Ammonia | CNX Resources | Energy Companies | Hydrogen | Industrywide Issues | Mingo County | West Virginia
CNX to Provide NatGas for WV Hydrogen Hub Clean Ammonia Plant
The ARCH2 (Appalachian Regional Clean Hydrogen Hub) project, the West Virginia-led effort to attract government funding for one of 6-10 regional hydrogen hubs, took a leap forward today with the announcement by Adams Fork Energy, Haldor Topsoe, and CNX Resources Corp. of a plan to build a “multi-billion-dollar” clean ammonia manufacturing facility in southern West Virginia. CNX will provide natural gas to the plant, tentatively scheduled to begin construction in 2024 in Mingo County, WV. The ammonia plant will be an “anchor project” in the ARCH2 Hydrogen Hub application currently under consideration by the U.S. Dept. of Energy.
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New shale permits issued for Mar. 20-26 in the Marcellus/Utica dropped by two from the prior week. There were 32 new permits issued in total last week, including 22 new permits for Pennsylvania, 8 new permits for Ohio, and 2 permits in West Virginia. (Note we recently updated last week’s report to include WV permits after the WVDEP fixed its database.) Last week the top receiver of new permits was CNX Resources with 10 new permits spread across two PA counties: Greene and Allegheny. Snyder Brothers received 8 permits in Armstrong County, PA.
CNX has reached a settlement with the Municipal Authority of Westmoreland County (MAWC) in a lawsuit brought by MAWC in 2016 claiming that CNX (and partner Noble Energy) claimed post-production deductions from royalties that should have been paid to MAWC. The original lawsuit sought combined damages of $3.6 million. The final number to be paid by CNX, according to reports, is $600,000.
The sharp analysts at RBN Energy have sifted through the announcements and “guidance” statements from 42 of the country’s major publicly-traded oil and natural gas drillers for 2023. Among them are 11 gas-focused drillers, nine of which have operations in the Marcellus/Utica region. Looking at the list of 11 gas-focused drillers, RBN finds production will be just about the same in 2023 as it was in 2022–projecting a dip of 1% this year. The analysis also finds collectively that the 11 gas-focused drillers will spend around 9% more on drilling this year due to Bidenflation. Spending more to produce the same–not a winning formula for a politician to run on.
CNX Resources CEO Nick DeIuliis is on a mission to reduce the number of outstanding shares of his company’s stock by buying back shares. The aim is to return value to shareholders. When a company buys back shares, it reduces the overall number of outstanding shares, which boosts the price for the remaining shares. In effect, DeIuliis is causing share prices to rise, putting money (and profits) into the pockets of shareholders. Since the third quarter of 2020, CNX has repurchased and retired 24% of the company’s outstanding shares of stock–one of the four top companies in the S&P 500 to do so.
And so begins the quarterly earnings report season. Yesterday CNX Resources issued its fourth quarter and full-year 2022 update. The company doubled its profits in 4Q22, making $1.2 billion, versus a profit of $630 million in 4Q21. However, as big as the profit was in 4Q, CNX still lost $142 million for the entire year–mainly due to $2.6 billion in losses on derivatives for the year. CNX generated $270 million in free cash flow for 4Q and cumulatively generated $707 million of free cash flow for the entire year. Production took a hit, down to 1.53 MMcfe/d (million cubic feet equivalent per day), compared to 1.72 MMcfe/d in 4Q21. The stated reason for the drop in production was a bad well and the cold snap (freeze-offs) during 4Q.
Earlier this week, MDN brought you news of a new vision from CNX Resources CEO Nick DeIuliis called “Appalachia First” (see 
CNX Resources President and CEO Nick DeIuliis has done it again. This morning CNX launched “Appalachia First,” the company’s vision for the future which draws on CNX’s regional leadership, core operational strengths, and an innovative business model. What is Appalachia First? In a nutshell, the strategy as outlined by CNX is to extract and KEEPING/USING natural gas right in our own region, making the Marcellus/Utica (i.e. Appalachia) the economic and jobs hub of the entire country. It’s brilliant!