CNX - Earnings call transcript Q1 2020 | CNX Resources Corporation

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Operator

Good day and welcome to CNX Resources First Quarter 2020 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] Please note, today’s event is being recorded. I would now like to turn the conference over to Tyler Lewis, Vice President of Investor Relations. Please, go ahead, sir.

Tyler Lewis

morning good and you to everybody. Thank CNX’s to first quarter call. conference Welcome

on and Chief We Don Nick DeIuliis, Financial Rush, call our today, Executive Griffith, Executive have President Chad President Officer; Operating Officer. the Vice President and Chief and Vice our our and CEO;

Gathering press posted To includes Today, we Midstream have and number for CNX remind this Partners, Partners from XX.XX ticker consolidates XX:XX will CNXM, results, issued which have everyone, of call Midstream call our our slide the presentation CNXM earnings CNX, the results and to first CNX a a and a.m. will will than updated X-XXX-XXX-XXXX. separate call quarter they us The today, to XXX% LP. later which release results require CNX be morning, a.m. we discussing CNX an reminder, dial-in at LLC, our is website. Eastern as its an end Earlier no

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

by and call prepared call and our will Nick, for We then Don begin remarks Q&A. by then we followed up will today the with Chad open

let that, Nick. me With turn the you, call to over

Nick DeIuliis

call consider X changed the were joining world the the And our back that your April virus just to Hope at it. on are managing how to the we you in families us. we and come well all virus and here Thanks, not as for much Tyler. quarterly the January Thank of of of morning, think months. Good the institutions end doing last challenges end speaking short at it’s everyone. hard has sit where with and that

which our time. already driven. that are remarkable. in I team They our it’s they times, of and company to these resilient, a during We industry this lot have a responded confirmed The creative, believed unprecedented our learned we about think lot, short way our team, nothing has are

field through gas Our they sustaining during want another relies in the society our natural minutes level beat. never outset, game answered and the that of citizens and to times life frontline Similarly, on team. And time. call fellow like essential the just and provide economy They our team to healthy keep the remote missed to on scenario flowing say word and on I all frontlines how a seamlessly keep take there, and businesses and these. to the us team I welcomed the producing out to to and of a other all to also corporate crisis. to our taken of a this and operations we safe who the proud work few tremendously team our our doing employees thank behalf the notch at transitioned and the am thanks continue support best their top have are they of essential monikers

you. thank So,

I highlights. posted the to morning. going through Slide this am the slide to We start I in going refer we with that key deck. going X some deck of the am to start

the times. we free across a the that optimizing they going places financial tool our are cash flow generate single right to cash To X they X about of additional Slide per simple, disposal. on that placed that CNX at and NAV important on from. crucial. generate highlights the companies items will the at the is consolidated is are biggest Slide think points basis flow share right I points and our long-term much we have discuss Those flow are to then we that that in but do we

focus things: right places NAV three then and to on times free during the allocate at count. So flow share, we the flow generate per that those and cash cash do

have We a that Midstream free succeed. a CNX our in cash are CNX going are flow and demonstrates going year-out. providing to owners X-year position morning, placed to multiyear to plan we And are generate this year-in,

Slide important or positive, up. of extensive piece Slide puzzle, is is standing shows back because it it business X, actions that’s functioning a another is the approach a not of pretty CNX it There just the to behind dataset it issues business leading on X of CNX lines, model. number that E&P executed front core. in investing we now. streamlined non-core been transactions was in what shows of our was divesting surrounding sometime what and for a has and a strategic of lot We where accomplishments

to We wary a frac of programmatically spend fleets. electric adopt Day balance flows very would onerous years, take-or-pay, for were We that hobble hedging have paid committing from was necessity reduced has cash X and like overhead first that We it the in-basin been significantly long-term We sheet. too technology FTE were our before late. to off. or

midstream been have now. cost the and control being obsessing but on de-leveraging some for of been years for low of now. a last realized And least, debt retaining reducing not We of time assets. our have producer number We importance strategic a we

action. discuss Don Slide early items to on QX in are a been couple for them and approach of few X now. minutes. a active I mention to shows many QX. and Chad There and going have how are X lot just want on it keeping Slide But QX QX in our of

be great positive next few shows CNX of flow million prelude anticipate tune years. First I we and X cash Slide to important, this. free in for the going QX things in and think was $XXX to come the most that’s to

a the cash approach mentioned, just our which drove of manifest of which QX, into free things, I all lot action. flow for many in what Now of

was have rate. rates interest as project Another key where $XXX X our financing, at a a we Cardinal the the evidenced markets States with accomplishment quarter in very at attractive on capital to million raised X.X% Slide ability gathering

call you earnings and challenging a prior our saw this in environment despite secured financing project about talked deal We overall. really

a show our of occupies capital depth the that’s and the us operate commodity it on free in to base chance within. gave shows strong abilities that also that allocation asset retired business of in be summarized QX bargain a Slide competitive cash down free valuations flow position we our market almost from value. to think This X. can when discount how intrinsic $XX is cash par. flow pricing million it or powerful chaotic significant and XXXX cycles show in market We notes short-term times disconnect I

want turn things to Chad, Don I Before on I hit to did items. two over and

This to flow company to slide. this Today, are result at approach items rollout three is Slide of listed its the I am For a Midstream. at bottom half you we the action. first, look both back ask the plan. that and business CNX going take shows the flip of free X-year cash specifically to and in on X of power plan CNX consolidated across a focus this and key The the

essence Now, we per allocate we our drive and that NAV able of the are effectively to is share how how capital.

And just look X-year goes a it. notes couple the into the before quick on deeper of team

average flow two And true we generate next and expect substantial year of free of per generate CNX $XXX year flow that cash million generate for of where $XXX in flow the we free when and free year billion million CNX over X that’s to look cash cumulatively flow. true true next across cash XXXX beyond is flow, we certainly and for are That’s front Midstream, for that’s $X where each XXXX, year First, cash they free to we free $XXX the XXXX, of where on generators generate expect cash true to the million plan. of expect years. the to and X-year every companies

plan CapEx point, and plan de-levers to activity over onward. year That substantially requires has the as plan X already $XXX ‘XX in but you to been modest of to XXXX manageable rest has it. consolidated only maintenance It’s years going This a know, balance phase XX Another this progress a to sheet. very our and million about in and beyond, it’s very for and achieve. tied each production TILs continue

in Central modest inventory. virtually Pennsylvania of at Southwest point, PA Another Utica least in Marcellus pace plan this that leaves plenty our key untouched and inventory, our

core of to gas when it to rally in we If interim, pricing. prices forward up natural at X-year end So, last, the and is is there the choose. be plan the inventory throttle is the plan. And ability the comes to gas based strip reality the when the going extensive of on if

of of sort are into that much slide calls these a the X-year in the information team a cliff that again notes in and plan it. much to going the in few minutes So, of more go is detail

And I on second and metrics. across XX different towards on basically deck the the the is pops all want and uniquely differentiation last starts how end slides. kinds The to is summarized upon the Slide that’s in chapter touch different. It back and the positioned CNX of and thing out beyond think I of

we and the protected the hedged cycle. most are First, most this in down

on XX. summarized that see Slide can You

next and to That going sheet, go not Slide the is counting leading they particularly I Slide strong, also illustrate free its $X our X summarized flow billion debt-like sheet over and when are basin The our costs, you again on especially balance you mentioned It’s XX. midstream control that recognize If business we when strength. the very XX, cash is next balance but that just FTE debt, onerous Slides to years. of stronger only XX. get XX cash in over with obligations. projected We one,

think us free flow generation flow industries just of year-in that just year-out point Appalachian for but cash we delivers you for that all CNX to last such industrials, E&P, the other utilities impressive yields as within highlight I consumer XX. impressive staples. then compare on cash and And and and and very E&P free when not Impressive Slide not impressive it

and more in a allocation show investors that is those think opportunity E&P investors. how yields some ways capital for cash investment beyond is firm traditional a than energy an of CNX great CNX firm I

is I things details. to operational of over Now go going am the with over Chad to who that, going to some turn

Chad Griffith

the with that $XX project billion The our and during financing to Cardinal commitment the the that update start bank commitments the his facility at States first remarks. Okay. driven reduction monetization plan I quarter was of revolving the at XXXX section. level. highlights Thanks credit million the $X.X re-determination following discussed XX of from am QX completed $X.X end on Nick. million, the same the by hedge we prior of Slide Nick spring going

two the price and this level for transactions The RBL the liquidity was maintaining predetermined of favorably company. bank plenty lower despite decks at

we with provide additional then of COVID-XX detail we adjusting being simultaneously I of gas by some and OPEC as those the a shocks: through a became days as events. our day-to-day global secondly, flooding re-determination, generational war, to are result price a and the business how began As first, major the oil Russia two will space and work final pandemic. the hit was oil market two

seriously. First, we very took the our and safety of health workers

region the ensure staff similar employees to quickly providers send closely we in developed businesses worked first our have recommendation CDC to the protocols. of to its minimizing risk response service to roles one home. of perform And with continue are protocol We the broad adoption to work with our very field while their from central office line in and could contagion ensure

continue to And We to working closely. will can situation all and we normal. hopefully soon, way back monitor begin the our recommendations

strength as continue of of we in as flood we are we in into during decline natural to The will markets. oil lot are gas crisis. remain close activity a gas the we for oil of return oil to oil us, and refined But collapse question which a many for always, decline, coming drop strong for and low, be wells into to way work gas keeping associated and will our As lower very this seen eye and winter much If summer, not patch winter out on oil gas of put also prices. biggest but has with commodity to activity. in the existing to fuels expect rapidly is shut and rig the prices the how prices much that rally the XXXX. clearly replaced due flow tremendous in associated sudden pressure the this in Rig demand is activity, And market the types frac on good price. crews have and dropping

we expect On be pressured over again associated and oil oil of other wells the turned if back next gas few these is be as forced from then to prices the months producers to system oil shut immediately and are to hand, are out disappear when but it the we would stronger storage crisis. gas the full online now, come

present soon processing opportunity. would way are Ordinarily, Regardless group. shale believe typical and frontloaded justify plays prime peer in cash dynamics in on condensate to more increase as with would well the pricing profile the we just of do to aren’t XXXX. and cash But how curve one it production candidates to order that of higher it to make value winning. with are unique their turn any to winter shaping to flow. and its our and have expect CNX’s volatility maximize by But dramatically plan. current production that NGLs we in our out, which Slide during NAV. extreme of costs is current of to XX due its so The flow also near-term new profiles that gas well prices ability amongst flow production apply price plans in higher winter to for so are. and as production certain this this we steep a extreme illustrates could and our enough the it prices that due the summer brand to Wet or between wells We spread the is operating ready flow more

XX and lower market. of shape live range. and our we XXXX other If be have as captured would back to field to that we Slide pads to of low low we turning and that The and prices outcomes if full Shirley-Pennsboro production of illustrates on production the X into materially, reflected delaying changing our delaying the production winter improve new is But late assumes wet in the end the expect flexibility fall. summer guidance production XXXX high we into XXXX, our our continually both range assess that production range. guidance from in retained gas the case were we reaccelerate until end hand, potential the

months that However, and conditions. for production the NGL production assuming in X are work through wet worst as the X from high condensate to our we even case, areas some we of partially market delayed

have Slide The the issues XX NGLs. for the also some oil price highlights and condensate. situation for NGLs oil impacts of of the impaired

recovery are we demand resolve quickly, this rated While are storage optimistic that huge itself wildcards. will overhang and

assuming note impacted wet X% dynamic, we have have by very current But approach and bottom Overall, So, our revenue of because ability blend we percentage recovery production. and this to the taken our QX. gas. prices in please wet very that we of into modest of summer assumed of guidance wet for CNX remainder less a by conservative the low production with rock production very portion are that a around XXXX is is

guidance. provides Slide XX more details on our XXXX updated

As expect its already in markets and optimizing our as the we range are profile over discussed, year. within the of fluctuate updated XXXX remainder to commodity production evolve

costs. $XX a the million. slightly are down, increase improved of primarily budget, which reduction free We going flow EBITDAX CNX of a to reducing standalone Midstream cash the our a on also this in we Despite distribution by results as our our capital service to reduction result during expect million morning, announced $XX EBITDAX year.

Slide on up remarks my XX. wrap will I

is midstream has a enterprise. operating CNX’s very build-out strategic part PA in completed valuable CNX the The for company, the development. Our and Southwest company CNXM of Midstream the future massive regions Partners

strong the balance the on Now philosophy intensity that be capital and sheet. stable free flow follows lower commercial they CNXM capital and build from will go-forward that, their out will company CNX allocation similar focused fixed complete, the and agreement. is fee is cash at significantly of maintain

position increased their the their As the cash best-in-class they This by I and million its moving to forward. company financial benefit distribution, announced each will mentioned balance already this its reduction which morning, to sheet quarter. $XX pertaining

will I over to that, hand it With Don.

Don Rush

giving morning, our an plan. start good I near-term on update to management by and would Chad maturity Thanks, everyone. like

and towards as have Slide we a we and we can XX% calendar alone, year. expect one In this maturity we earlier ‘XX XX, Chad million use bonds progress our by this as made XXXX and XXXX our in already to previously, bought approximately amount on to another have within of reduce generate million you Nick And $XXX bonds back outstanding generated million see effectively $XXX year. over $XXX As you tremendous near-term mentioned in heard just of from quarter. the QX to

Slide XX generated XXXX. see, can year net free that our CNX prior cash much maturity shows of you managed changes near-term $XXX debt expected their million using position how And by as end by can easily is protected maturities to flow E&P remaining by be the book our hedge be date. to

set XXXX bond expected Looking cash our are up sheet balance forward, free our until and free really optionality our next the – flow forward. and remains XXXX coupled going ironclad an maturity significant strong cash with are with once our looking liquidity significant XXXX, flow to anticipated forward us. to behind Those consolidated the generation facts, liquidity capability, bonds allocation company isn’t

Slide a using to the XX flow expect and markets to both that move shows debt This cash the balance materially trip. to leverage business E&P with in forward highlights ratios the we place our continue XX current XXXX in be we Slide to improve and starting improving NYMEX recognize space. from strength. E&P the E&P sheet generated are gas debt unique as is

As see the the well we can that our easily are very address market you indicating on trading slide, bonds anticipates could them. XXXX

since leaving move based on are the the in will discussing And and plan. forward. and to plenty note of on I it we go-forward is on plan upside we X-year excitement our Slide of gas CapEx important Starting it our anchoring this costs that that exist prices and numbers as already business achieving, is the is outlook dependable as they XX, begin forward today reality

can into down I want into the and XX. the to of you numbers, I really before on Slide rationale two plan While pieces explain it the see get as break X-year

it protects as reposition that a not for wherewithal commodity said hold. us provides book hedge have a would the also but bridge from the business only downturns, but our acts now that’s the and We us what strip, future lower-for-longer a for while to

hindsight, None our can XXXX investments, benefit coupled in Chad sets that book, regard. by is that million in and significant cash hedge flow infrastructure very project thrive With was and team $XXX to the effective. X our of lower up clearly laid the The we generated current with XXXX, set plan years the X midstream flow to our consolidated are backstopped us our our free prior than of thrive structure, across XXXX. XXXX cost of strip has financing, and produce there and peers has in near-term us already gas that $X.XX cash claim free and today. beyond in of up make out that control out

So spend XXXX. time on to I want

ready that – making that of As slide we higher, you much unique we free I we it there can out gas Bcfe XXX are There out produce have XX, produce is million prices gas consolidated making lot $XXX in XXXX can easily million cash of and show. movement have get XXXX. it not that flow a better. and $XXX And setting price optimism more see free cash the can any in more on are us if still that tell to flow ends well up profile is of conservative production the volumes laid we year and you the for XXXX being and than we a reality, extremely increase moves if prices on our XXXX Slide up are can and to XXXX that

serve maintain we cycle. profile, type Now and the that optionality price ability significant up-gas us produce That or to cycle cash into current going always of flow the price will free business forward. our down-gas well will has an matured production

beyond, story. really the XXXX simple very our a looking out business Now, and becomes

don’t XX other into. XX, As tackle our we can a any we pace grow structure cost the areas see dropped, and intensity cost large don’t begin expiring our capital and Slides methodically FTE under we have have of or on average wells cash We burdens fixed core Basically, strip. acres dictating to to produced debt on and and don’t issues obligations you inventory to XX development year at have of flow our significant free pace. a around harvest

averaged $X.XX And $XXX it million And today. am prices plan. numbers $X exist as as than Cash even see equity the repeating, that too the business And to models gas gas are industry. on to we I the as with strip forward is over projections flow gas year burned strip. to the go can shows, It’s cash which flow And and XX, in they worth why companies on feel to the prices and based a strategy. free under make E&P you about more times as to if it’s equity markets long-term, Slide neutral are Most say been this forwards struggling again current going we range, are prices do. neutral debt, do at flow get that business create back is space private slide the are skittish $X.XX the past. will gas the mirrors, our cash a not many more sense least They smoke say free $X have in the grow the these larger.

debt of refinance then breakeven goal strategy. a to opening is to continuing breakeven, Our not and

pay use to long-term will If that. their fund lost, over only already running companies, and prices are pay that companies their own which own are debtholders’ leaseholders, E&P we rise you if forced to money support GP&T interest to feel have why needs, the companies service cash is you to

try would to In replicate. on to like that and expand business is go-forward conclusion, unique today. earlier and on Nick very touched difficult some CNX’s I is points plan

where journey the methodical Our to and get was long, grain. are, we against

yet and proud accomplished what accomplished is We done we best the come. of are and it, that, not we are but to how we have

for team planned thought to And a substantial be own the prediction, the model strong that all XX. need proactive find adapt will nimble sheet solid X rock it. you need built acres, top While need a Slide out of you and a are, you at our flow on you need in NRI you high free Tier cost commodity peers trying and and forward fixed Simply attributes low to with prices, price balance NYMEX has. well need need survive destiny, successful, business changing to put, parts strip, excel a cycle. need you due best-in-class to us the you you structure, cost reasons of gas are is we it now type $X.XX CNX to are are your a low infrastructure, and thinking midstream attributes capitalized to control have can substantial cash which commodity foundation allow that case even a the from to These bottom, CNX what generates in revenue

And a look while current we right. and a world cash environment and production inventory we look free in the development good gas price higher at even strip, flow the will position when with time accelerate even is more better class to generation

mind, successful inventory X come. to have us large for Marcellus it you And allow and is allow upside our over CPA be the do. PA These are characteristics we only the us Our capture Tier haul. in Utica that what long plan a any long acreage E&P our a phenomenal acreage X-year to of time company way Southwest will to can the

generates becoming will All of – that extinct, equity years space in. is capital E&P spend ensures energy for the world in And markets years businesses through where a in private model built this I this our which the to far we remain the dominate peers generate their am money positioned the to their where it to in years is and was looking by business CNX personally and space can world that and where a picky work forward come. only are of hard leader and be future best

projections Slide XX free translates yield. a our cash and for XXXX free flow annual cash to flow

the can our yield it the in you is far yield free our peer cash cash And among mid-cap flow yield by cash remember, period. Appalachian hedge here XXXX group the E&P protected is and flow by shown books. best-in-class free space see, best As best the flow

is in free sheet, balance gas it with relative NYMEX makes any strong higher climbs the of XXXX exceptional a when industry flow forward free our truly share CNX’s cash yield price. line, current remember, current our our cash peers. based couple for our let in strip. the to investment you even into and Going guidance off beyond, mid-XX% And at our range alone Bottom yield flow

box find by investment in protected combination takeaway a up now Slide to XX with best And better of opportunity industry. company standpoint, enormous is the a on any downside of upside. far it right it amount The is relative perfectly. CNX from sums an hard a

will back over Tyler. With that, to I turn it

Tyler Lewis

Great. if Operator, Q&A the could open up line you time? at please, for this

Operator

Instructions] first from Welles will Fitzpatrick today your question with ahead Please [Operator SunTrust. go Our question. come of

Welles Fitzpatrick

getting your Hey, a thanks less multiyear It’s of a It’s more talked lot of for remarks. obviously prices other it worded the bond attractive? be aggressively and prepared of On accelerating, – is or or guide. good morning function is a good that that function XX, prices opportunity guide. of items to Page gas you guys sort a the costs whether

Don Rush

Don. Welles. Yes. This appreciate it, I is

a both. think I it’s combination of

would and that better, things forward, assume roll be of those you yields right, better. As if sorts bond gas prices you are would

incremental along of of the we lines really now, dispatch thinking right accelerate production. some crews So are to the kind do

very to well our So control do. that’s within

future the volatility out, side now and hard is the high is laid cloudy as ever what as of could right Chad or and side the pretty on be as predicting As the meaningful. low it

as So kind wait sit we we mode. here see of are and a today,

have clear winter the on the September if steady how state of I October, We how out it world, of we up if the summer quickly sort have doesn’t a to we or indication to cash some out great depending bullish that it’s going of XXXX side here still opportunity and is a pretty and in play of as for we production we amount shapes or great, ability have in flow think save of turn out. ability And to stay significant be really take sit will to And will longer. the be the of which thesis to produce down really move the that. the just and free have on that advantage to

Welles Fitzpatrick

to choke related minimis? potential you be the Shirley-Pennsboro, back am there correct Okay. if any or that And it of about I de midstream in talked processing are relatively and penalties profile that, XX some sort on will then wells in production assuming on to

Chad Griffith

sort volume Well, well that those that we the find and minimal work in trying solutions some provided those but there Shirley-Pennsboro there numbers volume both we with to we providers are commitments area where commitments modify there win to service in we factored win, into are certainly are they find area. benefit ways the to are guidance of commitments

out there they are there. So those out not are they are huge but

Don Rush

is a it again upstream today capital logical have using now but rational things numbers we to so production some bit the the aren’t as that including exists where go see can in then factored into and just stand your term some through choice. little flow and wait now change in over to decisions it the appendix processing a on great is Chad I there still and those four change decision ability in truly difficult prices strip is economics more force the free sense to is cash of is makes structure other and if wait in right a this the maybe the production, years if ahead some operating it go you next just change it all-in in clear the point conditions swing expenses couple we from of a right it or And like these places of free said and uptick we of the products cash guess prudent that slight of this

Welles Fitzpatrick

that. for Okay makes perfect. That Thank sense. you

Operator

Our Panjwani with next from go Please TPH. comes question ahead your of question. Sameer

Sameer Panjwani

Good morning guys.

debt transitioning CNX is expected flow think about transitioning flow about cumulative to through we a no above a free transition about and so thought the your debt to there change debt what So cumulative see XXXX of business XXXX or or in leverage is be free cash over the the longer this fair to cash maturity when the cash should it think after a to more would models time? do and distribution to profile, on outstanding think you XXXX term CNX

Don Rush

this So Don. is

answer in couple will I So that a parts. of question

it to of I understood think not pretty only known just important our reposition years about it a historically able and be these capital well about cash balance that structure don’t and is apparent to little hedge also do and spaces us for talked think return price a changed. it leverage that a So that think really near historically protection protection posts over one sheet those gas us to bridge were of course allowed little was our and healthy the goal the term think I it was talked I that business flow allow change but again and to quite being environment and couple and this bit books

it to today. forward us call would more we we where into to debt ‘XX sit there think looking need optimal So ‘XX to get and position a allows it structure business our do the over where capital

historically of cash to the So that think goes obviously it to grow flow what taken are capital good XXXX term know which like and to it’s companies from have substantial down have and math for the the mentioned done is to at time we forward have us beyond cash free flow position flow with good used for we best sitting think production we ratio what today to return thing capital part that that health go changed into for invest generate time. in at the up is industry most long have to used allocation for healthy buckets cash free flow should at our that we free free that flow have cash it we and will going we the amount and to sense metrics we acquisitions way somewhat free stay working have land the used balance philosophies used the infrastructure share leverage so to we puzzle cash best that would the cash place hard cash I of the term to pay and the we flow into cash to on free we we a recognized is I we about XXXX the business place would true the it debt in flow here will and time to sheet flow holders follow and and where it comfortable our and ready will putting mix be the the and of

Sameer Panjwani

am talked but is the have leverage like as sorry if And what would I shift the here? helpful. missed in quantify look you remarks goalposts I did That really in prepared you profile about the

Don Rush

Yes.

incremental debt end mean, So, am get it more ‘XX ratio to then that healthier to, mentioned XXXX the X.Xx with in, that more all of use for by tell. of call get ‘XXand something to XXXX but in are and we to to is and different again at it profile, time that back I point, – we maybe on XX dollars conducive they our into clear is we could or once when where leverage of heading goalpost we variables of we in that of gas are is have dropping you XXXX kind half call timeframe. at generating be the optimal who exist I of beyond It’s that’s the talked markets don’t know, that, the you react range, the off hard where again I if right sort that our prices going capital cash it you is as think and free us down they exactly will a year it, somewhere can and Xx call so being something over I into Slide a, hard selective so money trying know flow what and to or figure if and it’s metrics or maybe more of land to clearly you pretty like accordingly to out what below we ‘XX have slide necessary be we pay sorry the as

Sameer Panjwani

And the the of run-rate you time period, maintenance as spending? for decline the the non-D&C program think it. that over and we layout longer also how got trajectory of okay, base term about then should Okay,

Don Rush

Yes, we lay it out a little bit on Slide XX on sort of the non-D&C spending.

see talked about I in be upfront to making going to in our and as cost given lot a really are capital think we of it going our thorough allow systems, in efficiency that could have So, we tried couple call us a of water in the the that clarity our we systems you are that last forward. investments going even positions, to are and we new explaining some years step starting have infrastructure than land more now forward and change transparency and as

you longer in going midstream And meaningfully and the guess be you upstream time. change across stay lower profile base a consolidating maintenance the like forward. both step the production in non-D&C your gets mentioned a So, over of type decline I

the the around that as mid-XXs to into then drop along you the quoted we start to towards XXs we out. part laid plans of the mid-teens will So into head curve and move later

Sameer Panjwani

Got it. Thank you.

Operator

Our with Trotsenko ahead go Stifel. next of question Jane Please comes your question. from

Jane Trotsenko

Good slide, XX, morning I My at think, and comment second and on taking question more to little looking if could questions. this terms is quarter, I thanks completion? wanted on I just for looked in like my CapEx is how going, also is first maybe a get production the you and inside of quarter

Chad Griffith

Sure.

profile, reasons, due the quarter So, for wells currently production not we shut to QX today currently in any in are economic do that the we right. have in, current

we still assessing. something that are is So

prepared we curtailing in at of do right assume call and that. will our production We to a at a beginning looking it as are and looking minimum, commodity exact to X May lasting prices mentioned we we probably X be wet the optimize way I But are months. in that remarks, everyday amount certain in my

if wells. year So that prices be value that If end to later we present value prices further that production deferring at that’s generating will deferring of are looking year flow wells. more the available gas the of start rates we then to higher advantage the where and in continues take – increase cash increasing those steep and present much into the production of that the the to curve steepen even to return of in more of later those continue of

Don Rush

capital a in our fairly think set. sort you standpoint, number of guidance difference consistent the from through it’s about across the as And year, between QX of roll the QX as and QX, the is is And you the so rest consistent fairly year. QX

Jane Trotsenko

me perfect. wells it right? any you That’s like XQ completing to are And guys seems not in

Chad Griffith

the of Well, the upper gas in have crew where crew range and an some really course where spot over will period. continue do steady real production frac consistently comes that’s opportunity a bringing prices have if do to That’s pretty running the the state sort we in run, of the opportunity – we XXXX. we have is of opportunity

Don Rush

that like optimization competed upfront some management and are after kind sort looking production is wells cycle, at on out when flow-back the water it call And that flushed later. go of the into saving really of you we of

program So meaningfully. the we are not really changing capital

seriously the We of system are essential gas Nick’s take the earlier ecosystem operating of smooth to keeping comments part production a is. that we the the business

So we keeping things are rolling.

of shaped the pending around to management trying is better wells trying maximize stays all today. thoughtful timing part flows production pricing to these are margins later and that how the and and flow just We for some it the and wells cash of be saving

Jane Trotsenko

guys does Virginia you may of Utica the term XX% My so in the it. mix is the got going complete over up like well guys are this Marcellus let’s of wells follow more on West can XX% medium Okay term and be and you to plan? say like development envisioned wells about medium like how talk

Chad Griffith

gas over XXXX Really and have between of giving term like we in math and still really are to are at details determined look in look dry of we XX to we limited and slide to we the the mix where is development is gas beyond is return going determined plan as the we we investment. rates XX we year. Utica wells really plan to online we long that our the wells deck look The areas we to going best what the alignment be for for turn at to and are to the focus that D&C going mix best are details really laid really it have sort are for where going what the we online out that the as to do where looks so follow that, the wet at to the far to what is be as turn want right be year of still

Don Rush

is there is Marcellus. Southwest little did need and this this Southwest a bit would for back go that that in you Utica one is done have we the beyond a we if the talked more that next PA for so help the year that to one bit PA year pad And basically we blend a just just bulk around into do funding

inventory little Marcellus But program – but we year Marcellus gas areas Chad volumes. the gas if decade Utica of to PA some that talked as Southwest Utica now of that point are to XX these at Marcellus that that PA in there another have dry call that Slide Ohio Marcellus Southwest half of Southwest our a we Shirley-Penns the to warrant need commentary really PA or do rest on term, Ohio call with last flexibility of extension shifted the prices some bulk over the really plan little this upside Utica no XX in the that show doing from on year of other for so So it bit the Utica over the on of is of in getting of it next blending back is a we said, and end in Utica In PA near that into to that's add pad in it. is highlighted just bulk with just a to a and it CPA of Southwest our we in the plan drive mix the the the we to Southwest TIL life really of lot PA XX,we of in

Jane Trotsenko

price Henry if I may Hub guys to question what accelerate looking in XXXX? for CNX last Slide you XX, The XX% need production would at

Don Rush

Yes.

price. We are an get not going to into exact

gas is how also there's the type what there stone on. questions But is not obviously so really more there – decisions that that opportunities was the there reacting sooner mean push to allocation thesis price think NGL’S that into long $X capital $X so forward get gas set sooner. pretty or clearly a exist out exact I term is money more this a it five these to hedge and one is time, months other D&C of I there opportunity earlier, So attractive reacting if strip production there that at not the the we can so is are we make

hopefully So what’s of we the it – sense just doing generally, a we're appropriate. and follow able to if track record on makes developing are do it pretty math being pretty

Jane Trotsenko

Thank you so much.

Operator

Holly from of your question. Stewart Our Weil. question comes next go Scotia Howard Please with ahead

Holly Stewart

Good assumed follow Jane’s starting you morning to gentlemen. shut-ins? question, of months first can production the to with X off up I quantify May X just that the

Chad Griffith

Are you day? production far speaking as as like per

Holly Stewart

Volumes?

Chad Griffith

fuel subject is are certainly immediate if exactly It and and of of fields paying up there attention lot for and is the have cut. really backing which refinery happening I NGLs primarily deferral wet you at don’t to to be I there you Volumes. sure said condensate function how condensate going virus our is am with the one and in a looking know a what is NGL guys up that this. destruction being really Shirley-Pennsboro play been to we been but as have the of close storage lately with associated prices I the production demand been runs being have NGLs condensate out

and process, and up NGLs is Now them, really hard so condensate you directly it flow really a refinery is storage backing is if can and are stuff lot to rock-bottom. feed flow NGLs up that filling the getting prices of these into the

a that big and to even island. able portfolio places part on an Shirley-Pennsboro, to it’s production gas that one blend we the have. extent the – CNX, those to the wet are of unfortunately, we of is, for lot of sits it our not fortunately So a

like of It’s one be us really those for us be, to gas now. an things producer. to And tough so it’s right all-in example wet sort be place would of it it’s a an like that

Don Rush

little the the a Slide on red call see can part on you looks graph. And XX how of hatched bit it Yes. it

you of a a XXX of that. around want can a you if change, for kind So May, high type like do day ball production it’s it, to

Holly Stewart

thought for back, to if NGL long X just – just talk assuming And then but bring condensate get there, a usually remain volume am months, you Don. how a trying helpful, is that’s that X you shut price about I there low or that to in? prices sense you Okay, where on and

Don Rush

I Yes, in that’s right to the can have company. of thoughtful, follow spent why now the next we predict transparent tried obviously months timeframe to tell several working several again way we the next any laid at I are on impossible have and more months math you guidance. that be the the out just

so A share as businesses. making flow strong the value cash as the the are any longer leverage long-term both capital better, things good, months, we still much what still going per sets strong, still is we to you transparent So near-term several just later, instead ahead save equation it months for if folks next sure of ratios make really couple information looks are strong CNXM to intrinsic just and structure to predict were trying what doesn’t come maximized. not to up term is and have or we to going issues on wanted for the portfolios hold, for it CNX back, the If is long-term like. and back add of matter whenever are for stay go sure solving that will it and business net-net, things the of fundamentals

Holly Stewart

Yes.

XXXX like then the planned then XX a ‘XX, little just still color plan. so And perfect. and XX that TILs guide that’s is your X-year Okay, in maybe on in long-term looks

on plan ‘XX? as rig program that So give about maybe X.X or think that some still a here? reshaped for just how and program that it’s crew us we And can is color X you then a should

Don Rush

I’d say answer middle. in be a it’s but would the generic No, it Yes. I – guess

So are the if good. we to get on to we XXX Bcfe highlighted prices into gas higher want try I think whether it depends that end

previously going have a program to, mean year we kind are in highlighted that growing, XXXX. little I think or you gas had be, XX-well closer to just type we will I bit. I think if grows prices if be And it it, were will a count of just slightly you are likewise muted

to of think kind way that’s So the about the it.

one So, that’s do can approach. either I general It’s a And much to mean those. Chad, to – just a crew. doesn’t you adding take really talk of it frac

Chad Griffith

going gas on on close are – keep prices. commodity That’s right. we to markets eye Depend

got DUC that DUCs, level We and I have got number complete prices sort to was of but spot get in those wells a we inventory, – crew us bring really little of aspects. a have a to online healthy enables a of run advantage strong take very of bit and think quickly them

Holly Stewart

this question maybe big costs looks the one fully swing $X.XX, looks you it that for first what then reduction? look of is burdened a primary just down. I it quarter the Okay, on okay. if on cash at are the driver pretty year, XX longer like that term Slide that mean guide, are And like

Chad Griffith

some all really, of Over remember our from all the can the is There FTE them to we long-term, of you those of date the if way a date rollout back contracts. that. guys begin that to some of number the way acquisition Dominion legacy

were Some those of higher cost.

decline roll And of over that GP&T so decreasing to costs and overall driver to a that’s so of really of big operating operating that those begin time. begin – portion as off that expense

Don Rush

out see will folks we of taking near-term you avoid in the some have expensive through lean as products the flowing we debt with. de-lever And too more refi business of had the to and that’s just expense to have interest that kind

of more like net-net, has operation to cost company well us. and capitalized tremendous they that just we amount GP&T we just capacity have have And the in line systems for today, it, the that the of Chad and operation, but really progress focused conversations day-to-day are help long-term and of we that side call through, pushing So it been obviously team, talked, as item always we on water the efficient remote made management a here. built efficient

So, it’s are the a much going structure of be steady state in kind in areas business a chunky that forward. cost lower allowing just of couple to

Holly Stewart

Thanks guys. helpful. Okay,

Operator

for question-and-answer session. Thank our conclude very The has concluded. you now This today’s everybody attending much presentation. conference will

now disconnect. may You

CNX Resources (CNX) 27 Apr 202020 Q1 Earnings call transcript