Financial Data and Key Metrics Changes - In Q2 2025, the company generated total oil and gas sales revenue of $109.2 million, a 20% increase compared to Q2 2024, driven by a 37% increase in production to 31,576 BOE per day [21] - Net income for the quarter was $25.1 million or $0.19 per share, reflecting strong operational performance [22] - Operating cash flow before working capital changes was $69.5 million, providing robust liquidity for capital programs and dividends [22] - The leverage ratio remains conservative at 0.8 times net debt to adjusted EBITDA, despite long-term debt increasing by $25 million to $275 million [24] Business Line Data and Key Metrics Changes - The company turned 4.9 net wells to sales in Q2 2025, with oil production increasing by 46% to 16,009 barrels per day and natural gas production rising by 28% to 93,404 Mcf per day [7][21] - Lease operating expenses increased to $20.1 million or $7 per BOE, compared to $13.7 million or $6.5 per BOE in Q2 2024, reflecting elevated service costs [22][23] Market Data and Key Metrics Changes - The company raised its full-year production guidance by 10% to between 31,000 and 33,000 BOE per day, resulting in year-over-year growth of 28% [10][25] - Capital expenditure guidance was also raised to a range of $400 million to $420 million, driven mainly by new unbudgeted acquisitions expected to close in 2025 [10][25] Company Strategy and Development Direction - The company aims to become the leading public investment platform for energy development, focusing on operating partnerships and capitalizing on undervalued opportunities [12] - The strategy includes maintaining a balance between growth and returns while safeguarding financial flexibility [19] - The company plans to advance its operator partnership program, which will account for approximately 65% of development capital spend this year [19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's future, highlighting a proven strategy, high-quality asset base, and a talented team ready to execute [20] - The current environment is seen as constructive for acquisitions, with a lack of private equity capital in the space allowing for attractive smaller transactions [40] - The company anticipates continued growth into 2026, with a focus on adding inventory and managing leverage [52] Other Important Information - The company has identified nearly $60 million of new inventory acquisitions, with $40 million in the Permian Basin and $20 million from organic acreage leasing in the Utica Shale [12] - The company recorded a $23.9 million gain on derivatives primarily due to the decline in oil prices during the period [24] Q&A Session Summary Question: What is driving the higher oil mix in the second half of the year? - Management indicated that growth is predominantly coming from the Permian Basin, which has a higher oil mix compared to existing assets [31] Question: What is the board's appetite for adding to the net debt balance? - Management stated they are comfortable with a leverage ratio of 1 to 1.25 times and will continue to outspend cash flow to add inventory [35] Question: What gives confidence to lean into growth and acquisitions at this time? - The lack of private equity capital and the ability to aggregate smaller transactions at attractive prices are key factors [40] Question: How does the company balance adding inventory, growth, and managing leverage? - Management is currently leaning into growth and scale, prioritizing adding duration to inventory while maintaining a strong balance sheet [43] Question: What are the expectations for the 2026 program with operated partnerships? - Management expects to potentially run four rigs in 2026, with capital expenditure spending similar to or more than the current year [47] Question: What are the plans for exploring credit markets? - Management is considering increasing the RBL size and exploring options to term out some debt, including traditional high yield markets [54]