Good morning and welcome to the CNX Resources Q4 2024 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 0. After today's brief presentation, there will be an opportunity to ask questions. To ask a question, you may press star then 1 on your telephone keypad. To withdraw your question, please press star then 2. 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 Q4 Q&A Conference Call. Today, we will be answering questions related to our Q4 results. This morning, we posted to our Investor Relations website an updated slide presentation and detailed Q4 earnings release data, such as quarterly E&P data, financial statements, and non-GAAP reconciliations, which can be found in a document titled 4Q 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 for 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 include answers to questions, including 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. The discussion of risks and uncertainties related to those factors in 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? We will now begin the question-and-answer session. Again, to ask a question, you may press star then 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then 2. Our first question today comes from Gabe Daoud with TD Cowen. Please go ahead. Hey, thanks. Morning, everyone. I was hoping to start first on New Technologies and specifically 45V. Would you be able to walk us through your interpretation of guidance and whether the existing partnership with KeyState will move forward? I guess I thought that even with flaring as the counterfactual, the carbon intensity of CMM would still put you in a position to recognize maximum credit value. So would love, I guess, a bit more understanding on that. Yeah. Thanks for the question. This is Ravi. So I think you had quite a few layers in that question, so I'll be trying to address them one after the other. So first of all, the rule provides us important federal recognition for capture of coal mine methane as a low-carbon intensity feedstock for hydrogen production w e're pretty excited about that and kind of validate CMM's potential for decarbonizing a range of hard-to-abate sectors. So with this inclusion, we have successfully validated the premium nature of our coal mine methane previously in manufacturing, then in power and now we have validation within the hydrogen production sector. And while we're excited about the recognition of CMM in 45V and the way the proposed rules came out, that was pretty good. There were quite a few restrictions that were introduced within the rules, which we believe are inconsistent with the scientific assessment of CMM that was done by the national labs and what the intent of the IRA was. We're looking forward to the new administration will have an opportunity to kind of improve the rules to ensure there is clarity to make necessary investment decisions in the future to kind of scale this hydrogen economy. Our participation and moving some of these projects forward is going to be contingent on clarity on these rules going forward. Okay. Got it, g ot it. So you need more clarity before moving forward with anything. Okay, o kay. Thanks for that a nd then I guess as a follow-up, I'll switch gears to the E&P side. Could you maybe just talk a little bit about the second half of 25, with first half being or capital being heavily weighted to the first half? Obviously would expect some declines in the second half into 2026. So any additional commentary on maybe timing of re-accelerating activity or what you would need to see to spend more capital in 25? Any additional clarity that would be helpful? Thanks, everyone. Yeah, s o this is Alan. The way we think about it, we position the activity set, basically the whole production flat coming through 24. The activity set is primarily weighted upfront in Q1. We need to wait and see kind of where the industry production levels are coming out of winter, w e need winter to finalize, see where storage, where projected storage is going to be. And then we'll make an assessment b ut we do want to create that flexibility. If prices stay high or go higher, you could see us accelerate some activity and bring up some more volumes. But it's too early to tell at this point. Got it. Thanks, guys. The next question is from Zach Parham with JP Morgan. Please go ahead. Thanks for taking my question. I wanted to follow up on the 2025 budget. I mean, it seems very efficient and seems to be benefiting from some DUCs on the Apex assets. Could you just give us some color on what the run rate spending would be if you were going to hold this level of production flat going forward? Yeah, so I think we talked about this at the beginning of last year. The goal kind of a run rate is sub-500, and there's 2 things driving that rate. You're starting to see the efficiencies from the Utica CPA development combined with our kind of low decline PDP base. So we're comfortable on the legacy assets that you could hold that below 500 for the upcoming years. With respect to APEX, we had the chills that are going to come online here. Basically, those wells were completed. Post-close, all we need to do is kind of flow those back and turn them in. Ultimately, what we do with that position, we'll see, and that goes back to the earlier comment about production levels on that asset are going to be set by market pricing later in the year as part of our capital allocation process. Got it. Thanks for that color a nd I wanted to follow up on Gabe's question. You spoke about 45V, but could you talk about other potential pathways to generate credits from the CMM business in the future? Just really trying to think about what could be next for this environmental attributes business. Yeah. So we've been talking about this where coal-mined methane offers a clear environmental and economic advantage as an energy source a nd we have successfully validated premium pricing in manufacturing with a deal like you like in the power generation sector with qualification in the ATS Type Program a nd now we're through 45V for hydrogen production. So we're going to continue to target these different sectors, whether it's in power generation, manufacturing, data centers, and the validation that we get from recognition of these programs kind of open up a lot of other monetization opportunities. So we'll keep driving those efforts, and we'll share more information as we have more updates to share on that front. Thanks a lot. The next question is from Leo Mariani with Roth. Please go ahead. Hi. Just wanted to dive in a little bit more to some of the new tech numbers here, so it looked like Q4 of 24 saw very robust free cash flow at $30 million, so as we're kind of looking ahead into 2025, seemingly you guys are guiding to say that new tech free cash flow will be down a little bit this year. Maybe you could just provide a little color around that, given the strength that we saw in 4Q, and then just additionally, have you seen any real contribution yet from the oil field service business or the CNG, LNG business in 2024 to that free cash flow? And do you expect those businesses to be additive here in 25? Yeah, s o this is Ravi again. So the Q4 numbers are kind of primarily if you remember in Q3, we had a lower volume. We had a lower cash flow number because some of the volumes got pushed into Q4. So Q4 numbers are kind of benefiting from monetization of more environmental attributes in the Q4 volume itself, in Q4 itself. So the overall volume is consistent. And we were able to kind of bring some volume that would have been monetized in January, kind of got into December, which allowed the Q4 number to be high. But on a run rate basis, I think the volumes that we'll be able to monetize into that ATS Program is in that 17-18 BCF a nd the value recognition is kind of still staying in that, say, $30-$35 per megawatt hour range. So I think, and that's going to be the primary driver for the free cash flow in that segment, which kind of comes out to that $75 million-ish per year range. There may be some ebbs and flows because of when some of those volumes get monetized, but largely that's what the driver is. The AutoSep and CNG business, they're still in early commercialization phase. I mean, AutoSep is fully deployed on CNX's footprint, and we're seeing the cost benefits and the safety benefits and operational efficiencies and emission reduction objectives that we wanted to achieve with that s o we're seeing that on that front. But expansion beyond CNX's footprint, we expect to see in 25 a nd as some of that materializes, we'll share more information. Okay. That's helpful and then obviously, I think in your comments, you folks referred to hopefully the new administration here, which has come in, might take a fresh look at the 45V rule interpretation and maybe make some more favorable changes. Just overall, obviously, you have 45Q legislation pending as well. Clearly, we had the red wave that happened with the elections here. I mean, it's been, I guess, a short period of time, just a couple of weeks since the Trump administration has taken over. Do you folks have any read on how the new administration would just kind of be viewing coal mine methane in terms of the abatement there and how that can kind of translate into potential opportunities for you folks? Has there been any signal at the administration that they're more inclined to maybe be helpful on this front? I mean, I would say it's too early at this point in time. I mean, coal mine methane has a lot of inherent environmental and socioeconomic benefits. So I think we're going to continue to advocate and make the case for it b ut it's a 45Q and other processes like that. They're going to run their political new course. And we'll stay connected in that with the right folks. But in the meantime, we're going to continue to pursue opportunities in these other markets and sectors for monetization pathways. Okay. Well, that's helpful. And then just jumping over to some of your comments on production, just real quick, just wanted to kind of make sure I sort of understood them. So really, the goal here of 25 production is to kind of keep your base volumes flat b ut it sounds like, if I heard you right, you'll expect to see some maybe modest declines on the Apex volumes, maybe as we get into the second half of the year. I know you're bringing some deferred wells kind of online, which will happen for little to no capital s o maybe that props up production in the near term b ut then you kind of see a modest decline in the second half. Just wanted to make sure I sort of heard that right. It sounded like also if conditions, though, are more favorable in the gas market and the rest of the winter is decent, then there's a reasonable chance you might have a few more wells late this year with maybe the goal to kind of flatten that out as we head into the end of the year in 26. Yeah, that's right. The guidance we provided kind of speaks to what you're talking about with the optionality to increase volumes or accelerate volumes in the second half of the year if the pricing and capital allocation methodologies suggest we should do that. Okay. Okay. Thank you for the clarification. The next question is from Bert Donnes with Truist. Please go ahead. Hey, morning, guys. On the coal mine methane front, I just want to make sure I understood your comments correctly. You're only looking for clarity on the overly restrictive rules, but if those are cleared up, the financial incentives are enough. Is that correct? And then, is there any capital levels that would be associated if the rules were clarified positively that maybe a CapEx you'd have to spend? Okay, Bert, I think it's the restrictive nature of the rules and there's some lack of clarity on the book and claim methods and which facilities qualify. There's a lot there to unpack. I think it's going to take a little bit of time to figure out how all those things kind of shake out a nd once we have a better idea of all those things, I think that will provide a better understanding of what the plan forward could be in terms of capital investments and where those capital investments are made. So there's just too much lack of clarity at this point in time, and it's going to take a little bit of time to figure out how the rules get fixed and then how some of the more clarifications from Treasury and DOE on some of the other applications kind of come in so t oo early at this point in time to comment on that. Okay. Just to make sure, so there is some level of if the rules were clarified positively, you would have some level of revenue, but then maybe you could increase that amount by spending some capital. I guess there's room to accelerate activity through operating. So this is Nick. Just to be clear and back up a step, where we're at with coal mine methane and the climate benefits tied to it as a fuel stock blend to different industries. We've got manufacturing where it's established a premium pricing level. We've got the hydrogen economy now with the recently issued 45V guidance a nd we've got the power generation sector with sort of programs like the APS standards in Pennsylvania. We're continuing to work all those different avenues to optimize that portfolio. And some of that is going to involve things like 45Q and 45V. And some of that will include pursuing opportunities in things like the AI Power Generation Industry to feed it and recognizing the benefits in market transactions with regard to fugitive methane capture. So with respect to these individual rules and programs, it's part of a bigger puzzle. It's too early to say. We'll have to wait and see where it lands. That's perfect. Thank you a nd then just the other question would be on the buyback activity. I was just a little bit surprised you didn't step in in Q1 of 25. Were there maybe some blackout periods due to APEX or maybe a view on the macro, or is it maybe a game of we should preserve the capital if we want to accelerate in the second half instead of using it on buybacks now, or just any thoughts there? Thanks, guys. Yeah, I think we talked about it before. We don't talk about tactics on these calls. I think we just refer back to we do run a continuous capital allocation process, and obviously, there is a blackout period that's part of that consideration. Understood. Thanks, guys. The next question is from Michael Scialla with Stephens. Please go ahead. Thank you. Good morning, everybody. I wanted to ask on the Apex acquisition. You talked about 8,600 net acres there of undeveloped Utica. Just wondering with that acquisition being 36,000 acres, was the Utica developed on a large portion of that acreage, or is it limited by geology? Just looking for a little bit more color there. Yeah. Our view is that there's developable Utica across that footprint and there hasn't been any development on that particular asset just yet on the Utica. So does that imply that there's upside to that 8,600? I guess I'm just looking at how did you come to the 8,600 number? The 8,600 that we disclosed on the acquisition, you're saying, on the Utica? Yeah. Those are controlled. In terms of. Yeah. Those are controlled rights at acquisition. That's what they had in terms of Utica under lease. Gotcha. So they didn't have rights to all 3,600. Okay. Got it. There's 36,000. Sorry. And of those 8 wells that are going to be turn-in-line on that acreage, are all those Marcellus or any of those Utica? Those are all Marcellus. Okay, and just one more on the Utica. You're still thinking kind of 3 BCF per 1,000 foot of lateral, and any update on what you're seeing with cost per lateral foot in those wells? Yeah, Mike. That's correct. The wells that we gave guidance last quarter, like the BP6N and O well, they are holding production like we expected to and they are in line for 3 BCF per 1,000 feet. Anything on the cost side you can say there? I would just say part of the capital efficiency number that you're seeing in the total CapEx, we're delivering these wells at the target numbers we're looking to see. I think there's a little bit of room to improve. We're going to continue to work on that, but we're very pleased with where we're at on the drilling and the capital efficiency side on those wells. Great. Appreciate it, guys. The next question is from Noah Hungness with Bank of America. Please go ahead. Morning, Nick and team. I guess the first question here is also on the Utica. If you guys could give any latest thoughts on spacing just for new drill locations? Yes, I can do that. This is Nav. So on the spacing so far for the BP6 wells, they are at 1,300 foot spacing, and that's in line a nd then we have a few more spacing tests coming up at 1,500 feet. So we will be able to talk about that later this year. Appreciate it a nd then my second question is just on cash taxes for 25, how we can think about that given how volatile Strip has been? Yeah. So we're still a de minimis cash taxpayer until we reach kind of a cumulative $3 billion of free cash flow. So we don't see material kind of cash tax payments until we get out to late 26, early 27. Great. Thanks. The next question is from Jacob Roberts with TPH. Please go ahead. Morning. Morning. I wanted to touch on the comment about coal mine methane volumes relative to the referenced anticipated mining plans. Can you give any insight into how much insight you guys might have into those plans and the timeframe of that mine development we should be thinking about? And is that comment on development specific to the Buchanan Mine? It seems like you guys may be capturing almost all of the drainage gas there, but it appears there may be other mines with smaller volumes that could present some opportunities. And are there any limitations on capturing those volumes? Yeah, o ur volumes are primarily Buchanan Mine at this point in time. I mean, we have some capture operations in our Northern Appalachia footprint as well. We work closely with the mine operators to have an understanding of what their annual or long-term plans are, and we try to provide guidance and our expectations based on the best information we have from them. Okay, t hank you a nd then my second one is on marketing. Just curious, what is driving the changes year- over- year in the percentages and the various sales points? Maybe what you guys are looking for, seeing in those markets at the moment, and how that could shift through the year. Yeah, m arketing is on a daily basis, right? We're continually optimizing with our FT portfolio, which end markets we have. So any variation you're seeing quarter- to- quarter or year- to- year, it's just optimization on the marketing side. We haven't entered into any new sort of FT contracts or anything like that that would fundamentally change the market split. Thank you. Appreciate the time. This concludes our question and answer session. I would like to turn the conference back over to Tyler Lewis for any closing remarks. 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 is now concluded. Thank you for attending today's presentation. You may now disconnect.