CNX Resources(US:CNX)2025-10-30 15:11Financial Performance - CNX reported net income of $202 million, or earnings per diluted share of $1.21, for Q3 2025, compared to net income of $66 million, or earnings per diluted share of $0.37, for Q3 2024[175]. - CNX reported net income of $437 million, or earnings per diluted share of $2.57, for the nine months ended September 30, 2025, compared to $54 million, or $0.32 per diluted share, in 2024[220]. - Earnings before income tax surged to $266 million for the three months ended September 30, 2025, up 220.5% from $83 million in 2024[218]. - The company reported total earnings before income tax of $579 million for the nine months ended September 30, 2025, a substantial increase of 682.4% compared to $74 million in 2024[266]. - The effective income tax rate for the nine months ended September 30, 2025, was 24.5%, down from 26.5% in 2024[266]. Revenue and Sales Volumes - Total revenue for Q3 2025 was $584 million, up from $424 million in Q3 2024, reflecting a significant increase in sales of natural gas, NGL, and oil[178]. - Total revenue and other operating income increased to $1,629 million in 2025 from $1,130 million in 2024[223]. - Sales of natural gas, NGL, and oil, including cash settlements, amounted to $423 million in Q3 2025, compared to $354 million in Q3 2024, indicating a year-over-year growth of approximately 19.5%[178]. - Total sales volumes increased by 67.9 Bcfe to 476.7 Bcfe in 2025, primarily due to the Apex Transaction and new wells being turned-in-line[225]. - Total sales volumes increased by 26.8 Bcfe to 161.3 Bcfe for the three months ended September 30, 2025, compared to 134.5 Bcfe in 2024, primarily due to the Apex Transaction and new wells coming online[179][187]. Production Costs - Natural Gas, NGL and Oil Production Costs for Q3 2025 were $276 million, compared to $237 million in Q3 2024[178]. - Natural gas, NGL, and oil production costs, a non-GAAP measure, amounted to $803 million in 2025, up from $705 million in 2024[224]. - Total operating costs and expenses for the Shale segment were $682 million, an increase from $587 million in the previous year, primarily due to higher lease operating expenses and depreciation costs[234]. - Total operating costs and expenses for the Shale segment were $235 million for the three months ended September 30, 2025, compared to $198 million in 2024, with lease operating expenses rising to $21 million from $12 million[190]. Segment Performance - The Shale segment reported earnings before income tax of $171 million for the three months ended September 30, 2025, compared to $145 million for the same period in 2024[185]. - For the nine months ended September 30, 2025, the Shale segment reported earnings before income tax of $581 million, up from $449 million in the same period of 2024, reflecting an increase of $132 million or 29.4%[229]. - The CBM segment reported a loss before income tax of $5 million for Q3 2025, an improvement from a loss of $9 million in 2024[195]. - The CBM segment reported a loss before income tax of $14 million for the nine months ended September 30, 2025, an improvement from a loss of $18 million in 2024[240]. Acquisitions and Transactions - The company completed the acquisition of Apex Energy II, LLC, expanding its shale undeveloped leasehold in central Pennsylvania[171]. - CNX entered into an agreement to acquire Utica Shale oil and gas rights across approximately 23,000 acres for approximately $50 million, to be paid over three years starting January 2026[172]. - The company completed the Apex Transaction for total cash consideration of approximately $518 million during the nine months ended September 30, 2025[274]. - The net gain on asset sales and abandonments was $68 million for the three months ended September 30, 2025, compared to a net gain of $11 million in the same period of 2024[215]. Hedging and Commodity Instruments - CNX's total hedged natural gas production for Q4 2025 is 121.9 Bcf, with annual gas hedge positions of 484.0 Bcf for 2025 and 441.3 Bcf for 2026[170]. - An unrealized gain on commodity derivative instruments of $110 million was included in Q3 2025 earnings, contrasting with an unrealized loss of $6 million in Q3 2024[176]. - The company recorded an unrealized gain on commodity derivative instruments of $148 million for the nine months ended September 30, 2025, contrasting with a loss of $149 million in 2024[221]. Expenses and Costs - Total SG&A expenses decreased to $30 million in Q3 2025 from $33 million in Q3 2024, reflecting lower professional services and various one-time items[211]. - Total interest expense increased by $5 million to $43 million for the three months ended September 30, 2025, representing a 13.2% increase compared to $38 million in 2024[217]. - Total interest expense increased by $15 million to $129 million for the nine months ended September 30, 2025, primarily due to higher borrowings at increased interest rates[265]. Cash Flow and Liquidity - Cash provided by operating activities increased by $185 million to $732 million for the nine months ended September 30, 2025, compared to $547 million for the same period in 2024[273]. - As of September 30, 2025, CNX had cash, cash equivalents, and restricted cash of $17 million, down from $55 million as of December 31, 2024[272]. - Total debt as of September 30, 2025, was $2,585 million, including $329 million classified as current portion of long-term debt[277]. Market Conditions and Risks - The inflationary environment continues to present risks, particularly related to steel, diesel fuel, and labor costs, which could impact financial performance[169]. - The One, Big, Beautiful Bill Act allows for 100% bonus depreciation on property acquired and placed in service on or after January 19, 2025, impacting CNX's taxable temporary differences[173].