CNX Resources Corporation (NYSE:CNX) Q3 2023 Earnings Call Transcript

Zach Parham : Yes, thanks for taking my question. Can you give us a little more color on the trajectory of the free cash flow from New Tech going forward? Do you expect another increase in 4Q? And does that get you to a ’24 run-rate? Or do you expect New Tech free cash flow to kind of continue to ramp through ’24? And then maybe based on what you see now, assuming no more governmental regulations or anything that come in, is that $75 million to $100 million a good run-rate for 2025?

Ravi Srivastava: Good question. What I would say is, I think it’d be easier, it’s better to guide on some of the stuff on an annual basis. There is some seasonality aspects of it that some quarter might be better, some quarter might be worse in terms of how, how it kind of ends up. So we’re going to try and stick to an annual guidance on this until there’s better clarity on how everything shakes out. There’s the different pathways that we’re pursuing, I think we’ll have much better clarity on this in the coming days. But at this point in time, our annual number is what we can best articulate. And, again, like based on the pathways that’s already created, 75 to 100, on an annual basis is something that we have a good line-of-sight on. And the goal for the team would be to continue to grow that in ’25 and beyond.

Zach Parham : Got it. Thanks for that color. I guess just one follow up also on New Tech. I know you mentioned most of the free cash flow at this point is coming from the methane capture and the environmental attributes associated with that. I think most of that’s coming from the Buchanan met coal mine. What’s the future runway on capturing gas there? I guess, do those gas volumes decline overtime? And maybe on the other side of that, are there still gas, is there still gas volumes that are being invented, that you could capture and potentially generate even more credits?

Ravi Srivastava: So I think that’s where some of the, when I talked about an annual guidance on some of these things. Those are some of the uncertainty factors on the mining base and some of their stuff that dictates what the volumes are. But I think there is — as for the runway for the mine, the mine has been operational for decades, and it has been in room for several more decades to go so and we have a capital invest infrastructure in place to continue to do that. So part of the $75 million to $100 million is consistent contingent on capturing that methane, that having a certain mining base that we have seen over the over the last several years. And there’s opportunity to do more beyond that particular mine itself. But that’s not contemplated in 2024.

Zach Parham : Got it. I guess, just one clarification there. The gas that you’re capturing now, we think about shale gas, shale gas declines overtime. Does the gas that you’re capturing now does it have a base decline rate? Is it pretty flat? Just trying to get a sense of, of the opportunities out there?

Ravi Srivastava: It’s a different play all together, so to speak. I think it’s more a function of, of mining pace and how fast the mine is operating as opposed to the decline from the well itself.

Zach Parham : Got it. Thanks, guys. Appreciate the color.

Operator: The next question comes from Leo Mariani with ROTH MKM. Please go ahead.

Leo Mariani : Yeah, just a quick follow up here on the New Tech business. So maybe just kind of looking at it a little different way. So we think about the $75 million to $100 million of New Tech free cash flow next year. Is that sort of contractually kind of underpinned for you folks? Are you selling, these credits kind of on a long-term basis. And maybe that, volume and this sort of price is kind of locked in. Or is this maybe just more, your own internal prediction of what you expect for next year?