CNX Resources(CNX)2024-10-24 17:49Financial Data and Key Metrics Changes - The company will provide detailed production volumes and associated capital expenditures for 2025 in the next quarter, indicating flexibility in production profiles based on gas pricing [5][6] - Efficiency metrics remain similar or improved, with adjustments based on gas prices [7] Business Line Data and Key Metrics Changes - The company has deferred 11 DUCs earlier in the year, maintaining flexibility in production targets [5] - The AutoSep project is still in development, with potential for third-party work, but focus remains on expanding the fleet [10] Market Data and Key Metrics Changes - The company has removed five turn-in lines from the 2024 schedule, which are expected to shift into early 2025 rather than indicating reduced activity [16][17] - The company is optimistic about the deep Utica play, noting no near-term constraints on ramping up production if gas prices improve [23] Company Strategy and Development Direction - The company is exploring multiple pathways for regulatory clarity regarding tax credits under 45Q and 45V, which could enhance opportunities in Coal Mine Methane capture [12][18] - The capital allocation process remains flexible, considering M&A opportunities but no specific plans have been disclosed [29] Management's Comments on Operating Environment and Future Outlook - Management expressed uncertainty regarding the impact of regulatory changes on Coal Mine Methane operations until final guidance is available [20][21] - The company is pleased with cost improvements in drilling, achieving a 23% reduction in drilling time and a 31% decrease in overall costs compared to 2023 [24][26] Other Important Information - The company is targeting a drilling cost of approximately $1,800 per foot after 2024, reflecting significant cost reductions [31] - The company is positioned to grow its Coal Mine Methane portfolio, contingent on regulatory incentives [32] Q&A Session Summary Question: Clarification on 2025 capital disclosure - Management indicated that the capital expenditure guidance for 2025 will be provided next quarter, with flexibility based on gas pricing [5] Question: Efficiency and production targets - Efficiency remains similar or improved, with production targets dependent on gas prices [7] Question: New technology and regulatory clarity - Management stated that the opportunity set for Coal Mine Methane capture is uncertain until regulatory guidance is finalized [12][18] Question: Buyback and dividend considerations - Management emphasized a long-term attractive opportunity for the company, but short-term allocation decisions remain flexible [14] Question: Guidance on turn-in lines and drilling activity - The removal of turn-in lines is more about timing rather than reduced activity, with no changes to previously indicated drilling plans [16][17] Question: Cost and performance in the deep Utica play - Management reported significant cost improvements and noted that the deep Utica play is competitive with other plays [24][26] Question: M&A opportunities and new technology alignment - Management acknowledged ongoing discussions about M&A but did not provide specific opportunities at this time [29]