Q3 2025 Infinity Natural Resources Inc Earnings Call
A brief question and answer session will follow the prepared remarks as a reminder, this conference is being recorded it is now my pleasure to introduce your host Greg Pipkin Senior Vice President corporate development and strategy. Sir you may begin.
Thank you operator, good morning, and thank you for joining our third quarter 2025 earnings results Conference call.
Operator: Thank you. We will now begin the question-and-answer session. If you would like to ask a question, please press star 1 on your telephone keypad. If you would like to withdraw your question, simply press star 1 again. Your first question today comes from the line of Tim Resman from KeyBank Capital Markets. Your line is open.
With me today are Zack Arnold President and Chief Executive Officer, and David <unk>, Executive Vice President and Chief Financial Officer.
In a moment Zach and David will present their prepared remarks with a question and answer session to follow and updated investor presentation has been posted to the Investor relations portion of our website and we may reference certain slides during today's discussion.
Tim Resman: Hey, good morning, guys. Thank you for taking my questions. First, I wanted to dig in with natural gas, looking more attractive. I know you've sort of pushed back plans to test the deep Utica to 2026. There's been strong comments from public peers. Can you talk about any plans you may have to test that into what's looking like a stronger natural gas price environment?
We play of today's call will be available on our website beginning this evening I'd.
I'd like to remind you that today's call may contain forward looking statements. All statements that are not historical facts are forward looking statements.
Zack Arnold: Sure. Thanks, Tim. I'll take that question. This is Zack. We haven't announced anything specific to the development plan of the deep dry gas Utica, and we haven't given any guidance on our 2026 development program at all. As we continue to plan that, that will be a part of our development of that plan. We are always evaluating what other operators are doing, and we think there's continued momentum for the deep dry gas Utica in our South Bend area, and we're excited about that. It is important to remember that when we drill our first deep dry gas Utica well, it will be just one well of many splits in that year, and we'll be excited about it as we are excited about every project we develop.
We're looking statements are subject to a number of risks and uncertainties many of which are beyond our control that could cause actual results to materially differ from these forward looking statements.
Please review our earnings release, and the risk factors discussed in our SEC filings.
We will also be referring to certain non-GAAP financial measures. Please refer to our earnings release and Investor presentation for important disclosures regarding such measures, including definitions and reconciliations to the most comparable GAAP financial measures now over to Zack.
Thank you, Greg and welcome to Infinity Natural resources third quarter 2025 earnings call.
Tim Resman: Okay. Okay. That's fair. We'll stay tuned. I just wanted to dig in, make sure I heard you correctly, Zack. You said that 3,000 net acres that you added, I believe you said that's 350 transactions. I don't know if I heard that correctly, but you've added 4,300 year-to-date. Can you talk to kind of what the ground game, how that's evolving? I know it may be a little more challenging time to pursue sort of larger opportunities, but can you talk about maybe how that's progressing and how you see that into next year? Thank you.
We're pleased to share our quarterly operational and financial performance with you today, along with an overview of our ongoing development program and our perspective on the remainder of 2025.
Starting with the highlights from the third quarter we.
We delivered exceptional results that demonstrate our continued momentum across the Appalachian basin.
We achieved 39% total production growth year over year to 36.0 and BOE per day during the quarter.
This included 70% growth in natural gas production compared to the third quarter of 2024, reflecting our increased focus on natural gas development during 2025.
Zack Arnold: Yeah, great question. I want to maintain the statement that we are focused on both the ground game and larger-scale transactions. To answer your ground game question, we added 3,000 acres over the 350 transactions. I think that's an incredible testament to our team's ability to stay focused in areas where we see value. I think we have a strategic advantage by being located in the basin. That gives us a unique opportunity to be in the neighborhoods and in the communities as we go out and talk to folks. Those transactions that we closed and those acres that we added added additional working interest to projects that are incredibly meaningful to us. Projects that we're already developing at the back half of this year, we were able to increase our working interest due to the work that folks did.
Our continued execution is driving operational momentum.
We have experienced strong results on our recent projects, including our best producing projects in each of Ohio, and Pennsylvania to date.
Most notably we achieved a single day net production record of 47 nine Boe per day in October.
This milestone reflects the consistent execution and commitment to operational excellence that has driven several new company records.
Operationally, we had yet again, a very strong quarter, demonstrating our consistent execution throughout 2025 and.
In total we placed 10 wells into sales during the third quarter comprised of six oil weighted wells in the Ohio, Utica and for natural gas wells in the Pennsylvania Marcellus.
Zack Arnold: Really excited about that work, and we'll keep doing those ground game attacks in both areas, in Ohio and in Pennsylvania, and we'll keep looking at the larger scale in the NALC.
We drilled 93000 lateral feet and completed 442 stages across six wells during the quarter.
Tim Resman: Thank you.
Operator: Your next question comes from a line of John Freeman from Raymond James. Your line is open.
We continue to emphasize extended lateral development with an average well length of nearly 15000 feet during the quarter.
John Freeman: Good morning, guys. Nice to see the share repurchase plan, especially at these valuations. Just maybe how y'all think about the trade-off between share buybacks versus continued kind of ground game acquisitions.
On the drilling side, our team improved efficiencies on casing running speed decreasing the average time by more than 25%.
On the completion side, we set a new record for stages pumped in 24 hours on one of our projects in Guernsey County, exceeding 16 stages in a 24 hour period, reflecting both the quality of our completions design and our team's operational expertise on.
David Sproule: Yeah. Hey, John, this is David. I'll take that one. I think there's a couple points on that. First and foremost, the share buyback will not impact our asset development or acquisition strategies at all. I think that's very much a testament to the team, the capabilities that we have, and the assets that we're developing here. The second thing I'd say is the share price is significantly undervalued. We're being opportunistic here, given our long-term view of the business and our focus on allocating capital and maximizing shareholder returns at every step. It's a good opportunity for us, and we're excited about executing that alongside all the other assets that we're developing.
On the strategic front, we continued to have success in the ground game acquiring approximately 3000 net acres during the quarter across approximately 350 transactions, increasing working interest in our active development projects and enhancing future project.
These working interest additions are among the highest returning dollars we invest as we acquire more of each project we are already executed.
Looking at our activity by state.
In the Ohio, Utica, we drilled three wells and completed 377 stages during the quarter all in Guernsey County.
We also turn into sales a 57000 foot three well pad early in October resulting in the first production from our MS. Gingham watershed Conservancy District acquisition, we made earlier this year.
John Freeman: Got it. My follow-up question, it looks like the amount of natural gas hedges kind of went down each quarter going forward. Maybe can you just speak to that decision?
And the Pennsylvania, Marcellus, we drilled three wells and completed 65 stages.
Specifically in July we began drilling operations on the 50000 foot three well natural gas project that we elected to advance early in the second quarter.
David Sproule: Yeah. We've been pretty well hedged on natural gas. The decline there on natural gas hedges as a percent, is that your question, John? Is that a percentage of total natural gas?
We are excited to announce that we plan to turn these wells to sales in the coming weeks, representing approximately six months from F <unk> to revenue generation.
John Freeman: It looked like, David, that the absolute volume amount that y'all had hedged versus y'all's prior update had gone down the rest of Q3, Q4, and then also for Q4, Q2, just the actual volumes that y'all have gas hedges on, it looked like that went down.
Taking a step back to look at 2025 as a whole our team's execution and strong well performance has allowed us to increase our production guidance for full year 2025 to 33, 5% to 35 BOE per day from 32 to 35 <unk> per day.
David Sproule: Sure. We can circle back with you. I think, first and foremost, we're pretty well hedged on natural gas through 2025, as you guys can see. I think the change in our percentages hedging has continued to highlight the strong well performance that we're having in Pennsylvania. Our strategy overall with regards to hedges, as we've kind of talked about at length before, is to really look at this kind of return on investment that we get on these projects and lock in some of those at an FID, and then we have sort of uptick those when we have a completion cruise come. We'll continue to execute on that plan there, but we're pretty well hedged through 2025 in particular on natural gas, and then have great exposure to natural gas uptick in the coming years.
We are also updating our full year total development capital expenditure guidance to a range of $270 million to $292 million.
Which is inside the higher end of our combined D&C and midstream Capex guidance.
We are on track to have turned to sales 23 wells. This year 12, natural gas weighted wells and 11 oil weighted wells.
Nearly 50 50 split is slightly more gas heavy than our expectations coming into the year, but demonstrates the unique optionality our strategic positioning in Appalachia provides.
With a balanced portfolio across oil weighted Utica assets in Ohio, and natural gas weighted assets in Pennsylvania, we can adapt to varying commodity price environment and to execute projects that maximize shareholder returns.
John Freeman: Thanks, David. Nice quarter, guys.
Zack Arnold: Thank you.
The operational momentum we built throughout 2025, combined with our strategic asset positioning across both oil and natural gas assets.
Operator: Your next question comes from a line of Scott Hanold from RBC. Your line is open.
Scott Hanold: Yeah, thanks. I appreciate the fact that it's probably too early for 2026 guidance. I don't know, Zack, could you kind of frame it up for us a little bit? Should we think about this kind of one to one-and-a-half rig pace you ran this year as a reasonable kind of trajectory in how you think about oil versus gas mix in general? Just help us frame up for what that means on the capital side too, with the development efficiencies and everything else you're seeing.
Provides a solid foundation as we look ahead to 2026.
The strength of our balance sheet remains an invaluable asset and we will continue to be thorough and thoughtful as we evaluate organic and inorganic growth opportunities.
With that I'll turn the call over to David for a more detailed review of our financial results.
Thank you Zack.
Our third quarter results speak directly to the operational and financial execution during the period.
This nearly 50/50 split is slightly more gas-heavy than our expectations coming into the year, but demonstrates the unique optionality our strategic positioning in Appalachia provides.
Zach noted we delivered a 39% increase in net production of 36 Boe per day year over year.
Zack Arnold: Sure. I'll start by saying we aren't giving soft guidance yet for what 2026 will look like. We will provide guidance in Q1 to let everybody understand how we're approaching next year in our capital allocation and our pace of business. To kind of back up from that and just kind of give some framework for folks to be able to think about what our business could look like, though, as we still formulate all of our development plans, if we ran 1.2 rigs in 2025, I think you should expect that we remain at least that active in 2026. We are providing splits to our capital allocation right now between gas or oil, but we have very attractive returns in both commodities, and I would expect us to be active in both states next year.
With a balanced portfolio across oil weighted Utica. Assets in Ohio, a natural gas, weighted assets and Pennsylvania. We can adapt to varying commodity price environments, and execute projects that maximize shareholder returns.
Moreover, as noted earlier, our natural gas production increased 70% year over year to 138 Mcf per day for Q3 2025.
The operational momentum. We've built throughout 2025 combined, with our strategic asset positioning across both oil and natural gas assets.
We anticipate further production growth during the fourth quarter driven by additional turn in lines in the period.
Provides a solid foundation. As we look ahead to 2026.
While driving production growth. We also continued to drive cash operating costs lower the $6 nine per BOE from $9 42 per Boe in the prior year's quarter.
The strength of our balance sheet remains an invaluable asset, and we will continue to be thorough and thoughtful. As we evaluate organic and inorganic growth opportunities,
With that, I'll turn the call over to David for a more detailed review of our financial results.
As expected, our LOE and <unk> per unit metrics continued to decline as we bring on additional natural gas volumes in Pennsylvania.
Our third quarter results speak directly to the operational and financial execution during the period.
Scott Hanold: Okay. I got that. Just to clarify too, I think you said y'all reached like 47.9MBOE per day in October. Could you clarify that? Was that a peak rate or was that an average? Just help me kind of square the circle with I think you said you expect to see some growth through the fourth quarter. I think guidance for something around 43 a day, if you were up around 48, just kind of help us walk through the timing of the tills and natural declines coming off of some of the pads you've done.
As always we are focused on EBITDA generation and capital efficiency delivering best in basin, adjusted EBITDA margins and capital efficiency when compared to our Appalachian peers.
We generated adjusted EBITDA of $60 million during the quarter and adjusted EBITDA margin of $18 and 12 per Boe.
As Zach noted, we delivered a 39% increase in net production. The 36 mboe per day year-over-year. Moreover, as noted earlier, our natural gas production, increased 70% year-over-year to 138 mmcf per day for Q3 2025.
Again, a top tier result, compared to our Appalachian peers, the shift towards natural gas weighting continues to improve our operating cost structure, while maintaining leading margin. We expect per unit cost will continue to decline as we accelerate Pennsylvania production.
We anticipate further production growth during the fourth quarter, driven by additional turn-in lines during the period.
Zack Arnold: Sure. Specifically, that number was a daily spot rate that we reported there. We have six wells that we will be turning in line this quarter. Three of them have already happened. That number corresponded with those wells coming online. We have three additional gas wells that will come online here in pretty fresh time in the next couple of weeks. We do not give quarterly production guidance, so I cannot really help you specifically get to what this quarter is going to be, but I just point you back to the production range that we set. I think those production—sorry, I was just going to make a comment. We have been very happy with our recent well performance too, and that helps us hit those production records as we go.
The $6.9 per Boe from $942 per Boe in the prior year's quarter.
On capital deployment, we invested $95 million into our business during the quarter.
As expected our LOE and gpn per unit, metrics, continued to decline as we bring on additional natural, gas volumes in Pennsylvania.
Apprised of $83 $2 million in development capital expenditures and $11 $8 million in land acquisition.
Again, we anticipate capital spend to decline in the fourth quarter.
As always we are focused on IBA generation and capital efficiency, delivering bets and Basin adjusted. Eva Dawn margins and capital efficiency when compared to our Appalachian peers.
As <unk> noted our land acquisition strategy continues to deliver results with approximately 3000 net acres added during the third quarter and approximately 4300 net acres acquired year to date.
What makes these acquisitions, particularly valuable to infinity is that they increase our working interest in ongoing development projects, while expanding our future drilling inventory.
Scott Hanold: Yeah, just to clarify, am I correct, though, the implied kind of Q4 guidance is around 43-ish, somewhere around there? That if I take your full year or less, what you've done year to date?
From a practical standpoint, the increase in working interest on development Wells has effectively added approximately one net well to our 2025 development program our development capital spend for the calendar year is anticipated to be within our prior 2025 guidance.
We generated adjusted. EBA of $60 million during the quarter and then adjusted ibaon margin of 18 and 12 cents per Boe. Again, a top tier result compared to our Appalachian peers, the shift towards natural gas weighting continues to improve our operating cost structure while maintaining leading margins. We expect per unit costs will continue to decline as we accelerate Pennsylvania production.
Zack Arnold: Yeah. I don't know. We don't have a specific quarter number because we haven't necessarily spoken about that, but I would just keep you thinking about how the 33.5 to 35 represents our view of production for the year.
This represents more value for investors at the same spend.
Turning to the balance sheet, our leverage profile remains exceptionally strong with approximately $71 million and net debt on.
On Capital deployment, we invested 95 million into our business during the quarter comprised of 83.2 million in development, Capital expenditures, and 11.8 million in land Acquisitions. Again, we anticipate Capital spend to decline in the fourth quarter.
On October one we expanded our borrowing base, yet again, the $375 million, providing us with $304 million and liquidity.
Scott Hanold: Got it. Thanks.
Operator: Your next question comes from a line of Michael Sciola from Stephens. Your line is open.
Turning to 2025 guidance, we are raising our full year net daily production guidance to $33 five to 35 Boe per day.
Michael Sciola: Good morning. I wanted to ask, on your DNC CapEx guide for the year, you took that up at the midpoint a bit. I just want to see how well costs and the pace of development are trending versus your prior expectations.
As Act noted, our land acquisition strategy continues to deliver results, with approximately 3,000 net acres added during the third quarter and approximately 4,300 net acres acquired year to date. What makes these acquisitions particularly valuable to Infinity is that they increase our working interest in ongoing development projects while expanding our future drilling inventory.
32% to 35 <unk> per day.
This is driven by strong well performance and operational successes across our portfolio.
David Sproule: Yeah. I think a couple of things there. We've been really happy and proud of our operational team. They have not only delivered this year, but they delivered in an expedient fashion. We're kind of seeing some of that come through with the numbers there. Obviously, tariffs affect things, but I would tell you that our dollar-per-foot basis here is great and actually tracking extremely well to what we anticipated back in March. I think some of the things that you're seeing with a higher level of spend is reflecting a couple of thoughts. One is, Zack alluded to this in his comments, that we've added additional acreage and working interests. We kind of noted it in the prepared remarks that we provided. We've effectively added an additional well in that. As you think about an additional well for us, it's a 15,000ft lateral.
We are updating our full year total development capital expenditure guidance to a range of $270 million to $292 million <unk>.
From a practical standpoint, the increase in working interest on development. Wells has effectively added approximately 1, net. Well to our 2025 development program, our development Capital, spend for the calendar year is anticipated to be within our prior 2025 guidance.
Inside the higher end of our previous combined D&C and midstream capex guidance of $249 million to $292 million.
This represents more value for investors at the same spend.
Turning to the balance sheet, our leverage profile remains exceptionally strong, with approximately $71 million in net debt.
Again, we are inside the 2025 capex guidance for delivering more net wells for our investors.
Lastly.
On October 1st, we expanded our borrowing base yet again, the 375 million providing us with 304 million in liquidity.
Our board of directors has authorized a $75 million share repurchase program, reflecting confidence in our underlying long term value for our business the strength of our balance sheet.
Value nature of our stock price relative to our performance.
Turning to 2025 guidance, we are raising our full-year net daily production guidance to 33.5 to 35 MBoe per day, from 32 to 35 MBoe per day.
With that over to Zac closeout, our opening remarks.
Thanks, David to wrap up our third quarter results reflect the strength and strategic value of our diversified Appalachian operations.
This is driven by strongwell performance and operational successes across our portfolio.
Our success this quarter highlights what makes infinity natural resources unique our proven ability to optimize development across both our Ohio, Utica oil properties, and our Pennsylvania, Marcellus natural gas assets.
David Sproule: It's a pretty impactful benefit to us from an economic perspective, but also kind of does affect the overall spending channel. The second thing is we have pulled forward some of those natural gas projects and have spent some money to prepare us for 2026 with regards to our infrastructure aspect. You're seeing both of those kind of manifest here. Again, we're delivering better results. We're delivering more effective net wells at the same spend.
We are updating our full-year total development capital expenditure guidance to a range of $270 million to $292 million.
Inside the higher end of our previous combined DNC and midstream capex guidance of $249 million to $292 million.
We demonstrated this flexibility by successfully executing our accelerated natural gas program, while maintaining strong momentum on our oil development positioning us to turn in line 23 wells in 2025.
Again, we are inside the 2025 capex guidance, while delivering more net Wells for our investors.
The near $50 50 gas to oil production split.
We're exceptionally well positioned to sustain our active development pace into 2026, while continuing to deliver strong returns for our shareholders. Operator, you may now open up to Q&A.
Lastly, our board of directors has authorized a 75 million share repurchase program reflecting confidence in our underlying long-term value for our business. The strength of our balance sheet, and the undervalued nature of our stock price relative to our performance.
Scott Hanold: Sounds good. I know you had some midstream constraints that you talked about last quarter. At this point, are you running into any kind of constraints midstream or otherwise that could impact your operations going forward?
With that over to Zach. Close out our opening remarks.
Thank you we will now begin the question and answer session. If you'd like to ask a question. Please press star one on your telephone keypad. If you would like to withdraw your question simply press Star one again.
Thanks, David to wrap up our third quarter results, reflect the strength and strategic value of our Diversified Appalachian operations.
Zack Arnold: No. No midstream constraints. We're really excited about the midstream that we're building out on our own for gas assets, as David talked about, spend money there preparing for this year's gas volumes and next year's gas volumes. We're well positioned there. Our near-term development in Ohio is all from pads that are tied into pipeline already. No anticipated midstream issues at all.
Our success this quarter highlights, what makes Infiniti natural resources unique?
First question today comes from the line of Tim resident from Keybanc capital markets. Your line is open.
A proven ability to optimize development across both our Ohio Utica oil properties and our Pennsylvania Marcellus natural gas assets.
Hey, good morning, guys. Thank you for taking my quest.
Questions first wanted to dig in with natural gas looking more attractive.
Michael Sciola: Great, thank you.
I know you've sort of pushback plans.
Plans to test the deep Utica to 2026.
Operator: Your next question comes from a line of Paul Diamond from Citi. Your line is open.
We demonstrated this flexibility by successfully executing our accelerated natural gas program while maintaining strong momentum on our oil development. This positions us to turn in line with 23 wells in 2025, achieving a near 50/50 gas-to-oil production split.
There's been strong comments from public peers can you talk about any plans you may have.
Paul Diamond: Thank you. Good morning, all. Thanks for taking the call. Just wanted to touch back on the share buyback. It's kind of the strategy around execution. I mean, you stated you think the shares are undervalued. I guess, at what point would you lean further in? Is there a marker you have out there, or is it just more relative value or against an internal model? Just how to think about the pace and timing of that, I guess.
To test that into what's looking like a stronger natural gas price environment.
Sure. Thanks, Tim I'll take the question this is <unk> from.
We are exceptionally well positioned to sustain our active development pace into 2026, while continuing to deliver strong returns for our shareholders. Operator, you may now open up to Q&A.
We haven't announced anything specific to the development plan to the deep dry gas Utica and we haven't given any guidance on our 2026 development program at all so as we continue to plan that.
Thank you. We will now begin the question and answer session. If you would like to ask a question, please press star 1 in your telephone keypad if you would like to withdraw your questions simply press star 1 again.
David Sproule: Yeah. Hey, Paul. This is David. I think, first and foremost, I don't think it's surprising to anybody that's listening on this call that we think that our shares are undervalued. I don't think we're going to give today any view of where we would opportunistically utilize our buyback authorization, if you will, at this stage. We obviously are really happy and excited about the business that we have, the long-term generation of cash that we anticipate here, and think that the shares are significantly undervalued, and we're just going to be opportunistic about rolling them back into the company.
A part of our development of that plan, we are always evaluating what other operators are doing and we think there is continued momentum for the deep dry gas Utica in our South Bend area, we're excited about that it.
Your first question today comes from the line of Tim Resident from KeyBanc Capital Markets. Your line is open.
It is important to remember that when we drilled our first deep dry gas.
Because one well with many spuds in that year and we'll be excited about it.
But every project we developed.
Okay. Okay. That's fair, we'll stay tuned and then I just wanted to dig in.
Can you talk about? Um, any plans? You may have um to test that into, what's looking like a stronger natural gas uh price environment.
Make sure I heard you correctly that you said that 3000 net acres that you added.
I believe this is a 350 transactions.
I don't know if I heard that correctly, but you've added 4300 year to date can you talk to kind of what the ground game.
Paul Diamond: Got it. Makes perfect sense. Since IPO early this year and kind of as you've really commenced on that one to one-and-a-half kind of drill pace, can you talk about anything that might have, on either the upside or the downside, surprised you about well results versus the original expectations? The decline rates in line, the IPs, EURs, all that stuff?
How that's evolving.
It may be a little more challenging.
Time to pursue sort of larger opportunities, but you.
Can you talk about maybe how that's progressing and how you see that into next year. Thank you.
Yes, great question and I wanted to maintain the statement that we are focused on both the ground game in larger scale transactions, but.
Zack Arnold: Yeah, I think it's important to note that we've been incredibly spot on with our budgeting of these projects from a CapEx perspective and a production perspective. We've been very pleased with the team's ability to predict and forecast what these wells are going to do. We are really happy with a couple of the recent projects that are outperforming our base tight curve assumptions. Those are always nice to have, those surprises to the positive. I'll compliment the team that they've done a tremendous job in preparing for the IPO and executing this year at planning our business and putting out a budget that we can meet.
To answer your ground game question, we added 3000 acres.
Sure, thanks, Tim. Uh, I'll take that question. This is Zach. Um, we have an announcement regarding anything specific to the development plan of the deep dry gas Utica. And, uh, we haven't given any guidance on our 2026 development program at all. So, as we continue to plan that, you know, that will be a part of our development of that plan. Um, we are always evaluating what other operators are doing, and, uh, we think there's continued momentum for the Deep Dry Gas Utica in our South Bend area, and we're excited about that. Um, it is important to remember that when we drill our first deeper Utica, you could go out and we just have one well of many spuds in that year, and we'll be excited about it as we are excited about every project we develop.
The 350 transactions I think Thats, an incredible testament to our team's ability to stay focused in areas, where we see value I think we have a strategic advantage by being located in the basin that gives us a unique opportunity to be.
Okay. Okay, that's fair. We'll, we'll stay tuned and then I I just wanted to dig in. Make sure I heard you correctly. Zach, you said that 3,000 net Acres that you added.
I, I believe you said that 350 transactions.
In the neighborhoods and the community as we as we go out and talk to folks that those transactions that we closed on those acres that we added added additional working interest in projects that are incredibly meaningful to us. So projects that were already developing at the back half of this year, we were able to increase our working interest due to the work that folks are released.
So, I don't know if I heard that correctly, but, um, you know, you've added 4,300 year-to-date. Can you talk about, kind of, what the ground game? Um, how that's evolving? Um, and I know it may be a little more challenging, um, time to pursue sort of larger opportunities, but, um, you talked about, you know, maybe how that's progressing, and how you see that into next year. Thank you.
Paul Diamond: Got it. Understood. Appreciate the time. I'll leave it there.
Cited about that work and we'll keep doing those ground game apps in both areas in Ohio, and Pennsylvania, and we'll keep looking at the word risk eliminate Wilson.
Operator: Again, if you have a question, press star one on your telephone keypad. Your next question comes from the line of Nicholas Pope from Roth Capital. Your line is open.
Thank you.
Michael Sciola: Hey, good morning, guys.
Paul Diamond: Morning.
Your next question comes from the line of John Freeman from Raymond James Your line is open.
Michael Sciola: Another question about the share repurchase. I was just curious, and the comment is that it's for Class A shares. I was curious if there was a mechanism for conversion of the Class B shares to be a part of the share repurchase, or do they need to be completely separated in kind of the approval process?
Good morning, guys.
Nice to see the share repurchase plan, especially at these valuations just maybe how you all think about the tradeoff between.
Share buybacks versus continued kind of ground game acquisitions.
Yeah, Hey, John This is David I'll take that one I think theres a couple of points on that I think first and foremost the share buyback will not impact our asset development or acquisition strategies at all.
David Sproule: I think, hey, Nick, this is David. I think, first and foremost, our investors, our legacy investors, I should say, are really bullish on this story for us. I don't think you should anticipate any of that anytime soon. I think, with regards to the share repurchase, the program is targeted in around the Class A shares. Those are the economic shares that are trading, obviously. We have about 15.6 million shares that are trading. I think it's important to know, at yesterday's close of roughly $11.50, that would be in the execution of a $75 million share repurchase program, that would effectively claw back or repurchase north of 40% of the Class A shares. It's a pretty impactful share repurchase program for us, but again, it's just targeted on the shares that are actively trading in the market today.
I think thats.
It's very much a testament to the team and the capabilities that we have and the assets out of that work.
A great question. And I want to maintain the the statement that we are focused on both the ground game and larger scale transactions, but uh, to answer your ground game question and we added 3,000 Acres over the 350 transactions. I think that's an incredible Testament to our team's ability to stay focused in areas where we see value. I think we have a strategic Advantage by being located in the Basin that gives us a unique opportunity to, uh, to be in the neighborhoods and in the communities. As we as we go out and talk to folks that those transactions that we that we close in those Acres that we added added additional working interest to projects that are incredibly meaningful to us so projects that were already developing at the back. Half of this year, we were able to increase our working interest due to the the work that that folks did. So really excited about, uh, that work. And we'll keep doing those ground game attacks and both areas in Ohio, and in Pennsylvania. And we'll keep looking at the larger scale and also
Thank you.
Developing here and the second thing I'd say.
Your next question.
The share price is significantly undervalued.
Comes from a lion of John Freeman from Raymond James. Your line is open.
And we're being opportunistic here given our long term view of the business.
Good morning, guys.
And our focus on allocating capital and maximize shareholder returns at every step.
And so.
It's a it's a good opportunity for us and we're excited about executing down on one side of all the other assets that we're developing.
Uh, nice to see the uh the share repurchase plan uh especially at these valuations. Just maybe how y'all think about the trade-off between, uh, share BuyBacks, uh versus uh, continued kind of ground game acquisitions.
Okay, and then my follow up question.
Looks like the P M.
Out of our natural gas hedges kind of went down each quarter going forward, maybe can you just speak to that decision.
Yeah. Hey John, this is, uh, David. I'll take that one. I think there are a couple points on that. First and foremost, the, uh, the share buyback will not impact our asset development or our acquisition strategies at all.
Yes.
We've been pretty well hedged on natural gas the decline there on natural gas hedges as a percentage is that your question John is as a percentage of total aromatics asphalt.
Michael Sciola: Makes sense. Is there any, as you kind of look at that share repurchase and kind of how things are going to progress going forward, is it primarily going to be focused on the free cash flow that the company's generating? I just want to make sure it's not anything as like as you're going through the development process or spending development capital that this isn't something that's going to increase debt, that it's mostly going to be coming from the generation of free cash flow.
um, I think that's, uh, uh, very much a testament to the team and the capabilities that we have, and the assets that were, that were, um,
Developing here. The second thing I I'd say is, you know, the share price, uh, is significantly undervalued.
It looks like David that the absolute like volume amount that you all had hedged versus your prior update had gone down.
And we're being opportunistic here, given our long-term uh view of the business.
The rest of Q4 <unk> and then also for full year 2000, and secondly, just the actual volumes that you all have gas hedges on it.
And our focus on allocating capital and maximizing shareholder returns at every step. Um, and so, it's a good opportunity for us, and we're excited about executing that alongside all the other assets that we're developing.
David Sproule: Yeah, I think from our standpoint, Nick, none of the share repurchase program will impact the asset development and strategies of the development plans of the company. For us, I think that's the most critical aspect of the company that we have. We have a very strong balance sheet, and we intend to maintain a very strong balance sheet. We think that is just strategic strength of us to utilize that balance sheet, when appropriate and prudent. Again, none of the activities announced with the share repurchase program will impact our ability to execute on our plan.
Looked like that went down.
guys, and then
Sure. We can circle back with you I think first and foremost, we're pretty well hedged on natural gas through through 2025 as you guys can see.
The change in our percentages hedging is just continuing to highlight the strong well performance that we're having.
My my follow-up question. Um, it looks like the, uh, the amount of, uh, of natural gas Hedges kind of went down each each quarter going forward, maybe can you just speak to that decision?
In Pennsylvania.
But our strategy overall with regard to the hedges that you've kind of talked about at length before.
Yeah, you know, we've been pretty well hedged on natural gas. The decline, there on natural gas, Hedges as a percent. Is that your question? John. Is that a percentage of total magic gas?
Is to really look at the kind of return on investment that we get on these projects and lock in some of those.
And then and then we have sort of uptick.
Uptake those from the other completion crews come we.
We will continue to execute on that plan there.
Michael Sciola: Got it. Great stuff. That's all I had. Thanks.
But we're pretty well hedged through 2025 in particular on natural gas and then have great exposure to natural gas.
Zack Arnold: Thank you.
Operator: There are no further questions at this time. I will now turn the call back over to Zack Arnold for closing remarks.
It looked like David that the absolute like volume amount that y'all had hedged, uh, versus y'all's prior update. Had gone down, uh, the rest of 3, q4q. And then also for 4 year, 26, like just the actual volumes that y'all have gas Hedges on. Uh, it looked like that went down.
Kick.
In the coming years.
Thanks, David Nice quarter guys.
Zack Arnold: Well, thank you very much for joining us today as we shared our Q3 results. We appreciate your time and your interest in INR. Have a great day.
Thank you.
Your next question comes from the line of Scott Hanold from RBC. Your line is open.
Operator: This concludes today's conference call. Thank you for your participation. You may now disconnect.
Yeah. Thanks, I appreciate the fact that it's probably too early for 2026 guidance, but.
I don't know is that could you kind of frame it up for us a little bit like.
Should we think about like this this kind of one to one and a half rig pace. You ran this year is a reasonable kind of trajectory and how you think about oil versus gas mix in general in <unk>.
In some of those at an FID and then and then we have sort of a uptick those when we have a completion Crews come uh we'll continue to assess you on that plan. Their
Just help us frame up for what that means on the capital side too with.
The development efficiencies and everything else you are seeing.
Um, but we're pretty well hedged through 2025, in particular on natural gas, and then have great exposure to a natural gas uptick in the coming years.
Sure. So I'll start by saying, we are giving <unk> guidance, yet for 2026 will look like.
Thanks David. Nice quarter, guys.
Thank you.
We'll provide guidance in Q1 to let everybody understand how we're approaching next year in our capital allocation and our base of business. So to kind of back up from that and just kind of give some framework for folks to be able to think about what our business could look like though is we still formulate all of our development plan and we ran one.
Your next question comes from a line of Scott Hamilton from RBC. Your line is open.
Two rigs in 2025, I think you should expect that we remain at least enacted in 2026.
We are providing splits to our capital allocation right now between gas or oil, but we have very attractive returns in both commodities and I would expect us to be active in both states next year.
Yeah, thanks. Um, I appreciate the the fact that it's probably too early for 2026 guidance, but I don't know if that could could you kind of frame it up for us a little bit? Like it, you know, should we think about like this, this kind of 1 to 1 and a half rig Pace? You, you ran this year is is a reasonable kind of trajectory and and how you think about oil versus gas mix in general? And and, you know, just just help us frame up for you know, what that means in the capital side too with, you know, the the development efficiencies and and everything else you're saying,
Okay got that and then just to clarify I think you said you all reached like $47 nine Boe per day in October just could you clarify that was that a peak rate or was that an average I'm. Just just help me kind of square the circle with.
I think you said you expect to see some growth through the fourth quarter.
you sure. So I'll I'll start by saying we are giving soft guidance yet for what 2026 will look like. But we will provide guidance in uh, in q1. To let everybody understand how we're approaching next year in our Capital, allocation and our pace of business. So to to kind of back up from that and just kind of give some framework for folks to be able to think about what our business could look like though, as we still talk.
I think guidance some for something alarm 43, a day if Europe were up 48, just kind of help us walk through the timing of the tills and natural clients coming off of some of the pads you've done.
Formulate all of our development plans, and we ran 1.2 rigs in 2025. I think you should expect that. We remain at least that active in 2026.
Sure so specifically that number what the daily spot rate.
We reported there.
We have.
Six wells that we will be turning in line. This quarter three of them have already happened that number corresponded with those wells coming online. We have three additional gas wells that will come online here in pretty pretty Bush signed here in the next couple of weeks. So we don't give quarterly production guidance. So it doesn't.
Um, we're we are providing splits to our Capital allocation right now between gas or oil, but we have very attractive returns in both Commodities and I would expect us to be active in in both States next year.
Can't really hope you.
Specifically just to what this quarter is going to be but I would just point you back to the the production range that we set.
And.
Those production.
Sorry, I was just going to make a comment that we've been very happy with our recent well performance to map that helps us get through this.
Okay, I got that in and then just to clarify too and I, I think you said you all reached like 47.9 mb per day in October, just could you clarify? That was, was that a peak rate or was that an average? I'm just just telling me he's kind of square the circle with, you know, I think you said you you expect to see some growth you know, through the fourth quarter. I think guiding some for something around 43 a day. If if you were up where I'm 48 just kind of help us like walk through the timing of the tills and natural declines coming off as some of the, you know, the pads you've done.
Production orders as we go.
Yeah, and just to clarify.
It might correct, though the implied <unk> guidance is around 43 ish somewhere around there.
If I take your full year less what you've done year to date.
Okay.
Yes, I don't know we don't.
I have a specific order number because they haven't.
Necessarily spoken about that but I would just keep thinking about how the 33, 5% to 35 represents our view of production for the year.
Sure. So specifically that number was a daily spot rate that that that we reported there. Um, we have 6 Wells that we will be turning in line. This quarter 3 of them have already happened. That number corresponded with those Wells coming online. We have 3 additional gas Wells that will come online here in uh in pretty. Pretty fresh thyme here in the next couple of weeks. So we don't give quarterly production guidance, um, so it doesn't so I can't really help you uh, specifically get to what this quarter.
Got it thanks.
Is going to be, but I just point you back to the the production range that we set.
Your next question comes from the line of Michael <unk> from Stephens. Your line is open.
Yeah.
Yeah.
Good morning wanted to ask on your D&C Capex guide for the year, you took that up at the midpoint a bit towards see how well costs in the pace of development are trending versus your prior expectations.
Sorry I was just going to make a comment that we've been very happy with our our recent well performance too, and that that helps us get those those production records as we go.
I think a couple of things there.
Yeah. And and just to to clarify is, is am I correct though the implied kind of fork? You guys is around 43 somewhere around there that you know, if I take your full year or less what you've done here today,
We've been really happy and proud of our operational team.
Have not only delivered.
This year, but they delivered in an expedient fashion.
Some of that come through.
With the numbers here obviously.
Yeah, I don't know. Um you know we don't have a specific order number because we we haven't necessarily uh spoken about that. But I would just keep keep you thinking about how that the 33 and a half to 35 represents our view of of production for the year.
Tariffs affecting but I would tell you that our dollar per foot basis here.
Got it, thanks.
As great an accurate tracking extremely well to what we anticipated back in March I think some of the things that youre seeing with a higher level of spend is reflecting a couple of thoughts one is.
You. Our next question comes from a line of Michael Cella from Stevens. Your line is open
Zach alluded to this in his comments that we've added additional acreage and working interest.
Good morning. I wanted to ask about your DNC capex guide. For the year, you took that up at the midpoint a bit. I just want to see how well costs and the pace of development are trending versus your prior expectations.
You kind of noted in the prepared remarks that we that we provided.
Effectively added an additional well in that so as you think about an additional well for us as a 15000 foot lateral.
It's a pretty impactful.
Benefit to us from an economic perspective, but also kind of.
It does affect the overall expenditure in the second thing is.
We have pull forward some of those natural gas project.
To prepare for 2026 with regards to our infrastructure and so youre seeing both of those kind of manifest here.
But again, we're delivering better results, we're delivering more effective net wells.
At the same spend.
Sales good and I know you had some midstream constraints that you talked about last quarter at this point are you.
Running into any kind of constraints midstream or otherwise that could impact your operations going forward.
No no midstream constraints, we're really excited about the midstream that we are building out on our own for gas assets as David talked about spend money. They are preparing for this year's gas go into next year as guests going so well.
<unk>, there and our near term development in Ohio is all from ads that are tied into pipeline already so so no anticipated midstream issues at all.
Great. Thank you.
Our next question comes from the lineup Paul Diamond from Citi. Your line is open.
That we've added additional acreage and working interests and we kind of noted it in the, the prepared remarks that we that we provided, you know, we've effectively added an additional wealth in that. So as you think about an additional wealth for us is a 15,000 foot lateral. Um, it it's a pretty impactful, uh, benefit to us from an economics perspective but also kind of uh, does affect the overall expenditure. And the second thing is is um, you know, we have pull forward some of those natural gas projects and, and have spent money to prepare us for 2026 with regards to our infrastructure aspect. So, you're seeing both of those uh, kind of manifests here. Um, but again, we're delivering better uh, results. We're delivering more effective, net Wells at the same spend.
Thank you good morning, guys. Thanks for taking the call.
Wanted to touch back on the share buyback.
The strategy around execution I mean, you said you think the shares are undervalued I guess at what point would you mean for grid and they're a market you have out there or is just more relative aisle or against the internal model just kind of thinking about the.
Sounds good. And I know you had some Midstream, uh, constraints that you talked about last quarter at this point. Are you running into any kind of constraints, Midstream, or otherwise that could impact your operations going forward?
Based on the timing of that yet.
Paul This is David I think first and foremost I don't think its surprising to anybody listening on this call that.
But we think that our shares are undervalued I don't think were going to give today any any view of where we would.
No, no Mission constraints. We're really excited about, um, the Midstream that we're building out on our own for gas assets as David talked about spend money there, preparing for this year's, gas volumes. And next year's guest volumes. So so well, positioned there, and our near-term development in Ohio, is all from pads that are are tied into pipeline already. So, um, so no anticipated Mission issues at all.
Opportunistically.
Great. Thank you.
<unk> utilized.
Our buyback authorization, if you will.
At this stage.
You are. Next question. Comes from a line of Paul diamond from City. Your line is open,
We obviously are really happy and excited about.
The business that we have the long term generation of cash that we anticipate here.
I think that it's.
Shares are <unk>.
Significantly undervalued and we're just going to be opportunistic about rolling going back into the company.
Uh thank you. Good morning. Thanks for taking the call. Just wanted to touch back on the share buyback. It is kind of a strategy around execution. I mean you said you think the shares are undervalued? I guess, at what point would you mean further in? Is there a marker you have out there or is just more relative Val or against internal model? Just how to think about the
Got it thanks, perfect sense, and then since IPO earlier, this year and kind of not just really commenced on that one to one and a half drill pace I'm, sorry about anything that might have on either the upside or downside surprised you about well results versus your original expectations.
Pace and timing of that, I guess. Yeah.
Hey Paul. This is David. I I think first and foremost, I don't think it's surprising to anybody or listening on this call that uh, that we think that our Shares are undervalued. I don't think we're going to give today any any view of where we would uh opportunistically um,
Decline rates in mind.
<unk> all that stuff.
Yes, I think it's important to note that we've been incredibly spot on with our budgeting.
<unk> for projects.
Capex perspective, and a production perspective, we've been very pleased with the team's ability to predict and forecast.
Utilize. Uh, our BuyBacks authorization, if you will um, at this stage. Um, but we obviously are really happy and and excited about um, the business that we have the long-term generation of cash that we we anticipate here.
These wells are going to do we are really happy with a couple of the recent projects that are outperforming our.
And think, uh, that the shares are significantly undervalued and we're just going to be opportunistic about rolling them back into the company.
The type curve assumptions. So those are always nice to have those surprises to the positive, but I'll compliment the team that they've done a tremendous job in preparing for the IPO and executing this year are planning our business and putting out a budget that we can do.
Got it understood appreciate the time I'll leave it there.
Again, if you have a question press star one of your telephone Keypad. Your next question comes from the line of Nicholas Pope from Roth Capital. Your line is open.
Got, it makes perfect sense. And then, since IPO early this year, and kind of as you really commenced on that 1 to 1 and a half kind of drill Pace, I'm talking about anything that might have, you know, on the other, the upside of the downside surprised you about, you know, well results versus the original expectations, you know, the decline rates in line, the IP easy you are, is all that stuff.
Hey, good morning, guys.
Good morning.
Another question about the share repurchase I was just curious in the release the comment is that it's for class a shares I was curious if there was a mechanism for <unk>.
Conversion of the class B shares to be a part of the share repurchase or is that do they need to be completely separated in and kind of the approval process.
Yeah, I think it's important to note that we've been incredibly spot-on with our budgeting of these projects from a capital expenditure (capex) perspective, and from a production perspective, we've been very pleased with the team's ability to predict and forecast. The, uh, what these goals are going to do, we are really happy with a couple of the recent projects that are outperforming our base, uh, type service options. So those are always nice to have—those surprises to the positive. But I'll compliment the team that they've done a tremendous job in preparing for the IPO and executing this year, at planning our business and putting out a budget that we can meet.
I think hey, Nick This is this is David.
First and foremost our R. R.
Got it. Understood. I appreciate the time. I'll leave it there.
Investors are legacy investors I should say.
Are really bullish on this story for us and so I don't think you should anticipate any.
Again, if you have a question press star 1 on your telephone keypad, you are next question.
Comes from a line of Nicholas pope from Roth Capital, your line is open.
That anytime soon.
Good morning, guys.
I think with regards to the share.
Morning.
Um,
Repurchase.
The program is targeting around the class a shares. So those are the those are the economic shares that are trading obviously, we have about $15 6 million shares that are traded I think it's important to note at yesterday's close of roughly 11, 50 that would be and in the execution of its $75 million share repurchase.
Uh another question about the share repurchase. I was just curious in in in the relief you know the comment is that it's for class A shares. I was curious if there was a mechanism for
Ram that would effectively.
Conversion of of the Class B shares to be a part of the share repurchase or is that, do they need to be completely separated, in, in, in kind of the approval process.
Bob back or repurchase.
North of 40% of the class a shares.
So it's a pretty impactful share repurchase program for us, but again, it's just targeted on the shares that are actively trading in the market.
I think uh hey Nick this is uh this is David. I think the first and foremost our our our uh investors our Legacy investors, I should say.
Makes sense.
Is there any as you kind of look at that share repurchase and kind of how things are going to progress going forward is it primarily going to be focused on like the free cash flow of the company is generating I just want to make sure it's not anything as like Azure going through the development process or spending development capital.
Um, are really bullish on this story for us. And so, uh, I don't think you should anticipate any of that anytime soon. Uh, I think with regards to the share, uh, repurchase,
This isn't something that's going to increase that.
That's mostly going to be coming from the generation of free cash flow.
I think from our standpoint net none of the share repurchase program will impact the asset development and strategy.
Program is is targeted in and around the class A share. So those are the, those are the economic shares that are trading. Obviously, we have about 15.6 million shares that are trading. I think it's important to know at yesterday's close of roughly 1150. That would be uh and the execution of a 75 million dollar share repurchase program that would effectively uh, claw back or repurchase.
On the plans of the company so.
For us.
I think that's the most critical aspect of.
Of the company that we have and we have a very strong balance sheet, we intend to maintain a very strong balance sheet, we think that it's a strategic.
North of 40% of the Class A shares. Um, so it's a pretty impactful share repurchase program for us, but again, it's just targeted on the shares that are actively trading in the market today.
Strength of up.
To utilize that balance sheet.
When appropriate and prudent.
But again.
None of the activities announced the share repurchase program will impact our ability to execute on our plan.
Got it.
Thats all I had thanks.
Thank you.
And there are no further questions at this time I will now turn the call back over to Zach Arnell for closing remarks.
Makes sense. Um, is there any as you kind of look at that share repurchase and and and kind of how things are going to progress going forward? Is it primarily going to be focused on like the free cash flow that the company's generating. I just want to make sure it's not anything is like as you're going through the development process or spending development Capital that this isn't something that's going to increase debt like that, it's that's mostly going to be coming from the generation of free cash flow.
Well. Thank you very much for joining us today as we shared our Q3 results. We appreciate your time and your interest in iron ore have a great day.
You know, I think from my, our standpoint next, none of the share repurchase programs will impact the asset development and strategies of the, uh, development plans of the company. So, um, you know, for us,
This concludes today's conference call. Thank you for your participation you may now disconnect.
Yeah.
I think that's the most critical aspect of the company that we have. We have a very strong balance sheet. We intend to maintain a very strong balance sheet. We think that is a strategic uh,
Yeah.
Yeah.
Okay.
Strength of us uh to utilize that balance sheet, uh, 1 ARR and prudent. Um, but again, um, none of the activities announced for the show. We purchase program will impact our ability to execute on our plane.
Got it. Great stuff. That's all, head. Thanks.
Thank you.
Yeah, and there are no further questions at this time. I will now turn the call back over to Zach Arnold for closing remarks.
Well, thank you very much for joining us today as we shared our Q3 results. Uh, we appreciate your time and your interest in INR. Have a great day.
This concludes today's conference call. Thank you for your participation. You may now disconnect