Kalei Akamine

Kalei Akamine asked how long Viper's Permian volumes could continue to grow, given basin-wide activity reductions and expectations of zero oil growth, especially since Viper is exposed to about half of all third-party activity and benefits from its Diamondback relationship. He also inquired if Diamondback (FANG) would consider using its free cash to purchase more VNOM shares, given Viper's current valuation.

Answer

CEO Kaes Van't Hof attributed Viper's growth to the Diamondback-Viper relationship, expecting a 5-7% interest in Diamondback's wells for the next five years, combined with broad third-party exposure. Regarding FANG buying VNOM shares, he stated it's 'certainly on the table' but noted Diamondback's own strategic priorities, including reducing its share count. He emphasized Viper's undervalued status and the rationale for the non-Permian asset sale to enable Viper to reduce its own share count.

Kalei Akamine asked about key operating wins in the Marcellus since the Cabot deal four years ago, and whether Coterra Energy's best practices could create value through M&A in the Marcellus landscape. She also questioned the Marcellus inventory math.

Answer

Blake Sirgo, Executive Vice President of Business Units, highlighted significant improvements in the Marcellus asset, including increased lateral length, optimized well spacing, and cost reductions (e.g., piping frac water). Michael Deshazer, Executive Vice President of Operations, clarified that Marcellus inventory math is not a simple calculation but considers a three-year average of wells drilled and adjusts for capital spend and new go-forward costs, allowing more wells for the same capital.

Kalei Akamine asked about key operating wins in the Marcellus since the Cabot deal four years ago and if the application of Coterra's best practices could create value through M&A. She also questioned the Marcellus inventory math, specifically if it's a simple calculation of current TIL count versus years and if it includes DMIC delineation work.

Answer

Blake Sirgo, Executive Vice President of Business Units, highlighted significant increases in lateral length, optimized well spacing, and cost reductions across the value chain, such as piping frac water. Michael DeShazer, Executive Vice President of Operations, clarified that inventory math uses a three-year average of wells drilled and adjusts for capital spend and new go-forward costs, allowing more wells for the same capital as costs decrease.

Kalei Akamine of Bank of America challenged the use of cash, asking why Coterra prioritizes term loan repayment over more aggressive share buybacks, especially given the stock's discount and strong balance sheet. He also inquired about plans to participate in federal lease sales in New Mexico.

Answer

EVP & CFO Shane Young defended the debt paydown as a facilitator for more robust and consistent buybacks in the long term by reducing volatility. He did not rule out an increased pace of buybacks in the second half of the year. CEO Thomas Jorden confirmed Coterra hopes to be a competitive participant in upcoming federal lease sales, which he noted were an important part of the calendar in the past.

Kalei Akamine sought clarification on the definition of maintenance capital at $925 million per quarter, asking for the associated maintenance oil production level and if it includes non-D&C spend. She also asked for an update on the D&C backlog at year-end and how Diamondback plans to activate it, specifically if continuous pumping would reduce the need for additional frac crews.

Answer

Kaes Van't Hof (CEO, Diamondback Energy) explained that the Q4 CapEx range, multiplied by four, is a reasonable estimate for total DC&E plus non-DC&E CapEx to maintain approximately 510,000 barrels of oil per day (505,000 bbl/day in Q1 2026). He highlighted improved capital efficiency compared to previous years. Regarding the DUC backlog, Kaes Van't Hof stated that it remains well-positioned due to higher-than-expected drilling activity, providing a structural advantage. He noted that continuous pumping is exciting because it allows for using 'one less crew, most likely half to one less crew on an annual basis.'

Kalei Akamine of Bank of America asked about the company's 2026 oil hedging strategy and potential operational synergies from the pending Endeavor water asset sale.

Answer

CEO Kaes Van't Hof explained their patience on 2026 hedges is due to the high cost of deferred puts, and the need for hedging decreases as the balance sheet strengthens. He stated that the base dividend is protected at $37-$38 oil. Regarding the water assets, he noted that while a sale would create synergies for the combined system, it would not meaningfully change Diamondback's own operational capabilities, which are already set up for large-scale development.

Kalei Akamine asked for an update on frac efficiency goals (wells per crew) and inquired about the conditions that would lead to hitting the low end of the revised capital guidance range.

Answer

President Kaes Van’t Hof confirmed that the goal of 120 wells per crew per year is achievable, which could mean needing fewer fleets in the future. He clarified that reaching the low end of the capital range ($3.4 billion) would be a negative outcome, likely triggered by a 'red light' macro scenario with sub-$50 oil prices, forcing another crew to be dropped.

Kalei Akamine asked about the potential financial structure of a data center deal, including how benefits like land sales or gas pricing would flow back to Diamondback. He also inquired about the possibility of creatively using Viper Energy (VNOM) shares to manage the Endeavor share overhang.

Answer

President Kaes Van't Hof indicated the main benefit of a data center deal would be equity participation in the power plant and supplying the gas, rather than a simple land sale. The structure is flexible, with discussions ongoing about fixed price, collars, or index pricing for gas. He declined to comment on specific strategies for the share overhang but reiterated that Diamondback is happy with its majority ownership in Viper (VNOM), which was structured to keep Viper under-levered for future consolidation.

Kalei Akamine requested more detail on the 2025 CapEx plan, including original well cost assumptions and non-D&C spending. He also asked about the potential deal structure for the Deep Blue asset drop-down and whether the large royalty drop-down to Viper would be a single transaction.

Answer

President and CFO Kaes Van't Hof noted the original well cost assumption was ~$625/foot, now down to $600. He mentioned some one-time environmental and infrastructure spending in 2025 that should normalize lower. For asset sales, he stated a preference for cash from Deep Blue but will remain flexible. For the Viper transaction, the preference is to complete most, if not all, of the drop-down at once to quickly establish the new, larger scale of the business.

Kalei Akamine asked about potential upside to Range Resources' 2026 and 2027 plans regarding capital and volume, and sought an outlook on the NGL macro, including propane and ethane, and whether ethane demand could lead to natural gas parity.

Answer

CEO Dennis Degner identified operational efficiencies in drilling and completions, along with timely infrastructure utilization from midstream partners like MPLX, as key areas for potential upside. VP of Marketing Alan Engberg expressed optimism for the NGL macro, citing increasing demand and export capacity for both LPG and ethane. He noted record ethane exports in September and anticipated improved ethane spreads relative to natural gas, driven by global demand and new cracker startups.

Kalei Akamine (Bank of America) asked about potential upside opportunities for Range Resources' 2026 and 2027 plans, specifically regarding capital and volume performance, and sought an outlook on the NGL macro, including demand growth for propane and ethane and its impact on regional pricing.

Answer

CEO Dennis Degner highlighted operational efficiencies, long lateral drilling, and timely infrastructure utilization as key upside drivers. VP of Marketing Alan Engberg expressed optimism for NGLs, citing increasing demand from commissioned infrastructure, new PDH units, and export capacity expansions, which are expected to improve ethane and LPG pricing relative to natural gas.

Kalei Akamine asked about EQT's view on 2026 maintenance production given recent portfolio changes, the potential for data center projects in Ohio, and an update on XCL midstream system projects like Clarington Connector.

Answer

Jeremy Knop, CFO, stated that 2026 maintenance production is expected to be approximately flat to the 2025 exit rate. Toby Rice, President and CEO, confirmed EQT is engaged in conversations for Ohio data center opportunities, leveraging its commercial footprint. He updated that the Clarington Connector project is planned for 2026, with some spend in 2025, aiming to de-bottleneck the system for high-return, low-capital gains.

Kalei Akamine sought clarity on EQT's maintenance production for 2026, given recent portfolio changes. She also asked about EQT's reach for data center projects in Ohio and an update on XCL midstream system projects like Clarington Connector.

Answer

Jeremy Knop (CFO, EQT) stated that EQT expects 2026 production to be approximately flat to the 2025 exit rate. Toby Rice (President and CEO, EQT) confirmed EQT considers opportunities across its upstream, midstream, and commercial footprints, including Ohio. He noted Clarington Connector is planned for 2026 to de-bottleneck the system, with some spend in 2025.

Kalei Akamine of Bank of America asked for guardrails on the CapEx profile for EQT's new growth options and inquired about leading-edge D&C capital efficiency metrics compared to 2024, as well as the remaining runway for improvement.

Answer

President and CEO Toby Rice indicated a low single-digit production growth profile to meet new demand, enabled by EQT's scale and low-cost structure. He highlighted single-digit well cost improvements from 2024 to H1 2025, with more benefits expected from the compression program and Olympus integration. CFO Jeremy Knop added that past infrastructure investments are a key driver of current well cost reductions, reinforcing their strategy of "spending money to make money."

Kalei Akamine from Bank of America asked about the farmout process, seeking to understand what a successful outcome would entail for Tamboran Resources. She also questioned whether the company, under its current leadership and in preparation for a new CEO, remains committed to its original business plan of pursuing both domestic gas sales and LNG development opportunities.

Answer

Dick Stoneburner, Chair & Interim CEO, stated it was premature to discuss specific valuation expectations for the farmout, emphasizing it's an ongoing, negotiated process with strong interest from a wide range of counterparties. Regarding market opportunities, Stoneburner affirmed Tamboran's continued interest in both domestic gas sales (initially to the Northern Territory by mid-2026, then potentially Southeast markets as Phase Two) and long-term LNG development (brownfield Darwin LNG or greenfield Northern NT LNG), noting that the timing and specific approach might be influenced by the farmout partner.

Kalei Akamine from Bank of America inquired about Infinity Natural Resources' preliminary plans for its 2026 activity program, specifically regarding capital expenditure levels, and also asked for the company's perspective on evolving in-basin natural gas demand in Ohio.

Answer

President and CEO Zach Arnold stated that while it's early for 2026 guidance, he does not expect CapEx to decrease from 2025 levels as the company will continue to focus on growth. Regarding in-basin demand, Arnold expressed excitement about new power generation and data centers creating significant local demand, potentially improving local pricing differentials.

Kalei Akamine from Bank of America inquired about Infinity Natural Resources' preliminary thoughts on its 2026 activity program, specifically regarding capital expenditure levels and the balance between growth and free cash flow. He also asked for 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 responded that while it's early for 2026 guidance, he does not expect capital expenditures to decrease, as the company will continue to focus on developing its high-return inventory to drive growth while maintaining free cash flow. Regarding in-basin demand, Arnold expressed excitement, stating that new power generation and data center demand effectively supplants the need for new takeaway pipelines, which should lead to improved pricing differentials in Ohio, West Virginia, and Pennsylvania.

Kaleinoheaokealaula Akamine from Bank of America inquired about the capital outlook for 2026, questioning if it would be a 'harvest year' following 2025's growth. She also asked what recent M&A transactions in the region signal about asset valuations and Infinity's ability to create value through acquisitions.

Answer

President and CEO Zack Arnold stated that while 2025 CapEx guidance is firm, the 2026 plan is still under evaluation, but the company remains focused on growth. Regarding M&A, Arnold noted that recent deals provide confidence that the bid-ask spread for gas assets is bridgeable. EVP and CFO David Sproule added that recent transaction multiples would have been accretive to Infinity and that the company's strong balance sheet allows them to be patient and selective.

Kalei Akamine of Bank of America asked if the company can now achieve its long-term production targets without the significant capital ramp previously forecasted, given the major efficiency gains.

Answer

Chairman and CEO Ryan Lance affirmed that achieving growth with high capital efficiency is precisely the goal. He noted that since the last long-term plan was issued, the Marathon acquisition and significant efficiency improvements have allowed them to deliver production growth without adding rigs. He reiterated a preference for stable, consistent execution, letting production growth be an output of an efficient capital program.

Kalei Akamine of Bank of America sought details on a proposed permitting bill, including a potential P&A requirement, and asked about the Elk Hills Power Plant's potential PPA, including breakeven economics and resource adequacy pricing.

Answer

President & CEO Francisco Leon advised that details on the permitting bill were premature but stated CRC's existing P&A program of ~1,500 wells/year would prevent it from being a bottleneck. Regarding Elk Hills, Leon declined to provide specific 2026 guidance but emphasized the focus is on securing a long-term, premium-priced contract with a behind-the-meter customer, leveraging the value of reliable power paired with CCS.

Kalei Akamine of Bank of America asked about the strategy for the planned non-core asset sale, including its potential size and focus. He also inquired about the company's coring program in the Western Haynesville and whether it would help confirm their inventory assumptions.

Answer

President & CFO Roland Burns clarified the asset sale would focus on undeveloped drilling locations that the company cannot develop in the near term, rather than significant producing properties. Chairman & CEO M. Jay Allison added this monetization makes sense as they add new inventory in the Western Haynesville. Regarding the coring program, COO Daniel Harrison confirmed it is designed to gain geological data for steering laterals and to conduct scientific analysis to optimize completions and confirm gas-in-place estimates.

Kalei Akamine of Bank of America inquired about the non-core asset sale strategy, including the potential size, focus on inventory over production, and market valuation metrics. He also asked if the company's coring program was intended to confirm a development thesis of approximately 3,000 locations across three fairways.

Answer

President & CFO Roland Burns explained that the asset sale strategy is focused on monetizing drilling inventory that the company cannot develop in the near term, capitalizing on a market that now values locations highly. CEO M. Jay Allison added this is possible because of the vast new inventory being proven in the Western Haynesville. COO Daniel Harrison confirmed the coring program's goal is to gain geological data for well control and to scientifically validate gas-in-place estimates, aligning with the development view Akamine described.

Kalei Akamine of Bank of America asked about the strategy for non-core asset sales, including size and focus, and inquired about the goals of the coring program in the Western Haynesville and its alignment with the company's long-term development view.

Answer

President/CFO Roland Burns clarified that the divestiture plan focuses on monetizing drilling inventory that won't be developed soon, rather than selling current production, to capitalize on strong market demand. COO Daniel Harrison confirmed the coring program is designed to gain geological data for steering laterals and to analyze rock properties, which helps in understanding gas-in-place and optimizing future completions across the vast acreage.

Kalei Akamine of Bank of America asked about the strategy for the planned non-core asset sale, including its potential size and focus on PDP vs. undeveloped locations. He also inquired about the goals of the Western Haynesville coring program.

Answer

President and CFO Roland Burns clarified that the divestiture strategy is focused on monetizing undeveloped drilling locations that the company would not develop in the near term, rather than selling producing assets, to capitalize on strong market demand for inventory. CEO M. Jay Allison added this is logical as they add significant new inventory in the Western Haynesville. Regarding the coring program, COO Daniel Harrison confirmed it is designed to gain critical geological data for well steering, calculate original gas in place, and gather mechanical properties to optimize future completion designs.

Kalei Akamine of Bank of America asked about the strategy for the planned non-core asset sale, including its potential size and focus. He also inquired about the company's coring program in the Western Haynesville and whether it aims to confirm a development model of approximately 3,000 locations across three fairways.

Answer

President and CFO Roland Burns stated the asset sale will focus on monetizing drilling locations in the legacy Haynesville that Comstock cannot develop in the near term, capitalizing on strong market demand for inventory. Chairman & CEO M. Jay Allison added this is feasible due to the large inventory being added in the Western Haynesville. On the coring program, COO Daniel Harrison confirmed the analyst's view was 'spot on,' explaining the cores provide essential geological data for well steering and completion optimization to de-risk the vast acreage.

Kalei Akamine questioned the capital efficiency trajectory in the Montney, asking if the full impact of well cost savings is reflected in the current year's program, and also asked if Ovintiv would consider monetizing its Permian water infrastructure assets.

Answer

EVP & COO Greg Givens clarified that the $1.5 million per well savings in the Montney were already baked into the original guidance and that future improvements would be in the low single digits annually. President and CEO Brendan McCracken responded that monetizing the valuable water infrastructure is something the company evaluates on an ongoing basis.