CNX Resources Corp. Q1 2026 Filing Summary
Business Context and Reporting Period
This Form 10-Q covers the quarterly period ended March 31, 2026. CNX Resources Corporation is a large accelerated filer engaged in the production of natural gas, natural gas liquids (NGLs), and oil, primarily in the Appalachian Basin. The company operates through two main reportable segments: Shale and Coalbed Methane (CBM), with an "Other" segment capturing corporate items, purchased gas activities, and unrealized derivative gains/losses.
Key Financial Metrics
| Metric | Q1 2026 | Q1 2025 |
|---|---|---|
| Total Revenue | $786.7 million | $82.4 million |
| Net Income (Loss) | $348.1 million | ($197.7 million) |
| Diluted EPS | $2.18 | ($1.34) |
| Operating Cash Flow | $277.5 million | $215.7 million |
| Capital Expenditures | $169.9 million | $131.5 million |
| Total Debt (Gross) | $2,379 million | $2,429 million |
| Cash & Restricted Cash | $6.2 million | $12.9 million |
Production Margin (Non-GAAP): The company reported a production margin of $1.56 per Mcfe in Q1 2026, compared to $1.31 per Mcfe in Q1 2025.
Material Changes vs. Prior Period
- Revenue Surge: Total revenue increased by approximately 854% year-over-year. This was driven by a $171 million increase in natural gas, NGL, and oil revenue due to higher sales prices and volumes, and a massive swing in commodity derivative results from a $528 million loss in 2025 to a $4 million gain in 2026.
- Profitability Turnaround: The company moved from a net loss of $198 million in Q1 2025 to a net income of $348 million in Q1 2026. The primary driver was a $226 million unrealized gain on commodity derivatives in 2026, compared to a $418 million unrealized loss in 2025.
- Debt Restructuring: CNX issued $500 million of new 5.875% Senior Notes due 2034 and retired $500 million of 6.00% Senior Notes due 2029, incurring a $12 million loss on debt extinguishment.
- Production Growth: Total sales volumes increased by 4.6 Bcfe (3.1%) to 152.4 Bcfe, attributed to new wells turned-in-line and the integration of the Apex Energy II acquisition.
Guidance, Outlook, and Risks
- Capital Expenditure Guidance: Management expects full-year 2026 capital expenditures to range between $556 million and $586 million.
- Production Guidance: Full-year 2026 production volumes are expected to range between 605.0 Bcfe and 620.0 Bcfe.
- Hedging Strategy: As of April 10, 2026, the company has hedged 459.2 Bcf of natural gas production for 2026 at an average price of $2.74/Mcf and 402.2 Bcf for 2027 at $3.31/Mcf.
- Convertible Notes: $208 million of 2.25% Convertible Notes mature in May 2026. The company has elected to settle these obligations via the issuance of common stock.
- Risks: Key risks include volatility in natural gas and NGL prices, potential write-downs of proved reserves if prices decline, and exposure to commodity derivative mark-to-market fluctuations. The company also faces contingent liabilities related to the 1992 Coal Industry Retiree Health Benefit Act, though it maintains an indemnity agreement with Core Natural Resources.
Investor Verification Checklist
- Derivative Impact: Verify the sustainability of earnings given that the Q1 2026 net income was heavily influenced by a $226 million unrealized gain on derivatives, which is non-cash and volatile.
- Convertible Note Settlement: Confirm the dilution impact of the May 2026 Convertible Notes settlement, which will be settled in stock rather than cash.
- Liquidity Position: Review the low cash balance ($6.2 million) relative to the $208 million current portion of long-term debt due in May 2026, noting the reliance on the stock settlement election.
- Debt Covenants: Confirm continued compliance with the maximum net leverage ratio (3.50:1) and minimum current ratio (1.00:1) covenants under the CNX Credit Facility.
- Non-GAAP Reconciliation: Cross-reference the reported "Sales of Natural Gas, NGL and Oil, including Cash Settlements" ($500 million) against GAAP revenue to understand the true operational cash generation excluding derivative mark-to-market noise.