Q1 2026 Infinity Natural Resources Inc Earnings Call

May 13, 2026

Speaker #2: INFINITY NATURAL RESOURCES, FIRST QUARTER 2026 EARNINGS CALL. After today's prepared remarks, we will host a question-and-answer session. If you would like to ask a question, please press star one to raise your hand.

Operator 3: Infinity Natural Resources Q1 2026 Earnings Call. After today's prepared remarks, we will host a question-and-answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. I will now hand the call over to Mr. Thomas Marchetti, Vice President of Investor Relations. Please go ahead, sir.

Speaker #2: To withdraw your question, press star one again. I will now hand the call over to Mr. Tom Marchetti, Vice President of Investor Relations. Please go ahead, sir.

Speaker #3: Thank you, Operator. Good morning. And thank you for joining the INFINITY NATURAL RESOURCES, FIRST QUARTER 2026 EARNINGS CONFERENCE CALL. With me today are Zack Arnold, our President and Chief Executive Officer; and David Sproule, our Executive Vice President and Chief Financial Officer.

Thomas Marchetti: Thank you, operator. Good morning, and thank you for joining the Infinity Natural Resources Q1 2026 Earnings Conference Call. With me today are Zack Arnold, our President and Chief Executive Officer, and David Sproule, our Executive Vice President and Chief Financial Officer. In a moment, Zack and David will present the prepared remarks with a question and answer session to follow. An updated investor presentation has been posted to the investor relations section of our website, and we may reference certain slides during today's discussion. A replay of today's call will be available on our website beginning this evening. Before we begin, I would like to remind everyone that today's call may contain forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied. All statements that are not historical facts are forward-looking statements.

Tom Marchetti: Thank you, operator. Good morning, and thank you for joining the Infinity Natural Resources Q1 2026 Earnings Conference Call. With me today are Zack Arnold, our President and Chief Executive Officer, and David Sproule, our Executive Vice President and Chief Financial Officer. In a moment, Zack and David will present the prepared remarks with a question and answer session to follow. An updated investor presentation has been posted to the investor relations section of our website, and we may reference certain slides during today's discussion. A replay of today's call will be available on our website beginning this evening. Before we begin, I would like to remind everyone that today's call may contain forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied. All statements that are not historical facts are forward-looking statements.

Speaker #3: In a moment, Zack and David will present their prepared remarks, with a question-and-answer session to follow. An updated investor presentation has been posted to the Investor Relations section of our website.

Speaker #3: And we may reference certain slides during today's discussion. A replay of today's call will be available on our website beginning this evening. Before we begin, I would like to remind everyone that today's call may contain forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied.

Speaker #3: All statements that are not historical facts are forward-looking statements. Forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond our control.

Thomas Marchetti: Forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond our control. That could cause actual results to differ materially from those forward-looking statements. Please review our earnings release and risk factors discussed in our SEC filings. We will also be referring to certain non-GAAP financial measures. Please reference our earnings release and investor presentation for important disclosures regarding such measures, including definitions and reconciliations to the most comparable GAAP financial measures. With that, I will turn the call over to Zack.

Tom Marchetti: Forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond our control. That could cause actual results to differ materially from those forward-looking statements. Please review our earnings release and risk factors discussed in our SEC filings. We will also be referring to certain non-GAAP financial measures. Please reference our earnings release and investor presentation for important disclosures regarding such measures, including definitions and reconciliations to the most comparable GAAP financial measures. With that, I will turn the call over to Zack.

Speaker #3: That could cause actual results to differ materially from those forward-looking statements. Please review our earnings release and risk factors discussed in our SEC filings.

Speaker #3: We will also be referring to certain non-GAAP financial measures. Please reference our earnings release and investor presentation for important disclosures regarding such measures. Including definitions and reconciliations to the most comparable GAAP financial measures.

Speaker #3: With that, I will turn the call over to Zack.

Speaker #4: Thank you, Tom, and good morning. We appreciate everyone joining us today to review Infinity Natural Resources' first quarter results. The first quarter was pivotal for Infinity.

Zack Arnold: Thank you, Tom, and good morning. We appreciate everyone joining us today to review Infinity Natural Resources' Q1 results. The Q1 was pivotal for Infinity. We successfully closed the Antero Ohio Utica acquisition in late February, our largest transaction to date, and added working interest in our Pennsylvania assets through the Chase acquisition. These acquisitions immediately increased our scale with our operated well count increasing from 154 to 395, and our midstream system expanding to over 250 miles of gathering and water pipelines, positioning Infinity for disciplined growth through the end of the decade. Importantly, we did so while preserving the quality of our balance sheet through strategic financing, including the issuance of perpetual preferred securities and senior notes. Since closing these transactions, our teams have been focused on integrating the assets into our operational platform.

Speaker #4: We successfully closed the Antero, Ohio, Utica acquisition in late February, our largest transaction to date, and added working interest in our Pennsylvania assets through the Chase acquisition.

Speaker #4: These acquisitions immediately increased our scale, with our operated well count increasing from 154 to 395, and our midstream system expanding to over 250 miles of gathering and water pipelines.

Speaker #4: Positioning INFINITY for disciplined growth through the end of the decade. Importantly, we did so while preserving the quality of our balance sheet through strategic financing including the issuance of a perpetual preferred securities and senior notes.

Speaker #4: Since closing these transactions, our teams have been focused on integrating the assets into our operational platform. This includes onboarding personnel, evaluating the new inventory, and identifying opportunities to optimize operations across the acreage and associated infrastructure.

Zack Arnold: This includes onboarding personnel, evaluating the new inventory, and identifying opportunities to optimize operations across the acreage and associated infrastructure. The more time we spend with the Antero assets, the more excited we become about the opportunity, especially the midstream infrastructure, which we will discuss in more detail in a few minutes. Before that, let me review production and operating highlights from Q1. Net production averaged 299 million cubic feet equivalent of gas per day, a year-over-year growth rate of 88%. We turned to sales 4 wells in the volatile oil window with 53,000 lateral feet, 2 in early February and 2 in mid-March. On the operating front, we added a second frac crew and a second rig during the quarter, and we stimulated 11 wells and drilled 10 wells to TD, which is a company record.

Speaker #4: The more time we spend with the Antero assets, the more excited we become about the opportunity. Especially the midstream infrastructure. Which we will discuss in more detail in a few minutes.

Speaker #4: Before that, let me review production and operating highlights from the first quarter. Net production averaged 299 million cubic feet equivalent of gas per day, a year-over-year growth rate of 88%.

Speaker #4: We turned to sales four wells in the volatile oil window with 53,000 lateral feet—two in early February and two in mid-March. On the operating front, we added a second frac crew and a second rig during the quarter, and we stimulated 11 wells and drilled 10 wells to TD.

Speaker #4: Which is a company record. One of the frac crews was deployed to the assets we acquired from Antero approximately 30 days after closing, near the end of Q1.

Zack Arnold: One of the frac crews was deployed to the assets we acquired from Antero approximately 30 days after closing near the end of Q1, and we expect to turn these first 3 wells from the acquisition to sales during Q2. We've had 1 rig on legacy Infinity volatile oil window assets and 1 rig on legacy Infinity natural gas assets since January, and we intend to move a rig onto the newly acquired Antero assets later this quarter. As we have previously discussed, our plan for the balance of 2026 is to run 1 dedicated rig on legacy Infinity assets, drilling both volatile oil and dry gas wells, and 1 rig on the newly acquired assets.

Speaker #4: And we expect to turn these first three wells from the acquisition to sales during the second quarter. We've had one rig on legacy Infinity volatile oil window assets and one rig on legacy Infinity natural gas assets since January.

Speaker #4: And we intend to move a rig onto the newly acquired Antero assets later this quarter. As we have previously discussed, our plan for the balance of 2026 is to run one dedicated rig on legacy INFINITY assets, drilling both volatile oil and dry gas wells, and one rig on the newly acquired assets.

Speaker #4: As of today, we have accelerated completion activity in our volatile oil window to capture stronger near-term returns. This includes pulling four oil-weighted wells into the second quarter from later in the year, with mostly unhedged barrels.

Zack Arnold: As of today, we have accelerated completion activity in our volatile oil window to capture stronger near-term returns, which includes pulling 4 oil-weighted wells into Q2 from later in the year with mostly unhedged barrels. That said, we retain the flexibility, as always, to quickly pivot between commodities and will lean harder into the natural gas market if conditions warrant the shift. We continue to focus on longer laterals. During Q1, the average lateral length turned in line was over 13,000 lateral feet. We benefit from efficient cycle times with multi-well projects continuing to reach first production within 6 to 7 months, supporting faster capital recycling and improved returns. As an example, we started drilling on 4-well 55,000 lateral foot oil-weighted pad in November. We expect to turn in those wells in the coming days.

Speaker #4: That said, we retain the flexibility as always to quickly pivot between commodities and we'll lean harder into the natural gas market if conditions warrant the shift.

Speaker #4: We continue to focus on longer laterals. During the first quarter, the average lateral length turned in line was over 13,000 lateral feet. We benefit from efficient cycle times, with multi-well projects continuing to reach first production within six to seven months, supporting faster capital recycling and improved returns.

Speaker #4: As an example, we started drilling on four well 55,000 lateral foot oil-weighted pad in November, and we expect to turn in those wells in the coming days.

Speaker #4: Coming back to our newly acquired midstream infrastructure, in our minds, the scale and versatility of this unique system is vastly underappreciated, with 140 miles of gathering lines, 90 miles of water lines, six compressor stations, 43 compressors, and nearly 80,000 horsepower.

Zack Arnold: Coming back to our newly acquired midstream infrastructure. In our minds, the scale and versatility of this unique system is vastly underappreciated. With 140 miles of gathering lines, 90 miles of water lines, 6 compressor stations, 43 compressors, and nearly 80,000 horsepower. This is a turnkey system with no lead time or bottlenecks that would likely take years to replicate. We have retained nearly all the field employees associated with these assets and hired additional senior leadership for midstream, including a VP of midstream. The continuity and deep expertise of our midstream bench is truly invaluable. We are excited by the value that we can unlock from the system. To put it bluntly, we believe it is poised to become a meaningful contributor to future results as we are one of the limited number of operators in the Appalachian Basin with owned midstream infrastructure.

Speaker #4: This is a turnkey system with no lead time or bottlenecks that would likely take years to replicate. We have retained nearly all the field employees associated with these assets and hired additional senior leadership for midstream, including a VP of midstream.

Speaker #4: The continuity and deep expertise of our midstream bench is truly invaluable. We are excited by the value that we can unlock from this system.

Speaker #4: To put it bluntly, we believe it is poised to becoming meaningful contributors to future results as we are one of the limited number of operators in the Appalachian Basin with owned midstream infrastructure.

Speaker #4: Currently, the system is underutilized. Operating at less than a quarter of its currently available capacity, providing significant runway to support not only our own development but also third-party volumes.

Zack Arnold: Currently, the system is underutilized, operating at less than a quarter of its currently available capacity, providing significant runway to support not only our own development, but also third-party volumes. We received third-party volumes on the system for the first time during the Q1, and we will be focused on increasing third-party volumes on the system. As we move through the year, we expect to drive a meaningful ramp in throughput that will contribute to our financial results. This infrastructure also provides a significant structural cost advantage as we leverage existing pads and pipeline connections, significantly reducing or eliminating the need for incremental midstream capital on new development. As of today, approximately 75% of Infinity's natural gas volumes are flowing through our owned midstream system, and we expect that to increase as we ramp development.

Speaker #4: We received third-party volumes on the system for the first time during the first quarter, and we will be focused on increasing third-party volumes on the system.

Speaker #4: As we move through the year, we expect to drive a meaningful ramp in throughput that will contribute to our financial results. This infrastructure also provides a significant structural cost advantage as we leverage existing pads and pipeline connections, significantly reducing or eliminating the need for incremental midstream capital on new development.

Speaker #4: As of today, approximately 75% of INFINITY's natural gas volumes are flowing through our owned midstream system. And we expect that to increase as we ramp development.

Speaker #4: This system creates a strategic advantage for us that we expect to drive improved margins and lower breakevens over time. We'll share more over time as we continue to operate the assets.

Zack Arnold: This system creates a strategic advantage for us that we expect to drive improved margins and lower breakevens over time. We'll share more over time as we continue to operate the assets. I will now spend a few minutes on the macro. We remain constructive on the longer-term outlook for both liquids and natural gas. Oil and liquids markets in Appalachia remain strong, with a combination of domestic and international demand from refining and chemicals driving a favorable pricing environment. Beginning in April, we have increased our take-in-kind NGL volumes, which provides us greater control and optimization of the realized pricing specific to propane, butane, and pentane. For natural gas, we see a clear cadence of demand growth with near-term strength driven by LNG exports, continued momentum from gas-fired power generation in basin data centers, and longer-term expansion tied to industrial development.

Speaker #4: I will now spend a few minutes on the macro. We remain constructive on the longer-term outlook for both liquids and natural gas. Oil and liquids markets in Appalachia remain strong, with a combination of domestic and international demand from refining and chemicals driving a favorable pricing environment.

Speaker #4: Beginning in April, we have increased our take-in-kind NGL volumes, which provides us greater control and optimization of the realized pricing, specific to propane, butane, and pentane.

Speaker #4: For natural gas, we see a clear cadence of demand growth, with near-term strength driven by LNG exports, continued momentum from gas-fired power generation, in-base and data centers, and longer-term expansion tied to industrial development.

Speaker #4: As these demand drivers scale, we expect regional gas differentials to tighten alongside broader market growth. Given our outlook for oil and liquids, we've leveraged the flexibility of our platform to adjust our completion schedule and accelerate facilities construction to pull forward oil-weighted wells into Q2 to capture stronger price realizations.

Zack Arnold: As these demand drivers scale, we expect regional gas differentials to tighten alongside broader market growth. Given our outlook for oil and liquids, we've leveraged the flexibility of our platform to adjust our completion schedule and accelerate facilities construction to pull forward oil-weighted wells into Q2 to capture stronger price realizations. We will continue to evaluate our development plans across the portfolio with a focus on directing capital toward the highest return projects. Against this backdrop, here's where our plan stands for Q2. As I touched on earlier, we expect to turn in line a 4-well pad in the volatile oil window in the coming days, representing 55,000 lateral feet. We also expect to bring to market our first barrels from the Antero acquisition later this quarter, a 3-well pad in our rich gas area with 53,000 lateral feet.

Speaker #4: We will continue to evaluate our development plans across the portfolio with a focus on directing capital toward the highest return projects. Against this backdrop, here is where our plan stands for the second quarter.

Speaker #4: As I touched on earlier, we expect to turn in line a four-well pad in the volatile oil window in the coming days, representing 55,000 lateral feet.

Speaker #4: We also expect to bring to market our first barrels from the Antero acquisition later this quarter, a three-well pad in our rich gas area with 53,000 lateral feet.

Speaker #4: That's a total of seven wells turned in line and 109,000 lateral feet during the second quarter. With that, I will turn the call over to David to review our financial results and outlook.

Zack Arnold: That's a total of 7 wells turned in line and 109,000 lateral feet during the Q2. With that, I will turn the call over to David to review our financial results and outlook.

Speaker #5: Thank you, Zack, and good morning. Our financial and operational results for the first quarter reflect continued execution by our team. We anticipate that our production will increase each quarter throughout the remainder of the year.

David Sproule: Thank you, Zack, good morning. Our financial and operational results for Q1 reflect continued execution by our team. We anticipate that our production will increase each quarter throughout the remainder of the year. During Q1, our net production averaged 299 MMcfe per day. We expect Q1 to be our lowest production total for the calendar year. In terms of the components of production, oil production totaled approximately 9,600 barrels per day for the quarter, up 16% year over year. Natural gas production averaged 195 MMcfe per day, up 169% year over year. NGL production increased 25% year over year to 7,800 barrels per day. Natural gas represented 65% of our total production, with oil being 19% and NGLs being 16%. Turning to financial performance.

Speaker #5: During the first quarter, our net production averaged 299 MM/CFE per day. We expect the first quarter to be our lowest production total, for the calendar year.

Speaker #5: In terms of the components of production, oil production totaled approximately 9,600 barrels per day, for the quarter, up 16% year over year. Natural gas production averaged 195 MM/CFE per day, up 169% year over year.

Speaker #5: And NGL production increased 25% year over year to 7,800 barrels per day. Natural gas represented 65% of our total production, with oil being 19% and NGLs being 16%.

Speaker #5: Turning to financial performance, we generated approximately 155 million in revenues for the quarter, and adjusted EBITDA of 97 million, representing adjusted EBITDA margins of approximately $3.61 per MTFE.

David Sproule: We generated approximately $155 million in revenues for the quarter and adjusted EBITDA of $97 million, representing adjusted EBITDA margins of approximately $3.61 per Mcfe, which we believe is best in class in the Appalachian Basin. The company saw improved natural gas prices during the period that averaged $4.86 per MMBtu. Our regional differentials remained steady at $0.69 per MMBtu, reflecting a greater weighting towards a lower Btu content in our gas stream. Oil price realizations for the period were $65.77 per barrel. Q1 oil differentials tightened to slightly less than $7 per barrel during the period. We anticipate our oil differentials to remain consistent around $7 to $8 per barrel for Q2.

Speaker #5: Which we believe is best in class in the Appalachian Basin. The company saw improved natural gas prices during the period that averaged $4.86 per MM/BTU, our regional differentials remained steady, at 69 cents per MM/BTU, reflecting a greater weighting towards a lower BTU content in our gas stream.

Speaker #5: Oil price realizations for the period were $65.77 per barrel. First quarter oil differentials tightened to slightly less than $7 per barrel during the period.

Speaker #5: We anticipate our oil differentials to remain consistent around $7 to $8 per barrel for the second quarter. NGL realizations were strong during the quarter, supported by better NGL composition, firm pricing and export-driven demand, contributing to the overall strength of our revenues, and reinforcing the value of liquids-weighted development across our portfolio.

David Sproule: NGL realizations were strong during the quarter, supported by better NGL composition, firm pricing, and export-driven demand, contributing to the overall strength of our revenues and reinforcing the value of liquids-weighted development across our portfolio. Turning to costs, our controllable cash operating costs during the quarter totaled $1.43 per Mcfe. These costs reflected the impact of an extremely cold winter, which drove higher rental costs and snow removal, as well as true-ups for annual compensation. On a year-over-year basis, controllable cash operating costs declined approximately 18%, a reflection of the benefits of scale and improved operating leverage. As volumes grow across our Appalachian platform and we increase the utilization of our owned midstream infrastructure, we expect our overall cost structure to improve further.

Speaker #5: Turning to costs, our controllable cash operating costs during the quarter totaled $1.43 per MCFE. These costs reflected the impact of an extremely cold winter, which drove higher rental costs and snow removal, as well as true-ups for annual compensation.

Speaker #5: On a year-over-year basis, controllable cash operating costs declined approximately 18%, a reflection of the benefits of scale and improved operating leverage. As volumes grow across our Appalachian platform and we increase the utilization of our owned midstream infrastructure, we expect our overall cost structure to improve further.

Speaker #5: During the first quarter, capital expenditures incurred were approximately $123 million. Which included $112 million on development activities and $11 million on land activities. Our capital allocation strategy remains disciplined, and focused on long-term value creation.

David Sproule: During Q1, CapEx incurred were approximately $123 million, which included $112 million on development activities and $11 million on land activities. Our capital allocation strategy remains disciplined and focused on long-term value creation. During the quarter, we deployed completion crews to prioritize development in our volatile oil window to capture the strength of near-term oil markets. Our stimulation activities are expected to shift back toward natural gas towards the H2 of this year. We continue to prioritize high return opportunities across our Utica and Marcellus assets, selectively expand our inventory through accretive acquisitions and organic leasing, and maintain a strong balance sheet with ample financial flexibility. During the quarter, we raised $550 million in senior notes and $350 million of preferred equity.

Speaker #5: During the quarter, we deployed completion crews to prioritize development in our volatile oil window to capture the strength of near-term oil markets. Our stimulation activities are expected to shift back toward natural gas towards the back half of this year.

Speaker #5: We continue to prioritize high-return opportunities across our Utica and Marcellus assets, selectively expand our inventory through accretive acquisitions and organic leasing, and maintain a strong balance sheet with ample financial flexibility.

Speaker #5: During the quarter, we raised $550 million in senior notes and $350 million of preferred equity. The transactions enabled us to pay down all outstanding debt under our revolving credit facility, and increase our liquidity position.

David Sproule: The transactions enabled us to pay down all outstanding debt under our revolving credit facility and increase our liquidity position while expanding our investor base with institutional credit investors and premier energy investors in Quantum and Carnelian. We are well positioned with financial flexibility to execute our business plan. At quarter end, we had net debt of approximately $477 million and total liquidity of approximately $929 million. Our pro forma net leverage on an LTM basis was 1.3 turns during the period. We would anticipate our net leverage ratio to decline during the course of the calendar year towards our target leverage level.

Speaker #5: While expanding our investor base with institutional credit investors and premier energy investors in Quantum and Carnelian, we are well positioned with financial flexibility to execute our business plan.

Speaker #5: At quarter end, we had net debt of approximately $477 million, and total liquidity of approximately $929 million. Our pro forma net leverage on an LTM basis was 1.3 turns, during the period.

Speaker #5: We would anticipate our net leverage ratio to decline during the course of the calendar year, towards our target leverage level. For 2026, we continue to expect net production to average between $345 and $375 MM/CFE per day.

David Sproule: For 2026, we continue to expect net production to average between 345 and 375 MMcfe per day, representing growth of approximately 70% year over year, with gas production of approximately 235 to 255 MMcfe per day, and oil/liquids production of 18,000 to 20,000 barrels per day. Development capital expenditures, which are a combination of drilling and completions and midstream capital expenditures, are expected to range between $450 million and 500 million. With that, I will turn the call back to Zack for closing remarks.

Speaker #5: Representing growth of approximately 70% year over year, with gas production of approximately 235 to 255 MM/CFE per day, and oil/liquids production of 18 to 20,000 barrels per day.

Speaker #5: Development capital expenditures, which are a combination of drilling and completions, and midstream capital expenditures, are expected to range between $450 million and $500 million.

Speaker #5: With that, I will turn the call back to Zack for closing remarks. Thank you, David. As we move through 2026, we are advancing development across our assets with a continued focus on consistent operational execution, strong financial returns, and long-term shareholder value creation.

Zack Arnold: Thank you, David. As we move through 2026, we are advancing development across our assets with a continued focus on consistent operational execution, strong financial returns, and long-term shareholder value creation. Across the Ohio Utica and Pennsylvania Marcellus and Utica, our portfolio offers a deep inventory of high-quality development opportunities supported by our owned midstream system. We are particularly excited about the opportunity within our midstream platform, where increasing volumes flowing through the system are not only driving incremental efficiencies and margin benefits, but also positioning midstream to become a more meaningful contributor to earnings and cash flow over time. We will continue to evaluate complementary acquisitions that strengthen and expand our integrated Appalachian business, while also assessing development timing and potential hedging opportunities to optimize returns in the current commodity price environment. Operator, please open the line for questions.

Speaker #5: Across the Ohio Utica and Pennsylvania Marcellus and Utica, our portfolio offers a deep inventory of high-quality development opportunities, supported by our owned midstream system.

Speaker #5: We are particularly excited about the opportunity within our midstream platform, where increasing volumes flowing through the system are not only driving incremental efficiencies and margin benefits, but also positioning midstream to become a more meaningful contributor to earnings and cash flow over time.

Speaker #5: We will continue to evaluate complementary acquisitions that strengthen and expand our integrated Appalachian business, while also assessing development timing and potential hedging opportunities to optimize returns in the current commodity price environment.

Speaker #5: Operator, please open the line for questions.

Speaker #6: We will now begin the question and answer session. If you would like to ask a question, please press star one on your telephone keypad.

Operator 3: Your first question comes from the line of Scott Hanold with RBC Capital Markets. Your line is open. Please go ahead.

Speaker #6: Please limit yourself to one question and one follow-up. To withdraw your question, simply press star one again. Please pick up your handset when asking a question.

Speaker #6: If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Scott Hanold with RBC Capital Markets.

Operator: Your first question comes from the line of Scott Hanold with RBC Capital Markets. Your line is open. Please go ahead.

Speaker #6: Your line is open. Please go ahead.

Speaker #7: Yeah. Good morning. you know, Zack and team, look, I mean, you know, obviously, as, as your business strategy had been, y-you're very flexible to change your activity pace and cadence, you know, with the commodity and the macro and, and, you know, pulling forward to more oil stuff.

Scott Hanold: Good morning, you know, Zack and team. Look, I mean, you know, obviously as your business strategy have been, you're very flexible to change your activity pace and cadence, you know, with the commodity and the macro, and, you know, pulling forward some more oil stuff. Can you just give us a sense of, you know, what should we expect on some of the cadence on some of that oil production? You know, obviously, you know, one or two wells, you know, can make a big difference from y'all, but, you know, it, you know, seems like should we see a bigger step up in oil? Can you kind of talk about like how the base decline rate works right now with y'all and what to expect in the next quarter or two?

Speaker #7: Can you just give us a sense of, you know, what should we expect on, on some of the cadence on, on some of that oil production?

Speaker #7: you know, obviously, you know, one or two wells, you know, can make a big difference from y'all, but, you know, it, it, you know, it seems like should we see a, a bigger step up in oil?

Speaker #7: And can you kind of talk about, like, how the base decline rate works right now with y'all and, and what to expect in the next quarter or two?

Speaker #5: Great question, Scott. And good morning. this is Zack. I'll take, a first part of that now. And David can kind of chime in. We'll tag team it.

Zack Arnold: Great question, Scott Hanold. Good morning. This is Zack Arnold. I'll take first part of that, and David can kind of chime in. We'll tag team it. I think first and foremost, I'll address your decline question. I think we continuously are pleased and proud of our PDP and our new well performance. I think we've had very nice results, and we continue to demonstrate that. As we exited last year, we had a really big ramp into the end of the year. It was driven by a lot of turn-in-lines in late Q3 and early Q4. That saw a big ramp there.

Speaker #5: But I think, first and foremost, I'll, I'll address your, your decline question. I think we've continuously are pleased and proud of our PDP and our new well performance.

Speaker #5: I think we've had very nice results, and we continue to demonstrate that. As we exited last year, we had a really big ramp into the end of the year.

Speaker #5: It was driven by a lot of turn in lines and late Q3 and early Q4. So that, that saw a big ramp there. And, the wells that we talked about turning in line in this quarter, they're really gonna manifest more in second quarter production, as they, they came in line late in the quarter, and especially when you factor in effective contributing days at, at target rate.

Zack Arnold: The wells that we talked about turning in line in this quarter, they're really gonna manifest more in Q2 production as they came in line late in the quarter, and especially when you factor in effective contributing days at target rate. I think you'll start to see the Q1 development really showing in Q2 as well as the Q2 wells beginning to come in line. When we talked last time about what changes we wanted to make based on commodities, I think what we've really tried to do is not blow up the development schedule we put in place, but look for ways to subtly pull barrels forward. We're really proud of what the team's done. We'll have some turning lines coming online in June that weren't anticipated to be June.

Speaker #5: So, I think you'll start to see the Q1 development really showing in Q2, as well as the Q2 wells beginning to come in line.

Speaker #5: when we talked last time about what changes we wanted to make based on commodities, I think what we've really tried to do is not blow up the development schedule that we put in place, but look for ways to subtly pull barrels forward.

Speaker #5: And we're, we're really proud of what the team's done. We'll have some turn in lines coming online in June, that weren't anticipated to be June.

Speaker #5: So that, that's meaningful, as we bring those barrels in. That'll put them at full rate in July, and ahead of when we had originally, originally budgeted.

Zack Arnold: That's meaningful as we bring those barrels in. That'll put them at full rate in July and ahead of when we had originally budgeted. Because of that acceleration, that gives us a lot of exposure to unhedged barrels there. I'm sorry if I missed anything else in your question that you wanna add back into.

Speaker #5: And those, because of that acceleration, that gives us a lot of exposure to, to unhedged barrels there. I'm sorry if I missed anything else in your question that you wanna, you wanna add back into.

Speaker #6: Your next question comes from the line of Tim Rezvin with KeyBank. With KeyBank Capital Markets. Your line is open, Tim. Please go ahead.

Operator 3: Your next question comes from the line of Tim Rezvan with KeyBanc Capital Markets. Your line is open, Tim. Please go ahead.

Operator: Your next question comes from the line of Tim Rezvan with KeyBanc Capital Markets. Your line is open, Tim. Please go ahead.

Speaker #7: Good morning, folks. thanks for taking our questions. Scott sort of stole our first one on, on the oil. So I appreciate the, the outlook there.

Tim Rezvan: Good morning, folks. Thanks for taking our questions. Scott sort of stole our first one on oil, so I appreciate the outlook there. I did notice you have a 10,000 foot Utica test being spud this quarter. I know there's been some, it seems like it may be underway soon or it's finally gonna happen here. There's no completion schedule. It looks timeline this year, I guess maybe it's more of an early 2027 event. Can you talk kind of about your pre-drill expectations for this well? Do you view this like a development well? Is it more like a science well? Is there anything specific you're kinda looking to confirm here?

Speaker #7: But I, I did notice you have a 10,000-foot Utica test being spud this quarter. I know there's been some— it seems like it may be underway soon, or it's finally going to happen here.

Speaker #7: There's no completion schedule. It looks—timeline this year—I guess maybe it's more of an early 2027 event. But can you talk, kind of, about your pre-drill expectations for this well?

Speaker #7: Do you, do you view this like a development well? Is it more like a, a science well? Is there anything specific you're kind of looking to, to confirm here?

Speaker #7: And, and just any—any idea on when you plan to turn it to sales would be helpful. Thank you.

Tim Rezvan: Just any idea on when you plan to turn it to sales would be helpful. Thank you.

Speaker #5: Yeah. All, all good questions, Tim. And, you know, as, as a, a question that we get quarter over quarter, I think what we can say right now is we continue to watch offset operations and are monitoring what our, our peers are doing.

Zack Arnold: All good questions, Tim. You know, it's a question that we get quarter-over-quarter. I think what we can say right now is we continue to watch offset operations and are monitoring what our peers are doing. We do have a rig on that location. It's going to be focused on the science portion of this project. We'll do some, we'll drill a vertical pilot, collect some data there that we'll analyze. You were right in noticing that we don't intend to drill this well horizontally or complete it in this calendar year. This is really step one of evaluation. We'll go collect some science and spend some time observing and measuring the things that we need to, so we can properly plan our development there.

Speaker #5: we do have a rig on that location, and it's going to be focused on the science portion of this project. We'll do some, we'll drill a vertical pilot and, collect some data there that we'll analyze.

Speaker #5: you were right in noticing that we don't intend to drill this well horizontally or complete it in this calendar year. This is really step one of evaluation.

Speaker #5: So we'll go collect some science and spend some time, o-observing and, and measuring, the things that we need to, so we can properly plan our development there.

Speaker #5: but, you know, as, as I think we've said before, it's an exciting well for, for everyone of us included, but it's one out of the 40-plus plugs we have this year.

Zack Arnold: You know, as I think we've said before, it's an exciting well for everyone else included, but it's one out of the 40-plus wells we have this year. We're really excited in focusing our capital predominantly on projects that have clearly defined returns and a long track record of success.

Speaker #5: So we're really excited and focusing our capital predominantly on projects that have clearly defined returns and a long track record of success.

Speaker #7: Okay. Great. We'll stay tuned, I guess, for updates. on that. and, and just wanna follow up. I feel like I, I, I, I annoyed David with this question every quarter, but just kind of big picture, kind of M&A trends.

Tim Rezvan: Okay, great. We'll stay tuned, I guess, for updates on that. And then just wanna follow up. I feel like I annoy David with this question every quarter, but just kinda big picture, kinda M&A trends. We see the same thing you all see with leverage kinda going 2 or below 1 turn by the end of the year. I know you're integrating Antero, but you're pretty clearly a growth-focused company. Just kinda curious what your capacity, you know, for incremental M&A, like larger pieces is at this point and what we're seeing in the market. Thanks.

Speaker #7: we see the same thing you all see with, with leverage kind of going, to or below one, one turn by, by the end of the year.

Speaker #7: And I know you're integrating Interro, but you're pretty clearly a growth-focused company. So just kind of curious what your, capacity, you know, for incremental M&A, like larger, pieces, is at, at this point.

Speaker #7: And, and what you're seeing in, in the market. Thanks.

Speaker #5: Yeah. I, I think and thanks for the question, Tim. It's Dave. I, I think for us, you know, one of the things that we were very cognizant of is both integrating and, and positioning the company, for continued opportunity sets.

David Sproule: Yeah. Thanks for the question, Tim. This is Dave. For us, you know, one of the things that we were very cognizant of is both integrating and positioning the company for continued opportunity sets. We are highly active in that environment. We are highly selective in that environment also. We are very well-positioned to capitalize on assets that we see that fit our portfolio. We will continue to evaluate those as they come to across our sort of desk, if you will. We are very selective in that. Obviously, we've integrated a very big asset here.

Speaker #5: And so we are highly active in that environment. we are highly selective in that environment also. So we are very well positioned to capitalize on assets, that we see that fit our portfolio.

Speaker #5: and so we will continue to evaluate those, as they come, come to, across our sort of desk, if you will. but we are very selective in that.

Speaker #5: obviously, we've integrated a very big asset here. that integration has gone extremely well. And, and, positions us to not just execute on our development plan that we have in front of us, but positions us to have the flexibility to evaluate other things as they come through.

David Sproule: That integration has gone extremely well and positions us to not just execute on our development plan that we have in front of us, but positions us to have the flexibility to evaluate other things as they come through.

Speaker #7: I appreciate the context, folks. Thanks.

Tim Rezvan: I appreciate the context, folks. Thanks.

Speaker #6: Your next question comes from the line of Nicholas Pope with Roth Capital. Your line is open. Please go ahead.

Operator 3: Your next question comes from the line of Nicholas Pope with Roth Capital. Your line is open. Please go ahead.

Operator: Your next question comes from the line of Nicholas Pope with Roth Capital. Your line is open. Please go ahead.

Speaker #8: Good morning, everyone.

Nicholas Pope: Good morning, everyone.

Speaker #5: Good morning.

Zack Arnold: Morning.

Nicholas Pope: Kinda, I'd like to talk a little bit more about the integration of the Antero assets. Obviously, they haven't seen a lot of drilling in the past few years before you guys acquired them. Just as you kind of, you know, I think we're three months, almost three months into owning the asset. Curious, kind of as you look maybe at the existing producing base, like maybe what the opportunity set looks like, low-hanging fruit to kind of optimize production on that asset, and maybe how that might flow through LOE kind of in the near term as you kind of look at some of that opportunity set, if anything changes maybe or kind of how you're looking at that asset as you kind of gotten in the house.

Speaker #8: Kind of, I would like to talk a little bit more about the integration of the Interro assets. Obviously, they haven't seen a lot of drilling in the past few years before you guys acquired them.

Speaker #8: and, and just as you kind of, you know, I think we're three months, almost three months into owning the asset. Curious kind of as you look maybe at the existing producing base, like maybe what the opportunity set looks like, low-hanging fruit to kind of optimize production on that asset.

Speaker #8: And maybe how that might flow through LOE kind of in the near term, as you kind of look at some of that opportunity set, if anything changes, maybe, or kind of how you're looking at that asset as you kind of have gotten into the under—in the house.

Speaker #5: No, that's a great question. thank you for asking. This is Zack. I'll take a first crack at it. I think first and foremost, we, we are identifying some low-hanging fruit and things that our production engineering team can focus on.

Zack Arnold: No, that's a great question. Thank you for asking it. This is Zach. I'll take a first crack at it. I think first and foremost, we are identifying some low-hanging fruit and things that our production engineering team can focus on. It's kind of small ball stuff where you're working on bottom hole assemblies and plunger lists and some things that are just really optimizing the existing legacy production there. Still, it's work that you should do, and we're excited about that, and our team's focused on that. When you think about LOE impacts, you know, we're still completely getting our mind around the optimization of these wells that we can do. I think owning our midstream is first and foremost critical.

Speaker #5: And it's, it's kind of small ball stuff where you're working on bottom hole assemblies and plunger lists and some things that are just really optimizing the, the, the existing legacy production there.

Speaker #5: But still, it's work that you should do, and we're excited about that. And our team's focused on that. when you think about LOE impacts, you know, we still completely getting our mind around, the optimization of these wells that we can do.

Speaker #5: I think owning our midstream is, first and foremost, critical. But one spot where we see some exciting near-term activity to help that is with reusing water with the increased completion activities on these assets.

Zack Arnold: One spot where we see some exciting near-term activity to help that is with the reusing of water. With the increased completion activities on these assets, and our legacy assets and Wolf Run gives us a better capability to reuse water from the field, and that should have a net positive impact there on some of our LOE.

Speaker #5: And then, in our legacy assets, and well run, gives us a better capability to reuse water from the field. And that should have a net positive impact there on some of our LOE.

Speaker #7: And I guess I may be stepping back a little further on the broader LOE for the company. How do you anticipate that kind of shape over the remainder of 2026 as you look at these assets?

Nicholas Pope: I guess, maybe stepping back a little further on like the broader LOE for the company, how do you anticipate that kind of shape over the remainder of 2026 as you kind of look at these assets?

Speaker #5: Sure. So, you know, I think, you know, when you look in the first quarter, our LOE ticked up to about 33 cents an MCFE.

David Sproule: Sure. I think, you know, when you look at Q1, our LOE ticked up to about $0.33 in Mcfe. I think that's more of a reflection of the very, very harsh winter that we had in this part of the country. I think if you look at year over year, our costs have gone down significantly. We would anticipate those costs to continue to decline as they've had, you know, trend line-wise, in 2025. I would continue to anticipate that to occur in 2026.

Speaker #5: I think that's more of a reflection of, the f the very, very harsh winter that we had in this, this part of the country.

Speaker #5: I think if you look at year over year, our, our costs have gone, down significantly. we would anticipate those costs to continue to decline as they've had, you know, trendline-wise, in '25.

Speaker #5: I would continue to anticipate that to occur in 2026. With regards to the Interro integration and the impact therein, as Zack kind of mentioned with our ownership of the midstream assets, we start with a significant head start because our GP&T cost is erased with regards to—or I can use—our gathering and compression charges are erased with regards to the development of those assets.

David Sproule: With regards to the Antero integration and the impact therein, as Zack kind of mentioned with our ownership of the midstream assets, we start with a significant head start, because our GP&T cost is erased with regards to the development of those assets. These are gathering and compression charges are erased with regards to the development of those assets. You should anticipate over the course of this year, our overall cost structure to continue to decline, both from an impact from volumetric growth as well as from just a cost structure integration where the Antero assets have a lower cost structure than our assets in Carroll County or in legacy Guernsey County.

Speaker #5: So you should anticipate over the course of this year, our overall cost structure to continue to decline both from an impact from volumetric growth as well as from just the cost structure integration where, the Interro assets have a, the lower cost structure than our assets in, in Carroll County or in Gr legacy Guernsey County.

Speaker #8: Got it. I appreciate the time, guys. That was very helpful.

Nicholas Pope: Got it. I appreciate the time, guys. That was very helpful.

Speaker #6: Your next question comes from the line of Michael Shala with ahead.

Operator 3: Your next question comes from the line of Michael Scialla with Stephens. Your line is open. Please go ahead.

Operator: Your next question comes from the line of Michael Scialla with Stephens. Your line is open. Please go ahead.

Speaker #7: good morning, guys. You, were able to add some, acreage during the quarter and just want to see what the opportunity set looks like there.

Michael Scialla: Hi. Good morning, guys.

David Sproule: Morning.

David Sproule: -were able to add some acreage during the quarter. Just wanna see what the opportunity set looks like there. Is it any different now with the Antero acquisition and maybe how the cost of land have changed over the past year? Can you give any sense there and however you wanna break it down in terms of cost per new drilling location, and maybe difference between Ohio and Pennsylvania if you could.

Michael Scialla: -were able to add some acreage during the quarter. Just wanna see what the opportunity set looks like there. Is it any different now with the Antero acquisition and maybe how the cost of land have changed over the past year? Can you give any sense there and however you wanna break it down in terms of cost per new drilling location, and maybe difference between Ohio and Pennsylvania if you could.

Speaker #7: Is it any different now with the Interro acquisition and maybe how the, cost of land have changed over the past year? Can you give an-any sense there and however you want to break it down in terms of, cost per new drilling location, in, maybe the difference between Ohio and Pennsylvania, if you could?

Speaker #5: Yeah. We've been really proud of what our team's done to continue to add acres, especially in a quarter that was overshadowed by the closing of two deals.

Zack Arnold: Yeah, we've been really proud of what our team's done to continue to add acres, especially in a quarter that was overshadowed by closing of two deals. Them adding acres, I think, was a testament to their ability to execute two jobs at once. Very, very proud of that. We've seen nice opportunities to add acres both inside and outside of our units in both Ohio and in Pennsylvania. Give them credit for being able to focus dollars effectively in areas that we're interested in. I think with the new Antero acquisition, giving our land department more units to focus in has helped us be thoughtful with cost allocation and making sure that we're spending our dollars into acres that will get developed and at costs that we're happy with.

Speaker #5: So, it's them adding acres, I think, was a testament to their ability to execute two jobs at once. I'm very, very proud of that.

Speaker #5: We've seen nice opportunities to add acres both inside and outside of our units in both Ohio and in Pennsylvania to give them a cr a test, credit for being able to focus dollars effectively in areas that were interested in.

Speaker #5: I think with the, the new Interro acquisition, giving our land department more units to focus in has helped us, be thoughtful with cost allocation and making sure that we're, we're spending our dollars into, into acres that will get developed and at cost that we're happy with.

Speaker #5: as a reminder, in Ohio, once you reach, a threshold for statutory unitization, that puts you in a good position from a leasing perspective to execute on the development plan in front of you.

Zack Arnold: As a reminder, in Ohio, once you reach a threshold for statutory unionization, that puts you in a good position from a leasing perspective to execute on the development plan in front of you. Like that opportunity. Might stay away from giving specific lease per acre numbers. I will say our team's always focused on getting the best value that they can, understanding where acres fall into our inventory and focused on just being very thoughtful with dedicating those dollars and really focused on leases that are tight cycle times for us, putting them in front of the drill bit, putting them in units that we plan to drill so that we can get the return on those lease dollars very quickly.

Speaker #5: So, so like that opportunity. might stay away from giving specific, leasing, per acre numbers, but, but I'll, I will say our, our team's always focused on getting the best value that they can understanding where acres fall into our inventory and, and focused on just being very thoughtful with, dedicating those dollars and really focused on leases that are tight cycle times for us, putting them in front of the drill bit, putting them in units that we plan to drill so that we can get the return on those leased dollars very quickly.

Speaker #7: Appreciate that, Zack. I know you guys had talked about, potentially, pivoting at some point to generate positive free cash flow. Maybe your latest thoughts there on what the timing of that might look like?

Michael Scialla: Appreciate that, Zack. I know you guys had talked about potentially pivoting at some point to generate positive free cash flow. Maybe your latest thoughts there on what the timing of that might look like.

Speaker #5: I mean, I think in terms of our overall development program, program, and, and the guidance that we've provided, you know, obviously, this is a it's a fairly, capital-intensive year as we've discussed sort of priming the pump with regards to the Interro acquisition that we've closed upon.

David Sproule: I mean, I think in terms of our overall development program and the guidance that we provided, you know, obviously it's a fairly capital-intensive year as we've discussed, sort of priming the pump with regards to the Antero acquisition that we've closed upon. We would anticipate trending down over the next five years and to be consistent with that of our offset peers while still having outsized growth. We would anticipate our CapEx as a % of EBITDA to be lower this year than last year. We would anticipate that trend to continue into the coming years.

Speaker #5: But we would anticipate trending down over the next five years, and to be consistent with that of our offset peers, while still having outsized growth.

Speaker #5: So, we would anticipate our, our produc our CapEx as a percent of EBITDA to, to be lower this year than last year. and we would anticipate that trend to continue into the coming years.

Speaker #7: Okay. Fair enough. Thanks, guys.

Michael Scialla: Okay. Fair enough. Thanks, guys.

Speaker #6: Just a reminder, if you would like to ask a question, please press star one on your telephone keypad. To withdraw your question, press star one again.

Operator 3: Your next question comes from the line of Paul Diamond with Citi. Your line is open. Please go ahead.

Speaker #6: Your next question comes from the line of Paul Diamond with Citi. Your line is open. Please go ahead.

Operator: Your next question comes from the line of Paul Diamond with Citi. Your line is open. Please go ahead.

Paul Diamond: Thank you. Good morning, all. Thanks for taking the call. Just wanted a quick one to touch on. You guys talked about shifting activity more towards dry gas in the latter half of the year. I guess from a production perspective, how should we think about that, cadence-wise? Is that a pretty linear progression, or would we still expect to see those kind of step change moves?

Speaker #8: thank you. Good morning, all. Thanks for taking the call. I just wanted a quick one to touch on. You guys talked about shifting activity more towards dry gas in the latter half of the year.

Speaker #8: I guess our production perspective, how should we think about that, cage-wise? Is that a pretty linear progression, or will we still expect to see those kind of step-change moves?

David Sproule: In terms of step change with the production, Paul?

Speaker #5: in terms of step-change with the production, Paul?

David Sproule: In terms of step change with the production, Paul?

Speaker #8: yes. The mo the more ch the more chunky moves in production, you know, up on oil, down on gas, that sort of thing.

Paul Diamond: Yes, the more, the more chunky moves in production, you know, up on oil, down on gas, that sort of thing.

Speaker #5: Yeah, I—I would expect that, you know, we will still continue to exhibit heightened growth in every one of our hydrocarbons, quarter over quarter going forward.

David Sproule: Yeah. I would expect that, you know, we will still exhibit heightened growth in every one of our hydrocarbons quarter, each quarter going forward. I think the cadence of activity would lend itself to have a really heightened Q3 with regards to turning lines relative to the overall year. I do think that adding natural gas towards the, you know, middle to end of the year does have an impact on our overall natural gas volumes. Again, it's sort of relative to the other components and the timeframe of it being on.

Speaker #5: I, I, I think the cadence of activity would lend itself to have a, a really heightened third quarter with regards to turn-in lines relative to the overall year.

Speaker #5: I do think that, adding natural gas towards the, you know, middle to end of the year does have an impact on our overall natural gas volumes, but again, it's, it's sort of relative to the other components and, and the timeframe of it being on.

Speaker #5: So I wouldn't necessarily expect it to be, you know, it's a question of what is degree of step-change, but we would anticipate each quarter to be, higher than the last, as you kind of shape the shape the development of, of the assets that we have.

David Sproule: I wouldn't necessarily expect it to be, you know, it's a question of what is degree of step change, but we would anticipate each quarter to be higher than the last, as you kind of shape the development of the assets that we have. I'm probably not gonna give you the exact answer you want there, but I would tell you that we would anticipate our Q4 to be our highest production quarter for the year.

Speaker #5: So, I'm probably not going to give you the exact answer you want there, but I would tell you that we would anticipate our fourth quarter to be our highest production quarter for the year.

Speaker #8: Got it, understood. And then just one quick more strategy question. So, obviously, you guys have been growing at a pretty decent clip, both organically and in—

Paul Diamond: Got it. Understood. Just one quick more strategy question. Obviously you guys have been growing at a pretty decent clip, both organically and in. Thinking about how you see that growth rate into 2027 and beyond, is there kind of a point where you see it, I guess, slowing, you know, sort of leveling off? Is there kind of a target rate where it's like, okay, it gets to that next level where X, Y, and Z occur? I guess from a strategy perspective, where does just how linear should we expect that growth to remain?

Speaker #8: thinking about how you see that growth rate in the '27 and beyond, is there kind of a point where you see it, you know, slowing, no true leveling off?

Speaker #8: I mean, is there kind of a target rate where it's like, 'Okay, we're—' you know, you get to that next level where X, Y, Z can occur?

Speaker #8: I guess from a strategy perspective, where does, does how linear should we expect that growth to remain?

Speaker #5: Yeah. I, I think look, a lot of small a lot of big numbers and small numbers are aspects is you can't continue to grow at a, a 70, 80 percent kind of clip.

David Sproule: The law of big numbers and small numbers or aspects is you can't continue to grow at a 70%, 80% kind of clip. For us, as we think about 2027 and beyond, obviously we haven't provided guidance on that. I think it's fair to say that our production growth will still be relatively elevated compared to our peers, but we would start to expect to trend down as a percent of reinvestment rate over that time period.

Speaker #5: For us, as we think about 2027 and beyond, obviously, we haven't provided guidance on that. I think it's fair to say that our production growth will still be relatively elevated compared to our peers, but we would start to expect it to trend down as a percent of reinvestment rate over that time period.

Speaker #8: Got it. Understood. Appreciate your time on the insight.

Paul Diamond: Got it. Understood. Appreciate the time. I'll leave it there.

Speaker #6: Your next question comes from the line of Scott Hanold with RBC Capital Market. Your line is open. Please go ahead.

Operator 3: Your next question comes from the line of Scott Hanold with RBC Capital Markets. Your line is open. Please go ahead.

Operator: Your next question comes from the line of Scott Hanold with RBC Capital Markets. Your line is open. Please go ahead.

Speaker #7: Thanks. sorry. I had, myself on mute before when I was, after I asked my question, but, my, my follow-up was, on the infrastructure and the infrastructure utilization, you know, obviously, you all talk about it.

Scott Hanold: Thanks. Sorry, I had myself on mute before when I was after I asked my question. My follow-up was on the infrastructure and the infrastructure utilization. You know, obviously you all talk about it sort of being underutilized right now and an opportunity to kind of continue to grow that. Can you speak to like how much of the capacity, you know, do you think you'll reserve for third parties versus keeping it on your for yourselves and your production growth? You know, what kind of third-party revenue growth could that generate here over the coming quarters?

Speaker #7: It, it's sort of being underutilized right now in an opportunity to kind of continue to grow that. Can you can you speak to, like, how much of the capacity you know, do you think you'll, you'll reserve for third parties versus keeping it on your f-for yourselves in, in your production growth?

Speaker #7: And, you know, what kind of third-party revenue growth could, could that generate here over the coming quarters?

Speaker #5: Yeah. I'll take the, the portion on, on the, the first part of that question and, and handle that. So I think first and foremost, when we look at these assets, we're incredibly impressed with, with how things have been positioned.

Zack Arnold: Yeah, I'll take the portion on the first part of that question and handle that. I think first and foremost, when we look at these assets, we're incredibly impressed with how things have been positioned. You know, walking across some of these compressor stations and realizing just the infrastructure that's in place there and how little utilized it is today gives us a lot of excitement about ways that we can continue to grow the use of that system. I think when we think about third-party volumes and we think about our own volumes, we're always gonna prioritize our own volumes first.

Speaker #5: You know, walking across some of these compressor stations and realizing just the infrastructure that's in place there, and how little utilized it is today, gives us a lot of excitement about ways that we can continue to grow, grow the use of that system.

Speaker #5: So I think when we think about third-party volumes and we think about our own volumes, we're always going to prioritize our, our own volumes first.

Speaker #5: I think as we begin to think about ways that third-party volumes materialize, and most of those initially are going to materialize just through the, the units that we develop and having other operators inside of our, our units and, and, and other interests that, that we don't have leased inside of units that, that, as you see that, that'll that'll come naturally with our own development profile.

Zack Arnold: I think as we begin to think about ways that third-party volumes materialize. Most of those initially are gonna materialize just through the units that we develop and having other operators inside of our units and other interests that we don't have leased inside of units. As you see that'll come naturally with our own development profile. I think we won't put ourselves in a position in which the infrastructure is bottlenecked because of other competing objectives that we have.

Speaker #5: So, so I think we won't put ourselves in a position in which the infrastructure is bottlenecked because of, of other competing objectives that we have.

Speaker #5: And I think our ability to lever the expertise of some of the field staff we brought in, as well as some of the senior leadership that we're adding to the team, really allows us to look closely from an engineering and a business perspective here, making sure that the system that we have today continues to be optimized for however we, we add volumes to it, through our own drill bit or, or third-party volumes.

Zack Arnold: I think our ability to lever the expertise of some of the field staff we've brought in, as well as some of the senior leadership that we're adding to the team, really allow us to look closely from an engineering and a business perspective here, making sure that the system that we have today continues to be optimized for however we add volumes to it through our own drill bit or third-party volumes.

Speaker #7: Yeah, I would just add, Scott, that it's a $600 million-a-day pipe. You know, we're actively developing in that area, as Zack's highlighting, but we are highly incentivized to fill that pipe.

David Sproule: Yeah, I would just add, Scott, that it's a 600 million a day pipe. You know, we're actively developing in that area, as Zack's highlighting, but we are highly incentivized to fill that pipe, and so we will push to do so.

Speaker #7: And so we will push to do so.

Speaker #8: Okay. When, when you send up these, these contracts with these third parties, are, are they more, like, s you know, spot kind of month-to-month kind of volumes, or, or do you are you, you know, locking in some longer-term contracts with them?

Scott Hanold: Okay. When you sign up these contracts with these third parties, are they more like, you know, spot kind of month-to-month kind of volumes? Or are you know, locking in some longer-term contracts with them?

Speaker #5: Yeah, I think at this stage, we'll probably stay a little bit mute on that. I think for—it's a case-by-case basis on a lot of the, the opportunity sets that we see.

David Sproule: Yeah, I think at this stage we'll probably stay a little bit mute on that. I think it's on a case-by-case basis on a lot of the opportunity sets that we see. We'll probably talk a little bit more about that tool, you know, during the course of the year as we ramp up things.

Speaker #5: But, we'll probably talk a little bit more about that toward, you know, during the course of the, the year as we as we ramp up things.

Speaker #8: And as you think about modeling right now, it's, it's really small numbers. So it's. It's not that impactful. It's really just opportunities that we're making sure that we're thoughtful with exploiting.

Zack Arnold: As you think about modeling, right now it's really small numbers.

David Sproule: Yeah.

David Sproule: It's not that impactful. It's really just opportunities that we're making sure that we're thoughtful with exploiting.

Speaker #7: Appreciate it. Thank you.

Scott Hanold: Appreciate it. Thank you.

Speaker #6: There are no further questions at this time. I will now turn the call back over to Zack for closing remarks. Please go ahead.

Operator 3: There are no further questions at this time. I will now turn the call back over to Zack for closing remarks. Please go ahead.

Operator: There are no further questions at this time. I will now turn the call back over to Zack for closing remarks. Please go ahead.

Speaker #5: Thank you very much for joining us for the call today. We appreciate your continued interest in the company, and we look forward to sharing additional results with you soon.

Zack Arnold: Thank you very much for joining us for the call today. We appreciate your continued interest in the company, we look forward to sharing additional results with you soon. Operator, back to you.

Speaker #5: Operator, back to you.

Speaker #6: Thank you. This concludes today's call. Thank you for attending. You may now disconnect.

Operator 3: Thank you. This concludes today's call. Thank you for attending. You may now disconnect. This event has now concluded. Thank you for joining Infinity Natural Resources.

Operator: Thank you. This concludes today's call. Thank you for attending. You may now disconnect. This event has now concluded. Thank you for joining Infinity Natural Resources.