Good morning, and welcome to the CNX Resources fourth quarter 2020 earnings conference call. All participants will be in listen only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. Please note, this event is being recorded. I would now like to turn the conference over to Tyler Lewis, Vice President of Investor Relations. Please go ahead. Thank you. Good morning, everybody. Welcome to CNX's fourth quarter conference call. We have in the room today, Nick DeIuliis, our President and CEO, Don Rush, our Chief Financial Officer, Chad Griffith, our Chief Operating Officer, and Yemi Akinkugbe, our Chief Excellence Officer. Today, we will be discussing our fourth quarter results. This morning, we posted an updated slide presentation to our website. Also, detailed fourth quarter earnings release data, such as quarterly E&P data, financial statements, and non-GAAP reconciliations are posted to our website in a document titled 4Q 2020 Earnings Results and Supplemental Information of CNX Resources Corporation. As a reminder, any forward-looking statements we make or comments about future expectations are subject to business risks, which we have laid out for you in our press release today, as well as in our previous Securities and Exchange Commission filings. We will begin our call today with prepared remarks by Nick, followed by Don, and then we will open the call up for Q&A, where Chad and Yemi will participate as well. With that, let me turn the call over to you, Nick. Thanks, Tyler. Good morning, everybody. I want to emphasize four points in my brief remarks before I turn it over to our CFO, Don Rush. All four of these are emphasized in the slide deck that we posted this morning. The first one is 2020 marked the most successful year we've seen as an E&P, and frankly, as a public company going back to the late 1990s, as measured by free cash flow. This bar-setting level of free cash flow and free cash flow per share, it steadily and substantially grew as 2020 unfolded. Our original guidance for 2020 free cash flow was around $135 million, compared to over the $356 million, or approximately $1.60 per share that we actually posted. It's been an awesome year on the simplest, yet most crucial of metrics. Our debt and share count both declined in the quarter as we allocated that free cash flow to the great benefit of our owners, and execution allowed us to strengthen our balance sheet and return capital to shareholders. All of it in the middle of one of the most challenging of years in decades. Second point I want to make, we expect 2021 to be materially better than 2020 as measured by free cash flow. We expect to deliver approximately $425 million of free cash flow in 2021. That builds upon and then exceeds what we accomplished in a very successful 2020, and that's at the current strip pricing, not consensus pricing. Third point, we built a free cash flow generating machine, and that should deliver on average $500 million free cash flow per year between 2022 and 2026. Of course, that's a market improvement from our 2021 target that I just mentioned of $425 million. That creates a sequencing to position us for a three-peat on free cash flow level setting when you run through 2020, 2021, and 2022. Again, that's also at the current strip, not consensus pricing. That assumes the incremental interest expense for our bond issuance that we did last year. Our seven-year, $3+ billion free cash flow plan that we unveiled last April, it remains in place. The first year is now successfully in the books. Fourth and last point I want to make, we expect a generation of $500 million per year of free cash flow to continue for many years beyond 2026. Our basin leading cash costs, which were just $0.01 over a buck all in for the fourth quarter, it remains a huge differentiator for the capital markets. I think they're just starting to wake up to that fact. Extensive swaths of our acreage footprint and inventory, they work quite well at the forward strip because of our cost structure. That fires the engine for the free cash flow machine. That creates an annuitized and sizable free cash flow stream for years measured in decades. It's no coincidence that all four of these points that I just highlighted, they speak to the same metrics of free cash flow and free cash flow per share. Free cash flow, it informs our execution focus, our strategy, our capital allocation, incentive comp, our investment thesis, and our M&A screening process. We secure the drivers of it, like low costs and midstream integration. We execute to generate it, and then we astutely allocate it by applying clinical math. It's a simple, yet very powerful concept. Before I turn things over to Don Rush, one final thought. I just said our approach is simple and powerful, but it's also different from the industry. The management team and board of CNX, we didn't make our names originally in E&P, and what we've accomplished to date sort of proves that. How? We said we were different than a typical E&P from the get-go, and at the time, there were a lot of industry experts that were skeptics. That really didn't matter. We took a 150-year-old coal company at the time, and through constant battling, toiling, and perseverance, we transformed it in really every imaginable way into the premier manufacturer of natural gas and free cash flow per share, as well as the leader in tangible and impactful ESG performance in our space. We shunned the conventional E&P wisdom, and we took a best-in-class approach to disciplined capital allocation that was injected by our board to create even more per share value. We achieved all this during some of the most tumultuous times seen in generations. A traditional E&P team or board, coupled with a standard asset base, would have driven the company to a very different place. We know it because we see it out there. Fortunately, our differentiated approach set us up in the position of strength that we enjoy today. It positions us for even more great things on a per share basis moving forward. This is the team investors and other stakeholders want as stewards of their capital. With that, I'm going to turn things over now to Don Rush, our CFO. Thanks, Nick, good morning, everyone. I'm going to start on slide three, which highlights some of the key metrics that differentiate CNX. As you can see in the top left chart, CNX has one of the largest net shale acreage positions in the basin. This acreage position is even more impressive when looked at on a relative standpoint. Since our production is less than our peers and our base PDP decline is so shallow, we need to consume less of our current acreage each year to maintain the production profile we have today. If you look at the next 10 years-20 years, we will only need to develop a fraction of our acreage if we continue to stay in a maintenance of production plan. This is a key fact overlooked by many. The bigger you are, the more acres you must consume each and every year to maintain your business model. Our lean and highly profitable approach allows for a much longer runway and a less risky next few decades relative to our bigger peers, which need to consume two to three times the amount of acres we do each year in order for them to maintain their production. This is a big difference, especially when you consider that our plan not only consumes fewer acres, but also generates approximately $500 million per year of free cash flow on average. This outsized profitability on less production is due to our superior margins, driven by our best-in-class cost structure that you can see on the top right. This cost advantage allows us to generate significant free cash flow, and based on where we are currently trading, creates a very attractive free cash flow yield on our equity. We remain on track to continue to strengthen our balance sheet over the next several years, as you can see in the bottom right. When you view all these metrics together, it is clear we have positioned the company to grow intrinsic value per share going forward. Slide four digs deeper into the cost structure. As you can see, our Q4 costs came in around $1.01, which was slightly under the $1.04 we guided to on our Q3 call. All in, our fully burdened cash cost finished at $1.17 per Mcfe for the full year 2020. We expect 2021 costs to be more in line with our Q4 numbers and to average approximately $1.05 per Mcfe. Year-over-year equates to a 10% expected cost reduction. Assuming that future free cash flow is allocated towards debt repayments, we would expect fully burdened costs to decrease even further to around $0.90 per Mcfe and lower in the years beyond. When you combine our low-cost position, along with the steady execution we have seen throughout 2020, the result is four quarters of consistent free cash flow generation, which you can see on slide five. In Q4, we produced approximately $85 million of free cash flow and $356 million for full year 2020, which was modestly above our previous guidance. Last quarter, we discussed that if CNX shares continued to trade at a high free cash flow yield, we would have the wherewithal to repurchase shares in conjunction with paying down debt. That is exactly what we did, and in the quarter, we bought back $43 million worth of shares at an average price of $10.43 per share, with $6 million of that cash settling in the first few days of January 2021. Slide six illustrates the point that our best-in-class cost structure not only drives our annual free cash flow generation under the current strip, it also allows us to develop wells more economically than our peers. As you can see on the slide, out of the key variables in well economics, excluding price, OpEx has the largest overall impact on the economics of a new well. To quickly explain this slide, we used a hypothetical Southwest PA dry well with a 2.6 Bcfe per 1,000-foot type curve and the other assumptions footnoted below. We looked at how changing the four main variables affect the internal rate of return for that well. For clarity, the deltas shown on the slide are not percent improvements, but nominal rate of return enhancements for that well. For example, if the base well had a 30% IRR and you lower the OpEx of that well by $0.50, the well would improve to a 68% IRR. As you can see, operating expense has by far the largest impact on the profitability of a well, much greater than even a sizable 0.5 Bcfe per 1,000-foot type curve difference. Also, as you can see on the slide, the CapEx, or D&C per foot of a well, has a much smaller impact to the well's profitability compared to OpEx. This relationship holds true if you want to look at NPVs instead of IRRs as well. This is not to say that EURs and D&C costs are not important to us. We continue to focus on driving down capital costs and improving capital efficiency and well performance, look forward to that trend continuing as we become more and more efficient. However, we recognize a few things about capital D&C cost and its competitive impact. One, we acknowledge that all of our peers are good operators. Two, we all use the same vendor base in the basin, cost and technology advantages don't last long. Ultimately, D&C costs converge over time within the peer group. One example of this is the ongoing adoption of electric frac fleets by our competitors, a technology that CNX adopted early on. Three, lower D&C costs across the industry over the past decade has led to continued drilling at lower and lower gas prices, ultimately just bringing down the gas price. Four, at the end of the day, OpEx is the most material driver of well economics, as we said before. Five, our OpEx advantage is sticky and will remain in place for a long time. These concepts seem like they are common sense, but we find that most in the ecosystem often overlook it. Instead focus too intently on whether capital costs are $730 per foot or $680 per foot, when the reality is that CapEx per foot is far less impactful to the profitability of a well than operating costs. The bottom line is that CNX has a structural cost advantage on the biggest driver of well profitability due to the fact that we own and control our midstream and water infrastructure, and that we have avoided significant out-of-the-money firm transportation agreements that burden others. These were strategic decisions and cannot be replicated by others quickly or cheaply, and it allows our best areas to be more profitable than our peers in similar areas, and it allows for a large swathe of acreage to be economical for CNX at the current strip, whereas they might not be for our peers with higher cost structures and higher operating costs. Slide seven is an update from last quarter. Since then, we have closed on a $500 million senior notes offering, which created additional financial flexibility over the next several years. We have worked hard to get the balance sheet to where it is today. As you can see, we have not only paid down a significant amount of debt in 2020, we have also increased our maturity runway significantly, with our closest bond maturity now five years away in 2026. Slide eight provides an updated look for 2021 guidance. As we typically do for current year guidance, we incorporated some modest ranges with this updated disclosure. The summary is that based on the midpoint of the 2021 guidance ranges, production and EBITDA are up slightly from our previous guidance, and CapEx is up slightly due to timing, and it's $18 million CapEx beat last quarter based on the midpoint of 2020 guidance. Most importantly, we are reaffirming our 2021 free cash flow at approximately $425 million, where our free cash flow per share guidance is increasing due to our share buybacks in Q4. On the pricing front, our guidance is based on the forward strip as of January 7th, 2021, for natural gas prices, and we have used a conservative forecast for our NGL realized price per barrel of $15. Q1 NGL prices are currently running higher than that, and we will continue to monitor this as the year unfolds. Last, as we have said in the past, quarterly guidance is difficult to be accurate on, since a few weeks one way or the other on a new pad make a big difference for the quarter, but not for the overall pad economics. However, for some color, we expect quarterly production volumes to be relatively consistent throughout 2021, and as of now, capital is projected to be modestly heavier in the first half of the year versus the second half of the year. Slide nine is just a reminder that CNX continues to screen very well compared to not only our E&P peers, but against the market indices highlighted on this slide. As such, we feel that we are a great investment opportunity. Our focus remains on executing what has become a simple story about generating a significant amount of free cash flow each year and allocating that free cash flow to create substantial value for our shareholders. We believe that this will drive the intrinsic value per share of the company higher over time and continue to provide meaningful opportunities to reward our shareholders. With that, I will turn it back over to Tyler for Q&A. Great. Thanks. Operator, if you can open the line up for Q&A at this time, please. Certainly. We will now begin the question and answer session. To ask a question, you may press star then one on your touch-tone phone. If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. The first question will come from Zach Parham with JPMorgan. Please go ahead. Hey, guys. Thanks for taking my question. Just wanted to ask on thoughts on the buyback going forward. You utilized roughly half of the 4Q free cash flow to buy back shares. Is that a preview of what we should expect in 2021? I guess just more generally, your thoughts on buying back shares versus reducing debt with the free cash flow you generate. Yeah, no. Thank you for that. I'll start, Nick can add in anything I miss here. I think if you rewind time back to our Q3 call, we were pretty consistent in the conviction of the free cash flow plan, not only to close out 2020, but what we were projecting for 2021, and I call it the $500 million on average 2022- 2026. We made it fairly clear that, hey, the balance sheet was in a good shape, or our cash flow generation relative to our debt and our maturities, was a very stable, manageable scenario and situation. The leverage ratio targets that we're trying to get to, like a 1.5 times leverage, roughly with $1 billion EBITDA runway, as you're in that zone, you would need to have $1.5 billion of debt to get to that 1.5 leverage position. We had the wherewithal, and again, going back to the Q3 call, we quoted $1.5 billion between now and the end of 2023. Q4 was the first chunk of that $1.5 billion that we were projected to make. We said we had the wherewithal to spend $1 billion to pay down debt and have plenty of capacity of that extra $500 million to utilize for other things along the way. If the free cash flow yield at the equity, and if you look at the call close to roughly $2 per share free cash flow that we're projecting for 2021, stayed around close to a 20% free cash flow yield, we would be thoughtful and opportunistic as we move through the year here. I think, as you look forward, the clean answers are we follow the math, we use the variables, we change decision-making based on how the variables move around us, and we have the wherewithal to do things opportunistically with share count as the next several years unfold, and it'll be a part of the balance between the debt paydowns and potential returning capital to shareholders. The good news for CNX and CNX's shareholders are we have the confidence and the wherewithal to do both. Yeah, Zach, I would just add that, to me, the most important thing here is that we've got a conviction that our cost structure, the integration of our water midstream, upstream, and our inventory is going to be a substantial engine for generating free cash flow. I look at 2020 in total, Q4 for 2020, what our guidance is for 2021, and one year in the books across that seven-year plan that we unveiled last year. As long as we continue to execute, we are going to, A, generate that substantial free cash flow. I think the scoreboard to date has shown that we're doing that. B, we then want to allocate that free cash flow in the right places and at the right times. The two biggest, most attractive opportunities we see right now are, A, reducing debt, and B, opportunistically retiring shares at those free cash flow yields that Don had mentioned. That continues to be the two areas of focus for us on free cash flow allocation. The share count reduction will be opportunistic, and I wouldn't read into a quarter or a year in past. I would instead look towards the metrics that matter to us when we're doing our rate of return math. And- Yep. I'd expect too, in 2021, we continue to execute, we hit our guidance on free cash flow. You're going to see significantly lower debt at end of year, and you're going to see a lower share count if the free cash flow yield stays where it's been hovering at of recent. Yeah. Last quick comment, since I forgot to mention it. Our hedge book really helps on just the comfort and confidence in what these cash flows look like for the next several years with their approximately 90% in 2021. We already have a material position in 2022. If you look out in 2023, 2024, it's getting close to almost being 50% hedged out in that area, if you assume flat production. The structural advantages we have as a business, coupled with the clarity and cash flow generation via the hedge book, allows the wherewithal to be thoughtful on this as these next quarters and years unfold. Thanks, guys. Just one follow-up. We've seen basis widen out a bit. You all are mostly hedged on basis in 2021, but less so in the out years. Can you talk about what you can do to mitigate widening basis and just your general thoughts on what happens with basis over the next few years in Appalachia, given some concerns about new pipelines potentially being delayed? Yeah, Zach, this is Chad Griffith. I'll take that. I'm glad you asked because it was a point I was hoping to be able to make today. We've actually gotten out ahead on the hedging risk, and we're actually over 90% hedged on in-basin exposure 2021 through 2024 inclusive. That really isolates us and protects us from some of the in-basin volatility that I think you're pointing to and certainly that you're seeing, and some of the risk with some of these pipeline projects and potentially what might come down the road on these pipeline projects. We've gotten out ahead of it. We've isolated CNX from that risk, and we've been able to get those hedges put in place at what we think were attractive levels. A lot of those details are available in the supplemental materials that we've put out. We have not traditionally talked about exactly what markets have been included, but I'm glad you asked because we were able to add that additional color that a lot of that forward basis has actually been focused on removing that in-basin pricing exposure. Just to add on top of that, to Chad's point, there's the basis side, then there's the indexed in-basin price. Those two things can be confusing to think between the two. The basis number sometimes is just the difference between what Henry Hub is and what the in-basin local marginal dispatch cost is to economically hedge out into the future to produce a well in basin. We monitor this stuff very carefully. One thing the entire industry's gotten very good at is producing gas. I think when you look at any of the supply-demand fundamentals, whether it's in basin or any of the other basin markets out there, it's going to be tight. These things are going to be volatile. That's why we make decisions off the forward strip. That's why we take opportunities to de-risk the forward plan and ensure that we have the clarity and line of sight on the investments that we're making on the drill bit are protected from fluctuations that may or may not occur. One thing we've, I think, all learned is that the world is very unpredictable. There's major drivers and variables of gas prices that are out of anybody's control for the next months, let alone years. We use the strip to make decisions. We go ahead and lock in some of the economics of the wells prior to spending the capital. Gas prices go up, we have a good wherewithal to be able to take advantage of that if it's structural and it's a long-term forward strip thing that we can do. We've shown the wherewithal to manage our production profile to take advantage of seasonality or differences in spikes or downdrafts in the hand-to-hand combat gas pricing environment. We feel good about the business model we've built. Works really well if gas prices stay where they're at and basis stays where it's at for the next decade, or if it step changes up by $0.50, that's just even a better company for CNX. We work well either way. Thanks, guys. That's all for me. Appreciate the color. The next question will come from Neal Dingmann with SunTrust. Please go ahead. Morning, all. My first question, Nick, is for you or Don, really. Given your now stellar free cash flow, could you discuss a bit your thought process around free cash flow allocation? You mentioned a bit about all the debt repayment, equity repurchase. I'm wondering when it comes to these 2+ a bit of growth and then probably even in the future, potential dividends. I'm just wondering how you think about all these. Sure, Neal, I'll take a start at this. Just generally, macro thoughts that sort of play into this allocation opportunity set. One, lower debt typically in our industry with its volatility coupled with the opportunities that present themselves when things get volatile, is always a good thing. Sometimes that's difficult to quantify, but we know it's tangible, we know it's real. I think, the leverage ratio metric, absolute debt level metric, continuing to allocate a portion of the free cash flow to debt reduction is always going to be front and center with us through definitely the next calendar year, if not the next two, right? When you get into issues with respect to capital itself, I think the industry is going to be facing more challenging times, frankly. Whether it's because of forward strip pricing or just the overall sort of approach of how our industry is viewed by the capital markets, it's going to get stingier in terms of being able to make your case to secure capital. Those that can be free cash flow generators and self-fund and take advantage of the stingier capital environment are going to be the ones that not just navigate through it, but thrive in it. That's certainly us. The ability to post free cash flow is more crucial than it's ever been, especially on a consistent basis. The third thing goes back to our prior comments on the first question, which is on the share count reduction front, it is part and parcel and integral to our philosophy. It was really started by our board a number of years ago. If you look at our seven-year plan with one in the books, and you look at what the prognosis is for our business when it comes to free cash flow generation after that six-year period left on the seven years, there's a compelling case if the free cash flow yields we're trading at to reduce share count and create substantial owner value on a per-share basis. When that changes because of the math, right, because of the fact and circumstances, when we start to trade in line with what you would expect on yield, then other avenues for shareholder return, like dividends, I think come to the fore to be considered. Right now, for the foreseeable future, debt reduction, share count reduction opportunistically, I think those are the two primary paths for free cash flow allocation. No, makes sense. Really, maybe my follow-up for you, Chad, just on sort of more on cadence, timing, and focus. Obviously, those earlier slides just showed the depth of your inventory. I'm just wondering specifically, given that depth and a moderate plan, how do you think about this year? Maybe talk about targeting the Marcellus and Utica sort of dry and wet gas plans around that. Yeah, I think there's a little bit more wet gas in the mix as you roll in through from 2020 into 2021. You can kind of see it flowing through a little bit of the production cash costs that you're seeing in 2021 versus 2020. I think when you look at what we're going to do in 2021, we've kind of go back to the Q3 call, said that if there is the price spike that may or may not happen sort of later in the year, we've got the wherewithal to kind of hold some of the 2022 deals up a little bit or like we've done before, if there's a disconnect in shoulder seasons or something like that, we can delay some things and push it back to later periods. The net-net, we feel good about the next couple years. We have clean line of sight on being able to execute it very efficiently. We got an operating team that's the best in the business to get this done in a very efficient manner. We're set in how we want to think through that. As we said before, the bulk of the six-year program, I guess it was seven, now it's six-year program, is based off of Marcellus activity with a little bit of Southwest PA Utica to just blend down some of the damp Marcellus gas. Although Chad can talk a little bit after I finish about how that damp Marcellus gas and what we blend versus what we process now that changes as NGL prices change. A little bit of activity in the CPA Utica. Cadence-wise, it's fairly similar, fairly consistent, although again, these things get lumpy quarter-on-quarter. Chad, you want to talk a little bit about the blending and what we are doing? Yes. Thanks, Don. One of the additional benefits of owning our midstream system beyond the cost benefit is it provides you a tremendous amount of additional flexibility to be able to move gas around to optimize or maximize the value of those molecules. Certainly as NGL prices have rallied, particularly propane, we've been able to already move some of our wet production back towards processing to take advantage of that positive frac spread. We're continuing to assess a number of additional wells that are sort of right on the border between better to send to dry versus wet. We're monitoring those really on a daily basis. In close sort of communication with our processing partners to determine when is it actually economically best to send those molecules to processing. Ownership of that midstream system provides us that flexibility. Similarly, our asset base has a mix of really a dry sort of Marcellus versus some wet opportunities down the Shirley-Pennsboro field. We're looking at what's the exact way to optimize the timing of the fracs and TILs in that Shirley-Pennsboro field to take advantage of some of the near-term strength in NGL pricing. If I can just sneak one in on Chad, on your comment. I guess for you, Don, would you all consider monetizing any of this midstream, or it sounds like it just remains too important currently? I guess if you look at the last several years, we've got a pretty thorough track record of just making economical decisions on left rights on do you keep a business, do you sell a business? We've sold more things, both undeveloped acres and producing acres in different business units than I think anyone else over the last several years. We follow the math, we assess any of these decisions. Do we think that it's a big part of what drives the future economics of the company? Yes. Do we think it's a big piece of why our cash flows are so much lower risk than the peers? Absolutely. I've tried to explain it, call it upside down. What the peers would look like at a $0.50 higher gas price, we look like now. That just gives us a layer of reliable free cash flow that gives optionality to do interesting things over, above, and beyond that. It unlocks a lot of additional values for CNX. We evaluate everything when we go to making decisions to do things on a risk-adjusted cash flow basis, and we'll continue to do so. We like the position we're in. Part of the reason we like the position we're in is because we're the only one that has it. If everybody had the midstream, the gas price would probably just be $0.50 lower. It's unique for us because we're the only ones that have this type of a situation. Great details and a tremendous free cash flow, guys. Thank you. The next question will be from Holly Stewart with Scotia Howard Weil. Please go ahead. Good morning, gentlemen. Maybe I'll just start off with a couple of questions on the production numbers. Could you provide the overall shut-ins in 2020 and then let us know or give us some color on if there's anything in the 2021 guide, in terms of shut-ins? As far as what the total quantity of Bcf shut in during 2020, I think we can follow up with you on that, Holly. I sort of looked at it on a per day number and watched how it fluctuated over time, made sure we were optimizing the value of that. I don't have the total quantity sort of available in my back pocket right now. Far as 2021 guidance, we're not currently planning on having any shut-ins in any of that guidance. It is obviously something we'll continue to monitor. If the opportunity presents itself to be able to maximize the value of our assets or our production stream by timing production differently, then we will definitely jump on that just like we did last year. Just like we did last year, if we'd make that call again, we would lock in the arbitrage with hedges again, just like last year. Yeah. We'd modify and sculpt our hedge book appropriately if that opportunity presents itself. Like I said, that's just a lot of the flexibility that we have. It's hard to mathematically show the value until you do these things as they unfold, and trying to predict when they happen is impossible. We don't try. We just keep our eyes open for them, and we move quick when they show up. Great. Well, maybe Chad, just to follow up to that, can you provide the exit rate for the year for 2020? Yeah, I got that. We're looking at 1.7 Bcf. Tyler? Yeah. About 1.7 Bcf a day, Holly, is our exit rate. Okay, perfect. Don, I saw the slide on just the total cash cost guidance for 2021. Maybe getting just a little bit more granular 4 Q, the midstream costs were a lot lower than expectation. Is that a good level to think about as we're moving through 2021? No, where it gets is into some of the mix. As you roll into 2021, we've kind of given what the costs look like in 2021. Clearly, some of the optimization Chad talks about moves some things around. If you have some processing, you end up with some higher realizations. The cost looks a little bit higher, but ultimately your margins stay, and your cash flows that you're looking for 2021 stay the same. You're going to see, call it fluctuations based on a little bit more dry versus a little bit more wet. You look at some of the FT moving around onto unused to used and stuff like that. It's just really day-to-day, hand-to-hand combat, as we're seeing what the delta is between the Q3- Q4, then into 2021. We'll continue to use, call it goal post guides to give somewhat clarity, but it's going to fluctuate on a quarter to quarter as we make these week-to-week decisions. Okay. One more from me, if I could. How are you thinking about that CNXM credit facility? Does that stay in place? Yeah. Right now, that transaction was structured and effectuated. The debt instruments remained outstanding. We still do financials and post them to the holders down in that standpoint. What we do or don't do, call it over the long term, I guess to be determined. I think what it allows is some flexibility and call it safety and capital structure management. Obviously, the simple thing would be that, hey, one capital consolidated structure and low debt for the enterprise. If that makes sense over the next several years, then we can migrate towards that. If for whatever reason, to Nick's earlier comment, if some of the E&P specific kind of debt markets are more difficult due to whatever reason and rationale that might be, even though our balance sheet and everything looks good individually, you could get caught in just the industry-wide noise. We have the midstream side, which is just a pretty amazing, efficient way to raise capital with the kind of security and collateral you can provide in that. Like we talked about, the safety and the cash flows that are available to that kind of piece and entity. You saw this, I guess, right in the middle of the COVID situation when it started last February or March, when we did our CSG project financing. Our upstream bonds were trading difficult, along with the rest of the peers groups bonds trading difficult. We raised $150 million or so at, call it a blended almost 6% interest rate whenever upstream bonds were very challenged. Long term, we'll see. Near term, the most cost-effective thing to do is to kind of leave them as they are, and we'll make those decisions. We got time, clearly, with when the bonds down there expire, and obviously the credit facility down there has a good runway on it, too. Hey, Holly, this is Nick, too. Just a general thought on that. I think it's an important point because whether we keep two separate facilities or whether we combine them into one moving forward, I think it does show that our cost of capital should be more efficient because of the asset array that we've got than your typical upstream Appalachian peer. In other words, whether it's one single facility moving forward or two separates, the weighted average or blended cost of that is going to be better and cheaper than what you would typically see for an upstream only. That makes sense to us. That's like another confirmation of it driving things like cost and excuse me, free cash flow. Yeah, you probably saw that in the way that your bonds priced back in November. Okay. I appreciate all the color. Thank you. Thanks, Holly. The next question will be from Michael Scialla with Stifel. Please go ahead. Yeah, thanks. Good morning, guys. Looks like you're going to be able to pay off all your debt in your revolver pretty quickly with free cash flow. I just want to see how and when you're planning to retire your fixed debt in your seven-year plan. Do you build up a pile of cash until the fixed debt becomes due, or can you call any of the fixed debt early? Just how are you planning on handling that in your seven-year plan? No, I guess flexibility is a word we've been using often, but being able to pick and choose along the way is just something that we find to be helpful and thoughtful to be able to do this. We have a nice structure, I think, with what we have at the RBL, like you mentioned. We do have some of the CSG bonds out there too that are pretty Well, not pretty. They're very efficient. They're basically callable at par. We also have the call structure starting to kick in really here in a couple of months for our first unsecured bond, and clearly there's open market trading, too. If you look through 2021, easy math is, and just like you said, there's enough to basically take care of the RBLs, and that puts you in a place to allocate capital very thoughtfully, not only across the different pieces of the debt structure, but the wherewithal to do things on the share repurchase side as well. Simple math, and what we've kind of laid out in the 2021 guidance is just going to the RBL for the simple math and the guidance. When you look at the optionality you have to pick and choose these capital stacks, that's a nice piece to have. Okay, good. It sounds like no need to park cash on the balance sheet for any extended period of time. I wanted to ask on slide six, that's a great slide to show your cost structure advantage on operating costs relative to your competitors as it relates to well economics. If you looked at that same chart, not relative to your competitors, but just relative to yourself today versus where you think you'll be 12 months- 18 months from now, can you say what you think the biggest controllable driver under that scenario would be on your returns? Yeah, no, I think, as we've laid out on prior calls, forward-looking assumptions are fairly conservative. The cost components that we have kind of coming down were basically contractual in nature. I mean, it's unneeded commitments that we have just rolling off as they expire, the contracts expire. Clearly, Chad and team is obsessed on the D&C front, and they're doing a lot of great things to push the envelope there, and we're trying to obviously push the envelope on the OpEx cost side as well. Chad, I don't know if you want to talk about any of the initiatives we got on sort of the OpEx and the D&C to try to continue to beat what it is we're doing today. Yes. Thanks, Don. Certainly on the OpEx side, as we've talked many times about, a big chunk of the OpEx stack is contractual and/or corporate structure-based. Means that the ownership of our midstream, the firm transportation commitments we've made, these are long-term, sticky cost advantages that it would take our peers a long time or a lot of money to sort of narrow the gap on. Some of the stuff that's a little bit more directly controllable that we are paying laser focus to is your OpEx piece, which is a smaller part of overall operating costs, but certainly OpEx contributes to that. It's about 10% of that stack. We're always looking at ways of maintaining by optimizing how much maintenance we're doing, optimizing how much money we're spending, what we're doing with crews, how are we deploying our workforce, trying to squeeze every bit of optimization we can out of maintaining our asset base. Similarly, on the D&C side, look, not only does our sort of maintenance and production, the seven-year plan that we've put out there provide you guys a lot of guidance and a lot of long-term view, it also provides our operating teams a long-term view, that allows them to plan ahead, negotiate smart contracts, smart logistics, make sure that supplies will be in place, service providers know what's coming, that we see what challenges are coming down the road, whether it's longer laterals or different drilling locations. They see that coming down the road. They know where they're going. They know what to expect, and they can plan accordingly. That has allowed us to execute at an extremely high level and continue to improve the leading edge, cutting edge of D&C efficiency. Look, we've got a team downstairs, incredibly intelligent people, incredibly technical operators. Giving them that long line of sight on what to expect, giving them clear goalposts of what we're solving for, free cash flow per share, has allowed them to just focus on executing and getting the job done. Thank you for the details. The next question will be from Nitin Kumar with Wells Fargo. Please go ahead. Good morning, gentlemen. Thank you for taking my questions. I want us to maybe change tack a little bit and talk a little bit about what is your macro view on gas right now. Your own plan calls for very steady production. You were talking earlier about hedges. I'm just kind of curious, what do you see out there from your peers and just from the gas perspective? Yeah. We've been cautious about the 2021 strip for some time now. I think we've consistently messaged that we're keeping a very close eye on weather, particularly this winter weather. I think as we're all keenly aware that the winter's been a little bit disappointing so far, and I think the strip's traded off as a result. I think since our last call, I think Cal 2021, full calendar year is off maybe, call it $0.28 or so, and I think Cal 2022 is maybe off $0.10. You've seen the markets respond to the weaker winter, and I think that's what we are all sort of worried about. Nevertheless, I think there is some structural undersupply going on. It looks like even with production off one or 2 Bcf per day compared to last year, yet demand and exports are up. It does look like we're maybe structurally undersupplied. Everyone's shifting their bull thesis to next winter. It sort of makes sense to us, I think. At the same time, you've got rig counts ticking up ever so slightly. You've got weather continues to play a big role. I think the point is the markets are going to continue to fluctuate wildly as a function of weather, producer behavior, policy. There's going to be a lot of volatility in gas prices. We will continue to hedge. We continue to hedge. We're very heavily hedged well out into the future years. We'll continue to hedge. We'll continue to include basis as part of our hedge just to minimize the amount of those fluctuations' effect on our free cash flow plan. Just to sort of add on top of that, we do have a lot of internal views and analysis on these. We just recognize that a perfect crystal ball doesn't exist. A couple of variables and small movements on a couple of variables outside of anybody's control can take a very accurate model and make it look silly within the matter of months. When you look statistically, hedging typically ends up better than not hedging. That's just statistics, and we recognize that fact, and we're eyes open that there could be a structural change, and obviously, we'd be happy to see that. I think you're hearing a lot of the right things from different folks about trying to stay disciplined and focus more on free cash flow and maintenance of production. I think the ecosystem has a long way to go to solidify that they're actually going to do that. Part of the ecosystem is, if you just look at the research community and others, they're still valuing companies off of EBITDA multiples. The free cash flow talk, I think, is starting to come, but I think the more it's demanded and the more free cash flow is the main driver on how people are viewed and valued, there's always going to be risk because it's pretty easy to grow EBITDA as an E&P company. These wells and the ability to deploy capital and grow EBITDA is real. We've seen it. It hasn't actually showed up in shareholder value. I think you all could help the ecosystem, and everybody, I think, would be better off if focus on free cash flow is the main driver on how companies are viewed. EBITDA multiples remain the soup of the day. It's risky. It's enticing, I guess, to go ahead and grow that EBITDA to get a favorable kind of treatment in your valuation mechanics versus maybe the right decision was just to focus on free cash flow. It hasn't quite flowed through how people view companies yet. I certainly appreciate your focus on free cash flow, so I appreciate that part of your answer as well. I guess you also kind of in passing mentioned how difficult it is for the industry these days in terms of investor sentiment and ESG concerns. You were one of the first to adopt eFracs in the basin. I'm just kind of curious, are there strategic opportunities that you see to participate in any kind of green revenue streams and things like that? One of your peers was talking about partnering with a company on monitoring some of their wells. Just curious if beyond just reducing your own emissions and using eFracs, anything you're seeing that might be interesting? Yeah, no, I think this is something that some of the conversations that I've had, and I know Nick has had as well. I'll talk a bit, then Yemi can talk, and if Nick wants to chime in, too. I think a lot of the things we've been doing have been very, call it, ESG-focused and friendly. If you look back to the creation of CNX Gas and capturing, call it, coalbed methane that would have escaped to the atmosphere, and today it's called flaring and different things like that in the oil and gas field. We've been focused on trying to be thoughtful for a long time now. I just don't think we've talked in ways and languages that people are used to sort of seeing this. The evolution of frac fleet is one example. We're very focused on sort of local and sustainable and trying to be thoughtful on numerous fronts here. I think our track record shows we've leaned into a lot of these sorts of things. We have a partnership with a bigger plant that does kind of like, call it coalbed methane generation, and we've generated carbon credits. We've have for the last few years in different vehicles. The focus is there. I think communication could be improved, and I think the track record of things we've done, I think gives you a little taste of things we can do going forward. Yeah, we're very interested in not only doing right, but generating thoughtful profitabilities through this. And the company's set up and has a lot of the ingredients to be very successful if that becomes more and more important to the world. I'll go ahead and let Yemi chime in as well, too. Thanks, Don. I think the ESG, the new focus on ESG is appropriate, given in the environment we're in right now. Like Don was talking about, the whole purpose and the whole view of it as being in our DNA right from the outset. The way the company was created was, if you look at it, is more in the limelight of ESG. One of the things from us that we really appreciate with the new focus on it is we're local. We work local. We live local. Our employees are local. The new focus on ESG, especially to make sure that the companies are responsible, is actually a good thing. It's a very good thing for our workers. It's a very good thing for our company. In addition to that provides new opportunities for us and for all the companies out there as it relates to that. We started looking at ways to use more of our product. We've seen that when we deployed our electric frac fleet. We saw the efficiency, and that's why we started seeing some of our other competitors adopt that as well. As we continue to talk and evaluate, we're seeing more and more opportunity with our legacy asset to actually take advantage of the new focus and opportunities in ESG. Finally, the only thing I'll add is from a big picture perspective, if you look at sustainability and ESG, two buzzwords or terms that are being bannered about everywhere you look these days. We translate what that means into really three crucial legs. One, you got to be transparent. When I think of sustainability and our local commitments that Yemi just talked about or our free cash flow generation, we need to put out to the world there's a responsibility to transparently state in very clear metrics that are measurable what you're going to do versus just hollow words or promises or happy talk. I think you see too much happy talk when it comes to sustainability and ESG. Let's be transparent. Let's lay our cards on the table and show the capital markets and the wider stakeholder group what we're going to do. Two, tangible. Okay. These things, these targets, these metrics need to be measured, and they need to be tangible. What did we actually deliver on that you can measure, whether it's financial sustainability or ESG as it relates to wider stakeholder groups, tangible, measurable accomplishments, not sort of PR feel-good type things. Then the third piece of this is actions. If you're laying out the transparent view on what you're going to do, and then you're doing that in tangible metrics, are your actions going to be consistent with all the stuff you just said? I think it's pretty simple across those three, but despite all the talk and the volume of stuff that's being bannered about across those metrics, I think those three things are lacking quite a bit. We don't want to be in that boat. We definitely want to be in the camp of, "Hey, here's what we're going to do transparently, here's what we're going to measure and accomplish tangibly, and then here's what our actions were that were consistent with those two things. Great. Well, Nick, I can certainly tangibly touch the $43 million that you returned to cash shareholders this quarter, so that's great. If I can just sneak one last in. I won't be an E&P analyst if I didn't ask about capital efficiency. As you head into 2021, what is your base decline as you headed into 2020, and how do you see that tracking as you slow down your activity levels? We certainly expect base decline to continue to decline over the seven-year plan, now six-year plan. The idea there is as your production stays flat or flat-ish, that your replacement each year with new wells goes down because you got a bigger portion of your production base is sort of older wells. As the average age of your wells get older, the decline curve flattens out. Your replacement rate goes down over time, and your average decline rate goes down over time. I think this year we expect, sort of looking at 2020 exit rate and sort of what the decline is off of PDPs at the end of 2020, I think we're somewhere in the mid to low 30% sort of decline curve, decline rate year-over-year. That's sort of what we're targeting right now is needing to replace in 2021. As you move forward through 2022 and beyond this 2026 plan, it'll kind of trend down to around that 20% sort of timeframe. I think when you look at call it 2021, it's a little bit noisy just because we shut in a lot of things in 2020, so it turned a bunch of things back on right around kind of November and December at the end of 2020. Again, the decline rate between 2020 versus 2019 and 2020 versus 2021 just looks strange because of all the different shut-in things that we did. Like I said, assuming sort of no shut-ins and similar cadence, you'll see it move from that position in the low 30s down into the mid-20s and down into around the 20% or so when you get to the midway point of our now six-year plan. Yeah, that's a good point, Don. If you all recall, we held back a lot of production of our new wells and brought them online with winter. You basically had a handful of brand new pads till the November, December time period. They were at their peak production. As we roll off into the balance of 2021, you'll see those pads come off their typical early times for an incline. That was, I think I'm going off memory, it was from March- November. It was the bulk of our- Right pads that we Again, economically, fantastic. It helped our cash flows tremendously. It helped the rate of return of those pads tremendously. Clearly, it gets moving around a little bit on these base declines whenever you're doing things like that. Appreciate the answers, gentlemen. Thank you so much. The next question will be from Leo Mariani with KeyBanc. Please go ahead. Hey, guys. I was hoping to get a little bit more clarity on the production here. Obviously, a very strong fourth quarter. You guys talked about a 1.7 Bcf a day exit rate here, and I think if I heard you right, it sounds like you had a lot of wells that came on later in the quarter at peak rates, which helped you guys achieve that. As I look into 2021, your guidance is just over 1.5 Bcf a day on production, down quite a bit from that 1.7 Bcf exit rate. Can you just help me with the math there? Is there just a really big drop in the first quarter, maybe because no wells are coming on? I think you guys have said that the quarters individually in 2021 are all pretty similar on production. Can you help me bridge the gap between the 1.7 Bcf and the just over 1.5 Bcf in the guidance here? Maybe I'll start and let Don maybe wrap up with anything I miss, but certainly, I think what you're seeing with that exit rate is an impact of the shut-ins that we had during 2020, right? We held back a number of our brand-new pads, brought them online early November into November. You're seeing basically a December 31st number that is very, very strong. That results in a surge of production synced up with November, December, basically November, March, right? November, the winter months, the strong pricing that we saw and the incremental hedging that we layered on to capture the strong winter pricing. That was by design, that was by plan, that was the whole point of shutting in summertime 2020 production, was to get this surge of production during winter 2021. Obviously, as you roll into normal course, steady pace development, that normalizes over the course of the year. I think ultimately averages out to basically what you're looking at, over the course of the year, we'll end up averaging out the numbers you're alluding to there. I think as you roll into, again, this was by design. We wanted to get as much production as we can and how we optimize the flow of those wells to get when the price is back. Again, we got it via the hedge book. Even though the cash prices didn't hold in there as much as you'd hoped in December and in January, we got it via because we resculpted the hedge book, and we captured those margins even though that it didn't show up. As you look into, call it, I'd say our cadence on Q1, Q2, Q3, and Q4, Q2's probably going to be the lightest quarter. It typically is for us. It's not dramatically different. We'll run on that sort of average. Q1 will be a little bit above it. Q2 will be a little bit around it or so below it. Three and four will be similar in that front. Like I said, this could change pretty quickly if the gas prices spike in the summer, drop in the summer, spike in the shoulder, drop in the shoulder, spike next winter, don't spike next winter. We'll shift around our production management to squeeze out extras of millions of dollars. For us, that's all free money. If you can just shape your production profile different and increase your returns, why wouldn't you, right? I think these exit-to-exit quarter and years are going to just look weird for us because we're always going to be moving things around to try to grab that extra $1 million here or there. All right. Just to make sure I understand, again, I guess the 1.7 Bcf exit rate to the 1.5 Bcf does seem like a fairly healthy change. Are you guys saying that there's a big component of choke management and just production management also just driving the shape of the volumes where you guys were just trying to produce all out into the winter, and now you can choke back the wells and be a little bit more steady in 2021? Am I understanding that right? Obviously I know that as prices change during the year, you'll modify that approach, but just want to make sure I get that at a high level. Yeah, no. If prices are good, you try to grab as much production per day as you can. If prices aren't that good, you try to save a little bit for later if the later prices show something better. I think, again, it's going to be on a quarter-to-quarter, week-to-week thing. It's going to be hard to pick and tie. If you look a step back, 2020, our production, Tyler, what was it? $500 million and- $555 million. No, that's 2021. What was 2020? $511 million. 2020, we were at $511 million for the year. 2021, we're forecasting $555 million. Just because we were at 1.7 Bcf in December, and we're going to average a 1.5 Bcf or something all across the year, we've increased our production by 10% from 2020 versus 2021 for the capital program that we have out there. It still generates $425 million in free cash flow. This pick and tie is just like a 1.75 Bcf, and our 2021 production's coming down. Our 2020- 2021 production grew by 10%. You're going to have some things, and like I said, I'm glad that we had a 1.7 Bcf in the good months pricing. Right now, it's a little bit shaped to be down. I'd say it's a bunch of stuff, whether it's choke management or optimization on that, coupled with the fact, like we said earlier, we saved all of our wells that were going to be coming online in the summer and fall of last year and turn them all online in the winter. That's going to create a little bit of a not smooth production profile. Just to maybe wrap it up on this issue, I think what you're seeing is what happens. It's the difference between managing an E&P business for production and production growth and production cadence versus managing a cash flow generation plan to create per share value. We look at what's going on month by month or week by week or quarter by quarter in the context of free cash flow and free cash flow per share. The way I look at the progression is 2020 was a very successful free cash flow year at $356 million, 2021 is going to be even more successful if we hit our guidance right or when we hit our guidance at $425 million. To me, that's what we're solving for. Now, where production cadence plays out in that is nothing more than a variable and a lever to be managed versus the other way around. Okay. No, that's a good call. I guess just last one here from me. Can you just give us the number of wells that you plan to drill and complete or turn in line, however you want to look at it, in 2021? How many Marcellus wells should we expect to come online in 2021 versus how many Utica wells in the plan this year? Yeah. Something Sorry, I'm just getting a sheet of paper. The bulk of it is Marcellus. That's right. There's two Utica wells in 2021. Yep. Okay. What's the total number of wells then? We haven't said explicitly, Leo, so I think in 2020, we were at 46 wells or 47 wells, I believe. Off the top of my head, 45 wells. We said we're going to transition, obviously, to the maintenance plan, which averages 25 wells a year from 2022- 2026. 2021's going to be probably somewhere in between, but maybe a little bit higher. Okay. Between the 25 wells- 45 wells. All right. Yeah. Yeah, that's right. Yeah. I think right now we're around 37 wells. Like I said, we can get something posted out there for clarity. We'll do it as the quarters unfold in our supplemental tables. Yeah, right now, 2021, it's around 37 wells, and two of those are Utica. Yep. Okay. Thanks, guys. The next question will be from Noel Parks with Tuohy Brothers. Please go ahead. Morning. Hi. One question I had, I was thinking about your share buyback plan. You already have a good, healthy allocation already approved. Just looking at the stock and the chart and thinking about what your appetite was for taking the risk of continuing to buy if the shares and maybe gas prices keep trending up. If you have a sense of maybe an upper limit about how far up in price you might consider buying. I think why I ask this is, on a 52-week basis, the stock is kind of near the top of that range. If you back off a couple of years, it's kind of right smack in the middle of where it's traded the last few years. I guess my thought is, do you consider where it is now, just way undervalued on the free cash flow basis, as you've mentioned, and where continued buyback would be attractive, or do you think there's a chance that it's going to run too far beyond where you'd really want to put capital there? Yeah. I'll start with saying, predicting what the stock price is going to do or not do is an impossible thing. Rewind time, I never thought it would be a $5 or a $6 share for the time that we were there for the mill. Sure. I think trying to predict this stuff perfectly, it's similar to gas prices. It's like a fool's errand. It's just something that it's hard to do. Whenever you dumb it down to its basic principles of how do you feel about the free cash flow per share of the company? What's that translate into free cash flow yield? How do you think about pace and process and timing? As Nick said, this is something we talk about and think through with the board all the time. Clearly, we have the wherewithal to be thoughtful on this, and we'll try our best to judge things as best as we can over the next several quarters and years. Because you're right, there's different catalysts that could have different effects, and we'll continue to make the right calls at the right time to the best of our ability over the next several years here. The good thing is that there's a lot of cash flow coming relative to the debt, relative to the market cap of the company, relative to getting to the balance sheet, which would be completely ironclad once we're at that level. The optionality is there, and we spend a lot of time trying to be thoughtful around these decisions as weeks and days and months and quarters and years unfold. The only thing I'll add, Noel, is that to me, it's much. You're right about, obviously, the one year and the prior multi-year averages versus stock price. For us, the decision-making on allocation of our free cash flow, and particularly in the area of share count reduction, exclusively comes down to what we think our future performance is going to be, what the risk is assigned to it, and that metric, right, that defines that is free cash flow, free cash flow per share, the free cash flow yield. Seeing is there a per share value creation opportunity with respect to share count reduction. With the yields that we've experienced, right, looking at based on what that is, 2020, 2021, and forward on free cash flow there was a good opportunity there we took advantage of in Q4. We got the flexibility, as Don said, to keep doing that through 2021 and beyond. At the same time, debt reduction remains front and center with regard to our focus. Great. Thanks a lot. My other question, again, this is asking you to talk about or think about totally external factors, I have to admit, I am a little surprised that crude has stabilized as handily as it has right in the sort of low 50s for the last, I guess, we're going on three weeks or so. Of course, a lot could happen geopolitically, OPEC, COVID, and so forth. Do you have any sense, with your hedging, it doesn't affect you directly, that we might be seeing an associated gas story maybe start to interfere in the gas markets more as a, say, second half 2021 event? I was not really thinking that was going to be likely for at least another year plus. I guess if you can predict how Saudi Arabia and Russia will cooperate over the coming 12 months, that's a better crystal ball than I have. I think that's why we definitely focus on hedging, because some of this stuff is just beyond our ability to predict. I'm encouraged by seeing crude sort of stabilize around that $50 a barrel mark. That seems to keep people from getting too heavy back into the associated gas plays. Although I am hearing some banks start talking about seven handles on the oil price. You start getting up to those price levels. They're talking year or two down the road. At those levels, you probably start seeing some folks coming back into the associated gas play. I'm just not sure whether the OPEC+ is that interested in allowing American Permian producers to sort of achieve another foothold. I got to think that they are incented to try to keep price down to a level where the Permian just doesn't get going again, which should help keep associated gas out of the market. Man, the future will tell. That's why we just stay steady and consistent on hedging, and taking all that volatility risk out of our free cash flow plan. Great. Thanks a lot. Ladies and gentlemen, this concludes our question and answer session. I would like to turn the conference back over to Tyler Lewis for any closing remarks. Great. Thank you, Chad. Thank you everyone for joining us. If you have any additional questions, please feel free to reach out to the company. Thank you for joining. Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.