Appalachian natural gas producer (Marcellus/Utica). AGI Score 8. Pure-play gas with aggressive buyback. Data center power supply chain optionality. | CIK: 0001070412 | Analysis date: 2026-03-12
CNX is cheap on assets (P/TB 1.34x) with a natural gas thesis that has multiple ways to win. The company sits in the Appalachian Basin with 9.7 Tcfe of proved reserves, generates ~$534M of free cash flow, and is aggressively buying back shares ($528M in 2025 alone -- that is 9% of the market cap in a single year). It operates with only 390 employees. The data center power demand thesis gives it optionality on top of an already solid asset base. Similar thesis to EQT but smaller ($5.8B vs $40B) and potentially more leveraged to gas price upside. This has AMR-style characteristics: physical assets, cash generation, aggressive buybacks, and a market that may be undervaluing long-duration reserves in a world where electricity demand is about to structurally increase.
CNX Resources is a pure-play Appalachian natural gas E&P company. It was formerly part of CONSOL Energy (coal + gas), which separated in 2017. Today it operates exclusively in the Marcellus and Utica Shale formations in Pennsylvania, West Virginia, and Ohio, with a small coalbed methane (CBM) segment that contributes ~6% of production.
| Acreage (Marcellus, net) | ~557,000 acres |
| Acreage (Utica, net) | ~612,000 acres |
| Total Developed Acreage | 428,042 acres |
| Total Undeveloped Acreage | 26,092 acres |
| Production (FY2025) | 629.0 Bcfe |
| Of which Shale | 590.8 Bcfe (94%) |
| Of which CBM | 38.2 Bcfe (6%) |
| Product Mix | 89.5% natural gas, 10.5% NGLs/oil |
| 2026 Production Guidance | 605 - 620 Bcfe |
| 2026 Capex Guidance | $556 - $586 million |
| Employees | 390 |
| Reserves Life (at current production) | ~15.4 years |
The vertically integrated model is key. CNX owns midstream gathering systems (~2,000+ miles of pipeline) and sells directly to gas marketers, industrial customers, local distribution companies, and power generation facilities. This reduces reliance on third-party processors and gives them better netbacks. They also have a "Remediated Mine Gas" (RMG) program that extracts methane from old coal mines -- a niche environmental benefit that could eventually generate carbon credits.
Apex Acquisition (Jan 2025): CNX acquired Apex Energy II for $518M cash, adding Marcellus/Utica acreage. This also includes a 3-year option ($48M total) to acquire Utica Shale oil and gas rights beneath the legacy Apex footprint. This acquisition is why FY2025 production jumped to 629 Bcfe from 551 Bcfe in FY2024.
| Category | Mcfe | Tcfe | % of Total |
|---|---|---|---|
| Total Proved Reserves | 9,662,144 MMcfe | 9.66 Tcfe | 100% |
| Proved Developed (PDP) | 6,972,410 MMcfe | 6.97 Tcfe | 72.2% |
| Proved Undeveloped (PUD) | 2,689,734 MMcfe | 2.69 Tcfe | 27.8% |
| Category | Mcfe (millions) | Notes |
|---|---|---|
| Beginning Balance (Dec 2024) | 8,537,943 | |
| Extensions & Discoveries | +866,936 | Drilling results |
| Purchases of Minerals in Place | +667,993 | Apex acquisition |
| Revisions of Previous Estimates | +69,057 | Positive revision (gas prices up) |
| Production | -628,960 | Year's output |
| Sales of Minerals in Place | -21,572 | Minor divestitures |
| Ending Balance (Dec 2025) | 9,662,144 |
This is the SEC-required present value calculation of proved reserves at 10% discount rate, using year-end prices and costs.
| Item | FY2025 | FY2024 | FY2023 |
|---|---|---|---|
| Future Cash Inflows | $29.12B | $18.00B | $20.28B |
| Future Production Costs | ($10.41B) | ($8.03B) | ($8.52B) |
| Future Development Costs | ($2.22B) | ($1.74B) | ($1.90B) |
| Future Income Tax | ($4.19B) | ($2.08B) | ($2.51B) |
| Future Net Cash Flows (Undiscounted) | $12.30B | $6.14B | $7.36B |
| 10% Discount | ($7.23B) | ($3.30B) | ($4.25B) |
| Standardized Measure (PV-10 after tax) | $5.07B | $2.84B | $3.11B |
The Standardized Measure of $5.07B represents the present value of CNX's proved reserves alone, using conservative year-end pricing assumptions. This is roughly equal to the current market cap of $5.85B. This means the market is valuing the proved reserves at roughly 1.15x PV-10 and giving almost no value to: (a) undeveloped acreage beyond proved reserves, (b) the midstream gathering infrastructure, (c) optionality on higher gas prices, (d) the share buyback program's effect on per-share value, (e) data center demand optionality. The PV-10 figure jumped 79% from FY2024 to FY2025 primarily due to higher year-end gas prices used in the calculation, plus the Apex acquisition adding reserves.
| Cost Component | FY2025 | FY2024 | FY2023 |
|---|---|---|---|
| Lease Operating Expense | $0.15 | $0.13 | $0.11 |
| Production, Ad Valorem, and Other Fees | $0.05 | $0.05 | $0.05 |
| Transportation, Gathering & Compression | $0.61 | $0.69 | $0.69 |
| DD&A | $0.88 | $0.85 | $0.77 |
| Total Production Cost | $1.69 | $1.72 | $1.62 |
| G&A (allocated) | ~$0.23 | ~$0.29 | ~$0.22 |
| Interest Expense (allocated) | ~$0.27 | ~$0.27 | ~$0.26 |
| All-In Cost (est.) | ~$2.19 | ~$2.28 | ~$2.10 |
If we strip out DD&A (non-cash), the cash cost per Mcfe is approximately $1.31/Mcfe. This means CNX generates positive cash flow at any gas price above ~$1.31/Mcf at the wellhead. At current NYMEX of ~$4/Mcf (minus ~$0.60 basis differential), they realize ~$3.40/Mcf, generating roughly $2.09/Mcfe of cash margin.
Including DD&A, G&A, and interest, the all-in breakeven is approximately $2.19/Mcfe. CNX realized $2.75/Mcfe including hedge settlements in FY2025 and $3.04/Mcfe excluding hedges. Even in the terrible gas price year of FY2024 (avg realized $2.15/Mcfe ex-hedges), the company generated $816M of operating cash flow because hedges added $0.57/Mcfe.
| Metric | FY2025 | FY2024 | FY2023 |
|---|---|---|---|
| Average Gas Price (per Mcf) | $2.99 | $1.98 | $2.20 |
| Hedge Settlement Impact (per Mcf) | ($0.31) | +$0.57 | +$0.32 |
| Average Price Incl. Hedges (per Mcfe) | $2.75 | $2.66 | $2.61 |
| Average Price Excl. Hedges (per Mcfe) | $3.04 | $2.15 | $2.32 |
| NGL Price (per Bbl) | $21.30 | $21.60 | $21.24 |
| Oil/Condensate Price (per Bbl) | $55.26 | $61.56 | $65.88 |
CNX runs one of the most aggressive hedging programs in E&P. This is both a feature and a bug.
| Year | Volume Hedged (Bcf) | Avg Hedge Price ($/Mcf) | Notes |
|---|---|---|---|
| 2025 (actual) | 482.3 | $2.59 | ~77% of 629 Bcfe production hedged |
| 2026 | 448.8 | $2.74 | ~73% of guided 612 Bcfe midpoint |
| 2027 | 379.3 | $3.28 | ~62% hedged (assuming flat production) |
| 2028 | 186.5 | $3.25 | ~30% hedged |
| 2029 | Nominal | -- | De minimis |
If gas goes to $6/Mcf in 2026, CNX only captures that price on ~26% of production. The other 74% is locked at $2.74/Mcf. In FY2025, hedges cost CNX $181M ($0.31/Mcfe) vs the unhedged price. This is the price of insurance. For a 10x thesis, the hedges are the biggest drag on near-term upside. CNX won't fully participate in a gas price spike until 2028-2029.
In FY2024 when gas was terrible ($1.98/Mcf avg), hedges added $0.57/Mcfe, turning what would have been a much worse year into $816M operating cash flow. This is why CNX can maintain its buyback program through price cycles. The floor is real because of hedging. Even if gas collapsed to $1.50/Mcf, CNX would survive and keep buying back stock.
| Item | Dec 2025 | Dec 2024 |
|---|---|---|
| Derivative Assets (Current) | $106M | $88M |
| Derivative Assets (Non-Current) | $134M | $160M |
| Derivative Liabilities (Current) | ($378M) | ($355M) |
| Derivative Liabilities (Non-Current) | ($158M) | ($430M) |
| Net Derivative Position | ($296M) | ($537M) |
The net derivative liability of $296M (down from $537M) reflects that current gas prices are above CNX's hedge prices. As gas stays above $3/Mcf, these hedge liabilities shrink. The improvement from ($537M) to ($296M) is actually bullish -- it means gas forward curves moved up and the hedges became less of a drag.
This is one of the most compelling aspects of CNX. The company is systematically shrinking its share count while trading at a low multiple of assets.
| Year | Shares Repurchased | Avg Price | Total Cost | % of Float Retired | Shares Outstanding (YE) |
|---|---|---|---|---|---|
| FY2023 | 17,564,524 | $18.14 | $322M | 10.2% | 154,382,880 |
| FY2024 | 7,175,674 | $24.68 | $179M | 4.6% | 148,879,640 |
| FY2025 | 16,869,709 | $31.00 | $528M | 10.8% | 142,590,509 |
| 3-Year Total | 41,609,907 | $24.60 avg | $1,029M | 22.6% retired | |
$2.9 billion total authorized since 2017. As of Dec 31, 2025, ~$400M remained. On January 29, 2026, the Board approved an additional $2.0 billion increase, bringing available authorization to approximately $2.4 billion. At the current market cap of $5.85B, this $2.4B authorization represents 41% of the entire company. The Board has explicitly stated it evaluates the buyback based on "free cash flow position, leverage ratio, and capital plans."
CNX has tangible book value of ~$3.96B / 142.4M shares = $27.79/share. When the company buys back stock at $31 (1.12x tangible book), it is essentially acquiring its own reserves at a slight premium to book but well below replacement cost. Every share retired at $31 increases the per-share claim on 9.7 Tcfe of reserves for remaining shareholders.
| If CNX buys back... | Shares Remaining | TBV/Share | Reserves/Share (Mcfe) |
|---|---|---|---|
| Current (0%) | 142.4M | $27.79 | 67,851 |
| $500M more (~12.2M shares at $41) | 130.2M | $26.50 | 74,200 |
| $1B more (~24.4M at $41) | 118.0M | $25.03 | 81,882 |
| $2B more (~48.8M at $41) | 93.6M | $20.91 | 103,232 |
Note: TBV/share declines because buybacks above book value reduce book value. But the reserves per share increases, and reserves are the real economic asset. If gas prices rise, the per-share value of those reserves rises proportionally on fewer shares.
| Item | FY2025 | FY2024 | FY2023 |
|---|---|---|---|
| Revenue (Oil & Gas Operations) | $2,056M | $1,073M | $3,305M |
| Total Revenue (incl. derivatives) | $2,142M | $1,439M | $1,506M |
| Production Costs | ($1,065M) | ($950M) | ($904M) |
| G&A | ($151M) | ($158M) | ($125M) |
| Operating Income | $787M | $169M | $314M |
| Interest Expense | ($171M) | ($151M) | ($143M) |
| Gain/(Loss) on Derivatives (non-cash) | $97M | ($173M) | $1,925M |
| Pre-Tax Income | $803M | ($120M) | $2,223M |
| Net Income | $633M | ($90M) | $1,721M |
| EPS (Basic) | $4.48 | ($0.60) | $10.59 |
| EPS (Diluted) | $3.98 | ($0.60) | $8.99 |
Important: Revenue and net income are highly volatile because GAAP requires marking derivative instruments to market. The FY2023 net income of $1.72B includes a $1.93B non-cash gain on derivatives. The FY2024 net loss of $90M includes a $173M non-cash loss on derivatives. Ignore GAAP net income for valuation. Focus on operating cash flow.
| Item | FY2025 | FY2024 | FY2023 |
|---|---|---|---|
| Operating Cash Flow | $1,029M | $816M | $815M |
| Capital Expenditures | ($495M) | ($540M) | ($679M) |
| Free Cash Flow | $534M | $276M | $135M |
| Buybacks | ($524M) | ($184M) | ($320M) |
| Acquisitions | ($518M) | ($5M) | $0 |
| Net Debt Issuance/(Repayment) | $367M | ($62M) | $2M |
Key observation: Operating cash flow has been remarkably stable ($815-$1,029M) across very different gas price environments. The hedging program flattens cash flow volatility. In FY2025, OCF exceeded buybacks + capex + Apex acquisition only because of $367M net debt issuance. CNX funded Apex partially with debt.
| Item | FY2025 | FY2024 |
|---|---|---|
| Total Assets | $9,094M | $8,512M |
| Net PP&E | $8,014M | $7,483M |
| Gross PP&E | $14,208M | $13,137M |
| Goodwill | $323M | $323M |
| Other Intangibles | $57M | $64M |
| Cash | $1M | $17M |
| Total Debt | $2,605M | $2,292M |
| Net Debt | $2,604M | $2,275M |
| Stockholders' Equity | $4,337M | $4,098M |
| Tangible Book Value | $3,957M | $3,711M |
| TBV Per Share | $27.75 | $24.93 |
| Instrument | Amount | Rate | Maturity |
|---|---|---|---|
| Convertible Senior Notes | $209M | 2.25% | May 2026 (conversion price $12.84) |
| 6.00% Senior Notes | $500M | 6.00% | Jan 2029 |
| 4.75% Senior Notes (CNXM) | $400M | 4.75% | Apr 2030 |
| 7.375% Senior Notes | $500M | 7.375% | Jan 2031 |
| 7.25% Senior Notes | $600M | 7.25% | Mar 2032 |
| Revolver / Other | ~$396M | Variable | Various |
| Total | ~$2,605M | ~6.2% wt avg |
The $209M convertible notes due May 2026 have a conversion price of $12.84/share. Since CNX trades at $41, these are deep in the money and will convert to ~16.3M shares (dilutive). This is included in diluted EPS but worth noting -- it's a one-time dilution event in 2026. Debt/Equity ratio is 60%, manageable for an E&P with stable hedged cash flows. No near-term maturity wall after the 2026 convertible.
Both are Appalachian gas producers. EQT is the largest US natural gas producer. CNX is smaller but arguably cheaper on assets.
| Metric | CNX | EQT | Advantage |
|---|---|---|---|
| Market Cap | $5.85B | $40.4B | |
| Enterprise Value | $8.46B | $51.8B | |
| Stock Price | $41.11 | $64.64 | |
| Proved Reserves | 9.66 Tcfe | 28.05 Tcfe | |
| Production (FY2025) | 629 Bcfe | 2,382 Bcfe | |
| Reserves Life | 15.4 yrs | 11.8 yrs | CNX |
| P / Tangible Book | 1.34x | 1.70x | CNX |
| Trailing P/E | 10.3x | 19.5x | CNX |
| Forward P/E | 9.9x | 14.0x | CNX |
| EV / Reserves ($/Mcfe) | $0.88 | $1.85 | CNX |
| EV / EBITDA | 5.8x | 8.5x | CNX |
| EV / Revenue | 4.1x | 6.3x | CNX |
| Standardized Measure (PV-10) | $5.07B | $21.3B | |
| Mkt Cap / PV-10 | 1.15x | 1.90x | CNX |
| Operating Cash Flow | $1,029M | $5,126M | |
| Free Cash Flow | $534M | $1,829M | |
| FCF Yield | 9.1% | 4.5% | CNX |
| Debt / Equity | 60.1% | 28.9% | EQT |
| Buyback (FY2025) | $524M (9%) | $0 | CNX |
| Employees | 390 | ~2,900 | CNX |
| Beta | 0.62 | ~0.8 | |
| Net Income (FY2025) | $633M | $2,039M | |
| Net Income / Employee | $1.62M | $0.70M | CNX |
CNX is cheaper than EQT on P/TB, P/E, EV/Reserves, EV/EBITDA, EV/Revenue, Mkt Cap/PV-10, and FCF yield. EQT's only advantage is lower leverage (28.9% vs 60.1% debt/equity) and larger scale. EQT does not buy back shares at all. CNX retired 22.6% of its shares over 3 years while EQT spent zero. For an AMR-style thesis (cheap assets + aggressive buybacks), CNX is the clear winner. The key risk differential is leverage -- CNX's 60% D/E is manageable but higher than EQT's.
The correct approach: start with the bull case terminal value, divide by 10, and compare to today's price.
| Scenario | Avg Gas ($/Mcf) | EBITDA (est.) | Net Income (est.) | Bull Case Mkt Cap (10x P/E) | 10x Entry Mkt Cap | 10x Entry Price* |
|---|---|---|---|---|---|---|
| Current (~FY2025) | $2.99 | $1,548M | $633M | $6.3B | $630M | ~$4.43 |
| Moderate ($4.00) | $4.00 | $2,100M | $1,100M | $11B | $1.1B | ~$7.75 |
| Strong ($6.00) | $6.00 | $3,200M | $1,900M | $19B | $1.9B | ~$13.38 |
| Bull ($8.00) | $8.00 | $4,350M | $2,700M | $27B | $2.7B | ~$19.01 |
| Extreme ($12.00) | $12.00 | $6,500M | $4,200M | $42B | $4.2B | ~$29.58 |
*10x entry price based on 142M current shares. At 10x P/E multiple applied to each scenario's net income. Revenue estimates assume ~625 Bcfe production. Hedges ignored (assume they roll off).
Bull case ($8/Mcf gas): $27B market cap. 10x entry = $2.7B (~$19/share). Current price of $41 is 2.2x above the bull case 10x entry zone. Under the extreme scenario ($12/Mcf), 10x entry = $4.2B (~$30/share) -- still well below current. Under the extreme scenario ($42B market cap), 10x entry = $4.2B (~$30/share) -- still below current $41. CNX at $41 is NOT in the 10x entry zone under any reasonable gas price scenario. You would need it at $19-30 for a genuine 10x setup.
A pure 10x on P/E at current gas prices is impossible (would need 100x P/E). The realistic 3-8x requires three things working together:
| Component | Current | 5-Year Bull Case | Uplift |
|---|---|---|---|
| Gas Price (avg realized) | $2.99/Mcf | $5.50/Mcf | 1.84x |
| Production (Bcfe) | 629 | 700 | 1.11x |
| EBITDA | $1,548M | $3,500M | 2.26x |
| EV/EBITDA Multiple | 5.8x | 9.0x | 1.55x |
| Implied EV | $8.46B | $31.5B | 3.7x |
| Net Debt | $2.6B | $1.5B | (paid down) |
| Implied Market Cap | $5.85B | $30.0B | 5.1x |
| Shares Outstanding | 142M | ~90M | 0.63x |
| Implied Price Per Share | $41 | ~$333 | 8.1x |
Verdict: A pure 10x is a stretch but not impossible. You need $5.50+ sustained gas (plausible with data center demand but not certain), multiple expansion to where EQT trades today, and continued aggressive buybacks. The more realistic upside is 3-5x over 5 years: gas goes to $4-5/Mcf, multiple stays at 6-7x, buybacks continue. That gets you to $120-200/share, which is still excellent from $41.
The data center / AI power demand thesis is the key optionality. Here is the logic chain:
CNX does NOT have direct data center contracts (unlike CORZ or VST). The 10-K mentions "power generation facilities" as customers but has only 1 mention of "data center" (in a cybersecurity context) and 1 mention of "LNG." CNX benefits indirectly through higher gas prices, not through direct power deals. This is a commodity leverage play, not a direct infrastructure play.
| Tangible Book Value | $3,957M |
| TBV Per Share | $27.75 |
| PV-10 of Proved Reserves | $5,066M |
| PV-10 Per Share | $35.56 |
| Net PP&E | $8,014M |
| Net PP&E Less Total Debt | $5,409M |
| PP&E-Debt Per Share | $37.97 |
Floor estimate: $22-28/share (TBV less 10-20% margin of safety). At $22, you're paying 0.79x tangible book. Historical trough was ~$11 in 2021, but that was during COVID-era gas depression and before the Apex acquisition. The hedging program creates a cash flow floor that supports the asset floor -- even in terrible gas markets, CNX generates $800M+ OCF.
| Confidence Level | HIGH |
| Assets are tangible (wells, land, pipelines) | YES |
| Goodwill/intangibles risk | LOW ($380M, 4.2% of assets) |
| Bankruptcy risk | LOW (hedged CF covers debt service) |
| Hidden liabilities | MODERATE (environmental, ARO $163M) |
| Accounting complexity | MODERATE (derivative mark-to-market noise) |
| Technology disruption (5yr) | LOW (gas demand increasing) |
| Gas price collapse | If gas drops to $1.50-2.00/Mcf for an extended period, FCF evaporates. Hedges protect for 2-3 years but not forever. This is the #1 risk. |
| Leverage | 60% D/E is manageable but higher than EQT. Total debt of $2.6B is ~2.5x EBITDA. Not dangerous but limits flexibility in a downturn. |
| Convertible dilution | $209M convertible notes due May 2026 will add ~16.3M shares (11.4% dilution). One-time event but significant. |
| Hedges cap upside | 73% of 2026 production hedged at $2.74/Mcf. If gas spikes to $6+, CNX misses most of the upside near-term. |
| Appalachian basis differential | CNX sells at Appalachian prices which trade at a discount to NYMEX Henry Hub. Basis can widen unpredictably. |
| Single basin concentration | 100% Appalachia. Any regional issue (pipeline constraints, regulatory changes in PA/WV) hits the entire business. |
| Short interest | 17.8% short float with 6.6 day short ratio. The market has a meaningful bearish position on CNX. |
| Environmental/regulatory | Methane regulations, potential fracking restrictions. PA has been relatively friendly but politics can change. |
| Physical/tangible assets? | YES -- 9.7 Tcfe reserves, 428K developed acres, midstream infrastructure |
| Generating cash? | YES -- $534M FCF, $1,029M OCF in FY2025 |
| Buying back shares aggressively? | YES -- $1.03B in 3 years, 22.6% of shares retired, $2.4B authorization remaining |
| Cheap on assets? | YES -- 1.34x P/TB, 1.15x Mkt Cap/PV-10 |
| Market hates it / ignores it? | PARTIALLY -- 17.8% short interest, but stock has tripled from 2021 lows |
| Secular tailwind? | YES -- data center power demand, LNG exports, coal retirement = structural gas demand increase |
CNX at $41 is roughly fairly valued today but has significant optionality. You are paying 1.34x tangible book for an asset that generates 9% FCF yield, is aggressively shrinking its share count, and has a free call option on structurally higher gas prices from data center demand. The floor at $22-28 is protected by hedged cash flows and hard assets. The upside to $120-200 requires gas prices to structurally increase (plausible but not certain).
Compared to EQT, CNX is cheaper on every valuation metric and has a much more aggressive buyback program. EQT's advantage is lower leverage and larger scale. For a concentrated bet on Appalachian gas with AMR-style capital allocation, CNX is the better vehicle.
The stock to watch for entry is below $30 (0.78x PV-10, 1.08x TBV). At that level, you get the reserves near their discounted present value plus free optionality on everything else. Current price of $41 requires conviction that gas prices are headed structurally higher, which is a reasonable but not certain bet.
| SEC XBRL | CIK 0001070412 -- CompanyFacts API, all us-gaap and srt facts |
| 10-K Filing | Filed 2026-02-10, period ending 2025-12-31 (accession 0001070412-26-000038) |
| yfinance | CNX and EQT market data, financials, balance sheet, cash flow |
| SEC EDGAR Filings Index | Submissions API for filing history |