CNX - CNX Resources Corporation
Price:
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CONSENSUS:
Hold
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PRICE TARGET:
$36.17
DETAILS
HIGH:
$44.00
LOW:
$26.00
MEDIAN:
$35.00
CONSENSUS:
$36.17
UPSIDE:
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Q1 2026 Earnings Call
2026-04-30Operator: Good day, and welcome to the CNX Resources Corporation First Quarter 2026 Question and Answer Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to hand the call to Tyler Lewis, Senior Vice President of Finance and Treasurer. Please go ahead.
Tyler Lewis: Thank you, and good morning, everybody. Welcome to CNX Resources Corporation's first quarter Q&A conference call. Today, we will be answering questions related to our first quarter results. This morning, we posted to our Investor Relations website an updated slide presentation and detailed first-quarter earnings release data such as quarterly E&P data, financial statements, and non-GAAP reconciliations, which can be found in a document titled "1Q 2026 Earnings Results and Supplemental Information of CNX Resources Corporation." Also, we posted to our Investor Relations website our prepared remarks for the quarter, which we hope everyone had a chance to read before the call, as the call today will be used exclusively for Q&A. With me today for Q&A are Alan Shepard, our President and Chief Executive Officer; Everett Good, our Chief Financial Officer; and Navneet Behl, our Chief Operating Officer. Please note that the company's remarks made during this call and answers to questions include forward-looking statements which are subject to various risks and uncertainties. These statements are not guarantees of future performance, and our actual results may differ materially as a result of many factors. A discussion of risks and uncertainties related to those factors in CNX Resources Corporation's business is contained in its filings with the Securities and Exchange Commission and in the release issued today. Thank you for joining us this morning, and operator, please open the call for Q&A at this time.
Operator: We will now open the call for questions. Our first question comes from Leo Mariani of Roth. Please go ahead.
Leo Mariani: Yes, hi, good morning. I was hoping to hear a little bit more about the Utica. I see you brought three wells on here in the first quarter. Any comments on well performance or costs? I know you have been working hard to continue to improve the play over time, so just wanted to see if there was an update there.
Alan Shepard: Hey, Leo. Good question. We are continuing to develop the Utica program. The most recent pad was turned to sales late in the quarter, so we are a little ways off from providing any production results from that. Everything we have seen so far, as we have mentioned on previous calls, is very consistent with our expectation of the reservoir. We are continuing to make progress on the cost side, but nothing new to update at this time. The way to think about it is that toward the end of this year, we will be in a position to provide a more fulsome update. We will have a solid data set to provide to the market toward the end of 2026 or early 2027 once these wells have had enough duration on them.
Leo Mariani: Okay. And would you envision that, as you develop a more robust data set, if the play continues to progress nicely, we could see a little bit more allocation to the Utica versus the Marcellus in the next handful of years? Or do you think that the Marcellus is still probably going to be a little bit economically superior based on current rates?
Alan Shepard: I think the Marcellus has the advantage of having the infrastructure already in place. We optimize for the best economics per well, and right now, with the SWPA Marcellus, you generally do not need to build new infrastructure because of the legacy investments there. You will see us blend in more Utica over time as that is the longer-term position for the company, but in the SWPA Marcellus we are in harvest mode, and you will continue to see those wells for the next few years.
Leo Mariani: Okay, that is helpful for sure. I just wanted to ask on your NewTech business. Any updates there on business lines other than the environmental credit monetization that you have been consistently doing? Specifically, anything on AutoSet or on the CNG or LNG businesses you have mentioned in the past?
Alan Shepard: Everything is consistent with where we thought it would be at this point in 2026. We are still waiting for final guidance on 45Z, but we do not think that is going to impact any of the projections we have made so far. Nothing new to update there, Leo.
Operator: The next question comes from Jacob Roberts of TPH. Please go ahead.
Jacob Roberts: Good morning. On hedging, you typically transact on a longer-term basis than a lot of your peers. Given what seems to be the prevailing theory of an improving gas base in that 2028-plus timeframe, can you give some context on what you are seeing in the 2028 market? I think you added another 13 Bcf to the book with this update. Curious what you are seeing on that longer-dated market at the moment.
Everett Good: Yes, again, on our longer-term hedges, we are in a position to be more opportunistic, with patience, than we have been in the past. As we see price move up, we have also seen basis differentials tighten, and that has helped us get to a better all-in realized price in the California market. We are targeting to bring that up over time as we approach that year.
Jacob Roberts: Okay, perfect. I appreciate that. And then I know you made some changes to the balance sheet. Just curious what the next steps are from here on that front.
Everett Good: Yes, we did a very positive refinancing of our 2029 notes into new eight-year notes at 5.875% in the quarter. Generally, we have been very consistent in pushing out maturities to make sure that we are at least two to three years out before our next maturity. The next one up for us is a 2030 maturity that we will handle well ahead of time. It is all about keeping the maturity profile extended and making sure that we do not have periods with large maturity towers in front of us.
Jacob Roberts: Thanks. I appreciate the time.
Operator: Thank you. Our next question will come from Michael Stephen Scialla of Stephens. Please go ahead.
Michael Stephen Scialla: Hi, good morning. I wanted to ask about in-basin demand. Some of your competitors are becoming a lot more confident on that, talking about it growing by more than 10 Bcf per day by the end of the decade. Do you share that enthusiasm, and is there anything you can share that the company may be doing to capture some of that demand?
Alan Shepard: I would agree that we certainly see the same long-term optimism on the demand side. Some of the announcements that have come out are mind-boggling when you think about a nine-gigawatt power center plan; there have been multiple of those proposed. We see the announcements, and we are monitoring as RFPs come out for gas supply and are participating in those. The magnitude of gas that will be demanded in-basin in Appalachia is going to need to be sourced by multiple producers. If you think about folks like us that have the resource depth and the creditworthiness to enter into long-term arrangements with these new demand sources, we will certainly benefit. The only question in my mind is timing: is it three years, five years, or seven years?
Michael Stephen Scialla: Alan, do you see that developing more on the Ohio side? It looks like it is maybe ahead of Pennsylvania, and can you participate as much over there if that is the case?
Alan Shepard: For an Appalachian producer, given the interconnectedness of the pipes, we are pretty agnostic to where it develops. You can wheel gas around between the states pretty easily. As a macro observation, Ohio has shown itself to be a little easier to do business with in terms of speed. It is a little bit flatter there for some of the data centers, and they have intersection points with the long-haul pipelines like Clarington that make it very attractive. Pennsylvania is also competitive—you have the Homer City plant and the NextEra projects; they are still working on site selection but have indicated the Mon Valley area, which is certainly in our footprint. Bigger picture, we are agnostic; we are excited about the growth in demand. And as Everett mentioned, you are starting to see differentials tighten up in the out years, and we hope that trend continues.
Michael Stephen Scialla: Got it. I wanted to ask on your convertible notes. Can you say when during the quarter you expect that remaining $[inaudible] to convert? I am just trying to estimate the diluted share count for the second quarter.
Everett Good: That maturity is on May 1. So those shares will be issued—approximately 12 million shares net issuance—later this week.
Alan Shepard: And when we say net, that includes the effect of the cap call that we structured when we entered into the converts. So the 12 million is the net out the door.
Michael Stephen Scialla: Great. Thank you. Appreciate it.
Operator: This concludes our question and answer session. I would like to turn the call over to Tyler Lewis for any closing remarks.
Tyler Lewis: Great. Thank you again for joining us this morning. Please feel free to reach out if anyone has any additional questions. Otherwise, we will look forward to speaking with everyone again next quarter. Thank you.
Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.
Tyler Lewis: Thank you, and good morning, everybody. Welcome to CNX Resources Corporation's first quarter Q&A conference call. Today, we will be answering questions related to our first quarter results. This morning, we posted to our Investor Relations website an updated slide presentation and detailed first-quarter earnings release data such as quarterly E&P data, financial statements, and non-GAAP reconciliations, which can be found in a document titled "1Q 2026 Earnings Results and Supplemental Information of CNX Resources Corporation." Also, we posted to our Investor Relations website our prepared remarks for the quarter, which we hope everyone had a chance to read before the call, as the call today will be used exclusively for Q&A. With me today for Q&A are Alan Shepard, our President and Chief Executive Officer; Everett Good, our Chief Financial Officer; and Navneet Behl, our Chief Operating Officer. Please note that the company's remarks made during this call and answers to questions include forward-looking statements which are subject to various risks and uncertainties. These statements are not guarantees of future performance, and our actual results may differ materially as a result of many factors. A discussion of risks and uncertainties related to those factors in CNX Resources Corporation's business is contained in its filings with the Securities and Exchange Commission and in the release issued today. Thank you for joining us this morning, and operator, please open the call for Q&A at this time.
Operator: We will now open the call for questions. Our first question comes from Leo Mariani of Roth. Please go ahead.
Leo Mariani: Yes, hi, good morning. I was hoping to hear a little bit more about the Utica. I see you brought three wells on here in the first quarter. Any comments on well performance or costs? I know you have been working hard to continue to improve the play over time, so just wanted to see if there was an update there.
Alan Shepard: Hey, Leo. Good question. We are continuing to develop the Utica program. The most recent pad was turned to sales late in the quarter, so we are a little ways off from providing any production results from that. Everything we have seen so far, as we have mentioned on previous calls, is very consistent with our expectation of the reservoir. We are continuing to make progress on the cost side, but nothing new to update at this time. The way to think about it is that toward the end of this year, we will be in a position to provide a more fulsome update. We will have a solid data set to provide to the market toward the end of 2026 or early 2027 once these wells have had enough duration on them.
Leo Mariani: Okay. And would you envision that, as you develop a more robust data set, if the play continues to progress nicely, we could see a little bit more allocation to the Utica versus the Marcellus in the next handful of years? Or do you think that the Marcellus is still probably going to be a little bit economically superior based on current rates?
Alan Shepard: I think the Marcellus has the advantage of having the infrastructure already in place. We optimize for the best economics per well, and right now, with the SWPA Marcellus, you generally do not need to build new infrastructure because of the legacy investments there. You will see us blend in more Utica over time as that is the longer-term position for the company, but in the SWPA Marcellus we are in harvest mode, and you will continue to see those wells for the next few years.
Leo Mariani: Okay, that is helpful for sure. I just wanted to ask on your NewTech business. Any updates there on business lines other than the environmental credit monetization that you have been consistently doing? Specifically, anything on AutoSet or on the CNG or LNG businesses you have mentioned in the past?
Alan Shepard: Everything is consistent with where we thought it would be at this point in 2026. We are still waiting for final guidance on 45Z, but we do not think that is going to impact any of the projections we have made so far. Nothing new to update there, Leo.
Operator: The next question comes from Jacob Roberts of TPH. Please go ahead.
Jacob Roberts: Good morning. On hedging, you typically transact on a longer-term basis than a lot of your peers. Given what seems to be the prevailing theory of an improving gas base in that 2028-plus timeframe, can you give some context on what you are seeing in the 2028 market? I think you added another 13 Bcf to the book with this update. Curious what you are seeing on that longer-dated market at the moment.
Everett Good: Yes, again, on our longer-term hedges, we are in a position to be more opportunistic, with patience, than we have been in the past. As we see price move up, we have also seen basis differentials tighten, and that has helped us get to a better all-in realized price in the California market. We are targeting to bring that up over time as we approach that year.
Jacob Roberts: Okay, perfect. I appreciate that. And then I know you made some changes to the balance sheet. Just curious what the next steps are from here on that front.
Everett Good: Yes, we did a very positive refinancing of our 2029 notes into new eight-year notes at 5.875% in the quarter. Generally, we have been very consistent in pushing out maturities to make sure that we are at least two to three years out before our next maturity. The next one up for us is a 2030 maturity that we will handle well ahead of time. It is all about keeping the maturity profile extended and making sure that we do not have periods with large maturity towers in front of us.
Jacob Roberts: Thanks. I appreciate the time.
Operator: Thank you. Our next question will come from Michael Stephen Scialla of Stephens. Please go ahead.
Michael Stephen Scialla: Hi, good morning. I wanted to ask about in-basin demand. Some of your competitors are becoming a lot more confident on that, talking about it growing by more than 10 Bcf per day by the end of the decade. Do you share that enthusiasm, and is there anything you can share that the company may be doing to capture some of that demand?
Alan Shepard: I would agree that we certainly see the same long-term optimism on the demand side. Some of the announcements that have come out are mind-boggling when you think about a nine-gigawatt power center plan; there have been multiple of those proposed. We see the announcements, and we are monitoring as RFPs come out for gas supply and are participating in those. The magnitude of gas that will be demanded in-basin in Appalachia is going to need to be sourced by multiple producers. If you think about folks like us that have the resource depth and the creditworthiness to enter into long-term arrangements with these new demand sources, we will certainly benefit. The only question in my mind is timing: is it three years, five years, or seven years?
Michael Stephen Scialla: Alan, do you see that developing more on the Ohio side? It looks like it is maybe ahead of Pennsylvania, and can you participate as much over there if that is the case?
Alan Shepard: For an Appalachian producer, given the interconnectedness of the pipes, we are pretty agnostic to where it develops. You can wheel gas around between the states pretty easily. As a macro observation, Ohio has shown itself to be a little easier to do business with in terms of speed. It is a little bit flatter there for some of the data centers, and they have intersection points with the long-haul pipelines like Clarington that make it very attractive. Pennsylvania is also competitive—you have the Homer City plant and the NextEra projects; they are still working on site selection but have indicated the Mon Valley area, which is certainly in our footprint. Bigger picture, we are agnostic; we are excited about the growth in demand. And as Everett mentioned, you are starting to see differentials tighten up in the out years, and we hope that trend continues.
Michael Stephen Scialla: Got it. I wanted to ask on your convertible notes. Can you say when during the quarter you expect that remaining $[inaudible] to convert? I am just trying to estimate the diluted share count for the second quarter.
Everett Good: That maturity is on May 1. So those shares will be issued—approximately 12 million shares net issuance—later this week.
Alan Shepard: And when we say net, that includes the effect of the cap call that we structured when we entered into the converts. So the 12 million is the net out the door.
Michael Stephen Scialla: Great. Thank you. Appreciate it.
Operator: This concludes our question and answer session. I would like to turn the call over to Tyler Lewis for any closing remarks.
Tyler Lewis: Great. Thank you again for joining us this morning. Please feel free to reach out if anyone has any additional questions. Otherwise, we will look forward to speaking with everyone again next quarter. Thank you.
Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.