CNX Resources(US:CNX)2024-04-25 19:49Financial Data and Key Metrics Changes - The company maintained its free cash flow guidance for 2024 at $75 million from the New Tech business group, indicating stable expectations for cash generation [10] - The company executed aggressive share buybacks in the first quarter, purchasing approximately $50 million worth of shares, which is part of a projected $300 million buyback program for the year [12][13] Business Line Data and Key Metrics Changes - The New Tech business group is expected to start generating cash flow towards the end of 2024, with a more significant impact anticipated in 2025 and 2026 [10] - The company is focusing on two new ventures in the New Tech segment: one in oilfield services (OFS) and another in alternative fuels, which are expected to contribute to future cash flow [7][10] Market Data and Key Metrics Changes - The company is exploring opportunities in various markets, including ground transportation, sustainable aviation fuel, and onshoring manufacturing, which are all expected to generate free cash flow [37][38] - The company sees a growing demand for energy, particularly in advanced economies and developing regions, which aligns with its strategic focus on natural gas and alternative energy solutions [25][33] Company Strategy and Development Direction - The company is committed to its "Appalachia First" vision, which emphasizes responsible natural gas production and local utilization through technologies like CNG and LNG [33] - The strategy includes vertical expansion into market opportunities for natural gas and electricity generation, aiming to reduce emissions and costs while enhancing GDP and job creation [34][36] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the potential of new technologies to meet the growing energy demand while addressing environmental concerns [25][36] - The company is closely monitoring market conditions and pricing to inform its operational decisions and future planning, particularly for 2025 [51][52] Other Important Information - The company has partnered with Deep Well Services and NuBlu Energy to bring its new technologies to market, leveraging their expertise in the oilfield service and energy sectors [22][29] - The capital needs for the new technologies are expected to be low, with no incremental capital planned for 2024 [40] Q&A Session Summary Question: Potential cash flow generation from new ventures - Management indicated that the New Tech business group is expected to generate $75 million in free cash flow for 2024, with more significant contributions anticipated in 2025 and 2026 [10] Question: Allocation of free cash flow between buybacks and debt reduction - The CFO noted that the company remains flexible in its approach to buybacks and debt reduction, with a focus on maintaining flat to declining debt levels [12][13] Question: Details on new technologies and their market mechanisms - Management elaborated on proprietary technologies that combine various functions in conventional flowback processes, resulting in reduced costs and environmental impact [18][20] Question: Activity curtailments and production decisions - Management confirmed that the decision to hold 11 wells was based on operational considerations and free cash flow optimization [44] Question: Preliminary outlook for 2025 and pricing triggers - The company plans to maintain a $500 million run rate for 2025, with adjustments based on market pricing and conditions observed over the summer [51] Question: Changes in hedging philosophy due to debt structure - Management acknowledged a correlation between the balance sheet and hedging strategy, indicating a shift towards shorter hedging durations while maintaining flexibility [52]