Mach Natural Resources LP(MNR) - 2025 Q2 - Quarterly Results

Report Announcement Mach Natural Resources LP reported Q2 2025 financial and operating results and declared its quarterly cash distribution - Mach Natural Resources LP (NYSE: MNR) reported financial and operating results for the three months ended June 30, 2025, and declared its quarterly cash distribution[1] Second Quarter 2025 Highlights Mach reported strong Q2 2025 results, including strategic acquisitions and a cash distribution Recent Strategic Developments Mach Natural Resources LP announced two accretive transactions on July 10, 2025, for a combined consideration of approximately $1.3 billion, significantly enhancing its scale and diversifying its portfolio with entry into the Permian Basin and San Juan Basin - Announced two accretive transactions on July 10, 2025, for approximately $1.3 billion, enhancing scale and diversifying Mach's portfolio with Permian Basin and San Juan Basin entry[3] - CEO Tom L. Ward stated that Q2 results reflect strong execution of the 2025 plan, allowing for a $0.38 per common unit distribution, and that recent acquisitions lay groundwork for sustainable long-term growth[3] Key Financial and Operational Summary Mach reported total revenue of $289 million and net income of $90 million for Q2 2025, with an average total net production of 83.6 Mboe/d, generating $130 million in net cash from operating activities and maintaining a strong financial position Q2 2025 Key Financial & Operational Metrics | Metric | Value | Unit | | :-------------------------------- | :------ | :----- | | Total Revenue | $289 | million | | Net Income | $90 | million | | Adjusted EBITDA | $122 | million | | Net Cash Provided by Operating Activities | $130 | million | | Quarterly Cash Distribution | $0.38 | per common unit | | Total Net Production | 83.6 | Mboe/d | | Oil Production | 19.3 | MBbl/d | | Lease Operating Expense | $6.52 | per Boe | | Total Development Costs | $64 | million | Financial Position as of June 30, 2025 | Metric | Value | Unit | | :-------------------------------- | :------ | :----- | | Cash Balance | $14 | million | | Revolving Credit Facility Availability | $180 | million | | Pro Forma Net-Debt-to-Adjusted-EBITDA | 0.9x | | Second Quarter 2025 Detailed Results Mach's Q2 2025 detailed results cover operational performance, production, expenses, and capital costs Operational Performance Mach achieved an average oil equivalent production of 83.6 Mboe/d in Q2 2025, with a production mix of 23% oil, 53% natural gas, and 24% NGLs, contributing to $219 million in production revenues, while spudding 9 gross (8 net) and bringing online 11 gross (9 net) operated wells Q2 2025 Production Volumes and Revenue Mix | Metric | Value | Unit | | :-------------------------------- | :------ | :----- | | Average Oil Equivalent Production | 83.6 | Mboe/d | | Production Mix: Oil | 23% | | | Production Mix: Natural Gas | 53% | | | Production Mix: NGLs | 24% | | | Total Production Revenues | $219 | million | | Revenue Mix: Oil | 51% | | | Revenue Mix: Natural Gas | 31% | | | Revenue Mix: NGLs | 18% | | - Spud 9 gross (8 net) operated wells and brought online 11 gross (9 net) operated wells in Q2 2025[8] - As of June 30, 2025, 3 gross (2.7 net) operated wells were in various stages of drilling and completion[8] Detailed Expenses and Capital Costs Mach's lease operating expense in Q2 2025 was $50 million ($6.52 per Boe), with additional gathering and processing expenses of $32 million ($4.18 per Boe), and total development costs amounted to $64 million, including $59 million for upstream capital Q2 2025 Operating Expenses and Development Costs | Expense Category | Amount | Per Boe (where applicable) | | :------------------------------------ | :------- | :------------------------- | | Lease Operating Expense | $50 million | $6.52 | | Gathering and Processing Expenses | $32 million | $4.18 | | Production Taxes (as % of sales) | 4.8% | | | Midstream Operating Profit | ~$4 million | | | G&A Expenses (excl. equity-based comp) | $7 million | | | Interest Expense | $12 million | | | Total Development Costs | $64 million | | | Upstream Capital | $59 million | | | Other Capital (midstream & land) | $5 million | | Distributions Mach's board declared a $0.38 per common unit quarterly cash distribution for Q2 2025 Quarterly Cash Distribution Declaration Mach's board of directors declared a quarterly cash distribution of $0.38 per common unit for the second quarter of 2025, payable on September 4, 2025, to unitholders of record as of August 21, 2025 - Declared a quarterly cash distribution of $0.38 per common unit for Q2 2025[11] - The distribution is payable on September 4, 2025, to common unitholders of record as of August 21, 2025[11] 2025 Outlook Mach will provide updated 2025 guidance after closing Permian and San Juan Basin transactions in Q3 2025 Forward-Looking Guidance Update Mach will provide updated forward-looking guidance for 2025 following the expected closing of the Permian Basin and San Juan Basin transactions during the third quarter of 2025 - Updated forward-looking guidance will be provided after the closing of the Permian Basin and San Juan Basin transactions, expected in Q3 2025[12] - Additional details of Mach's forward-looking guidance are available on the Company's website[13] Conference Call and Webcast Information Mach will host a conference call and webcast on August 8, 2025, to discuss Q2 2025 results Q2 2025 Results Call Details Mach will host a conference call and webcast on Friday, August 8, 2025, at 9:00 a.m. Central (10:00 a.m. Eastern) to discuss its second quarter 2025 results, with a replay available on the Company's website - Conference call and webcast for Q2 2025 results scheduled for Friday, August 8, 2025, at 9:00 a.m. Central (10:00 a.m. Eastern)[14] - Participants can access the call by dialing 877-407-2984 or via webcast link on www.ir.machnr.com[14](index=14&type=chunk) - A replay will be available on the Company's website following the call[14] About Mach Natural Resources LP Mach Natural Resources LP is an independent upstream oil and gas company focused on the Anadarko Basin Company Profile Mach Natural Resources LP is an independent upstream oil and gas company primarily focused on the acquisition, development, and production of oil, natural gas, and NGL reserves in the Anadarko Basin region of Western Oklahoma, Southern Kansas, and the panhandle of Texas - Mach Natural Resources LP is an independent upstream oil and gas company[15] - Focuses on acquisition, development, and production of oil, natural gas, and NGL reserves[15] - Primary operational area is the Anadarko Basin region of Western Oklahoma, Southern Kansas, and the panhandle of Texas[15] Non-GAAP Financial Measures This section defines Adjusted EBITDA, its purpose, and provides a reconciliation to GAAP net income Adjusted EBITDA Definition and Use Mach defines Adjusted EBITDA as net income adjusted for interest, depreciation, depletion, amortization and accretion (DDA), unrealized derivative gains/losses, loss on debt extinguishment, equity-based compensation, and gain/loss on sale of assets; this non-GAAP measure is used by management and external users to evaluate operating performance without regard to financing methods, capital structure, or historical cost basis, but it is not a substitute for GAAP net income - Adjusted EBITDA is defined as net income before (1) interest expense, net, (2) depreciation, depletion, amortization and accretion, (3) unrealized loss (gain) on derivative instruments, (4) loss on debt extinguishment, (5) equity-based compensation expense and (6) (gain) loss on sale of assets, net[17] - Used by management and external users to evaluate operating performance and results of operation from period to period and against peers without regard to financing methods, capital structure or historical cost basis[18] - Adjusted EBITDA is a non-GAAP measure and should not be considered an alternative to, or more meaningful than, net income as determined in accordance with GAAP[18] Adjusted EBITDA Reconciliation The report provides a detailed reconciliation of GAAP net income to Adjusted EBITDA for the three and six months ended June 30, 2025, and 2024, showing the specific adjustments made Reconciliation of Net Income to Adjusted EBITDA | ($ in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income | $89,661 | $39,516 | $105,547 | $81,218 | | Interest expense, net | 12,097 | 25,880 | 29,514 | 50,952 | | Depreciation, depletion, amortization and accretion | 67,098 | 68,061 | 130,683 | 135,531 | | Unrealized (gain) loss on derivative instruments | (48,551) | (124) | (6,211) | 33,099 | | Loss on debt extinguishment | — | — | 18,540 | — | | Equity-based compensation expense | 2,103 | 2,300 | 4,215 | 3,482 | | Gain on sale of assets | (138) | (298) | (167) | (309) | | Adjusted EBITDA | $122,270 | $135,335 | $282,121 | $303,973 | Cautionary Note Regarding Forward-Looking Statements This section disclaims forward-looking statements, highlighting risks and advising consultation of Form 10-K Disclaimer and Risk Factors This section highlights that the release contains forward-looking statements based on management's current beliefs, which are subject to various assumptions, risks, and uncertainties beyond the company's control, including commodity price volatility, market conditions, regulatory changes, and operational challenges, and readers are cautioned against undue reliance on these statements and are directed to the 'Risk Factors' section in the Company's Annual Report on Form 10-K for further details - The release contains forward-looking statements based on management's current beliefs, subject to numerous assumptions, risks, and uncertainties beyond the Company's control[21] - Identified risks include commodity price volatility, impact of public health events, uncertainties in reserve estimates, difficult capital markets, lack of transportation, regulatory changes, and competition[21] - Readers should not place undue reliance on forward-looking statements and are advised to consult the 'Risk Factors' in the Company's Annual Report on Form 10-K for a discussion of potential risks[21][22]