Kalei Akamai

Kalei Akamai asked about the recapitalization plan for Pinnacle Gas Services, specifically the cost of addressing the preferred equity and the planned size and sufficiency of a new bank credit facility to support midstream ambitions. She also inquired about interest in the potential equity sell-down and the timing rationale for the Marquez plant expansion, particularly its connection to the NextEra Data Center project.

Answer

President and CFO Roland Burns explained the plan to recapitalize Pinnacle by selling common equity to eliminate expensive preferred equity, allowing cash flow to fund CapEx and establish a low-cost credit facility, with a goal to complete this by May. Chairman and CEO Jay Allison added that the Pinnacle system's maturation aligns with increased rig activity and production, servicing both data center and LNG demand. Roland Burns clarified that the Marquez plant expansion (Train Two) is expected to be operational by summer 2026, positioned ahead of production to capture third-party business, with heavy CapEx largely behind it by summer.

Kalei Akamai asked for a definition of Diamondback Energy's maintenance capital at $925 million per quarter, including the associated maintenance oil production level and if it encompasses all tradable non-DNC spend. She also requested an update on the DUC backlog at year-end and the company's intentions for activating it, especially with continuous pumping, and if additional frac crews would be needed.

Answer

Kaes Van't Hof (CEO, Diamondback Energy) stated the Q4 CapEx range ($875M-$975M) multiplied by four is a good estimate for holding the new baseline of 510,000 bbl/day (505,000 bbl/day in Q1 2026) flat, including total DC&E plus non-DC&E CapEx, highlighting improved capital efficiency. He noted that with oil prices and efficiencies, they drilled more wells than expected, maintaining a strong DUC backlog as a structural advantage. He added that continuous pumping uses one less crew (half to one less annually) and that pipe is being put in the ground almost as cheaply as COVID-era days.

Kalei Akamai from Bank of America inquired about Infinity's preliminary thoughts on its 2026 activity program and capital spending, as well as the company's perspective on in-basin demand and egress in Ohio, referencing a recent power plant acquisition and the Borealis pipeline project.

Answer

President and CEO Zach Arnold indicated that 2026 CapEx is not expected to decrease as the company will continue to focus on developing its high-return inventory to drive growth. He also expressed excitement about rising in-basin demand from power generation and data centers, which he believes will improve regional pricing by supplanting the need for new takeaway pipeline projects.