Financial Data and Key Metrics Changes - The company reported a 6% increase in production quarter over quarter, reaching 35,600 barrels of oil equivalent per day, which is near the high end of guidance [4] - Adjusted EBITDA grew by 11% quarter over quarter to $39 million, despite lower commodity prices [5] - Unrestricted cash increased to approximately $125 million, while net debt was reduced to under $226 million, marking a $60 million decrease in net debt for 2025 [5][11] Business Line Data and Key Metrics Changes - Production from the former Cox Operating assets contributed significantly to the overall production increase, with three recompletions performed in Q3 2025 [8] - The company executed eight workovers in Mobile Bay in 2025, enhancing production at this key natural gas field [9] Market Data and Key Metrics Changes - The company expects the midpoint of production for Q4 2025 to be around 36,000 barrels of oil equivalent per day, indicating continued production growth [12] - Full-year capital expenditures are projected to be around $60 million, reflecting strategic investments in midstream infrastructure [10][14] Company Strategy and Development Direction - The company is focused on profitability, operational execution, and returning value to stakeholders through disciplined capital spending and strategic acquisitions [4][12] - The strategy includes low-risk acquisitions of producing properties rather than higher-risk drilling, especially in the current uncertain commodity price environment [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to grow despite current commodity price challenges, citing a strong track record of adjusting to market conditions [23] - There has been no impact from recent government shutdowns on permitting or regulatory constraints, allowing operations to continue smoothly [21][22] Other Important Information - The company has maintained a consistent quarterly dividend for the past two years and announced a fourth-quarter 2025 payment [6] - Liquidity is strong, with over a quarter of a billion dollars available, including cash and credit facilities [11][18] Q&A Session Summary Question: Infrastructure investments and future operating costs - Management indicated that investments in pipeline infrastructure will be accretive to earnings and cash flow, enhancing both short-term and long-term value [16] Question: Current M&A environment and potential deals - The Gulf of America is described as open for business, with the company well-positioned to pursue opportunities due to strong liquidity [18] Question: Depth of recompletion and workover projects into 2026 - Management is optimistic about production support from ongoing workover projects and is currently finalizing the budget for 2026 [19][20] Question: Impact of government shutdowns on operations - Management confirmed that there has been zero impact from government shutdowns on operations or permitting [21][22]

Core Viewpoint - The FAA has approved Boeing to increase its 737 Max monthly production from 38 to 42 units, which is expected to positively impact the company's free cash flow [1][3]. Production Increase - Boeing's production increase from 38 to 42 units per month has been officially approved by the FAA after extensive reviews of Boeing's production lines [1]. - The FAA will continue to monitor Boeing's production processes, and any further increase to 47 units per month will require additional FAA approval [1][6]. Company Statements - Boeing expressed satisfaction with the FAA's approval, stating that they have followed a disciplined rate readiness process guided by their safety management system [2][3]. - The company emphasized its commitment to safety and quality while working with suppliers to increase production in a disciplined manner [2]. Production Goals and Timeline - Boeing aimed to reach a production rate of 42 units per month by the end of the year, with initial expectations of achieving this in the third quarter [4][6]. - The FAA has been receiving daily data from Boeing regarding the manufacturing process, which has shown consistent performance leading to the approval [5][6]. Future Considerations - The sustainability of the increased production rate will depend on maintaining quality and managing the supply chain effectively [6].

Financial Data and Key Metrics Changes - The company reported a cash loss per month of approximately $400,000, which is nearly half of what it was a year ago, indicating improved cost management [10][11] - General and administrative (G&A) costs have decreased, with salaries and fees down by $225,000 in Q1 compared to the previous year, translating to an annual run rate reduction of about $1 million [25][70] - Interest expenses dropped by $165,000 for the quarter due to note conversions as part of balance sheet cleanup efforts [19] Business Line Data and Key Metrics Changes - Oil production remained stable, with an uptick in oil revenue attributed to market price fluctuations, while gas revenues increased by $50,000 for the quarter due to higher gas prices [23][24] - The company has hedged 70% of its oil production at $70 per barrel, which mitigates the impact of current lower market prices [11][23] Market Data and Key Metrics Changes - Oil prices have been volatile, affecting stock performance, but the company is hedged to protect against these fluctuations [8][12] - The company is exploring gas opportunities, particularly in specialty gases like helium, which command higher prices compared to conventional gas [47] Company Strategy and Development Direction - The company is focused on reducing debt, with plans to retire approximately $20 million in senior debt and $1.8 million in seller notes in the upcoming quarter [39] - There is a strong emphasis on workovers and drilling preparations, with expectations to drill 3 to 6 wells in Q1 of 2026 [40][75] - The management is optimistic about future acquisitions due to low oil prices, which could be accretive to the company's stock [40] Management's Comments on Operating Environment and Future Outlook - Management believes the oil market has peaked, with expectations of trading between $60 and $80 per barrel, and anticipates that production will not be able to meet increasing demand indefinitely [61][62] - The company is positioned for significant growth in Q3 and Q4 of 2025, with a focus on cost control and smart hedging strategies [76] Other Important Information - The company has received approval for 45 workovers, which will enhance oil production and water injection capabilities [15] - The management team is committed to improving operational safety, reporting no incidents in 2024 and Q1 of 2025 [32] Q&A Session Summary Question: Can you give us some color on your gas operations and what you think the future in gas will be for the company? - Management noted that gas prices have performed better than oil prices, leading to increased gas revenue, and they are exploring gas opportunities, including specialty gases like helium [46][47] Question: How was your relationship with Chevron? - The relationship with Chevron is described as excellent, with Chevron expressing willingness to purchase increased oil production [52] Question: Will the entire deal with Encore close in June, or can it be done in pieces? - The management indicated that the deal is likely to close all at once, with a target date in June but possibly extending to July due to paperwork complexities [56] Question: Can you explain how the hedging program operates and if it generates profit? - The hedging program involves swaps that lock in prices for 70% of production, providing a safety net against market fluctuations [58] Question: What are your thoughts on the oil and gas business in '25? - Management believes the oil market has peaked and anticipates a trading range of $60 to $80 per barrel, with a focus on workovers and better drilling practices [61][62] Question: Do you see an opportunity to acquire rigs at a cheaper price? - The management does not anticipate purchasing a drilling rig but may consider acquiring workover rigs due to favorable market conditions [67] Question: How do you look at 2025, especially with the industry under pressure? - The company is focused on reducing costs and leveraging acquisitions without significantly increasing G&A expenses [70][71]