CNX Marks 26th Consecutive Quarter of Free Cash Flow, Settles Convertible Notes to Strengthen Balance Sheet

By Positive Energy Hub Staff

CNX Resources Corporation reported another quarter of durable performance in the second quarter of 2026, generating $138 million in free cash flow and marking its 26th consecutive quarter of positive free cash flow generation. Since the inception of its seven-year plan in 2020, CNX's differentiated business model has now produced approximately $3.1 billion in cumulative free cash flow.

"Q2 2026 marks our 26th consecutive quarter of free cash flow generation, highlighting our Sustainable Business Model that is the cornerstone of our success," said Alan Shepard, President and CEO. "During the quarter, we opportunistically repurchased a significant number of shares and reduced our total debt outstanding. The strength of our balance sheet, combined with our consistent cash flow generation, provides significant flexibility as we continue to clinically allocate capital to grow long-term per share value."

That flexibility shows in how CNX allocated capital during the quarter.

CNX repurchased approximately 5.6 million shares for $199 million at an average price of $35.28 per share, and after quarter-end bought back another 1.2 million shares for $40 million at an average price of $33.03 per share. Since its peak share count in the third quarter of 2020, the company has now repurchased about 106 million shares for $2.2 billion at an average price of $20.43 per share — a market-leading 34 percent cumulative reduction in shares outstanding.

On the balance sheet side, CNX retired the remaining $209 million of its outstanding convertible notes during the quarter, settling the obligation by issuing approximately 12.6 million shares net of the capped call settlement. Combined with the quarter's activity, CNX has reduced net debt by $193 million year-to-date.

Behind the financial results was another quarter of steady operational execution.

The team drilled 2 Utica Shale wells in Central Pennsylvania (CPA), frac'd 6 Marcellus Shale wells in Southwestern Pennsylvania (SWPA), and turned in line [1] 5 SWPA Marcellus wells during the quarter. CNX also set a new company record for 24-hour lateral footage drilled in the Utica, reaching 4,416 feet. Given current commodity market conditions, the company continues to run a maintenance-of-production program of roughly 1.5 rigs and a partial-year fracturing crew, with capital expenditures expected to rise in the third quarter before declining in the fourth, and production volumes expected to peak in the fourth quarter.

CNX's lower-carbon product platform also continued to contribute to results. The company recognized about $13 million in net sales of environmental attributes tied to approximately 4.0 Bcf [2] of Remediated Mine Gas (RMG) [3] during the quarter, keeping it on pace for its full-year target of roughly 17 Bcf of RMG and about $50 million in Pennsylvania Tier 1 Alternative Energy Credit (AEC) [4] net sales at current market prices. After quarter-end, CNX also sold credits under Section 45Z [5] of the federal tax code for approximately $30 million in net cash proceeds — a $10 million increase from prior guidance — after the U.S. Treasury clarified that the company's 2025 remediation activities qualified for a full year of monetization. A subsequent U.S. Department of Energy update to the emissions-modeling formula used to calculate those credits is expected to push total annual 45Z tax credit sales to approximately $40 million beginning in 2027.

Looking ahead, CNX reaffirmed its 2026 production guidance of 605 to 620 Bcfe [6], with 34 total wells expected to turn in line (27 Marcellus, 7 deep Utica), and reaffirmed base capital expenditure guidance of $540 million to $570 million. Using a natural gas price of $3.55 per MMBtu [7] based on July 15 NYMEX [8] pricing, the company continues to expect approximately $525 million of full-year free cash flow, with free cash flow per share guidance rising from $3.41 to $3.55 per share following the quarter's buybacks.

On the environmental, social, and governance front, CNX's industry-leading Radical Transparency program surpassed 1.1 million air quality datapoints collected since inception, with the Pennsylvania Department of Environmental Protection now leveraging the public-private program to conduct an independent greenfield site monitoring study in Washington County — one of the most intensive studies of unconventional gas wells undertaken in the country. As with prior monitoring, CNX continues to find no evidence that its gas development operations harm human health or degrade local air quality, a track record that calls into question proposals for expanded buffer zones in Pennsylvania.

Taken together, the second quarter reflected a familiar CNX formula: disciplined operations, another quarter of free cash flow generation, continued share repurchases, a stronger balance sheet, and ongoing investment in lower-carbon products and transparent operations. For Appalachia, that's another quarter of pairing energy production with long-term, per share value creation.

Notes

1. "Turned in line" means a well has been completed and connected for sales.
2. Bcf = billion cubic feet, a standard unit for measuring natural gas volume.
3. RMG is natural gas captured from mine ventilation systems that would otherwise be released into the atmosphere.
4. AECs are credits generated under Pennsylvania's Alternative Energy Portfolio Standard for qualifying energy sources.
5. Section 45Z is a federal tax credit for producing lower-carbon transportation fuels.
6. Bcfe = billion cubic feet equivalent, a unit that converts natural gas and related liquids into one comparable measure.
7. MMBtu = million British thermal units, the standard unit used to price natural gas.
8. NYMEX = New York Mercantile Exchange, where natural gas futures prices are set.