Bertrand Donnes

Bertrand Donnes asked about the impact of recent natural gas price volatility on M&A efforts in Ohio and Pennsylvania, and requested an update on the timing for drilling the company's deep Utica wells.

Answer

CEO Zack Arnold stated that Infinity's familiarity with both oil and gas windows provides a broad scope for M&A opportunities of all sizes, and while price volatility can affect bid-ask spreads, the company remains positioned to execute on deals that fit its plan. Regarding the deep Utica, Arnold confirmed the company has the permit in hand and will evaluate the right time to execute the project, encouraged by positive results from peers.

Bertrand Donnes inquired about the effect of recent natural gas price volatility on M&A efforts and requested an update on the timing for the company's deep Utica wells.

Answer

CEO Zack Arnold stated that the team's extensive experience in both oil and gas windows provides a broad scope for M&A opportunities, allowing them to pursue various deal types despite commodity price movements. Regarding the deep Utica wells, Arnold confirmed they have the necessary permit and are evaluating the optimal time to execute the project, encouraged by positive results from peers.

Bertrand Donnes inquired about the potential synergies and cost-saving opportunities from the recent Lime Rock acquisition, the timeline for integrating its drilling locations, and the impact of market volatility on Ring Energy's future M&A strategy.

Answer

CEO Paul McKinney, SVP of Operations Shawn Young, and EVP & COO Alexander Dyes detailed significant synergy opportunities, particularly in combining water disposal systems and general operational efficiencies, referencing a 22% cost reduction in the past FOG acquisition as a successful precedent. McKinney stated that drilling on the new Lime Rock locations would likely begin in the second half of the year. Regarding M&A, he explained that while volatility can help align buyer and seller expectations, Ring's immediate priority post-closing is to strengthen its balance sheet before pursuing further deals.

Bertrand Don asked how management balances substantial share repurchases against potential activity increases or M&A if the stock price remains low. He also requested an outlook for asset retirement obligation (ARO) costs.

Answer

CFO Stephen Riney detailed the 5-year plan which includes $2.2B in debt paydown and $1.75B in buybacks. CEO John Christmann affirmed they would continue buying back undervalued stock. Riney outlined the 2025 ARO spend of ~$170M, noting that North Sea costs are expected to grow while other areas remain relatively flat.

Bertrand Donnes questioned whether the growth decision was driven by strip prices or fundamentals and asked about the potential for M&A within the three-year plan.

Answer

CEO Dennis Degner asserted the plan was driven by free cash flow goals and line-of-sight demand, not just commodity prices. CFO Mark Scucchi added that while they are open-minded to M&A, the bar is very high as any deal must improve upon their compelling organic growth story.

Bertrand Donnes asked about the logistics of adding modest growth, questioning whether it would be triggered by hedging higher prices or by a fundamental supply-demand forecast. He also asked about the status of discussions for signing fixed gas supply agreements for data centers.

Answer

CFO Mark Scucchi clarified that growth decisions are driven by fundamental demand signals, such as new LNG or power demand, rather than being strictly linked to price or hedging. On data centers, he noted that while conversations are happening rapidly, these are complex, multi-decade deals that will likely develop throughout 2025. CEO Dennis Degner added that the recent PJM auction results and Pennsylvania's 'sites program' are encouraging signs of progress in this area.

Bertrand Donnes inquired about the sustainability of the projected 30% liquids production growth in 2025 and whether this focus alters the company's M&A strategy towards gas versus liquids or PDP-heavy versus undeveloped assets.

Answer

EVP and CFO Michael Hodges confirmed the liquids growth is sustainable and that the company retains flexibility to pivot between liquids and gas development based on market conditions. President and CEO John Reinhart added that for bolt-on acquisitions, the company prefers opportunities with a significant undeveloped component to leverage its operational execution, similar to its strategy for organic acreage additions.

Bertrand Donnes asked for clarification on the source of Gulfport's improved capital guidance and inquired about the company's current ranking of its drilling inventory across different assets.

Answer

President and CEO John Reinhart explained that the capital savings were driven primarily by operational efficiency gains (two-thirds) and service cost reductions (one-third), with no material shifts in activity. He added that while the returns on all high-quality inventory are competitive, the company is currently prioritizing liquids-rich assets like the Utica condensate and Marcellus wells to maximize margins and cash flow.

Bertrand Donnes asked about the M&A outlook in the Barnett shale, questioning if the improved gas strip would encourage consolidation or widen bid-ask spreads. He also sought more detail on the Q4 upstream outperformance, asking whether new well performance or base decline management was the primary driver.

Answer

CEO Christopher Kalnin suggested that if the gas strip stabilizes at current levels, it should trigger more M&A activity in the second half of the year. President of Upstream Eric Jacobsen attributed the strong Q4 upstream results primarily to new wells performing at or above type curve and accelerated turn-in-line timing, which gave the company high confidence for future development.

Bertrand Donnes asked about BKV's role as a consolidator in the Barnett, questioning seller willingness and synergy potential, and also probed the company's appetite for acquiring additional power plants.

Answer

CEO Chris Kalnin responded that while there is a market for consolidation and significant synergy potential in the Barnett, transaction activity has been muted by commodity price volatility. Regarding power, Kalnin described BKV's posture as 'leaning forward' on acquisitions, citing an unprecedented wave of data center demand and a belief that the window to acquire existing plants at reasonable prices is closing.

Bertrand Donnes from Truist asked about the M&A environment for private Haynesville assets with rising gas prices and whether Comstock had an appetite for long-term supply contracts with LNG or data center customers.

Answer

President & CFO Roland Burns noted that Comstock has seen great capital discipline across the basin with no ramp-up in activity from private operators. On contracts, Burns confirmed Comstock is looking to build a portfolio of direct purchasers, including LNG shippers and power generation, to secure stable prices. CEO Miles Allison highlighted that 90% of the Western Haynesville production is undedicated, providing significant flexibility.

Bertrand Donnes of Truist inquired about the flexibility and notice period required to add or drop drilling rigs. He also asked about the drivers behind the continued leasing activity and sought clarification on the configuration of a 'triple horseshoe pad'.

Answer

President and CFO Roland Burns stated that about half the rig fleet requires only a 45-day notice, providing significant flexibility. CEO Miles Allison clarified that recent leasing has been focused on cleaning up existing acreage and that major acquisition spending is complete. COO Daniel Harrison confirmed a 'triple horseshoe pad' consists of three individual horseshoe wells drilled from a single surface location.

Bertrand Donnes of Truist Securities asked if hyperscalers are attempting to form consortiums with multiple E&P companies to circumvent paying a premium for EQT's unique attributes, and whether potential deals are leaning towards fixed-price or premium-to-index structures.

Answer

President and CEO Toby Rice argued that speed to market is now a critical factor for tech companies, making EQT's simple, one-stop-shop solution highly attractive. CFO Jeremy Knop added that EQT has the flexibility to offer both fixed-price and premium-to-index deals, having offered both in the past, and that the final structure is priced at an indifference point based on customer needs.

Bertrand Donnes questioned if EQT plans to shape production to capitalize on seasonal price differences or if it will maintain a steady operational cadence. He also asked for the rationale behind selling low-capital assets in a low-price environment and how buyers are valuing those assets.

Answer

CFO Jeremy Knop stated that EQT's strategy prioritizes a consistent, efficient operational cadence over seasonal production shaping. Regarding the asset sale, he explained the valuation was strong, as the $1.25 billion in immediate proceeds far exceeded the assets' estimated $750 million of free cash flow over the next five years. He noted that buyers are looking past the prompt price to the long-term strip and intrinsic asset value, including the Upper Marcellus potential.

Bertrand Donnes questioned the assumptions in the free cash flow outlook, particularly if it incorporates expected differential upside from new LNG facilities. He also asked if the recent hedging activity signals a broader strategic shift for the typically unhedged company.

Answer

CFO Michael Kennedy provided a rule of thumb that every $0.10 change in equivalent price equals about $100 million in free cash flow, and confirmed the outlook sees higher differentials in 2026. Regarding hedging, he explained it was a strategic decision tied specifically to de-risking lean gas pads by locking in a floor above $3.00/Mcf, and the company would consider similar wide-collar strategies for future lean gas pads.

Bertrand Donnes inquired about Antero's strategy for building a backlog of drilled but uncompleted (DUC) wells and the rationale behind its share buyback approach, particularly given the strong 2025 free cash flow forecast.

Answer

CFO Michael Kennedy explained that Antero is already building a DUC inventory, with two pads currently deferred, and this will continue if they maintain a two-rig, one-completion-crew program. Regarding capital returns, Kennedy stated that the first $600 million of free cash flow is allocated to debt reduction to zero out the credit facility, after which the majority of free cash flow will be directed to share buybacks.

Bertrand Donnes asked if the financial incentives of 45V are sufficient pending rule clarifications and what capital might be required. He also questioned the lack of share buyback activity in Q1 2025, asking if it was related to blackout periods or capital preservation.

Answer

Ravi Srivastava, President of New Technologies, stated that significant lack of clarity remains on multiple aspects of the 45V rules, making it too early to comment on capital. CEO Nick DeIuliis added that 45V is just one part of a broader CMM monetization strategy. Regarding buybacks, CFO Alan Shepard declined to discuss tactics but noted that blackout periods are a consideration in their capital allocation process.

Bertrand Donnes asked about the removal of the 2025 capital disclosure from recent materials and whether operational efficiencies were still similar. He also inquired about the directional outlook for the New Tech business and the timeline for the AutoSep project.

Answer

CFO Alan Shepard stated that full 2025 guidance will be provided next quarter and is dependent on gas prices, but confirmed that operational efficiencies are similar or better. Regarding New Tech, Shepard deferred detailed guidance but noted the current focus for AutoSep is on building out the fleet with its JV partner.

Bertrand Donnes of Truist Securities inquired about Kimbell's M&A strategy, including target basins and deal size preference, and asked about the drivers behind the record quarterly lease bonus.

Answer

President and CFO Davis Ravnaas stated that while the Permian remains a key focus for M&A, Appalachia is an emerging area of interest. He emphasized a preference for larger, impactful deals over smaller ones to better utilize the balance sheet and navigate competitive dynamics. He attributed the record lease bonus primarily to new activity in the Mid-Continent's Cherokee shale play.