CNX Resources Corp. expects production to peak in the fourth quarter now that the operational issues it faced earlier in the year have been resolved.
The company has reported sequential production declines since early this year on asset sales and issues at well pads, such as retrieving downhole equipment and production casing problems, that have forced it to adjust its turn-in-line (TIL) schedule.
The company still remains on track to bring 68 wells online by the end of the year, COO Tim Dugan said this week during a call to discuss third quarter results, and expects production to peak after a number of wells were placed to sales late in the third quarter.
CNX produced 119 Bcfe during the period, up from 101 Bcfe at the same time last year. Third quarter volumes declined slightly from 122.6 Bcfe in 2Q2018, but the company had guided for the decline on the cadence of its TIL schedule following the operational issues earlier in the year.
The company also completed the sale of its Utica Shale joint venture assets to Ascent Resources LLC in August and lost some production.
While the midpoint of its guidance remains unchanged, CNX lowered it slightly at the high end. Full-year production now is forecast at 497.5-507.5 Bcfe, compared to the previous range of 490-515 Bcfe.
While the Marcellus Shale accounted for the bulk of the company’s third quarter production at 70.6 Bcfe, Utica Shale volumes from Monroe County, OH, and Pennsylvania continued climbing. CNX said it produced 33.6 Bcfe in the play during the third quarter, up 67% from a year ago.
As most other Appalachian operators have, CNX said its average quarterly realized prices increased. The company said it earned $2.92/Mcfe during the third quarter, up from $2.50/Mcfe a year ago. Revenue also increased to $397 million from $287 million over the same time.
CNX reported third quarter net income of $125 million (59 cents/share), compared with a net loss of $26 million (minus 11 cents) in 3Q2017.
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