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CNX Resources Corp (CNX) Q1 2024 Earnings Call Transcript Highlights: Strategic Insights and ...

GuruFocus Research
·2-min read

  • Revenue: Detailed in the 1Q 2024 earnings release and supplemental information.

  • Net Income: Figures available in the first quarter financial statements.

  • Earnings Per Share (EPS): Data provided in the detailed earnings release.

  • Free Cash Flow: Information included in the quarterly financial statements.

Release Date: April 25, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Q & A Highlights

Q: Can you quantify the potential cash flow generation of the new ventures in OFS and alternative fuels, and detail the timing of these ventures generating cash flow? A: (Ravi Srivastava - CNX Resources Corp - President - New Technologies) Our free cash flow guidance for 2024 remains at $75 million a year from the new tech business group. The significant commercial opportunities will start to form towards the end of 2024 and have a more meaningful impact in 2025 and 2026.

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Q: How are you thinking about allocating free cash flow between buybacks and debt reduction going forward? A: (Alan Shepard - CNX Resources Corp - Chief Financial Officer) We maintain flexibility in our approach, aiming to keep debt flat or declining. We continue to see opportunities for buybacks, especially when stock prices are favorable.

Q: Could you elaborate on the physical mechanisms of the new tech businesses, particularly the proprietary devices involved? A: (Ravi Srivastava - CNX Resources Corp - President - New Technologies) Our technology combines various functions like pressure management and sand removal into one automated piece of equipment, reducing environmental impact and operational costs. It also harnesses geomatic energy from high-pressure reservoirs to manufacture CNG and LNG efficiently.

Q: What are the capital needs for these new technologies? A: (Ravi Srivastava - CNX Resources Corp - President - New Technologies) The capital requirements for these new solutions are very low compared to our E&P program, with no incremental capital planned for 2024.

Q: Can you discuss the decision behind the activity curtailments and the potential for further reductions? A: (Ravi Srivastava - CNX Resources Corp - President - New Technologies) We are currently sticking to our guidance with 11 deferrals. Decisions on well operations are coordinated closely with operational teams to optimize free cash flow.

Q: What is the outlook for the preliminary 2025 activity levels and the price outlook needed to trigger additional investments? A: (Ravi Srivastava - CNX Resources Corp - President - New Technologies) The 2025 plan reflects the shifting of 11 deferred wells into early next year. We will monitor pricing and other factors over the summer to firm up plans for 2025.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.