The text mentions that despite NYMEX pricing decreasing by over $0.50 per MMBtu since the last earnings update, the impact on CNX’s financials is expected to be largely offset by the deferral in capital activity and stronger NGL prices. This indicates that while the price of natural gas has fallen, the company has managed to mitigate the potential negative effects through strategic adjustments to their capital expenditures and benefits from other commodity prices.
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CNX Wells Drilled Since 2023
This strategy is part of CNX’s broader approach to manage fluctuations in market conditions while still aiming to achieve their financial goals.
- Efficiencies and Cost Reductions: CNX has focused on enhancing drilling efficiencies and reducing costs. They have successfully implemented proprietary technology to automate the gas flowback process, which is significant for high pressure, high-rate wells. This technology helps reduce costs and emissions.
- Marcellus Shale Wells: During the first quarter of 2024, CNX drilled 14 Marcellus Shale wells. These wells had an average lateral length of approximately 16,500 feet. A notable feature was a 5-well pad with an average lateral length of about 19,700 feet. These lengths are indicative of the company’s ability to execute extended lateral drills, which can potentially increase the output and efficiency of each well.
- Completion Activities Delayed: CNX decided to delay completion activities on three Marcellus Shale pads consisting of 11 wells due to challenging near-term gas market conditions. This decision was part of a strategic move to adjust to market dynamics and is expected to reduce the projected annual volumes by approximately 30 Bcfe and lower projected capital expenditures by about $50 million.
- Future Drilling and Completion Plans: Looking forward, CNX plans to continue with reduced drilling and completion activities, which will be primarily limited to one horizontal drilling rig and a partially utilized completion crew for the remainder of the year. This approach is aligned with their goal to optimize capital expenditure and manage production levels effectively amid fluctuating natural gas prices.
Overall, CNX’s drilling strategy is characterized by a focus on technological advancement, efficiency improvement, and strategic adjustments to market conditions.
