CNX Resources Corporation

Good day and welcome to the CNX Resources first quarter 2021 earnings conference call. All participants will be in a 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. Please note that 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 to everybody. Welcome to CNX's first quarter conference call. We have in the room today Nick Deulius, our President and CEO, Don Rush, our Chief Financial Officer, Chad Griffith, our Chief Operating Officer, and Yemi Akincibe, our Chief Excellence Officer. Today we will be discussing our first quarter results. This morning we posted an updated slide presentation to our website, also detailed first quarter earnings release data, such as quarterly E&P data, financial statements, and non-GAAP reconciliations are posted to our website in a document titled 1Q-2021 Earnings Results and Supplemental Information of CNX Resources. As a reminder, any forward-looking statements we make or comments about future expectations are subject to business risks, which we have laid out for you in our press release today, as well as in our previous Securities and Exchange Commission filings. We will begin our call today with prepared remarks by Nick, followed by Chad, Don, and then Yemi, and then we will open the call up for Q&A. With that, let me turn the call over to you, Nick. Thanks, Tyler. Good morning, everybody.

I'm going to focus my comments on the first two slides of the deck that we posted this morning before turning it over to Chad Griffith, our COO, to discuss our hedging strategy in gas markets. Then we're going to go over to Don Rush, our CFO, to talk about the financials. And then Yemi will wrap things up to talk about some thoughts on ESG that we've got. But starting out on slide two, there's one main theme that I think is important to highlight, and the theme there is steady execution. First quarter was another example of steady execution, and it's illustrated by us generating $101 million in free cash flow. This is the fifth consecutive quarter that the company generated significant free cash flow. Similar to last quarter, we used some of that free cash flow to pay down debt. That helped build further liquidity, and we used some of the free cash flow to buy back our shares in the open market at attractive pricing. So for the quarter, we repurchased 1.5 million shares at an average price of $12.26 per share at a total cost of $18 million. We still have ample capacity of around $240 million under our existing stock repurchase program, which is a reminder that's not subject to an expiration date. Also in the quarter, we upped our free cash flow guidance by $25 million to $450 million. That's $2.04 per share compared to the previous guidance of $1.93 per share. Our steady performance drives our confidence in continuing to execute upon our seven-year free cash flow plan, and we continue to expect we'll generate over $3 billion over those seven years. Again, this is done by steady execution each and every day. Our long-term plan is largely de-risked through our hedging program that supports a simpler operational program that consists of one rig and one frack crew. We've worked hard to get the company to where we are today, and our focus is going to remain on successfully executing that plan. I want to jump over now to slide three. This is a slide that we have showed for the past few quarters now, but I think that it's a really powerful one. Our competition is For investor capital is not so much among just our Appalachian peers, but more so across the broader market. And as you can see by three of the main financial metrics that we track, CNX screens incredibly well across various metrics and indices. We believe that these things matter most to generalist investors along with what has become a much simpler differentiated story. CNX is a differentiated company due to the structural cost advantage we enjoy compared to our peers. mainly because we own our midstream infrastructure. And this mode provides us with superior margins that drive significant free cash flow, which in turn puts us in a unique position to flexibly allocate capital across a full spectrum of shareholder value creation opportunities. While our near-term focus is to continue to reduce debt and opportunistically acquire shares, we continually evaluate all our alternatives that we've got. So, last in that regard, With respect to the often asked about potential M&A activity, our view remains consistent from last time we spoke. Our two key screening metrics are the ability to deliver long-term free cash flow per share accretion and having good risk-adjusted returns. The strength of our company affords us the ability to be patient on this front to ensure that we avoid M&A missteps that too often permanently can destroy shareholder value. With that now, I'm going to turn things over to Chad.