Financial Data and Key Metrics Changes - The company reported production of 94,000 BOE per day, with 21% oil, 56% natural gas, and 23% NGLs [21] - Average realized prices were $64.79 per barrel of oil, $2.54 per MCF of gas, and $21.78 per barrel of NGLs [21] - Total oil and gas revenues reached $235 million, with oil contributing 50%, gas 32%, and NGLs 18% [21][22] - Adjusted EBITDA was $134 million, and operating cash flow was $106 million [24] Business Line Data and Key Metrics Changes - The company has focused on maintaining a disciplined execution strategy, only purchasing assets at discounts to PDP/PV10 [5] - The acquisition of ICAV and Savinol has allowed the company to expand into new basins and review more acquisitions in the sub-$150 million range [4][5] - The company has reduced expected CapEx by 8% for 2026 without affecting production guidance [6] Market Data and Key Metrics Changes - The company anticipates a significant increase in natural gas demand due to LNG exports, projecting 24 BCF a day of demand from 2026 to 2030 [11] - The Midcon region currently produces about 9 BCF a day of gas with takeaway capacity of approximately 12 BCF a day [20] Company Strategy and Development Direction - The company aims to maintain a debt/EBITDA ratio around one time to ensure financial stability and flexibility for future acquisitions [3] - The focus is on low-decline crude assets and natural gas projects, with a target reinvestment rate of less than 50% [7][9] - The company plans to continue drilling in the Deep Anadarko and Mancos Shale, targeting dry gas projects for 2026 [8][19] Management's Comments on Operating Environment and Future Outlook - Management believes the company is nearing the end of a cyclical downturn in crude oil, expecting to harvest higher prices for Savinol crude production [10] - There is cautious optimism regarding natural gas demand, with expectations of increased activity in 2027 and beyond [47] - The company is confident in its ability to maintain production levels while reducing costs through more efficient drilling practices [18][29] Other Important Information - The company announced a distribution of $0.27 per unit, totaling over $1.2 billion in distributions since inception [9][24] - The company ended the quarter with $54 million in cash and $295 million available under its credit facility [24] Q&A Session Summary Question: What is driving the upside in the Midcon operation? - The upside is attributed to moving deeper into gas zones and achieving competitive pricing above $4, allowing for rates of return north of 50% [26] Question: Are there takeaway constraints in the Midcon? - There are no issues with takeaway capacity, estimating 3 BCF a day of takeaway capacity [27] Question: What is the DNC cost on Deep Anadarko locations? - The DNC cost is approximately $14 million per well, with expected rates of return in the 60s [28][29] Question: How does the company plan to manage its distribution in 2026? - The company expects increasing distributions throughout 2026 as new wells come online [31] Question: What is the strategy for potential drilling partnerships? - The company is open to bringing in partners to help develop its extensive land holdings without changing its reinvestment strategy [39] Question: How is the integration of new properties going? - Integration is going well, with a focus on cost management and operational efficiency [45]