CNX Resources NYSE: CNX executives used the company’s first-quarter 2026 question-and-answer call to discuss early progress in its Utica development program, longer-dated hedging activity, recent balance sheet moves, and how management is positioning for potential growth in Appalachian gas demand later this decade.
Utica development: consistent early results, more data expected later
In response to a question from Roth MKM analyst Leo Mariani about Utica activity after CNX brought three wells online in the first quarter, management said the latest pad was turned to sales late in the quarter and it is still too early to provide meaningful production results.
The company said what it has seen so far remains consistent with its expectations for the reservoir and that it continues to make progress on costs, but it did not provide new performance metrics on the call. Management indicated a more robust update is likely once the company has accumulated more operating history from the wells.
“We’re a little way off from providing any sort of production results from that,” the company said, adding that a fuller update could come “towards the end of 2026, early 2027, once these wells have had enough duration on them.”
When asked whether CNX could shift more capital to the Utica relative to the Marcellus over the next few years, management emphasized that the Southwest Pennsylvania Marcellus benefits from existing infrastructure, which supports well economics today. At the same time, the company framed the Utica as a longer-term position that could represent a larger part of the development mix over time.
“The SWPA Marcellus…has the advantage of having the infrastructure already there,” management said. “You will see us kind of blend in more Utica over time as that’s sort of the longer-term position for the company.”
New technology and other businesses: no material updates cited
Mariani also asked for updates on CNX’s newer business lines beyond environmental credit monetization, including prior references to AutoSep and potential CNG or LNG-related initiatives. Management said activity remained in line with expectations at this stage of 2026 and did not offer new disclosures.
The company said it is still awaiting final guidance on 45Z, but added it does not expect that to change the projections it has previously provided.
“Nothing new to update there,” management said, while noting the outstanding 45Z guidance item.
Hedging: opportunistic approach in longer-dated markets
TPH analyst Jake Roberts asked about CNX’s hedging strategy, noting the company tends to transact further out on the curve than many peers. He pointed to market expectations for improved natural gas fundamentals in 2028 and beyond and asked what CNX is seeing in the 2028 strip, referencing an incremental 13 Bcf added to hedges in the company’s latest update.
Chief Financial Officer Everett Good said CNX believes it is positioned to be more patient and opportunistic than in prior periods when adding longer-term hedges. He highlighted movement in forward prices and tightening basis differentials as factors improving the company’s outlook for all-in realized pricing in calendar 2028.
“We’re certainly in a position to be more opportunistic… and patient,” Good said. “As we see that price move up, and we’ve seen basis differentials tighten as well… that’s really helped us get to a better all-in realized price in kind of the Cal 28 market.”
Balance sheet actions: refinancing and maturity management
Roberts also asked about next steps after balance sheet changes. Good pointed to what he described as a “very positive refinancing” completed during the quarter, in which CNX refinanced its 2029 notes into new eight-year notes at a 5 7/8% rate.
Good said CNX’s approach is to keep its maturity profile extended and avoid concentrated maturity “towers,” aiming to address maturities well in advance. He identified the next maturity as a 2030 obligation and said the company intends to handle it ahead of time.
“It’s all about keeping the maturity profile extended and making sure that we don’t have particular periods where you have large maturity towers in front of us,” Good said.
Appalachian demand outlook: optimism, with timing as the key question
Stephens analyst Michael Scialla asked whether CNX shares competitors’ optimism that in-basin demand in Appalachia could grow by more than 10 Bcf per day by the end of the decade, and what CNX is doing to capture that demand.
CEO Alan Shepard said CNX shares the long-term optimism, citing the scale of proposed power projects as indicative of potential demand. He said the company is monitoring developments and participating in requests for proposals (RFPs) for gas supply as they emerge.
Shepard also suggested that meeting potential demand growth would require supply from multiple producers, and said companies with both resource depth and the credit profile to enter long-term arrangements could benefit.
“We certainly see the same sort of long-term optimism on the demand side,” Shepard said, adding that “the magnitude of gas that’s going to be demanded… is going to need to be sourced by multiple producers.” However, he emphasized uncertainty around the timeline: “The only question in my mind is timing… Is it three years? Is it five years? Is it seven years?”
On geography, Scialla asked whether demand could develop more quickly in Ohio than Pennsylvania and whether CNX could participate. Shepard said CNX is largely agnostic given the interconnected nature of regional pipeline infrastructure, though he observed that Ohio has appeared “a little easier to do business with, in terms of speed.” He also referenced Pennsylvania-area projects he said would be within CNX’s footprint, including the Homer City plant and NextEra projects that have indicated a Mon Valley location.
Convertible notes: conversion expected in early May
Scialla also asked about the timing of conversion for the company’s remaining convertible notes and the impact on second-quarter diluted share count. Good said the maturity date is May 1 and that the conversion would result in issuance of approximately 12 million shares on a net basis later in the week.
Management clarified that the figure is net of the cap call structure the company put in place when it entered the convertibles.
“That maturity is on May 1st, so this week,” Good said. “Those shares will be issued about approximately 12 million shares, net issuance later this week.”
About CNX Resources NYSE: CNX
CNX Resources Corporation is a natural gas and natural gas liquids producer with operations concentrated in the Appalachian Basin. Established as an independent, publicly traded entity in 2018 following its spinoff from Consol Energy, the company focuses on the exploration, development and production of hydrocarbon resources in the Marcellus and Utica shales across Pennsylvania, West Virginia and Ohio.
In addition to its upstream activities, CNX Resources has invested in midstream infrastructure through its subsidiary that gathers, processes and transports natural gas.
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