) a restricted payment basket for the repurchase of limited partner units not to exceed Available Cash (as defined in the partnership agreement) in any quarter of up to $150.0 million per year and up to $200.0 million during the life of the facility.

Interest on base rate loans is payable on the first business day of each calendar quarter. Interest on LIBOR loans is payable on the last day of each interest period or, in the case of interest periods longer than three months, every three months. The unused portion of our revolving credit facility is subject to a commitment fee ranging from 0.375% to 0.500% per annum depending on our most recent consolidated leverage ratio.

The revolving credit facility contains a number of affirmative and negative covenants that include, among others, covenants that restrict the ability of the Partnership, its subsidiary guarantors and certain of its non-guarantor, non-wholly-owned subsidiaries, except in certain circumstances, to: (i) create, incur, assume or suffer to exist indebtedness; (ii) create or permit to exist liens on their properties; (iii) prepay certain indebtedness unless there is no default or event of default under the revolving credit facility; (iv) make or pay any dividends or distributions in excess of certain amounts; (v) merge with or into another person, liquidate or dissolve; or acquire all or substantially all of the assets of any going concern or going line of business or acquire all or a substantial portion of another person’s assets; (vi) make particular investments and loans; (vii) sell, transfer, convey, assign or dispose of its assets or properties other than in the ordinary course of business and other select instances; (viii) deal with any affiliate except in the ordinary course of business on terms no less favorable to the Partnership than it would otherwise receive in an arm’s length transaction; and (ix) amend in any material manner its certificate of incorporation, bylaws, or other organizational documents without giving prior notice to the lenders and, in some cases, obtaining the consent of the lenders. The agreement also contains customary events of default, including, but not limited to, a cross-default to certain other debt, breaches of representations and warranties, change of control events and breaches of covenants. The obligations under the revolving credit facility agreement are secured by substantially all of the assets of the Partnership and its wholly owned subsidiaries.

In addition, the Partnership is obligated to maintain at the end of each fiscal quarter:

•for as long as at least $150.0 million of the Senior Notes are outstanding (see below), a maximum total leverage ratio of no greater than 5.25 to 1.00 (which increases to no greater than 5.50 to 1.00 during qualifying acquisition periods);

•if less than $150.0 million of the Senior Notes are outstanding (see below), a maximum total leverage ratio of no greater than 4.75 to 1.00 (which increases to no greater than 5.25 to 1.00 during qualifying acquisition periods);

•a maximum secured leverage ratio of no greater than 3.50 to 1.00; and

•a minimum interest coverage ratio of no less than 2.50 to 1.00.

The Partnership was in compliance with all financial covenants at June 30, 2020.

On June 30, 2020, the Partnership had an outstanding balance on the revolving credit facility of $319.0 million at an interest rate of 1.95% and $0.03 million of letters of credit outstanding, leaving $281.0 million available for borrowing.

At December 31, 2019, the outstanding balance on the revolving credit facility was $311.8 million at an interest rate of 3.26%.

Senior Notes

In March 2018, the Partnership, together with its wholly owned subsidiary CNX Midstream Finance Corp (“Finance Corp”) and (collectively with the Partnership, the “Issuers”), completed a private offering of the Senior Notes, with related guarantees (the “Guarantees”) and received net proceeds of approximately $394.0 million, after deducting the initial purchasers’ discount. In connection with the issuance of the Senior Notes, the Partnership capitalized related offering expenses, which are recorded in our consolidated balance sheet as a reduction to the principal amount. Net proceeds from the Senior Notes offering were primarily used to fund the Shirley-Penns acquisition that occurred in 2018 and repay existing indebtedness under our prior $250.0 million unsecured revolving credit facility. The Senior Notes mature on March 15, 2026 and accrue interest at a rate of 6.5% per year, which is payable semi-annually in arrears on March 15 and September 15. There are no principal payment requirements on the Senior Notes prior to maturity.

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The Senior Notes and Guarantees were issued pursuant to an indenture (the “Indenture”), dated March 16, 2018, among the Partnership, Finance Corp, the guarantors party thereto (the “Guarantors”) and UMB Bank, N.A., as trustee (the “Trustee”). The Senior Notes rank equally in right of payment with all of the Issuers’ existing and future senior indebtedness and senior to any subordinated indebtedness that the Issuers’ may incur. The Guarantees rank equally in right of payment to all of the Guarantors’ existing and future senior indebtedness.

The Issuers may redeem all or part of the Senior Notes at redemption prices ranging from 104.875% beginning March 15, 2021 to 100.0% beginning March 15, 2024. Prior to March 15, 2021, the Issuers may on one or more occasions redeem up to 35.0% of the principal amount of the Senior Notes with an amount of cash not greater than the amount of the net cash proceeds from one or more equity offerings at a redemption price of 106.50%. At any time or from time to time prior to March 15, 2021, the Issuers may also redeem all or a part of the Senior Notes, at a redemption price equal to 100.0% of the principal amount thereof plus the Applicable Premium, as defined in the Indenture, plus accrued and unpaid interest.

If the Partnership experiences certain kinds of changes of control, holders of the Senior Notes will be entitled to require the Partnership to repurchase all or any part of that holder’s Senior Notes pursuant to an offer on the terms set forth in the Indenture. The Partnership will offer to make a cash payment equal to 101.0% of the aggregate principal amount of the Senior Notes repurchased plus accrued and unpaid interest on the Senior Notes repurchased to, but not including, the date of purchase, subject to the rights of holders of the Senior Notes on the relevant record date to receive interest due on the relevant interest payment date.

The Partnership’s long-term debt consisted of the following:

(in thousands)	June 30, 2020		December 31, 2019
Senior Notes due March 2026 at 6.5%	$	400,000	$	400,000
Less: Unamortized debt issuance costs	1,115		1,213
Less: Unamortized bond discount	4,250		4,625
Total Senior Notes	$	394,635	$	394,162

NOTE 7 — COMMITMENTS AND CONTINGENCIES

Litigation

The Partnership may become involved in certain legal proceedings from time to time, and where appropriate, we have accrued our estimate of the probable costs for the resolution of these claims. The Partnership believes that the ultimate outcome of any matter currently pending against the Partnership will not materially affect the Partnership’s business, financial condition, results of operations, liquidity or ability to make distributions.

NOTE 8 — SEGMENT INFORMATION

Operating segments are the revenue-producing components of a company for which separate financial information is produced internally and is subject to evaluation by the chief operating decision maker in deciding how to allocate resources. In order to effectively manage the Partnership, we have divided our current midstream assets among two separate categories that we refer to as our “Anchor Systems” and “Additional Systems” based on their relative current cash flows, growth profiles, capital expenditure requirements and the timing of their development. All of the Partnership’s operating revenues, income from operations and assets are generated or located in the United States.

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Segment results for the periods presented were as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2020		2019		2020		2019
Gathering Revenue:
Anchor Systems	$	62,991	$	76,298	$	139,537	$	146,469
Additional Systems	2,961		1,803		6,546		3,851
Total Gathering Revenue	$	65,952	$	78,101	$	146,083	$	150,320
Net Income (Loss):
Anchor Systems	$	32,536	$	46,760	$	77,726	$	81,874
Additional Systems	264		(297)		864		(435)
Total Net Income	$	32,800	$	46,463	$	78,590	$	81,439
Depreciation Expense:
Anchor Systems	$	7,700	$	5,444	$	14,773	$	10,680
Additional Systems	509		416		1,014		830
Total Depreciation Expense	$	8,209	$	5,860	$	15,787	$	11,510
Capital Expenditures for Segment Assets:
Anchor Systems	$	14,049	$	103,322	$	45,357	$	179,121
Additional Systems	328		988		1,679		3,746
Total Capital Expenditures	$	14,377	$	104,310	$	47,036	$	182,867

Segment assets as of the dates presented were as follows:

(in thousands)	June 30, 2020		December 31, 2019
Segment Assets
Anchor Systems	$	1,139,779	$	1,123,488
Additional Systems	99,111		111,114
Total Segment Assets	$	1,238,890	$	1,234,602

NOTE 9 — LONG-TERM INCENTIVE PLAN

Under the Partnership’s 2014 Long-Term Incentive Plan (our “LTIP”), our general partner may issue long-term equity-based awards to directors, officers and employees of the general partner or its affiliates, or to any consultants, affiliates of our general partner or other individuals who perform services on behalf of the Partnership. The Partnership is responsible for the cost of awards granted under the LTIP, which limits the number of units that may be delivered pursuant to vested awards to 5.8 million common units, subject to proportionate adjustment in the event of unit splits and similar events. Common units subject to awards that are canceled, forfeited, withheld to satisfy tax withholding obligations or otherwise terminated without delivery of the common units will be available for delivery pursuant to other awards.

The following table presents phantom unit activity during the six months ended June 30, 2020:

	Number of Units	Weighted Average Grant Date Fair Value
Total awarded and unvested at December 31, 2019	174,465	$	16.83
Granted	146,849	15.15
Vested	(83,188)	17.32
Forfeited	(17,122)	15.93
Total awarded and unvested at June 30, 2020	221,004	$	15.60

The Partnership accounts for phantom units as equity awards and records compensation expense on a straight-line basis over the vesting period based on the fair value of the awards on their grant dates. Awards granted to independent directors vest

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over a period of one year, and awards granted to certain officers and employees of the general partner vest 33% per year over a period of three years.

The Partnership recognized $0.4 million and $0.5 million of compensation expense related to phantom units for the three months ended June 30, 2020 and 2019, respectively, and $0.9 million and $1.2 million for the six months ended June 30, 2020 and 2019, respectively, which was included in general and administrative expense–related party in the consolidated statements of operations.

At June 30, 2020, the unrecognized compensation related to all outstanding awards was approximately $2.6 million, which we expect to recognize through 2022.

NOTE 10 — SUBSEQUENT EVENTS

Merger Agreement

On July 26, 2020, we entered into the Merger Agreement with our general partner, CNX Resources, and its wholly owned subsidiary CNX Resources Holdings, LLC (“Merger Sub”), pursuant to which Merger Sub will be merged with and into CNXM with CNXM surviving as an indirect wholly owned subsidiary of CNX Resources. Under the terms of the Merger Agreement, at the effective time of the Merger, each outstanding common unit of CNXM not owned by CNX Resources and its subsidiaries will be converted into the right to receive 0.88 shares of CNX’s common stock.

Except for CNXM’s Class B units, which will automatically be canceled immediately prior to the effective time of the Merger for no consideration in accordance with our partnership agreement, the interests in CNXM owned by CNX Resources and its subsidiaries will remain outstanding as limited partner interests in the surviving entity. Our general partner will continue to own the non-economic general partner interest in the surviving entity.

Completion of the Merger is subject to certain customary conditions, including, among others: (i) the receipt of the Written Consent (as defined below); (ii) there being no law or injunction prohibiting consummation of the transactions contemplated under the Merger Agreement; (iii) the effectiveness of a registration statement on Form S-4 relating to the shares of CNX common stock to be issued pursuant to the Merger Agreement; (iv) approval for listing on the NYSE of the shares of CNX common stock to be issued pursuant to the Merger Agreement; (v) subject to specified materiality standards, the accuracy of certain representations and warranties of the other party; and (vi) compliance by the other party in all material respects with its covenants.

In connection with execution of the Merger Agreement, CNXM and two indirect wholly owned subsidiaries (the “Subsidiaries”) of CNX Resources, entered into a Support Agreement, dated as of July 26, 2020 (the “Support Agreement”), pursuant to which the Subsidiaries have agreed to deliver a written consent (the “Written Consent”), covering all of the CNXM common units beneficially owned by them, approving the Merger. The Merger Agreement and any other matters necessary for consummation of the Merger and the other transactions contemplated in the Merger Agreement.

Upon completion of the Merger, CNXM’s common units will no longer be publicly traded. Subject to the satisfaction or waiver of the conditions described above, the Merger is expected to close in the fourth quarter of 2020.

Cash Distribution

On July 27, 2020, the Board of Directors of the Partnership’s general partner declared a cash distribution to the Partnership’s unitholders with respect to the second quarter of 2020 of $0.5000 per common unit. The cash distribution will be paid on August 14, 2020 to unitholders of record at the close of business on August 7, 2020.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion of the financial condition and results of operations of CNX Midstream Partners LP in conjunction with the historical and unaudited interim consolidated financial statements and notes to the consolidated financial statements. Among other things, those historical unaudited interim consolidated financial statements include more detailed information regarding the basis of presentation for the following information. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those discussed in such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified under “forward-looking statements” below and those discussed in the section entitled “Risk Factors” in the Partnership’s Annual Report on Form 10-K for the year ended December 31, 2019, which we filed with the SEC on February 10, 2020, and in our Quarterly Reports on Form 10-Q, filed subsequent to that Annual Report on Form 10-K. In this Item 2, all references to “we,” us,” “our,” the “Partnership,” “CNXM,” or similar terms refer to CNX Midstream Partners LP and its subsidiaries.

Executive Overview

We are a growth-oriented master limited partnership focused on the ownership, operation, development and acquisition of midstream energy infrastructure in the Appalachian Basin. We currently provide midstream services to our customers’ production in the Marcellus Shale and Utica Shale in Pennsylvania and West Virginia under long-term, fixed-fee contracts. Our assets include natural gas gathering pipelines and compression and dehydration facilities, as well as condensate gathering, collection, separation and stabilization facilities. We are managed by our general partner, CNX Midstream GP LLC (our “general partner”), which is a wholly-owned subsidiary of CNX Gathering LLC (“CNX Gathering”). CNX Gathering is a wholly owned subsidiary of CNX Gas Company LLC (“CNX Gas”), which is a wholly-owned subsidiary of our Sponsor, CNX Resources Corporation (NYSE: CNX) (“CNX Resources”).

In the current environment, the Partnership has been re-evaluating its current capital allocation opportunities and will remain flexible based on market conditions and availability of opportunities. We remain committed to growing value for our investors over the long term by allocating capital investment to high rate of return midstream projects, delivering cash distributions to our investors over the long term while remaining flexible based on market conditions and availability of opportunities.

The markets for crude oil, natural gas and NGLs remain volatile, and prices may continue to fluctuate in response to, among other things: Geopolitical factors, such as events that may reduce or increase production from particular oil-producing regions and/or from members of the Organization of Petroleum Exporting Countries ("OPEC"), and global events, such as the ongoing coronavirus COVID-19 pandemic (“COVID-19”).

Continued strength in natural gas production, along with reduced heating demand for natural gas as a result of relatively mild winter temperatures throughout most of the United States, accounted for relatively higher inventory levels. Despite an April 12 agreement by the OPEC and its allies to reduce global production by approximately 10%, the economic slowdown and global stay-at-home orders continue to suppress demand for natural gas. The U.S. Energy Information Administration’s (“EIA”) Short-Term Energy Outlook for April 2020 as well as July’s Outlook cite heightened uncertainty because of the economic slowdown, particularly industrial gas demand and changes in energy markets’ supply and demand dynamics.

In the first quarter of 2020, NYMEX oil prices moved downward due in part to concerns about COVID-19 and its impact on near-term worldwide oil demand and due to changes in oil production by certain members of OPEC. This oversupply of oil contributed to historically low oil prices, which compounded the impact of the domestic oversupply of NGLs as well as current export constraints and drove NGL prices to historic lows. During the second quarter of 2020, even though OPEC agreed to cut production, downward pressure on prices continued amid concerns over available storage capacity for refined products such as crude, and refinery inputs including condensate, c5+ and butane. In June, oil prices began to rise as COVID-19 related stay-at-home orders started to lift and the supply of oil fell as a result of the production cuts. However, uncertainty still remains, as OPEC production cuts are currently set to ease in the third quarter of 2020, and the ongoing impact of the COVID-19 pandemic remains unknown.

The EIA’s Short-Term Energy Outlook for July 2020 forecasts remain subject to heightened levels of uncertainty relating to COVID-19 mitigation and reopening efforts that continue to evolve and expects U.S. crude oil production to fall in 2020 due to reduced demand for petroleum products and lower oil prices. The EIA expects high inventory levels and surplus crude oil production capacity will limit upward price potential in the coming months, but the EIA forecasts crude inventories to decline into 2021.

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COVID-19 Pandemic

Although CNXM did not incur significant disruptions to our operations during the six months ended June 30, 2020 as a result of the COVID-19 pandemic, we are unable to predict the impact that the COVID-19 pandemic will have on our future, including our financial position, operating results, liquidity and ability to obtain financing in future reporting periods, due to numerous uncertainties. These uncertainties include the severity of the virus outbreak domestically, the availability of a vaccine, the duration of the outbreak, governmental or other actions taken to combat the virus (which could include limitations on our operations or the operations of our customers and vendors), and the effect that the COVID-19 pandemic may have on the demand for natural gas and natural gas liquids. The health of our Sponsor’s employees, contractors and vendors, and our ability to meet staffing needs in our operations and certain critical functions cannot be predicted and is vital to our operations. Further, the impacts of a potential worsening of global economic conditions and the continued disruptions to, and volatility in, the credit and financial markets as well as other unanticipated consequences remain unknown. In addition, CNXM cannot predict the impact that COVID-19 will have on our customers, vendors and contractors; however, any material negative impact on these parties could adversely impact CNXM. For instance, if service providers to our industry are forced into bankruptcy or otherwise consolidate due to weakening economic conditions, demand could outpace supply in the long-term and cause these costs to increase. The situation surrounding COVID-19 remains fluid, and CNXM continues to actively manage our response in collaboration with our contractors, customers, Sponsor, Sponsor’s employees and vendors, and to assess potential impacts to our financial position and operating results, as well as any adverse developments that could impact our business and operations.

CNXM has already taken, and will continue to take, proactive steps to manage any disruption in our business caused by COVID-19. For instance, even though our operations were not required to close, CNXM and our Sponsor were early adopters in employing a work-from-home system, even before any government mandate on non-essential businesses was enacted. CNXM increased its technology platform, infrastructure and security to allow for a work-from-home environment ahead of the actual need, and therefore, once the hypothetical became a reality, we believe CNXM was ahead of many companies in this respect. CNXM has also deployed additional safety protocols at our field sites in order to keep our Sponsor’s employees and contractors safe and to keep our operations running without material disruption. As our Sponsor’s employees begin to return to work, CNXM has implemented certain additional safety measures and protocols in order to maintain the safety of those Sponsor’s employees as well.

Recent Business Developments:

On July 26, 2020, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with our general partner, CNX Resources and CNX Resources Holding LLC, a wholly owned subsidiary of CNX Resources (“Merger Sub”), pursuant to which Merger Sub will be merged with and into CNXM with CNXM surviving as an indirect wholly owned subsidiary of CNX Resources (the “Merger”). Under the terms of the Merger Agreement, at the effective time of the Merger, each outstanding common unit of CNXM not owned by CNX Resources and its subsidiaries will be converted into the right to receive 0.88 shares of CNX Resources’ common stock.

Except for CNXM’s Class B units, which will automatically be canceled immediately prior to the effective time of the Merger for no consideration in accordance with our partnership agreement, the interests in CNXM owned by CNX Resources and its subsidiaries will remain outstanding as limited partner interests in the surviving entity. Our general partner will continue to own the non-economic general partner interest in the surviving entity.

Completion of the Merger is subject to certain customary conditions, including, among others: (i) the receipt of the Written Consent (as defined below); (ii) there being no law or injunction prohibiting consummation of the transactions contemplated under the Merger Agreement; (iii) the effectiveness of a registration statement on Form S-4 relating to the shares of CNX Resources common stock to be issued pursuant to the Merger Agreement; (iv) approval for listing on the NYSE of the shares of CNX Resources common stock to be issued pursuant to the Merger Agreement; (v) subject to specified materiality standards, the accuracy of certain representations and warranties of the other party; and (vi) compliance by the other party in all material respects with its covenants.

In connection with execution of the Merger Agreement, CNXM and two indirect wholly owned subsidiaries (the “Subsidiaries”) of CNX Resources, entered into a Support Agreement, dated as of July 26, 2020 (the “Support Agreement”), pursuant to which the Subsidiaries have agreed to deliver a written consent (the “Written Consent”), covering all of the CNXM common units beneficially owned by them, approving the Merger. The Merger Agreement and any other matters necessary for consummation of the Merger and the other transactions contemplated in the Merger Agreement.

Upon completion of the Merger, CNXM’s common units will no longer be publicly traded. Subject to the satisfaction or waiver of the conditions described above, the Merger is expected to close in the fourth quarter of 2020.

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Second Quarter and Year to Date Financial Highlights

Comparative results net to the Partnership, with the exception of operating cash flows, which is presented on a gross consolidated basis, were as follows:

	Three Months Ended   June 30,				Six Months Ended   June 30,
(in millions)	2020		2019		2020		2019
Net income	$	32.6	$	46.7	$	77.8	$	81.9
Net cash provided by operating activities	$	45.5	$	74.8	$	85.6	$	124.7
Adjusted EBITDA (non-GAAP)	$	49.7	$	59.3	$	110.1	$	113.8
Distributable cash flow (non-GAAP)	$	37.1	$	46.9	$	83.9	$	89.9
Expansion Capital	$	8.8	$	98.2	$	34.5	$	169.3

For a discussion of why the above non-GAAP metrics are viewed as important by management, and how the non-GAAP financial measures reconcile to their nearest comparable financial measures prepared in accordance with accounting principles generally accepted in the United States (“GAAP”), see “Non-GAAP Financial Measures” below for additional information.

Quarterly Cash Distribution

On July 27, 2020, the Board of Directors of the Partnership’s general partner declared a cash distribution to the Partnership’s unitholders with respect to the second quarter of 2020 of $0.5000 per common unit. The cash distribution will be paid on August 14, 2020 to unitholders of record at the close of business on August 7, 2020.

Factors Affecting the Comparability of Our Financial Results

The Partnership continues to monitor a number of factors that may cause actual results of operations and financial results to differ from our historical results or current expectations. These factors include: the continuing impact of the COVID-19 pandemic and the related economic downturn, as well as the ramifications of the crude oil price war between OPEC/Saudi Arabia and Russia that began during the first half of the year. These and other factors could affect the Partnership’s operations, earnings and cash flow for any period and could cause such results to not be comparable to those of the same period in previous years. The results presented in this Form 10-Q are not necessarily indicative of future operating results.

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Results of Operations

Three Months Ended June 30, 2020 Compared to the Three Months Ended June 30, 2019

	Three Months Ended June 30,
	2020		2019		Change ($)		Change (%)
(in thousands)
Revenue
Gathering revenue — related party	$	54,203	$	59,205	$	(5,002)	(8.4)	%
Gathering revenue — third party	11,749		18,896		(7,147)		(37.8)	%
Miscellaneous income	86		—		86		100.0	%
Total Revenue	66,038		78,101		(12,063)		(15.4)	%
Expenses
Operating expense — related party	4,367		6,514		(2,147)		(33.0)	%
Operating expense — third party	6,049		6,188		(139)		(2.2)	%
General and administrative expense — related party	2,748		4,027		(1,279)		(31.8)	%
General and administrative expense — third party	1,585		1,364		221		16.2	%
Loss on asset sales and abandonments	1,663		—		1,663		100.0	%
Depreciation expense	8,209		5,860		2,349		40.1	%
Interest expense	8,617		7,685		932		12.1	%
Total Expense	33,238		31,638		1,600		5.1	%
Net Income	$	32,800	$	46,463	$	(13,663)	(29.4)	%
Less: Net income (loss) attributable to noncontrolling interest	250		(282)		532		(188.7)	%
Net Income Attributable to General and Limited Partner Ownership Interest in CNX Midstream Partners LP	$	32,550	$	46,745	$	(14,195)	(30.4)	%

Operating Statistics - Gathered Volumes for the Three Months Ended June 30, 2020

	Anchor	Additional	TOTAL
Dry Gas (BBtu/d) 1	993	48	1,041
Wet Gas (BBtu/d) 1	327	46	373
Other (BBtu/d) 2	273	—	273
Total Gathered Volumes	1,593	94	1,687

Operating Statistics - Gathered Volumes for the Three Months Ended June 30, 2019

	Anchor	Additional	TOTAL
Dry Gas (BBtu/d) 1	879	3	882
Wet Gas (BBtu/d) 1	670	61	731
Other (BBtu/d) 2	178	—	178
Total Gathered Volumes	1,727	64	1,791

¹ (One billion British Thermal Units per day - BBtu/d) Classification as dry or wet is primarily based upon system area. In certain situations, we may elect to allow customers to access alternate delivery points within our system, which would be a negotiated change addressed on a case-by-case basis.

² Includes third-party volumes we gather under high-pressure short-haul agreements (271 BBtu/d and 173 BBtu/d for the three months ended June 30, 2020 and 2019, respectively) as well as condensate handling.

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Revenue    

Our revenue typically increases or decreases as our customers’ production on our dedicated acreage increases or decreases. Since we charge a higher fee for natural gas that is shipped through our wet system than through our dry system, our revenue can also be impacted by the relative mix of gathered volumes by area, which may vary dependent upon our customers’ elections as to where to deliver their produced volumes, which may change dynamically depending on the most current commodity prices at the time of shipment.

Total revenue decreased 15.4% to approximately $66.0 million for the three months ended June 30, 2020 compared to approximately $78.1 million for the three months ended June 30, 2019 primarily due to a 49.0% decrease in gathered volumes of wet gas, offset in part by an increase of 18.0% in gathered volumes of dry gas. The net decrease in gathered volumes was the result of temporary production curtailments by our Sponsor and one of our third-party customers due to a decline in both natural gas and natural gas liquids pricing. Although a majority of the wet wells have since come back online due to a rebound in pricing, the concerns over storage capacity and other items discussed in the Executive Overview above could impact future periods. The impact of the lower wet gas volumes was partially offset by well turn-in-line activity that occurred over the past twelve months.

In addition, there was an increase of 95 BBtu/d in other volumes compared with the prior year quarter, due primarily to activity under short-haul gathering contracts. Volumes gathered under short-haul gathering contracts do not have as significant an impact on revenues as volumes gathered at our standard dry or wet gas rates.

Operating Expense    

Operating expense primarily includes electrically-powered compression, direct labor, repairs and maintenance and compression expenses. Total operating expenses were approximately $10.4 million in the three months ended June 30, 2020 compared to approximately $12.7 million in the three months ended June 30, 2019. Included in total operating expense was electrically-powered compression expense of $3.0 million for the three months ended June 30, 2020 compared to $4.4 million for the three months ended June 30, 2019, which was reimbursed by our customers pursuant to our gas gathering agreements and included in revenue. Operating expenses decreased 11.3% after adjusting for the electrically-powered compression expense reimbursement in the current quarter compared to the prior year quarter primarily due to a 5.8% decrease in volumes and continued adherence to cost control initiatives implemented by our operations team over the past few years.

General and Administrative Expense    

General and administrative expense primarily includes direct charges for the management and operation of our assets. Total general and administrative expense was approximately $4.3 million for the three months ended June 30, 2020 compared to approximately $5.4 million for the three months ended June 30, 2019. The decrease was primarily due to lower personnel related costs as part of continuing cost reductions.

Loss on Asset Sales and Abandonments

During the three months ended June 30, 2020, due to ongoing assessments of projects that generate the highest returns on invested capital, the Partnership abandoned the construction of a pipeline project that was designed to support additional production within certain areas of the Anchor System as well as land rights-of-way in both the Anchor and Additional Systems. After evaluating the amount of project spending that could be repurposed to other ongoing projects, management determined that the loss on abandoning this project and rights-of-way was $1.7 million. No such transactions occurred in the three months ended June 30, 2019.

Depreciation Expense    

Depreciation expense is recognized on gathering and other equipment on a straight-line basis, with useful lives ranging from 25 years to 40 years. Total depreciation expense was approximately $8.2 million in the three months ended June 30, 2020 compared to approximately $5.9 million in the three months ended June 30, 2019. The increase was the result of additional assets placed into service over time.

Interest Expense 

Interest expense is comprised of interest on our 6.5% Senior Notes due 2026 (the “Senior Notes”) as well as on the outstanding balance of our revolving credit facility. Interest expense was approximately $8.6 million for the three months ended June 30, 2020 compared to approximately $7.7 million for the three months ended June 30, 2019. The increase in interest expense was primarily due to an increase in borrowings on our revolving credit facility which was related to our long-term capital program completed in 2019, as well as a reduction in the amount of interest that was capitalized in the second quarter of 2020. These increases were partially offset by lower interest rates on our revolving credit facility.

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Six Months Ended June 30, 2020 Compared to the Six Months Ended June 30, 2019

	Six Months Ended June 30,
	2020		2019		Change ($)		Change (%)
(in thousands)
Revenue
Gathering revenue — related party	$	116,381	$	112,981	$	3,400	3.0	%
Gathering revenue — third party	29,702		37,339		(7,637)		(20.5)	%
Miscellaneous Income	151		—		151		100.0	%
Total Revenue	146,234		150,320		(4,086)		(2.7)	%
Expenses
Operating expense — related party	8,195		12,062		(3,867)		(32.1)	%
Operating expense — third party	14,645		12,162		2,483		20.4	%
General and administrative expense — related party	5,605		7,994		(2,389)		(29.9)	%
General and administrative expense — third party	4,350		2,900		1,450		50.0	%
Loss on asset sales and abandonments	1,652		7,229		(5,577)		(77.1)	%
Depreciation expense	15,787		11,510		4,277		37.2	%
Interest expense	17,410		15,024		2,386		15.9	%
Total Expense	67,644		68,881		(1,237)		(1.8)	%
Net Income	$	78,590	$	81,439	$	(2,849)	(3.5)	%
Less: Net income (loss) attributable to noncontrolling interest	821		(413)		1,234		(298.8)	%
Net Income Attributable to General and Limited Partner Ownership Interest in CNX Midstream Partners LP	$	77,769	$	81,852	$	(4,083)	(5.0)	%

Operating Statistics - Gathered Volumes for the Six Months Ended June 30, 2020

	Anchor	Additional	TOTAL
Dry Gas (BBtu/d) 1	1,015	56	1,071
Wet Gas (BBtu/d) 1	437	48	485
Other (BBtu/d) 2	286	—	286
Total Gathered Volumes	1,738	104	1,842

Operating Statistics - Gathered Volumes for the Six Months Ended June 30, 2019

	Anchor	Additional	TOTAL
Dry Gas (BBtu/d) 1	853	3	856
Wet Gas (BBtu/d) 1	649	66	715
Other (BBtu/d) 2	156	—	156
Total Gathered Volumes	1,658	69	1,727

¹ (One billion British Thermal Units per day - BBtu/d) Classification as dry or wet is primarily based upon system area. In certain situations, we may elect to allow customers to access alternate delivery points within our system, which would be a negotiated change addressed on a case-by-case basis.

² Includes third-party volumes we gather under high-pressure short-haul agreements (283 BBtu/d and 150 BBtu/d for the six months ended June 30, 2020 and 2019, respectively) as well as condensate handling.

Revenue    

Our revenue typically increases or decreases as our customers’ production on our dedicated acreage increases or decreases. Since we charge a higher fee for natural gas that is shipped through our wet system than through our dry system, our revenue can also be impacted by the relative mix of gathered volumes by area, which may vary dependent upon our customers’ elections as to where to deliver their produced volumes, which may change dynamically depending on the most current commodity prices at the time of shipment.

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Total revenue decreased approximately 2.7% to $146.2 million for the six months ended June 30, 2020 compared to $150.3 million for the six months ended June 30, 2019, which was primarily due to a 32.2% decrease in gathered volumes of wet gas, offset in part by an increase of 25.1% in gathered volumes of dry gas. The net decrease in gathered volumes was the result of temporary production curtailments by our Sponsor and one of our third-party customers due to a decline in both natural gas and natural gas liquids pricing. Although a majority of the wet wells have since come back online due to a rebound in pricing, the concerns over storage capacity and other items discussed in the Executive Overview above could impact future periods. The impact of the lower wet gas volumes was partially offset by well turn-in-line activity that occurred over the past twelve months.

In addition, there was a 130 BBtu/d increase in other volumes gathered period over period, due primarily to activity under short-haul gathering contracts. Volumes gathered under short-haul gathering contracts do not have as significant an impact on revenues as volumes gathered at our standard dry or wet gas rates.

Operating Expense    

Total operating expenses were approximately $22.8 million for the six months ended June 30, 2020 compared to approximately $24.2 million for the six months ended June 30, 2019. Included in total operating expense was electrically-powered compression expense of $6.7 million for the six months ended June 30, 2020 compared to $7.7 million for the six months ended June 30, 2019, which was reimbursed by our customers pursuant to our gas gathering agreements and included in revenue. Although total volumes gathered increased 6.7%, operating expenses decreased by approximately 2.3% after adjusting for the electrically-powered compression expense reimbursement in the six months ended June 30, 2020 when compared to the prior period. This was primarily due to continued adherence to cost control measures implemented by our operations team over the past few years.

General and Administrative Expense    

General and administrative expense is comprised of direct charges for the management and operation of our assets. Total general and administrative expense was approximately $10.0 million for the six months ended June 30, 2020 compared to approximately $10.9 million for the six months ended June 30, 2019. The comparative decrease was primarily due to lower personnel related costs as part of continuing cost reductions, offset in part by transaction costs associated with the IDR Elimination Transaction that occurred during the first quarter of 2020 (see Note 1–Description of Business, in the Notes to the Unaudited Consolidated Financial Statements in Item 1 of this Form 10-Q).

Loss on asset sales and abandonments

During the six months ended June 30, 2020, due to ongoing assessments of projects that generate the highest returns on invested capital, the Partnership abandoned the construction of a pipeline project that was designed to support additional production within certain areas of the Anchor System as well as land rights-of-way in both the Anchor and Additional Systems. After evaluating the amount of project spending that could be repurposed to other ongoing projects, management determined that the loss on abandoning this project and rights-of-way was $1.7 million.

During the six months ended June 30, 2019, due in part to changes in customer drilling plan timing and ongoing assessments of projects that generate the highest returns on invested capital, the Partnership abandoned the construction of a compressor station that was designed to support additional production within certain areas of the Anchor System. After evaluating the amount of project spending that could be repurposed to other ongoing projects, management determined that the loss on abandoning the project was $7.2 million.

Depreciation Expense    

Depreciation expense is recognized on gathering and other equipment on a straight-line basis, with useful lives ranging from 25 years to 40 years. Total depreciation expense was approximately $15.8 million for the six months ended June 30, 2020 compared to approximately $11.5 million for the six months ended June 30, 2019. The increase was the result of additional assets placed into service over time.

Interest Expense 

Interest expense is comprised of interest on our 6.5% senior notes due 2026 (the “Senior Notes”) as well as on the outstanding balance of our revolving credit facility. Interest expense was approximately $17.4 million in the six months ended June 30, 2020 compared to approximately $15.0 million for the six months ended June 30, 2019. The increase in interest expense was primarily due to an increase in borrowings on our revolving credit facility which was related to our long-term capital program completed in 2019, as well as a reduction in the amount of interest that was capitalized in 2020. These increases were partially offset by lower interest rates on our revolving credit facility.

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Non-GAAP Financial Measures

EBITDA and Adjusted EBITDA

We define EBITDA as net income (loss) before net interest expense, depreciation and amortization, and Adjusted EBITDA as EBITDA adjusted for gains or losses on asset sales and abandonments and other non-cash items which should not be included in the calculation of Distributable Cash Flow. EBITDA and Adjusted EBITDA are used as supplemental financial measures by management and by external users of our financial statements, such as investors, industry analysts, lenders and ratings agencies, to assess:

•our operating performance as compared to those of other companies in the midstream energy industry, without regard to financing methods, historical cost basis or capital structure;

•the ability of our assets to generate sufficient cash flow to make distributions to our partners;

•our ability to incur and service debt and fund capital expenditures; and

•the viability of acquisitions and other capital expenditure projects and the returns on investment of various investment opportunities.

We believe that the presentation of EBITDA and Adjusted EBITDA in this Quarterly Report on Form 10-Q provides information that is useful to investors in assessing our financial condition and results of operations. The GAAP measures most directly comparable to EBITDA and Adjusted EBITDA are Net Income and Net Cash Provided by Operating Activities. EBITDA and Adjusted EBITDA should not be considered an alternative to Net Income, Net Cash Provided by Operating Activities or any other measure of financial performance or liquidity presented in accordance with GAAP. EBITDA and Adjusted EBITDA exclude some, but not all, items that affect Net Income or Net Cash Provided by Operating Activities, and these measures may vary from those of other companies. As a result, EBITDA and Adjusted EBITDA as presented below may not be comparable to similarly titled measures of other companies.

Distributable Cash Flow

We define Distributable Cash Flow as Adjusted EBITDA less net income attributable to noncontrolling interest, cash interest expense and maintenance capital expenditures, each net to the Partnership. Distributable Cash Flow does not reflect changes in working capital balances.

Distributable Cash Flow is used as a supplemental financial measure by management and by external users of our financial statements, such as investors, industry analysts, lenders and ratings agencies, to assess:

•the ability of our assets to generate cash sufficient to support our indebtedness and make future cash distributions to our unitholders; and

•the attractiveness of capital projects and acquisitions and the overall rates of return on alternative investment opportunities.

We believe that the presentation of Distributable Cash Flow in this Quarterly Report on Form 10-Q provides information that is useful to investors in assessing our financial condition and results of operations. The GAAP measures most directly comparable to Distributable Cash Flow are Net Income and Net Cash Provided by Operating Activities. Distributable Cash Flow should not be considered an alternative to Net Income, Net Cash Provided by Operating Activities or any other measure of financial performance or liquidity presented in accordance with GAAP. Distributable Cash Flow excludes some, but not all, items that affect Net Income or Net Cash Provided by Operating Activities, and these measures may vary from those of other companies. As a result, our Distributable Cash Flow may not be comparable to similarly titled measures that other companies may use.

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The following table presents a reconciliation of the non-GAAP measures of EBITDA, Adjusted EBITDA and Distributable Cash Flow to the most directly comparable GAAP financial measures of Net Income and Net Cash Provided by Operating Activities.

	Three Months Ended   June 30,				Six Months Ended   June 30,
(in thousands)	2020		2019		2020		2019
Net Income	$	32,800	$	46,463	$	78,590	$	81,439
Depreciation expense	8,209		5,860		15,787		11,510
Interest expense	8,617		7,685		17,410		15,024
EBITDA	49,626		60,008		111,787		107,973
Non-cash unit-based compensation expense	380		541		884		1,153
Loss on asset sales and abandonments	1,663		—		1,652		7,229
Adjusted EBITDA	51,669		60,549		114,323		116,355
Less:
Net income (loss) attributable to noncontrolling interest	250		(282)		821		(413)
Depreciation expense attributable to noncontrolling interest	483		395		963		789
Other expenses attributable to noncontrolling interest	1,154		1,098		2,327		2,218
Loss on asset sales attributable to noncontrolling interest	110		—		110		—
Adjusted EBITDA Attributable to General and Limited Partner Ownership Interest in CNX Midstream Partners LP	$	49,672	$	59,338	$	110,102	$	113,761
Less: cash interest expense, net to the Partnership	7,286		7,282		15,191		13,886
Less: maintenance capital expenditures, net to the Partnership	5,310		5,168		10,983		10,003
Distributable Cash Flow	$	37,076	$	46,888	$	83,928	$	89,872
Net Cash Provided by Operating Activities	$	45,495	$	74,753	$	85,618	$	124,666
Interest expense	8,617		7,685		17,410		15,024
Loss on asset sales and abandonments	1,663		—		1,652		7,229
Other, including changes in working capital	(4,106)		(21,889)		9,643		(30,564)
Adjusted EBITDA	51,669		60,549		114,323		116,355
Less:
Net income (loss) attributable to noncontrolling interest	250		(282)		821		(413)
Depreciation expense attributable to noncontrolling interest	483		395		963		789
Other expenses attributable to noncontrolling interest	1,154		1,098		2,327		2,218
Loss on asset sales attributable to noncontrolling interest	110		—		110		—
Adjusted EBITDA Attributable to General and Limited Partner Ownership Interest in CNX Midstream Partners LP	$	49,672	$	59,338	$	110,102	$	113,761
Less: cash interest expense, net to the Partnership	7,286		7,282		15,191		13,886
Less: maintenance capital expenditures, net to the Partnership	5,310		5,168		10,983		10,003
Distributable Cash Flow	$	37,076	$	46,888	$	83,928	$	89,872

Distributable Cash Flow is a non-GAAP measure that is net to the Partnership. The $9.8 million and $5.9 million decreases in Distributable Cash Flow in the three and six months ended June 30, 2020 compared to the 2019 period were primarily attributable to decreases in wet gas volumes gathered under our fixed-fee gathering agreement with our customers due to temporary production curtailments.

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Liquidity and Capital Resources

Liquidity and Financing Arrangements

We have historically satisfied our working capital requirements, funded capital expenditures, acquisitions and debt service obligations, and made cash distributions with cash generated from operations, borrowings under our revolving credit facility and issuance of debt and equity securities. If necessary, we may issue additional equity or debt securities to satisfy the expenditure requirements necessary to fund future growth. We believe that cash generated from these sources will continue to be sufficient to meet these needs in the future. Nevertheless, the ability of the Partnership to satisfy its working capital requirements, to service its debt obligations, to fund planned capital expenditures, or to pay dividends will depend upon future operating performance, which will be affected by prevailing economic conditions in the natural gas industry and other financial and business factors, including the current COVID 19 pandemic, some of which are beyond our control.

We continuously review our liquidity and capital resources. If market conditions were to change, for instance due to the significant decline in natural gas, NGLs and/or crude oil prices or uncertainty created by the COVID-19 pandemic, and our revenue was reduced significantly or operating costs were to increase significantly, our cash flows and liquidity could be reduced.

As of June 30, 2020, we were in compliance with all our debt covenants. After considering the current and potential effect of the significant decline in natural gas, NGLs and/or crude oil prices and uncertainty created by the COVID-19 pandemic on our operations, the Partnership currently expects to remain in compliance with its debt covenants.

Cash Flows

Net cash provided by or used in operating activities, investing activities and financing activities were as follows for the periods presented:

	Six Months Ended June 30,
(in millions)	2020		2019		Change
Net Cash Provided by Operating Activities	$	85.6	$	124.7	$	(39.1)
Net Cash Used in Investing Activities	$	(47.0)	$	(182.9)	$	135.9
Net Cash (Used in) Provided by Financing Activities	$	(37.7)	$	65.9	$	(103.6)

Net Cash Provided by Operating Activities decreased approximately $39.1 million for the six months ended June 30, 2020 compared to the six months ended June 30, 2019. The Partnership’s consolidated Adjusted EBITDA decreased by $2.0 million in the current year period compared to the prior year period. The remainder of the change was primarily due to reductions in working capital.

Net Cash Used in Investing Activities decreased $135.9 million in the current year period compared to the prior year period due primarily to the long-term capital program being completed during 2019 and the go-forward capital intensity of the Partnership being lower.

Net Cash (Used in) Provided by Financing Activities in the current year period decreased compared to the prior year period primarily due to a reduction in net borrowings required to support lower levels of capital spending (investing activities).

Indebtedness

Revolving Credit Facility

We are party to a $600.0 million secured revolving credit facility, as amended in April 2019 (our “revolving credit facility”), that matures on April 24, 2024 and includes the ability to issue letters of credit up to $100.0 million in the aggregate. The revolving credit facility has an accordion feature that allows, subject to certain terms and conditions, the Partnership to increase the available borrowings under the revolving credit facility by up to an additional $250.0 million. The available borrowing capacity under the revolving credit facility is limited by certain financial covenants pertaining to leverage and interest coverage ratios as defined in the revolving credit facility agreement.

Borrowings under the amended revolving credit facility bear interest at our option at either:

•the base rate, which is the highest of (i) the federal funds open rate plus 0.50%, (ii) PNC Bank, N.A.’s prime rate, or (iii) the one-month LIBOR rate plus 1.00%, in each case, plus a margin ranging from 0.50% to 1.50%; or

•the LIBOR rate plus a margin ranging from 1.50% to 2.50%.

We incurred interest expense of $4.4 million on our revolving credit facility (not including amortization of revolver fees) during the six months ended June 30, 2020. At June 30, 2020, the Partnership had an outstanding balance on the revolving

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credit facility of $319.0 million and $0.03 million of letters of credit outstanding, leaving $281.0 million available for borrowing.

For additional information on our revolving credit facility, including details relating to the amendment that was completed in April 2019, see Note 6–Long-Term Debt in the Notes to the Unaudited Consolidated Financial Statements in Item 1 of this Form 10-Q.

Senior Notes due 2026

On March 16, 2018, the Partnership completed a private offering of $400.0 million in 6.5% senior notes due 2026 (the “Senior Notes”), and received net proceeds of approximately $394.0 million, after deducting the initial purchasers’ discount. In connection with the issuance of the Senior Notes, the Partnership capitalized related offering expenses, which are recorded in our consolidated balance sheet as a reduction to the principal amount. Net proceeds from the Senior Notes offering were primarily used to fund the Shirley-Penns Acquisition and repay existing indebtedness under our revolving credit facility.

The Senior Notes mature on March 15, 2026 and accrue interest at a rate of 6.5% per year, which is payable semi-annually, in arrears, on March 15 and September 15. We incurred interest expense of $13.0 million (not including amortization of capitalized bond issue costs) on the Senior Notes during the six months ended June 30, 2020.

For additional information regarding our Senior Notes, see Note 6–Long-Term Debt in the Notes to the Unaudited Consolidated Financial Statements in Item 1 of this Form 10-Q.

Capital Expenditures

The midstream energy business is capital intensive and requires maintenance of existing gathering systems and other midstream assets and facilities, as well as the acquisition or construction and development of new gathering systems and other midstream assets and facilities. Our partnership agreement requires that we categorize our capital expenditures as either:

•Maintenance capital expenditures, which are cash expenditures (including expenditures for the construction or development of new capital assets or the replacement, improvement or expansion of existing capital assets) made to maintain, over the long-term, our operating capacity, operating income or revenue. Examples of maintenance capital expenditures are expenditures to repair, refurbish and replace pipelines, to maintain equipment reliability, integrity and safety and to comply with environmental laws and regulations. In addition, we designate a portion of our capital expenditures to connect new wells to maintain gathering throughput as maintenance capital to the extent such capital expenditures are necessary to maintain, over the long-term, our operating capacity, operating income or revenue; or

•Expansion capital expenditures, which are cash expenditures to construct new midstream infrastructure and those expenditures incurred in order to extend the useful lives of our assets, reduce costs, increase revenues or increase system throughput or capacity from current levels, including well connections that increase existing system throughput. Examples of expansion capital expenditures include the construction, development or acquisition of additional gathering pipelines and compressor stations, in each case to the extent such capital expenditures are expected to expand our operating capacity, operating income or revenue. In the future, if we make acquisitions that increase system throughput or capacity, the associated capital expenditures may also be considered expansion capital expenditures.

Capital Expenditures for the Six Months Ended June 30, 2020

	Anchor		Additional		Total
Capital Investment
Maintenance capital	$	10,949	$	674	$	11,623
Expansion capital	34,408		1,005		35,413
Total Capital Investment	$	45,357	$	1,679	$	47,036
Capital Investment Net to the Partnership
Maintenance capital	$	10,949	$	34	$	10,983
Expansion capital	34,408		50		34,458
Total Capital Investment Net to the Partnership	$	45,357	$	84	$	45,441

We anticipate that we will continue to make expansion capital expenditures in the future. Consequently, our ability to develop and maintain sources of funds to meet our capital requirements is critical to our ability to meet our growth objectives.

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We expect that any significant future expansion capital expenditures will be funded by borrowings under our revolving credit facility and/or the issuance of debt and equity securities.

Cash Distribution

The amount of distributions paid under the Partnership’s cash distribution policy and the decision to make any distribution will be determined by our general partner, taking into consideration the terms of the partnership agreement. Under that agreement, the Partnership makes quarterly distributions on its common units to the extent the Partnership has available cash after the establishment of cash reserves. However, we do not have a legal or contractual obligation to pay distributions quarterly or on any other basis at any rate.

On July 27, 2020, the board of directors of our general partner declared a cash distribution to our unitholders of $0.5000 per common unit with respect to three months ended June 30, 2020. The cash distribution will be paid on August 14, 2020 to unitholders of record as of the close of business on August 7, 2020.

For additional information on our cash distribution policy, see Note 3–Cash Distributions in the Notes to the Unaudited Consolidated Financial Statements in Item 1 of this Form 10-Q.

Insurance Program

We share an insurance program with our Sponsor, and we reimburse our Sponsor for the costs of the insurance program, which includes insurance policies with insurers in amounts and with coverage and deductibles that we believe are reasonable and prudent. We cannot, however, assure that this insurance will be adequate to protect us from all material expenses related to potential future claims for personal and property damage or that these levels of insurance will be available in the future at economical prices.

Off-Balance Sheet Arrangements

We do not maintain any off-balance sheet transactions, arrangements, obligations or other relationships with unconsolidated entities or others that are reasonably likely to have a material current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources which are not disclosed in the notes to the unaudited consolidated financial statements of this Quarterly Report on Form 10-Q.

Contractual Obligations

For a discussion of amounts outstanding under our Revolving Credit Facility and Senior Notes, see Note 6–Long-Term Debt, in the Notes to the Unaudited Consolidated Financial Statements in Item 1 of this Form 10-Q.

Critical Accounting Policies

For a description of the Partnership’s accounting policies and any new accounting policies or updates to existing accounting policies as a result of new accounting pronouncements, see Note 2–Significant Accounting Policies, in the Notes to the Unaudited Consolidated Financial Statements in Item 1 of this Form 10-Q. The application of the Partnership’s accounting policies may require management to make judgments and estimates about the amounts reflected in the Consolidated Financial Statements. If applicable, management uses historical experience and all available information to make these estimates and judgments. Different amounts could be reported using different assumptions and estimates.

As of June 30, 2020, the Partnership did not have any accounting policies that we deemed to be critical or that would require significant judgment.

Forward-Looking Statements

This report contains forward-looking statements. Statements that are predictive in nature, that depend upon or refer to future events or conditions or that include the words “believe,” “expect,” “anticipate,” “intend,” “estimate,” “will” and other expressions that are predictions of or indicate future events and trends and that do not relate to historical matters identify forward-looking statements. Our forward-looking statements include statements about our business strategy, our industry, our future profitability, our expected capital expenditures and the impact of such expenditures on our performance, the costs of being a publicly traded partnership and our capital programs.

A forward-looking statement may include a statement of the assumptions or bases underlying the forward-looking statement. We believe that we have chosen these assumptions or bases in good faith and that they are reasonable. You are cautioned not to place undue reliance on any forward-looking statements, as these statements involve risks, uncertainties and other factors that could cause our actual future outcomes to differ materially from those set forth in such statements. You should also understand that it is not possible to predict or identify all such factors and should not consider the following list to be a

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complete statement of all potential risks and uncertainties. Factors that could cause our actual results to differ materially from the results contemplated by such forward-looking statements include:

•the possibility that the market price of CNX Resource's common stock will fluctuate prior to the completion of the Merger causing the value of the merger consideration to change;

•the risk that a condition to the closing of the Merger may not be satisfied on a timely basis, if at all;

•the timing of the completion of the Merger;

•the substantial transaction-related costs that may be incurred by CNX Resources and the Partnership in connection with the Merger;

•the possibility that CNX Resources and the Partnership may, under certain specified circumstances, be responsible for the other party's expenses;

•the possibility that CNX Resources and the Partnership may be the targets of securities class actions and derivative lawsuits;

•the limited duties the Partnership's partnership agreement places on the general partner for actions taken by the general partner;

•the risk that certain officers and directors of CNX Resources and the general partner have interests in the Merger that are different from, or in addition to, the interests they may have as the Partnership's unitholders or the CNX Resources' stockholders, respectively;

•the possibility that financial projections by CNX Resources and the Partnership may not prove to be reflective of actual future results;

•our ability to grow, or maintain, our current rate of cash distributions;

•our reliance on our customers, including our Sponsor, CNX Resources Corporation;

•the effects of changes in market prices of natural gas, NGLs and crude oil on our customers’ drilling and development plans on our dedicated acreage and the volumes of natural gas and condensate that are produced on our dedicated acreage;

•because of the natural decline in production from existing wells, our success, in part, depends on our ability to maintain or increase natural gas and condensate throughput volumes on our midstream systems, which depends on the level of development and completion activity on acreage dedicated to us;

•changes in our customers’ drilling and development plans in the Marcellus Shale and Utica Shale, and our customers’ ability to meet such plans;

•our ability to maintain or increase volumes of natural gas and condensate on our midstream systems;

•the demand for natural gas and condensate gathering services, changes in general economic condition, and competitive conditions in our industry, including competition from the same and alternative energy sources;

•actions taken by third-party operators, gatherers, processors and transporters;

•our ability to successfully implement our business plan;

•our ability to complete internal growth projects on time and on budget;

•our ability to generate adequate returns on capital;

•the price and availability of debt and equity financing;

•the availability and price of oil, NGLs and natural gas to the consumer compared to the price of alternative and competing fuels;

•the availability of storage capacity for refined products such as crude, and refinery inputs including condensate, c5+ and butane;

•prolonged customer curtailments;

•energy efficiency and technology trends;

•operating hazards and other risks incidental to our midstream services;

•natural disasters, weather-related delays, casualty losses and other matters beyond our control;

•the impact of outbreaks of communicable diseases such as the novel highly transmissible and pathogenic coronavirus (“COVID-19”) on business activity, the Partnership’s operations and national and global economic conditions, generally;

•interest rates;

•labor relations;

•defaults by our customers under our gathering agreements;

•changes in availability and cost of capital;

•changes in our tax status;

•the effect of existing and future laws and government regulations;

•the effects of future litigation; and

•certain factors discussed elsewhere in this report.

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Although forward-looking statements reflect our good faith beliefs at the time they are made, they involve known and unknown risks, uncertainties and other factors. For more information concerning factors that could cause actual results to differ materially from those conveyed in the forward-looking statements, including, among others, that our business plans may change as circumstances warrant, please refer to the “Risk Factors” and “Forward-Looking Statements” sections of our Annual Report on Form 10-K for the year ended December 31, 2019 filed with the Securities and Commission on February 10, 2020 and subsequent Quarterly Reports on Form 10-Q. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, changed circumstances or otherwise, unless required by law

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Commodity Price Risk

We generate substantially all of our revenues pursuant to fee-based gathering agreements under which we are paid based on the volumes of natural gas and condensate that we gather and compress, rather than the underlying value of the commodity. Consequently, our existing operations and cash flows do not have significant direct exposure to commodity price risk. However, we are indirectly exposed to commodity price risks through our customers, who may reduce or shut-in production during periods of depressed commodity prices or as a result of an economic downturn resulting from the COVID-19 pandemic, or other health crisis. We have been able to mitigate this exposure to a limited extent through the use of minimum volume commitments and minimum well commitments in our gas gathering agreements with our customers. Although we intend to enter into similar fee-based gathering agreements with new customers in the future, our efforts to negotiate terms with third parties may not be successful.

In the future, we may acquire or develop additional midstream assets in a manner that increases our exposure to commodity price risk. Such exposure to the volatility of natural gas, NGLs and crude oil prices could have a material adverse effect on our business, financial condition, results of operations, cash flows and ability to make cash distributions to our unitholders.

Interest Rate Risk

We maintain a $600.0 million secured revolving credit facility and pay interest at a variable rate. Assuming the June 30, 2020 outstanding balance on our revolving credit facility of $319.0 million was outstanding for the entire year, an increase of one percentage point in the interest rates would have resulted in an increase to interest expense of $3.2 million. Accordingly, our results of operations, cash flows and financial condition, all of which affect our ability to make cash distributions to our unitholders, could be materially and adversely affected by significant increases in interest rates.

Credit Risk

We are subject to credit risk due to the concentration of receivables from our most significant customer, our Sponsor, for gas gathering services. We generally do not require our customers to post collateral. We maintain credit policies intended to minimize overall credit risk and actively monitor these policies to reflect changes and scope of operations. The inability or failure of our significant customers to meet their obligations to us, or their insolvency or liquidation, may adversely affect our financial results.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of management of our general partner, including the principal executive officer and principal financial officer, we evaluated the effectiveness of the Partnership’s “disclosure controls and procedures,” as such term is defined in Rule 13a-15(e) under the Exchange Act, as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on that evaluation, management, including the principal executive officer and principal financial officer of our general partner, have concluded that the Partnership’s disclosure controls and procedures are effective as of June 30, 2020 to ensure that information required to be disclosed by the Partnership in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission (“SEC”) rules and forms, and includes controls and procedures designed to ensure that information required to be disclosed by the Partnership in such reports is accumulated and communicated to management, including the principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There were no changes in the Partnership's internal controls over financial reporting that occurred during the fiscal quarter covered by this Quarterly Report on Form 10-Q that have materially affected, or are reasonably likely to materially affect, the Partnership’s internal control over financial reporting.

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PART II: OTHER INFORMATION

ITEM 1.LEGAL PROCEEDINGS

Refer to Note 7–Commitments and Contingencies in the Notes to the Unaudited Consolidated Financial Statements included in Item 1 of this Form 10-Q is incorporated herein by reference.

ITEM 1A. RISK FACTORS

The Partnership is subject to certain risks and hazards due to the nature of the business activities it conducts. For a discussion of these risks, see “Item 1A. Risk Factors” in the Partnership’s 2019 Annual Report on Form 10-K as filed with the SEC on February 10, 2020 ("2019 Form 10-K") and in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2020. These risks described could materially and adversely affect the Partnership's business, financial condition, cash flows, and results of operations. The Partnership may experience additional risks and uncertainties not currently known; or, as a result of developments occurring in the future, conditions that are currently deemed to be immaterial may also materially and adversely affect the Partnership's business, financial condition, cash flows, and results of operations.

Events beyond our control, including a global or domestic health crisis, may result in unexpected adverse operating and financial results.

The recent outbreak of the coronavirus pandemic (COVID-19) has affected, and may materially and adversely affect, our business, operating and financial results and liquidity. The severity, magnitude and duration of the current COVID-19 outbreak is uncertain, rapidly changing and hard to predict. While the full impact of this virus and the long-term worldwide reaction to it and impact from it remains unknown at this time, government reaction to the pandemic and restrictions and limitations applied by the government as a result, continued widespread growth in infections, travel restrictions, quarantines, or site closures as a result of the virus could, among other things, impact the ability of our Sponsor’s employees and our contractors to perform their duties, cause increased technology and security risk due to extended and company-wide telecommuting, lead to disruptions in our supply chain (including necessary vendors or service providers), lead to a disruption in our infrastructure acquisition or permitting activities and cause disruption in our relationship with our customers. Additionally, the COVID-19 outbreak has significantly impacted economic activity and markets around the world, and COVID-19 or another similar outbreak could negatively impact our business in numerous ways, including, but not limited to, the following:

•our revenue may be reduced if the outbreak results in an economic downturn or recession, as many experts predict, to the extent it leads to a prolonged decrease in the demand for natural gas, to a lesser extent, NGLs and/or crude oil;

•our operations may be disrupted or impaired if a significant portion of our Sponsor’s employees or our contractors are unable to work due to illness or if our operations are suspended or temporarily shut-down or restricted due to control measures designed to contain the outbreak;

•the operations of our upstream counterparties may be curtailed by many of the same challenges we face and, as such, may not be able to meet their minimum volume delivery obligations under their agreements with us and further, because of these challenges, have difficulties paying applicable shortfall or deficiency fees; and

•the disruption and instability in the financial markets and the uncertainty in the general business environment may affect opportunities to enhance our liquidity position and long-term financial flexibility.

To the extent the COVID-19 pandemic adversely affects our business and financial results, it may also have the effect of heightening many of the other risks set forth in Item 1A “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2019 and in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, such as those relating to our financial performance and debt obligations. The rapid development and fluidity of this situation precludes any prediction as to the ultimate adverse impact of COVID-19 on our business, which will depend on numerous evolving factors and future developments that we are not able to predict, including the length of time that the pandemic continues, its effect on the demand for natural gas, NGLs and/or crude oil, the response of the overall economy and the financial markets as well as the effect of governmental actions taken in response to the pandemic.

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The Merger is subject to conditions, including some conditions that may not be satisfied on a timely basis, if at all. Failure to complete the Merger, or significant delays in completing the Merger, could negatively affect our business and financial results and the trading prices of our common units.

The completion of the Merger is subject to a number of conditions. The completion of the Merger is not assured and is subject to risks. The Merger Agreement contains conditions, some of which are beyond our control, that, if not satisfied or waived, may prevent, delay or otherwise result in the Merger not occurring.

If the Merger is not completed, or if there are significant delays in completing the Merger, CNX Resources’ and our future business and financial results and the trading price of our common units could be negatively affected, and each of the parties will be subject to several risks, including the following:

•the parties may be liable for fees or expenses up to $3.5 million to one another under the terms and conditions of the Merger Agreement;

•there may be negative reactions from the financial markets due to the fact that current prices of our common units may reflect a market assumption that the Merger will be completed; and

•the attention of our management will have been diverted to the Merger rather than their own operations and pursuit of other opportunities that could have been beneficial to their respective businesses.

Because the exchange ratio is fixed and because the market price of CNX Resources common stock will fluctuate prior to the completion of the Merger, our unitholders cannot be sure of the market value of the CNX Resources common stock they will receive as merger consideration relative to the value of our common units they exchange.

The market value of the consideration that our unitholders will receive in the Merger will depend on the trading price of CNX common stock at the closing of the Merger. The exchange ratio that determines the number of shares of CNX common stock that our unitholders will receive in the Merger is fixed at 0.88 shares of CNX Resources common stock for each common unit. This means that there is no mechanism contained in the Merger Agreement that would adjust the number of shares of CNX Resources common stock that our unitholders will receive based on any decreases or increases in the trading price of CNX Resources common stock. Stock or unit price changes may result from a variety of factors (many of which are beyond CNX Resources’ and our control), including:

•changes in CNX Resources’ or our business, operations and prospects;

•changes in market assessments of CNX Resources’ or our business, operations and prospects;

•changes in market assessments of the likelihood that the Merger will be completed;

•interest rates, commodity prices, general market, industry and economic conditions and other factors generally affecting the price of CNX Resources common stock or our common units; and

•federal, state and local legislation, governmental regulation and legal developments in the businesses in which CNX Resources and we operate.

If the price of CNX Resources common stock at the closing of the Merger is less than the price of CNX Resources common stock on the date that the Merger Agreement was signed, then the market value of the merger consideration will be less than contemplated at the time the Merger Agreement was signed.

When our common unitholders receive the merger consideration depends on the completion date of the Merger, which is uncertain.

Completing the Merger is subject to several conditions, not all of which are controllable by us. Accordingly, the date on which our unitholders will receive merger consideration depends on the completion date of the Merger, which is uncertain and subject to several other closing conditions.

We may incur substantial transaction-related costs in connection with the Merger.

We expect to incur substantial expenses in connection with completing the Merger, including fees paid to legal, financial and accounting advisors, filing fees, proxy solicitation costs and printing costs. Many of the expenses that will be incurred, by their nature, are difficult to estimate accurately at the present time.

37

Certain executive officers and directors of our general partner have interests in the Merger that are different from, or in addition to, the interests they may have as unitholders which could have influenced their decision to support or approve the Merger.

Certain executive officers and directors of our general partner own equity interests in CNX Resources, receive fees and other compensation from CNX Resources, and will have rights to ongoing indemnification and insurance coverage by the surviving company that give them interests in the Merger that may be different from, or be in addition to, interests of an unaffiliated unitholder.

Financial projections by CNXM may not prove to be reflective of actual future results.

In connection with the Merger, we prepared and considered, among other things, internal financial forecasts for CNXM. These forecasts speak only as of the date made and will not be updated. These financial projections were not provided with a view to public disclosure, are subject to significant economic, competitive, industry and other uncertainties and may not be achieved in full, at all or within projected time frames. In addition, the failure of businesses to achieve projected results could have a material adverse effect on CNX Resources’ share price and financial position following the Merger.

ITEM 6.EXHIBITS

		Incorporated by Reference
Exhibit Number	Exhibit Description	Form	SEC File Number	Exhibit	Filing Date
31.1†	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934
31.2†	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934
32.1‡	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350
32.2‡	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350
101.INS	XBRL Instance Document - the instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document.
101.SCH†	XBRL Taxonomy Extension Schema Document.
101.CAL†	XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF†	XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB†	XBRL Taxonomy Extension Labels Linkbase Document.
101.PRE†	XBRL Taxonomy Extension Presentation Linkbase Document.

^† Filed herewith.

^‡ Furnished herewith.

38

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Quarterly Report on Form 10-Q to be signed on July 30, 2020 on its behalf by the undersigned thereunto duly authorized.

CNX MIDSTREAM PARTNERS LP
By:	CNX MIDSTREAM GP, LLC, its general partner
By:	/S/ NICHOLAS J. DEIULIIS
	Nicholas J. DeIuliis
	Chief Executive Officer and Chairman of the Board (Duly Authorized Officer and Principal Executive Officer)
By:	/S/ DONALD W. RUSH
	Donald W. Rush
	Chief Financial Officer and Director (Duly Authorized Officer and Principal Financial Officer)
By:	/S/ JASON L. MUMFORD
	Jason L. Mumford
	Chief Accounting Officer (Duly Authorized Officer and Principal Accounting Officer)

39

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Nicholas J. DeIuliis, certify that:

1.I have reviewed this quarterly report on Form 10-Q of CNX Midstream Partners LP;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:	July 30, 2020
/S/ Nicholas J. DeIuliis
Nicholas J. DeIuliis
Chief Executive Officer
CNX Midstream GP LLC (the general partner of CNX Midstream Partners LP)
(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Donald W. Rush, certify that:

1.I have reviewed this quarterly report on Form 10-Q of CNX Midstream Partners LP;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:	July 30, 2020
/S/ Donald W. Rush
Donald W. Rush
Chief Financial Officer
CNX Midstream GP LLC (the general partner of CNX Midstream Partners LP)
(Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002,

18 U.S.C. Section 1350

I, Nicholas J. DeIuliis, Chairman of the Board and Chief Executive Officer (principal executive officer) of CNX Midstream GP LLC, the general partner of CNX Midstream Partners LP (the “Registrant”), certify that to my knowledge, based upon a review of the Quarterly Report on Form 10-Q for the period ended June 30, 2020, of the Registrant (the “Report”):

(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

Date:	July 30, 2020
/S/ Nicholas J. DeIuliis
Nicholas J. DeIuliis
Chief Executive Officer
CNX Midstream GP LLC (the general partner of CNX Midstream Partners LP)
(Principal Executive Officer)

EX-32.2

Exhibit 32.2

CERTIFICATION

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002,

18 U.S.C. Section 1350

I, Donald W. Rush, Chief Financial Officer and Director (principal financial officer) of CNX Midstream GP LLC, the general partner of CNX Midstream Partners LP (the “Registrant”), certify that to my knowledge, based upon a review of the Quarterly Report on Form 10-Q for the period ended June 30, 2020, of the Registrant (the “Report”):

(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

Date:	July 30, 2020
/S/ Donald W. Rush
Donald W. Rush
Chief Financial Officer
CNX Midstream GP LLC (the general partner of CNX Midstream Partners LP)
(Principal Financial Officer)

XML

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2020	Jul. 30, 2020
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2020
Document Transition Report	false
Entity File Number	001-36635
Entity Registrant Name	CNX MIDSTREAM PARTNERS LP
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	47-1054194
Entity Address, Address Line One	1000 CONSOL Energy Drive
Entity Address, City or Town	Canonsburg
Entity Address, State or Province	PA
Entity Address, Postal Zip Code	15317-6506
City Area Code	724
Local Phone Number	485-4000
Title of 12(b) Security	Common Units Representing Limited Partner Interests
Trading Symbol	CNXM
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		89,799,224
Entity Central Index Key	0001610418
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q2
Amendment Flag	false

XML

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) shares in Thousands, $ in Thousands		3 Months Ended		6 Months Ended
		Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Revenue
Gathering revenue — related party		$ 54,203	$ 59,205	$ 116,381	$ 112,981
Gathering revenue — third party		11,749	18,896	29,702	37,339
Miscellaneous income		86	0	151	0
Total Revenue		66,038	78,101	146,234	150,320
Expenses
Operating expense — related party (Note 4)		4,367	6,514	8,195	12,062
Operating expense — third party		6,049	6,188	14,645	12,162
General and administrative expense — related party (Note 4)		2,748	4,027	5,605	7,994
General and administrative expense — third party		1,585	1,364	4,350	2,900
Loss on asset sales and abandonments		1,663	0	1,652	7,229
Depreciation expense		8,209	5,860	15,787	11,510
Interest expense		8,617	7,685	17,410	15,024
Total Expense		33,238	31,638	67,644	68,881
Net Income		32,800	46,463	78,590	81,439
Less: Net income (loss) income attributable to noncontrolling interest		250	(282)	821	(413)
Net Income Attributable to General and Limited Partner Ownership Interest in CNX Midstream Partners LP		32,550	46,745	77,769	81,852
Calculation of Limited Partner Interest in Net Income:
Net Income Attributable to General and Limited Partner Ownership Interest in CNX Midstream Partners LP		32,550	46,745	77,769	81,852
Less: General partner interest in net income, including incentive distribution rights		0	6,325	0	11,604
Limited partner interest in net income		$ 32,550	$ 40,420	$ 77,769	$ 70,248
Earnings per limited partner unit:
Basic (in dollars per unit)		$ 0.36	$ 0.63	$ 0.87	$ 1.10
Diluted (in dollars per unit)		$ 0.35	$ 0.63	$ 0.84	$ 1.10
Weighted average number of limited partner units outstanding (in thousands):
Basic (in shares)		89,799	63,732	89,798	63,715
Diluted (in shares)		92,817	63,755	92,820	63,759
Cash distributions declared per unit (in dollars per share)	[1]	$ 0.5000	$ 0.3865	$ 0.5829	$ 0.7597
Revenue, Product and Service [Extensible List]		us-gaap:NaturalGasGatheringTransportationMarketingAndProcessingMember	us-gaap:NaturalGasGatheringTransportationMarketingAndProcessingMember	us-gaap:NaturalGasGatheringTransportationMarketingAndProcessingMember	us-gaap:NaturalGasGatheringTransportationMarketingAndProcessingMember

[1] Represents the cash distributions declared during the month following the end of each respective quarterly period. See Note 10.

XML

CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Current Assets:
Cash	$ 989	$ 31
Receivables — related party	16,583	21,076
Receivables — third party, net (Note 2)	8,615	7,935
Other current assets	1,672	1,976
Total Current Assets	27,859	31,018
Property and Equipment (Note 5):
Property and equipment	1,329,543	1,302,566
Less — accumulated depreciation	122,804	106,975
Property and Equipment — Net	1,206,739	1,195,591
Other Assets:
Operating lease right-of-use assets	1,594	4,731
Other assets	2,698	3,262
Total Other Assets	4,292	7,993
TOTAL ASSETS	1,238,890	1,234,602
Current Liabilities:
Trade accounts payable	9,312	15,683
Accrued interest payable	7,794	7,973
Accrued liabilities	14,825	43,634
Due to related party (Note 4)	52,191	4,787
Total Current Liabilities	84,122	72,077
Long-term liabilities — related party (Note 4)	85,000	0
Other Liabilities:
Revolving credit facility (Note 6)	319,000	311,750
Senior Notes (Note 6)	394,635	394,162
Total Long-Term Debt	713,635	705,912
TOTAL LIABILITIES	882,757	777,989
Partners’ Capital and Noncontrolling Interest:
Limited partner units (89,799,224 issued and outstanding at June 30, 2020 and 63,736,622 issued and outstanding at December 31, 2019)	251,862	380,473
Class B units (3,000,000 issued and outstanding at June 30, 2020 and none issued and outstanding at December 31, 2019)	34,590	0
General partner interest	0	7,280
Partners’ capital attributable to CNX Midstream Partners LP	286,452	387,753
Noncontrolling interest	69,681	68,860
Total Partners’ Capital and Noncontrolling Interest	356,133	456,613
TOTAL LIABILITIES AND PARTNERS’ CAPITAL	$ 1,238,890	$ 1,234,602

XML

CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - shares	Jun. 30, 2020	Dec. 31, 2019
Units issued (in shares)	89,799,224	63,736,622
Units outstanding (in shares)	89,799,224	63,736,622
Class B
Common stock, shares issued (in shares)	3,000,000	0
Common stock, shares outstanding (in shares)	3,000,000	0

XML

CONSOLIDATED STATEMENTS OF PARTNERS' CAPITAL AND NONCONTROLLING INTEREST (Unaudited) - USD ($) $ in Thousands	Total	Total Capital Attributable to Partners	Total Capital Attributable to Partners Limited Partners	Total Capital Attributable to Partners Class B Units	Total Capital Attributable to Partners General Partner	Noncontrolling Interest
Partners' Capital, beginning balance at Dec. 31, 2018	$ 399,314	$ 331,443	$ 320,543		$ 10,900	$ 67,871
Increase (Decrease) in Partners' Capital [Roll Forward]
Net income	81,439	81,852	70,248		11,604	(413)
Contributions from general partner and noncontrolling interest holders, net	30	30			30
Quarterly distributions to unitholders	(56,208)	(56,208)	(46,724)		(9,484)
Unit-based compensation	1,153	1,153	1,153
Vested units withheld for taxes	(690)	(690)	(690)
Partners' Capital, ending balance at Jun. 30, 2019	425,038	357,580	344,530		13,050	67,458
Partners' Capital, beginning balance at Mar. 31, 2019	407,000	339,260	327,380		11,880	67,740
Increase (Decrease) in Partners' Capital [Roll Forward]
Net income	46,463	46,745	40,420		6,325	(282)
Quarterly distributions to unitholders	(28,940)	(28,940)	(23,785)		(5,155)
Unit-based compensation	541	541	541
Vested units withheld for taxes	(26)	(26)	(26)
Partners' Capital, ending balance at Jun. 30, 2019	425,038	357,580	344,530		13,050	67,458
Partners' Capital, beginning balance at Dec. 31, 2019	456,613	387,753	380,473	$ 0	7,280	68,860
Increase (Decrease) in Partners' Capital [Roll Forward]
Net income	78,590	77,769	77,769			821
Quarterly distributions to unitholders	(44,645)	(44,645)	(44,645)
IDR Elimination Transaction	(135,000)	(135,000)	(162,310)	34,590	(7,280)
Unit-based compensation	884	884	884
Vested units withheld for taxes	(309)	(309)	(309)
Partners' Capital, ending balance at Jun. 30, 2020	356,133	286,452	251,862	34,590	0	69,681
Partners' Capital, beginning balance at Mar. 31, 2020	330,397	260,966	226,376	34,590		69,431
Increase (Decrease) in Partners' Capital [Roll Forward]
Net income	32,800	32,550	32,550			250
Quarterly distributions to unitholders	(7,444)	(7,444)	(7,444)
Unit-based compensation	380	380	380
Partners' Capital, ending balance at Jun. 30, 2020	$ 356,133	$ 286,452	$ 251,862	$ 34,590	$ 0	$ 69,681

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Cash Flows from Operating Activities:
Net income	$ 78,590	$ 81,439
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation expense and amortization of debt issuance costs	16,730	12,449
Unit-based compensation	884	1,153
Loss on asset sales and abandonments	1,652	7,229
Other	144	41
Changes in assets and liabilities:
Due to/from affiliate	2,256	(3,269)
Receivables — third party	(680)	347
Other current and non-current assets	3,535	(7,039)
Accounts payable and other accrued liabilities	(17,493)	32,316
Net Cash Provided by Operating Activities	85,618	124,666
Cash Flows from Investing Activities:
Capital expenditures	(47,036)	(182,867)
Proceeds from sale of assets	80	0
Net Cash Used in Investing Activities	(46,956)	(182,867)
Cash Flows from Financing Activities:
Contributions from general partner and noncontrolling interest holders, net	0	30
Vested units withheld for unitholder taxes	(309)	(690)
Quarterly distributions to unitholders	(44,645)	(56,208)
Net borrowings on secured $600.0 million credit facility	7,250	124,000
Debt issuance costs	0	(1,220)
Net Cash (Used in) Provided by Financing Activities	(37,704)	65,912
Net Increase in Cash	958	7,711
Cash at Beginning of Period	31	3,966
Cash at End of Period	989	11,677
Cash paid during the period for:
Interest	17,602	15,892
Noncash investing activities:
Accrued capital expenditures	$ 10,552	$ 36,266

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Parenthetical)	Jun. 30, 2020 USD ($)
Secured Debt | Credit Facility
Revolving credit facility	$ 600,000,000.0

XML

DESCRIPTION OF BUSINESS

6 Months Ended

Jun. 30, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

DESCRIPTION OF BUSINESS

DESCRIPTION OF BUSINESS

CNX Midstream Partners LP (the “Partnership”, or “we”, “us”, or “our”) is a growth-oriented master limited partnership focused on the ownership, operation, development and acquisition of midstream energy infrastructure in the Appalachian Basin. We currently provide midstream services to our customers’ production in the Marcellus Shale and Utica Shale in Pennsylvania and West Virginia under long-term, fixed-fee contracts. Our assets include natural gas gathering pipelines and compression and dehydration facilities, as well as condensate gathering, collection, separation and stabilization facilities. We are managed by our general partner, CNX Midstream GP LLC (our “general partner”), a wholly owned subsidiary of CNX Gathering LLC (“CNX Gathering”). CNX Gathering is a wholly owned subsidiary of CNX Gas Company LLC (“CNX Gas”), which is a wholly owned subsidiary of CNX Resources Corporation (NYSE: CNX) (“CNX Resources”). Accordingly, CNX Resources is the sole Sponsor of the Partnership, and we may refer to CNX Resources as the “Sponsor” throughout this Quarterly Report on Form 10-Q.

Description of Business

Our midstream assets consist of two operating segments that we refer to as our “Anchor Systems” and “Additional Systems” based on their relative current cash flows, growth profiles, capital expenditure requirements and the timing of their development.

•Our Anchor Systems, in which the Partnership owns a 100% controlling interest, include our most developed midstream systems that generate the largest portion of our current cash flows, including our five primary midstream systems (the McQuay, Majorsville, Dry Ridge, Mamont and Shirley-Penns Systems), a 20” high-pressure pipeline and related assets.

•Our Additional Systems, in which the Partnership owns a 5% controlling interest, include several gathering systems throughout our dedicated acreage. Revenues from our Additional Systems are currently derived primarily from the Pittsburgh Airport area, which is within the wet gas region of our dedicated acreage, and the Wadestown area in the dry gas region. Currently, the substantial majority of capital investment in these systems would be funded directly by CNX Resources in proportion to CNX Gathering’s 95% retained ownership interest.

In order to maintain operational flexibility, our operations are conducted through, and our operating assets are owned by, our operating subsidiaries. However, neither we nor our operating subsidiaries have any employees. Our general partner has the sole responsibility for providing the personnel necessary to conduct our operations, whether through directly hiring employees or by obtaining the services of others, which may include personnel of CNX Resources as provided through contractual relationships with the Partnership. All of the personnel who conduct our business are employed or contracted by our general partner and its affiliates, including our Sponsor, but we sometimes refer to these individuals as our employees because they provide services directly to us. See Note 4–Related Party Transactions for additional information.

Merger Agreement

On July 26, 2020, we entered into an Agreement and Plan of Merger (the “Merger Agreement”). See Note 10–Subsequent Events for more information.

IDR Elimination Transaction

On January 29, 2020, CNX and CNXM entered into agreements and consummated a transaction that eliminated CNXM’s incentive distribution rights (“IDRs”) held by its general partner and converted the 2.0% general partner interest in CNXM into a non-economic general partnership interest (collectively, the "IDR Elimination Transaction"). 

CNX received the following under the IDR Elimination Transaction in exchange for the cancellation of the IDRs and conversion of the 2.0% general partner interest:

•26 million CNXM common units;

•3 million new CNXM Class B units, which will not receive or accrue distributions until January 1, 2022, at which time they will automatically convert into CNXM common units on a one-for-one basis; and

•$135.0 million, to be paid in three installments of $50.0 million due December 31, 2020, $50.0 million due December 31, 2021 and $35.0 million due December 31, 2022.

As a result of the IDR Elimination Transaction, CNX now owns 47.7 million CNXM common units, or approximately 53.1%, of the outstanding limited partner interests in CNXM, excluding the CNXM Class B units. Following the conversion of the

CNXM Class B units into CNXM common units on January 1, 2022, CNX’s ownership will increase to 50.7 million CNXM units, or approximately 54.6% of the outstanding limited partner interests in CNXM, on a proforma basis.

XML

SIGNIFICANT ACCOUNTING POLICIES

6 Months Ended

Jun. 30, 2020

Accounting Policies [Abstract]

SIGNIFICANT ACCOUNTING POLICIES

SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation and Use of Estimates

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and various disclosures. Actual results could differ from those estimates, which are evaluated on an ongoing basis, utilizing historical experience and other methods considered reasonable under the particular circumstances. Although these estimates are based on management’s best available knowledge at the time, changes in facts and circumstances or discovery of new facts or circumstances may result in revised estimates and actual results may differ from these estimates. Effects on the Partnership’s business, financial position and results of operations resulting from revisions to estimates are recognized when the facts that give rise to the revision become known. In the opinion of management, all adjustments considered necessary for a fair presentation of the accompanying consolidated financial statements have been included.

The balance sheet at December 31, 2019 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by GAAP for complete financial statements. For further information, refer to the Consolidated Financial Statements and related notes for the year ended December 31, 2019 included in CNX Midstream Partners LP’s (the “Partnership”, or “we”, “us”, or “our”) Annual Report on Form 10-K as filed with the Securities and Exchange Commission (SEC) on February 10, 2020.

Principles of Consolidation

The consolidated financial statements include the accounts of the Partnership and all of its controlled subsidiaries, including 100% of each of the Anchor Systems and Additional Systems in the applicable periods presented within this Quarterly Report on Form 10-Q. Although the Partnership has less than a 100% economic interest in the Additional Systems, it has been consolidated fully with the results of the Partnership in the applicable periods as the Partnership is considered to be the primary beneficiary and has a controlling financial interest and the power through its ownership to direct the activities of the Additional Systems. After adjusting for noncontrolling interests, net income attributable to general and limited partner ownership interests in the Partnership reflect only that portion of net income that is attributable to the Partnership’s unitholders.

Transactions between the Partnership and CNX Resources have been identified in the consolidated financial statements as transactions between related parties and are disclosed in Note 4–Related Party Transactions.

Revenue Recognition

We record revenue when obligations under the terms of the contracts with our shippers are satisfied; generally, this occurs on a daily basis as we gather natural gas at the wellhead. Revenue is measured as the amount of consideration we expect to receive in exchange for providing the natural gas gathering services.

Nature of performance obligations

At contract inception, we assess the services promised in our contracts with customers and identify a performance obligation for each promised service that is distinct. To identify the performance obligations, we consider all of the services promised in the contract, regardless of whether they are explicitly stated or are implied by customary business practices.

Our revenue is generated from natural gas gathering activities. The gas gathering services are interruptible in nature and include charges for the volume of gas actually gathered and do not guarantee access to the system. Volumetric-based fees relate to actual volumes gathered. In general, the interruptible gathering of each unit one million British Thermal Units (MMBtu) of natural gas represents a separate performance obligation. Payment terms for these contracts require payment within 25 days of the end of the calendar month in which the hydrocarbons are gathered.

Transaction price allocated to remaining performance obligations

We are required to disclose the aggregate amount of transaction price that is allocated to performance obligations that have not yet been satisfied. However, the guidance provides certain practical expedients that limit this requirement. Substantially all of our revenues are derived from contracts that have terms of greater than one year. Under these contracts, the interruptible gathering of each unit of natural gas represents a separate performance obligation.

For revenue associated with the Shirley-Penns System, for which we have remaining contractual performance obligations, the aggregate amount of the transaction price allocated to those remaining performance obligations was $346.2 million at June 30, 2020. See Note 4–Related Party Transactions for a detailed breakout of the minimum revenue by year.

The amount of revenue associated with this contract up to the minimum volume commitment (“MVC”) is fixed in nature, and volumes that we may gather above the MVC will be variable in nature. As of June 30, 2020, no future performance obligations exist relative to volumes to be gathered in excess of the MVC as the related volumes have not yet been nominated for gathering. Therefore, we have not disclosed the value of unsatisfied performance obligations for the variable aspect of this agreement, nor have we disclosed the value of other unsatisfied performance obligations that are variable in nature.

Prior-period performance obligations

We record revenue when obligations under the terms of the contracts with our shippers are satisfied; generally this occurs on a daily basis when we gather gas at the wellhead. In some cases, we are required to estimate the amount of natural gas that we have gathered during an accounting period and record any differences between our estimates and the actual units of natural gas that we gathered in the following month. We have existing internal controls for our revenue estimation process and related accruals; historically, any identified differences between our revenue estimates and actual revenue received have not been significant. For the quarters ended June 30, 2020 and 2019, revenue recognized in the reporting period related to performance obligations satisfied in prior reporting periods was not material.

Disaggregation of revenue

See Note 8–Segment Information for additional information.

Contract balances

We invoice customers once our performance obligations have been satisfied, at which point payment becomes unconditional. Accordingly, our contracts with customers do not give rise to contract assets or liabilities. We also have no contract assets recognized from the costs to obtain or fulfill a contract with a customer.

Classification

The fees we charge our affiliates, including our Sponsor, are recorded in gathering revenue — related party in our consolidated statements of operations. Fees from midstream services we perform for third-party shippers are recorded in gathering revenue — third-party in our consolidated statements of operations.

Cash

Cash includes cash on hand and on deposit at banking institutions.

Receivables

On January 1, 2020, the Partnership adopted the guidance under the Financial Accounting Standards Board (the “FASB”) Accounting Standard Update (“ASU”) 2016-13 Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which replaces the incurred loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. The Partnership adopted Topic 326 using the prospective transition method.

Prior to adopting Topic 326, the Partnership reserved for specific accounts receivable when it was probable that all or a part of an outstanding balance would not be collected, such as customer bankruptcies. Collectability was determined based on terms of sale, credit status of customers and various other circumstances. We regularly reviewed collectability and established or adjusted the reserve as necessary using the specific identification method. Account balances were charged off against the reserve after all means of collection had been exhausted and the potential for recovery was considered remote.

Under Topic 326, management recorded an allowance for credit losses related to the collectability of third-party customers receivables using the historical aging of the customer receivable balance. Related party receivables between entities under common control are excluded from Topic 326. The collectibility was determined based on past events, including historical experience, customer credit rating, as well as current market conditions. We will continue to monitor customer ratings and collectability on a quarterly basis. Account balances will be charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The allowance for credit losses was as follows:

(in thousands)	June 30, 2020
Receivables — Third-Party	$	8,691
Allowance for Credit Losses	(76)
Receivables — Third-Party, Net	$	8,615

Fair Value Measurement

The FASB Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurements and Disclosures, clarifies the definition of fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. This guidance also relates to all nonfinancial assets and liabilities that are not recognized or disclosed on a recurring basis (e.g., the initial recognition of asset retirement obligations and impairments of long-lived assets). The fair value is the price that we estimate we would receive upon selling an asset or that we would pay to transfer a liability in an orderly transaction between market participants at the measurement date. A fair value hierarchy is used to prioritize input to valuation techniques used to estimate fair value. An asset or liability subject to the fair value requirements is categorized within the hierarchy based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. The highest priority (Level 1) is given to unadjusted quoted market prices in active markets for identical assets or liabilities, and the lowest priority (Level 3) is given to unobservable inputs. Level 2 inputs are data, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly.

The carrying values on our balance sheets of our current assets, current liabilities and revolving credit facility approximate fair values due to their short maturities. We estimate the fair value of our long-term debt, which is not actively traded, using an income approach model that utilizes a discount rate based on market rates for other debt with similar remaining time to maturity and credit risk (Level 2). The estimated fair value of our long-term debt was approximately $369.0 million and $370.5 million on June 30, 2020 and December 31, 2019, respectively.

Property and Equipment

Property and equipment is recorded at cost upon acquisition and is depreciated on a straight-line basis over the assets’ estimated useful lives or over the lease terms of the assets. Expenditures which extend the useful lives of existing property and equipment are capitalized. When properties are retired or otherwise disposed, the related cost and accumulated depreciation are removed from the respective accounts and any gain or loss on disposition is recognized.

The Partnership evaluates whether long-lived assets have been impaired during any given quarter and has processes in place to ensure that we become aware of such indicators. Impairment indicators may include, but are not limited to, sustained decreases in commodity prices, a decline in customer well results and lower throughput forecasts, and increases in construction or operating costs. For such long-lived assets, impairment exists when the carrying amount of an asset or group of assets exceeds our estimates of the undiscounted cash flows expected to result from the use and eventual disposition of the asset or group of assets. If the carrying amount of the long-lived asset(s) is not recoverable, based on the estimated future undiscounted cash flows, the impairment loss would be measured as the excess of the asset’s carrying amount over its estimated fair value. In the event that impairment indicators exist, we conduct an impairment test.

Fair value represents the estimated price between market participants to sell an asset in the principal or most advantageous market for the asset, based on assumptions a market participant would make. When warranted, management assesses the fair value of long-lived assets using commonly accepted techniques and may use more than one source in making such assessments. Sources used to determine fair value include, but are not limited to, recent third-party comparable sales, internally developed discounted cash flow analyses and analyses from outside advisors. Significant changes, such as the condition of an asset or management’s intent to utilize the asset, generally require management to reassess the cash flows related to long-lived assets. No property and equipment impairments were identified during the periods presented in the accompanying consolidated financial statements.

Leases

In February 2016, the FASB issued ASU 2016-02–Leases (Topic 842), which increases transparency and comparability among organizations by recognizing right-of-use (“ROU”) lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The ASU maintains a distinction between finance leases and operating leases, which is substantially similar to the classification criteria for distinguishing between capital leases and operating leases in the previous lease guidance. Retaining this distinction allows the recognition, measurement and presentation of expenses and cash flows arising from a lease to remain similar to the previous accounting treatment. A lessee is permitted to make an accounting policy election by class of underlying asset to exclude from balance sheet recognition any lease assets and lease liabilities with a term of 12 months or less, and instead to recognize lease expense on a straight-line basis over the lease term. For both financing and operating leases, the ROU asset and lease liability are initially measured at the present value of the lease payments. In July 2018, the FASB issued ASU 2018-11 which provides entities with the option to initially apply the new lease standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption, if necessary.

We determine if an arrangement is a lease at inception. Operating leases are included in operating lease ROU assets and accrued liabilities on our consolidated balance sheets. Operating lease ROU assets and operating lease liabilities are recognized

based on the present value of the future minimum lease payments over the lease term at the commencement date. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at the commencement date of the lease in determining the present value of future payments. The operating lease ROU asset also includes any lease payments made and excludes lease incentives and initial direct costs incurred. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term.

Environmental Matters

We are subject to various federal, state and local laws and regulations relating to the protection of the environment. Environmental expenditures that relate to current operations are expensed or capitalized as appropriate. Expenditures that relate to an existing condition caused by past operations, and do not contribute to current or future revenue generation, are expensed. Liabilities are recorded when environmental assessments and/or clean-ups are probable, and the costs can be reasonably estimated. At this time, we are unable to assess the timing and/or effect of potential liabilities related to greenhouse gas emissions or other environmental issues. As of June 30, 2020 and December 31, 2019, we had no material environmental matters that required the recognition of a separate liability or specific disclosure.

Asset Retirement Obligations

Our gathering pipelines and compressor stations have an indeterminate life. If properly maintained, they should operate for an indeterminate period as long as supply and demand for natural gas exists, which we expect for the foreseeable future. We are under no legal or contractual obligation to restore or dismantle our gathering system upon abandonment. Therefore, we have not recorded any liabilities for asset retirement obligations at June 30, 2020 or December 31, 2019.

Variable Interest Entities

Each of the Anchor and Additional Systems is structured as a limited partnership (the “Limited Partnerships”) and a variable interest entity (“VIE”). These VIEs correspond with the manner in which we report our segment information in Note 8–Segment Information, which also includes information regarding the Partnership’s involvement with each of these VIEs and their relative contributions to our financial position, operating results and cash flows.

The Partnership fully consolidates each of the Limited Partnerships through its ownership of CNX Midstream Operating Company LLC (the “Operating Company”). The Operating Company, through its general partner ownership interest in each of the Limited Partnerships during the period in which any ownership interest exists, is considered to be the primary beneficiary for accounting purposes and has the power to direct all substantive strategic and day-to-day operational decisions of the Limited Partnerships.

Income Taxes

We are treated as a partnership for federal and state income tax purposes, with each partner being separately taxed on its share of the Partnership’s taxable income. Accordingly, no provision for federal or state income taxes has been recorded in the Partnership’s consolidated financial statements for any period presented in the accompanying consolidated financial statements.

Equity Compensation

Equity compensation expense for all unit-based compensation awards is based on the grant date fair value estimated in accordance with the provisions of ASC 718–Compensation–Stock Compensation. We recognize unit-based compensation costs on a straight-line basis over the requisite service period of an award, which is generally the same as the award’s vesting term. See Note 9–Long-Term Incentive Plan for further discussion.

Net Income Per Limited Partner Unit and General Partner Interest

Net income per limited partner unit is calculated using the two-class method, under which income is allocated to participating securities in accordance with the terms of our partnership agreement. The two-class method uses an earnings allocation method under which earnings per limited partner unit are calculated for each class of common unit and any participating security considering all distributions declared and participation rights in undistributed earnings as if all earnings had been distributed during the period. Diluted net income per limited partner unit reflects the potential dilution that could occur if securities or agreements to issue common units were exercised, settled or converted into common units.

Prior to the IDR Elimination Transaction on January 29, 2020, we allocated net income between our general partner and limited partners, which included allocations of net income to our limited partners, our general partner and the holders of our IDRs in accordance with the terms of our partnership agreement. We also allocated any distributions in excess of earnings for the period to our general partner and our limited partners based on their respective proportionate ownership interests in us, after taking into account distributions to be paid with respect to the IDRs, as set forth in our partnership agreement. Following the IDR Elimination Transaction, the Partnership’s common unitholders are entitled to all distributions until the Class B units are

converted to common units on January 1, 2022. Class B unitholders have no rights to distributions until they are converted into common units.

Historical Earnings per Unit

The Partnership calculates historical earnings per unit under the two-class method and allocates the earnings or losses of a transferred business before the date of a dropdown transaction entirely to the general partner. If applicable, the previously reported earnings per unit of the limited partners would not change as a result of a dropdown transaction.

Diluted net income per limited partner unit reflects the potential dilution that could occur if securities or agreements to issue common units, such as awards under the long-term incentive plan, were exercised, settled or converted into common units. When it is determined that potential common units resulting from an award subject to performance or market conditions should be included in the diluted net income per limited partner unit calculation, the impact is calculated by applying the treasury stock method. There were 193,016 phantom units that were not included in the calculation for the three and six months ended June 30, 2020 because the effect would have been antidilutive. There were also 41,819 and 41,644 phantom units that were not included in the calculation for the three and six months ended June 30, 2019, respectively, because the effect would have been antidilutive.

Recent Accounting Pronouncements

In March 2020, the FASB issued ASU 2020-04 - Reference Rate Reform - Facilitation of the Effects of Reference Rate Reform on Financial Reporting (Topic 848). This ASU provides optional expedient and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. In response to the concerns about structural risks of interbank offered rates and, particularly, the risk of cessation of the London Interbank Offered Rate (LIBOR), regulators in several jurisdictions around the world have undertaken reference rate reform initiatives to identify alternative reference rates that are more observable or transaction based and less susceptible to manipulation. The ASU provides companies with optional guidance to ease the potential accounting burden associated with transitioning away from reference rates that are expected to be discontinued. The amendments in this ASU are effective for all entities as of March 12, 2020 through December 31, 2022. The Partnership is still evaluating the effect of adopting this guidance.

In March 2020, the FASB issued ASU 2020-03 - Codification Improvements to Financial Instruments. This ASU improves and clarifies various financial instruments topics, including the Current Expected Credit Loss standard. The ASU includes seven different issues that describe the areas of improvement and the related amendments to GAAP, intended to make the standards easier to understand and apply by eliminating inconsistencies and providing clarifications. The amendments in this ASU have different effective dates. The adoption of this guidance is not expected to have a material impact on the Partnership's financial statements.

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CASH DISTRIBUTIONS

6 Months Ended

Jun. 30, 2020

Equity [Abstract]

CASH DISTRIBUTIONS

CASH DISTRIBUTIONS

Our partnership agreement requires that we distribute an amount equal to 100% of Available Cash from Operating Surplus, as those terms are defined in the partnership agreement, within 45 days after the end of each quarter to unitholders of record on the applicable record date, in accordance with the terms below.

Allocations of Available Cash from Operating Surplus and Incentive Distribution Rights

Prior to the IDR Elimination Transaction on January 29, 2020 (See Note 1–Description of Business), the percentage allocations of available cash from operating surplus between the unitholders and our general partner was based on the specified target distribution levels. IDRs represented the right to receive an increasing percentage, up to a maximum of 48% (which did not include the 2% general partner interest), of quarterly distributions of available cash from operating surplus after the minimum quarterly distribution and the target distribution levels had been achieved.

Cash Distributions

The Board of Directors declared the following cash distributions to the Partnership’s common unitholders and to the general partner for the periods presented:

(in thousands, except per unit information)
Quarters Ended	Quarterly Distribution Per Unit		Total Cash Distribution		Date of Distribution
Year ending December 31, 2019
March 31, 2019	$	0.3732	$	28,940	May 14, 2019
June 30, 2019	$	0.3865	$	30,637	August 14, 2019
September 30, 2019	$	0.4001	$	32,371	November 12, 2019
December 31, 2019	$	0.4143	$	37,201	February 13, 2020
Year ending December 31, 2020
March 31, 2020	$	0.0829	$	7,444	May 15, 2020

See Note 10–Subsequent Events for information regarding the distribution that was approved by the Board of Directors with respect to the quarter ended June 30, 2020.

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RELATED PARTY TRANSACTIONS

6 Months Ended

Jun. 30, 2020

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS

In the ordinary course of business, we engage in related party transactions with CNX Resources (and certain of its subsidiaries) and CNX Gathering, which include the fees we charge and revenues we receive under a fixed fee gathering agreement (including fees associated with electrically-powered compression that CNX Resources reimburses to us) and our reimbursement of certain expenses to CNX Resources under several agreements, discussed below. In addition, we may waive or modify certain terms under these arrangements in the ordinary course of business, including the provisions of the fixed fee gathering agreement, when we determine it is in the best interests of the Partnership to do so. Any material transactions are reviewed by the Board of Directors or the Audit Committee, together with oversight by our conflicts committee, as deemed appropriate.

Operating expense and general and administrative expense – related party were derived from CNX Resources and consisted of the following:

	Three Months Ended   June 30,				Six Months Ended   June 30,
(in thousands)	2020		2019		2020		2019
Operational services	$	2,327	$	3,851	$	4,236	$	7,484
Electrical compression	2,040		2,663		3,959		4,578
Total Operating Expense — Related Party	$	4,367	$	6,514	$	8,195	$	12,062

Total General and Administrative Expense — Related Party $ 2,748  $ 4,027  $ 5,605  $ 7,994 

Related party liabilities due to CNX Resources consisted of the following:

(in thousands)	June 30, 2020		December 31, 2019
Expense reimbursements	$	679	$	489
Capital expenditures reimbursements	50		—
General and administrative services	1,462		4,298
IDR Transaction - current portion	50,000		—
Total Due to Related Party - Current Portion	52,191		4,787
IDR Transaction - long-term portion	85,000		—
Total Due to Related Party - Current and Long-Term	$	137,191	$	4,787

All related party receivables were due from CNX Resources at June 30, 2020 and December 31, 2019.

Merger Agreement

On July 26, 2020, we entered into an Agreement and Plan of Merger (the “Merger Agreement”). See Note 10–Subsequent Events for more information.

Operational Services Agreement

Upon the closing of the initial public offering of our common units (our “IPO”), we entered into an operational services agreement with CNX Resources, which was amended and restated on December 1, 2016. Under the agreement, CNX Resources provides certain operational services to us in support of our gathering pipelines and dehydration, treating and compressor stations and facilities, including routine and emergency maintenance and repair services, routine operational activities, routine administrative services, construction and related services and such other services as we and CNX Resources may mutually agree upon from time to time. CNX Resources prepares and submits for our approval a maintenance, operating and capital budget on an annual basis. CNX Resources submits actual expenditures for reimbursement on a monthly basis, and we reimburse CNX Resources for any direct third-party costs incurred by CNX Resources in providing these services.

Omnibus Agreement

We are party to an omnibus agreement with CNX Resources, CNX Gathering and our general partner that addresses the following matters:

• our payment of an annually-determined administrative support fee (approximately $7.3 million for the year ending December 31, 2020 and $7.9 million for the year ended December 31, 2019) for the provision of certain services by CNX Resources and its affiliates, including executive costs. Such costs may not necessarily reflect the actual expenses that the Partnership would incur on a stand-alone basis, and we are unable to estimate what those expenses would be on a stand-alone basis;

• our obligation to reimburse CNX Resources for all other direct or allocated costs and expenses incurred by CNX Resources in providing general and administrative services (which reimbursement is in addition to certain expenses of our general partner and its affiliates that are reimbursed under our partnership agreement);

• our right of first offer to acquire (i) CNX Gathering’s retained interests in our Additional Systems, (ii) CNX Gathering’s other ancillary midstream assets and (iii) any additional midstream assets that CNX Gathering develops; and

• our obligation to indemnify CNX Gathering for events and conditions associated with the use, ownership or operation of our assets that occur after the closing of the IPO, including environmental liabilities.

The omnibus agreement will remain in full force and effect throughout the period in which CNX Gathering controls our general partner. If CNX Gathering ceases to control our general partner, either party may terminate the omnibus agreement, provided that the indemnification obligations will remain in full force and effect in accordance with their terms.

Gathering Agreements

On January 3, 2018, we entered into the Second Amended and Restated gas gathering agreement (“GGA”) with CNX Gas, which is a 20-year, fixed-fee gathering agreement. Under the Second Amended and Restated GGA, we continue to gather, compress, dehydrate and deliver all of CNX Gas’ dedicated natural gas in the Marcellus Shale on a first-priority basis and gather, inject, stabilize and store all of CNX Gas’ dedicated condensate on a first-priority basis. Under this agreement, during the year ending December 31, 2020, we will receive a fee based on the type and scope of the midstream services we provide, summarized as follows:

•For the services we provide with respect to natural gas from the Marcellus Shale formation that does not require downstream processing, or dry gas, we will receive a fee of $0.4531 per MMBtu.

•For the services we provide with respect to natural gas from the Marcellus Shale formation that requires downstream processing, or wet gas, we will receive:

◦a fee of $0.3116 per MMBtu in the Pittsburgh International Airport area; and

◦a fee of $0.6222 per MMBtu for all other areas in the dedication area.

•Our fees for condensate services will be $5.6580 per Bbl in the Majorsville area and in the Shirley-Penns area.

Each of the foregoing fees escalates by 2.5% on January 1 each year through the end of the initial term. Commencing on January 1, 2035, and as of January 1 thereafter, each of the applicable fees will be adjusted pursuant to the percentage change in CPI-U, but such fees will never escalate or decrease by more than 3% per year.

The Second Amended and Restated GGA also dedicated an additional 63,000 acres in the Utica Shale in and around the McQuay and Wadestown areas and introduced the following gas gathering and compression rates (rates shown effective January 1, 2020):

•Gas Gathering:

◦McQuay area Utica - a fee of $0.2368 per MMBtu; and

◦Wadestown Marcellus and Utica - a fee of $0.3678 per MMBtu.

•Compression:

◦For areas not benefiting from system expansion pursuant to the Second Amended and Restated GGA, compression services are included in the base fees; and

◦In the McQuay and Wadestown areas, for wells turned in line beginning January 1, 2018 and beyond, we will receive additional fees of $0.0683 per MMBtu for Tier 1 pressure services (maximum receipt point of pressure of 600 psi) and $0.1366 per MMBtu for Tier 2 pressure services (maximum receipt point of pressure of 300 psi).

In addition, the Second Amended and Restated GGA committed CNX Gas to drill and complete 140 total wells in the McQuay area within the Anchor Systems, provided that if 125 wells have been drilled and completed in the Marcellus Shale, then the remainder of such planned wells must be drilled in the Utica Shale. To the extent the requisite number of wells are not drilled and completed by CNX Gas in a given period, we will be entitled to a deficiency payment per shortfall well as set forth below:

•January 1, 2018 to December 31, 2018 - 30 wells (CNX Gas exceeded this requirement by eight wells)

•January 1, 2019 to April 30, 2020 - 40 wells (CNX Gas exceeded this requirement by two wells)

•May 1, 2020 to April 30, 2021 - 40 wells (deficiency payment of $2.0 million per well)

•May 1, 2021 to April 30, 2022 - 30 wells (deficiency payment of $2.0 million per well)

In the event that CNX Gas drills wells and completes a number of wells in excess of the number of wells required to be drilled and completed in such period, (i) the number of excess wells drilled and completed during such period will be applied to the minimum well requirement in the succeeding period or (ii) to the extent CNX Gas was required to make deficiency payments for shortfalls in the preceding period, CNX Gas may elect to cause the Partnership to pay a refund in an amount equal to (x) the number of excess wells drilled and completed during the period, multiplied by (y) the deficiency payment paid per well during the period in which the shortfall occurred.

On March 16, 2018, we entered into the First Amendment to the Second Amended and Restated GGA, which added the MVC on volumes associated with the Shirley-Penns System through December 31, 2031. The MVC commits CNX Gas to pay the Partnership the wet gas fee under the GGA for all natural gas we gather up to a specified amount per day through December 31, 2031. During the MVC period, if CNX Gas actually delivers volumes in a given quarter in excess of the volume commitment for such quarter, CNX Gas is entitled to credit such excess volumes against amounts otherwise payable under the MVC in the future.

We will recognize minimum revenue on volumes throughout the term of the GGA, as set forth below:

(in millions)	Minimum Revenue per MVC
Remainder of year ending December 31, 2020	$	1.4
Year ending December 31, 2021	40.7
Year ending December 31, 2022	47.7
Year ending December 31, 2023	42.8
Year ending December 31, 2024	39.6
Remainder of term	174.0
Total minimum revenue to be recognized pursuant to Shirley-Penns MVC	$	346.2

For all natural gas the Partnership gathers in excess of the MVC, the Partnership will receive a fee of $0.3678 per MMBtu in 2020, which escalates by 2.5% on January 1 of each year. Since the Shirley-Penns acquisition in 2018, CNX Gas has exceeded the required MVC calculation each quarter. For the quarter ended June 30, 2020, the MVC calculation was met by a combination of actual volumes and a prior period credit for excess volumes of 4.5 BBtu. This leaves a remaining credit for excess volumes of 30.0 BBtu.

On May 2, 2018, we completed a transaction with our Sponsor, pursuant to which we entered into the Second Amendment to the Second Amended and Restated GGA, which committed CNX Gas to drill and complete an additional 40 wells in the Majorsville/Mamont area within the Anchor Systems by the end of 2023. To the extent the requisite number of wells are not drilled and completed by CNX Gas in a given period, we will be entitled to a deficiency payment per shortfall well as set forth below:

•July 1, 2018 to December 31, 2020 - 15 wells (As of June 30, 2020, CNX Gas has exceeded the minimum well commitment by six wells)

•January 1, 2021 to December 31, 2023 - 25 wells (deficiency payment of $2.8 million per well)

CNX Gas provides us with quarterly updates on its drilling and development operations, which include detailed descriptions of the drilling plans, production details and well locations for periods that range from up to 24-48 months, as well as more general development plans that may extend as far as ten years. In addition, we regularly meet with CNX Gas to discuss our current plans to timely construct the necessary facilities to be able to provide midstream services to them on our dedicated acreage. In the event that we do not perform our obligations under our GGA, CNX Gas will be entitled to certain rights and procedural remedies thereunder, including the temporary and/or permanent release from dedication and indemnification from us.

There are no restrictions under our GGAs with CNX Gas on the ability of CNX Gas to transfer acreage in the right of first offer (“ROFO”) area, and any such transfer of acreage in the ROFO area will not be subject to our right of first offer. 

Upon completion of its 20-year term in 2037, our GGA with CNX Gas will continue in effect from year to year until such time as the agreement is terminated by either us or CNX Gas on or before 180 days prior written notice.

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PROPERTY AND EQUIPMENT

6 Months Ended

Jun. 30, 2020

Property, Plant and Equipment [Abstract]

PROPERTY AND EQUIPMENT

PROPERTY AND EQUIPMENT

Property and equipment consisted of the following:

(in thousands)	June 30, 2020		December 31, 2019		Estimated Useful Lives in Years
Land	$	79,617	$	79,829	N/A
Gathering equipment	767,532		717,277		25 — 40
Compression equipment	404,128		332,358		30 — 40
Processing equipment	30,979		30,979		40
Assets under construction	47,287		142,123		N/A
Total Property and Equipment	$	1,329,543	$	1,302,566
Less: Accumulated depreciation
Gathering equipment	$	85,783	$	75,879
Compression equipment	29,823		24,311
Processing equipment	7,198		6,785
Total Accumulated Depreciation	$	122,804	$	106,975
Property and Equipment — Net	$	1,206,739	$	1,195,591

The Partnership capitalized approximately $0.2 million and $0.9 million of interest on assets under construction during the three and six months ended June 30, 2020, respectively. The Partnership capitalized approximately $1.3 million and $2.1 million of interest on assets under construction during the three and six months ended June 30, 2019, respectively.

During the six months ended June 30, 2020, the Partnership abandoned the construction of a pipeline project that was designed to support additional production within certain areas of the Anchor System as well as land rights-of-way in both the Anchor and Additional Systems, resulting in a loss of $1.7 million.

During the six months ended June 30, 2019, the Partnership abandoned the construction of a compressor station that was designed to support additional production within certain areas of the Anchor System, resulting in a loss of $7.2 million.

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LONG-TERM DEBT

6 Months Ended

Jun. 30, 2020

Debt Disclosure [Abstract]

LONG-TERM DEBT

LONG-TERM DEBT

Revolving Credit Facility

In March 2018, we entered into a five-year $600.0 million secured revolving credit facility with an accordion feature that allows, subject to certain terms and conditions, the Partnership to increase the available borrowings under the revolving credit facility by up to an additional $250.0 million. The revolving credit facility includes the ability to issue letters of credit up to $100.0 million in the aggregate. The available borrowing capacity is limited by certain financial covenants pertaining to leverage and interest coverage ratios as defined in the revolving credit facility agreement.

On April 24, 2019, the Partnership amended its revolving credit facility and extended its maturity to April 2024. Among other things, we received an annual interest rate reduction of 0.25% on borrowings compared to the original agreement. Under the terms of the amended agreement, borrowings under the revolving credit facility will bear interest at our option at either:

•the base rate, which is the highest of (i) the federal funds open rate plus 0.50%, (ii) PNC Bank, N.A.’s prime rate, or (iii) the one-month LIBOR rate plus 1.00%, in each case, plus a margin ranging from 0.50% to 1.50%; or

•the LIBOR rate plus a margin ranging from 1.50% to 2.50%.

Following the amendment, the revolving credit facility now includes (i) the addition of a restricted payment basket permitting cash repurchases of IDRs subject to a pro forma secured leverage ratio of 3.00 to 1.00, a pro forma total leverage ratio of 4.00 to 1.00 and pro forma availability of 20% of commitments and (ii) a restricted payment basket for the repurchase of limited partner units not to exceed Available Cash (as defined in the partnership agreement) in any quarter of up to $150.0 million per year and up to $200.0 million during the life of the facility.

Interest on base rate loans is payable on the first business day of each calendar quarter. Interest on LIBOR loans is payable on the last day of each interest period or, in the case of interest periods longer than three months, every three months. The unused portion of our revolving credit facility is subject to a commitment fee ranging from 0.375% to 0.500% per annum depending on our most recent consolidated leverage ratio.

The revolving credit facility contains a number of affirmative and negative covenants that include, among others, covenants that restrict the ability of the Partnership, its subsidiary guarantors and certain of its non-guarantor, non-wholly-owned subsidiaries, except in certain circumstances, to: (i) create, incur, assume or suffer to exist indebtedness; (ii) create or permit to exist liens on their properties; (iii) prepay certain indebtedness unless there is no default or event of default under the revolving credit facility; (iv) make or pay any dividends or distributions in excess of certain amounts; (v) merge with or into another person, liquidate or dissolve; or acquire all or substantially all of the assets of any going concern or going line of business or acquire all or a substantial portion of another person’s assets; (vi) make particular investments and loans; (vii) sell, transfer, convey, assign or dispose of its assets or properties other than in the ordinary course of business and other select instances; (viii) deal with any affiliate except in the ordinary course of business on terms no less favorable to the Partnership than it would otherwise receive in an arm’s length transaction; and (ix) amend in any material manner its certificate of incorporation, bylaws, or other organizational documents without giving prior notice to the lenders and, in some cases, obtaining the consent of the lenders. The agreement also contains customary events of default, including, but not limited to, a cross-default to certain other debt, breaches of representations and warranties, change of control events and breaches of covenants. The obligations under the revolving credit facility agreement are secured by substantially all of the assets of the Partnership and its wholly owned subsidiaries.

In addition, the Partnership is obligated to maintain at the end of each fiscal quarter:

•for as long as at least $150.0 million of the Senior Notes are outstanding (see below), a maximum total leverage ratio of no greater than 5.25 to 1.00 (which increases to no greater than 5.50 to 1.00 during qualifying acquisition periods);

•if less than $150.0 million of the Senior Notes are outstanding (see below), a maximum total leverage ratio of no greater than 4.75 to 1.00 (which increases to no greater than 5.25 to 1.00 during qualifying acquisition periods);

•a maximum secured leverage ratio of no greater than 3.50 to 1.00; and

•a minimum interest coverage ratio of no less than 2.50 to 1.00.

The Partnership was in compliance with all financial covenants at June 30, 2020.

On June 30, 2020, the Partnership had an outstanding balance on the revolving credit facility of $319.0 million at an interest rate of 1.95% and $0.03 million of letters of credit outstanding, leaving $281.0 million available for borrowing.

At December 31, 2019, the outstanding balance on the revolving credit facility was $311.8 million at an interest rate of 3.26%.

Senior Notes

In March 2018, the Partnership, together with its wholly owned subsidiary CNX Midstream Finance Corp (“Finance Corp”) and (collectively with the Partnership, the “Issuers”), completed a private offering of the Senior Notes, with related guarantees (the “Guarantees”) and received net proceeds of approximately $394.0 million, after deducting the initial purchasers’ discount. In connection with the issuance of the Senior Notes, the Partnership capitalized related offering expenses, which are recorded in our consolidated balance sheet as a reduction to the principal amount. Net proceeds from the Senior Notes offering were primarily used to fund the Shirley-Penns acquisition that occurred in 2018 and repay existing indebtedness under our prior $250.0 million unsecured revolving credit facility. The Senior Notes mature on March 15, 2026 and accrue interest at a rate of 6.5% per year, which is payable semi-annually in arrears on March 15 and September 15. There are no principal payment requirements on the Senior Notes prior to maturity.

The Senior Notes and Guarantees were issued pursuant to an indenture (the “Indenture”), dated March 16, 2018, among the Partnership, Finance Corp, the guarantors party thereto (the “Guarantors”) and UMB Bank, N.A., as trustee (the “Trustee”). The Senior Notes rank equally in right of payment with all of the Issuers’ existing and future senior indebtedness and senior to any subordinated indebtedness that the Issuers’ may incur. The Guarantees rank equally in right of payment to all of the Guarantors’ existing and future senior indebtedness.

The Issuers may redeem all or part of the Senior Notes at redemption prices ranging from 104.875% beginning March 15, 2021 to 100.0% beginning March 15, 2024. Prior to March 15, 2021, the Issuers may on one or more occasions redeem up to 35.0% of the principal amount of the Senior Notes with an amount of cash not greater than the amount of the net cash proceeds from one or more equity offerings at a redemption price of 106.50%. At any time or from time to time prior to March 15, 2021, the Issuers may also redeem all or a part of the Senior Notes, at a redemption price equal to 100.0% of the principal amount thereof plus the Applicable Premium, as defined in the Indenture, plus accrued and unpaid interest.

If the Partnership experiences certain kinds of changes of control, holders of the Senior Notes will be entitled to require the Partnership to repurchase all or any part of that holder’s Senior Notes pursuant to an offer on the terms set forth in the Indenture. The Partnership will offer to make a cash payment equal to 101.0% of the aggregate principal amount of the Senior Notes repurchased plus accrued and unpaid interest on the Senior Notes repurchased to, but not including, the date of purchase, subject to the rights of holders of the Senior Notes on the relevant record date to receive interest due on the relevant interest payment date.

The Partnership’s long-term debt consisted of the following:

(in thousands)	June 30, 2020		December 31, 2019
Senior Notes due March 2026 at 6.5%	$	400,000	$	400,000
Less: Unamortized debt issuance costs	1,115		1,213
Less: Unamortized bond discount	4,250		4,625
Total Senior Notes	$	394,635	$	394,162

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COMMITMENTS AND CONTINGENCIES	6 Months Ended
	Jun. 30, 2020
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIES	COMMITMENTS AND CONTINGENCIESLitigationThe Partnership may become involved in certain legal proceedings from time to time, and where appropriate, we have accrued our estimate of the probable costs for the resolution of these claims. The Partnership believes that the ultimate outcome of any matter currently pending against the Partnership will not materially affect the Partnership’s business, financial condition, results of operations, liquidity or ability to make distributions.

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SEGMENT INFORMATION

6 Months Ended

Jun. 30, 2020

Segment Reporting [Abstract]

SEGMENT INFORMATION

SEGMENT INFORMATIONOperating segments are the revenue-producing components of a company for which separate financial information is produced internally and is subject to evaluation by the chief operating decision maker in deciding how to allocate resources. In order to effectively manage the Partnership, we have divided our current midstream assets among two separate categories that we refer to as our “Anchor Systems” and “Additional Systems” based on their relative current cash flows, growth profiles, capital expenditure requirements and the timing of their development. All of the Partnership’s operating revenues, income from operations and assets are generated or located in the United States.

Segment results for the periods presented were as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2020		2019		2020		2019
Gathering Revenue:
Anchor Systems	$	62,991	$	76,298	$	139,537	$	146,469
Additional Systems	2,961		1,803		6,546		3,851
Total Gathering Revenue	$	65,952	$	78,101	$	146,083	$	150,320
Net Income (Loss):
Anchor Systems	$	32,536	$	46,760	$	77,726	$	81,874
Additional Systems	264		(297)		864		(435)
Total Net Income	$	32,800	$	46,463	$	78,590	$	81,439
Depreciation Expense:
Anchor Systems	$	7,700	$	5,444	$	14,773	$	10,680
Additional Systems	509		416		1,014		830
Total Depreciation Expense	$	8,209	$	5,860	$	15,787	$	11,510
Capital Expenditures for Segment Assets:
Anchor Systems	$	14,049	$	103,322	$	45,357	$	179,121
Additional Systems	328		988		1,679		3,746
Total Capital Expenditures	$	14,377	$	104,310	$	47,036	$	182,867

Segment assets as of the dates presented were as follows:

(in thousands)	June 30, 2020		December 31, 2019
Segment Assets
Anchor Systems	$	1,139,779	$	1,123,488
Additional Systems	99,111		111,114
Total Segment Assets	$	1,238,890	$	1,234,602

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LONG-TERM INCENTIVE PLAN

6 Months Ended

Jun. 30, 2020

Share-based Payment Arrangement [Abstract]

LONG-TERM INCENTIVE PLAN

LONG-TERM INCENTIVE PLAN

Under the Partnership’s 2014 Long-Term Incentive Plan (our “LTIP”), our general partner may issue long-term equity-based awards to directors, officers and employees of the general partner or its affiliates, or to any consultants, affiliates of our general partner or other individuals who perform services on behalf of the Partnership. The Partnership is responsible for the cost of awards granted under the LTIP, which limits the number of units that may be delivered pursuant to vested awards to 5.8 million common units, subject to proportionate adjustment in the event of unit splits and similar events. Common units subject to awards that are canceled, forfeited, withheld to satisfy tax withholding obligations or otherwise terminated without delivery of the common units will be available for delivery pursuant to other awards.

The following table presents phantom unit activity during the six months ended June 30, 2020:

	Number of Units	Weighted Average Grant Date Fair Value
Total awarded and unvested at December 31, 2019	174,465	$	16.83
Granted	146,849	15.15
Vested	(83,188)	17.32
Forfeited	(17,122)	15.93
Total awarded and unvested at June 30, 2020	221,004	$	15.60

The Partnership accounts for phantom units as equity awards and records compensation expense on a straight-line basis over the vesting period based on the fair value of the awards on their grant dates. Awards granted to independent directors vest

over a period of one year, and awards granted to certain officers and employees of the general partner vest 33% per year over a period of three years.

The Partnership recognized $0.4 million and $0.5 million of compensation expense related to phantom units for the three months ended June 30, 2020 and 2019, respectively, and $0.9 million and $1.2 million for the six months ended June 30, 2020 and 2019, respectively, which was included in general and administrative expense–related party in the consolidated statements of operations.

At June 30, 2020, the unrecognized compensation related to all outstanding awards was approximately $2.6 million, which we expect to recognize through 2022.

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SUBSEQUENT EVENTS

6 Months Ended

Jun. 30, 2020

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS

Merger Agreement

On July 26, 2020, we entered into the Merger Agreement with our general partner, CNX Resources, and its wholly owned subsidiary CNX Resources Holdings, LLC (“Merger Sub”), pursuant to which Merger Sub will be merged with and into CNXM with CNXM surviving as an indirect wholly owned subsidiary of CNX Resources. Under the terms of the Merger Agreement, at the effective time of the Merger, each outstanding common unit of CNXM not owned by CNX Resources and its subsidiaries will be converted into the right to receive 0.88 shares of CNX’s common stock.

Except for CNXM’s Class B units, which will automatically be canceled immediately prior to the effective time of the Merger for no consideration in accordance with our partnership agreement, the interests in CNXM owned by CNX Resources and its subsidiaries will remain outstanding as limited partner interests in the surviving entity. Our general partner will continue to own the non-economic general partner interest in the surviving entity.

Completion of the Merger is subject to certain customary conditions, including, among others: (i) the receipt of the Written Consent (as defined below); (ii) there being no law or injunction prohibiting consummation of the transactions contemplated under the Merger Agreement; (iii) the effectiveness of a registration statement on Form S-4 relating to the shares of CNX common stock to be issued pursuant to the Merger Agreement; (iv) approval for listing on the NYSE of the shares of CNX common stock to be issued pursuant to the Merger Agreement; (v) subject to specified materiality standards, the accuracy of certain representations and warranties of the other party; and (vi) compliance by the other party in all material respects with its covenants.

In connection with execution of the Merger Agreement, CNXM and two indirect wholly owned subsidiaries (the “Subsidiaries”) of CNX Resources, entered into a Support Agreement, dated as of July 26, 2020 (the “Support Agreement”), pursuant to which the Subsidiaries have agreed to deliver a written consent (the “Written Consent”), covering all of the CNXM common units beneficially owned by them, approving the Merger. The Merger Agreement and any other matters necessary for consummation of the Merger and the other transactions contemplated in the Merger Agreement.

Upon completion of the Merger, CNXM’s common units will no longer be publicly traded. Subject to the satisfaction or waiver of the conditions described above, the Merger is expected to close in the fourth quarter of 2020.

Cash Distribution

On July 27, 2020, the Board of Directors of the Partnership’s general partner declared a cash distribution to the Partnership’s unitholders with respect to the second quarter of 2020 of $0.5000 per common unit. The cash distribution will be paid on August 14, 2020 to unitholders of record at the close of business on August 7, 2020.

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SIGNIFICANT ACCOUNTING POLICIES (Policies)

6 Months Ended

Jun. 30, 2020

Accounting Policies [Abstract]

Basis of Accounting

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”).

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and various disclosures. Actual results could differ from those estimates, which are evaluated on an ongoing basis, utilizing historical experience and other methods considered reasonable under the particular circumstances. Although these estimates are based on management’s best available knowledge at the time, changes in facts and circumstances or discovery of new facts or circumstances may result in revised estimates and actual results may differ from these estimates. Effects on the Partnership’s business, financial position and results of operations resulting from revisions to estimates are recognized when the facts that give rise to the revision become known.

Principles of Consolidation

The consolidated financial statements include the accounts of the Partnership and all of its controlled subsidiaries, including 100% of each of the Anchor Systems and Additional Systems in the applicable periods presented within this Quarterly Report on Form 10-Q. Although the Partnership has less than a 100% economic interest in the Additional Systems, it has been consolidated fully with the results of the Partnership in the applicable periods as the Partnership is considered to be the primary beneficiary and has a controlling financial interest and the power through its ownership to direct the activities of the Additional Systems. After adjusting for noncontrolling interests, net income attributable to general and limited partner ownership interests in the Partnership reflect only that portion of net income that is attributable to the Partnership’s unitholders.

Transactions between the Partnership and CNX Resources have been identified in the consolidated financial statements as transactions between related parties and are disclosed in Note 4–Related Party Transactions.

Revenue Recognition

We record revenue when obligations under the terms of the contracts with our shippers are satisfied; generally, this occurs on a daily basis as we gather natural gas at the wellhead. Revenue is measured as the amount of consideration we expect to receive in exchange for providing the natural gas gathering services.

Nature of performance obligations

At contract inception, we assess the services promised in our contracts with customers and identify a performance obligation for each promised service that is distinct. To identify the performance obligations, we consider all of the services promised in the contract, regardless of whether they are explicitly stated or are implied by customary business practices.

Our revenue is generated from natural gas gathering activities. The gas gathering services are interruptible in nature and include charges for the volume of gas actually gathered and do not guarantee access to the system. Volumetric-based fees relate to actual volumes gathered. In general, the interruptible gathering of each unit one million British Thermal Units (MMBtu) of natural gas represents a separate performance obligation. Payment terms for these contracts require payment within 25 days of the end of the calendar month in which the hydrocarbons are gathered.

Transaction price allocated to remaining performance obligations

We are required to disclose the aggregate amount of transaction price that is allocated to performance obligations that have not yet been satisfied. However, the guidance provides certain practical expedients that limit this requirement. Substantially all of our revenues are derived from contracts that have terms of greater than one year. Under these contracts, the interruptible gathering of each unit of natural gas represents a separate performance obligation.

For revenue associated with the Shirley-Penns System, for which we have remaining contractual performance obligations, the aggregate amount of the transaction price allocated to those remaining performance obligations was $346.2 million at June 30, 2020. See Note 4–Related Party Transactions for a detailed breakout of the minimum revenue by year.

The amount of revenue associated with this contract up to the minimum volume commitment (“MVC”) is fixed in nature, and volumes that we may gather above the MVC will be variable in nature. As of June 30, 2020, no future performance obligations exist relative to volumes to be gathered in excess of the MVC as the related volumes have not yet been nominated for gathering. Therefore, we have not disclosed the value of unsatisfied performance obligations for the variable aspect of this agreement, nor have we disclosed the value of other unsatisfied performance obligations that are variable in nature.

Prior-period performance obligations

We record revenue when obligations under the terms of the contracts with our shippers are satisfied; generally this occurs on a daily basis when we gather gas at the wellhead. In some cases, we are required to estimate the amount of natural gas that we have gathered during an accounting period and record any differences between our estimates and the actual units of natural gas that we gathered in the following month. We have existing internal controls for our revenue estimation process and related accruals; historically, any identified differences between our revenue estimates and actual revenue received have not been significant. For the quarters ended June 30, 2020 and 2019, revenue recognized in the reporting period related to performance obligations satisfied in prior reporting periods was not material.

Disaggregation of revenue

See Note 8–Segment Information for additional information.

Contract balances

We invoice customers once our performance obligations have been satisfied, at which point payment becomes unconditional. Accordingly, our contracts with customers do not give rise to contract assets or liabilities. We also have no contract assets recognized from the costs to obtain or fulfill a contract with a customer.

Classification

The fees we charge our affiliates, including our Sponsor, are recorded in gathering revenue — related party in our consolidated statements of operations. Fees from midstream services we perform for third-party shippers are recorded in gathering revenue — third-party in our consolidated statements of operations.

Cash

Cash includes cash on hand and on deposit at banking institutions.

Receivables

On January 1, 2020, the Partnership adopted the guidance under the Financial Accounting Standards Board (the “FASB”) Accounting Standard Update (“ASU”) 2016-13 Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which replaces the incurred loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. The Partnership adopted Topic 326 using the prospective transition method.

Prior to adopting Topic 326, the Partnership reserved for specific accounts receivable when it was probable that all or a part of an outstanding balance would not be collected, such as customer bankruptcies. Collectability was determined based on terms of sale, credit status of customers and various other circumstances. We regularly reviewed collectability and established or adjusted the reserve as necessary using the specific identification method. Account balances were charged off against the reserve after all means of collection had been exhausted and the potential for recovery was considered remote.

Under Topic 326, management recorded an allowance for credit losses related to the collectability of third-party customers receivables using the historical aging of the customer receivable balance. Related party receivables between entities under common control are excluded from Topic 326. The collectibility was determined based on past events, including historical experience, customer credit rating, as well as current market conditions. We will continue to monitor customer ratings and collectability on a quarterly basis. Account balances will be charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote.

Fair Value Measurement

The FASB Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurements and Disclosures, clarifies the definition of fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. This guidance also relates to all nonfinancial assets and liabilities that are not recognized or disclosed on a recurring basis (e.g., the initial recognition of asset retirement obligations and impairments of long-lived assets). The fair value is the price that we estimate we would receive upon selling an asset or that we would pay to transfer a liability in an orderly transaction between market participants at the measurement date. A fair value hierarchy is used to prioritize input to valuation techniques used to estimate fair value. An asset or liability subject to the fair value requirements is categorized within the hierarchy based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. The highest priority (Level 1) is given to unadjusted quoted market prices in active markets for identical assets or liabilities, and the lowest priority (Level 3) is given to unobservable inputs. Level 2 inputs are data, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly.The carrying values on our balance sheets of our current assets, current liabilities and revolving credit facility approximate fair values due to their short maturities. We estimate the fair value of our long-term debt, which is not actively traded, using an income approach model that utilizes a discount rate based on market rates for other debt with similar remaining time to maturity and credit risk (Level 2).

Property and Equipment

Property and equipment is recorded at cost upon acquisition and is depreciated on a straight-line basis over the assets’ estimated useful lives or over the lease terms of the assets. Expenditures which extend the useful lives of existing property and equipment are capitalized. When properties are retired or otherwise disposed, the related cost and accumulated depreciation are removed from the respective accounts and any gain or loss on disposition is recognized.

The Partnership evaluates whether long-lived assets have been impaired during any given quarter and has processes in place to ensure that we become aware of such indicators. Impairment indicators may include, but are not limited to, sustained decreases in commodity prices, a decline in customer well results and lower throughput forecasts, and increases in construction or operating costs. For such long-lived assets, impairment exists when the carrying amount of an asset or group of assets exceeds our estimates of the undiscounted cash flows expected to result from the use and eventual disposition of the asset or group of assets. If the carrying amount of the long-lived asset(s) is not recoverable, based on the estimated future undiscounted cash flows, the impairment loss would be measured as the excess of the asset’s carrying amount over its estimated fair value. In the event that impairment indicators exist, we conduct an impairment test.

Fair value represents the estimated price between market participants to sell an asset in the principal or most advantageous market for the asset, based on assumptions a market participant would make. When warranted, management assesses the fair value of long-lived assets using commonly accepted techniques and may use more than one source in making such assessments. Sources used to determine fair value include, but are not limited to, recent third-party comparable sales, internally developed discounted cash flow analyses and analyses from outside advisors. Significant changes, such as the condition of an asset or management’s intent to utilize the asset, generally require management to reassess the cash flows related to long-lived assets. No property and equipment impairments were identified during the periods presented in the accompanying consolidated financial statements.

Leases

In February 2016, the FASB issued ASU 2016-02–Leases (Topic 842), which increases transparency and comparability among organizations by recognizing right-of-use (“ROU”) lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The ASU maintains a distinction between finance leases and operating leases, which is substantially similar to the classification criteria for distinguishing between capital leases and operating leases in the previous lease guidance. Retaining this distinction allows the recognition, measurement and presentation of expenses and cash flows arising from a lease to remain similar to the previous accounting treatment. A lessee is permitted to make an accounting policy election by class of underlying asset to exclude from balance sheet recognition any lease assets and lease liabilities with a term of 12 months or less, and instead to recognize lease expense on a straight-line basis over the lease term. For both financing and operating leases, the ROU asset and lease liability are initially measured at the present value of the lease payments. In July 2018, the FASB issued ASU 2018-11 which provides entities with the option to initially apply the new lease standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption, if necessary.

We determine if an arrangement is a lease at inception. Operating leases are included in operating lease ROU assets and accrued liabilities on our consolidated balance sheets. Operating lease ROU assets and operating lease liabilities are recognized

based on the present value of the future minimum lease payments over the lease term at the commencement date. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at the commencement date of the lease in determining the present value of future payments. The operating lease ROU asset also includes any lease payments made and excludes lease incentives and initial direct costs incurred. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term.

Environmental Matters

We are subject to various federal, state and local laws and regulations relating to the protection of the environment. Environmental expenditures that relate to current operations are expensed or capitalized as appropriate. Expenditures that relate to an existing condition caused by past operations, and do not contribute to current or future revenue generation, are expensed. Liabilities are recorded when environmental assessments and/or clean-ups are probable, and the costs can be reasonably estimated. At this time, we are unable to assess the timing and/or effect of potential liabilities related to greenhouse gas emissions or other environmental issues.

Asset Retirement Obligations

Our gathering pipelines and compressor stations have an indeterminate life. If properly maintained, they should operate for an indeterminate period as long as supply and demand for natural gas exists, which we expect for the foreseeable future. We are under no legal or contractual obligation to restore or dismantle our gathering system upon abandonment.

Variable Interest Entities

Each of the Anchor and Additional Systems is structured as a limited partnership (the “Limited Partnerships”) and a variable interest entity (“VIE”). These VIEs correspond with the manner in which we report our segment information in Note 8–Segment Information, which also includes information regarding the Partnership’s involvement with each of these VIEs and their relative contributions to our financial position, operating results and cash flows. The Partnership fully consolidates each of the Limited Partnerships through its ownership of CNX Midstream Operating Company LLC (the “Operating Company”). The Operating Company, through its general partner ownership interest in each of the Limited Partnerships during the period in which any ownership interest exists, is considered to be the primary beneficiary for accounting purposes and has the power to direct all substantive strategic and day-to-day operational decisions of the Limited Partnerships.

Income Taxes

We are treated as a partnership for federal and state income tax purposes, with each partner being separately taxed on its share of the Partnership’s taxable income. Accordingly, no provision for federal or state income taxes has been recorded in the Partnership’s consolidated financial statements for any period presented in the accompanying consolidated financial statements.

Equity Compensation

Equity compensation expense for all unit-based compensation awards is based on the grant date fair value estimated in accordance with the provisions of ASC 718–Compensation–Stock Compensation. We recognize unit-based compensation costs on a straight-line basis over the requisite service period of an award, which is generally the same as the award’s vesting term. See Note 9–Long-Term Incentive Plan for further discussion.

Net Income Per Limited Partner Unit and General Partner Interest

Net income per limited partner unit is calculated using the two-class method, under which income is allocated to participating securities in accordance with the terms of our partnership agreement. The two-class method uses an earnings allocation method under which earnings per limited partner unit are calculated for each class of common unit and any participating security considering all distributions declared and participation rights in undistributed earnings as if all earnings had been distributed during the period. Diluted net income per limited partner unit reflects the potential dilution that could occur if securities or agreements to issue common units were exercised, settled or converted into common units.

Prior to the IDR Elimination Transaction on January 29, 2020, we allocated net income between our general partner and limited partners, which included allocations of net income to our limited partners, our general partner and the holders of our IDRs in accordance with the terms of our partnership agreement. We also allocated any distributions in excess of earnings for the period to our general partner and our limited partners based on their respective proportionate ownership interests in us, after taking into account distributions to be paid with respect to the IDRs, as set forth in our partnership agreement. Following the IDR Elimination Transaction, the Partnership’s common unitholders are entitled to all distributions until the Class B units are

converted to common units on January 1, 2022. Class B unitholders have no rights to distributions until they are converted into common units.

Historical Earnings per Unit

The Partnership calculates historical earnings per unit under the two-class method and allocates the earnings or losses of a transferred business before the date of a dropdown transaction entirely to the general partner. If applicable, the previously reported earnings per unit of the limited partners would not change as a result of a dropdown transaction.

Diluted net income per limited partner unit reflects the potential dilution that could occur if securities or agreements to issue common units, such as awards under the long-term incentive plan, were exercised, settled or converted into common units. When it is determined that potential common units resulting from an award subject to performance or market conditions should be included in the diluted net income per limited partner unit calculation, the impact is calculated by applying the treasury stock method.

Recent Accounting Pronouncements

In March 2020, the FASB issued ASU 2020-04 - Reference Rate Reform - Facilitation of the Effects of Reference Rate Reform on Financial Reporting (Topic 848). This ASU provides optional expedient and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. In response to the concerns about structural risks of interbank offered rates and, particularly, the risk of cessation of the London Interbank Offered Rate (LIBOR), regulators in several jurisdictions around the world have undertaken reference rate reform initiatives to identify alternative reference rates that are more observable or transaction based and less susceptible to manipulation. The ASU provides companies with optional guidance to ease the potential accounting burden associated with transitioning away from reference rates that are expected to be discontinued. The amendments in this ASU are effective for all entities as of March 12, 2020 through December 31, 2022. The Partnership is still evaluating the effect of adopting this guidance.In March 2020, the FASB issued ASU 2020-03 - Codification Improvements to Financial Instruments. This ASU improves and clarifies various financial instruments topics, including the Current Expected Credit Loss standard. The ASU includes seven different issues that describe the areas of improvement and the related amendments to GAAP, intended to make the standards easier to understand and apply by eliminating inconsistencies and providing clarifications. The amendments in this ASU have different effective dates. The adoption of this guidance is not expected to have a material impact on the Partnership's financial statements.

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SIGNIFICANT ACCOUNTING POLICIES (Tables)

6 Months Ended

Jun. 30, 2020

Accounting Policies [Abstract]

Schedule of Receivables

The allowance for credit losses was as follows:

(in thousands)	June 30, 2020
Receivables — Third-Party	$	8,691
Allowance for Credit Losses	(76)
Receivables — Third-Party, Net	$	8,615

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CASH DISTRIBUTIONS (Tables)

6 Months Ended

Jun. 30, 2020

Equity [Abstract]

Cash Distributions

The Board of Directors declared the following cash distributions to the Partnership’s common unitholders and to the general partner for the periods presented:

(in thousands, except per unit information)
Quarters Ended	Quarterly Distribution Per Unit		Total Cash Distribution		Date of Distribution
Year ending December 31, 2019
March 31, 2019	$	0.3732	$	28,940	May 14, 2019
June 30, 2019	$	0.3865	$	30,637	August 14, 2019
September 30, 2019	$	0.4001	$	32,371	November 12, 2019
December 31, 2019	$	0.4143	$	37,201	February 13, 2020
Year ending December 31, 2020
March 31, 2020	$	0.0829	$	7,444	May 15, 2020

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RELATED PARTY TRANSACTIONS (Tables)

6 Months Ended

Jun. 30, 2020

Related Party Transactions [Abstract]

Schedule of Related Party Transactions

Operating expense and general and administrative expense – related party were derived from CNX Resources and consisted of the following:

	Three Months Ended   June 30,				Six Months Ended   June 30,
(in thousands)	2020		2019		2020		2019
Operational services	$	2,327	$	3,851	$	4,236	$	7,484
Electrical compression	2,040		2,663		3,959		4,578
Total Operating Expense — Related Party	$	4,367	$	6,514	$	8,195	$	12,062

Total General and Administrative Expense — Related Party $ 2,748  $ 4,027  $ 5,605  $ 7,994 

Related party liabilities due to CNX Resources consisted of the following:

(in thousands)	June 30, 2020		December 31, 2019
Expense reimbursements	$	679	$	489
Capital expenditures reimbursements	50		—
General and administrative services	1,462		4,298
IDR Transaction - current portion	50,000		—
Total Due to Related Party - Current Portion	52,191		4,787
IDR Transaction - long-term portion	85,000		—
Total Due to Related Party - Current and Long-Term	$	137,191	$	4,787

Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction

We will recognize minimum revenue on volumes throughout the term of the GGA, as set forth below:

(in millions)	Minimum Revenue per MVC
Remainder of year ending December 31, 2020	$	1.4
Year ending December 31, 2021	40.7
Year ending December 31, 2022	47.7
Year ending December 31, 2023	42.8
Year ending December 31, 2024	39.6
Remainder of term	174.0
Total minimum revenue to be recognized pursuant to Shirley-Penns MVC	$	346.2

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PROPERTY AND EQUIPMENT (Tables)

6 Months Ended

Jun. 30, 2020

Property, Plant and Equipment [Abstract]

Property and Equipment

Property and equipment consisted of the following:

(in thousands)	June 30, 2020		December 31, 2019		Estimated Useful Lives in Years
Land	$	79,617	$	79,829	N/A
Gathering equipment	767,532		717,277		25 — 40
Compression equipment	404,128		332,358		30 — 40
Processing equipment	30,979		30,979		40
Assets under construction	47,287		142,123		N/A
Total Property and Equipment	$	1,329,543	$	1,302,566
Less: Accumulated depreciation
Gathering equipment	$	85,783	$	75,879
Compression equipment	29,823		24,311
Processing equipment	7,198		6,785
Total Accumulated Depreciation	$	122,804	$	106,975
Property and Equipment — Net	$	1,206,739	$	1,195,591

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LONG-TERM DEBT (Tables)

6 Months Ended

Jun. 30, 2020

Debt Disclosure [Abstract]

Schedule of Debt

The Partnership’s long-term debt consisted of the following:

(in thousands)	June 30, 2020		December 31, 2019
Senior Notes due March 2026 at 6.5%	$	400,000	$	400,000
Less: Unamortized debt issuance costs	1,115		1,213
Less: Unamortized bond discount	4,250		4,625
Total Senior Notes	$	394,635	$	394,162

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SEGMENT INFORMATION (Tables)

6 Months Ended

Jun. 30, 2020

Segment Reporting [Abstract]

Schedule of Operating Revenues and Income from Operations

Segment results for the periods presented were as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2020		2019		2020		2019
Gathering Revenue:
Anchor Systems	$	62,991	$	76,298	$	139,537	$	146,469
Additional Systems	2,961		1,803		6,546		3,851
Total Gathering Revenue	$	65,952	$	78,101	$	146,083	$	150,320
Net Income (Loss):
Anchor Systems	$	32,536	$	46,760	$	77,726	$	81,874
Additional Systems	264		(297)		864		(435)
Total Net Income	$	32,800	$	46,463	$	78,590	$	81,439
Depreciation Expense:
Anchor Systems	$	7,700	$	5,444	$	14,773	$	10,680
Additional Systems	509		416		1,014		830
Total Depreciation Expense	$	8,209	$	5,860	$	15,787	$	11,510
Capital Expenditures for Segment Assets:
Anchor Systems	$	14,049	$	103,322	$	45,357	$	179,121
Additional Systems	328		988		1,679		3,746
Total Capital Expenditures	$	14,377	$	104,310	$	47,036	$	182,867

Reconciliation of Assets from Segment to Consolidated

Segment assets as of the dates presented were as follows:

(in thousands)	June 30, 2020		December 31, 2019
Segment Assets
Anchor Systems	$	1,139,779	$	1,123,488
Additional Systems	99,111		111,114
Total Segment Assets	$	1,238,890	$	1,234,602

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LONG-TERM INCENTIVE PLAN (Tables)

6 Months Ended

Jun. 30, 2020

Share-based Payment Arrangement [Abstract]

Schedule of Nonvested Performance-based Units Activity

The following table presents phantom unit activity during the six months ended June 30, 2020:

	Number of Units	Weighted Average Grant Date Fair Value
Total awarded and unvested at December 31, 2019	174,465	$	16.83
Granted	146,849	15.15
Vested	(83,188)	17.32
Forfeited	(17,122)	15.93
Total awarded and unvested at June 30, 2020	221,004	$	15.60

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DESCRIPTION OF BUSINESS (Details) shares in Millions, $ in Millions			1 Months Ended			6 Months Ended	25 Months Ended
	Jan. 01, 2022 shares	Jan. 29, 2020 shares	Dec. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 USD ($)	Jun. 30, 2020 segment system	Dec. 31, 2022 USD ($)
Schedule of Equity Method Investments [Line Items]
Number of operating segments | segment						2
Number of primary midstream systems | system						5
Shirley-Penns System | Anchor Systems
Schedule of Equity Method Investments [Line Items]
Ownership interest						100.00%
Shirley-Penns System | Additional Systems
Schedule of Equity Method Investments [Line Items]
Ownership interest						5.00%
CNX Midstream Partners LP
Schedule of Equity Method Investments [Line Items]
General partner's ownership interest (as a percent)		2.00%
Ownership percentage		53.10%
Additional Systems | Additional Systems | CONE Gathering
Schedule of Equity Method Investments [Line Items]
Noncontrolling interest, percent						95.00%
Beneficial Owner
Schedule of Equity Method Investments [Line Items]
Related party, shares owned		47.7
Ownership percentage		54.60%
Beneficial Owner | Scenario, Forecast
Schedule of Equity Method Investments [Line Items]
Related party, shares owned	50.7
Beneficial Owner | CNX Midstream Partners LP
Schedule of Equity Method Investments [Line Items]
Number of installments for partners' capital contributions		3
Beneficial Owner | CNX Midstream Partners LP | Scenario, Forecast
Schedule of Equity Method Investments [Line Items]
Noncash contribution of assets held by general partner | $			$ 35.0	$ 50.0	$ 50.0		$ 135.0
Beneficial Owner | CNX Midstream Partners LP | Common Units
Schedule of Equity Method Investments [Line Items]
Partners' capital account, units, contributed		26.0
Beneficial Owner | CNX Midstream Partners LP | Class B Units
Schedule of Equity Method Investments [Line Items]
Partners' capital account, units, contributed		3.0

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SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019
Accounting Policies [Abstract]
Payment terms			25 days
Contract term			Substantially all of our revenues are derived from contracts that have terms of greater than one year.
Performance obligations expected to be satisfied	$ 346,200,000		$ 346,200,000
Fair value of long-term debt	369,000,000.0		369,000,000.0		$ 370,500,000
Property and equipment impairments	0	$ 0	0	$ 0
Asset retirement obligation	0		0		$ 0
Provision for federal or state income taxes	$ 0	$ 0	$ 0	$ 0
Antidilutive securities excluded from computation of earnings per share (in units)	193,016	41,819	193,016	41,644

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SIGNIFICANT ACCOUNTING POLICIES - Receivables (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Accounting Policies [Abstract]
Receivables — Third-Party	$ 8,691
Allowance for Credit Losses	(76)
Receivables — Third-Party, Net	$ 8,615	$ 7,935

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CASH DISTRIBUTIONS - Narrative (Details)	6 Months Ended
	Jun. 30, 2020
Distribution Made to Limited Partner [Line Items]
Available cash distribution (as a percent)	1
Period to distribute available cash (in days)	45 days
General Partnership
Distribution Made to Limited Partner [Line Items]
General partner's ownership interest (as a percent)	2.00%
Maximum
Distribution Made to Limited Partner [Line Items]
Incentive distribution, rate (as a percent)	48.00%

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CASH DISTRIBUTIONS - Schedule of Cash Distributions (Details) - USD ($) $ / shares in Units, $ in Thousands						3 Months Ended		6 Months Ended
	May 15, 2020	Feb. 13, 2020	Nov. 12, 2019	Aug. 14, 2019	May 14, 2019	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Equity [Abstract]
Total Quarterly Distribution Per Unit (in dollars per share)	$ 0.0829	$ 0.4143	$ 0.4001	$ 0.3865	$ 0.3732
Total Quarterly Cash Distribution	$ 7,444	$ 37,201	$ 32,371	$ 30,637	$ 28,940	$ 7,444	$ 28,940	$ 44,645	$ 56,208

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RELATED PARTY TRANSACTIONS - Schedule of Related Party Transactions (Details) - CNX Resources Corporation - Affiliated Entity - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Related Party Transaction [Line Items]
General and administrative expenses	$ 2,748	$ 4,027	$ 5,605	$ 7,994
Operating Expense
Related Party Transaction [Line Items]
Charges for services	4,367	6,514	8,195	12,062
Operating Expense | Shared Service Agreement
Related Party Transaction [Line Items]
Charges for services	2,327	3,851	4,236	7,484
Operating Expense | Electrically-Powered Compression Reimbursement
Related Party Transaction [Line Items]
Charges for services	$ 2,040	$ 2,663	$ 3,959	$ 4,578

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RELATED PARTY TRANSACTIONS - Payables (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Related Party Transaction [Line Items]
Accounts payable, related party, current portion	$ 52,191	$ 4,787
CNX Resources Corporation
Related Party Transaction [Line Items]
Accounts payable, related party, current portion	52,191	4,787
Total accounts payable, related parties, current and long-term	137,191	4,787
Expense reimbursements | CNX Resources Corporation
Related Party Transaction [Line Items]
Accounts payable, related party, current portion	679	489
Capital expenditures reimbursements | CNX Resources Corporation
Related Party Transaction [Line Items]
Accounts payable, related party, current portion	50	0
General and administrative services | CNX Resources Corporation
Related Party Transaction [Line Items]
Accounts payable, related party, current portion	1,462	4,298
IDR Transaction | CNX Resources Corporation
Related Party Transaction [Line Items]
Accounts payable, related party, current portion	50,000	0
Accounts payable, related parties, long-term portion	$ 85,000	$ 0

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RELATED PARTY TRANSACTIONS - Omnibus Agreement (Details) - Affiliated Entity - USD ($) $ in Thousands	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2020	Dec. 31, 2019
CNX | Administrative Services
Related Party Transaction [Line Items]
General and administrative expenses						$ 7,900
CNX Resources Corporation
Related Party Transaction [Line Items]
General and administrative expenses	$ 2,748	$ 4,027	$ 5,605	$ 7,994
Scenario, Forecast | CNX | Administrative Services
Related Party Transaction [Line Items]
General and administrative expenses					$ 7,300

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RELATED PARTY TRANSACTIONS - Gathering Agreements (Details) a in Thousands, $ in Millions			3 Months Ended	6 Months Ended	12 Months Ended			16 Months Ended	30 Months Ended	36 Months Ended
	May 02, 2018 well	Jan. 03, 2018 a well	Jun. 30, 2020 BTU $ / MMBTU $ / bbl	Jun. 30, 2020 BTU $ / MMBTU $ / bbl	Apr. 30, 2022 USD ($) well	Apr. 30, 2021 USD ($) well	Dec. 31, 2018 well	Apr. 30, 2020 well	Dec. 31, 2020 well	Dec. 31, 2023 USD ($) well	Jan. 01, 2018 $ / MMBTU
Related Party Transaction [Line Items]
Downstream fees receivable (in dollars per MMBtu)			0.6222	0.6222
Conditional increase, percent				2.50%
Maximum change in fees, commencing January 1, 2035, percent				3.00%
Gas gathering, prior period credit utilized | BTU			4.5
Gas gathering, prior period credit remaining | BTU			30.0	30.0
MVC, gas gathering fee (in dollars per MMBtu)			0.3678	0.3678
CNX Gas | Affiliated Entity | Gas Gathering Agreements
Related Party Transaction [Line Items]
Term of agreement		20 years
Additional acres dedicated (in acres) | a		63
Termination period to either party		180 days
Marcellus Shale formation
Related Party Transaction [Line Items]
Fees receivable, excluding downstream (in dollars per MMBtu)			0.4531	0.4531
Marcellus Shale formation | CNX Gas | Affiliated Entity | Gas Gathering Agreements
Related Party Transaction [Line Items]
Number of wells drilled and completed (in wells) | well		125					30	40
Number of wells exceeding requirement | well							8	2
Pittsburgh International Airport Areas
Related Party Transaction [Line Items]
Downstream fees receivable (in dollars per MMBtu)			0.3116	0.3116
Majorsville area
Related Party Transaction [Line Items]
Condensate fees receivable (in dollars per Bbl) | $ / bbl			5.6580	5.6580
Utica Shale, McQuay Area | CNX Gas | Affiliated Entity | Gas Gathering Agreements
Related Party Transaction [Line Items]
Gas gathering fee (in dollars per MMBtu)			0.2368	0.2368
Marcellus and Utical Shale, Wadestown Area | CNX Gas | Affiliated Entity | Gas Gathering Agreements
Related Party Transaction [Line Items]
Gas gathering fee (in dollars per MMBtu)			0.3678	0.3678
McQuay And Wadestown Areas | CNX Gas | Affiliated Entity | Gas Gathering Agreements
Related Party Transaction [Line Items]
Compression fee, tier 1 pressure services, maximum of 600 psi (in dollars per MMBtu)											0.0683
Compression fee, tier 2 pressure services, maximum of 300 psi (in dollars per MMBtu)											0.1366
Majorsville And Mamont Areas | CNX Gas | Affiliated Entity | Gas Gathering Agreements
Related Party Transaction [Line Items]
Number of wells drilled and completed (in wells) | well	40
Shirley-Penns area
Related Party Transaction [Line Items]
Condensate fees receivable (in dollars per Bbl) | $ / bbl			5.6580	5.6580
McQuay Area [Member] | CNX Gas | Affiliated Entity | Gas Gathering Agreements
Related Party Transaction [Line Items]
Number of wells drilled and completed (in wells) | well		140
Subsequent Event | Marcellus Shale formation | CNX Gas | Affiliated Entity | Gas Gathering Agreements
Related Party Transaction [Line Items]
Number of wells drilled and completed (in wells) | well					30	40
Deficiency payment, per well | $					$ 2.0	$ 2.0
Subsequent Event | Majorsville And Mamont Areas | CNX Gas | Affiliated Entity | Gas Gathering Agreements
Related Party Transaction [Line Items]
Number of wells drilled and completed (in wells) | well									15	25
Number of wells exceeding requirement | well									6
Deficiency payment, per well | $										$ 2.8
Minimum | CNX Gas | Affiliated Entity | Gas Gathering Agreements
Related Party Transaction [Line Items]
Quarterly update, historical period				24 months
Maximum | CNX Gas | Affiliated Entity | Gas Gathering Agreements
Related Party Transaction [Line Items]
Quarterly update, historical period				48 months
Quarterly update, future outlook period				10 years

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RELATED PARTY TRANSACTIONS - Schedule of MVC per Gathering Agreements (Details) $ in Millions	Jun. 30, 2020 USD ($)
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Performance obligations expected to be satisfied	$ 346.2
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-07-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Performance obligations expected to be satisfied, expected timing	6 months
Performance obligations expected to be satisfied	$ 1.4
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Performance obligations expected to be satisfied, expected timing	1 year
Performance obligations expected to be satisfied	$ 40.7
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Performance obligations expected to be satisfied, expected timing	1 year
Performance obligations expected to be satisfied	$ 47.7
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Performance obligations expected to be satisfied, expected timing	1 year
Performance obligations expected to be satisfied	$ 42.8
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Performance obligations expected to be satisfied, expected timing	1 year
Performance obligations expected to be satisfied	$ 39.6
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Performance obligations expected to be satisfied, expected timing
Performance obligations expected to be satisfied	$ 174.0

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PROPERTY AND EQUIPMENT (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2020	Dec. 31, 2019
Property, Plant and Equipment [Line Items]
Total Property and Equipment	$ 1,329,543	$ 1,302,566
Less — accumulated depreciation	122,804	106,975
Property and Equipment — Net	1,206,739	1,195,591
Land
Property, Plant and Equipment [Line Items]
Total Property and Equipment	79,617	79,829
Gathering equipment
Property, Plant and Equipment [Line Items]
Total Property and Equipment	767,532	717,277
Less — accumulated depreciation	$ 85,783	75,879
Gathering equipment | Minimum
Property, Plant and Equipment [Line Items]
Estimated useful life	25 years
Gathering equipment | Maximum
Property, Plant and Equipment [Line Items]
Estimated useful life	40 years
Compression equipment
Property, Plant and Equipment [Line Items]
Total Property and Equipment	$ 404,128	332,358
Less — accumulated depreciation	$ 29,823	24,311
Compression equipment | Minimum
Property, Plant and Equipment [Line Items]
Estimated useful life	30 years
Compression equipment | Maximum
Property, Plant and Equipment [Line Items]
Estimated useful life	40 years
Processing equipment
Property, Plant and Equipment [Line Items]
Total Property and Equipment	$ 30,979	30,979
Less — accumulated depreciation	$ 7,198	6,785
Estimated useful life	40 years
Assets under construction
Property, Plant and Equipment [Line Items]
Total Property and Equipment	$ 47,287	$ 142,123

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PROPERTY AND EQUIPMENT - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Property, Plant and Equipment [Line Items]
Gain (loss) on asset sales and abandonments	$ (1,663)	$ 0	$ (1,652)	$ (7,229)
Assets under construction
Property, Plant and Equipment [Line Items]
Interest costs capitalized	$ 200	$ 1,300	900	2,100
Anchor Systems
Property, Plant and Equipment [Line Items]
Gain (loss) on asset sales and abandonments			$ (1,700)	$ (7,200)

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LONG-TERM DEBT - Narrative (Details)					1 Months Ended	6 Months Ended
	Mar. 15, 2024	Mar. 15, 2021	Apr. 24, 2019 USD ($)	Mar. 16, 2018	Mar. 31, 2018 USD ($)	Jun. 30, 2020 USD ($)	Dec. 31, 2019 USD ($)
Debt Instrument [Line Items]
Interest rate decrease			0.25%
Debt covenant, maximum secured leverage ratio			3.00
Deb covenant, maximum total leverage ratio			4.00
Pro forma commitment percentage			20.00%
Maximum borrowing capacity, per year			$ 150,000,000.0
Maximum borrowing capacity, per life of facility			$ 200,000,000.0
Debt covenant, minimum interest coverage ratio						2.50
Credit Facility
Debt Instrument [Line Items]
Revolving credit facility					$ 600,000,000.0
Additional borrowing capacity available					$ 250,000,000.0
Debt covenant, maximum secured leverage ratio						3.50
Long term line of credit						$ 319,000,000.0	$ 311,800,000
Credit facility interest rate						1.95%	3.26%
Remaining borrowing capacity						$ 281,000,000.0
Debt term					5 years
Repayments of debt					$ 250,000,000.0
Credit Facility | Federal Funds Rate
Debt Instrument [Line Items]
Basis spread on variable rate			0.50%
Credit Facility | Base Rate, London Interbank Offered Rate (LIBOR)
Debt Instrument [Line Items]
Basis spread on variable rate			1.00%
Letter of Credit
Debt Instrument [Line Items]
Revolving credit facility					100,000,000.0
Long term line of credit						$ 30,000.00
Leverage Ratio 1 | Credit Facility
Debt Instrument [Line Items]
Deb covenant, maximum total leverage ratio						5.25
Debt covenant, maximum, aggregate unsecured notes						$ 150,000,000.0
Debt covenant, maximum total leverage ratio during qualifying acquisition periods						5.50
Leverage Ratio 2 | Credit Facility
Debt Instrument [Line Items]
Deb covenant, maximum total leverage ratio						4.75
Debt covenant, maximum, aggregate unsecured notes						$ 150,000,000.0
Debt covenant, maximum total leverage ratio during qualifying acquisition periods						5.25
Minimum | Credit Facility
Debt Instrument [Line Items]
Commitment fee percentage						0.375%
Minimum | Credit Facility | LIBOR plus 1%
Debt Instrument [Line Items]
Basis spread on variable rate			0.50%
Minimum | Credit Facility | LIBOR
Debt Instrument [Line Items]
Basis spread on variable rate			1.50%
Maximum | Credit Facility
Debt Instrument [Line Items]
Commitment fee percentage						0.50%
Maximum | Credit Facility | LIBOR plus 1%
Debt Instrument [Line Items]
Basis spread on variable rate			1.50%
Maximum | Credit Facility | LIBOR
Debt Instrument [Line Items]
Basis spread on variable rate			2.50%
Senior Notes
Debt Instrument [Line Items]
Senior Notes (Note 6)					$ 394,000,000.0	$ 394,635,000	$ 394,162,000
Stated rate					6.50%
Redemption price including premium, percent				106.50%
Percent of principal amount able to be redeemed				35.00%
Redemption price of principal, percent				100.00%
Change of control, cash payment of aggregate principal amount repurchased, percentage				101.00%
Senior Notes | Scenario, Forecast
Debt Instrument [Line Items]
Redemption price including premium, percent	100.00%	104.875%

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LONG-TERM DEBT - Schedule of Debt (Details) - Senior Notes - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019	Mar. 31, 2018
Debt Instrument [Line Items]
Stated rate			6.50%
Senior Notes due March 2026 at 6.5%	$ 400,000	$ 400,000
Less: Unamortized debt issuance costs	1,115	1,213
Less: Unamortized bond discount	4,250	4,625
Total Senior Notes	$ 394,635	$ 394,162	$ 394,000

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SEGMENT INFORMATION - Narrative (Details)	6 Months Ended
	Jun. 30, 2020 segment
Segment Reporting [Abstract]
Number of operating segments	2

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SEGMENT INFORMATION - Schedule of Segment Results (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019
Segment Reporting Information [Line Items]
Gathering Revenue	$ 66,038	$ 78,101	$ 146,234	$ 150,320
Net Income (Loss)	32,800	46,463	78,590	81,439
Depreciation Expense	8,209	5,860	15,787	11,510
Capital Expenditures for Segment Assets	14,377	104,310	47,036	182,867
Segment Assets	1,238,890		1,238,890		$ 1,234,602
Gathering Revenue
Segment Reporting Information [Line Items]
Gathering Revenue	65,952	78,101	146,083	150,320
Anchor Systems
Segment Reporting Information [Line Items]
Net Income (Loss)	32,536	46,760	77,726	81,874
Depreciation Expense	7,700	5,444	14,773	10,680
Capital Expenditures for Segment Assets	14,049	103,322	45,357	179,121
Segment Assets	1,139,779		1,139,779		1,123,488
Anchor Systems | Gathering Revenue
Segment Reporting Information [Line Items]
Gathering Revenue	62,991	76,298	139,537	146,469
Additional Systems
Segment Reporting Information [Line Items]
Net Income (Loss)	264	(297)	864	(435)
Depreciation Expense	509	416	1,014	830
Capital Expenditures for Segment Assets	328	988	1,679	3,746
Segment Assets	99,111		99,111		$ 111,114
Additional Systems | Gathering Revenue
Segment Reporting Information [Line Items]
Gathering Revenue	$ 2,961	$ 1,803	$ 6,546	$ 3,851

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LONG-TERM INCENTIVE PLAN - Narrative (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation costs	$ 2.6		$ 2.6
Common Units | 2014 LTIP | Stock Compensation Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of common units authorized (in units)	5,800,000		5,800,000
Common Units | 2014 LTIP | Phantom Share Units (PSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unit based compensation	$ 0.4	$ 0.5	$ 0.9	$ 1.2
Director | 2014 LTIP
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period			1 year
Officer | 2014 LTIP
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period			3 years
Annual award vesting percentage			33.00%

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LONG-TERM INCENTIVE PLAN - Schedule of Nonvested Performance-based Units Activity (Details) - Phantom Share Units (PSUs)	6 Months Ended
	Jun. 30, 2020 $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding [Roll Forward]
Total awarded and unvested, beginning balance (in shares) | shares	174,465
Granted (in shares) | shares	146,849
Vested (in shares) | shares	(83,188)
Forfeited (in shares) | shares	(17,122)
Total awarded and unvested, ending balance (in shares) | shares	221,004
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract]
Total awarded and unvested, beginning balance (in shares) | $ / shares	$ 16.83
Granted (in dollars per share) | $ / shares	15.15
Vested (in dollars per share) | $ / shares	17.32
Forfeited (in dollars per share) | $ / shares	15.93
Total awarded and unvested, ending balance (in shares) | $ / shares	$ 15.60

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SUBSEQUENT EVENTS (Details)			3 Months Ended		6 Months Ended
		Jul. 27, 2020 $ / shares	Jun. 30, 2020 $ / shares	Jun. 30, 2019 $ / shares	Jun. 30, 2020 $ / shares	Jun. 30, 2019 $ / shares	Jul. 26, 2020
Subsequent Event [Line Items]
Cash distributions declared per unit (in dollars per share)	[1]		$ 0.5000	$ 0.3865	$ 0.5829	$ 0.7597
Subsequent Event
Subsequent Event [Line Items]
Cash distributions declared per unit (in dollars per share)		$ 0.5000
Subsequent Event | CNX Resources Merger | Discontinued Operations, Disposed of by Means Other than Sale
Subsequent Event [Line Items]
Conversion of units							0.88

[1] Represents the cash distributions declared during the month following the end of each respective quarterly period. See Note 10.