Hello, and welcome to the CNX Resources third quarter twenty twenty-four Q&A 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. To ask a question, you may press star, then one on your telephone keypad, and to withdraw from the question queue, please press star, then two. As a reminder, this conference is being recorded. I would now like to hand the call to Tyler Lewis, Vice President of Investor Relations. Please go ahead. Thank you, and good morning, everybody. Welcome to CNX's third quarter Q&A conference call. Today, we will be answering questions related to our third quarter results. This morning, we posted to our investor relations website an updated slide presentation and detailed third quarter earnings release data, such as quarterly E&P data, financial statements, and non-GAAP reconciliations, which can be found in a document titled 3Q 2024 Earnings Results and Supplemental Information of CNX Resources." Also, we posted to our investor relations website our prepared remarks for the quarter, which we hope everyone had a chance to read 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. These 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? Of course. As a reminder, to ask a question, you may press star then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. Again, to withdraw your question, you may press star, then two. At this time, we will pause momentarily to assemble our roster. Today's first question comes from Bert Donnes with Truist. Please go ahead. Hey, good morning, team. Just wanted to start off on the full year twenty-five capital disclosure. It looks like it maybe got removed from your press release and your presentation. You know, is that five fifty no longer accurate? And, you know, maybe there were some moving parts on your turn-in-line schedule, so is that moving up or down, or is inflation impacting that? Any color there would be helpful. Yeah, great question. So I think the way to think about 2025 is next quarter, we're going to provide everyone with, kind of the full production volumes we're going to target, the associated CapEx with that. You know, that'll be entirely a function of what we see developing the pricing for next year. We do still retain the 11 DUCs that we had deferred earlier in the year, so we have pretty significant flexibility in terms of what production profile we want to hit. But again, that all comes back to where we see pricing headed for next year. So, you know, the removal disclosure is really just about, you know, we're close to next quarter, and we'll provide the exact numbers then. Okay, maybe not as a disclosure, but is the efficiency still similar, or is it just a matter of moving parts? Just wanted to make sure that was the part of the question. Yeah, the efficiency is similar to better. It's just a matter of moving parts and setting the exact number we want to target. It's sort of a function of gas prices. Perfect. Makes sense. And then the second part, I know it's certainly way too early for new tech exact numbers on 2025 and beyond. You know, there's some moving parts on the CMM volumes and pricing, and AutoSep looks like it might have slid to the right. Just directionally, do you have any views on 2025 and 2026 versus the $75 million? Like, just directionally, upwards or downwards? Yeah, again, we'll provide the detailed view on that next quarter. As of right now, we just kind of defer to what's in the commentary on this. Gotcha. And was the AutoSep pushed to the right on the? I think the prior disclosure just implied you were going to do some third-party work in the second half. I just want to make sure that was either the case still or no longer the case. Yeah, that's still a possibility. The focus right now on AutoSep is working with our JV partner to develop some additional units in that fleet. Right now, the existing unit we have is fully deployed on our internal operations, so there's potential for some third-party work this year, but the focus of that right now is building out that fleet. We're seeing really good kind of interest from customers, and it's still in real early stages. So that's why we'll again talk about it next quarter, where we see the full year guidance for that business, but maybe still looking good there. Gotcha. I appreciate the details. Thanks, guys. Thank you. The next question comes from Zach Parham with J.P. Morgan. Please go ahead. Thanks for taking my questions. First, just wanted to ask on the new tech business. You mentioned in the prepared remarks you're still waiting on some regulatory clarity for 45V and potentially 45Q. Could you talk a little bit more about the opportunity set if you do get some regulatory clarity there? You know, how much more coal mine methane could you potentially capture, and what would be the associated CapEx spend with that to capture incremental volumes? Yeah, thanks for the question, Doug. And the short answer is we don't know, and we can't say right now, because we don't know enough, you know, about how the market's gonna develop. We have. In our commentary, we have laid out there's four different, you know, pathways that they're pursuing. And the first one being the AEPS program, where, you know, the states are looking to kind of reduce their CO2 emissions and look at alternative energy resources to be deployed for electric generation, right? And then we got the 45V pathway for hydrogen production generation. And now we got this 45 Q opportunity for CO2 sequestration, greenhouse gas emission reduction opportunity. And then we're also pursuing private sector transactions. That's the opportunity set. While the AEPS pathway is defined and that kind of sets the stage for what our opportunity to capture right now is and what our sort of cash flow guidance that we're providing right now, as the other pathways, while we're very excited about, you know, like, what they can be, but they're still taking form. As these markets start to kind of crystallize, then we'll be in a better position to provide our view on, you know, how we could play a role in serving these markets, but right now, it's just too premature, like, until these pathways for markets become more definitive. Thanks for that. My follow-up, I just wanted to ask on the buyback. The stock has moved quite a bit higher. It's higher than where y'all bought back in the past. I'm just curious how you're thinking about the buyback going forward with the stock now in the mid-thirties. You know, do you still consider it a good value to be buying back stock? You know, at some point, do you consider pivoting to a dividend? Just curious how you're thinking about cash return from here in general. Yeah, so we continue to see a very attractive opportunity over the long term for CNX when we look out into the future prospects of the business. But I wouldn't read into that in terms of short-term allocation decisions. It's sort of counterproductive for us to provide near-term guidance on those activities. What I will say is I'll point everybody back to fundamentally, you know, our disciplined capital allocation process is the same, regardless of what the share price is. The share price is just an input into that process. We're going to continue to follow that process and the results that it kind of spits out. The only other thing I'd note there is we have pretty significant flexibility just in terms of where our balance sheet is and with our hedge book. You know, all capital allocation opportunities are open to us. Thanks, guys. Thank you. The next question comes from Leo Mariani with Roth Capital. Please go ahead. I just wanted to follow up a little bit more here on the guidance. It looks like you guys removed five turn-in-lines from the schedule in 2024. Just curious if maybe those kind of slid to the right, or are you paring back some activity? Obviously, gas prices have not been fantastic here over the last, you know, couple months. So just trying to get a sense if you're being a little more cautious on overall activity on the drilling side, or perhAEPS maybe those just slid, you know, a tiny bit into early 2025 on the turn-in-lines. Yeah, it's more of the latter. Those were, those were DUCs that were kind of scheduled for that mid to late December and kind of slipped across the across the year-end line. So it's kind of artificial, you think about it from that perspective. So there's no, no change in the activity set from what we indicated back in the spring, where we deferred those 11 DUCs. Okay, that's helpful. And then just wanted to follow up on the 45Q, 45V potential tax credits here. Could you just give us kind of a sense of, you know, roughly what type of federal tax credit is kind of being contemplated under 45Q? You know, I guess from, like, a CO2 perspective, it's around $85 per ton. Is that something similar that you think could occur, you know, for methane? And then under the 45V rules, is there potentially some kind of, you know, multiple, big multiple of that number in terms of the tax credit? Just trying to get a sense of what you think is being kind of contemplated right now, and any high-level timeframe as to when you think a decision could be made, you know, under those potential bills? Yeah, thanks for the question. On the 45Q side of things, I think that, I think the number that's been floated out there in the draft language is around $60 per ton. But at the same time, like, you know, there's a lot of moving parts to understand, like, what's gonna qualify and what's not. So I think it's too early to say, like, which volumes are gonna qualify for that. I think we will have to wait until the final language is out. On the 45V side of things, it talks about a tax incentive for producing hydrogen, and I think the best - the most that you can get is, like, $3 per kilogram. And how that translates into what incentive it would be for coal mine methane. I think it's gonna have to go through a very rigorous exercise of understanding, like, you know, like, again, like, you know, like, specifics of what the guidance is gonna entail. So it's very difficult to say at this point in time what that will be. So stay tuned. Once the guidance is out, I think we'll be able to provide more color. And as for the timing, I think I can say at least on the 45V side of things, what we've heard from the Treasury is that it's expected before the end of the year, in Q4. Okay. Very helpful. Thank you. Thank you. The next question comes from Nitin Kumar with Mizuho. Please go ahead. Hi, good morning, guys, and thanks for taking my question. You've given us some color on the 45Q and 45V, but I'll try something maybe a little different. On the 45Q, the treasury has been a little bit prescriptive in terms of what equipment qualifies. They have a date of, I think, 2018 and a twelve-year sunset. Could you walk us through your current operations in CMM? What is the sort of average life of that equipment today, and is this being replenished or sort of renewed every few years? I mean, I would say that again, it's too early to say it until unless the language for the 45Q draft language as it pertains to methane capture is finalized. It's we'll just be like hypothesizing what that means. So, like, once the language is clear, I think we'll be able to provide better guidance. Okay, fair enough. And then, I want to just maybe circle back to Zach's question. You know, I understand you can't talk about plans to increase CMM, but do you have a sense of what is the fund cost today of... Forget about 45V or 45Q. What is the cost of maybe implementing new systems on mines? And, what is the opportunity set for CNX? I think you do about 70 to 80 BCF a year. How much can you grow that? Yeah, I mean, I think it kind of goes back to the same question, Nitin, where, like, in the absence of good guidance in terms of, like, what's gonna qualify, what's not, it'll be too premature to talk about, like, you know, what qualifies, how much qualifies. So I would say stay tuned until the better information is available for us so we can provide better guidance on the matter. All right, I thought I could take a shot. Thanks, guys. Thank you. The next question is from Michael Scialla with Stephens. Please go ahead. Morning, everybody. Yeah, I wanted to ask on the Deep Utica play, obviously some very high rates there. Anything, if the gas prices improve next year, is there anything that would, if you wanted to ramp that play, that would constrain that? Any infrastructure issues, or is it still too early on the cost side to know if you really want to push the pedal down there, if the market looks like it needs more gas? Let me answer the first question first. We're extremely happy with the performance on the cost side and just the overall execution at a Nav's team. In terms of ramping volumes, you know, those wells are super prolific in early time, so you certainly have that optionality. We don't have any kind of near-term major constraints. I think what you're hitting at is just really the function of pricing. And in any ramp-up situation, as we've seen in the past, you do need some lead time to do it, but there's nothing I'd point to right now that would prevent us if we were to see that sort of market price signal. Great. Could you, is it too early to say on the cost side, or can you give, I mean, you gave some days, which I guess would imply is $100,000 per day, a good estimate on the drilling side? And then, we can, could we assume, like, one-third, two-thirds on the completion side? I think I can give you, Michael, the cost side. So far, you know, like we you know put in our guidance here is we've gotten our drilling time down to, like, what? Like, you know, under 50 days. That's a 23% improvement over 2023. And on the current set of wells that we've just you know completed, that's we've improved even more that. So you know, I am very pleased with the progress we have made, but not anywhere close to satisfied on where we should be. So we will keep continuing making progress on both cost and you know, drilling performance. Just to kind of give you an example on drilling performance, is our all-in cost, like, you know, we've been able to drive them down, like, almost 31% from 2023. And drilling has been the major driver for that cost coming down, and drilling costs have come down almost 38% from 2023, which was what? Like, you know, $1,200 per foot, down to, like, what? $750 per foot. And we are making progress continuously as we speak. Great. Navneet, is it, is it fair to say it competes with your Marcellus right now, or is it, still kind of a little bit higher cost play? It's actually absolutely competed. It's in the mix in the capital allocation process, for sure. Yeah. And just to kind of give you an idea of, like, these are highly prolific wells. For example, 10,000-foot Utica well, compared to, you know, Southwest PA Marcellus well, will make about 20 BCF, 7 times faster than the Southwest PA well, right? So these are highly prolific, highly, you know, higher rate of return wells. So we are really excited about the play. Great. Appreciate the color. Thank you, guys. Thank you. The next question is from Jacob Roberts with TPH. Please go ahead. Morning. Good morning. Maybe for Ravi, stepping away from the, you know, financial outlook on the 45Q and 45V changes. If we think about the 18 Bcf of coal mine methane today, should we be viewing those potential changes under 45Q and 45V as mutually exclusive opportunities, or is there a way to benefit from both? I mean, I hate to kind of repeat the same thing. Until the guidance is out, I don't know, and we don't know whether that 18 BCF and how that's gonna get that treatment. So, so once we have better idea, once we have better information, we'll be able to provide more color on how that 18 BCF gets treated under the two programs. Fair enough. As a follow-up, just given the equity appreciation, has that changed any conversations around the M&A market and what opportunities might be out there? And then more specifically, do you think there are opportunities that exist that would align more with the new technology segment? Yeah, I would just defer back to the earlier commentary. You know, I talked about our capital allocation process, and one of the things that gets considered throughout that process is M&A, you know, both oil and gas and potentially other things, as you allude to. But nothing specific to comment on at this point. Great. Appreciate your time, guys. Thank you. The next question comes from Kevin McCurdy with Pickering Energy Partners. Please go ahead. Hey, good morning, guys. Can I ask for a little clarification on the well costs on the Utica side? I think you mentioned earlier that costs were down 31% from 2023. Where does that put you on a dollar per foot in for this latest round of wells? Yeah. So I think the number that I have in mind is about $1,800 per foot is where we're targeting after 2024. Gotcha. Okay. That's, that's helpful, and then I appreciate all the updates on the new technology side, and I know that you're kind of limited on what you can say, but can you just kind of confirm for us on the CMM volumes that, that this year, I think you're at 17-18 BCF. That's not capped at that rate, right? You could potentially increase that over the next few years if there was an incentive to do so? Yeah. David, it's all going to be a function of the incentive program we talked about. You know, we enjoy the ability to grow the portfolio, but until we see final regulations, we can't analyze how and which projects would come online and at what time. Any thoughts of the total capacity that you could grow to? Again, without the details of the program, you can't make that estimate. Great. I appreciate it. Thank you, guys. Thank you. This concludes our question and answer session. I would now like to turn the call back over to Tyler Lewis for any closing remarks. Great. Thank you again for joining us this morning, and please feel free to reach out if anyone has additional questions. Otherwise, we'll look forward to speaking with everyone again next quarter. Thank you. The conference is now concluded. Thank you for your participation. You may now disconnect your lines.