Good morning, and welcome to the CNX Resources fourth quarter 2023 Q&A conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing star then zero on your telephone keypad. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. 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, and good morning, everybody. Welcome to CNX's fourth quarter Q&A conference call. Today, we will be answering questions related to our fourth quarter and full year results. This morning, we posted to our investor relations website an updated slide presentation and detailed fourth quarter earnings release data, such as quarterly E&P data, financial statements, and non-GAAP reconciliations, which can be found in a document titled: "4Q 2023 Earnings Results and Supplemental Information of CNX Resources." Also, and as previously announced, we posted to our investor relations website our prepared remarks for the quarter. This is a new format to better streamline the earnings process and dissemination of information. So we hope that everyone had a chance to read the prepared remarks before the call, as the call today will be used exclusively for Q&A. With me today for Q&A are Nick DeIuliis, our President and CEO, Alan Shepard, our Chief Financial Officer, Navneet Behl, our Chief Operating Officer, and Ravi Srivastava, President of our New Technologies Group. Please note that the company's remarks made during this call, including answers to questions, include forward-looking statements which are subject to various risks and uncertainties. Statements are not guarantees of future performance, and our actual results may differ materially as a result of many factors. A discussion of risks and uncertainties related to those factors and CNX's business is contained in its filings with the Securities and Exchange Commission and in the release issued today. With that, thank you for joining us this morning, and operator, can you please open the call up for Q&A at this time? Thank you. We will now begin the question and answer session. To ask a question, you may press star then one on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. The first question comes from Bert Donnes with Truist. Please go ahead. Hey, good morning, guys. Just wanted to start off on the New Tech free cash flow guidance. Maybe could you talk about specifically what's changed over the past three months to kind of impact your outlook? And then, I, you know, I suspect it's probably pricing. But, secondly, is it a matter of IRRs when you, when you discussed in your prepared remarks about the incentive for new expansion? Is it, is it IRRs not meeting some sort of internal threshold, or is it maybe that the projects have actually flipped to a negative free cash flow territory? Thanks. Hey, Bert, this is Ravi. On the New Tech cash flow side of things, you're right. What's gonna impact the cash flows for New Tech is two things, the volume that qualifies for different programs, and I think the team's done a great job of maximizing what those volumes can be. We've provided a guidance of about 15-18 BCF that qualifies for these various programs, and we were focused on getting all that volume kind of turned in line. So that's happened. We're pretty excited about that part of it. The second thing that impacts what the free cash flow is gonna be is what the pricing is. And we've... We have seen some softening of pricing, specifically in the APS market for the Tier One RECs, and that's driven the cash flows down. But there's some seasonality, there's some volatility that kind of comes in, into that. What the pricing that we were seeing in Q3, Q4 of last year, there's no reason why we cannot go back to those types of pricing later in the year. But what we're trying to do is providing guidance based on the information that we have available at this point in time, and that's where that market stands at this point in time. And on the future investment standpoint, that's correct. I think we have a portfolio of opportunities that we can invest our capital into, and we do have opportunity to go and capture more gas. But at this point in time, with the incentive structure that's available through the programs that we have access to at this point in time, we're limited in terms of how much more capital we can invest to capture this more base methane. That makes sense. Then, just shifting gears a little bit, but it looks like the footnote on full year 2024 cash unit cost just ticks up a little bit versus the 4Q 2023 disclosure. Is there any color on which bucket is maybe going up, and does that reverse if, you know, you ramp up your production? Thanks. So the way to think about those quarterly quarter-to-quarter kind of unit cost numbers, they fluctuate based on kind of the production volumes for the quarter and potential maintenance projects that slide around between quarters. The way to think about it is always to look to the sort of annual guidance that we provide, and then you'll see the, that's kind of the way you should think about modeling that on an annual basis, because there's noise in quarter to quarter. . Okay, so there's nothing specifically going up, you know, that we saw, like, GP&T or LOE. Okay, got it. No. Thanks, guys. The next question comes from Zach Parham with J.P. Morgan. Please go ahead. Hey, guys. Thanks for taking my question. I guess first, another one on New Tech. In December, you announced you were no longer partnering with the Adams Fork Project, which is one of the potential driver, drivers of future New Tech free cash flow growth. Can you talk a little bit about the drivers that you expect to. You know, you've talked about growing New Tech from here. Maybe what, what drives that higher than the $75 million in 2024 as we go out to 2025 and future years? Hey, Zach, that's a great question. So, the way I would look at New Tech free cash flow growth, you could put them into, I would say three different buckets. One is the environmental attribute opportunities. We talked about the volume that qualifies for some of these opportunities being 15-18 BCF. So we can grow that volume. For that volume to grow, there's better incentive that needs to be available for it. So we're looking for other opportunities, other incentive programs where or other pathways that can be created, where the realization for these environmental attributes can be, you know, we can realize more value for these. So we're looking at a portfolio of opportunities on that front. So if that happens, not only the realizations go up, there is opportunity to add more volume to it. So that's one pathway to grow New Tech free cash flows. The second part of it that we've talked about in the past is we have a technology portfolio that we're trying to create value out of. And I think 2024 is going to be the year where we've been in the prototype and testing phase for a lot of that stuff, but I think this year we start to see that those opportunities start to take commercial scale. So we're excited about those. I think more to come on that front in the coming quarters, but we're very excited with the progress that we have seen on that front. And then the third part is this alternate fuel opportunity, where hydrogen projects or getting into CNG, LNG market opportunities creates opportunity for NewTech to grow its cash flows. And again, I think it dovetails with the technology of an IP opportunity that we have that creates CNG and LNG opportunities for us. So more to come on that front, but we're pretty excited about what we have in our portfolio and those three different buckets combined is what's going to drive New Tech cash flows in the coming years. Thanks, Robbie. Maybe my follow-up on the E&P business. Eleven of your 35 planned turning lines in 2024 will be in the central PA area versus the southwest PA area, which is up a bit from 2023. Can you just talk a little bit about what your future development split will look like? Will we see more activity shift to central PA versus southwest PA over time? Yeah, I think we've talked about historically, we're very focused on continuing to develop that Southwest PA asset. That's where the bulk of our infrastructure is currently. And right now, you know, we assess those opportunities on a NPV kind of total IRR basis. We did drill some CPA Uticas as well, the wells this year. And we've talked about those. We expect those to come online next year, and that's some of the TILs you're talking about. But overall, you know, in the next few years, the mix should look pretty consistent that you've seen historically, but in the longer term, you would see us migrate up towards CPA towards the latter part of the decade. Great. Thanks for the color, guys. The next question comes from Leo Mariani with Roth MKM. Please go ahead. Yeah. Hi, I just wanted to follow up a little bit on kind of production, you know, trajectory here in 2024. I know you guys only had kind of two TILs in the fourth quarter. So just generally speaking, should we expect kind of production to dip a little bit here in the second quarter and then kind of start kind of moving up as we get to the middle of the year to kind of hit that guidance range? And I know that, you know, previously last year, you kind of had the point estimate on guidance, and, and this year you got a little bit of a range. So maybe just provide any kind of color around that would be helpful. Yeah. You, you'll see kind of similar to what you saw last year. Q1 will probably be the low number for our volumes, and that'll build throughout the year, and we should end the year at the highest kind of quarterly run rate. But on average, you know, we, as we talked about, we're trying to maintain kind of a flat production profile on an annual basis, about 580 Bcfe. Got it. Okay, that's helpful. And then, can you just talk a little bit more about, you know, how you get from 2024 capital to 2025 capital? So you got roughly $600 million, you know, this year, and it's expected to kind of step down to closer to $500 million next year. Can you maybe just kind of talk us through a little bit what the, the kind of delta there is? Yeah. What you're seeing there is what we've, we've kind of set out to achieve, right? We're going to hold production flat and focus on capital efficiency. When you do hold production flat, you end up needing to turn-in-line fewer and fewer wells each year. So the 25 plan is going to, you know, you should expect to see fewer TILs, and with that comes lower capital, right? Particularly on the completion side. So that's really the big driver there. We're not modeling any sort of cost reductions or anything like that. It's truly an activity-based reduction. Got it. So I'm assuming a lot of this is probably just a function of lower decline rates as you continue to hold production flatter. It's just taking fewer wells. And is there also any kind of component that you're seeing where, you know, perhaps the wells have improved at all? I'm just trying to get a sense of, you know, it's a pretty big step down, right? Going from 600 to 500, you know, call it 17%-18% less capital. It's a really nice change in efficiency. We just wanted to see if there's any kind of well improvement, performance component here. Yeah, I wouldn't, I wouldn't describe it as well improvement performance. I mean, we will have the, the CPA Utica wells in that blend next year, and we expect those to be very robust like we saw in prior, prior years. So really it's just, you know, to maintain 580, you hit it. The production declines are lower, the, the capital intensity on the infrastructure side is lower, and you end up with lower completion activity. So that's right where we want to be. Okay, thank you. So we see a signal to grow production in this basin. Yep. Yep, that makes sense. Thank you. The next question comes from Michael Scialla with Stephens. Please go ahead. Yeah, good morning, everybody. Maybe just to follow up on Leo's question there, too. Just curious, with that step down to $500 million, was there anything built in, CapEx-wise for the Adams Fork Project in that timeframe, or was that further out? No, that was further out. Okay, got it. And then, your production guidance for this year looks like you're implying some mid-single-digit growth year-over-year. I want to see how you see the in-basin fundamentals playing out this year, and any concern about potential bottlenecks on storage or export capacity? No, I mean, it's all gonna be weather dependent. I think up here, things have been pretty consistent and staying flat. So, you know, we'd expect the supply side to remain steady and it's gonna be a demand function. You know, we'll see how kind of we get through the winter here, the rest of February and March, and we'll have a better view on that. But, you know, we're protected in any scenario, you know, with our hedge book, so we're ready to go for whatever 2024 brings. Gotcha. If I could ask one more. For this year's non-drilling CapEx, the $145 million-$175 million you talked about, can you give any rough split on the land, midstream, and new tech breakout there? Yeah, the new tech's in a separate bucket. It's in that discretionary line, and that's pretty de minimis. It's in that $5 million-$10 million range, but that also includes all of our efforts on ESG reductions. So, there's two kind of things in that bucket. On the land side, if you're around the $30 million sort of range, and the rest is split between water infrastructure and midstream infrastructure, that kind of keeps up with the field development. Great. Appreciate it. Again, if you have a question, please press star, then one. The next question comes from Jacob Roberts with TPH. Please go ahead. Morning. Morning, Jacob. We. Morning. We were wondering if you're able to give any insight into the split of the $75 million in new tech in terms of perhaps credits versus private party transactions. And then is there any expectation, you know, given the volatility of those markets in terms of how they'll be monetized on a quarterly basis? So, as we've said in our prepared commentary, the sources for the cash flow for impact is coming from the APS market. There's some of the compliance markets that we're part of, and there's some voluntary transactions that we've taken. So at this point in time, we're making some dynamic decisions on where the opportunity is and where to direct those attributes to. So it's difficult to provide the split on an ongoing basis. But what I would say is that some of the other transactions on the voluntary side and all that stuff, they're all driven by what the other opportunity costs are. So the APS program is probably a good driver for what the realization would be for some of this stuff. And then, the variability is kind of gonna come from the volume and what's happening in that market for pricing, the APS market. Okay. I appreciate that. And then my second question: At a high level, how are you guys thinking about balancing uses of FCF in the coming years between shareholder returns, which have been on a solid pace, potential debt reduction, or even maybe how you plan to handle those maturities in the 2026, 2027 time frame? Yeah. So, you know, we've been pretty consistent in kind of messaging to the market. In the longer term, you know, we are looking to delever. That's gonna occur through kind of absolute debt reduction, as well as kind of growth in gas pricing and the new tech revenue side. You know, we're well positioned right now with where the balance sheet sits and where the hedge book sits to have the luxury to basically deploy, you know, close to 100% of free cash flow to shareholder returns. You know, it's a odd, kind of a quarter-by-quarter decision, though, you know, to continue that pace, right? We always talk about following the math, and that's what we do. Right now, we still see a lot of opportunity in the undervalued shares to continue where we're at. Great. Appreciate the time. The next question comes from John Abbott with Bank of America. Please go ahead. Hey, good morning. Hey, Robbie, my question's for you. You talked about those three different opportunities to grow free cash flow on the new technology side. You talked about these commercial opportunities in bucket number two. Can you provide any more color? Yeah O n what those are, approximately, what you're looking at there? Or do we have to wait and see? L ike, what I could say is, like, we've developed you know, a portfolio of IP around opportunities that help reduce costs on the oil and gas flow back completion side of things and reduces emissions on that side of things. It's very exciting and more to come on that front. I think it's been in this prototype phase. We've been doing a lot of testing on that, but I think we're at a point where it starts to take some commercial scale. So, stay tuned. In the next couple of quarters, we'll have a much better idea of how that shapes out in the NewTech free cash flow in the coming years. Appreciate it. My other one's just sort of a quick follow-up. Just in, you know, you gave your seven-year plan a while back. So any thoughts about when you may update your longer-term guidance? Yeah. I mean, right now, you know, we've been extremely successful in that plan. You know, we're at 33% of the share repurchases. We've still got three years left to go on that plan. You know, when there's a material change to kind of the strategy that we've laid out, that'll be the appropriate time to update it. Right now, there's nothing that I can point to that's planned to do so. All right. Thank you very much. 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 again for joining us this morning. Please feel free to reach out if anyone has any additional questions. Otherwise, we will look forward to speaking with everyone again next quarter. Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.