Executive Summary

Q4 2024 showed a GAAP net loss driven by a large unrealized derivative loss, despite higher natural gas revenue and record quarterly free cash flow; adjusted metrics remained strong with Adjusted EBITDAX of $280M and Operating Margin of 33% .
Production rose sequentially to 141.9 Bcfe (+5% q/q), with average daily output of 1,543 MMcfe/d; realized price improved and cash margins stayed resilient .
2025 guidance introduced, including pro forma with Apex Energy: 605–620 Bcfe production, Adjusted EBITDAX $1.225–$1.275B, total capex $450–$500M, and total FCF ~~$575M (~~$3.85/sh); ~85% of gas hedged on open volumes at strip assumptions as of 1/15/2025 .
Strategic bolt-on Apex closed Jan 27, 2025 for ~$505M, immediately accretive to FCF/share; CNX also upsized 7.25% senior notes by $200M to support acquisition and preserve flexibility .
Management highlighted optionality to accelerate H2’25 activity if pricing supports, while calling Treasury’s final 45V rules “overly restrictive” and pursuing alternative monetization for coal mine methane (CMM) attributes—key narrative drivers for 2025 .

What Went Well and What Went Wrong

What Went Well

Adjusted performance was strong: Adjusted EBITDAX $280M, Adjusted EBITDA $278M, Operating Margin 33%, and Cash Operating Margin 63% in Q4—demonstrating robust underlying operations despite GAAP volatility .
Free cash flow surged to $199M in Q4 (FY 2024 FCF $331M), supported by higher natural gas revenue ($364.4M) and resilient cost structure and margins .
Strategic execution: Apex acquisition closed, expanding CPA Marcellus/Utica footprint and integrated midstream; management emphasized accretive FCF/share and operational synergies .

Quote: “The acquisition is expected to be immediately accretive to CNX's key metric of free cash flow per share.” — CNX press release .

What Went Wrong

GAAP results were impacted by hedging mark-to-market: Q4 unrealized loss on commodity derivatives of ($304M) drove total revenue down and net loss of ($144.6M), diluted EPS of ($0.97) .
Unrealized hedge volatility flipped from Q3 (+$89M realized gain, small unrealized loss) to Q4 (large unrealized loss), highlighting sensitivity to forward curves vs hedge positions .
Treasury’s final 45V guidance viewed as “overly restrictive,” delaying hydrogen-end-use scale-up for CMM pending improved rules; management will pursue alternate monetization pathways .

Financial Results

Metric	Q2 2024	Q3 2024	Q4 2024
Total Revenue and Other Operating Income ($USD Thousands)	$321,443	$424,213	$136,577
Natural Gas, NGL and Oil Revenue ($USD Thousands)	$236,233	$259,459	$364,413
Net Income ($USD Thousands)	($18,261)	$65,540	($144,624)
Diluted EPS ($USD)	($0.12)	$0.37	($0.97)
Operating Margin (%) (non-GAAP)	29%	29%	33%
Adjusted EBITDA ($USD Millions)	$240	$251	$278
Adjusted EBITDAX ($USD Millions)	$242	$253	$280
Free Cash Flow ($USD Millions)	$47	$60	$199

Segment/KPI Breakdown

Production & Pricing	Q2 2024	Q3 2024	Q4 2024
Total Sales Volumes (Bcfe)	134.0	134.5	141.9
Average Daily Production (MMcfe/d)	1,472.5	1,461.8	1,543.1
Shale Gas Sales (Bcf)	111.7	110.8	115.6
CBM Sales (Bcf)	9.7	10.0	9.9
NGLs Sales (Bcfe)	12.4	13.2	16.2
Oil & Condensate Sales (Bcfe)	0.1	0.4	0.2
Avg Sales Price – Nat Gas ($/Mcf)	$1.60	$1.73	$2.41
Gain on Commodity Derivatives – Cash Settlement ($/Mcf)	$0.91	$0.78	$0.17
Realized Nat Gas Price ($/Mcf)	$2.51	$2.51	$2.59

Cost/Margin KPIs (per Mcfe, non-GAAP)

KPI	Q2 2024	Q3 2024	Q4 2024
Total Production Cash Costs (before DD&A) ($/Mcfe)	$0.86	$0.90	$0.87
Cash Margin (Production, before DD&A) ($/Mcfe)	$1.72	$1.73	$1.85
Fully Burdened Cash Costs (before DD&A) ($/Mcfe)	$1.03	$1.11	$1.22
Fully Burdened Cash Margin (before DD&A) ($/Mcfe)	$1.55	$1.52	$1.50
Cash Operating Margin (%)	58%	58%	63%

Hedging & Derivatives

Derivative P&L ($USD Millions)	Q2 2024	Q3 2024	Q4 2024
Realized Gain	$110	$95	$21
Unrealized (Loss)/Gain	($96)	($6)	($304)
Total Gain/(Loss) on Commodity Derivatives	$14	$89	($283)

Balance Sheet Highlights (selected)

Item ($USD Thousands)	6/30/24	9/30/24	12/31/24
Total Assets	$8,602,954	$8,538,049	$8,511,903
Total Liabilities	$4,352,309	$4,281,334	$4,413,873
Stockholders’ Equity	$4,250,645	$4,256,715	$4,098,030
Net Debt ($USD Millions)	$2,278	$2,284	$2,111

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Production Volumes (Bcfe)	2025E (CNX standalone)	N/A	545–555	New
Production Volumes (Bcfe)	2025E (Apex)	N/A	60–65	New
Production Volumes (Bcfe)	2025E (Pro forma)	N/A	605–620	New
% Liquids	2025E	N/A	~7–8%	New
% Nat Gas Hedged	2025E	N/A	~85%	New
Adjusted EBITDAX ($USD Millions)	2025E (CNX)	N/A	$1,090–$1,130	New
Adjusted EBITDAX ($USD Millions)	2025E (Apex)	N/A	$135–$145	New
Adjusted EBITDAX ($USD Millions)	2025E (Pro forma)	N/A	$1,225–$1,275	New
Total Capital Expenditures ($USD Millions)	2025E (CNX)	N/A	$425–$475	New
Total Capital Expenditures ($USD Millions)	2025E (Pro forma)	N/A	$450–$500	New
Total Free Cash Flow ($USD Millions)	2025E (Pro forma)	N/A	~$575	New
FCF per Share ($)	2025E	N/A	~$3.85 (based on 149.25M shares)	New
Cash Taxes	2025E	N/A	De minimis until cumulative ~$3B FCF; material payments expected late ’26/early ’27	Maintained view

Note: Q3 2024 updated 2024 guidance (Adjusted EBITDAX $975–$1,025M; total capex $525–$550M; FCF ~$300M; FCF/share ~$2.01) .

Earnings Call Themes & Trends

Topic	Q2 2024 (Prev)	Q3 2024 (Prev)	Q4 2024 (Current)	Trend
45V/45Q policy and CMM monetization	Expect guidance in H2’24; building optionality; ATS credits $33–$36/MWh; 15–18 Bcf CMM volumes	Awaiting clarity; four pathways (ATS, 45V, 45Q, private)	45V final rules deemed “overly restrictive”; pursuing alt pathways; need clarity to invest	Continued focus; cautious near-term
Deep Utica development	Early wells meeting expectations; more detail to come	Strong performance; costs down materially; competes with Marcellus	Spacing at 1,300–1,500 ft; cost efficiency maintained; optionality to ramp	Execution improving
Capital allocation (buybacks/dividends)	No specific near-term guidance; disciplined process	Attractive long-term; process-driven; flexibility via hedge book and balance sheet	Tactics not disclosed; blackout noted; flexibility maintained	Consistent discipline
H2’25 activity optionality	TBD post summer/winter pricing/storage	Will set 2025 volumes/capex next quarter driven by gas pricing	Capex front-loaded in Q1; may accelerate H2 if prices stay high	Optionality emphasized
Service costs/inflation	Flat service costs; basin balanced	Basin balanced; macro inflation driver	—	Stable cost backdrop

Management Commentary

“If prices stay high or go higher, you could see us accelerate some activity and bring up some more volumes, but it's too early to tell at this point.” — CFO Alan Shepard (Q4 call) .
“The Department of Treasury's recognition of captured waste coal mine methane (CMM) as a feedstock for hydrogen production is validation… However, we believe that the final 45V implementation rules are overly restrictive…” — CNX statement on 45V .
“We look forward to demonstrating the unique CNX approach… The acquisition is expected to be immediately accretive to CNX's key metric of free cash flow per share.” — CEO Nick Deiuliis on Apex .
“Our volumes are primarily at Buchanan mine… we work closely with the mine operators… and provide guidance based on best information.” — President, New Technologies, Ravi Srivastava .
“We're delivering [Utica] wells at the target numbers… very pleased with drilling and capital efficiency.” — CFO Alan Shepard .

Q&A Highlights

New Technologies: 45V requires clearer rules; CNX will pursue ATS, voluntary markets, and private transactions; Q4 New Tech FCF benefited from timing of monetizations; run-rate ATS ~17–18 Bcf at ~~$30–$35/MWh (~~$75M/yr) .
E&P/Capex: 2025 activity front-loaded; optionality to accelerate in H2 if pricing/storage supports; sub-$500M run-rate capex can hold legacy production flat, with Apex TILs turning in with minimal capital .
Utica: Spacing tests at 1,300–1,500 ft; target ~3 Bcf per 1,000’ lateral; cost per foot materially reduced, assets compete with Marcellus in capital allocation .
Marketing/hedging: Daily optimization across sales points; hedge book shorter duration, ~80% hedge target going into a year; cash taxes de minimis until cumulative ~$3B FCF .
Buybacks: Tactics not disclosed; blackout periods noted; continuous capital allocation process .

Estimates Context

Wall Street consensus (S&P Global) for Q4 2024 EPS/Revenue/EBITDA was unavailable at time of analysis due to SPGI API request limit. Anchor comparisons to consensus could not be made; investors should cross-check third-party estimates as available.

Key Takeaways for Investors

Underlying cash generation and adjusted profitability remain strong despite GAAP volatility from derivative mark-to-market; focus on Adjusted EBITDAX ($280M) and Q4 FCF ($199M) as truer indicators of operating health .
Sequential production growth and improved realized gas pricing support 2025 pro forma guidance; ~85% hedged open volumes provide downside protection amid price uncertainty .
Apex adds scale, infrastructure, and stacked pay optionality; immediate FCF/share accretion and low-cost midstream footprint bolster capital efficiency into 2025 .
Policy path for CMM monetization via 45V/45Q remains uncertain; CNX is pivoting to ATS/voluntary/compliance markets—monitor regulatory updates as a key narrative catalyst .
Management retains flexibility to accelerate H2’25 activity if pricing/storage conditions warrant; traders should watch spring/summer strip and storage trends for potential activity signals .
Hedge book dynamics can materially swing GAAP results; position sizing and basis exposure in Eastern Gas-South/TETCO M2/Michcon matter for realized outcomes .
Balance sheet steady; net debt down to ~$2.11B at year-end with liquidity enhanced by notes issuance and revolver capacity—supporting multi-pronged capital deployment .

CNX Resources Corp (CNX)·Q4 2024 Earnings Summary