CNX Resources (CNX) Q4 2023 earnings summary

Executive summary

• Generated $62 million of Q4 free cash flow (FCF), extending positive FCF generation to 16 consecutive quarters; 2024 FCF guidance is ~$300 million.

• 2024 guidance is built around expected production of ~580 Bcfe and a maintenance-of-production plan.

Financial highlights

• Q4 FCF was $62 million; cumulative FCF since Q1 2020 was $1.9 billion.

• Q4 cash operating margin was 60%; fully burdened cash costs before DD&A were $1.09 per Mcfe.

• Repurchased 5.3 million shares in Q4 at an average $21.41 per share, for $113 million; bought another 800,000 shares through Jan. 11, 2024, at $20.41 per share, for $16 million.

Outlook and guidance

• 2024 production guidance is 570–590 Bcfe, with midpoint ~580 Bcfe; expected liquids mix is 8%–9% and natural gas hedging is 82%.

• 2024 adjusted EBITDAX guidance is $1.0–$1.15 billion; FCF guidance is ~$300 million, or $1.95 per share, including ~$20 million of expected asset sales and ~$75 million from New Tech.

• 2024 capital expenditure guidance is $575–$625 million: drilling and completions $430–$450 million, non-D&C $140–$165 million, and discretionary capital $5–$10 million.

• 2024E cash operating margin is 59%, FCF yield 10%, leverage ratio 1.8x, and fully burdened cash costs before DD&A $1.15 per Mcfe.

• Maintenance-of-production plan targets capital intensity below $500 million by 2025.