CNX - Earnings call transcript Q3 2018 | CNX Resources Corporation

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Operator

Good morning and welcome to the CNX Resources' Q3 2018 Earnings Conference Call. All participants will be in listen-only mode. After today's presentation, there will be an opportunity to ask questions. Please note, this event is being recorded. I would now like to turn the conference over to Tyler Lewis, VP of Investor Relations. ahead. go Please

Tyler Lewis

good quarter and everybody. to Welcome Thanks, call. morning third conference CNX's Chad, to

which We room President in Officer; Don Officer; have at the Dugan, and includes Rush, and us our Gathering Tim Vice a.m. our our will Midstream. release. Earlier CEO; press consolidates XXX% later of Chad XX Midstream CNXM, President which for Griffith, of we this updated an the Executive have and LP. President dial-in no Chief call CNX separate be X-XXX-XXX-XXXX. website. call to remind our our XX:XX CNX CNXM Today, results a And to today, from as require Vice everyone, To a.m. our Marketing ticker and our results, and than The Financial the President CNX, today third discussing number Partners Chief its Partners, posted issued slide we'll LLC, Operating Nick DeIuliis, of Eastern quarter CNX an have and a presentation morning, reminder, Midstream is end CNX call will CNX earnings they results,

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

and then Q&A. then me call begin for our over the let to and today with by prepared Tim, will turn you, Don Nick, will We call that, by open remarks we With up the Nick. call followed

Nicholas J. DeIuliis

everybody. good and Tyler, morning, Thanks,

so future begin generations. Pittsburgh Pittsburgh that talking for in kind This our the counter this with see what the a a a like and that home City our quarter occurred a as a the happen of whether Western it's all company of community, this event. literally discussing it's tight-knit a few to weekend. hard buddies we'd of like to impacted there here tragic our town who to completely into to family-oriented that's why morning, And the to always And happened it's get the today the extend PA, all and or and been we was take-care-of-our-own been Resources, it's wanted just we a events we something it's What of over by the see in CNX for as with moments and past Saturday region. this about values And company Before families region our condolences performance upon. out built were truly here.

just So, letting on thanks spend for us that. a few seconds

Now, into let's QX the say to that see to and sum opportunities road. shift I the respect all firing team is cylinders. future the I on unfolded to with If basically had we what everything up, looking down would how

a lot efficiencies, evidence costs slide You posted. that. X of we capital slide of driving see We production, to Consistent with the lower. for deck is driving tried the execution they're in summarize scale, economies that that

our increase locked-in prior with we of million to to guidance what range $XXX $XXX You EBITDAX a hedge couple billion of year, book $X.XX the are XXXX was as full-year that to and a for able $XXX the to and consolidated million. million compared all guidance to

see is date is basis, of math that more share pretty our in while EBITDAX the on to of getting EBITDAX for shrinking share cover tie count that's on more and owners. our more our a at expand compelling. I'll you you shares that keeps can the program the of midpoint But last So XXXX, and formula next when expect that's we look October only share our if mentioned just per file to guidance $X.XX XX, based going XXXX. basis our on the repurchase the is opinion, is generate on CNX per we as the I to the here. consolidated share simple it, matters slides. XX-Q of And outstanding just which, growing in the

at decline, that and modest the look in guided quarter, last we production our earnings saw you during If a to call. quarter's we

Most So, quarter. as in we half XX line up expected, turning ended on second of those in the wells. came wells of the

modestly quarter but quarter, the So, up for due for fourth production the declined second to timing, to the also sets year. production to it peak compared

guidance published the our for in during additional XX at And it to the midpoint look to roughly when comes basically of you of XX the XXX.X the XXX.X expect previous production. the guidance total wells the line XXX.X get range Bcfe, so to we to track will year. to on quarter. production bring turned-in-line full-year we've narrowed turned If fourth which wells maintains guidance, That Bcfe,

balance strong NAV us opportunities. continues Our share accretive sheet, to present it some per

XXXX play to This notes. the in in $XX We million savings future a $X year. an to NAV of to interest continue approximately and the brings real per into million We $XXX increases that back interest are us offense our These driving saved our third annual dollars the quarter. million bought expense, looking X% total additional our remaining share. real

X.XX has That's attributable basis. balance sheet with Our trailing to net XX stronger, on been months at debt times. never EBITDAX an

referring as to there our Some times the ratio keep X.X target. leverage people out

get it's More guidance, topsy-turvy on as today, in a times. QX, were I down it's at The because capacity a sheet allocation to ratio bit currently having we that opportunity of a optionality take But creates road. balance capital accurately, above leverage it only advantage capital of. the will now, times, looking and inaccurate to there lot the leverage think below since improve healthy develop. managing a opportunities true, X.X right vary that If adaptability. energy ratio And going be as it X.X today. think world is think I already our allocation upon to our target, down this be to we're based misleading. I And we'd bit that's would level

price. opportunity up allocation provides share capital pretty sums and discounted biggest Slide results. the our compelling some X was think I

and XX numerous On today. already downturn. for on behind in shares others ball, is said and, have that prior total, during and year. calls the we last didn't started E&P X.X was owners the the dilute time, a the additional through XX% equity to third year, Appalachian count but reasons, repurchase past, since eight lose million only program bought front, That's shares quarter our bought then our I've in outstanding. That's company share the back reduction not start main of at meaningful the the are XX.X as October million a a we share effort this back issue to during many several in bad an shares We reason, discipline like CNX the

authorization be and allocator, to to share the And a that's for allocator allocators, NAV company. Second, capital CNX great capital an this of frustration, our capital misinformed grow names conviction a a that We've market in as balance per share all over this undervalued job of the at that's are today, going, opportunity. our is not shares that's we not able that sheet complaint, keep very happier. The that prices that per new we've makes a $XXX strong us a shares happy. that got fact And facts our XX% opportunity. even NAV duo to and a of million were below to us our far makes retire outstanding

checked, producer and, such, Market. is So, this a commodity low-cost the Mr. the day. Last we business as thank time wins you,

Utica Our strong they pays, we PA, $X.XX least, us total Mcfe to per cash and in down and $X.XX volumes, Stacked old-fashioned costs had powerful We higher. well per driven production dry quarter, down we're situate drive dry The control. performance, two in and well. of additional Mcfe core spud last were there. cash cost costs low-cost program focused continues on Southwest those trio; margins deep not performance optimizing and our margins third costs even of more a the to well and Marcellus wells Utica by driving go but

saw You repurchase on We down and the proceeds we to JV during the that pay quarter. debt cash shares. Ohio used the sale Utica closed

continue of our be for distinguished divestitures there's to approach filter We track shortage of share. in the opportunistic and decisions have of a per no opportunities monetizations. record under future We'll NAV and make

there with here wrap CNX the story the to shape old at one-year when comes it like monetization comments taking I'd same anniversary few that's approach culture we about opportunities. the is remarks my a company. So of to new the

nurture the done. that's exactly that challenges I culture and think both company. and build the reboot a thinking, November spin rewards the gave our team to drives that occurred we've The crucial and opportunity to what it's and results for last us

think evident far. so for results quarter I and it's the the from year the in

culture its innovation data-driven Our around into coming challenge-driven a mindset is and own. built

That's over we that, so you demonstrate think Rush Don how for foundation of must and value envelope. And it every about and to work company. constantly the for importantly, we been the where to Most With to work operational been to our the future to push now sit a some business. business execution we're the and in go I the on mindset the for We're the pervasive. focus need to it telling culture heading allocators. streamline board. that And And and the don't idle. now always going We're as of day. the the forward culture these we was executing of our to be. a We and our we the financials detail. turn I'm more shrewd costs continue is do mindset want, results I've sheet the imperative Balance little most look control why constantly We across can where ways to in field. to mindful I We simplify we things bring about way of they're be excited we discuss excellence. capital I've excited. while

Donald W. Rush

and Nick, Thanks, everyone. morning, good

highlights per consolidated and Slide of some This grew debt. we quarter hedge It almost our of to brought bought net Mcfe is X math. back important all financial versus clear significant think benefiting reduced for our cash our the We margins is In We we significantly our We our will times. added cash margins company. on quarter, highlights generated strong shows X.X which share it by outstanding approximately our our from cash to XX XXX% flow. lowered We the Slide execute We Tim per X% $X.XX to stats. our wells really strategy to the leverage cost, quarter. our shortly. We year-over-year. the I costs. are line. ratio our on reduced fronts. EBITDAX And free book lower consolidated ability attributable touch new operating on X of below reemphasize

last understand combined ultimately, it individually as businesses it as intrinsic the our both is earnings on truly both well ways call, continue investors. to we provide our to value. clarity understand mentioned will I to to As And show important to

Moving to slide X.

the third Bcf of basis we Bcf In hedges XXXX. approximately of for are quarter, added through We and XX.X XX% XXXX. hedged out NYMEX hedges, XXX.X

As of of we have NAV focus important to said, our component our hedging per the returns us sheet our strategy. gives approach balance part major opportunity a and efforts and risk-adjusted on share. our an is It's

be like to our liquids, to While slide discussing XXXX volumes see highlight comprised pricing And would you helped expected marketing, quarter, of realizations. are can NGL on X% I strong overall X. in that to the definitely which increase X%

to it difficult that approach comes important a is hedge reason we when This to is volatile. it very as However, have and, NGLs. have are we NGLs taken the to witnessed, note flexible

you have EBITDAX notably, to are $XX and mentioned, updated as our they dry million On going financial compared our change, the Nick can increased allows and Most we to guess predict liquids by we the do and XXXX future. guidance. of us briefly XXXX next slide to of trying base systems guidance guidance. approximately our prices flexibility midstream to wet instead some previous as X, what see adjust Our the asset

capital our Our production keeping and same. the while guidance remains narrowed cost midpoint and XXXX unchanged, range the we E&P

to for Midstream capital due XXXX MLP quarter. CNX consolidated Our increasing its this slightly capital our XXXX guidance increased

into but Tim. improvements, due We accelerated will I'll to and well land and XXXX construction systems With Midstream touch CNXM during to essentially, from projects upsized detail on more over it additional activity made some hand in acquisition, XXXX. the their this that, CNX strategic call, a

Timothy C. Dugan

morning, and very a good We everyone. Don, successful third quarter. Thanks, busy and a had very

through excited to costs. As has we're share driving growth the NAV our operating company before, and in capital well the we've of allocation, how into and said transitioned quality CNX firmly per field show success mode execution is

X% X. decline slide was in XXX out year-over-year we end quarter quarter on the to expect expected call. the activity communicated in on a and quarter-over-quarter increase starting of cadence of the the XX% an The as a I'll second pan how we timing. Now, we discuss was decline as and result about just Bcfe, our Production year the turned-in-line quarter-over-quarter, And minute. and

of left we're bottom of pretty is at that a chart On proud CNX. slide X the

our can last cash XX% you reused of total As major in benefited per were by quarter-over-quarter the driver per-well from fracs. And slide costs X% way, costs. or $X.XX this than $X.XX the Utica right our see, year. water water which significant the just Mcfe fallen have lower decreased cash we by by The reduction Shale the largely costs was our lower Mcfe, chart on The of cash bottom driven another illustrates third production volumes. to quarter the gas per produced dry roughly for production lower total more driven same quarter disposal of as LOE,

our peers. is high-cost give that access usually price they to greater the we which to the Our than firm This other industry-leading advantage a markets, cost major of low fixed is commitments, transport see. and does competitive relative processing peers transportation transportation but uplift feel

advantage this come projects to increasing as expect our clearer additional and become We become burden online to pipeline competitors. an

highlights year. XX track wells XX remainder stated the of Turning year. development to of The the a the our quarter, on in XX. of our slide quarter in for what previously turned in for third line and expect total guidance we turned-in-lines the company we're to reach This

of those quarter compared production the implied in For is to the doing of production math, full-year on about based guidance. midpoint our the XX% growth quarter the fourth you third

recent the are in which that outperforming have steadily strong just significant a is wells. on minute. legacy early from And this we we'll to results turned-in-lines, continue see While more a ramp,

South deep rigs, dry the Marcellus running discussed Southwest four three pad CPA horizontal on last PA area core Utica currently are We our in quarter. one Shaw we Central and in

stacked The Both half expected hole and earlier Southwest turned in to and Richhill spud XX two a on Marcellus with PA potentially second wells pad activity our in in Utica in lessons be should We're pay rigs X and PA Morris developed have will is XXXX. our which moving mode. type production, multi-well Morris Richhill line into running The from wells, region. two to return simultaneous trip To-date, hit Richhill areas benefit Utica pad existing and our are CPA We on flowing of XXE, like top construction learned techniques Majorsville Majorsville November an line flow new the Marcellus yet continues operations. Utica and is deep Southwest pads Central dry of near quickly to efficiencies and is pressure. and pads has to situated applying the in its and the factory curve XXE above field.

Moving XX. on slide to

fields. continue in months As I turned wells in we've over briefly, to the line previous outperform mentioned past several the same the wells

type XXXX and wider proven XX% the Richhill performance slide, result but from repeatable. same. the turned curve example, younger, that from the than Morris among results well compare and far XXXX, story you benefiting For wells type field. the have the spacings, XXXX Richhill the the loadings, turned-in-lines of legacy wells overarching other flowing production on at wells is the are field, wells the can curves, increased in top deployed loadings, Analyst are much on the notice Day proppant of expected materials. EURs materials. latest laid as in how Early top inter-lateral What expected as the spacing, advances wells legacy and you'll see In Analyst are XXXX These Day spacing, are and hitting higher improvements. and are both as higher in cumulative wells is exceeds above stage proppant other new stage expected are shorter from procedures, drawdown Morris the that the from type line and lengths, XXXX to the legacy technical is the technical carefully optimized the of These This Morris XXXX curve. consistently wells strong designed or our in the and that out

bit pads Marcellus development Morris So, all top drill And allow in allocation earlier. of be for blending by for way, stacked designed why in to continues a and to take the return capital expectations is are the priority. these that and to so of Well, is why capital simultaneous we're up year for XXXX. Richhill why our XX% our and important? this make other the pay are of in mentioned the rate expected efficiencies, turned-in-lines approximately confident wells next Richhill like This advantage I operations

of deep in and PA Now, turn Central talk dry XX things happening exciting the Utica. slide about some the let's to

for quarter second pad. the the pad. where and on first three of three the to rig XXXX. on in Due weeks, it line In X delineation past and on capacity, few this prospects our excited in we began expected dry pads. XX the months a the how June Utica. online well slide lateral laterals consistent Those came fourth line efficiency few previewed turned by regarding deep far of we Aikens, drilling efficiency show CPA, late Shaw Gaut, The in Point call, to drilling to we're added and in are the the Bell turned in half charts next we've we in indications seeing As the and results the log early of those come from We're just just in the core laterals, fourth Shaw completed drilling be located takeaway well. Shaw the the wells northeast

demonstrates chart how has relative how can on XXXX. left, have slide, costs comparison. of the days-versus-depth to in drilled much upper quickly the well Gaut a At initial the see improved fallen the On the you bottom drilling

mode ability region return. and and in rate data a with points more these high in development do reach our full more this us it confident to of All make of

Looking get and the compared don't XX, we what rate rest at our on Nick days. can we we the laurels, of in how of now now culture. asked the last the years few slide efficiencies about is, we've highlighted just to changes fact our often and The push the like over gained looks far change early some exciting

As XX several days day to focused XX of days we're of under every process. March, in and company looking on of service XX our seven for currently our across the drilling lateral rig peak spud the job. the speed reached stages hours, Day in averaging reaches partners. a to ways and Marcellus throughout everyone's efficiency back capital the always we've including offsite when completion development a to feet of X,XXX-foot Analyst facet X,XXX new optimize in a new start a from milestones, such, are Since per just we're or frac metrics from These a kind of drilling moving our of organization the TD,

plans front, add have On particularly continued also remote the re-examine and more existing examine designs wellhead pads. going development able we've planning return feet subgrade mitigate on than to our to to average PDP lateral utilized and been and XXX trips to length We've shut-ins, to fracturing forward.

push continue operations. envelope across Now, lastly, of to from the we our a technological all standpoint

result of As also we net the HSE fracture greater excited efficiencies higher of savings be We We're this that non-productive in in will frac of and which implemented. well design to potential year, a very time pressure, will meaningful rate the for reduces per and program first reduce crew drive treatment $XXX,XXX allows $XXX,XXX which when complexity. frac all-electric treating to announced Evolution in last design benefits. turn could up helps half in believe casing about quarter, new next starting cost

that And our latest And driving continually beginning, have sandbox NAV here industry at best apply per tools turn an that And advances at evaluating this to share technology company. like will the of I and make to back disposal growth focus happen. the that, array in of Tyler. I we our we it the are said the on Appalachia. the remains and across we with that can We see

Tyler Lewis

for call Thanks. up please? at time, open the Operator, if can you Q&A this

Operator

Certainly.

ahead. The from with Energy Advisors. Please will go be first question MacCurdy Heikkinen Kevin

Kevin Moreland MacCurdy

LOE guys. Good question cost. room And My Hey. you that to of on amount first increase there the is water is lower of Will forward? roll morning, the repeatability are any reusing?

Nicholas J. DeIuliis

on Well, record that Utica look efforts on deep have highlighted and we've as continue Marcellus, long-term forward. utilize improvement, cost at I put we'll results drive to the continue look for we I'd you the dry and of the costs do our continuous is our track then think for can managing And say the and over our the moving our the at when are and for you there we both that repeatable completions, produced in the and that trends Kevin, room very we additional forth and as water much cash waterfront, improvement. to

Kevin Moreland MacCurdy

on throughout driven the Great. how ethane by NGL quarter, trend and higher year winter? has how and And was recovery of trended the will that maybe this the volumes much throughout that

Chad A. Griffith

floor Kevin. little I'll at of shot Yeah. at processing of had of – Hey, a quarter. recovery we the the this take to that is the Griffith, increased ethane It facilities. hit a was one Chad ethane increase have did we during bit recovery of answer. We and sort a

that's a we barrel a increase with look one-time have ethane, average your was recovered quarter quarter. and weighted it at thing. the ethane So, it to for brought lot because That's probably When optionality down for it ethane. of that of had, we NGL the recovery, sort NGLs going

it We a available to that the what's recover of optimize optionality leave and that we've really capacity best de-ethanization as lot a And it month-to-month economics and to gas we just stream we look in for reject at better and on it the or really basis. have ethane? got Is there, it ethane.

Kevin Moreland MacCurdy

Got you.

in So point? economics the at not recovery of this are favor

Chad A. Griffith

now. right neutral It's It's pretty neutral. really very

almost heat of value barrel or that to equivalent the (XX:XX) recovering the ethane. of content So, ethane exactly a is

Kevin Moreland MacCurdy

Thanks for guys. Great, questions. answering my

Operator

Stewart with ahead. Howard will go Scotia Weil. from question next Please come The Holly

Holly Barrett Stewart

for of provide a latter XQ quarter, first Good into kind us wells morning, to of XQ and your rate us the of the one, kind majority the exit XQ? ramp of Maybe your half of just sense were you brought give could given just an in gentlemen. the on

Timothy C. Dugan

peak majority third then of for don't with wells, see think out I turned-in-lines quarter. this point, in our and coming the rate. I Holly, quality we've think the in exit the Well, laid the But fourth production an year to going of the quarter the the at we're

Donald W. Rush

Correct.

Holly Barrett Stewart

Okay. XXXX in guidance And then for January? Nick, maybe, is plan still the

Nicholas J. DeIuliis

plan Like That's I into opportunities when at. capital we'll bit looking all in that and share reduction we we're drill options highlighted, Yeah. say commentary, that said across the the balances have the QX the all allocation Tim to results got January future the that cover more the out, count we've how looking about for year. that come

Holly Barrett Stewart

Great. of project how couple now, of went right Okay. impacting Nexus pipeline do if about we question Mountaineer Curious utilizing XQ in two service projects your a And the then same capacity and I that you're Xpress, kind on think for side then October. GP&T? guess those into

Chad A. Griffith

for Holly, the question. Thanks,

not our their They turned Nexus greenfield For capacity, into our capacity portion yet only has service. actually started.

full this path we're come into still expecting at time. for which service, really we're waiting to any so, And

for not using is in and so Nexus. us So, yet portion that yet service not we're

So, that yet charge has also demand started us. for not

that capacity And two-piece is been know, think, only we is service. expecting next to in strategically piece, On But was more, that us large, Majorsville for most sort some important the Virginia the came much that Appalachia. and fill of as Majorsville of Mountaineer able that to gas Xpress a the back to have piece by that capacity. reaches that buy we've been using. been And early Southwest of PA not portion piece year. important The the that portion of QX that's find portion to I West you releasing and we're It and project. to we've some

Holly Barrett Stewart

that think we of that for expense Okay. And those line any through kind projects? then with XQ guess impact I should

Chad A. Griffith

already I I that's we provided. guidance think mean, baked the into

Nicholas J. DeIuliis

It's full-year guidance, baked Holly. into the

Holly Barrett Stewart

guys. Great. Okay. Thanks,

Operator

The Welles will Fitzpatrick be SunTrust. with next from question

Welles Fitzpatrick

Good Hey. morning.

Nicholas J. DeIuliis

Welles. Morning,

Welles Fitzpatrick

you but about approach, talk that allowed methodology there's Can I to Are NAV? if about buy – and something the about accretive the obviously, are I try your with NAV-based you expiration in RBL is you to paired the an on you see know no you the buyback. be to – plans Can going mean, talk forward? shares talk so, you to drops? that going use back have you regard? especially going to Can

Donald W. Rush

it think Yeah, we've to the easiest that be similar sure. And is used here explain way approach it'll I to-date. a

using we risk-adjusted ratio outside And as buybacks. we've on, future has weigh our buy current comfortable As do stated, our opportunity of opportunities ceiling. we NAV and balance against of return-based you use share hit the to shares decisions. that make company a the to then capacity below approach And sheet kind per are we back share leverage the

with think, a the as is going hand So opportunistic, I a on forward, being being prudent guess blend see which we've the you'll been I and other patient doing, lot of same coupled that of when appropriate well.

take see advantage future changes to business and we when an go of So, comfortable sheets things in either direction whether ahead or the balance it's opportunity.

Welles Fitzpatrick

could portions or be casing then, about to first acreage talk And your little that as certain something we bit, that you'll are if design you testing Perfect. new across Okay. go see as a forward? that applicable this is we there

Donald W. Rush

as it most deep we our applicable Utica now development. dry being to see Right

Welles Fitzpatrick

Okay.

the to believe Okay. would doing stacked lateral, blended that so And I X,XXX-foot million? for $X.X Perfect. in – $X Am then Does a that that apply that there's that million under take right? quarter I savings?

Timothy C. Dugan

type I'm for the the assumptions referring assuming? wells, curve well costs targeted You're to

Welles Fitzpatrick

Yeah. That's correct.

Nicholas J. DeIuliis

out Utica right $X that But an design about have will put and of below now, that Yeah. million impact on we We're million expect and the completion casing are we quickly Marcellus on new dollars, our approaching drilling more be to this target $XX target. Talking Marcellus. a that. of would and we

Chad A. Griffith

to Yeah. follow... Welles, just

Welles Fitzpatrick

Thanks. Perfect. Okay.

Chad A. Griffith

was a Utica. it a we million about, $XX talked X,XXX-foot ...the lateral the million assuming for $XX.X target

Welles Fitzpatrick

Okay.

Thank perfect. That's you. Okay.

Operator

next The will go Please with and be Panjwani ahead. from Tudor, Pickering Holt. question Sameer

Sameer Panjwani

guys. morning, Good

drop-downs, here potential on about expected is focus a to million opportunities. $XXX You grow to the XXXX. EBITDA potential talked little the I future But bit think monetization by

a can to the any run So, are rate them and near you make where MLP phase heading of within basis today an that update to entering into development just of wouldn't on or sense stands the of retained it where of XXXX kind move if program fit maturity the give future? the us a assets in

Donald W. Rush

Yeah.

to to Day like that were materials in EBITDA whenever sits of that ramp back sort where of going it So, from which the XXXX-type timeframe a posted, million, March, number. was the the some was, walked Analyst through $XXX currently we

of make assets the work and in hard area find in comprised win-win tell that opportunities are sense. we're that stages always can various that CNX you at that, to I So, between trying CNXM, maturity.

to which of once still So, go as one, create you we're I of scenarios. to and in we record figure can very which but these we for searching much order done constantly the what do. in once do get think shown, act ones track it want work in, out do quick ones I we tell our when kind and opportunities we're would win-win progress, on to to has And find if

Sameer Panjwani

Okay. towards And your how have given messaged go-forward allocating on of Great. $X.XX? then, thoughts do wanted XXXX. share, you moderating with think I peers growth forward NAV to in think on buybacks. per just approaching slower focus your already aggressively capital curve more the I the about And growth some get

activity, or rate is and think between kind of helpful rank this I the bit context return kind to some think and opportunity be but the as set a in forward given some you what it mentioned trying the where the D&C of to strip today. buybacks sits of would you Q&A, I how of little referenced just get

Donald W. Rush

Yeah.

different So, few to that pieces question. a

eyes the mean, forward wide I open we're strips. on First,

just in job of attention we're and get I think sure mind not they them drilling we better. good and paying making that with hoping making do decisions it to a and

variables or with constantly are peers our advances, new opportunities per whether inputs the doing. capital that it's and NAV share, what reevaluating technological or the allocation occur, we're Second,

mix So it's a re-ranking going constant forward. as these opportunities we're

Third, other forward backwards, think our to going And capital a and of of hard on these our is an don't output. simply production an process for where We put best XX%, That's use. going and the see one you'll really really focus all The all X%, risk-adjusted just back-solve to circumstances. it's to returns XX%. output. is I none do in lot of to similar

be able drill as returns help a mix that the the the portfolio to on create well. kind I it'll returns of other each pieces So bit, look more mean, we're other via better of our out.

kind constantly of and variables hand-in-hand we're decisions they and them making So screening change. go as

Sameer Panjwani

Thank you. Okay.

Operator

Trotsenko Please from Jane go will with question next ahead. Stifel. The be

Jane Trotsenko

highlights release portfolio, it versus lower production on to press in a the higher relates Utica you that Utica Utica in The your rate your your of you change than see as and Marcellus. assets Marcellus if are of in in assets costs remaining Could morning. Good please the Marcellus? comment competitiveness

Timothy C. Dugan

significant very the right other, Marcellus on. focus with each more is move a you that's We a compete mean, and earlier look Utica. the a Well what really change our significant I forward of is the at Utica on our change, gas. together that very in generate to they're plan But because of dry mover first returns. the maximizes Utica that, rate and development But and We're gas. with well great we of different. Marcellus front-runner, The dry a but play. of the we the we're competitive think, returns, I that wet in they has The rate a development there, But when have the Utica advantage. blend we're both and we're put in now with continuing way

much of we So as take advantage possible. that as

Jane Trotsenko

me on that. just let So, elaborate kind of

PA talk a have Is it Could then highest assets? bit returns is has left what in Virginia West you other returns? Ohio assets, right, Central three terms Utica, little relative and in PA. you just Central and your of the like So, to maybe

Timothy C. Dugan

No.

PA, in Central for same rates I the Southwest In on Central provide the but to stacked-pay Utica Utica. past, different our is place already the Utica, PA, they're really and damp all the as Marcellus of with driver they that Marcellus about of development benefits. the think the Utica provide be assets basis. wells strategy Utica different, a PA increased is will and uplift, blending talked In place takes any wells, existing we've and the of in that they both the critical and provides that type there uplift stacked return all have of for in Marcellus the all in will we returns significant because rates pay

Jane Trotsenko

Okay.

Henry pricing to (XX:XX) on relates in natural saw in-basin realized exposure spot please pricing? The next question on pricing. Hub than that your I gas Okay. gas Got the a in versus to by and the XQ. comment how improvement is improved more it it. pricing much basis Could sold you

Timothy C. Dugan

Sure.

a little we take us from a So, differentiates bit different to our approach FTE, lot of peers.

price. of then we us coming projects moving peers And that's think were other advantage gas here QX, of coming trend local And local benefit our these to like just that in the gas these locally to improved had without of that commitments of have signing And selling And basin, really we that and results the and have lot able our QX, the big for really of projects of into lift of online lowest a price. taking pieces peer coming so... this that the what are in-basin saw in some FTE export up price improving to. group. out our I receive of ultimately online, We any capacity

Jane Trotsenko

spot the And much any spot and a if a Okay. basis basis is sell your gas pricing, you basis? how spot on sold like, of (XX:XX) on

Timothy C. Dugan

month we look what a portfolio see every of spot. of the upon deals, got real-time we a we've of sort in optimize Xst basis, mix market that optimize conditions of based we've of marketplace. deals, book of happening seasonal our and a So And mix got sales term of month and mix we mix really, So right? sort at

Jane Trotsenko

Okay.

much. so you Thank Okay.

Operator

with Sachs. The next go ahead. Please from John Goldman be question will Nelson

John Nelson

one of Good go Nick, Pittsburgh the might out the folks kind who focus you prepared be morning. community. our for also to needs in hoping and Thank remarks afraid taking I'm slide the you X. to on I leverage And little a your of understanding hearts of target. questions. my referenced bit Was on better certainly, condolences text those a

So, in time the be to repurchase you going be particular a of it be or that a words, it I period is comfortable guess of better thinking share something to not ceiling? should for we but leverage folks above would understand to mince program, as trying target, the opportunistic on

Donald W. Rush

Yeah.

of this think a is would of I So different it Don. ways. couple

lot. a just at target. And, of you So a annualized, this question months, asked last we Are XX kind months? really, trailing we next looking going as quarter you look business ratio concern leverage XX this get at

only not XXXX, but XXXX, at XXXX. cash at look look the we We stress-test XXXX, it. but So forward strips, we

low-cost So really comfort allow that on book, have it's a allows us us of unfold. coupled cost this our where to strategy to blend with assets sit kind position and curve a hedge

of doesn't in sense together. as much make all isolation quite any the So, taking pieces as do they

opposed all So ceiling, the we more think X.X and measurement. really as snapshot-point-in-time times is about X.X times a much to dynamic but that a encompassing how is

John Nelson

So the it a ceiling maybe forward X.X times that? interpret on to could is way be more expectation

Donald W. Rush

We today. position bought weren't at QX, QX and in we shares we're and back the that at

over a and sight, the of did we we where today and visibility with with line So here had that we at be would clean prudently patiently it we're time confidence.

of blend a ceiling. what hedge viewing of blend looks it's a position forward. So a it our as going like It's

the factors kind of blend stress-test viability business. a of that the say, all of it's, really a so And

of accretive a sheet, that balance ceiling is strong NAV of at to is share uses. pieces our it, per that to with comfortable that a strong a kind feel And you roll but for it's we have So bunch using linear then the way other in X.X ensuring one if answer of a a opportunistic kind times yes, look business. encompassed capacity

John Nelson

just line takeaway you what interpret sure not or be think of should mince trying kind just of signaling to kind really that go item that over down to I of that Is again, the And from should adaptability how word? Okay. on there. really that wasn't words, kind clear the wasn't time,

Nicholas J. DeIuliis

in ratio John, This price was to And pricing, with EUR this conditions equal, to out ratio, CNX the ability to what being this leverage or be balance and and as stock. is be only could part respect sheet change. is could then that being doing, be guidance all is referencing changes of looking X.XX forward so our going this mentioning with our EBITDAX Nick. be The put could because adaptability at things improvements, QX the leverage lower. share at that of move QX we quickly

these about. then the ability the it's to in ratio speaks just to and leverage position external cash specifically that move as extraneous where quickly our adaptability in flow Don's assumptions ramp and change. talking the coupled with puts QX, being So, us And at, internal

Donald W. Rush

us time to add And, to that gives position really to adapt. too, Yeah. the hedge

us if things So, change doesn't it change, for next quarter.

gives a modify with gas circumstances we the that to runway future fit book in We have a as see for prices. us hedge

So circumstances time us. gives it to adapt change us around as

John Nelson

me. figure of then it And And incremental an one expectation million of but period just that to authorized, clarification. for helpful kind was board really the there has is that on to last time $XXX That's know program open-ended able you expect on horizon all I just time targeted? color how an over it, The that? any complete what be

Donald W. Rush

use. of now, I to have for a it's think that tool to we've kind be just to in tool we'll going a been while constantly box talking our as

pointing parcel way to the the and we as part and view of of run kind we business ultimately, just horizons So, the time is run a unnecessary. We it company.

decision part to if us always just will we be ongoing it's our use of making So that there for choose.

John Nelson

again. on. else somebody Thanks let I'll hop Great.

Operator

turn would Tyler this to gentlemen, session. Ladies over I remarks. any Lewis like concludes closing and our to back for question-and-answer conference the

Tyler Lewis

forward morning. Chad, Thanks, look Great. everyone, speaking thank We with and again for next to you, you. this you Thank joining us quarter.

Operator

for has now conference Thank attending The concluded. presentation. you today's

disconnect. now may You

CNX Resources (CNX) 30 Oct 182018 Q3 Earnings call transcript