CNX Raises 2026 Free Cash Flow Outlook to $550 Million

CNX Resources (CNX) raised its 2026 free cash flow outlook to approximately $550 million after generating $125 million in the third quarter, extending its run of positive free cash flow to 27 consecutive quarters. The natural gas producer also continued its share-repurchase program, spending $180 million to buy back 5.2 million shares during the period.

The updated non-GAAP free cash flow forecast compares with the company’s previous estimate of about $525 million. CNX now expects approximately $3.85 of free cash flow per share, up from its prior projection of about $3.55, based partly on a lower share count as of Oct. 14.

CNX reported a third-quarter cash operating margin of 62% and fully burdened cash costs before depreciation, depletion and amortization of $1.10 per thousand cubic feet equivalent. Its trailing-12-month leverage ratio was 1.8 times. For the full year, the company projects a 63% cash operating margin, costs of about $1.15 per Mcfe and leverage of 1.7 times, with the leverage estimate assuming expected free cash flow is used to reduce net debt.

Production and spending outlook

CNX revised its expected 2026 production range to 612.5 billion to 617.5 billion cubic feet equivalent, compared with the previous range of 605 Bcfe to 620 Bcfe. Liquids are expected to represent about 8% to 9% of production, while 82% of forecast natural gas output is hedged.

The company projects adjusted EBITDAX of $1.29 billion to $1.31 billion, versus its earlier range of $1.265 billion to $1.315 billion. Total capital expenditures are expected to be between $571 million and $586 million, including $405 million to $410 million for drilling and completions, $150 million to $160 million for other spending and a $16 million payment for Utica Shale rights beneath the Apex Energy footprint.

CNX expects to turn in line 34 wells during 2026, including 24 in the Southwest Pennsylvania Marcellus, three in the Central Pennsylvania Marcellus and seven in the Utica Shale.

The free cash flow forecast includes approximately $50 million of expected asset-sale proceeds and about $30 million from the sale of 45Z tax credits tied to 2025 remediation activities. CNX said the $30 million tax-credit proceeds were received in the third quarter. The guidance also identifies an approximately $80 million free cash flow contribution from environmental attribute sales.

Buybacks and balance sheet

CNX repurchased its third-quarter shares at an average price of $34.35. Since the buyback program began in 2020, the company has acquired approximately 111 million shares for $2.3 billion at an average price of $21.08, retiring about 36% of its outstanding shares. The total includes approximately 1.1 million shares purchased between Oct. 1 and Oct. 14.

Adjusted net debt stood at $2.275 billion at the end of the third quarter, down $270 million from the third quarter of 2020. The company said that reduction was achieved despite an approximately $518 million increase associated with the Apex Energy acquisition.

As of Sept. 30, CNX had roughly $1.7 billion of available liquidity under credit facilities with combined elected commitments of $2 billion, excluding letters of credit. Its senior unsecured debt had a weighted-average maturity of 5.25 years.

Emissions and risks

CNX said it continues to focus methane-reduction efforts on fugitive emissions and other large-release events, using aerial surveillance, fixed sensors, enhanced leak-detection programs and operational-data monitoring. The company reported capturing approximately 9 million metric tons of waste methane carbon-dioxide equivalent from mining operations, more than 10 times its Scope 1 emissions.

The outlook remains subject to risks including volatility or declines in natural gas and natural gas liquids prices, customer financial conditions and contractual performance, broader economic or geopolitical disruption, changes in environmental attribute markets and the company’s ability to qualify for related credits. Changes in safety, health and environmental regulations could also affect results. CNX noted that its forward-looking projections are based partly on market prices and estimates as of Oct. 14 and may differ materially from actual outcomes.