CNX Resources (CNX) Q2 2024 earnings summary

Executive summary

• Q2 2024 production volumes totaled 134.0 Bcfe, with new tech division volumes at the higher end of projections and 4.5 Bcf produced.

• Net loss for Q2 2024 was $18.3 million, compared to net income of $475 million in Q2 2023, driven by a $96 million unrealized loss on commodity derivatives and lower asset sale gains.

• Free cash flow in Q2 2024 was $47 million, marking the 18th consecutive positive quarter.

• Environmental attribute sales contributed $33 million in Q2 2024, up from $8 million in Q2 2023.

• Deep Utica wells are meeting expectations on cost and performance, with more details to be provided in future quarters.

Financial highlights

• Total revenue and other operating income for Q2 2024 was $321 million, down from $840 million in Q2 2023, primarily due to lower commodity prices and derivative impacts.

• Q2 2024 cash operating margin was 58%; fully burdened cash costs before DD&A were $1.03 per Mcfe.

• Q2 2024 natural gas, NGL, and oil revenue was $236 million, down from $257 million in Q2 2023.

• Tier 1 REC values have remained steady at $33-$36 per MWh throughout the year, supporting stable cash flows.

• Q2 2024 operating expense increased to $300 million from $272 million in Q2 2023, mainly due to higher lease operating, transportation, and DD&A costs.

Outlook and guidance

• 2024 free cash flow guidance reaffirmed at approximately $300 million, or ~$1.98 per share.

• 2024 production volumes expected between 545 and 555 Bcfe, with 86% of natural gas hedged.

• Adjusted EBITDAX guidance for 2024 narrowed to $950–$1,050 million.

• Total 2024 capital expenditures expected between $525 and $575 million.

• Third-party CNG sales are not material for 2024 guidance but are expected to become more meaningful in 2025.