REPX(US:REPX)2026-03-05 16:02Financial Data and Key Metrics Changes - In Q4 2025, net income increased by $69 million quarter-over-quarter, benefiting from a $72 million gain from the midstream sale and $20 million of higher hedging gains [19][22] - Adjusted EBITDAX increased by 3% quarter-over-quarter to $66 million, with margins rising from 59% to 63% [20] - Debt decreased by $120 million quarter-over-quarter, resulting in a balance of $255 million as of December 31, 2025 [22][23] Business Line Data and Key Metrics Changes - Oil production increased by more than 1,700 barrels per day or 9% quarter-over-quarter, with a 26% increase compared to Q4 2024 [8][9] - Full year oil production increased by 15% year-over-year, while total equivalent production increased by 29% [9] - Development activity counts were down 28% year-over-year, with 18 net wells drilled in 2025 [10] Market Data and Key Metrics Changes - New Mexico oil production grew by 74% year-over-year, representing 34% of total company oil production in 2025, up from 23% in 2024 [11] - The company experienced pipeline maintenance constraints that pressured Waha pricing during Q4 2025 [17] Company Strategy and Development Direction - The company plans for over 20% year-over-year oil volume growth in 2026, with a focus on significant increases in activity and spending [6][14] - A stock repurchase program of up to $100 million was authorized, with approximately 152,000 shares repurchased at a weighted average price of $26.54 [5] - The company aims to replace 100% of its drilled locations annually through strategic land acquisitions [92] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about 2026, highlighting a strong financial position and asset base [7] - The company remains flexible to moderate activity and spending if the oil price environment deteriorates [6] - Management noted that the Silverback acquisition continues to exceed expectations, producing at a 65% higher oil rate than anticipated [12] Other Important Information - The company achieved a total recordable incident rate of zero in 2025, reflecting a strong safety performance [9] - Core cash operating costs decreased by 13% quarter-over-quarter, with significant contributions from workover expenses [18] Q&A Session Summary Question: Can you help us shape production cadence for 2026 and 2027? - Management indicated a forecasted dip in Q1 2026 due to downtime and deferred production, with expectations for a ramp-up in subsequent quarters [31] Question: How flexible is the capital allocation plan given current oil prices? - Management stated that while they have a solid plan for 2026, they have the flexibility to adjust rig operations based on market conditions [44] Question: Can you elaborate on completion optimization efforts? - Management discussed various strategies for completion optimization, including reduced sand usage and improved well performance [35][39] Question: Are there still opportunities for production optimization in New Mexico? - Management confirmed ongoing opportunities for optimization, including wellbore cleanouts and switching artificial lift methods [61] Question: How does the agreement with WaterBridge impact costs and efficiencies? - Management noted that while costs may increase, the agreement allows for full-scale development of the field [94]