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    CNX Resources (CNX)

    CNX Q1 2025: $125M Buyback & 19 New Wells Signal Production Growth

    Reported on Jun 26, 2025 (Before Market Open)
    Pre-Earnings Price$30.59Last close (Apr 23, 2025)
    Post-Earnings Price$30.00Open (Apr 24, 2025)
    Price Change
    $-0.59(-1.93%)
    • Increased Production Pipeline: The company reported 19 turn-in-lines in Q1, with additional TILs expected in Q2 and Q4, suggesting an upward trajectory in production capacity.
    • Shareholder-Friendly Capital Allocation: A robust $125 million buyback demonstrates management's confidence in the stock and commitment to enhancing shareholder value.
    • Operational Upside from Well Performance: The 8 Apex wells have been performing better than expected, indicating strong operational performance and potential for further production gains.
    • Production Volatility: The scheduling of turn-in-lines heavily in Q1 with anticipated lulls in Q3 and subsequent TILs in Q4 indicates a potentially uneven production trajectory, which could raise concerns about consistent production and revenue generation.
    • Exposure to Price Volatility: Although the company is 85% hedged, the remaining 15% of volumes exposed to open pricing leaves it vulnerable to natural gas price fluctuations, which could adversely affect free cash flow if market conditions deteriorate.
    • Emerging Tax Pressures: The unexpected cash tax payment in Q1—even if de minimis—coupled with emerging state tax impacts could signal potential future tax liabilities that might strain cash flow if these trends accelerate.
    1. Price & FCF
      Q: Why remains FCF guidance stable?
      A: Despite declines in NYMEX and NGL strip pricing and widening gas differentials, management noted that 85% of volumes are hedged, so only a small portion is exposed—hence free cash flow guidance holds in its stated range.

    2. Production Outlook
      Q: What is the production schedule outlook?
      A: Management highlighted that most turn-in-lines occurred in late Q1 with additional completions planned in Q2, a slowdown in Q3, and more activity in Q4, maintaining steady production momentum.

    3. Capital Allocation
      Q: How are cash taxes and buyback viewed?
      A: They explained that cash taxes remain de minimis until cumulative free cash flow hits around $3 billion, and the robust $125 million buyback is seen as an attractive capital allocation strategy.

    4. Activity Flexibility
      Q: Will gas price volatility alter activity?
      A: Management stated there are no planned changes; instead, they will monitor storage levels through the shoulder season to guide any adjustments.

    5. Production & CapEx
      Q: What are the production and CapEx expectations?
      A: They expect production to stay within a consistent range, prioritizing free cash flow per share over hitting a specific production target, with no detailed CapEx figures disclosed.

    6. Acreage & M&A
      Q: What impact from Westmoreland deal?
      A: The recent transaction is viewed as validation of the basin’s quality, reinforcing their strong acreage position and long-term outlook.

    7. Apex Performance
      Q: How are the Apex wells performing?
      A: Management reported that the eight new Apex wells are performing better than expected, contributing positively to their long-term production outlook.

    8. Facility Impact
      Q: Does PJM deactivation affect sales credits?
      A: They confirmed that deactivation at one facility won’t impact EA sales, as multiple facilities are used to generate the necessary credits.

    Research analysts covering CNX Resources.