CNX Resources(US:CNX)2025-04-24 18:36Financial Performance - CNX reported a net loss of $198 million, or loss per diluted share of $1.34, for Q1 2025, compared to net income of $7 million, or earnings per diluted share of $0.04, for Q1 2024[163]. - Total revenue for Q1 2025 was $82 million, a decrease from $384 million in Q1 2024, with sales of natural gas, NGL, and oil, including cash settlements, amounting to $441 million, up from $381 million[166]. - An unrealized loss on commodity derivative instruments of $418 million was recorded in Q1 2025, compared to a loss of $47 million in Q1 2024[164]. - Natural gas, NGL, and oil production costs for Q1 2025 were $247 million, slightly up from $237 million in Q1 2024[166]. - The natural gas, NGL, and oil production margin for Q1 2025 was $194 million, compared to $144 million in Q1 2024, reflecting an increase in profitability[167]. - The Other Segment incurred a loss before income tax of $486 million for Q1 2025, compared to a loss of $155 million in Q1 2024, primarily due to an unrealized loss on commodity derivatives of $418 million, up from $47 million in the prior year[190][192]. - The effective income tax rate for Q1 2025 was 27.5%, compared to (8.4)% in Q1 2024, indicating a significant change in tax benefit[211]. Sales and Production Volumes - The total sales volumes increased by 7.4 Bcfe to 147.8 Bcfe in Q1 2025, primarily due to the Apex Transaction and increased NGL sales volumes[168]. - Total Shale sales volumes increased by 7.6 Bcf to 138.4 Bcf in Q1 2025, compared to 130.8 Bcf in Q1 2024, driven by the Apex Transaction and increased ethane recoveries[176]. - Production volumes for Q1 2025 were 147.8 Bcfe, with full-year expectations between 605.0 Bcfe and 620.0 Bcfe[219]. Segment Performance - The Shale segment reported earnings before income tax of $215 million for Q1 2025, compared to $161 million for Q1 2024[174]. - Natural gas, NGLs, and oil/condensate revenue for the Shale segment increased to $508 million in Q1 2025 from $292 million in Q1 2024, a $216 million increase driven by a 73.8% rise in average gas sales price and a 5.8% increase in total sales volumes[176]. - The CBM segment reported a loss before income tax of $2 million for Q1 2025, compared to a nominal loss in Q1 2024[183]. - For the three months ended March 31, 2025, the CBM segment reported natural gas revenue of $43 million, a $10 million increase from $33 million in the same period of 2024, driven by a 33.8% increase in average sales price despite a 2.1% decrease in sales volumes[184]. Costs and Expenses - Total operating costs and expenses for the Shale segment were $207 million in Q1 2025, up from $198 million in Q1 2024, with lease operating expenses rising to $17 million[178]. - Total operating costs and expenses for the CBM segment rose to $38 million in Q1 2025 from $37 million in Q1 2024, with lease operating expenses increasing to $6 million from $5 million due to higher well tending and maintenance costs[186]. - Total SG&A costs rose to $39 million in Q1 2025 from $38 million in Q1 2024, with long-term equity-based compensation increasing by 28.6% due to more equity awards[199]. Cash Flow and Capital Expenditures - Cash provided by operating activities increased by $31 million to $216 million in Q1 2025, while cash used in investing activities rose significantly by $474 million to $(634) million[218]. - Capital expenditures for Q1 2025 were $131 million, with full-year expectations ranging between $450 million to $500 million[219]. - The company reported a net gain on asset sales of $10 million for the three months ended March 31, 2025, compared to a net loss of $20 million in Q1 2024[207]. Debt and Equity - Total debt as of March 31, 2025, was $2,691 million, including a current portion of long-term debt of $328 million[223]. - CNX had total equity of $3,771 million at March 31, 2025, compared to $4,098 million at December 31, 2024[226]. - The company repurchased $125 million of its common stock on the open market during the three months ended March 31, 2025[223]. Market and Regulatory Risks - Inflationary pressures, particularly related to steel, diesel fuel, and labor, continue to pose risks to CNX's financial position[160]. - Environmental regulations may increase costs and introduce uncertainties that could adversely impact the natural gas market, leading to potential short and long-term liabilities[232]. - Changes in federal or state tax laws focused on natural gas exploration and development could negatively affect CNX's financial position and profitability[232]. - Cybersecurity incidents targeting data systems could materially adversely affect CNX's business and financial condition[232]. Strategic Initiatives - CNX is committed to improving operational efficiency to mitigate potential cost increases from inflation[160]. - The company completed the acquisition of Apex Energy II, LLC, expanding its shale undeveloped leasehold in central Pennsylvania[162]. - CNX's hedged gas volumes include a combination of NYMEX financial hedges, index financial hedges, and physical fixed price sales[161].