Good day and welcome to the CNX Resources 2nd Quarter 2026 Question and Answer Conference Call. Today, all participants will be in a listen-only mode. Should you need any assistance during today's call, please signal for 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 at that time, you may press star then 1 on a touchstone phone. To withdraw your question, please press star then 2. Please note that today's event is being recorded. I would now like to turn the conference over to Tyler Lewis, Senior Vice President of Finance and Treasurer. Please go ahead.

Thank you, and good morning, everybody. Welcome to CNX's second quarter Q&A conference call. Today, we will be answering questions related to our second quarter results. This morning, we posted to our Investor Relations website an updated slide presentation and detailed second quarter earnings release data, such as quarterly E&P data, financial statements, and non-GAAP reconciliations, which can be found in a document titled 2Q-2026, 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 before the call, as the call today will be used exclusively for Q&A. With me today for Q&A are Alan Shepard, our President and Chief Executive Officer, Everett Good, our Chief Financial Officer, and Mabneet Bell, our Chief Operating Officer. Please note that the company's remarks made during this call, including answers to questions, include 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. A 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 a release issued today. With that, thank you for joining us this morning. And, Operator, can you please open the call for Q&A at this time?

Thank you. We will now begin the question and answer session. As a reminder, to ask a question, you may press star, then 1, on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw it, please press star, then 2. And today's first question will come from Gabe Dowd with Truist. Please go ahead.

Thanks, Operator. Morning, everyone. Hey, morning, guys. Can we just start with 45Z maybe and just the updated guidance there around credit monetization? How should we think about, I guess, timing around Treasury issuing a final ruling to feel comfortable about that $40 million revenue number for 2027?

Yeah, on the Treasury guidance itself, that's the sometime second part of this year. And I'll turn it over to Everett. He can sort of walk you through what happened.

Yes. So, there are a couple pieces that we disclosed. One was a step up in cash flows for the current year where we had confirmation that the methane stream captured for the first four months of 25 qualified for credit. So, we stepped up our monetization this year. And then the Treasury also refined its carbon intensity calculations in its CREAT model, which raised the value of our annual monetization to approximately $40 million a year. So we combine our 45Z sales going forward, which will be monetized in 27, plus our environmental attributes, we're targeting approximately a $90 million a year run rate between the two.

Okay. Okay, 90 million a year. Okay, great. Great. Thanks for that. And then maybe just a follow-up, could we get your updated thoughts around capital allocation moving forward? You know, maybe a little bit of a weaker near-term macro environment with a medium to longer-term improving picture. So, how does CNX maybe think about capital allocation given that and your attractive cadence on the buyback?

Yeah, so we, you know, nothing's changed from our process. I mean, we're on year six and a half of sort of executing our capital allocation philosophy, you know, focuses on creating long-term value per share. And when we see sort of opportunities where the margin of safety is pretty big, we're going to go ahead and take advantage of that. So, you know, we don't sort of signal as to what we're going to do, but we have a lot of flexibility and we're seeing some attractive opportunities right now on the equity side.

Great. Okay. Thanks, Gus.

And our next question is from Leo Mariani with Roth. Please proceed.

I was hoping you could talk a little bit to capital here. In your prepared remarks, you guys said that third quarter CapEx is moving up some versus 2Q, and I guess it's going to move back down in 4Q. I mean, just kind of eyeballing that, it looks like it kind of puts you at the higher end of the 26 CapEx range. Just wanted to verify that that's generally accurate, and maybe you guys are seeing some inflation starting to hit the numbers here.

No, I wouldn't ever read into that, Leo. You know, we've still gotten to the midpoint of those numbers, and, you know, the commentary is more just about reflecting of the timing of the activity we have going on in the field, right? So you're just going to see slightly higher in Q3 and then sort of level out in Q4, and that just matches up with the activity in the field. Not seeing really anything on the inflation side to note.

Okay, that's helpful. And just on production, you guys talked about how fourth quarter was the peak. Obviously, there's been weakness in gas. Are you guys kind of attempting to sort of manage your turning lines a bit to try to get production to hopefully peak in winter when maybe price is a little bit better? And does that mean third quarter is a little bit weaker and fourth quarter is kind of the strongest? Just trying to get a little sense of what you're doing on the production.

Yeah, I think the schedule usually naturally sets up like that where we kind of have some of the paths coming on towards the end of the year. But, again, we don't over-engineer for that answer. We're solving for sort of a different outcome. them. But yeah, the way it lines up this year, you'll see a big couple of whales come on in Q3, and then you'll see the rest of them sort of surge into Q4.

Okay, that's helpful. And just on the 45Z, I'll mention that you monetized, you sold the $30 million of credits. Is that kind of all going to hit like in the third quarter? It's kind of one lump sum payment for you guys? I'm just trying to understand that.

Yeah, as a reminder, you'll see it come through in the cash flow in Q3. That's why we disclosed it sort of early July activity. When you see it in the financials, remember, it comes through the income tax expense line and shows up there. So you don't really see it in EBITDA, but you'll see the cash flow impact, which is the most important thing coming through in Q3.

Okay. Thank you. And the next question is from Michael Shala with Stevens. Please proceed.

Morning, everybody. Just looking at your second quarter spending, I realize you don't guide quarterly, but It was a little bit lower than we were anticipating, I think, the street in general as well. It looks like you only drilled two wells. Granted, they were in the Utica, but anything slow activity during the quarter, or was that pretty much as planned?

Yeah, that's as planned. I think it's just a function of us not providing quarterly guidance. We're not planning on doing. Again, I would just look to sort of where the full-year guidance is and where those midpoints sit, and that's the right way to think about it.

Okay. And on the 45Z, obviously encouraging there, given that, any plans for additional remediation or you just kind of stick with the Buchanan mine going forward?

No, that's the right question. I mean, we're starting to see this carbon intensity score come down and the value of these credits creep up. We're getting close to where that might make sense, and, you know, we're always evaluating the opportunities to expand the system. We certainly have some rights and opportunities to do that. Nothing definitive at this time, but, you know, as we keep making progress, that would be the goal longer term.

So probably nothing this year, but possibly.

Nothing near term, yeah, but nothing for the rest of this year.

Okay. I just wanted to sneak one more in, if I could. It looked like your last couple quarters you've set some 24-hour drilling records on the Utica. Anything you can say there in terms of well costs? I think you're in kind of that 1,700 per foot range. Is that still a good number there, or is that moving either way?

Yeah, I would say that's sort of the number we're staying with right now. I mean, we've seen what we've talked about last time is the opportunity for improvement is in the drilling side. Completion is in the rest of the well construction is pretty steady. But, you know, every time we go back to one of these pads, every time we get a new well, We're getting better and better, as you would expect, as the industry has shown over the years. So we'll provide, you know, when we're ready and we have a fulsome data set, we'll provide maybe an update on that at a future point.

Sounds good. Thanks, Alan. Yep. Thank you.

The next question comes from Jacob Roberts with TPH. Please go ahead.

Good morning. Hi, Jake. Hey, I know you just specifically said no quarterly guidance, but I'm wondering if you could help us out a little bit on the activity plan from here, and specifically how we should be thinking about the till count by quarter relative to the higher level of spending in Q3, and maybe specifically if you could comment on where the remaining Utica tills will fall in the back half of the year.

Yeah, I'll give you some direction there. So we've got a large Marcellus pad in process right now that will come on in Q3. So that's 12 to 13 of your tills will hit in Q3. And then the Utica pad that we're in the process of right now, that will hit later in Q4. That's very helpful.

Maybe for Everett, on the low-carbon side, obviously positive to the 45Z uplift there, but I wanted to focus on the Pennsylvania AEC market. It sounded to me like if you're thinking about $90 million for next year, that's a flat run rate on the AEC market going forward. I'm just curious if you could speak to what you're seeing in that market and kind of the confidence you have around the numbers for the rest of this year and into 2027.

Yeah, we're essentially just marking it to market off of where we're seeing tradeoff ice. So we're assuming it's stable to flat. But, you know, we do see some level of volatility in that market. And as we provide, you know, go for guidance, we can constantly market to market. But we're seeing relative stability there in the price.

Great. I appreciate the time.

As a reminder, if you do have a question, please press star, then one. And the next question comes from Betty Jiang with Barclays. Please proceed.

Great. Thank you. Good morning. Good morning, Betty. Great question. On the buyback, I mean, clearly you're really leaning into the counter-cyclical buyback here. Just wondering philosophically, I think you took out some debt on the revolver. What's your willingness to lean on the debt to buy back more stock in this environment?

That's a good question. I think maybe if you think about the short-term outlook for gas and the longer-term outlook, maybe that's informative, right? But, you know, 26 going into 27 is setting up to be a little bit soft. But longer term, you know, the outlook for gas here in Appalachia in particular is tremendous. You know, so if that's your view, you should be much more sort of an upstream operator, much more interested in repurchasing shares, right? I think based on our activity level, there's a reasonable argument that we're probably the most bullish of the operators here in Appalachia. So, yeah, and under that circumstances, the right constraints and risk management around it, You could certainly see outspend if that's what made sense. But, you know, regardless of any of that, we're going to keep running the process we've been running for the last six years and allocate capital to the best use.

Got it. Makes sense. And then operationally, I have two parts to focus. One, the lateral length is a lot longer in 2Q in Southwest PA. Just if you could comment on is that specific to 2Q or just generally your program is getting longer in lateral length? And then secondly, on the central PA, now that your 1Q well has been on for a while and you also brought on Utica in the second quarter, just maybe how these wells are faring relative to your expectations.

Yeah, on the lat length, that's really a function of, you know, what your acreage position is. Obviously, the longer the better in terms of well economics. So we try to fit them in to optimize for that. But, again, it's a function of where you have acreage. On the Utica side, you know, I think you see from the state data and from whatever else that's been published out there that these wells are performing sort of as we guided to. So we're very pleased with sort of the results from the Utica, and we think it's top tier in the basin.

Got it. Thank you.

And this does conclude today's question and answer session. I would now like to turn the conference back over to Tyler Lewis for any closing remarks.

Great. Thank you again for joining us this morning, and please feel free to reach out if anyone has any additional questions. Otherwise, we'll look forward to speaking with everyone again next quarter.

Thank you. Thanks, everybody.

And the conference has now concluded. Thank you for attending today's presentation, and you may now disconnect.