CNX Resources Corp. said Tuesday it would increase spending this year and drill more wells that won’t come online and benefit the company until 2020, despite investors who continue to expect capital discipline.

The drilling and completion budget has been increased to $885 million to turn-in-line 86 wells in 2019 and 2020, compared to the previous range of $700 million to turn 72 wells to sales between this year and next.  Including land, water and midstream expenses, total spending would increase to $1.205-1.275 billion this year, compared to about $1 billion under the previous guidance. Production is not expected to increase this year on the increased spending, as CNX reaffirmed its 495-515 Bcfe forecast.

“The incremental activity add is driven by increased confidence in the rates of return we see in our Utica opportunity set,” said CEO Nicholas Deluliis during a call on Tuesday to discuss first quarter results. Data from some of the Utica assets in Pennsylvania is stronger, while drilling efficiencies and completion improvements in the play there have helped costs, he said.

CNX laid out a cautious approach for 2019 earlier in the year, with plans to keep spending and production volumes flat unless the natural gas outlook improved or Utica development evolved in a way that allowed the company to build more of the formation into its program.

The new plans would add 14 wells in all, with 11 slated for the deep dry Utica in Pennsylvania and another eight Marcellus Shale wells. The deep Utica wells, CNX said, have “substantially lower operating costs” compared to Marcellus wells. This year’s efforts, management said, would help increase year/year production by 10% in 2020 and generate $500 million in free cash flow.

A small part of the spending increase includes $15 million for an incident in January, when the company experienced a pressure anomaly during completion operations on a four-well deep Utica pad in Westmoreland County, PA. The company was forced to stop work and flare gas from nearby vertical wells until it eventually killed the unruly Shaw 1G well. The incident was attributed to faulty casing in the Shaw 1G, which is still in the process of being plugged permanently.

Four drilled but uncompleted wells have the same type of casing, including the other three on the Shaw pad, Deluliis said. Those wells will be isolated with a liner to ensure their integrity. The company expects to complete the remaining Shaw wells this year.

“As a precautionary measure, on a forward-looking basis, we have ceased using such pipe across our operations where the identified combination of environmental factors and pressures could be present,” Delullis said of the casing.

CNX produced 133 Bcfe in the first quarter, slightly higher than 130 Bcfe in the year-ago period. While production declined from 136 Bcfe in 4Q2018, the company still beat Wall Street expectations as volumes are backend-weighted and set to grow through the end of the year.

Average 1Q2019 realized gas prices were $2.97/Mcfe, compared with $3.00/Mcfe at the same time last year. CNX’s average differential to the New York Mercantile Exchange during the quarter was negative 17 cents, or its best since 2015 as the Appalachian Basin saw a lift from new takeaway capacity. Prices are forecast to decline, however, prompting the company to slightly lower its earnings outlook as demand falls off with the summer nearing.

The company reported a first quarter net loss of $87 million (minus 44 cents), versus net income of $528 million ($2.35) in the year-ago period. This year’s results included a $154 million loss on derivatives. As a result, revenue also sank to $278.4 million from $495.7 million in 1Q2018.