Financial Data and Key Metrics Changes - The company achieved the highest free cash flow per share in its history at $0.54, driven by lower per unit costs and solid production performance [4] - Adjusted operating cash flow reached $900 million, and adjusted free cash flow was $460 million, with cash capital expenditures of $500 million [6] - Cash on the balance sheet increased from $479 million at year-end to approximately $700 million by March 31, and leverage decreased from 1x to 0.8x [6][7] Business Line Data and Key Metrics Changes - Oil production was 175,000 barrels per day, and total production was 373,000 barrels of oil equivalent per day, exceeding expectations [5] - Controllable cash costs were reduced by 4%, and drilling and completion costs decreased by 3%, landing at $750 per foot for the quarter [6] Market Data and Key Metrics Changes - Approximately 25% of 2025 oil production is hedged at a price just above $73 per barrel, allowing the company to be more opportunistic during downturns [9] - The company has maintained a strong balance sheet with updated credit ratings of BA1 from Moody's and BB+ from S&P, positioning it one notch away from investment grade at all three rating agencies [7] Company Strategy and Development Direction - The company is focused on opportunistic investments during downturns, aiming to acquire high-quality assets with low breakeven costs [11][12] - A recent acquisition in New Mexico for $608 million is expected to enhance returns and add over 100 new gross operating locations [12][14] - The company emphasizes maintaining a strong balance sheet while executing share buybacks and acquisitions simultaneously [18][17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating the current market and capitalizing on opportunities, highlighting the importance of a strong balance sheet [4][10] - The company plans to reduce capital expenditures by $50 million while maintaining production at the high end of guidance, indicating a flexible approach to capital allocation [19][20] - Management noted that the oil and gas industry will always have volatility, which creates potential for outsized value creation [11] Other Important Information - The company has a disciplined approach to mergers and acquisitions, ensuring that any new acquisitions meet rigorous investment criteria [15][16] - The acquisition in New Mexico is expected to generate over 5% free cash flow per share accretion in the near, mid, and long term [14] Q&A Session Summary Question: How does the New Mexico bolt-on deal compare to recent deals? - Management expressed excitement about the deal, highlighting its fit with the M&A strategy and the quality of the inventory [22][24] Question: What is the capacity for continued share buybacks? - Management indicated ample capacity for both acquisitions and share buybacks, emphasizing a patient approach to market opportunities [27][28] Question: Can you share how the New Mexico deal came about? - The deal was a culmination of discussions over several years, with a competitive advantage due to existing operational familiarity [33][35] Question: What is driving better-than-expected production? - The outperformance is attributed to two larger acquisitions from 2024, with improved artificial lift and operational practices leading to higher production [37][38] Question: How do you view the trade-offs of responding to oil price changes? - Management emphasized a returns-focused approach, maintaining flexibility to adjust activity based on market conditions [45][46] Question: What is the outlook for service costs? - Service costs are beginning to move lower, with some price concessions being observed due to reduced activity in the industry [60][61] Question: How do you see organic inventory expansion opportunities? - Management is optimistic about continuing to add inventory through organic means, particularly in the Delaware Basin [85][88]

Financial Data and Key Metrics Changes - For the first quarter, GAAP income was $1.1 million or $0.02 per diluted share, while earnings available for distribution were $5 million or $0.02 per diluted share [9][10] - The first quarter dividend paid was $0.06, with expectations for future growth [10] - The company has approximately $295 million in total equity and a GAAP book value of $5.4, while the stock trades at about $2.85, indicating significant undervaluation [10][15] Business Line Data and Key Metrics Changes - In the first quarter, the company deployed $65 million in various commercial real estate (CRE) debt, including $47 million in AAC CMBS bonds with an approximate 11% yield [11] - A $35 million loan was split between Rhythm Capital and Rhythm Property Trust, yielding a 12% to 13% unlevered return [11] - The company sold $21 million of legacy residential assets during the quarter [12] Market Data and Key Metrics Changes - The company has no legacy commercial real estate exposure, positioning it favorably in the current market environment [6][15] - The market has seen wider spreads across various asset classes, indicating increased volatility and potential opportunities [21][22] Company Strategy and Development Direction - The company aims to grow earnings and shareholder value by focusing on opportunistic investments and diversifying across different asset classes [15][16] - The management is looking for strategic transactions or acquisitions to enhance earnings growth [12][13] - The company plans to maintain a clean balance sheet while gradually moving away from legacy assets [41] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to create shareholder value despite market volatility [10][21] - The company is focused on deploying capital at attractive returns while being patient in the current market [12][15] - There is a robust pipeline of opportunities, and management believes that the current valuation presents a significant growth opportunity [13][15] Other Important Information - The company raised $52 million in capital during the quarter [11] - Management emphasized the importance of maintaining a diversified portfolio to mitigate risks [16] Q&A Session Summary Question: Has market volatility changed sellers' motivations? - Management noted wider spreads across the board and observed stability in the market, indicating more opportunities for deal flow [21] Question: Are there shifts in thoughts on platform or transformative acquisitions? - Management clarified that they are still looking at platforms and origination businesses, focusing on how to leverage origination engines [23] Question: What is the status of the $17.5 million subordinate mortgage investment? - Management described it as an opportunistic investment and emphasized a diversified portfolio strategy [29] Question: When will the company start paying down higher coupon corporate debt? - Management indicated that the corporate debt at 9.5% will likely remain until the company scales further [31] Question: How is the dividend coverage progressing? - Management stated that growing earnings and reducing lower coupon assets are key to improving dividend coverage [34] Question: What is the outlook for selling legacy assets? - Management indicated that the ability to sell legacy assets is limited, with only about $25 million remaining that could potentially be sold [42] Question: What percentage of the balance sheet is core long-term home versus commercial real estate? - Management stated that the goal is to deploy capital primarily in commercial real estate assets, with a focus on opportunistic investments [52] Question: What is the experience of the team focusing on CRE? - Management highlighted a robust team with extensive experience in commercial real estate, including partnerships with affiliates [54] Question: What are the banks' current lending activities? - Management noted that banks are still lending on the senior side and are looking for partners, while also being cautious with non-performing loans [57]

Financial Data and Key Metrics Changes - For the first quarter, GAAP income was $1.1 million or $0.02 per diluted share, while earnings available for distribution were $7.07 million or $0.02 per diluted share [9][10] - The first quarter dividend paid was $0.06, with expectations for future growth [10] - The company has approximately $295 million in total equity and a GAAP book value of $5.4, while the stock trades at about $2.85, indicating significant undervaluation [10][14] Business Line Data and Key Metrics Changes - In the first quarter, the company deployed $65 million in various commercial real estate (CRE) debt, including $47 million in AAC CMBS bonds with an approximate 11% yield [11] - A $35 million loan was split between Rhythm Capital and Rhythm Property Trust, yielding a 12% to 13% unlevered return [11] - The company sold $21 million of legacy residential assets during the quarter [12] Market Data and Key Metrics Changes - The company has no legacy commercial real estate exposure, positioning it favorably in the current market environment [6][15] - The market has seen wider spreads across various asset classes, indicating increased volatility and potential opportunities [21][22] Company Strategy and Development Direction - The company aims to grow earnings and shareholder value by focusing on opportunistic investments and diversifying across different asset classes [15][16] - There is a strong emphasis on maintaining a clean balance sheet while seeking strategic acquisitions to enhance growth [30][31] - The management is cautious about market volatility but remains optimistic about future deal flow and investment opportunities [21][22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to create shareholder value despite current market challenges [10][15] - The company is focused on deploying capital at attractive returns while being patient in the current volatile environment [12][15] - There is a belief that the commercial real estate sector is fundamentally undervalued, providing a favorable backdrop for future growth [34] Other Important Information - The company raised $52 million in capital during the quarter, enhancing its financial position [11] - The management team has extensive experience in commercial real estate, which is expected to drive the company's strategic initiatives [52][53] Q&A Session Summary Question: Has market volatility changed sellers' motivations? - Management noted wider spreads across the board and observed stability in the market, indicating more opportunities for deal flow [21][22] Question: Are there shifts in thoughts on platform or transformative acquisitions? - Management clarified that they are still looking at platforms and origination businesses, maintaining a focus on growth [23] Question: What is the status of the subordinate mortgage investment? - Management described the investment as opportunistic and emphasized a diversified portfolio approach [28][29] Question: When will the company start paying down higher coupon corporate debt? - Management indicated that the corporate debt would likely remain outstanding until the company scales further, with potential for a rate drop upon an upgrade [30][31] Question: How is the dividend coverage progressing? - Management highlighted the need to grow earnings and eliminate lower coupon assets to improve dividend coverage [32][33] Question: What is the outlook for selling legacy assets? - Management stated that the ability to sell legacy assets is limited, with only about $25 million remaining that could potentially be sold [41] Question: What is the current balance sheet composition? - Management indicated that the core balance sheet will focus on commercial real estate assets, with a goal to deploy capital effectively [50] Question: What is the team's experience in commercial real estate? - Management emphasized a robust team with extensive experience in commercial real estate, which is crucial for navigating the current market [52][53] Question: What are the banks' current lending activities? - Management noted that banks are still lending on the senior side and are looking for partners, while also being cautious about non-performing loans [54][55]