Tim Rezvan

Tim Rezvan asked about the increase in Kimbell Royalty Partners' net line-of-sight maintenance well assumption to 6.8 from 6.5 and the company's strategy for addressing mezzanine equity given strong free cash flow and debt reduction.

Answer

President and CFO Davis Ravnaas clarified that the modest increase in the maintenance well level was due to the Boren Resources acquisition in Q1 of the prior year, which added high-upside unconventional horizontal properties. On mezzanine equity, Mr. Ravnaas stated Kimbell anticipates redeeming a portion in the latter half of the year, opportunistically balancing cash interest expense on the RBL with mezzanine costs.

Tim Rezvan asked why Kimbell Royalty Partners' net line-of-sight maintenance well assumption increased to 6.8 from 6.5, despite Permian exposure and increasing lateral lengths, and how the company plans to address its mezzanine equity given steady free cash flow.

Answer

President and CFO Davis Ravnaas explained that the increase in the maintenance well assumption was due to the acquisition of Boren's unconventional, horizontal properties in Q1 2025. Regarding mezzanine equity, he stated that Kimbell anticipates redeeming a portion in the latter half of the year, opportunistically balancing cash interest expense on the RBL with mezzanine costs.

Tim Rezvan of KeyBanc Capital Markets inquired about Kimbell's strategic interest in an upstream partnership, similar to the recent Citio/Viper transaction, and asked how the company is re-evaluating its acquisition and development strategy given a potential slowdown in Permian oil production and rising gas-directed activity.

Answer

President and CFO R. Davis Ravnaas stated that while an operator partnership is an option the company explores, its primary focus remains on accretive M&A deals under $500 million. He reiterated Kimbell's basin-agnostic, return-focused approach, noting that the recent outsized Permian activity was opportunity-driven and that they are currently seeing a slowdown in Permian packages coming to market. Chairman and CEO Robert Ravnaas added well wishes to the leadership team at Citio.

Tim Rezvan followed up on the absence of a formal debt or leverage target, noting modeling suggests sub-$5 billion debt in 2027, and asked about the appropriate leverage profile given an 8-year inventory life, which he suggested might be shorter than some peers. He also inquired about the Permian assets acquired from Civitas, specifically if the 8-year inventory number uses Civitas's assumptions (focusing on Wolfcamp A and B) and if organic additions are anticipated from deeper intervals.

Answer

EVP and CFO Wade Pursell reiterated comfort with the mid-ones leverage area, aiming to drive it down to the low-ones (1.2-1.3), considering liquidity, maturities, and mid-cycle commodity price assumptions. President and CEO Beth McDonald clarified that the 8-year inventory was calculated at $60 oil and $3 gas (compared to $70 oil and $3.25 gas previously) and represents 3P high-confidence locations. Regarding the Permian, Beth McDonald stated that the technical team is actively optimizing stacked pay development using multivariate analysis and geomechanical modeling, anticipating continued optimizations into 2027, indicating ongoing work beyond prior Civitas assumptions.

Tim Rezvan, a Managing Director and Equity Research Analyst at KeyBanc Capital Markets, questioned SM Energy's appropriate leverage profile given the 8-year inventory life, which he noted might be shorter than peers. He also asked about the Permian assets acquired from Civitas, specifically if the 8-year inventory number incorporates deeper intervals beyond Wolfcamp A and B, and if organic additions are anticipated from further technical work.

Answer

EVP and CFO Wade Purcell expressed comfort with current mid-ones leverage, aiming for low-ones (1.2-1.3) before increasing stock buybacks, emphasizing liquidity and commodity price assumptions. President and CEO Beth McDonald clarified the 8-year inventory is based on conservative price assumptions ($60 oil/$3 gas) and high-confidence 3P locations. Regarding Permian assets, Beth highlighted the technical team's ongoing optimization of stacked pay development in the Midland Basin, suggesting potential for organic inventory additions through advanced analysis in late 2026 and 2027.

Tim Rezvan asked for details on Uinta logistics improvements at the Price River Terminal and the company's strategic outlook on natural gas prices heading into 2026.

Answer

EVP & COO Beth McDonald characterized the record volumes moved through the terminal as strong operational execution in response to higher production, not a change in marketing strategy. President & CEO Herbert Vogel reiterated a cautious stance on natural gas, waiting for sustained price signals and structural demand growth before shifting capital, while noting they are happy to hedge future gas production.

Tim Rezvan asked about Matador Resources' midstream value realization, a key priority for 2026, and the aggregate San Mateo and Matador Midstream EBITDA guidance. He questioned the timeline for a potential drop of Matador assets into San Mateo and whether it depends on the resolution of the Five Point continuation vehicle.

Answer

Joe Foran, Founder, Chairman, and CEO, described a holistic approach to planning, considering economic climate, hedging, and strong vendor/bank relationships. He noted that the Five Point continuation fund is making steady progress and is expected to be resolved in the near term. Chris Calvert, EVP and Chief Operating Officer, added that Five Point's structuring of a deal for future growth is exciting, especially with the productivity of Ameredev acreage, and that the continuation vehicle signifies Five Point's continued support for San Mateo's growth story.

Tim Rezvan of KeyBanc Capital Markets inquired about Matador Resources Company's second priority for 2026, 'midstream value realization,' and the aggregate San Mateo and Matador Midstream EBITDA guidance. He asked about the timeline for a potential drop-down of Matador assets into San Mateo, specifically if it required the Five Point continuation vehicle to settle, and requested a theoretical walk-through of the steps.

Answer

Joe Foran (Founder, Chairman, and CEO) described a holistic, collaborative planning approach, adapting to economic and political climates. He mentioned hedging 50% of oil and the importance of vendor relationships. Regarding Five Point, Foran stated they have been good partners, and the continuation fund is making steady progress, expected to be resolved soon, though Matador doesn't control the timeline. He also noted unanimous support from their 19-bank group, which increased their borrowing base. Chris Calvert (EVP and Chief Operating Officer) added that Five Point's continuation vehicle allows them to be part of San Mateo's future growth, highlighting the Ameredev acreage productivity's connection to both E&P and Matador Midstream. Calvert reiterated that the cadence of any drop-down is still being worked on.

Tim Rezvan of KeyBanc Capital Markets questioned why Matador's midstream EBITDA guidance for the year remained unchanged despite a record-setting second quarter and reduced midstream operating expense guidance.

Answer

Brian Willey, EVP of Midstream, explained that the record Q2 performance was driven by connecting approximately 30 new Matador wells and significant chemical cost savings. He clarified that the first-half EBITDA represents about half of the full-year guidance range, and the company anticipates a shift in drilling activity away from areas serviced by San Mateo in the second half, thus justifying the decision to maintain the existing annual guidance.

Tim Rezvan from KeyBanc Capital Markets questioned why Matador's full-year midstream EBITDA guidance remained unchanged despite a record second quarter and lower midstream operating expense guidance.

Answer

Brian Willey, EVP of Midstream, explained that the record Q2 performance was driven by Matador's own record production growth, with approximately 30 new wells connected. He noted that first-half EBITDA is on track with the annual guidance range and that drilling activity is shifting to areas where the San Mateo midstream asset is less active, balancing out the full-year forecast.

Tim Rezvan of KeyBanc Capital Markets questioned why Matador's full-year midstream EBITDA guidance remained unchanged despite a record second quarter and lower midstream operating expense guidance.

Answer

Brian Willey, EVP of Midstream, explained that the record Q2 performance was driven by connecting approximately 30 new Matador wells. He clarified that the full-year guidance is still appropriate as Matador's drilling activity is scheduled to shift to the Animal Bridge area, where San Mateo has less operational presence. Willey also highlighted a $1 million cost saving on chemicals achieved through coordination between the upstream and midstream teams.

Tim Rezvan of KeyBanc Capital Markets questioned why Matador's full-year midstream EBITDA guidance remained unchanged despite a record second quarter and lower operating expense guidance.

Answer

Brian Willey, EVP of Midstream, explained that the record Q2 performance was driven by connecting approximately 30 new Matador wells, leading to record production. However, he noted that the full-year guidance is still appropriate as Matador's drilling activity will shift to areas outside of the San Mateo operational footprint in the second half of the year, balancing out the strong first-half results.

Tim Rezvan from KeyBanc Capital Markets asked for more details on the Daenerys appraisal well's next steps, the expected timing of appraisal results (late 2026), and potential development pathways if results are positive. He also inquired about Talos's medium-term growth strategy, specifically if organic growth precludes inorganic opportunities, given the company's strong operational and financial traction over the past year.

Answer

Paul Goodfellow, President and CEO of Talos Energy, stated the Daenerys appraisal well is expected to spud late in Q2, with evaluation by late Q3/early Q4. He noted the well is designed for maximum appraisal and future utility, with parallel design work for standalone or tie-back scenarios, acknowledging weather risk. On growth, Mr. Goodfellow reiterated the strategy's focus on rigorous execution and active organic growth, including recent lease sale activity. He confirmed continued pursuit of bolt-on and inorganic opportunities outside the Gulf of Mexico, emphasizing disciplined capital allocation and a high bar for strategic fit.

Tim Rezvan sought clarification on the 'late 2026' timing for Daenerys appraisal results and the potential path forward if results are positive. He also asked about Talos Energy's medium-term strategy, specifically regarding the balance between organic and inorganic growth to achieve greater scale and relevance.

Answer

Paul Goodfellow, President and CEO of Talos Energy, stated the Daenerys appraisal well is expected to spud late in Q2 2026, with results anticipated by late Q3/early Q4, noting weather risks. He reiterated the disciplined capital allocation framework for growth, emphasizing organic efforts like lease acquisitions and a high bar for accretive inorganic opportunities that fit Talos's core skills.

Tim Rezvan of KeyBanc Capital Markets asked for an update on the Zama project, referencing recent news about Pemex and the delayed sell-down of Talos's interest, and sought clarity on the state of the deepwater M&A market.

Answer

VP & Interim CFO Gregory Babcock explained the Zama transaction closing was delayed to late Q3 due to refiling paperwork. President and CEO Paul Goodfellow added that the partnership is strong and working with Pemex to optimize the development plan. Regarding M&A, Goodfellow noted strong interest in deepwater assets and confirmed Talos is actively evaluating opportunities.

Tim Rezvan asked about Black Stone Minerals' Permian strategy, including leasing outside the Coterra development area and the priority of Permian activities given the focus on Haynesville. He also questioned the company's confidence in funding the $0.30 distribution through distributable cash flow, especially with lower Henry Hub strip prices, and sought clarification on the $30 million exploration expense related to seismic, its cadence, and future adjustments to adjusted EBITDA.

Answer

Co-CEO Taylor DeWalch and SVP and CFO Chris Bonner discussed Permian activity, noting excitement for Coterra and Southern Delaware developments, with volumes expected later in 2026 and materially in 2027, while being thoughtful about broader Permian forecasting due to pricing. They expressed confidence in funding the distribution through minimum commitments and strong natural gas hedges. Chris Bonner clarified that the $30 million expense is over 90% seismic, with most costs incurred in 2026 and completion by early 2027, and no significant additional seismic costs are anticipated in this development area. Taylor DeWalch added that the proprietary seismic data could generate future licensing revenue.

Tim Rezvan from KeyBanc Capital Markets asked about Black Stone Minerals' strategy and priorities in the Permian Basin, given comments on leasing outside the Coterra area and lower liquids guidance for 2026, and also questioned the confidence in funding the $0.30 distribution through distributable cash flow given Henry Hub strip prices. He also sought clarification on the $30 million exploration expense, specifically if it was all seismic and its cadence.

Answer

Co-CEO Taylor DeWalch explained that Permian activity includes high-interest Coterra development and a large-scale Southern Delaware project, with volumes expected later in 2026 and more significantly in 2027. SVP and CFO Chris Bonner added that broader Permian development forecasting is thoughtful due to current pricing. Taylor expressed confidence in funding the distribution based on minimum commitments and ongoing activity, with Chris noting strong natural gas hedges. Regarding seismic, Chris confirmed the $30 million expense is over 90% seismic, primarily in 2026, with completion by early 2027, and no significant additional costs expected in this area. Taylor emphasized the proprietary nature of the seismic shoots for subsurface analysis and potential future licensing revenue.

Tim Rezvan of KeyBanc Capital Markets asked for clarification on the updated production guidance, questioning why Blackstone's acreage isn't participating in the broader Haynesville activity uplift. He also sought more specific numbers on the goal to double development obligations and inquired about the expected oil/gas mix for the 2026 production growth.

Answer

Chairman & CEO Thomas Carter explained the production lag stems from Aethon's drilling slowdown in late 2023, a decision that takes 18-24 months to impact volumes. He detailed a strategic shift to diversify operators beyond Aethon, which will take time to ramp but is expected to significantly increase well counts by 2028-2030. SVP & CFO Taylor DeWalch added that recent rig additions have not been on Blackstone's high-interest acreage and projected the 2026 production mix would be around 25-26% oil, similar to 2024 levels.

Tim Rezvan asked about Texas Pacific Land Corporation's exposure to rare earths exploration activity in Hudspeth County, where TPL holds meaningful acreage, and requested any color on ongoing exploration or right-of-way activities.

Answer

CEO Tyler Glover confirmed that TPL has a couple of exploration projects currently underway on properties acquired or traded in the last seven or eight years. He noted that while it's in the early stages, findings seem promising and TPL will provide updates as more information becomes available.

Tim Rezvan inquired if Texas Pacific Land Corporation plans to release more detailed information on its data center opportunities beyond existing shareholder commentary. He also asked for clarification on the efficiencies TPL aims to capture with its new desalination process, particularly regarding waste heat capture and its impact on power intensity, given regional electricity constraints. Additionally, Mr. Rezvan sought information on TPL's exposure to rare earths exploration and right-of-way activity in its Hudspeth County acreage.

Answer

CEO Tyler Glover indicated that TPL eventually plans to release more information on data centers but is currently bound by strict confidentiality agreements, viewing privacy as a competitive advantage. EVP of Texas Pacific Water Resources, Robert Crain, explained that the desalination design adaptation and waste heat capture aim to reduce energy consumption (kilowatt per hour per barrel), with waste heat acting as 'almost free energy' to lower power intensity, especially when combined with power generation. Mr. Glover confirmed that TPL has a couple of early-stage rare earths exploration projects in Hudspeth County with promising initial findings, committing to provide updates as more information becomes available.

Tim Rezvan inquired about Magnolia's development approach, specifically the pad template and lateral lengths, and asked about M&A interest in large PDP-heavy packages versus smaller opportunities. He also sought clarity on the expected oil mix for 2026.

Answer

Chris Stavros, Chairman, President, and CEO, confirmed that 3-4 wells per pad remains typical, with lateral lengths varying but averaging 8,000-8,500 feet, drilling longer when possible. He expressed disinterest in large PDP-heavy deals, preferring undeveloped upside and leaning towards liquids. Mr. Stavros stated he expects absolute oil production to grow 2%-3% in 2026, with the oil mix percentage remaining in the mid-30s to 40% range.

Tim Rezvan questioned Magnolia's 2026 development approach, specifically regarding multiwell pads in Giddings, typical pad template size, and lateral lengths. He also asked about the M&A market, inquiring if Magnolia would consider large, potentially transformative deals, and the expected oil mix for 2026.

Answer

Chris Stavros, Chairman, President, and Chief Executive Officer, confirmed that the typical pad size remains around 3-4 wells, with average lateral lengths of 8,000-8,500 feet, though longer laterals are drilled when possible. He reiterated disinterest in PDP-heavy large deals, preferring undeveloped upside and liquids-rich assets, while acknowledging the greater risks of large acquisitions. For 2026, Mr. Stavros expects absolute oil production to grow by 2-3%, with the oil mix percentage remaining in the mid-30s to 40% range.

Tim Rezvan asked about the strong but gassier wells brought online, questioning if the production profile was a tactical decision and how it informs future drilling flexibility. He also challenged the mid-single-digit growth target, given the low reinvestment rate and expanded inventory, asking if a rig increase is inevitable to sustain recent growth rates.

Answer

CEO Christopher Stavros confirmed it was a tactical decision to drill in a gassier area to capture better gas pricing, but the prolific nature and high pressure of the wells, on both the gas and oil side, were unanticipated. Regarding growth, Stavros reiterated that the model targets mid-single-digit growth to avoid enhancing decline rates. He explained that the higher growth seen is an outcome of better-than-expected well results, not a change in strategy, and the plan remains to grow mid-single-digits while maximizing capital efficiency.

Tim Rezvan of KeyBanc Capital Markets questioned the strategy behind the gassier, high-performing wells brought online earlier in the year and asked why the company doesn't target higher growth given its strong balance sheet and inventory.

Answer

CEO Christopher Stavros confirmed it was a "tactical decision" to pivot to a gassier area to capture better gas pricing, but the prolific nature of the wells, including strong oil production, exceeded expectations. Regarding growth, he reiterated that the business model targets mid-single-digit growth (4-6%) to avoid accelerating decline rates. He noted that the current 10% growth is an outcome of exceptional well performance, not a change in the disciplined capital strategy.

Tim Rezvan asked about Murphy Oil's medium-term appraisal plan for Vietnam, specifically how the company views other prospects in the Cuu Long Basin beyond the 2026 Hai Su Vang appraisals and Lac Da Vang north well. He also inquired about the drivers behind the 7% decline in preliminary year-end 2025 proved developed reserves, particularly the nearly 13% decline in oil.

Answer

Eric Hambly (President and CEO) characterized Vietnam's strategy as developing two hubs (Lac Da Vang and Hai Su Vang), with other discoveries likely tied into these future facilities. He anticipated testing a significant part of the remaining prospectivity between 2028 and 2029. Regarding reserves, Hambly noted a 103% overall proved reserve replacement, attributing proved developed reserve movement to lumpiness in offshore projects (e.g., Chinook 8 moving from PUD to PD in 2026) and prior years' significant adds, characterizing it as normal and a positive move to 57% proved developed.

Tim Rezvan asked about the medium-term appraisal plan for Vietnam, specifically concerning the prospects highlighted on slide 13 (Lac Da Trang, Lac Da Nau, and Lac Da Hong) beyond the 2026 plan for Hai Su Vang and Lac Da Trang. He also inquired about the context for the preliminary year-end 2025 reserves decline, particularly the 7% proved developed and almost 13% oil decline, asking if it was primarily price-related or driven by other factors.

Answer

Eric Hambly, President and CEO, and Atif Riaz, VP, Investor Relations and Treasurer, described Vietnam's emerging hubs around Lac Da Vang (northern) and Hai Su Vang (southern), with other discoveries like Lac Da Trang, Nau, and Hong likely tying into these facilities in the future. An exploration well for Lac Da Vang north is planned for this year, and remaining prospectivity is expected to be tested between 2028 and 2029. For reserves, they noted a 103% overall proved reserve replacement, maintaining reserves around 700 million barrels for over a decade. The proved developed reserves, which are 50-57% of total proved, can experience lumpiness due to offshore projects moving from proved undeveloped to proved developed (e.g., Chinook 8 this year), but this is considered normal and a positive move for the company's proved developed percentage.

Tim Rezvan asked if the significant share repurchase in Q3 was an 'extreme quarter' due to low share prices, or if Viper would consider even larger buybacks at the expense of the variable dividend if market dislocation warranted it. He also inquired about dialogue with 'unnatural holders' (new holders from the CTO closing, representing about 13% of shares) and how Viper plans to address a potential overhang if they decide to sell.

Answer

CEO Kaes Van't Hof stated that the extent of buybacks 'depends,' emphasizing Viper's high margins (92-93% at $60 oil) and flexibility due to others spending capital to maintain production. He suggested they could lean in further without compromising cash flow or the balance sheet if market dislocation continues. Regarding 'unnatural holders,' he confirmed Viper is prepared to address potential sales, noting these holders merged their stock knowing the long-term upside, and affirmed Viper's 'firepower' to buy back shares from any large shareholder.

Tim Rezvan of KeyBanc Capital Markets highlighted the difficulty in modeling Infinity's production due to its dynamic commodity mix and requested more specific detail on the anticipated shift towards natural gas for the remainder of the year.

Answer

President and CEO Zach Arnold acknowledged the modeling challenge and provided a forward-looking turn-in-line schedule for both oil and gas wells to illustrate the production ramp. However, when pressed for a specific year-end percentage, EVP and CFO David Sprowl declined to provide a quantitative commodity mix breakdown at this time.

Tim Rezvan from KeyBanc Capital Markets highlighted the complexity of modeling the company's variable commodity mix, especially with deferred oil production. He asked for more detailed guidance on the expected production mix between oil and natural gas for the remainder of the year and suggested this be a standard part of future guidance.

Answer

President and CEO Zach Arnold acknowledged the modeling challenge and provided a detailed turn-in-line schedule for the rest of the year, outlining the number of oil and gas wells expected to come online in Q3 and Q4 to provide more clarity on the production ramp. However, EVP & CFO David Sproule declined to commit to a specific percentage breakdown for the year-end commodity mix at this time.

Tim Rezvan of KeyBanc Capital Markets sought clarification on the pace of share repurchases in the current quarter, asking if the preferred stock redemption process would create any blackout windows or otherwise inhibit the company's ability to buy back stock. He also asked if the discretionary acreage acquisition program could be considered a perpetual, ongoing part of Gulfport's strategy.

Answer

EVP & CFO Michael Hodges explained that while they must be mindful of the ongoing preferred redemption, there are ways to continue common share repurchases, such as using pre-established trading plans. CEO John Reinhart described the acreage acquisition program as a continuation of a multi-year effort, noting that the land team continues to find sufficient high-quality opportunities in the Utica and surrounding areas, making it a very effective use of cash that they intend to pursue.

Tim Rezvan of KeyBanc Capital Markets questioned the realism of achieving the 1.0x leverage target in the next two years and asked about the appropriate absolute debt balance for the company. He also asked if Crescent would be comfortable with net debt increasing for a leverage-neutral acquisition.

Answer

CEO David Rockecharlie reiterated the company's framework of operating between 1.0x and 1.5x leverage and its focus on paying down debt with free cash flow. CFO Brandi Kendall detailed the path to deleveraging, including paying down the RBL by year-end, and confirmed that for M&A, the company is comfortable going up to 1.5x leverage as long as the deal meets its return and accretion criteria.

John, on for Tim Rezvan, questioned if the quarter's pattern of small acquisitions is repeatable and asked about the company's comfort with leverage ticking higher, particularly in relation to its 1.0x target.

Answer

CEO Christopher Conoscenti affirmed that the pipeline for smaller, bolt-on acquisitions remains robust and repeatable, contrasting them with more episodic large-scale M&A. On leverage, he stated the strategy is unchanged: maintain a strong balance sheet, use retained cash to pay down debt, and preserve flexibility. He explained they will borrow for accretive deals and then work leverage back towards the 1.0x goal.