Earnings Highlights CNX, PTEN
CNX Resources
The company’s full year 2024 production guidance is unchanged from the prior reporting quarter. CNX Resources continues to hold onto their 11 well TIL deferrals for the time being. The producer isn't doing any natural gas production shut-ins, nor do they plan on any shut-ins in the future as their margins are high on a per well basis. The company’s 2025 production guidance implies 5.5% YOY production growth, while their 2024 production guidance implies a YOY production decline of 2.4%.
Patterson UTI
The company’s activity in natural gas basins fell further than expected due to increased white space late in the quarter, with customers slowing completion activity in response to weak natural gas prices. Revenue in the Permian Basin, which was more than half of their completion services revenue in the second quarter, was in line with expectations.
The outlook for Lower 48 shale drilling activity for the rest of the year appears relatively steady at current levels, with a return to growth expected in 2025, particularly in natural gas basins. Approximately 80% of their active fleets are capable of being powered by natural gas, which is likely to increase by the end of the year.
Patterson UTI expects to see relatively steady industry drilling activity compared to current levels through the rest of the year. They expect customers will continue to use completion activity to manage annual budgets, which is likely to impact frac activity with higher-than-normal calendar white space likely persisting through year-end. The company believes much of the impact from customer consolidation and weak natural gas prices is likely already reflected in the current industry activity.
