Business Context and Reporting Period
Company: CNX Resources Corp (CNX)
Filing Type: Form 10-K (Annual Report)
Reporting Period: Fiscal year ended December 31, 2025
Business Overview: CNX is an independent ultra-low carbon intensity natural gas development, production, midstream, and technology company centered in the Appalachian Basin. Operations focus on unconventional shale formations (Marcellus and Utica) in Pennsylvania, Ohio, and West Virginia, and Coalbed Methane (CBM) in Virginia.
Key Financial Metrics
| Metric | 2025 | 2024 |
|---|---|---|
| Net Income (Loss) | $633 million | ($90 million) |
| Earnings Per Share (Diluted) | $3.98 | ($0.60) |
| Total Revenue | $2,239 million | $1,267 million |
| Operating Cash Flow | $1,029 million | $816 million |
| Capital Expenditures | $495 million | $540 million |
| Total Long-Term Debt | $2,429 million | $2,166 million |
| Proved Reserves (Tcfe) | 9.7 Tcfe | 8.5 Tcfe |
| Production Volumes (Bcfe) | 629.0 Bcfe | 550.8 Bcfe |
Material Changes vs. Prior Period
- Profitability Turnaround: The Company reported a net income of $633 million in 2025, a significant improvement from a net loss of $90 million in 2024. This was driven by higher natural gas prices and increased production volumes.
- Acquisition Impact: On January 27, 2025, CNX completed the acquisition of Apex Energy II, LLC for approximately $518 million. This transaction added significant proved reserves (668 Bcfe) and contributed to the 14% increase in total sales volumes.
- Revenue Growth: Total revenue increased 76% to $2.24 billion, primarily due to a 51% increase in the average natural gas sales price (excluding derivatives) and higher volumes.
- Derivative Impact: While 2024 included a $453 million unrealized loss on commodity derivatives, 2025 included a $278 million unrealized gain. However, realized cash settlements on derivatives resulted in a $181 million loss in 2025 compared to a $281 million gain in 2024.
- Asset Sales: The Company recognized a net gain of $97 million on asset sales and abandonments in 2025, primarily from the sale of Marcellus Shale rights in Ohio.
Guidance, Outlook, and Risks
2026 Guidance
- Production: Expected annual sales volumes of 605 - 620 Bcfe.
- Capital Expenditures: Expected to range between $556 million and $586 million. This includes the first of three annual payments of $16 million for Utica Shale rights associated with the Apex footprint.
- Commodity Price Volatility: Revenue is highly sensitive to natural gas and NGL prices. The Company uses derivatives to manage risk, which can limit upside potential during price spikes.
- Regulatory Environment: Operations are subject to evolving federal and state regulations regarding greenhouse gas emissions, hydraulic fracturing, and pipeline safety. Changes in these regulations could increase costs or restrict operations.
- Debt Obligations: Total long-term debt is approximately $2.4 billion. The Company must maintain compliance with financial covenants, including a maximum net leverage ratio of 3.50 to 1.00.
- Environmental Attributes: Future revenue from environmental attributes (e.g., carbon credits) is subject to market volatility and regulatory eligibility criteria.
- Derivative Exposure: Verify the impact of the $181 million realized loss on commodity derivatives on actual cash flow versus the reported net income.
- Debt Covenants: Confirm continued compliance with the 3.50:1 net leverage ratio and minimum current ratio covenants under the $1.4 billion revolving credit facility.
- Reserve Revisions: Review the 2025 reserve report for the 104 Bcfe increase due to performance revisions and the 33 Bcfe decrease due to plan changes.
- Acquisition Integration: Assess the operational integration and cost synergies realized from the Apex Energy II acquisition.
- Capital Allocation: Monitor the execution of the $2.4 billion remaining stock repurchase authorization and the $556-$586 million capital expenditure plan for 2026.
Management Commentary
Management highlighted the strategic value of the Apex acquisition in expanding undeveloped leasehold and infrastructure. The Company continues to focus on low-cost operations, with average lifting costs (excluding taxes) at $0.15 per Mcfe. CNX maintains a significant hedging program, with approximately 449 Bcf of 2026 production hedged at an average price of $2.74 per Mcf.