Q2 2025 Gulfport Energy Corp Earnings Call

Greetings and welcome to the goal Point Energy Corporation second quarter 2025 earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to to introduce Jessica anel vice president of investor relations,

Thank you and good morning. Welcome to go for energy corporation, second quarter, 2025 earnings conference call. I am Jessica anel speakers on today's call. Include John Reinhardt, president and chief executive officer, Michael Hodges, Executive, Vice, President and Chief Financial Officer. And in addition, Matthew Rucker, Executive Vice President, and chief operating officer will be available for the Q&A portion of today's call. I would like to remind everybody that during this conference,

Reference call the participants may make certain forward-looking statements relating to the company's Financial condition results of operations, plans, objectives, future performance and business. We caution you that the actual results could differ materially from those that are indicated in these forward-looking statements due to a variety of factors information concerning, these factors can be found in the company's filings with the SEC. In addition, we may reference non-gaap measures reconciliations to the comparable. Gaap measures will be posted on our website, an updated gulport presentation with posted yesterday evening to our website in conjunction with the earnings announcement at this time. I would like to turn the call over to John Reinhardt, president and CEO.

Thank you, Jessica and thank you for joining our call today.

We're excited to announce several strategic initiatives. Alongside our second quarter results. Highlighting our focus on enhancing the underlying fundamental value of the company and delivering long-term value to our shareholders.

First, we are pleased to share our plans to allocate up to 100 million toward discretionary acreage Acquisitions. In the coming months, securing future drilling opportunities and strengthening our inventory, runway, in the core of the Utica Shale.

The announcement for the demonstrates, our commitment to identifying capturing and developing high-quality low Break Even resources.

This level of reinvestment marks Gulf ports. Highest lease hold spend in over 6 years.

Bringing our 3year allocation of discretionary land, spending to nearly million dollars.

Together with our Marcellus delineation Focus, these efforts are cumulatively targeting approximately 6 and a half years of incremental inventory Runway since the beginning of 2023.

Next, we are increasing our share of purchase program authorization by 50% from 1.0 billion to 1.5 billion dollars to facilitate our ongoing investment in our equity.

The company opportunistically purchased 65 million of Golfport. Common shares during the quarter and is already returned 125 million to our shareholders in the first half of 2025,

Announcement to redeem all of our outstanding. Preferred stock has a potential to meaningfully accelerate, our share of purchase efforts, allowing Gulfport to take advantage of the, current undervalued nature of our Equity. While simplifying. Our capital structure in a way, that is accretive to our key per share. Cash flow metrics moving forward.

We remain committed to upholding our strong balance sheet, and the initiatives announced today demonstrate our discipline Capital allocation, and the strength of our current and projected financial position.

Golf court delivered, a solid second quarter marked by high single-digit. Quarterly production growth.

Strong operating costs performance and consistent. Operational execution resulting in capital spending and cash flow results that beat analyst expectations.

Operationally the company executed across all 5 of our development areas and experience strong. Well performance, despite a series of unplanned third-party Midstream challenges.

Our average daily production totaled 1.006 billion cubic feet equivalent per day and increase of 8% over the first quarter of 2025 and includes a quarterly impact of approximately 40 million cubic feet per day from Midstream outages and constraints.

These issues included downtime following weather related infrastructure. Disruptions and unplanned processing plant outages which we are pleased to report. Have both been restored in. Normal production, operations, have resumed in these areas.

In addition short-term constraints associated with compression and gas quality are being prioritized with mitigating projects underway by our Midstream Partners that Target further increases to Midstream capacity.

While these Productions targets.

while these production impacts have been resolved or actively be mitigated the cumulative effect of these occurrences result in our full year, total net production to to Trend toward the low end of our previously, stated production, guidance range,

Offsetting these impacts, we continue to execute at high levels of efficiency and have seen, very strong will result in our development program during the first half of the year.

Our cage development of 4. Well Utica, condensate pad in South West Harrison County continues to perform very well under our revised manage pressure flow back strategy.

We took the completion production and Facilities learnings from our nearby. Highly productive Lake development, which facilitated increased initial production rates at the cage pad allowing us to maximize returns in the current commodity environment. While also preserving long-term well productivity

Following 120 days online. The cage development continues to exhibit strong oil, performance, and is delivered, approximately 65% more cumulative, oil than Gulf ports, Lake PAD as shown in our investor deck on slide 12.

These results, in combination with the strong performance of both Golfport and nearby peer activity, reinforce the prospective nature of this acreage and the development optionality that it possesses.

During the second quarter, the company also brought online a 4. Well Utica wet gas pad in Northwest Belmont County.

This pad marks, the first pad turned to sales as a product of our discretionary acreage Acquisitions and is located in an area of the play where we have secured over 2 years of nearby inventory.

This area of the play, produces it. Well level production rates comparable to our udica, dry gas development on a volume equivalent basis. But with enhanced cash flows and economics driven by the associated liquids production.

Assuming 3.50 natural, gas and 65 oil. And our corporate cost structure is provided in our guidance, we forecast the first 12 months of production, in this area of the play generating approximately 30% more Revenue than our top tier dry gas development.

When considering that this leasing activity began in late 2023, the development underscores the strategic value of our discretionary acreage acquisition efforts and reinforces the continued development of this high-return wet gas area of the play for years to come.

On the land, front through June, 30 2025, we have invested, roughly 17 million on maintenance, leasehold and land investment.

Focused on bolstering our near-term drilling programs with increase of working interest and lateral, footage and units. We plan to drill near-term.

We have been actively pursuing these opportunities primarily in the dry gas and wet gas. Windows of the Utica and have invested approximately 7 million dollars during the second quarter of 2025 as part of our plan to allocate 75 to 100 million in total during the second half of 2025 and into early 2026.

Upon successful completion of our plans. We anticipate this level of spin will add more than 2 years of cordial and inventory. At our current development. Pace reinforcing our ongoing commitment to organically grow our undeveloped World counts and increase development, optionality,

In summary, we're pleased with the progress made in the first six months of 2025, and the strategic announcements today demonstrate our continued focus on what lies ahead, while navigating a dynamic commodity environment. We are committed to continuing to deliver on our financial and strategic objectives, driving continued efficiency across our operations, and delivering value to our shareholders through equity repurchases, while bolstering the company's already high-quality resource base, all positioning the company for long-term success. Now, I'll turn the call over to Michael to discuss our financial results.

Thank you, John. And good morning everyone.

In spite of volatile, commodity backdrop, our pattern of execution here at Gulfport remained unchanged as we generated More than 70%, adjusted free, cash flow, growth quarter over quarter, and we were unwavering in our commitment to return significant value to our shareholders.

Net cash provided by operating activities before changes in working capital totaled approximately $198 million during the second quarter, more than funding our capital expenditures and common share repurchases while maintaining our balance sheet strength.

We reported adjusted EBA of approximately 212 million during the quarter and generated adjusted free. Cash flow of 64.6 Million bolstered by cash, operating costs and capital expenditures coming in better than an analyst, expectations.

With nearly 3/4 of our anticipated. Full year Capital spending complete and a strong hedge book locking in a significant portion of our revenues for the remainder of the year. We expect adjusted free cash flow to accelerate and financial momentum to increase over the second half of 2025. Paving the way for the Strategic initiatives that were announced alongside our second quarter results last night,

Our all-in realized price for the second quarter was $3.61 per Mcfe, including the impact of cash-settled derivatives.

This realized unit price is 17 cents above the 9x, Henry Hub, index, price, highlighting the benefit of Gulfport differentiated hedge position, the pricing uplift of our liquids production and our marketing portfolio for natural gas. That includes direct access to premium Gulf Coast markets.

As many of our peers have discussed natural. Gas demand is rising fuel by LNG expansion and increase. Power generation needs driven by the expected growth of AI related infrastructure in the Northeast.

This evolving landscape presents, exciting opportunities for both Gulfport and our in-base and peers. And we are actively engaging in conversations that would potentially Supply natural gas to local power plants or other similar projects to meet this Rising demand.

When coupled with our direct exposure to the growing LNG Corridor, through our tgp, 500 and Transco 85 firm Transportation agreements. That I referred to previously, our advantage, marketing position provides goport access to both of the keyed growth areas of gas, demand, ultimately, improving our gas price realizations, net backs and cash flows.

Turning to the balance sheet, our financial position strengthened, even further this quarter with trailing 12-month, net leverage as of June 30th of approximately 0.85 times down from the prior quarter, and benefiting from our increasing ibida that our business has delivered over the past year.

Set another way our far Financial momentum at Gulfport is rising as leverage has decreased by more than 10% since the beginning of the year and we have returned more than our adjusted free. Cash flow to our shareholders. Over the same period without adding debt to the balance sheet.

During the second quarter, we paid off the remaining balance of our previously, tendered 8%, senior notes, due 2026.

Further strengthening it to strengthening our balance sheet with our nearest debt maturity. Now extending to 2028

capture value for our stakeholders as demonstrated through the leasehold acquisition and shareholder return initiatives, we announced alongside our earnings

As John mentioned previously, we announced the opportunistic Redemption of all outstanding shares of Gulfport, preferred stock alongside our second quarter results. Last night.

this transaction assuming full cash, Redemption has the potential to meaningfully accelerate, our Equity repurchases simplify our capital structure and further demonstrates, our competence in the attractive value proposition that Gulf ports, Equity represents

We had been assessing the right timing for this transaction for some time, and the combination of our consistently declining financial leverage, rising forecasted free cash flow, and the expectation of a strong natural gas commodity environment in late 2025 and 2026 made this timing ideal.

In addition to the benefits, I mentioned already. Redeeming the preferred stock eliminates the preferred dividend and allows us to retire. The underlying common Equity without affecting our public float.

The optional Redemption will be effective on September 5th, 2025.

Based on 31356 preferred shares outstanding as of June 30th and ex assuming full cash Redemption. We estimate the potential to retire. Roughly 2.2 million underlying common shares equivalent to more than 10% of our diluted share count for approximately 379 million based on our closing stock price from last night.

The strength of our balance sheet and liquidity position allows us to execute this cash flow, creative transaction while remaining in a strong financial position and assuming full cash Redemption. The growth in our forecasted adjusted free, cash flow in the coming. Quarters should allow us to achieve our leverage Target of approximately 1 times in either late 2025 or early 2026.

To support the Redemption of the preferred stock and enable the company to continue our ongoing Equity repurchase program. Our board has also increased the stock repurchase authorization by 50% to 1.5 billion.

As of June 30th, we had repurchased approximately 6.2 million shares of common stock at an average price of 1113.48. Lowering our share count by approximately 18% at a weighted average price more than 30% below. Our current share price,

since launching the program in March of 2022 and assuming the full cash, Redemption of the preferred stock, and our repurchases through June 30th of this year, we could suppress 1 billion dollars in cumulative Equity, repurchases, by the end of the third quarter of 2025,

We believe our committed approach to share repurchases over the past few years has delivered tremendous value to our shareholders and we will remain opportunistic rather than programmatic allowing us to allocate Capital dynamically. When we believe the current valuation does not reflect the strength of our underlying fundamentals. And as such repurchasing shares, at today's level represents a highly attractive use,

Capital.

Finally, given the level of Gulf ports, expected free cash flow generation over the coming years and changes to tax rules with recently passed legislation. We wanted to provide a quick update on Gulfport current tax position we benefit from our significant nol position and its impact on our near-term cash tax liabilities.

At current strip prices, we expect our cash tax position to be negligible and potentially zero for 2025 and believe the amount of cash taxes owed will be less than 5% of our anticipated. Free cash flow for the next 2 years.

In closing, we remain focused on delivering long-term shareholder value as reflected in our continued return of capital through Strategic Equity repurchases and the announcement of our preferred stock Redemption.

Our operational performance has remained strong and we are reinvesting in our inventory base to strengthen future opportunities, leaving the company. Well, positioned to benefit from the improving macro trends for natural gas, that should deliver meaningful cash flow growth for the company, going forward with that, I will turn the call back over to the operator, to open up the call for questions.

Thank you. We'll now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. The confirmation tone will indicate your line is in the question queue. You may press star 2 to remove your question from the queue. For participants using speaker equipment and may be necessary to pick up your handset. Before pressing the star Keys 1 moment, please while we pull for questions.

Thank you. Our first question is from Zach. Parum with JP Morgan.

Utica and where they'll fit into your development schedule going forward.

Yeah. Is that good morning? This is John. Thanks for the question. You know, I think as we looked at the uh, cash flow profile, the company in 2025. Uh, it it's pretty prolific here, especially in the second half of the year, and we certainly have been leaning in on reinvesting back into the company. In addition, to buying shares, both are a really good use of cash with regards to the 75 to 100 million. That represents the score of 40 to 50 Wells that we're targeting. These will be in Belmont County Ohio and, uh, Northern Monroe County. So really, adjacent to our current footprint, where we can take care of, uh, take advantage of some Midstream synergies and other infrastructure synergies. Uh we're really targeting as far as the quality of acreage uh continued focus on low break, even high quality acreage that will move towards the Left End of the skyline chart. And given our our HBP position of our Legacy uh acreage, uh, that value certainly retains in a company's portfolio.

Portfolio. So very happy with the prospects that we've been able to identify out there. We've already kind of got a jump, start with 7 million dollars under our belt and Q2. So looking forward to wrapping up the commitments and closure of these high-quality 2-year, kind of Runway inventory ads,

Thanks John, um, maybe 1 for Michael. Could you talk a little bit more about the mechanics of the preferred stock Redemption? Um, you know, how, how you see that going? Will you just if if it's all cash redeemed would you just lean on the, the revolver in the near term? And maybe also, uh, how how do you view buying back stock in the open market? At this point when you have this potential big preferred stock Redemption? Um, in front of you next month?

Yeah, exactly. This is Michael great question. So I'll start with the first part of that question. So mechanically, we issued the notice last night, uh, to the holders of the preferred stock. They have, uh, until September 5th in order to make a decision as to whether they would like to convert to Common Equity, uh, or have the company repurchase uh their shares at the end of that period. And so the the price will set toward the end of that period. Um, you know, we'll see what those holders choose to do quite frankly. We see it as an acceleration of our existing program and we, you know, as I mentioned in my prepared comments, believe that the the value of the equity right now presents it pretty exciting opportunity. So, uh, obviously don't have a lot of line of sight to wear, that'll end up. Um, I think, you know, this transaction simplifies, the capital structure, it it eliminates the dividends. So really either way, whether there's conversions to come in or repurchase, there's some embedded benefits to the company there. Um, I think as far in terms of financing any of the cash redemptions we have you know almost 900 million dollars in liquidity as you mentioned leverages under a turn so we certainly can lean on the revolver to do that and we have the flexibility to do it. We actually also have a borrowing base that allows from

For us to increase the liquidity under the, under the rbl, as well. So we'll we'll kind of see where things shake out. And and as you mentioned we've got a lot of free cash flow the second half of the year. Um, if we see uh, more cash needed on the preferred, we'll we'll adjust accordingly. But, you know, we've got a lot of optionality there to continue to be buyers of the equity. Um, you know, just depending on how that shakes out. So like I said, long term, we feel like this is a great transaction for Gulfport. It's got a lot of benefits to it and we'll get back to you guys after that, 30-day period with the results of the Redemption.

Thanks, Michael. Appreciate the caller.

Our next question is from David Deco ball with TD Cowen.

Uh, thanks for taking my questions, everyone, um, and congrats on the quarter. I, I just wanted to ask just Michael perhaps just to elaborate this bill on, on the post Redemption World for for Gulfport. Um, your leverage, I guess would be just under 1 turn. Uh, so heading in the 26th, I guess, how do you think about?

Um, the allocation of free cash towards shareholders versus deleveraging or, you know, is there are we kind of at a, a comfortable leverage Target? You know, post the Redemption

Northwest Belmont County location, this quarter. So those are very attractive to us and then we'll see how the equity performs. I think we still believe there's a pretty pretty significant opportunity there. Um, hopefully that starts to narrow. But, you know, as we sit here today, we'd be significant buyers of the equity next year as well. So like I said unchanged, we feel like this is really an extension of what we've been doing the last couple years um just an opportunity for us to lean in a bit here with a singular transaction. So I don't think anything changes in terms of our philosophy going forward.

That's helpful, Michael, thank you. Um,

And maybe for matter John just, you know, the success that we've seen at the cage pad, you know, for managed flow back or pressure management. Uh, you know how how do we think about now just the competitive returns of that compensate area? Particularly, you know, she'll be expect to see more activity directed there as a percentage of the portfolio. Uh, also just giving, you know, kind of the the, the context of of the macro backdrop. Right now, as we head into 26,

Yeah, thanks, David. This is Matt. Um, yeah, we've seen very good results in that area, both with the lake and the cage taking our learnings, uh, from the lake on the cage kind of modifying our flow back strategy. There we talked about that on the oil side and and the advantages we see there, um, listen, it's a strong part of our portfolio. Uh, it's still above 70% IR threshold. It does currently Trail uh in this environment the other uh high quality areas that we have but it's part of our mix. We like a nice balanced portfolio that we can be pretty flexible.

At in any given calendar year. So, you know, we'll continue to, uh, watch the Commodities and where those go and heading into 26. Certainly at the current moment. We're probably more uh bullish on the gas side and pivoting around that. But um you know, we haven't set those uh, targets yet on the budget side and we'll continue to work that as we get closer to 26.

Thanks Matt.

Our next question is from Jacob Roberts with Tudor Pickering, Halt and Company.

Good morning.

Thank you. Good morning Jake.

I wanted to uh revisit the discretionary spend, I think in the past you guys have talked about a willingness to pursue kind of more transformative opportunities um and I hate to call 75 to 100 million dollars, small scale. But is there an implication here that that a much larger scale opportunity are unavailable or more unlikely?

I appreciate the question. Jake know I wouldn't read into uh, anything. What I'll say is we've been pretty consistent at least since our arrival here over the past 3 years where we're going to protect the balance sheet. Keep leveraged low uh increase efficiencies, lower cost and uh, buy shares with a free cash flow and reinvest in into the company with additional inventory. So the way I would look at it, it's kind of the same strategy, you know, uh, from a lot of different perspectives. It has a lot of benefits but as long as you follow those key tenants and you know, I I think that position

Positions you with a very healthy company with a lot of options. So we're very pleased with the prospects. We have out there with this organic acquisition program and we're going to continue to apply cash because it's a very high return and a good use of free cash flow along with mine are undervalued shares.

Great. Thank you. And then maybe a follow-up sort of to David's question. I wanted to ask about the scoop side of the portfolio. I know you've wrapped up the program for the year, but we're just hoping you could kind of rank that maybe against that 70% IRR you mentioned and how you view the asset against the current commodity backdrop.

Yeah, no, I appreciate the question Jake. Certainly it is uh continued part of our portfolio. Um, you know, we're still at that those levels of a pad or 2 a year. Uh, nothing firm on 26 yet, but we did turn in line at 2. Well scoop pad that we mentioned in the first quarter there, where we completed activities and, uh, you know, uh, some deep Woodford with a little bit of a liquid component there that certainly, uh, from our standpoint is robust in nature from returns. Uh, it it does stack up with the Utica. Uh, it is a little bit more Capital intensive on a per well basis. So we we fit that within our portfolio in any given calendar year. But uh we've always been uh happy with our returns in the scoop. It's a matter of how it fits in our uh overall budget portfolio and where we allocate Capital. So uh we'll continue to to develop uh, in that Basin and and we keep an eye as well on just some other strategies.

Out there, that that sits in our inventory that we haven't developed recently, uh, Springer Sycamore. And some of our, uh, you know, nearby competitors. Certainly have continued to delineate that around us, and it's a little bit more liquids, heavy of a component, uh, which which currently doesn't compete as well with some of the other areas. Uh, but those are things we keep an eye on and have the ability again to be very uh, diverse and flexible in our development programs.

Thank you. I appreciate the time.

Our next question is from Carlos Escalante with wolf.

Hey team. Good morning. Thank you for taking my question. Um, I I guess my first question uh

Would like to focus on on the power Contracting and momentum that Basin has seen recently. So with so much of that going on. I wonder if you can offer any color on any possibility that Gulfport participates in something similar and a second part to that question, if I may all else equal, would you choose to grow your volumes or take a better basis once all these new projects, create a new in Bas and demand sink.

Yeah, I'll take the first part of that question at least initially here, Carlos. I think. Um, the answer is yes. I think we, we will be in a position to participate. Now I think if you think about Gulfport relative to some of the other guys that have announced long-term agreements, you know anchor agreements with large projects. We're we're probably not of that size and scale right? So I think um you know we are seeing more inbound interest in in in finding volumes for those types of projects. I think for us being you know a smid cap that's you know even though our our financial health is is pristine. In my opinion we're not investment grade. So I think for us we're likely to work through an intermediaries. We're likely to be part of some kind of an aggregation strategy for uh 1 of those sources that are looking to to build.

Some gas position rather than just Supply it entirely ourselves. But I can tell you that just in the last quarter, for example, we've seen significantly more interest in that. And and if you think about all that going on, whether you're directly partnered with some of those projects or not. We expect that you'll see rising in Basin uh prices just alongside of that Demand, right? So whether you're directly involved which we think, again, we likely will be at least on some level or whether you just see the, the local basis start to tighten over time as as molecules, in the Basin become more in demand. We think that's that's a net, net positive for the company. Um, now, for your second part of your question, maybe, could you, could you ask that again? I'm not sure. I completely understand the second part there. Carlos.

Yeah. Uh, if if these projects do come to fruition and based on whether you participate or not, that will inevitably create either some kind of growth potential or bet better basis uh, differentials or the differentials so just wonder

if if, if you, if you had to pick based on your strategy which 1 would Golf Board, feel more comfortable in in applying moving forward,

Yeah, I mean, I think in John can jump in if he has a different perspective, but I think from for us anyway, um we've been fairly consistent, you know, with a kind of a, a relatively flat production profile, 0, to 5%. I mean, I think as you look out the forward, curve, the background we believe is, is be bullish for gas. We think it's improving, uh, on the other hand, it's still got a 3 handle on it, and the number to be out here is for us to project.

Significant growth at those levels is, is unlikely even with some narrowing basis like you, like, you mentioned. So I think there's certainly, uh, in my belief, there's there's an opportunity for that to happen, but I think for Gulfport to significantly change our existing strategy would require some some much larger, um, macro move than what we're currently seeing. So I I maybe I'd say I think we're we're less likely to, to grow into that. I think we're more likely to benefit at least from the way you post the question from the rising uh uh, prices in the narrowing differentials over time.

Gotcha, thank you, Mike, I appreciate that. And then for my follow-up.

Hate to beat the the dead horse with with the preferred. But can you perhaps walk Us in more detail making a, a very gross assumption that all your preferred Equity owners um the side to to to to pursue the buyback option, they need a buyback option. Assuming that how do you envision? You will treat the, the preferred Equity as soon as it is converted to the common stock, um, and that in the context of your buyback authorization for the second half of 2024,

So I think that's the way we would look at it and we'll just have to make that adjustment. Once we know the results here in about a month,

very helpful caller. Thank you guys.

Thanks Carlos.

Our next question is from Payton Dorne, with UBS.

Payton is your line on mute.

Hey, sorry about that. It was on mute, sorry about that. Uh, hey, this is Peyton. Thanks for getting me on. I know it's a bit early to lay out the 2026 plan in detail, but I wondered if you could provide a bit more color on the trajectory of volumes to start the year, just given the activities slow down over this back half of the year. Thank you.

Yeah. Hey, I appreciate the question I think, uh, if you think about the Cadence of the production profile, which which is what I believe you're asking about, we're really looking for, uh, an uptick in, uh, Q3, you know, just call it, uh, you know, around 10% plus or minus and total volumes, and relatively flat and Q4, uh, leading into 26. Uh, we we certainly haven't, uh, compiled and, and communicated, 26 guidance. But what I would tell you is, uh, you know, we've been very focused on gas and wet gas and even in the wet gas areas, these have been highly prolific gas weighted Wells, uh, which, which have certainly a, uh, a longer dated,

Plateau period in a in a staunch, you're kind of production profile moving forward. Uh so if you think about the Cadence kind of ending the year kind of flattish and going into 26, we feel real good about it and we'll certainly communicate more on the 26 plans as we get those uh the budgets and the forecast lined out here in the beginning of the year.

All right. Great, thank you. And then just, you know, keeping the theme on the repurchases.

You know, last night and today 1 of the themes you highlighted on the preferred Redemption was preserving Gulf ports, public float and the trading liquidity. And just knowing that strategy when we think about the kind of the capital returns in 2026 and Beyond, would you maybe consider instituting a base event and not solely relying on BuyBacks for the returns or changing up the strategy just a bit to um,

Maybe preserve that liquidity as we go forward.

Yeah, I hate, it's a great question. Payton, I appreciate you asking. It's something. We, you know, we certainly monitor at the management team and discuss with our board of directors. I think we've had a lot of success with our Sherry purchase program over the last 3 years. Uh, I think if you look back, we're like I mentioned in some of my prepared comments, where we know more than 30% ahead on a kind of a cumulative event investment based on where the stock trades today. So I think we're really satisfied with that. I think the market really likes the consistency of that. I know other folks, talk about Sherry purchases, go for it. It's been very consistent in delivering on that. So I think for us and, you know, you still have to keep in mind, we do have a, you know, a large shareholder. That's uh, that's sold some blocks in the past. And we think that's,

A great opportunity for the company to be able to buy those non floating shares that you were describing, um, as a way to again, capture Equity value. And so, I still see that out there potentially on the horizon at some point. So, um, anyway, I think I would say that, yes, we're monitoring it. I think for now the strategy is probably going to be similar uh, going forward and and certainly, if that changes we would let you all know. But I think, uh, I think we're, we're really satisfied with the results so far.

All right, great, thank you for getting me on.

Thanks. Bye.

Our next question is from Noah hungus with Bank of America.

Morning team. Um, I guess for my first question here, I wanted to follow up a bit on patient's question on uh, you know, uh, on kind of 26 capex, Cadence is there. I know it's too early to get, uh, guidance but just in terms of just, in terms of how its weighted versus front half and back half, should we think that it's a similar waiting, like, what we saw, uh, this year in 25?

Yeah. No, it no. This is John appreciate the question. Yeah, again, it's, uh, it's pretty early to be commenting on on 26th, but what I, what I can tell you is that by and large, uh, the company's planning a a front-loaded capital program. I would say this year, uh, was a little bit exasperated simply because some of the well types that we were drilling, they were very short, cycled Wells. Uh, so so it kind of, uh,

Ated effects of just having a lot of liquids. Productions was have a short Plateau, so shifting towards gas, it just changes your production profile corporately and we're going to be very mindful as we put together the 26 plans, to be able to capitalize on the different quarterly Cadence and make sure that we maximize cash flow for the company.

Great, that’s very helpful. Um, and then for my second question, um, could you just give us any color on how much production is sidelined right now due to some of the lingering midstream constraints? And then once those constraints are alleviated, um, is it something as simple as you guys can just open up the choke a bit and fill that new capacity?

Yeah. Uh, this is John and I appreciate that question as well. Um, so with regards to the the quantity, what I'll tell you is is is I quoted in my prepared marks before. Uh, the vast majority of these have been mitigated, uh, a lot of the early, um, issues were weather related, kind of plant outages, uh, there was a slip on the side of a hill with a gathering line. The very pleased with the Midstream Partners response. Their reactions, they jumped on it. It was mitigated in production and those areas are back up to expected production rates. What I'll tell you is the, uh, the the the lingering or ongoing, uh, projects that the Midstream companies have provided to offset and mitigate some of the production capacity, or, or set another way the compression ads that they're, they're adding as well as gas Quality Equipment, those remain ongoing and

And although they're a minority, uh, part part of the overall downtime, uh, these projects will be completed towards the end of the quarter and end of the fourth quarter. And so what we wanted to do was make sure that everybody was calibrated with our low end of the guide range. Uh, so so that way, you can kind of look at our quarterly uptick and our flat Q4 to narrow in, on where our Productions forecasted to be, considering the cumulative impact of all of those impacts. So, very pleased with the Midstream providers responses to these. They prioritize them and jumped on them. And it really didn't mitigate what could have been, you know, a more meaningful impact to the company.

That's helpful color. Thanks.

our next question is from, Tim resman with keybanc capital markets,

Good morning, folks, and thank you for taking my questions. I wanted to follow up on on Zach's question earlier. Uh, I don't believe you directly addressed it as we think about repurchases this quarter at a time when shares have, you know, put back significantly along with gassy peers is there anything like related to, um, an extended Blackout Window on the preferred redemptions or anything that would keep you from, you know, doing your normal pace of of repurchases this quarter and that would include maybe wanting to wait until you you get notice on the on the preferred just trying to understand kind of what any moving Parts there.

Yeah, hey Tim, it's Michael. I mean, I think to answer your question, there's always things we have to be aware of, and there's also ways to work through those things. So, um, there's opportunities, uh, where we can put plans in place ahead of, uh, windows and, uh, protect the company from that perspective. So, um, you know, I think yes, is the answer to your question? There are, there are ways that we can still work through, uh, common share repurchases, even when we have these other transactions going on, um, and we also are being mindful of kind of what this Redemption, uh, results in from a cash perspective. And so as we get that information later in the quarter, uh, we should be able to then toggle our own intentions from that point forward. So uh, I think the answer to both your questions is yes, there's opportunities there but also things we need to be aware of

Okay. Okay. Okay. I I appreciate that context and then just follow up 1, more on the discretionary acreage Acquisitions. Um, you know, you didn't guide to it at the start of the year and then you came out with a a number, a little bit bigger. Um, John, can you sort of frame the, the opportunity set? Is this something you think can be Perpetual? I know you need to have a seller to be a buyer. But how do how do we think about? Kind of this this ground game of of of bolt-ons? Is that something that can be continued several years? Thank you.

Yeah, Tim, thanks for the question. You know, I think I would point you to, uh, the last 3 years. We've ran, uh, a pretty Landscaping program, uh, looking for these opportunities. And what I'll tell you is, we've been extremely successful with prospecting and finding good opportunities adjacent to our, our current inventory and Lease hold, uh, foothold. Um, you know, these prospects have ranged through Belmont, Monroe, County, and primarily in the wet gas area and the dry gas. Um, so

We can shift to the left of the skyline and drill a really quick, but I'll tell you that there, there's still significant and sufficient opportunities as you go throughout Monroe and melmont's up in the wet gas, dry gas and and even quite frankly, we're agnostic to, uh, you know, Southwest PA or even farther north in Ohio. So plenty of opportunities out there. Uh, you know, very happy with the landings progress. They continue to to assess and move very quickly on these opportunities to secure them, and we put the bit to them within 2 years, it would, which really amps up the returns for these this program. So, it's a really good use of cash. So, appreciate the question, a lot of, uh, prospects out there in the land teams have done a good job, identifying securing them in the Ops teams really are focused on prioritizing, turning the bid on them and getting these converted to cash flow and producing assets.

Thank you.

Thank you. There are no further questions at this time. I'd like to hand the floor back over to John Reinhardt for any closing comments.

Thank you everybody for taking the time to join our call today. Should you have any questions? Please don't hesitate to reach out to our investor relations team. This concludes our call have a great day.

This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.