Q3 2023 CNX Resources Corporation Earnings Call

Speaker 1: Good morning and welcome to the CNX Resources 3rd quarter 2023 earnings conference call. All participants will be in listen only mode. Should you need assistance please, Figually Conference Specialist by pressing star, then zero on your telephone keypad. After today's presentation, there will be an opportunity to ask questions.

Good morning, and welcome to the C N extra resources third quarter 2023 earnings Conference call. All participants will be in listen only mode should you need assistance. Please signal a conference specialist by pressing Star then zero on your telephone keypad.

After todays presentation, there will be an opportunity to ask questions.

Speaker 1: You ask a question you may press star than one on your telephone keypad. To withdraw your question, please press star than two. Please note this event is being recorded.

Ask your question you May Press Star then one on your telephone keypad to withdraw your question. Please press Star then two.

Please note this event is being recorded.

Speaker 1: I would now like to turn the conference over to Tyler Lewis, Vice President of Investor Relations. Can we have a moment of silence?

I would now like to turn the conference over to Tyler Lewis Vice President of Investor Relations. Please go ahead.

Speaker 2: Thank you and good morning to everybody. Welcome to CNX's third quarter conference call. We have in the room today, Nick D'Eulius, our president and CEO , Alan Sheppard, our chief financial officer, Naveen Biel, our chief operating officer, and Ravi Shravostava, president of our new technology.

Thank you and good morning to everybody welcome to <unk> third quarter Conference call. We have in the room today, Nick Delius, our president and CEO, Alan Shepard, our Chief Financial Officer that neat deal, our Chief operating officer, and Ravi Srivastava, President of our New technologies group.

Speaker 2: Today, we will be discussing our third quarter results. This morning, we posted an updated slide presentation to our website. Also, detailed third quarter earnings release data, such as quarterly E&P data, financial statements, and non-GAP reconciliation, are posted to our website in a document titled 3Q, 2023, Earnings Results, and Supplemental Information of CNX Resource.

Today, we will be discussing our third quarter results. This morning, we posted an updated slide presentation to our website also detailed third quarter earnings release data such as quarterly E. N P data financial statements and non-GAAP reconciliations are posted to our website in a document titled three Q2 thousand 23.

Earnings results and supplemental information of C N X resources as.

Speaker 2: As a reminder, any forward-looking statements we make or comments about future expectations are subject to business risks, which we have laid out for you in our press release today, as well as in our previous Security and Exchange Commission filings.

As a reminder, any forward looking statements, we make or comments about future expectations are subject to business stress, which we have laid out for you in our press release today as well as in our previous security and Exchange Commission filings.

Speaker 2: We will begin our call today with prepared remarks by Nick, followed by Alan, and then we will open the call for Q&A where Nav and Robbie will participate as well. With that, let me turn the call over to you.

We will begin our call today with prepared remarks by Nick followed by Alan and then we will open the call for Q&A, where Nab and Ravi will participate as well with that let me turn the call over to you Nick.

Speaker 3: It thanks Tyler, good morning everybody. Third quarter of 2023, it marks our 15th consecutive quarter of free cash flow generation despite experiencing what I would call extremely challenging in base and price.

Hey, Thanks, Tyler good morning, everybody.

Third quarter of 2023, it marks our 15th consecutive quarter of free cash flow generation.

Despite experiencing what I would call extremely challenging in basin pricing.

Speaker 3: And our continued execution of our long-term strategy, which started back in 2020. It's generated approximately 1.8 billion in free cash flow. It's reduced outstanding debt by approximately 385 million. And it's allowed us to repurchase and retire 31% of our outstanding shares at deeply discounted price.

And our continued execution of our long term strategy, which started back in 2020, which generated approximately $1 8 billion in free cash flow, it's reduced outstanding debt by approximately $385 million and it's allowed us to repurchase and retire 31% of our outstanding shares at deeply discounted.

Speaker 3: and we remain on pace to exceed our original goals supported by our sustainable business model that has and will continue to generate significant long-term for sure value for our owner.

Prices.

And we remain on pace to exceed our original goals supported by our sustainable business model that has and will continue to generate significant long term per share value for our owners.

Speaker 3: And all of that, you know, it might sound like a broken record because we've been straining out this theme for these metrics for a couple of years now, which is sort of the point. And that's the consistent execution and clinical capital allocation. Those things drive the creation of meaningful, per share value over the long.

And all of that you know it might sound like a broken record because we've been stringing out. This theme for these metrics or a couple of years now which is sort of the point and that's the consistent execution and clinical capital allocation those things drive the creation of meaningful per share value over the long term.

Speaker 3: During the quarter, our operations team, it continued to execute efficiently. In fact, the team's been successful in further improving cycle times and accelerating activity, and Allen will go into some more of those details in a minute and how it impacts our four-year production outlook and capital time.

During the quarter our operations team continued to execute efficiently in fact, the team has been successful in further improving cycle times and accelerating activity and Alan will go into some more of those details in a minute and how it impacts our full year production outlook and capital timing more specifically one thing I'd like to.

Speaker 3: More specifically, one thing I'd like to highlight during the quarter is that we brought online four new wells beneath the Pittsburgh International Airports runway.

Highlight during the quarter is that we brought online four new wells beneath the Pittsburgh International Airport runway and these latest wells highlight our public private partnership with the airport and we achieved this by the way with zero safety incidents zero environmental impacts these.

Speaker 3: And these latest wells highlight our public-private partnership with the airport. And we achieved this, by the way, with zero safety incidents and zero environmental impact.

Speaker 3: These four new wells are projected to generate almost 70 million in royalty revenue for the airport through 2042. And about 20 million of that will be over the next four years.

These four new wells are projected to generate almost $70 million in royalty revenue for the airport through 'twenty 42, and about $20 million that will be over the next four years and this is on top of a similar amount of royalty revenue that the airports already received from our partnership that was created back in 2013, sorry.

Speaker 3: And this is on top of a similar amount of royalty revenue that the airport's already received from our partnership that was created back in 2013.

Speaker 3: So our historic partnership with the Pittsburgh International Airport is created a sustainable fuel hub utilizing locally sourced, lower-cost, lower-carbon intensity natural gas. And it's a perfect example of our Appalachia First Vision driving tangible results.

So our historic partnership with the Pittsburgh International Airport, it's created a sustainable fuel hub utilizing locally source lower cost lower carbon intensity natural gas and it's a perfect example of our Appalachia first vision driving tangible results.

Speaker 3: Let's shift now to the new technologies group, very exciting part of our business. And we continue to expect around 75 million, with up to potentially 100 million in free cash flow in 2024 associated with the new technologies group. Just getting started with new tech, and we think this business has potential being an even bigger free cash flow growth driver for the company moving forward.

Let's shift now to the new technologies group very exciting part of our business and we continue to expect around $75 million with up to potentially 100 million in free cash flow in 'twenty 'twenty four associated with the New technologies group. We're just getting started with new Tech and we think this business has the potential of being an even bigger free cash flow growth driver.

For the company moving forward.

Speaker 3: The near term new tech free cash flow growth is through our ability to monetize environmental attributes tied to our waste methane, abatement operations in Virginia, and our new tech effort is poised to lead a charge into the hydrogen economy with the atoms for clean ammonia project, where we expect to provide ultra low carbon intensity feedstock and carbon capture and sequestration service.

The near term new Tech free cash flow growth is through our ability to monetize environmental attributes tied to our waste methane abatement operations in Virginia.

And our new Tech afterward is poised to lead the charge into the hydrogen economy with the Adams four clean ammonia project, where we expect to provide ultra low carbon intensity feedstocks and carbon capture and sequestration services.

Speaker 3: The DOE recently announced the funding of this project is part of the Arch2 Hydrogen Hub application. And while we certainly applaud the funding announcement and inclusion of Arch2 in the award, we're also eagerly awaiting implementation guidance regarding the related hydrogen production tax credit for the 45V provision of the IRA. And that's going to materially impact the project economic.

The the D O E recently announced the funding of this project is part of the arch to hydrogen hub application.

And while we certainly applaud the funding announcement and inclusion of arch too in the award.

Also eagerly awaiting implementation guidance regarding the related hydrogen production tax credit or the forty-five V provision of the eye or a and that's going to materially impact. The project economics. So the intent of the hydrogen production provision of the I R. E of course was to incentivize the creation of low carbon into.

Speaker 3: So the intent of the hydrogen production provision of the IRA, of course, was to incentivize.

Speaker 3: creation of low carbon intensity hydrogen and to reduce emissions and to enhance US energy security and to create jobs and economic activity and energy communities. And I'll tell you the Adam's work project squarely aligns with

Hence the hydrogen.

And so you reduce emissions and to enhance U S energy security and to create jobs and economic activity in energy communities and I'll tell you the atoms Fork project squarely aligns with all of those objectives. So we're monitoring developments with the 45 guidance closely and we're hopeful that D. C will follow the intent of the law and help us make us important.

Speaker 3: So we're monitoring developments with the 45E guidance closely, and we're hopeful that D.C. will follow the intent of the law and help us make this important West Virginia project and others like it, frankly, a reality.

West, Virginia project and others like it frankly a reality.

Speaker 3: Also like to highlight that we reached our 2023 methane emission reduction target of 70,000 tons of carbon dioxide equivalent by the end of the third quarter this year, which was off.

Also like to highlight that we reached our 2023 methane emission reduction target of 70000 tons of carbon dioxide equivalent by the end of the third quarter of this year, which was awesome. So that of course is a quarter ahead of schedule and our team is still hard at work with regards to making further adjustments and improvements to reduce emissions firm.

Speaker 3: So that, of course, is a quarter ahead of schedule. And our team is still hard at work with regards to making further adjustments and improvements to reduce emissions further.

Speaker 3: Great accomplishment by our regulatory reporting and operations teams.

Other great accomplishment by our regulatory reporting and operations teams and by the end of this year, we expect the cumulative effect of a reduction efforts.

Speaker 3: And by the end of this year, we expect the cumulative effect of our reduction efforts.

Speaker 3: to reduce methane emissions on a carbon dioxide, equivalent tons basis by about 49% since 2020, some of the 50% reduction in a very short period of time.

<unk> methane emissions on a carbon dioxide equivalent tons basis by about 49% since 2000, twenty's almost a 50% reduction in a very short period of time.

Speaker 3: Our methane reduction goals for 2023 were focused mostly on pneumatic devices and liquids unloading. Those were the 2 biggest opportunity sets and we invested 7Million of capital for specific projects and the team's got the work.

Our methane reduction goals for 2023 were focused mostly on nomadic devices and liquids unloading those were the two biggest opportunity sets and we invested 7 million of capital for specific projects and the teams got to work.

Speaker 3: A year to date, we've changed out over 700 pneumatic devices, and it became in at a cost, the low cost, actually a very competitive one. It's $3 of CO2 equivalent per time.

Year to date, we've changed out over 700 nomadic devices.

They came in at a cost of low cost actually a very a sort of competitive one at $3 of C. O two equivalent per ton and we.

Speaker 3: And we now plan to add an additional 160 or so devices to our plan for the rest of the year because we're ahead of schedule due to that fantastic pace that the team is set. And in addition, the team's been working on our liquids unloading processes, as I just mentioned, which also contributes significantly to our methane emission reduction of the 70000 tons of CO2 equivalent.

Now plan to add an additional 160 or so devices to our plan for the rest of the year. Because we are ahead of schedule due to that fantastic pace that the team is set and in addition, the team has been working on our liquids unloading processes as I, just mentioned, which also contributed significantly to our methane emission reduction of the 70000 tons.

C O two equivalent.

Speaker 3: So we set a difficult but yet achievable targets and we do what we say we're gonna do. So we're not going to be in the game, you're not gonna see this from us of setting goals that are decades away to sort of avoid accountability. Our focus is always going to be on the tangible and the impactful and the local type of act.

So we set it's difficult, but yet achievable targets and we do what we say we're going to do so we're not going to be in the game, you're not going to see this from us of setting goals that are decades away to sort of avoid accountability. Our focus is always going to be on the tangible and impactful Andy local type of actions.

Speaker 3: Now, last but certainly not least, we continue to have conviction that our shares are materially undervalued. During the quarter, we bought back an additional 1% of our shares outstanding our compound annual growth rate or cater for our share repurchase program over the past 3 years.

Now last but certainly not least we continue to have conviction that our shares are materially undervalued during the quarter. We bought back an additional 1% of our shares outstanding our compound annual growth rate or CAGR for our share repurchase program over the past three years since the peak share count.

Speaker 3: since the peak share count around third quarter of 2020, is approximately negative 11%. And we think that's top tier across the capital markets and that it compares favorably to the classic best-in-class share repurchasers like AutoZone as an example, where AutoZone's retired shares at about a minus 8% CAGR over a 25-year period.

Around the third quarter of 2020 is approximately negative 11% and we think that's top tier across the capital markets and that it compares favorably to the classic best in class share repurchases like Autozone as an example, where auto zones retired shares at about a minus 8% CAGR over a 20.

Five year period.

Speaker 3: So, we believe that our share repurchase program provides an opportunity to create incredible value for our long term like, like minded owners. We're gonna benefit as their per share value continues to grow meaningfully over the coming years.

So we believe that our share repurchase program provides an opportunity to create incredible value for our long term like Mount Likeminded owners, we're gonna benefit as their per share value continues to grow meaningfully over the coming years.

Now, let's hear from Alan.

Speaker 4: Thanks, Nick and good morning to everyone as Nick mentioned this quarter represents the 15th consecutive quarter of free cash flow generation through the execution of our sustainable business model and long term strategic plan.

Thanks, Nick and good morning to everyone as Nick mentioned this quarter represents the 15th consecutive quarter of free cash flow generation through the execution of our sustainable business model and long term strategic plan in the quarter, we generated approximately $19 million of free cash flow. Despite the challenging price environment. Since we initially laid out our free cash flow plan in the first quarter of 2020.

Speaker 4: quarter we generated approximately $19 million in free cash flow despite the challenging price environment. Since we initially laid out our free cash flow plan in the first quarter of 2020, this brings our cumulative free cash flow to approximately $1.8 billion, around 50 percent of our current market cap. Looking ahead, we expect this quarter to mark the trough of our free cash flow generation as the confluence of lower capital, higher expected gas pricing, and growth in our new tech cash flows solidifies our confidence in achieving robust free cash flow generation in the quarters ahead.

This brings our cumulative free cash flow to approximately $1 8 billion around 50% of our current market cap.

In your head, we expect this quarter to Mark the trough of our free cash flow generation is the confluence of lower capital higher expected death pricing and growth of our new Tech cashflows solidifies our confidence in achieving robust free cash flow generation in the quarters ahead.

Speaker 4: We continue to believe that our shares traded a significant discount to their intrinsic value, and as such, during the quarter, bought back an additional 2.4 million, or 1% of shares outstanding at an average price of $19.50 per share. And after the close of the quarter through October 12th, we bought back an additional 1 million shares at an average price of $22.20.

We continue to believe that our shares trade at a significant discount to their intrinsic value and as such during the quarter bought back an additional two 4 million or 1% of shares outstanding at an average price of $19 50 per share and after the close of the quarter through October 12, we bought back an additional 1 million shares at an average price of $22 in 'twenty.

Speaker 4: Since the third quarter of 2020, we have now bought back approximately 31 percent of our total shares outstanding at an average price of $15.58, an exceptional result, not just in our industry, but anywhere in the capital markets. And we believe those results will only become more impressive as we're well positioned to continue to take advantage of this opportunity moving forward.

That's the third quarter of 2020, we'd have now bought back approximately 31% of our total shares outstanding at an average price of $15.58.

An exceptional result, not just in our industry, but anywhere in the capital markets and we believe those results will only become more impressive as we are well positioned to continue to take advantage of this opportunity moving forward.

Speaker 4: Turning briefly to the balance sheet, our significant maturity runway and robust hedge book continue to be key components that underpin our capital allocation flexibility. Given these 2 elements, combined with our low cost position, we remain comfortable with our current leverage profile and have the luxury to remain opportunistic with respect to our debt management. Furthermore, we believe that the growth in the new technologies group over the next few years will result in a lower leverage ratio, even before considering potential further reductions in absolute debt.

Turning briefly to the balance sheet, our significant maturity runway and robust hedge book continue to be key components that underpin our capital allocation flexibility given these two elements combined with our low cost position, we remain comfortable with our current leverage profile and have the luxury to remain opportunistic with respect to our debt management.

Furthermore, we believe that the growth in the new technologies group over the next few years will result in a lower leverage ratio, even before considering potential further reductions in absolute debt.

Speaker 4: Speaking of the new technology group, it continues to deliver tangible results in both positive free cash flow and environmental impact. During the quarter, we recorded approximately 13Million in free cash flow primarily associated with sales of environmental attributes. From our waste methane capture activities, which brings our year to date free cash flow from new tech to approximately 19Million. Further, as Nick mentioned, we continue to have good line of sight to the new technologies group contributing approximately 75 to 100Million in free cash flow in 2024.

You have the new technology group.

Opinions to deliver tangible results in both positive free cash flow and environmental impact during the quarter, we recorded approximately $13 million of free cash flow, primarily associated with sales of environmental attributes from our waste methane capture activities, which brings our year to date free cash flow from new tech to approximately $19 million further as Nick mentioned, we continue to have good lineup.

The new technologies group contributing approximately 75 to 100 million of free cash flow in 2024.

Speaker 4: And as we said last quarter, free cash flow from NewTek has the potential to be meaningfully higher in the years beyond 2024.

But as we said last quarter free cash flow from new Tech has the potential to be meaningfully higher in the years beyond 2024.

Let's now shift to the updated guidance outlook.

Speaker 4: Broadly speaking, we are reaffirming the 2023 and initial 2024 guidance that we updated last quarter. As Nick mentioned in his commentary, NAV and the operations team have done an outstanding job in compressing cycle times and accelerating our drilling and completion activity. The accelerated operational results, particularly on the completion side, have pulled the timing of capital into Q3 and accelerated online dates for our 2 most recent pads. As a result of our accelerated pace, we now have both, we now expect both annual production and capital trend towards the higher end of the ranges provided.

Broadly speaking we are reaffirming the 2023 of initial 'twenty 'twenty four guidance that we updated last quarter as Nick mentioned in his commentary Nab and the operations team have done an outstanding job of compressing cycle times, and accelerating our drilling and completion activity.

Accelerated operational results, particularly on the completion side have pulled the timing of capital into Q3 and accelerated online dates for our two most recent pads as a result of our accelerated pace. We now have both we now expect both annual production and capital to trend towards the higher end of the ranges provided.

Speaker 4: Looking ahead to 2024, we expect to average annual production volumes of approximately 580 BCFE. And as we discussed last quarter, we also expect total capital expenditures to fall beginning in 2024 through 2025 to around 500 million. We will provide the full 2024 guidance with our next quarterly update.

Looking ahead to 2024, we expect to average annual production volumes of approximately 580 Bcf fee and as we discussed last quarter. We also expect total capital expenditures to fall beginning of 'twenty 'twenty four grew 2025 to around $500 million.

We will provide the full 'twenty 'twenty four guidance with our next quarterly update.

Speaker 4: To conclude, the sustainable business model that we have created is continuing to deliver value to our shareholders throughout the commodity cycle. Our focus for the remainder of 2023 will remain on safe and compliant execution to develop our extensive natural gas asset base, accelerating free cash flow growth from our new technologies business, on consistent and clinical capital allocation to grow our long-term free cash flow per share, and most importantly, as always, on ensuring all our decisions continue to reflect a long-term owner mindset. With that, I'll turn it back over.

To conclude the sustainable business model that we have created is continuing to deliver value to our shareholders throughout the commodity cycle. Our focus for the remainder of 2023 will remain on safe and compliant execution to develop our extensive natural gas asset base accelerating free cash flow growth from our new technologies business on consistent and critical capital allocation to <unk>.

So our long term free cash flow per share and most importantly, as always on ensuring all our decisions continue to reflect a long term owner mindset.

Matt I'll turn it back over to Tyler for Q&A.

Speaker 2: Operator, if you can please open the call for questions.

So operator, if you can please open the call for questions at this time.

Speaker 1: Yes. We will now begin the question and answer session. To ask a question, you may press star then one on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster.

Yes, we will now begin the question and answer session.

You ask a question you May press Star then one on your telephone keypad.

If you're using a speakerphone please pick up your handset before pressing the keys if at any time. Your question has been addressed and you would like to withdraw your question. Please press Star then two.

At this time, we will pause momentarily to assemble our roster.

Speaker 1: The first question comes from Burt Dones with Truist. Please go ahead.

The first question comes from Bert.

With truest. Please go ahead.

Speaker 5: Hi, good morning, guys. Thanks for taking my question. On the new tech front, would you say the 75 to 100 million range is kind of the low hanging fruit? I know you mentioned, you know, there's the potential for meaningfully higher free cash flow. Just want to understand if that next leg up, you know, requires government legislation or new partnerships or anything like that? Or if

Hi, Good morning, guys. Thanks for taking my question on the new Czech front.

Would you say the $75 million to $100 million ranges is kind of the low hanging fruit I I know you mentioned you know there's the potential for meaningfully higher free cash flow I just wanted to expand if that next leg up you know requires government legislation or new partnerships or anything like that or if you know the 75 to a one.

Speaker 5: 75 to 100 million can stair step quickly to that meaningfully higher.

Million can stare step quickly tonight that meaningfully higher free cash flow.

Speaker 6: So, the 75 to 100Million dollars that we guided to, we have a good line of sight on what we can accomplish next year. We're not making a government legislations and all those uncertainties into that guidance for next year. However.

But ravi so the $75 million to $100 million that'd be guided to we have a good line of sight on what we can accomplish next year, we're not baking like government legislation and in all of those uncertainties into that guidance for next year.

However, like depending on how some of these things come out theres, an opportunity to grow that well beyond 2024.

Speaker 6: depending on how some of these things come out, there's an opportunity to grow that beyond 2024. And as we talked about our Adams Fork project, there's CCS opportunities, low fee stock sale opportunities, all that stuff is contingent on how that project progresses. So all that stuff adds to that meaningful growth opportunities in 25 onwards, but next year we have good line of sight on what we need to do to get to that 75 to 100%.

And as we talked about our item support project.

The Ccs opportunities low feedstock sale opportunities all of that stuff is contingent on how that project progresses. So all of that stuff adds to the meaningful growth opportunities in 'twenty five onwards, but next year we have.

Good line of sight on on what we need to do to get to that $75 million to $100 million.

Speaker 5: Okay, and then could you could you break out maybe where you've you've gotten so far that 75 to 100 million between I think there's three buckets that you kind of you you put that in and maybe

Okay, and then could you could you break out maybe where you've you've gotten so far that $75 million to $100 million between I think there's three buckets that you kind of you.

If you put that in and maybe the year to date range.

Speaker 5: um... whether or not that is you know which bucket that falls into and then

Whether or not that is you know, which bucket that falls into and then.

Speaker 5: little small ones here, but does some of that have a macro, you know, pricing supply demand baked into it? Like if we saw a better environment for that, would that free cash flow range move or is the 75 to 100 million more of a fix?

Just little small ones here, but there's.

So some of that have a macro.

Pricing supply demand are baked into it like if we saw a better environment for that would that free cash flow range move or is the 75 to 100 million more of a fixed outcome.

Speaker 4: To your first question, that's primarily associated with the free cash flows you're seeing generated be in the last two quarters, which is the environmental attributes. They make up the bulk of that expectation for next year. The range we've given there kind of includes some of the subjectivity to the pricing and those regulatory pathways that we already have line of sight onto Robbie's point.

Yeah. So to your first question, that's primarily associated with the free cash flow as your center seeing generally being the last two quarters, which is the environmental attributes of they make up the bulk of that expectation for next year.

And you know that's the range, we give them their kind of includes some of the subjectivity to the pricing in those regulatory pathways that we are we already have line of sight on to Robert's point so right.

Unknown Executive: Good morning and welcome to the CNX Resources 3rd quarter 2023 earnings conference call. All participants will be in listen only mode. Should you need assistance, please signally conference specialists by pressing star then zero on your telephone keypad.

Speaker 6: Right. I think some of that seventy five two hundred million dollars is contemplated on where we see where the market is today. But just like any if you're in tune with where some of these environmental attribute pricing and all that stuff is there is some level of fluctuation volatility in it. But we think that seventy five two hundred million dollars is still a chance.

So some of that $75 million to $100 million of contemplated on where we see where the market is today like just like any if you are in tune with where some of these environmental attribute pricing and all that stuff is there is some level of fluctuation volatility in it, but we think that $75 million to $100 million.

Unknown Executive: After today's presentation, there will be an opportunity to ask questions. You ask a question you may press star than one on your telephone keypad. To withdraw your question, please press star then two.

Still achievable.

Got you thanks, guys.

Unknown Executive: Please note this event is being recorded.

Speaker 1: The next question comes from Zach Parham with J.P. Morgan. Please go ahead.

The next question comes from Zach pardon with J P. Morgan.

Tyler Lewis: I would now like to turn the conference over to Tyler Lewis, vice president of investor relations. Please go ahead. Thank you and good morning to everybody.

Please go ahead.

Speaker 7: Hey, guys, thanks for taking my question. Could you give us a little more color on the trajectory of the free cash flow from NewTek going forward? You know, do you expect another increase in 4Q and does that get you to a 24 run rate? Or do you expect NewTek free cash flow to kind of continue to ramp through 24?

Hey, guys. Thanks for taking my question could you give us a little more color on the trajectory of the free cash flow for new Tech going forward you know.

Tyler Lewis: Welcome to CNX's 3rd quarter conference call. We have in the room today, Nick DeIuliis, our president and CEO, Alan Shepard, our chief financial officer, Navneet Behl, our chief operating officer, and Ravi Srivastava, president of our new technologies group. Today, we will be discussing our 3rd quarter results. This morning, we posted an updated slide presentation to our website. Also, detailed 3rd quarter earnings release data, such as quarterly E&P data, financial statements, and non-GAP reconciliation.

Do you expect another increase in four Q and does that get you to a 24 run rate or do you expect new tax free cash flow to kind of continue to ramp through 24.

Speaker 7: And then maybe based on what you see now, you know, assuming no more, you know, governmental regulations or anything that come in, is that 75 to 100 million a good run rate for 2025?

And then maybe based on what you see now.

Assuming no more governmental regulations or anything that come in is that 75 to 100 million a good run rate for 2020 five.

Speaker 6: Hey, good question. What I would say is I think it'll be easier. It's better to guide on some of these stuff on an annual basis. There is some. Uh, seasonality aspects of it, but some quarter might be better. Some quarter might be worse in terms of how, how it kind of pans out. So we're going to try and stick to a. Uh, an annual guidance on this until there's better clarity on on how everything shakes out. There's there's a.

Okay.

Good question, what I would say is that I think it would be easier.

Better to guide on some of these tuck on an annual basis. There is some are.

Tyler Lewis: We posted to our website in a document titled 3Q, 2023, earnings results, and supplemental information of CNX resources. As a reminder, any forward looking statements we make were comments about future expectations for subject to business risks, which we have laid out for you in our press release today, as well as in our previous security and exchange commission filings.

Steve Miller seasonality aspects of it but some quarter it might be better or some quarters it might be worse in terms of how.

Kind of pans out so we're going to try to stick to our annual guidance on this until there is better clarity on on how everything shakes out.

The different pathways that we're pursuing I think will have much better right.

Speaker 6: different pathways that we're pursuing. I think we'll have much better clarity on this in the coming days. But at this point in time, annual number is what we can best articulate. And again, like based on the pathways that's already created, 75 to 100 on an annual basis is something that we have a good line of sight.

Clarity on this end and in the coming days, but at this point in time, our tangible numbers, what we can best articulate.

Tyler Lewis: We will begin our call today with the pair of remarks by Nick, followed by Alan, and then we will open the call for Q&A, where Nav and Ravi will participate as well.

And Oh.

Nicholas DeIuliis: With that, let me turn the call over to you, Nick. Hey, thanks, Tyler. Good morning, everybody.

Like based on the pathway that's already created 75 to 100.

Nicholas DeIuliis: 3rd quarter of 2023, it marks our 15th consecutive quarter of free cash flow generation, despite experiencing what I would call extremely challenging and basin pricing. And our continued execution of our long-term strategy, which started back in 2020, it's generated approximately 1.8 billion in free cash flow. It's reduced outstanding debt by approximately 385 million, and it's allowed us to repurchase and retire 31% of our outstanding shares at deeply discounted prices. And we remain on pace to exceed our original goals supported by our sustainable business model that has and will continue to generate significant long-term for share value for our owners.

Our annual basis is something that we have a good line of sight on that.

Speaker 6: And the goal for the team would be to continue to grow that in 25.

The goal for the team would be to continue to grow that in 'twenty five and beyond.

Speaker 7: Got it. Thanks for that color. I guess just one follow up also on new tech, you know, you mentioned most of the free cash flow at this point is coming from.

Got it thanks for that color I guess, just one follow up also on new Tech I know you mentioned most of the free cash flow at this point is coming from the methane capture in the environmental attributes associated with that.

Speaker 7: you know, the methane capture and the environmental attributes associated with that.

Speaker 7: You know, I think most of that's coming from the Buchanan Met coal mine.

I think most of that is coming from the Buchanan met coal mine, what what's the future runway on capturing gas there I guess do those gas volumes decline over time and maybe on the other side of that are there still gas there's still gas volumes that are being invented that you could capture and potential.

Speaker 7: What's the future runway on capturing gas there? I guess, do those gas volumes decline over time? And maybe on the other side of that, are there still gas?

Speaker 7: is there still gas volumes that are being vented that you could capture and potentially generate even more credit?

We generate even more credits.

Nicholas DeIuliis: And all of that, you know, it might sound like a broken record, because we've been stringing out this theme for these metrics for a couple of years now, which is sort of the point. And that's the consistent execution and clinical capital allocation. Those things drive the creation of meaningful per share value over the long-term.

Speaker 6: So, I think that's where some of the, when I talked about an annual guidance on some of these things, those are some of the uncertainty factors on the mining base and some of that stuff that dictates what the volumes are. But, but I think there is, as for the run rate for the mind, the mind's been operational for decades and it has running room for, for, for several more decades.

So I think that's where some of the when I talked about.

And annual guidance on some of these things, but those are some of the uncertainty factors on the mining base and some other stuff that dictates Oh wow, what the volumes are but but but I think.

That's what the run rate for the mine. The mine has been operational for four decades than it has.

Nicholas DeIuliis: During the quarter, our operations team, it continued to execute efficiently. In fact, the team's been successful in further improving cycle times and accelerating activity, and Alan will go into some more of those details in a minute and how it impacts our four-year production outlook and capital timing. More specifically, one thing I'd like to highlight during the quarter is that we brought online four new wells beneath the Pittsburgh International Airport to runway.

Any room for for several more decades.

Speaker 6: to go side and we have captured invest infrastructure in place to continue to do that. So part of the seventy five to one hundred billion dollars is contingent on capturing that methane and that having a certain mining base that you've seen over the over the last several years.

He goes I don't in a and B have a chapter and verse of infrastructure.

Infrastructure in place to continue to do that.

So when a part of the 75 to 100 billion dollar system is contingent on capturing that methane about having a certain mining base that we have seen over the over the last several years and theirs.

Nicholas DeIuliis: And these laid as well to highlight our public-private partnership with the airport. And we achieved this, by the way, with zero safety incidents and zero environmental impact. These four new wells are projected to generate almost 70 million in royalty revenue for the airport through 2042 and about 20 million of that will be over the next four years. And this is on top of a similar amount of royalty revenue that the airports already received from our partnership that was created back in 2013. And it's a perfect example of our Appalachia first vision driving tangible results.

Speaker 6: And there's opportunity to do more beyond that particular mine itself, but but that's not contemplated.

There is opportunity to do more beyond that particular mine itself.

But that's not contemplated in 2024.

Speaker 7: Got it. I guess just one clarification there. The gas that you're capturing now, you know, we think about shale gas, shale gas declines over time. Does the gas that you're capturing now, does it have a base decline rate? Is it pretty flat? Just trying to get a sense of the opportunity set there.

Got it I guess, just one clarification there does the gas that you're capturing now you know we think about shale gas shale gas declines over time does the gas that you're capturing now does it have a base decline rate is pretty flat just trying to get a sense of the opportunity set there.

Speaker 6: It's a different play altogether, so to speak. I think it's more a function of mining pace and how fast the mine is operating as opposed to the decline from the well itself.

It's a it's a it's a different.

Play altogether, so to speak I think it's more a function of of mining pace and how fast the minus operating as opposed to the decline from the well itself.

Got it thanks, guys I appreciate the color.

Nicholas DeIuliis: Let's shift now to the new technologies group, very exciting part of our business. And we continue to expect around 75 million with up to potentially 100 million free cash flow in 2024 associated with the new technologies group. We're just getting started with new tech and we think this business has potential being an even bigger free cash flow growth driver for the company moving forward. The near term new tech free cash flow growth is through our ability to monetize environmental attributes tied to our waste methane, abatement operations in Virginia.

Speaker 1: The next question comes from Leo Mariani with Roth MKM. Please go ahead.

The next question comes from Leo Mariani with Ralph M. Kam. Please go ahead.

Speaker 7: Yeah, it's just a quick follow up here on the new tech business. So maybe just kind of looking at this little different way. So when you think about the 75 to 100 million, you know, of new tech for cash flow, you know, next year, is that sort of contractually kind of underpinned, you know, for you folks, are you selling, you know, these credits kind of on a long term basis and maybe that, you know, volume and this sort of price is kind of locked in or is this maybe just more, you know, your own internal prediction of what you expect for next year.

Yeah, just a quick follow up here on the new Tech business. So maybe just kind of looking at it a little different way. So when you think about the $75 million to $100 million.

Of new Tech free cash flow you know next year is that sort of contractually kind of underpinned for you folks or are you selling these credits kind of on a long term basis and maybe that volume.

Nicholas DeIuliis: And our new tech effort is poised to lead a charge into the hydrogen economy with the atoms for clean ammonia project where we expect to provide ultra low carbon intensity feedstock and carbon capture and sequestration services. The DOE recently announced the funding of this project is part of the arch to hydrogen hub application. And while we certainly applaud the funding announcement and inclusion of arch to in the award, we're also eagerly awaiting implementation guidance regarding the related hydrogen production tax credit for the 45 v provision of the IRA.

Volume and it's where the price is kind of locked in or is this maybe just more you know your own internal prediction of what you expect for next year.

Speaker 6: It's it's more of an internal production of what we expect the pricing to be. There is there's there's a mix of long term contracts in certain arenas and then there's certain other programs where the pricing and volume kind of fluctuates in some other arenas. It's a mixed bag of those kind of opportunities. But it's our seventy five to one hundred million dollars is based on where we see you know how the different opportunities kind of shake out.

It's yeah, it's more of a production of what we expect the pricing to be there's a there's a there's a mixed up long term contracts and certain arenas and then there's certain other programs with the pricing and volume kind of fluctuates and some other arena. So it's a mixed bag of those kind of opportunities.

Nicholas DeIuliis: And that's going to materially impact the project economics. So the intent of the hydrogen production provision of the IRA of course was to incentivize the creation of low carbon intense the hydrogen and to reduce emissions into enhance US energy security and to create jobs and economic activity and energy communities. And I'll tell you the atoms for projects squarely aligns with all those objectives. So we're monitoring developments with the 45 v guidance closely and we're hopeful that DC will follow the intent of the law and help us make this important West Virginia project and others like it frankly a reality.

But it's $75 million to $100 million is based on where do we see.

How the different opportunities kind of shake out.

Speaker 8: Okay, that's helpful. And then just on, you know, kind of the remainder of the year, I guess you guys are saying that CapEx and production are at the higher end here. You know, as I'm looking at kind of year-to-date CapEx, you know, for the first three quarters, am I looking at this right that you've got about $100 million left to spend in 4Q, which is kind of roughly half of what third quarter levels are? So, are you seeing just?

Okay. That's helpful. And then just on you know kind of the remainder of the year. I guess you guys are saying that capex and production are at the higher end here as I'm looking at kind of year to date Capex for the first three quarters and I look at this right that you've got about $100 million left to spend.

And for Q2, which is kind of roughly half of what third quarter levels are so are you seeing just eliminate operational activity.

Speaker 8: limited operational activity, you know, in the fourth quarter and

In the fourth quarter.

Speaker 8: Yeah, similar question on the production. I mean, I can get kind of the high end of the guide, but I guess that assumes that production can even come down a little bit in 4Q versus 3Q. I just want to verify that I'm kind of looking at these numbers, right, that you would expect like CapEx to be kind of cut in half in 4Q and maybe production tails off a little this quarter.

Similar question on the production I mean, I can get kind of the high end of the guide, but I guess that assumes that production can even come down a little bit in <unk> versus <unk> I just want to verify that.

Nicholas DeIuliis: Also like to highlight that we reached our 2023 methane emission reduction target of 70,000 tons of carbon dioxide equivalent by the end of the third quarter this year, which was awesome. So that of course is a quarter ahead of schedule and our team is still hard at work with regards to making further adjustments and improvements to reduce emissions further. Great accomplishment by our regulatory reporting and operations teams and by the end of this year, we expect a cumulative effect of our reduction efforts to reduce methane emissions on a carbon dioxide equivalent tons basis by about 49% since 2020, some of the 50% reduction in a very short period of time.

Kind of looking at these numbers right that you would expect capex to be kind of cut half into <unk> and any production tailed off a little this quarter.

Speaker 4: Yeah, that's right. You're going to see a significant delay in CapEx in Q4. And what we talked about there during the commentary was the completions team has just been so efficient that we pulled basically 11 of the 13 remaining tools in the second half of the year came into Q3. That's also driving kind of the production bump. But if you think about it, basically, we got one rig running and we've kind of had to slow down to almost idle the frack crew because we've been ahead of schedule and we don't want to push volumes into this market given current prices. So.

Yeah, Yeah, that's right you're going to see a significant decline in capex in Q4, and what we talked about there during the commentary was the.

<unk> team.

Been so efficient that we pulled basically 11 of the 13 remaining tools in the second half of the year came into Q3.

That's also driving kind of the production bump, but if you think about it basically we got one rig running and you know we've kind of had to slow down to almost idle frac crew because we've been ahead of schedule and we don't want to push volumes into this market given current prices. So.

Speaker 4: We are just way ahead of schedule and you will see a big drop in Q4 capital.

We are just way ahead of schedule and you will see a big drop in Q4 capital and export it.

Nicholas DeIuliis: Our methane reduction goals for 2023 were focused mostly on pneumatic devices and liquids unloading those were the two biggest opportunity sets. And we invested seven million of capital for specific projects and the teams got the work a year to date, we've changed out over 700 pneumatic devices and it came in at a cost, the low cost actually a very sort of competitive one at $3 of CO2 equivalent for time. And we now plan to add an additional 160 or so devices to our plan for the rest of the year because we're ahead of schedule due to that fantastic pace that the team is set.

Speaker 8: Okay, no, that's very helpful guys. And then just on the production, just to follow up there. So if I look at third quarter production, I mean, it looks like it's around a 570 BCF.

Okay. No. That's very helpful guys and then just on the production just to follow up there. So if I look at third quarter production I mean, it looks like it's around a 570 Bcf annual run rate in <unk>, a little bit lower than your 24 guide of 580, and I guess, if you know.

Speaker 8: and you will run rate and 3Q to a little bit lower than your 24 guide of 580 and I guess it...

Speaker 8: You know, production is coming down slightly here in fourth quarter, you know, what's the kind of plan? Is there a plan for early 24 where you kind of make it up, but you're you're ramping up activity on January 1st to try to get those volumes up to that 580 V level. Is that kind of the high level operating plan here to kind of get back after it right? When the year turns.

<unk> is coming down slightly here in fourth quarter.

You know, what's the kind of plan is our plan for early 'twenty, four where you how does it make it up but youre ramping up activity on January 1st to try to get those volumes up to that mid <unk> level is that kind of the the high level operating plan here to kind of get back after it right when the euro terms.

Nicholas DeIuliis: And in addition, the teams been working on our liquids unloading processes, as I just mentioned, which also contributes significantly to our methane emission reduction of the 70,000 tons of CO2 equivalent, on the ballot. So we set a difficult but yet achievable targets, and we do what we say we're going to do. So we're not going to be in the game. You're not going to see this from us of setting goals that are decades away to sort of avoid accountability. Our focus is always going to be on the tangible and impactful and the local type of actions.

Speaker 4: And so think about the operating plan. If you've mentioned, we have a continuous drilling program ongoing, right? It's really just timing on the fracks. The fracks are kind of big of a spend on the DNC side. So right now we slowed down the completion activity because we're at a schedule. And next year, the 580 is going to come and go.

And so if you think about your operating plan of your Bachelor and we have a continuous drilling program ongoing right and it's really just timing on the Fracs fracs and kind of biggest spend on the D&C side. So right now we slowed down the completion activity.

Because we are ahead of schedule in the next year. The 580 is going to come and go.

Speaker 4: For the year, I'm going to provide a specific volume guidance quarter by quarter. But the way to think about it now is we've mentioned before we're trying to get to kind of this 1.5916 run rate where we're at. And that's where you should roughly expect to see volumes through next year.

For the year, I mean, I'm, not providing specific volume guidance quarter by quarter, but the way to think about it now as we mentioned before we're trying to get kind of this 1.5916 run rate, that's where we're at and that's where you should roughly expect to see volumes through next year.

Nicholas DeIuliis: Now last but certainly not least, we continue to have conviction that our shares are materially undervalued during the quarter. We bought back an additional 1% of our shares outstanding. Our compound annual growth rate or Kager for our share repurchase program over the past three years since the peak share account around third quarter of 2020 is approximately negative 11%. And we think that's top tier across the capital markets and that it compares favorably to the classic best-in-class share repurchase like AutoZone as an example where AutoZone's retired shares at about a minus 8% Kager over a 25-year period.

Okay. Thanks, guys.

Speaker 1: The next question comes from Michael, Julia with Stevens. Here is Whit macro.

The next question comes from Michael <unk> with Stephens. Please.

Please go ahead.

Speaker 9: Yeah, hi, uh, morning. Just had another one on the new tech. Um, just trying to understand the, uh.

Yeah, Hi.

Good morning, just had another one on the the new Tech I'm, just trying to understand the.

Speaker 9: The revenue generation there, most of the revenues, or I guess maybe all the revenues be, are they generated with the alternative energy credits associated with the power plant? Or is there any other credits that.

The revenue generation there are most of the revenues or I guess, maybe all the revenues be are.

Are they generated with the alternative energy credits associated with the power plant or are there any other credits that are.

Speaker 9: you are able to generate by abating the methane.

You are able to generate by abating the yeah.

Nicholas DeIuliis: So we believe that our share repurchase program provides an opportunity to create incredible value for our long-term like-minded owners who are going to benefit as their per share value continues to grow meaningfully over the coming years.

Methane.

Speaker 6: So this is Rade. All the year opportunities that they're pursuing, they're a combination of volunteering, compliance assets, compliance utility programs, and the AEPs. So there's more to that. And then we expect to add forestry carbon credits and wet land mitigation, a lot of other areas to it. So it's not just coming from one source, we have pathways into multiple opportunities.

So this.

This is ravi.

But year opportunity that we're pursuing they're a combination of voluntary compliance offsets compliance utility programs and AEP is oh, so there's there's more of that and then.

Alan Shepard: Now let's hear from Alan. Thanks Nick and good morning to everyone. As Nick mentioned this quarter represents the 15th consecutive quarter of free cash flow generation through the execution of our sustainable business model and long-term strategic plan. The quarter we generated approximately 19 million of free cash flow despite the challenging price environment. As we initially laid out our free cash flow plan in the first quarter of 2020, this brings our cumulative free cash flow to approximately 1.8 billion or around 50% of our current market cap.

We expect to add forestry carbon credits and wetland mitigation a lot of whether he is.

Two it so there's it's not just coming from one source, we have oh like pathways into multiple opportunities.

Okay got it and are you sharing any of those.

Speaker 9: credits with anybody else or the solely CNX that is getting those credit to this point.

It's with anybody else or is it solely XI and X that is getting.

Getting those credits at this point.

Alan Shepard: Looking ahead, we expect this quarter to mark the trough of our free cash flow generation as the confluence of lower capital, higher expected gas pricing, and growth in our new tech cash flows solidifies our confidence in achieving robust free cash flow generation in the quarters ahead. We continue to believe that our shares trade a significant discount to their intrinsic value and as such during the quarter bought back an additional 2.4 million or 1% of shares outstanding at an average price of 19 dollars and 50 cents per share.

Speaker 6: I mean, those credits are monetized. I'm not, we're not consuming the most photos. I don't understand the question. Sorry, I just do.

I mean those credits are monetized.

Got it.

We're not consuming them ourselves I don't understand the question.

Sorry, I was just wondering if.

Speaker 9: You are, you're the only one abating methane at the end of the line. So, yeah, if you generate the credits, I mean, you can monetize them with another party, but you're the only one that is abating methane at the point.

You are.

You're the only one of beating them.

The methane breath right.

Get them on.

So yeah, if you generate the credits I mean do you you can monetize them with with another party, but are you. The only one that is abating methane that's the plan.

Alan Shepard: And after the close of the quarters through October 12th, we bought back an additional 1 million shares at an average price of 22 dollars and 20 cents. That's the third quarter of 2020. We have now bought back approximately 31% of our total shares outstanding at an average price of 15 dollars and 58 cents. An exceptional result not just in our industry, but anywhere in the capital markets. And we believe those results will only become more impressive as we're well positioned to continue to take advantage of this opportunity moving forward.

Speaker 6: Right, if you're asking who the like there's only working one working interest partner in the project.

Right. If you were asking who look like there was only working when working interest partner in the project. That's us got it got it okay very good.

Speaker 9: Got it, got it, okay, very good. It looked like you've sold some production, or sold some assets, I assume there was some production associated with that, can you say what that was for the 19 million that you generate and asset sales for the quarter?

It looks like you sold some.

Production.

They're sold some assets I assume there was some production associated with that can you say what that was for the the $19 million that you generated in asset sales for the quarter.

Speaker 4: The bulk of that is selling spare parts. Again, we really do you guys. We have a deep inventory of leases throughout Appalachia. We're at the point now where folks come to us for a lot of unit fill-in. So we're able to monetize some of this non-core assets acreage at pre-attractor prices and we saw an upsurge of that in Q3. So it wasn't production related. We did have the second part of the clothes on our assets sale for the non-opsil we did, but that was about three million of the 19. But the bulk of that is just from selling. So I'm from our deep.

Alan Shepard: Turning briefly to the balance sheet, our significant maturity runway and robust hedgebook continue to be key components that underpin our capital allocation flexibility. Given these two elements, combined with our low cross position, we remain comfortable with our current leverage profile and have the luxury to remain opportunistic with respect to our debt management. Furthermore, we believe that the growth in the new technologies group over the next few years will result in the lower leverage ratio even before considering potential further reductions in absolute debt.

The bulk of that selling spare parts.

Again, we really do you guys, we have a deep inventory of leases throughout Appalachia, and we're to the point now where folks come to us for a lot of unit fill in so we're able to monetize some of this noncore assets acreage at pretty attractive prices and we saw an upsurge of that in Q3.

So it wasn't production related we did have the second part of the close on our asset sale for.

The non op that we did but that was about $3 million of 19. The bulk of that is just from selling.

Alan Shepard: Speaking of the new technology group, it continues to deliver tangible results in both positive free cash flow and environmental impacts. During the quarter, we recorded approximately 13 million in free cash flow. Primarily associated with sales of environmental attributes from our waste methane capture activities, which brings our year-to-date free cash flow from new tech to approximately 19 million. Further, as Nick mentioned, we continue to have good line of sight to the new technologies group contributing approximately 75 to 100 million in free cash flow in 2024. And as we said last quarter, free cash flow from new tech has the potential to be meaningfully higher in the years beyond point. 24.

Someone from our deep inventory of leases.

Speaker 9: That was good, okay. And just last month for me, I had wondered any insight on what you think will cost, might look like for 24 relative to where they were this year.

Oh good okay.

And just last one for me wondering if any insight on what do you think go well cost might look like for 24 relative to where they were this year.

Speaker 4: I think if you're after about sort of oil field services and inflation, things like that, we're modeling everything to be pretty flat. We expect a weight nav team to go into, we'll see some operational efficiencies to improve cost, but we're not modeling or thinking about any sort of major down draft and oil field service costs for next year.

Yeah, I think if you if you're asking about sort of oilfield services inflation things like that we're modeling everything would be pretty flat. We expect are way downstream is going to see some operational efficiencies to improve costs, but we're not modeling or thinking about any sort of major downdraft in oilfield service costs for next year.

Alan Shepard: Let's now shift to the updated guidance outlook. So I'll be speaking, we are reaffirming the 2023 and initial 2024 guidance that we updated last quarter. As Nick mentioned in his commentary, Nav and the operations team have been an outstanding job in compressing cycle times and accelerating or drilling and completion activity. The accelerated operational results, particularly on the completion side, have pulled the timing of capital into Q3 and accelerated online dates for our two most recent bad.

Got it thank you.

Speaker 1: The next question comes from Jacob Roberts with TPH. Please go ahead. Morning.

The next question comes from Jacob Roberts with T. P. H. Please go ahead.

Good morning.

Good morning.

Just.

Back to that but you can be can empower facility I'm curious if you could.

Speaker 10: Let us know how to think about the uptime of that plant, or the runtime of that plant relative to power pricing in the region.

Let us know how to think about the uptime of that plan are at run time, where that plant relative to power pricing in the region.

Alan Shepard: As a result of our accelerated pace, you now have both, we now expect both annual production and capital trend towards the higher end of the ranges provided. Looking ahead to 2024, we expect to average annual production volumes of approximately 580 BCFE. And as we discussed last quarter, we also expect total capital expenditures to fall beginning in 2024 through 2025 to around 500 million.

Speaker 4: I mean, that's a, that's a peeker plant, right? It runs. That's called upon the PJM.

I mean, that's a peak or plant right. It runs that's called upon the PJM. So.

Speaker 10: but no guardrails in terms of what PJ Impraising is and when that is honor.

Okay, but no no guardrails in terms of what PJM pricing is and when that is on or off.

Alan Shepard: We will provide the full 2024 guidance with our next quarterly update. You conclude, the sustainable business model that we have created is continuing to deliver value to our shareholders throughout the commodity cycle. Our focus for the remainder of 2023 will remain on safe and compliant execution to develop our extensive natural gas asset base. Accelerating free cash flow growth from our new technologies business on consistent and clinical capital allocation to grow our long term free cash flow per share. And most importantly, as always, on ensuring all our decisions continue to reflect a long term owner mindset.

Speaker 4: It's all dictated by Spark economics, right? Like, but the power prices relative to flowing gas for the plants to turn it on. But it's just a traditional peak of plant. Nothing unique about it.

No. That's it's all dictated by the spark economics, right like with the power prices relative to flowing gas to the plants to turn it off.

Just a traditional pizza plan nothing unique about it.

Speaker 10: And then, you know, relative to that feed gas is seeing as the sole supplier of gas to the plant and then longer term were the plant to increase utilization.

And then you know relative to the feed gas is the sole supplier of gas to the plant and then longer term, where the where the plant to increase utilization.

Speaker 6: Can CNX provide that to Pi in total? CNX is the soul's supplier.

Can you provide that supply and in totality.

<unk> is the soles.

Supplier of gas to that facility at this point in time.

Tyler Lewis: With that, I'll turn it back over to Tyler for two and a thank you.

Theres volumes produced from that field beyond what that plan assumes.

Unknown Executive: Operator, if you can please open the call for questions at this time. Yes, we will now begin the question and answer session to ask a question. You may press star than one on your telephone keypad. If you are using a speaker phone, please pick up your handset before pressing the keys. If at any time your question has been addressed, and you would like to withdraw your question, please press star than two.

Perfect I appreciate the time.

Speaker 1: The next question comes from John Abbott with Bank of America. Please go ahead. Hey, good morning.

The next question comes from John Abbott with Bank of America. Please go ahead.

Hey, good morning, and thank you for taking our questions.

Speaker 9: So with the new technology business and the free cash flow guide that you provided here, I mean, how do you think about the potential impact to your credit rate and going forward?

So with the new technology business and the free cash flow guide that you provided here.

How do you think about the potential impact to your credit rating going forward.

Speaker 4: Yeah, so we've had those discussions yet. It's not being incorporated. You know, I think they're probably credit guys usually wait for some more quarters on our belt before we give us credit for it. I think the one thing we did want to point out was that it will create some natural deep leveraging even before considering reductions in absolute debt.

Yeah. So we've had those discussions yet and it's not being incorporated.

Unknown Executive: At this time, you will pause momentarily to assemble our roster.

They are probably credit guys, usually wait for some more quarters under our belt before we give us credit for it.

Bert Donnes: The first question comes from Bert Donnes with Truist. Please go ahead. All right.

One thing we did want to point out was that it would create some natural deleveraging I'm, even before considering reductions in absolute debt.

Ravi Srivastava: Good morning, guys. Thanks for taking my question. On the new tech front, would you say the 75 to 100 million ranges is kind of the low hanging fruit? I know you mentioned, there's the potential for meaningfully higher free cash flow. I just want to understand if that next leg up requires government legislation or new partnerships or anything like that, or if the 75 to 100 million can spare step quickly to that meaningfully higher free cash flow.

Speaker 9: Very, very helpful. And then also again with the free cash flow outlook that you've provided there, I mean, it doesn't seem like there's any incremental cap-ax spend on there. Is there incremental cap-ax that we should be thinking about related to new technology guide as relates to Colbemefe and Abatement in 2024 and 2025?

Very very helpful. And then also again with the to free cash flow outlook that you provided there I mean, it doesn't seem like there's any incremental capex spend on there is there incremental capex that we should be thinking about related to that kind of two new technology guide as it relates to co pay methane abatement in 2024 and 2025.

Speaker 6: Yeah, on 24.25 we do expect to spend some capital on the new tech group front, but not necessarily on the whole mind, but the whole mind, the inner bakeman side of things.

Yeah on 'twenty four 'twenty five we do expect to spend some capital on the new Tech group, Frank but not necessarily on the Coalbed met coal mine methane abatement side of things.

Ravi Srivastava: Hey, Bert Saravi. So the 75 to 100 million dollars that we guided to, we have a good line of spite on what we can accomplish next year. We're not making government legislations and all those uncertainties into that guidance for next year.

Ravi Srivastava: However, like depending on how some of these things come out, there's an opportunity to grow that beyond 2024. And as we talked about on Adam's work project, there's CCS opportunities, low peak stock sale opportunities, all that stuff is contingent on how that project progresses. So all that stuff adds to that meaningful growth opportunities in 25 onwards. But next year, we have good line of spite on what we need to do to get to that 75 to 100.

Speaker 9: I guess we'll get further clarity on that probably at year end results here. But any idea in terms of how we should think about other capital for 2000?

Alright, and I guess I guess you.

We'll get further clarity on that probably at year end results here, but any idea in terms of what how should we should think about other capital for 2024.

Speaker 4: Yeah, I mean, we'll provide the full guidance break out. When we get to Q1 or sorry, January of 2024, but you should expect to see everything kind of declined from this year as we make our way towards that 500 million a year. All right.

Yeah, I mean, what will provide the full guidance breakout.

You get to Q1 or I'm, sorry January of 'twenty 'twenty four.

But you should expect to see everything kind of decline from this year as we make our way towards that 500 million a year.

All right very helpful. Thank you very much.

Yeah.

Speaker 1: The next question comes from Brian Veeley with Capital One Securities. Please go ahead.

The next question comes from Brian Velie with capital one securities.

Ravi Srivastava: And then could you could you break out maybe where you've you've gotten so far that $7,500 million between I think there's three buckets that you kind of you put that in and maybe the the year-to-date range. Whether or not that is, you know, which bucket that falls into and then just little small ones here, but just some of that have a macro, you know pricing supply demand. And baked into it like if we saw a better environment for that, would that free cash flow range move or is it $7,500 million more of a fixed outcome.

Please go ahead.

Speaker 11: Good morning everybody, really appreciate all the detail on New Tech. I have a couple of other questions that maybe you could be able to answer and help me out a little bit. Just wondering if you can help me understand how much methane do you capture to earn one of the credits, like a single credit?

Good morning, everybody really appreciate all the detail on new Tech I have a couple of other questions that maybe you'd be able to answer and help me out a little bit.

Just wondering if you could help me understand how much methane do you capture to earn one of the credits like a single credit.

Uh huh.

Speaker 6: I'm not sure how to answer that question, but I think what I can tell you is, and we've provided details in our CSR, and I've got our quarterly updates on. We're capturing it on six million tons, CO2E off.

I'm not sure how to answer that question, but I think what I can tell you is that in.

We have.

Provided details on our CSR in our quarterly updates on where we're capturing out 6 million tonnes.

C O TUI off methane.

Ravi Srivastava: Thanks. Yeah, this is down to your first question. That's primarily associated with the free cash flow as your center scene generating being the last two quarters, which is the environmental attributes. They make up the bulk of that expectation for next year. And you know, that's the range we give their kind of includes some of the subjectivity to the pricing and those regulatory pathways that we already have one fight on to Robbie's point.

And.

Speaker 6: Different programs have different ways of monetizing that. So that's why it's difficult to answer specifically, which...

It's different programs have different ways of monetizing that so that's why it's difficult to answer specifically what your question was.

Speaker 11: Okay, I understand. So it sounds like just different conversion rates depending on the program. And then I guess I probably answers the next question. I was going to ask was, you know, what was the credit price that you could sell these credit that was assumed in the $7,500 million budget? Or I'm sorry, pre-cashable range for next year. But I assume that those price assumptions vary also by program. That's correct. Okay, one last question.

Okay I understand so it sounds like just different conversion rates, depending on the program.

And then I guess.

Probably answers. The next question I was going to ask was you know what was the credit price that you could sell these credits at that was assumed in the 75 to 100 million budget or I'm, sorry, free cash flow range for next year, but I assume that those price assumptions vary also by program.

Ravi Srivastava: Right. I think the sum of that $7,500 million is contemplated on where we see where the market is today, like just like any, if you're in tune with where some of these environmental attributes pricing and all that stuff is there is some level of fluctuation, volatility in it, but we think that $7,500 million is still achievable.

That's correct.

Okay, great and.

One last question just based on kind of the current market.

I'm, sorry say that one more time apologize that's why we provided the range and then the.

Speaker 4: That's why we provided the range and then the expected range based on kind of the current market.

Unknown Executive: Gotcha.

Unknown Executive: Thanks, guys.

Expected range is based on kind of the current market.

Zach Parham: The next question comes from Zach Parham with JP Morgan. Please go ahead. Yeah, thanks for taking my question. Could you give us a little more color on the trajectory of the free cash flow from new tech going forward. Do you expect another increase in 4Q and does that get you to a 24 run rate or do you expect new tech free cash flow to kind of continue to ramp through 24. And then maybe based on what you see now, you know, assuming no more governmental regulations or anything that come in, is that 75 to 100 million, a good run rate for 2025? That's a good question. What I would say is I think it'll be easier.

Speaker 11: Perfect. And then last question, this is pretty well very interesting stuff. I don't know anybody else is talking about this in the EMP space. I assume maybe the way you're able to do this is, you know, your your past experience in the coal industry and relationships that you have there. Is that a unique strategic advantage that you expect really only you will be able to exploit or is that something you expect other people to kind of follow on and start doing similar things?

Perfect and then last question listen, it's pretty well very interesting stuff.

I don't know anybody else is talking about this in the E&P space I assume maybe the way you are able to do this is you know your past experience in the coal industry and relationships that you have there is that is that a unique strategic advantage that you expect really only you will be able to exploit or is that something you expect other people to kind of follow on and start.

Doing similar things.

Speaker 6: I think it's a combination of both. I think there's other people who can do this, but we have developed some technology around capturing waste methane most effectively. Like there's some skill that goes into it, and we think we have the upper hand.

Yeah, I think it's a combination of both I think there is other people who can do this but we have developed some technology around capturing based methane most effective leaves like theirs.

There's some scale that goes into it and do you think.

Ravi Srivastava: It's better to guide on some of these stuff on an annual basis. There is some. Seasonal personality aspects of it. Some quarter might be better. Some quarter might be worse in terms of how, how it kind of ends up. So we're going to try and stick to an annual guidance on this until there's better clarity on how everything shakes out. There's different pathways that we're pursuing. I think we'll have much better clarity on this in the coming days, but at this point in time, annual number is what we get best articulate.

We have the upper hand.

Speaker 11: Got it. Thanks very much for the color. I really appreciate all the details on the tech.

Got it thanks very much for the color I really appreciate all the details when you check.

Oh gosh.

Speaker 1: The next question comes from Niten Kumar with Mzuho. Please go ahead.

The next question comes from Knits and Kumar with Mizuho. Please go ahead.

Speaker 12: Good morning guys, obviously a lot of interest in the new tech and and and and deservedly. So I guess my question is, are the current the current free cash flows? Are they only from Pennsylvania credits or are you getting anything from other states? And is it all kind of current time or are you monetizing any crude credits from, you know, past activities?

Hey, good morning, guys. So obviously a lot of interest in the new Tech and deservedly. So I guess my question is.

Although the current free cash flows I think only from Pennsylvania credits or are you getting anything from other states.

Ravi Srivastava: And again, like based on the pathways that's already created 75 to 100 on an annual basis is something that we have a good line of sight on. And the goal for the team would be to continue to grow that in 25 and beyond.

And is it all kind of current time or are you monetizing any crude credits from past activities.

Speaker 6: So I think I already answered this question where not all the revenues cutting from Pennsylvania.

So I think I already answered. This question, we're not all the revenue is coming from Pennsylvania.

Ravi Srivastava: Thanks for that color. I guess just one follow up also on new tech. You know, you mentioned most of the free cash flow at this point is coming from the methane capture in the environmental attributes associated with that. You know, I think most of that's coming from the Buchanan met coal mine. What's the future runway on on capturing gas there? I guess to those gas volumes decline over time. And maybe on the other side of that are there's still gas.

Speaker 6: program that you mentioned and well.

Program that you mentioned.

Uh huh.

Well.

Speaker 6: And on the rules, I think most of these programs where they have a timeline on how much you can improve. So it's not from...

And on the under accrual side of things that I think most of these programs were.

They have a timeline on how much you can accrue so there's it's not from.

Speaker 6: Previously it included whatever is permitted by the program. Generally concurrent, the way to think about it.

Previously accrued it's whatever it's permanent by the program generally concurrence the way to think about it yes.

Speaker 12: Okay. That's helpful. And then I guess going back to the regular gas side of things, you know, my question was really around, it seems like you're dropping a little activity. I know you pulled some capex into the third quarter.

Okay.

That's helpful and then I guess going back to the regular gas side of things you know my question was really around.

Ravi Srivastava: There's still gas volumes that are being invented that you could capture and potentially generate even more credit. So, I think that's where some of the, when I talked about an annual guidance on some of these things, those are some of the uncertainty factors on the mining base and some of that stuff that dictates what the volumes are, but I think there's a sort of run rate for the mine, the mine's been operational for decades and it has running room for several more decades to go side and we have a capture and the best infrastructure in place to continue to do that.

It seems like you're dropping a little activity I know you pull some capex in the third quarter.

Well.

Speaker 12: Not looking for formal guidance, but there is a pretty, you know, significant step up in production in in 2024 based on the outlook that you've provided. So I'm just curious is this is there any sort of cadence of activity that you expect for 24? Is it going to be front half faded or back half faded? Just looking at strip and trying to understand how you're planning for the year in double timing.

Not looking for formal guidance, but there's a pretty significant step up in production in 2024 based on the outlook that you've provided some I'm just curious.

It is this is there any sort of cadence of activity that you expect for 24. It is it can be front half weighted or back half weighted just looking at strip and trying to understand how you're planning for the year in terms of timing.

Yeah, I mean, I just mentioned earlier, there's there's nothing in particular worth highlighting and growing by the quarter to quarter.

Speaker 4: Like I mentioned earlier, there's nothing in particular with highlighting the core of the quarter. Cadence, the way to think about it is just we do it 580. And we targeted this sort of run rate where we're at. So it should just fluctuate around that a little bit. And in this year, we had a lot of capital to build up from call it the 55 to the 580 next year. So once we're back to that maintenance production of 580, that's going to be the driver of the capital decline.

Ravi Srivastava: So, part of the $75 to $100 billion is contingent on capturing that methane and that having a certain mining base that deals with the last several years and there's opportunity to do more beyond that particular mine itself, but that's not contemplated in 2024. Got it, I guess just one clarification there, the gas that you're capturing now, you know, we think about shale gas, shale gas declines over time. Does the gas that you're capturing now, does it have a base decline rate?

Cadence the way to think about it just are we doing 580 <unk>.

You're targeting to sort of run rate right. So it should just fluctuate around that a little bit.

And you know this year, we had a lot of capital to build up from call. It. The 555 for the 580 next year. So once we're back to that maintenance production of 580, that's going to be the driver of the capital declining right.

Speaker 12: I'm gonna speak one more in, I'm sorry, but for some of us who have followed you for a while, you're coming, I think you've highlighted in the fourth year of your maintenance of production plan. This is a concentrated plan, a specific area. When you start, expect to start unlocking the other inventory in your portfolio and then start spending some of the mid-stream capex I was associated with that.

Okay, I'm going to sneak one more in I'm sorry, but.

You know for some of those who have followed you for a while you're coming I think you've highlighted in the fourth year of your maintenance for production plan.

Ravi Srivastava: Is it pretty flat just trying to get a sense of the opportunities out there? It's a different play altogether, so to speak, I think it's more a function of mining pace and how fast the mine is operating as opposed to the decline from the well itself. Got it, thank you, I appreciate the color.

Did you eat.

This was concentrated on that specific area.

When do you expect to start unlocking the other inventory in your in your portfolio and then start spending some of the midstream capex that was associated with that.

Speaker 4: Yeah, we're still a few years out from needing non-lock anything. We still have a nice chunk of South West BAA to develop. I think you can see in the program, we are lacing in kind of a CPA Utical well here and there. And as those results become available, we'll highlight those in the materials moving forward. But we're still a few years out from needing any sort of major infrastructure investment in a new area.

Yeah, we're we're still a few years out from noon to unlock everything we still have a nice chunk of southwest VA to develop.

Leo Mariani: The next question comes from Leo Mariani with Roth MKM, please go ahead. Yeah, it's just a quick follow up here on the new tech business, so maybe just kind of looking at this little different way, so we think about the $75 to $100 million, you know, of new tech for cash flow, you know, next year. Is that sort of contractually kind of underpinned, you know, for you folks, are you selling, you know, these credits kind of on a long term basis and maybe that volume and this sort of price is kind of locked in or is this maybe just more, you know, your own internal production of what you expect for next year.

You can see in the program, we are leasing and kind of a CPA Utica well here and there, but as those results become available we'll highlight those materials moving forward.

A few years out from any of these sort of major infrastructure investment in a new area.

Okay. Thanks, guys.

Speaker 1: This concludes our question and answer your session. I would like to turn the conference back over to Tyler Lewis for an closing remarks.

This concludes our question and answer session I would like to turn the conference back over to Tyler Lewis for any closing remarks.

Speaker 2: Thank you everyone for joining this morning and thank you for your interest in CNX. Please feel free to reach out if anyone might have any additional questions.

Great. Thank you everyone for joining this morning, and thank you for your interest in CNS. Please feel free to reach out if anyone might have any additional questions. Thanks.

Leo Mariani: It's more of an internal production of what we expect there, the pricing to be there is there's there's a mix of long term contracts in certain arenas and then there's certain other programs where the pricing and volume kind of fluctuates in some other arenas. It's a mixed bag of those kind of opportunities, but it's a $75 to $100 million is based on where we see, you know, how the different opportunities kind of shake out. Okay, that's helpful.

Speaker 1: Thank you. The conference has now concluded. You may now disconnect.

Thank you. The conference has now concluded you may now disconnect.

Speaker 13: Don.

[music].

Leo Mariani: And then just on, you know, kind of the remainder of the year, I guess you guys are saying that CapEx and in production are at the higher end here. You know, as I'm looking at kind of year to date, CapEx, you know, for the first three quarters and I look at this right that you've got about $100 million left to spend in 4Q, which is kind of roughly half of what third quarter levels are.

Leo Mariani: So are you seeing just limited operational activity, you know, in the fourth quarter and similar question on the production. I mean, I can get kind of the high end of the guide, but I guess that assumes that production can even come down a little bit and 4Q versus 3Q. I just want to verify that I'm kind of looking at these numbers right that you'd expect like CapEx can be kind of half and 4Q and maybe production tails off a little this quarter.

Leo Mariani: Yeah, that's right. You're going to see a significant delay in CAPEX and what we talked about there during the commentary was the completions team. You know, it's just been so efficient that we pulled basically 11 of the 13 remaining tools in the second half of the year came into Q3. That's also driving kind of the production pump, but if you think about it, basically we got one rig running and, you know, we've kind of had to slow down to almost idle, but frack crew because we've been had a schedule and we don't want to push volumes into this market, given current prices. So we are just way ahead of schedule and you will see a big drop in Q4 cap will next quarter. Okay, no, that's very helpful guys.

Leo Mariani: And then just on the production, just to follow up there. So if I look at third quarter production, I mean, it looks like it's around a 570 BCF annual run rate and three cute, a little bit lower than your 24 guide of 580, and I guess if, you know, productions coming down slightly here in fourth quarter. You know, what's that kind of plan? Is there a plan for early 24 where you could just make it up, but you're you're wrapping up activity on January 1st to try to get those volumes up to that 580, the level, is that kind of the high level operating plan here to kind of get back after it right when the year turns.

Leo Mariani: And so think about the operating plan, if you mentioned, we have a continuous drilling program ongoing, right, and it's really just timing on the fracks. Fracks is kind of the biggest spend on the DNC side. So right now we slow down the completion activity because we're at a schedule and, you know, next year, the 580 is going to come and go for the year. I mean, we're not providing specific volume guidance quarter by quarter, but the way to think about it now is we've mentioned before we're trying to get to kind of this 1.5 9 1 6 run rate. Where we're at and that's where you should roughly expect to see volumes through next year. Okay, thanks guys.

Michael Delia: The next question comes from Michael Delia with evens. Please go ahead. Yeah, hi, morning, just had the one on the new tech, trying to understand the revenue generation there. Most of the revenues are, I guess, maybe all the revenues be are they generated with the alternative energy credits associated with the power plant, or are there any other credits that you are able to generate by abating the. Yeah, nothing. So this is right.

Michael Delia: The year opportunity that we're pursuing their combination of volunteering compliance assets, compliance utility programs and AEPs. So there's there's there's more to that and then we expect to add forestry carbon credits and wetland mitigation. A lot of other years to it. So there's it's not just coming from one source that we have like pathways into multiple opportunities.

Michael Delia: Okay, and are you sharing any of those credits with anybody else or is it solely CNX that is getting those credit to this point. I mean, those credits are monetized. Not we're not consuming them as far as I don't understand the question. Sorry, I just want to know if you are. You're the only one abating. Methane. Yeah. Right, if you're asking who the like, there's only working one working interest partner in the projects. Got it.

Ravi Srivastava: Okay, very good. Like you've sold some production, they're sold some assets. I assume there was some production associated with that. You say what, what that was for the 19 million that you generate and asset sales for the corner. You know, the bulk of that selling spare parts. You know, again, we we really do you guys we have a deep inventory of leases throughout Appalachian. For the point now where folks come to us for a lot of unit fill in, so we're able to monetize some of this non-core assets acreage at pre attractive prices and we saw an upsurge of that in Q3.

Ravi Srivastava: So it wasn't production related. We did have the second part of the clothes on our assets fail for the non-up sale we did, but that was about 3 million of the 19. The bulk of that is just from selling. Someone from our deep inventory of leases.

Unknown Executive: That was good. Okay.

Unknown Executive: And just last month for me, I wondered any insight on what you think go well cost might look like for 24 relative to where they were this year. Yeah, I think if you're after about sort of oil field services inflation thing like that, we're modeling everything to be pretty flat. You know, we expect a way down streams going to see some operational efficiencies to improve costs, but we're not modeling or thinking about any sort of major down draft and oil field service costs for next year. Got it.

Unknown Executive: Thank you.

Jacob Roberts: The next question comes from Jacob Roberts with TPH. Please go ahead. Morning. Just back to the be can be can in power facility. I'm curious if you could let us know how to think about the up time of that plan of the run time of that plant relative to power pricing in the region. I mean, that's a peeker plant, right? It runs that's called upon the PJM. Okay, but no no guard rails in terms of what PJ pricing is and when that is on or off.

Jacob Roberts: Yeah, that's all dictated by spark economics, right? Like with the power prices relative to to flowing gas to the plants to turn it on. So it's just a traditional peeker plant. Yeah, nothing unique about it. And then you know relative to that feed gas is CNX, the sole supplier of gas to the plant and then longer term or the were the plant to increase utilization. Can CNX provide that supply in in total? CNX is the sole supplier of gas to that facility at this point in time. There's volumes produced in that field beyond what that plan consumes. Perfect.

Jacob Roberts: Appreciate the time.

John Abbott: The next question comes from John Abbott with Bank of America. Please go ahead. Hey, good morning and thank you for taking our questions. So with the new technology business and the free cash flow guide that you provided here. I mean, how do you think about the potential impact to your credit rate and going forward? Yeah, so we've had those discussions yet. It's not being incorporated. You know, I think they're probably credit guys usually wait for some more quarters on our belt before we give us credit for it. I think the one thing we did want to point out was that it will create some natural tea leveraging even before considering reductions and absolute debt.

John Abbott: Very, very helpful. And then also, again, with the free cash flow outlook that you've provided there, I mean, it doesn't seem like there's any incremental cap-X spend on there. Is there incremental cap-X that we should be thinking about related to new technology guide as relates to co-pay methane abatement in 2024 and 2025? Yeah, on 24-25, we do expect to spend some capital on the new tech group front, but not necessarily on the co-pay methane abatement side of things.

John Abbott: All right, and I guess we'll get further clarity on that probably at year end results here, but any idea in terms of how we should think about other capital for 2024? Yeah, I mean, we'll provide the full guidance breakout when we get to Q1 or sorry, January of 2024, but you usually expect to see everything kind of decline from this year as we make our way towards that 500 million a year. All right, great helpful.

John Abbott: Thank you very much.

Brian Velie: The next question comes from Brian Velie with Capital One Securities. Please go ahead. Good morning, everybody. I really appreciate all the detail on new tech. I have a couple of other questions that maybe you could be able to answer and help me out a little bit. I'm just wondering if you could help me understand how much methane do you capture to earn one of the credits, like a single credit? I'm not sure how to answer that question, but I think what I can tell you is and we've provided details in our CSR and our quarterly updates on we're capturing it on six million tons.

Brian Velie: Let's feel to E of methane in the different programs have different ways off monetizing that. So that's why it's difficult to answer specifically what your question was. Okay, I understand. So it sounds like just different conversion rates depending on the program. And then I guess I probably answered the next question I was going to ask was, you know, what was the credit price that you could sell these credit that that was assumed in the 75 to 100 million budget.

Brian Velie: I'm sorry, three cash flow range for next year, but I assume that those price assumptions vary also by program. That's great. One last question. I'm sorry, I say that one more time. That's why we provided a range and then the expected range based on current market. Perfect. And then last question, this is pretty well, very interesting stuff. I don't know anybody else is talking about this in the EMP space. I assume maybe the way you're able to do this is, you know, your past experience in the coal industry and relationship.

Brian Velie: You have there is that is that a unique strategic advantage that you expect really only you will be able to exploit or is that something you expect other people to kind of follow on and start doing similar things. Yeah, I think it's a combination of both. I think there's other people who can do this, but we have some technology around capturing based methane most effectively. There's still there's some skill that goes into it and we think we have the upper hand. There. Thanks very much for the color. I really appreciate all the details on the tech. All the best.

Nitin Kumar: The next question comes from Nitin Kumar with Mizuho. Please go ahead.

Nitin Kumar: Good morning, guys. Obviously a lot of interest in the new tech and deservedly. So I guess my question is, are the current free cash flows? Are they only from Pennsylvania credits or are you getting anything from other states? And is it all kind of current time or are you monetizing any crude credits from, you know, past activities? So I think I already answered this question where not all the revenue is cutting from Pennsylvania program that you mentioned.

Nitin Kumar: And on the cruel side of things, I think most of these programs where they have a timeline on how much you can accrue. So there's not from previously accrued. It's whatever is permitted by the program. Generally, concurrent. The way to think about it. Yeah. Okay. That's helpful.

Nitin Kumar: And then I guess going back to the regular gas out of things. You know, my question was really around. It seems like you're dropping a little activity. I know you pull some caps into the third quarter. I'm not looking for formal guidance, but there is a pretty, you know, significant step up in production in in 2024 based on the outlook that you've provided. So I'm just curious. Is this, is there any sort of cadence of activity that you expect for 24?

Nitin Kumar: Is it going to be front half faded or back half faded? Just looking at strip and trying to understand how you're planning for the year in double timing? Yeah, I mean, like you mentioned earlier, there's, there's nothing in particular with highlighting, like the quarter quarter cadence. The way to think about it is we do a 580 and we targeted the sort of run rate we're at. So it should just fluctuate around that a little bit.

Nitin Kumar: And you know, in this year, you know, we had a lot of capital to build up from call it the 55 to the 580 next year. So once we're back to that maintenance production of 580, that's going to be the driver of the capital declining, right?

Nitin Kumar: Okay, I'm going to speak one, one more and I'm sorry, but, you know, for some of us who have followed you for a while, you're coming. I think you've highlighted you're in the fourth year of your maintenance of production plan. And this is a concentrated in the specific area. When you start expect to start unlocking the other inventory in your portfolio and then start spending some of the midstream. Capics that was associated with that.

Nitin Kumar: Yeah, we're still a few years out from the non lock anything. We still have a nice chunk of South West be able to develop. We'll highlight those in the materials moving forward, but we're still a few years out from needing any sort of major infrastructure investment in the area.

Unknown Executive: Thanks guys.

Unknown Executive: This concludes our question and answer your session.

Tyler Lewis: I would like to turn the conference back over to Tyler Lewis for an closing remarks. Thank you everyone for joining this morning and thank you for your interest in CNX. Please feel free to reach out if anyone might have any additional questions. Thanks. Thank you.

Unknown Executive: The conference has now concluded.

Unknown Executive: You may now disconnect.