Infinity Natural Resources (NYSE:INR) M&A Announcement Transcript

Summary of Infinity Natural Resources Conference Call on Acquisition of Antero's Ohio Utica Shale Assets Company and Industry - Company: Infinity Natural Resources (NYSE: INR) - Industry: Oil and Gas, specifically focusing on upstream and midstream assets in the Ohio Utica Shale Core Points and Arguments 1. Acquisition Announcement: Infinity Natural Resources announced the acquisition of Antero Resources and Antero Midstream's Ohio Utica assets for a total consideration of $1.2 billion, with Infinity acquiring a 51% interest for $612 million and Northern Oil and Gas acquiring the remaining 49% for $588 million [4][5][6] 2. Transaction Structure: The acquisition is expected to close in Q1 2026, funded through cash on hand and borrowings under an expanded $875 million credit facility, without issuing any equity [5][6] 3. Strategic Rationale: The acquisition is seen as transformational and accretive, enhancing shareholder value by complementing Infinity's existing operational footprint with approximately 71,000 net acres adjacent to its core position in Guernsey County, Ohio [5][6][8] 4. Operational Synergies: The combined assets will create a pro forma position of approximately 102,000 Ohio net horizontal Utica Shale acres with about 1.4 trillion cubic feet equivalent (TCFE) of undeveloped net reserves, enhancing capital efficiency and operational synergies [6][8] 5. Production Metrics: The acquired assets produced approximately 133 million cubic feet equivalent (MCFE) per day during Q3 2025 from 255 producing laterals, with 764 billion cubic feet (BCF) of net undeveloped reserves [8][9] 6. Midstream System: The acquisition includes a midstream system spanning over 140 miles, capable of gathering volumes exceeding 600 million cubic feet of gas per day, with an estimated replacement value over $500 million [9][10] 7. Financial Metrics: The acquisition is expected to be immediately accretive to adjusted EBITDA margins, cash flow per share, and net asset value per share, with anticipated synergies of $25 million in 2026 [9][10] 8. Future Development Plans: Infinity plans to increase its operated rig counts to two rigs post-closing, focusing on high-return, low-break-even locations while optimizing development across its combined portfolio [9][11] 9. Production Growth: The company reported over 30% production growth in the first nine months of 2025 and aims to maintain an industry-leading growth profile by developing these assets out of cash flow [10][11][52] Other Important Details 1. Royalty Rates: Typical royalties in Ohio range from 18% to 20% [41] 2. Working Interest: Northern Oil and Gas holds a 49% interest in both the upstream and midstream assets acquired [41] 3. Future Inventory: There are about 60-80 gas-weighted locations in the acquired inventory, with a focus on balancing development across volatile oil and dry gas windows [21][52] 4. Market Conditions: The company is cognizant of current commodity prices, which may influence the allocation of capital towards gas versus oil development [51][52] 5. Integration Plans: The integration of Antero's assets is expected to be seamless, with a focus on leveraging technical expertise and operational capabilities to enhance the acquired assets [10][11] This summary encapsulates the key points discussed during the conference call regarding Infinity Natural Resources' acquisition of Antero's Ohio Utica Shale assets, highlighting the strategic rationale, operational synergies, and future growth plans.