Sign in

    CNX Resources (CNX)

    CNX Q2 2024: 4.5Bcf output supports $75M free cash flow forecast

    Reported on Jun 26, 2025 (Before Market Open)
    Pre-Earnings Price$24.89Last close (Jul 24, 2024)
    Post-Earnings Price$25.75Open (Jul 25, 2024)
    Price Change
    $0.86(+3.46%)
    • Strong Q2 Operational Performance: Q2 production of 4.5 Bcf supports their full‐year production range of 15–18 Bcf and backs their free cash flow guidance of about $75 million for the year.
    • Promising New Technology Initiatives: Their AutoSep and CNG solutions are already deployed on internal pads and with early third‐party engagements, setting the stage for material revenue contributions starting 2025.
    • Effective Cost and Production Management: Consistent well performance and a controlled hedging strategy—with no additional production curtailment—demonstrate operational discipline and margin stability.
    • Slower near-term revenue growth: The new technology offerings, including AutoSep and CNG, are expected to be immaterial to 2024 revenue, with meaningful contributions pushed into 2025, suggesting near-term revenue may lag expectations.
    • Capital investment requirements: Both new technology initiatives will require additional capital expenditures, which could depress free cash flow and delay profitability improvements.
    • Dependence on external market and policy factors: Future production, cash flow performance, and project advancement hinge on uncertain market pricing, hedge book adjustments, and tax policy guidance (e.g., for coal mine methane projects), which introduces further risk.
    1. Hedge Book
      Q: Future hedge levels compared to past?
      A: Management emphasized targeting about 80% hedging for upcoming years while shortening hedge duration beyond that, indicating a deliberate, risk-managed approach.

    2. Tier 1 Credits
      Q: What are current Tier 1 prices?
      A: They reported stable Tier 1 credit values in the $33–$36 per MWh range, reflecting consistent market pricing.

    3. Revenue Increase
      Q: What drove the $23M revenue boost?
      A: The $23M increase was driven by stronger environmental attribute sales and solid water revenue performance, showcasing operational efficiency.

    4. New Tech Division
      Q: How is the new tech ramp performing?
      A: With 4.5 Bcf in Q2, the division exceeded expectations and is poised to contribute more significantly from 2025, despite minimal current revenue impact.

    5. Production Levels
      Q: Is production being curbed now?
      A: Management confirmed no additional curtailment, maintaining production slightly above the hedge book levels as a safety measure.

    6. Tax Credit Timeline
      Q: When will the coal mine methane credit guidance come?
      A: They expect guidance on the coal mine methane tax credit in Q3–Q4, with project progress tied to favorable policy developments.

    7. Service Costs
      Q: Are service costs shifting notably?
      A: Service costs have held flat through the first half and are projected to remain steady, reflecting stable operating expenses.

    Research analysts covering CNX Resources.