Zach Parham

Zach Parham asked about National Fuel Gas Company's ability to capitalize on recent local natural gas price spikes and the potential for future growth projects within the pipeline business beyond currently announced initiatives.

Answer

Justin Loweth, President of Seneca Resources and National Fuel Midstream, confirmed that a small portion of daily gas volumes is kept open to tactically benefit from high prices in premium markets. Dave Bauer, President and Chief Executive Officer, expressed optimism for additional pipeline opportunities due to strategic asset location and ongoing dialogues, noting the company's conservative approach to project announcements.

Zach Parham with JPMorgan Chase & Co. inquired about National Fuel Gas Company's ability to leverage recent spikes in local natural gas prices and flow incremental volumes, and also asked about the potential for future pipeline growth projects beyond those already announced.

Answer

Justin Loweth, President of Seneca Resources and National Fuel Midstream, confirmed the company's ability to tactically utilize a small portion of daily gas to capitalize on high in-basin prices. Dave Bauer, President and CEO, expressed optimism for additional pipeline expansion opportunities due to the strategic location of their systems.

Zach Parham of JPMorgan Chase & Co inquired about the drivers for pausing the stock buyback program and asked for a quantification of the cash tax impact from the recent federal tax bill for fiscal 2026 and beyond.

Answer

President & CEO David Bauer explained the buyback pause is driven by capital allocation priorities, specifically preserving balance sheet flexibility for potential growth opportunities. Principal Financial Officer & Treasurer Timothy Silverstein added that the tax bill will lower the cash tax rate by 200-300 basis points in the near term, with a larger impact expected around 2027.

Zachary Parham of JPMorgan Chase & Co. inquired about National Fuel's share buyback strategy, asking how stock price influences the pace and if the completion target might be extended.

Answer

President and CEO David Bauer responded that while price is a factor, the company remains committed to its buyback program. He affirmed that after ensuring balance sheet strength, the primary capital allocation preference is organic growth or M&A, with returning capital to shareholders as the subsequent priority. The program may take slightly longer to complete, but the intention remains firm.

Zach Parham inquired about National Fuel Gas's buyback strategy, considering the stock's strong performance and all-time highs, and infrastructure build, including the Constitution pipeline.

Answer

CEO David Bauer stated that price is a factor, but the company remains committed to the buyback program. Regarding infrastructure, he noted New York State as a roadblock for the Constitution pipeline and emphasized the need for Clean Water Act reform.

Zach Parham asked about the factors driving lower D&T costs in the Hanzo basin for 2026, specifically whether it's due to efficiency gains or OFS deflation. He also inquired about Expand Energy's macro views and flexibility, asking if they anticipate returning to 7.5 bcf/d production in January and how they plan to bring volumes to market.

Answer

COO Josh Viets clarified that the reduction in D&T costs is primarily due to efficiency improvements, with OFS markets expected to remain relatively stable. He stated that Expand Energy has the capability to reach 7.5 bcf/d early in 2026 and will be responsive to market conditions, aiming to average 7.5 bcf/d across the year with flexibility to adjust volumes.

Zach Parham asked for details on the drivers behind the significant increases in drilling footage per day and whether further improvements are expected. He also inquired about the drivers of year-over-year well productivity increases in the Haynesville.

Answer

Executive VP & COO Josh Viets attributed the drilling efficiency to the integration of data sets post-merger, team collaboration, and the growing use of AI and data analytics, stating they are 'just scratching the surface.' He noted Haynesville productivity gains were driven by optimized drawdown strategies in a better price environment and a 15-20% increase in proppant intensity, made economic by the company's own sand source.

Zach Parham questioned the key drivers behind the significant increases in drilling footage per day and asked about the factors contributing to improved well productivity in the Haynesville.

Answer

Executive VP & COO Josh Viets attributed the drilling efficiency gains to post-merger data integration, collaborative efforts, and the growing use of AI and data analytics. Regarding Haynesville productivity, Viets explained that improvements stem from optimized drawdown strategies in a better price environment and enhanced completion designs with higher proppant intensity, made economic by the company's proprietary sand source.

Zach Parham from JPMorgan Chase & Co. sought details on the drivers behind the significant increases in drilled footage per day and asked about the potential for future gains. He also inquired about the specific factors driving year-over-year productivity improvements in the Haynesville.

Answer

Executive VP & COO Josh Viets attributed the efficiency gains to the integration of data sets, collaborative efforts, and the maturing use of AI and data analytics for real-time optimization. He noted that improved drawdown strategies and a 15-20% increase in proppant intensity, made economic by their own sand source, have boosted Haynesville well productivity.

Zach Parham inquired about Matador's well productivity trends, specifically the year-over-year change in BO per lateral foot, and the expectations for well productivity going forward into 2026, considering geographical mix and lateral lengths.

Answer

Tom Elsener, EVP of Reservoir Engineering, stated that Matador expects the same or better BO per foot in 2026, coupled with an approximate 10% increase in lateral length, which should positively impact total EURs and capital efficiencies. He highlighted strong project economics with over 50% rates of return and $1.1-$1.2 million BOE wells, citing the Avalon well as an example of successful high-quality Wolfcamp and Bone Spring wells.

Zach Parham of JP Morgan Chase & Co asked for details on rig activity plans for the second half of 2025 and into 2026, questioning what production growth an eight-rig program could deliver and the criteria for adding a ninth rig.

Answer

EVP & CFO William Lambert explained that the rig count was adjusted in April to optimize capital efficiency amid market volatility. He emphasized that looking ahead, the primary goal is to work production growth and free cash flow margin in tandem. Lambert noted that Matador has the flexibility to defer a decision on adding another rig until later in the year while still being positioned to achieve above-average growth in 2026.

Zach Parham of JPMorgan Chase & Co. inquired about rig activity plans for the second half of 2025 and into 2026, asking what production growth an eight-rig program could deliver.

Answer

EVP and CFO William Lambert stated that the company will be at eight rigs shortly. He explained that any decision to add a ninth rig in 2026 will be based on balancing robust free cash flow margins with oil production growth. Lambert emphasized that Matador has the flexibility to defer this decision until later in the year while still aiming to achieve above-average growth in 2026.

Zach Parham from JP Morgan Chase & Co inquired about rig activity plans for the second half of 2025 and into 2026, asking if the eight-rig program is for maintenance or growth and what would trigger adding a ninth rig.

Answer

EVP and CFO William Lambert stated that the rig count was adjusted in April to optimize capital efficiency amid market volatility. He explained that for 2026, the focus is on balancing oil production growth with free cash flow margins. The company has the flexibility to defer a decision on adding another rig until later in the year while still aiming for above-average growth.

Zach Parham of JPMorgan Chase & Co. inquired about the company's rig activity plans for the second half of 2025 and into 2026, asking what level of production growth an eight-rig program could deliver.

Answer

EVP and CFO William Lambert stated that the decision to reduce rig activity in April was a response to market volatility to enhance 2025 capital efficiency. He explained that any decision to add a ninth rig would be based on the ability to drive incremental growth while maintaining superior free cash flow margins. Lambert noted that Matador has the flexibility to defer this decision until late 2025 or early 2026 and still achieve above-average industry growth.

Zachary Parham of JPMorgan Chase & Co. asked about Matador's long-term growth outlook, questioning whether the company would maintain current production levels or resume growth, given the updated guidance.

Answer

CEO Joseph Wm. Foran affirmed the company's intention to grow, stating the current slowdown is a temporary timing matter due to market conditions. He emphasized a strategy of 'profitable growth at a measured pace,' highlighting the company's strong balance sheet, debt repayment of $190 million, and 10-15 years of inventory. Van Singleton, President, added that the company not only replaced but grew reserves in Q1, preserving optionality for future profitable growth.

Zachary Parham inquired about Matador's D&C cost guidance, which was lowered by 3% year-over-year to $880 per foot, asking for color on current leading-edge costs and the company's ability to drive them even lower.

Answer

Executive Christopher Calvert stated that the 2025 D&C cost guide being below the full-year 2024 actual cost already represents a leading-edge position. He attributed the savings to operational efficiencies, including optimizing simul-frac, increasing the use of trimul-frac from 14 to 16 wells, and securing strong vendor partnerships.

Zachary Parham from JPMorgan Chase & Co. asked for more color on cash tax expectations for 2025 and beyond, following a reported tax refund and the company's expectation to not be subject to the Alternative Minimum Tax (AMT) in 2025.

Answer

Robert Macalik, EVP and CAO, expressed confidence in the reduced 2024 cash tax estimate and confirmed that avoiding the corporate AMT in 2025 is a significant win. He stated that the specific cash tax rate for 2025 will be dependent on the full operational and financial plan, with more details to be provided in February.

Zach Parham of JPMorgan Chase & Co. followed up on marketing by asking if Permian Resources is considering power deals linked to electricity pricing and requested an update on the company's go-forward hedging strategy.

Answer

Co-CEO James Walter explained that while they have evaluated power deals, they have not yet found opportunities that offer better netbacks than their current options, particularly in New Mexico where power is most needed. CFO Guy Oliphint reiterated their hedging strategy remains roughly 30/20/10% for the next three years, but they remain flexible and opportunistic, as shown by hedges added in June.

Zachary Parham asked about current trends in service costs given the drop in industry activity. He also inquired about the drivers behind the lower Q1 operating expenses and the outlook for the remainder of the year.

Answer

Hays Mabry, an executive, responded that service costs are beginning to move lower as some providers offer price concessions to maintain market share. He attributed the strong Q1 OpEx performance to production outperformance, which lowered per-unit costs due to the fixed-cost nature of lease operating expenses (LOE).

Zachary Parham of JPMorgan Chase & Co. asked for a breakdown of the recent D&C cost reductions, specifically the split between efficiency gains and service cost deflation. He also inquired about the long-term strategic role of the Midland Basin asset within the company's Delaware-focused portfolio.

Answer

Co-CEO William Hickey detailed that D&C cost reductions were driven approximately 55% by structural efficiency gains, particularly in drilling days, and 45% by deflation in materials and services. Executive Hays Mabry described the Midland asset as a valuable cash-flowing component that is not a primary focus but fits well in the portfolio, adding that the company remains open to optimization opportunities.

Zach Parham inquired about current trends in oilfield service costs and the outlook for cash taxes in 2025, including potential exposure to the Alternative Minimum Tax (AMT).

Answer

Co-CEO William Hickey noted that while some material costs like sand have seen deflation, major service costs remain sticky, and the company is focused on constructive partnerships. An unnamed executive stated that the 2024 cash tax reduction was due to Earthstone synergy optimization, and they do not expect to be subject to the AMT in 2025, anticipating continued meaningful tax deferrals.

Zach Parham from JPMorgan Chase & Co. questioned the strategic shift back to aggressive share buybacks, asking what gives Civitas comfort given that net debt is higher and oil prices are lower than when the buybacks were initially paused. He also asked for an update on 2026 production plans following the recent asset sale.

Answer

CFO & Treasurer Marianella Foschi explained that recent de-risking actions, including increased hedging, cost optimizations, and asset sales, have solidified their plan to reach the $4.5 billion year-end net debt target, providing the confidence to resume buybacks. President & COO Clay Carrell added that for 2026, the company still plans a maintenance capital program, but with oil production now expected to be in the 145,000 to 150,000 bbl/d range due to the divestiture.

Zachary Parham questioned the trend for operating expenses (OpEx), noting that Q1 LOE was above expectations due to water issues in the Permian, and asked for clarity on how the company will meet its full-year cost guidance. He also asked for reconciliation between the company's confidence in its $300 million asset sale target and its statement about not being 'price takers' in a challenged market.

Answer

CEO M. Doyle explained that higher Q1 LOE was due to a contractor's inability to meet obligations, requiring supplemental capacity, but these costs are expected to be recovered. He expressed confidence in meeting full-year guidance as water volumes decline, overall production increases, and cost optimization initiatives take effect in the second half. Regarding asset sales, Mr. Doyle clarified that their confidence stems from pursuing the monetization of non-producing assets, such as surface acreage and infrastructure, which are less dependent on volatile upstream commodity prices.

Zach Parham inquired about the development timeline for the newly acquired Midland Basin bolt-on locations and asked for the long-term view on capital allocation between M&A, cash returns, and debt reduction after reaching the near-term leverage target.

Answer

CEO Chris Doyle stated that activity on the new Midland assets would likely begin late in 2025 but ramp up more significantly in 2026. CFO Marianella Foschi reiterated that the primary focus is the 2025 net debt target of $4.5 billion, with most free cash flow allocated to debt reduction. She emphasized that any further M&A or buybacks would be opportunistic and balanced for long-term value, not formulaic.

Zachary Parham inquired about the preference for share buybacks over variable dividends, asking if the current stock price ensures buybacks will remain the priority. He also asked for details on the 2025 level-loaded capital program and its impact on production and CapEx.

Answer

CFO Marianella Foschi confirmed that at current valuations, the company is 'pretty far from stock prices at which we do a variable dividend' and expects the Q4 variable return to be higher and allocated to buybacks. CEO M. Doyle explained that due to efficiency gains, the 2025 maintenance CapEx will be much closer to the 2024 level of $1.95 billion than previously anticipated, with a goal of holding volumes flat.

Zach Parham from JPMorgan Chase & Co. asked for the potential timing of a power deal for the Elk Hills plant and inquired about the company's medium-to-long-term dividend growth strategy.

Answer

President & CEO Francisco Leon stated that CRC plans to provide an update on a potential power deal before the end of the year, citing strong interest from hyperscalers. He also affirmed that dividend growth is a key part of their shareholder return policy, noting a four-year track record of annual increases, and that it remains a mainstay of their capital allocation framework.

Zach Parham of JPMorgan Chase & Co inquired about the significant increase in discretionary leasehold spending, asking for details on the geographic location within the Utica and its integration into the development schedule. He also asked about the mechanics of the preferred stock redemption, including how it would be funded and its impact on open market share buybacks.

Answer

CEO John Reinhart explained that the $75-$100 million in leasehold spending targets 40-50 wells in Belmont and Northern Monroe County, adjacent to Gulfport's current footprint to leverage existing infrastructure. EVP & CFO Michael Hodges detailed the preferred stock redemption, stating holders have until September 5th to decide on conversion or a cash repurchase. He noted the company could use its revolver for any cash portion, preserving flexibility to continue buying back common stock opportunistically.

Zachary Parham asked for details on the outperformance of the Kage pad versus the Lake pad, questioning if it was driven by geology, well design, or facilities. He also inquired about the early outlook for 2026, particularly regarding potential gas production growth following the H2 2025 shift to dry gas.

Answer

EVP and COO Matthew Rucker attributed the Kage pad's success to applying learnings from the Lake pad, specifically in rightsizing the frac design and upgrading facilities to handle higher flow rates. President and CEO John Reinhart added that while 2026 guidance is not yet available, the constructive macro outlook for natural gas supports a shift toward a more wet and dry gas-weighted program, with the H2 2025 activity serving as an early indicator.

Zach Parham asked about the decision-making process behind reducing the capital budget by $15 million while redeploying the other $10 million of savings, and also inquired about the future trajectory of oil production.

Answer

EVP and CFO Michael Hodges characterized the capital allocation as a 'hybrid approach' to balance shareholder returns with reinvestment in high-return projects. He projected that for 2025, the company's production mix will shift from ~92% natural gas to the high 80s, resulting in a meaningful increase in oil and NGL volumes that will significantly boost margins.

Zach Parham asked about SM Energy's long-term cash tax outlook following a recent tax bill and the production trajectory for the Uinta asset for the remainder of 2025 and into 2026.

Answer

EVP & CFO A. Wade Pursell stated that cash taxes are expected to remain at similarly low levels for the foreseeable future, assuming current laws and spending hold. EVP & COO Beth McDonald explained that Uinta's strong Q2 production was due to the timing of wells coming online and outperformance, and the asset will remain a strong contributor while other basins see more activity in the second half of the year.

Zachary Parham asked about the 2026 operational plan, specifically if the rig count would increase from six, and whether a six-rig program could maintain flat production with lower year-over-year CapEx.

Answer

President and CEO Herb Vogel explained that 2026 plans are scenario-based and dependent on future commodity prices, with no fixed plan yet. He and CFO Wade Pursell confirmed that a six-rig program would result in lower overall costs and could maintain production in a 'flattish' range, depending on the mix of oil and gas assets drilled.

Asked for more details on the transport and rail delays in the Uinta Basin, questioning if they are a recurring issue. Also sought clarification on potential non-op spending, including which assets it would involve and the potential capital amount.

Answer

The company stated that Q4 takeaway constraints were due to refinery downtime and rail delays. They are building flexibility with storage and railcars to manage this going forward. The potential non-op spending is related to several net wells in the Permian Basin for the latter half of the year, which is not yet confirmed or budgeted and would be a higher amount than the non-op spending in 2024.

Zachary Parham of JPMorgan Chase & Co. requested more details on the Uinta Basin rail transport delays and asked about the potential for unbudgeted non-op spending later in the year.

Answer

COO Beth McDonald explained that Q4 takeaway constraints were due to refinery downtime and rail delays, and the company is building flexibility with railcar and storage capacity to manage this going forward. CEO Herbert Vogel stated that potential non-op spending in the Permian Basin for several net wells is not yet confirmed or budgeted but would be back-end weighted and not contribute to production until 2026.

Zachary Parham sought more detail on the Uinta Basin transport delays, asking if they were a one-off issue, and inquired about potential non-operated spending, including the assets involved and the potential capital amount.

Answer

COO Beth McDonald stated that Q4 takeaway constraints were due to refinery downtime and rail delays, and the company is building future flexibility with more storage and railcar capacity. President and CEO Herbert Vogel clarified that potential non-op spending would be in the Permian Basin, is not yet confirmed, would be back-end weighted, and could be a higher amount than the $19 million spent in 2024.

Zach Parham of JP Morgan Chase & Co asked about the expected trajectory for oil production for the remainder of 2025 and into 2026, and inquired about the M&A outlook for bolt-on acquisitions.

Answer

CEO Christopher Stavros projected that oil production would be "similar to slightly higher" for the rest of 2025, following the general trajectory of total production. For 2026, he anticipates mid-single-digit total growth, with oil growth likely at a slightly lower rate. On M&A, Stavros indicated that smaller bolt-on opportunities with individuals and families remain available, while larger, more complex deals are less likely, especially given commodity price volatility.

Zach Parham questioned the oil production trajectory for the second half of 2025 and into 2026, noting that the company had already hit its previous Q4 target in Q2. He also asked about the M&A outlook for bolt-on acquisitions.

Answer

CEO Christopher Stavros projected that oil production would be similar to or slightly higher than Q2 levels for the remainder of the year, following the total volume trajectory. For 2026, he anticipates mid-single-digit total production growth, with oil growth likely at a slightly lower rate. Regarding M&A, Stavros sees continued opportunities for smaller bolt-on deals with individuals and families, but noted that larger, more complex transactions are less likely, especially with recent price volatility.

Zach Parham asked about Magnolia's capital allocation strategy between gassier and oilier assets in the current macro environment and the outlook for M&A activity.

Answer

President and CEO Christopher Stavros stated that the Giddings asset's strong returns across the commodity mix provide flexibility, eliminating the need to strategically favor oil or gas unless a dramatic price separation occurs. On M&A, Stavros noted that the market for bolt-on acquisitions has slowed due to a wider bid-ask spread amid economic uncertainty, though the company continues to evaluate small, accretive opportunities.

Zachary Parham questioned the expected production trajectory for 2025, given that Q1 CapEx is projected to be the highest for the year, and also requested more detail on the appraisal work in the Karnes asset.

Answer

President and CEO Christopher Stavros projected that production would grow ratably throughout the year, potentially approaching 100 Mboe/d by year-end. Regarding Karnes, he explained the appraisal work is on a 25,000-acre, oily area from a small acquisition. While early results are encouraging, further study is needed before committing to full development.

Zach Parham inquired about the timing, cash realization, and duration of the 45Z tax credit. He also asked about CNX's plans for E&P activity levels, the potential for volume growth, and the capital profile of a maintenance program in 2026.

Answer

CFO & President Alan Shepard clarified that the first eligibility for 45Z credits is 2025, with the first cash opportunity in 2026, and the program currently runs through 2029. Regarding activity, Shepard stated that due to high gas storage levels, CNX will maintain its current activity plan with no growth. He provided a capital efficiency ratio of approximately $0.85 per million as the key metric for future maintenance capital.

Zachary Parham inquired about CNX's activity levels, specifically the timing for the remainder of the year's turn-in-lines (TILs), the expected production trajectory for the latter half of the year and into 2026, and the company's flexibility to add activity given gas price volatility.

Answer

Chief Financial Officer Alan Shepard explained that most completion activity was scheduled for the first half of the year, with more TILs in Q2, a lull in Q3, and additional TILs in Q4. He also stated that there are currently no planned changes to the activity set, as the company will monitor market conditions and storage levels through the shoulder season before making any decisions.

Zachary Parham inquired about the run-rate spending required to maintain flat production levels given current efficiencies, and asked about alternative pathways beyond 45V for generating credits from the coal mine methane (CMM) business.

Answer

CFO Alan Shepard confirmed a target run-rate of sub-$500 million for maintenance capital, driven by Utica efficiencies and the low-decline base. Ravi Srivastava, President of New Technologies, highlighted that CMM has already validated premium pricing in manufacturing and power generation, and the company will continue to pursue opportunities in sectors like data centers.

Zachary Parham inquired about the potential opportunity for the New Tech business, including incremental coal mine methane capture and CapEx, pending regulatory clarity on 45V and 45Q tax credits. He also asked about the company's share buyback strategy at the current higher stock price.

Answer

Ravi Srivastava, President of New Technologies Group, explained it is too premature to quantify the opportunity from 45V/45Q until regulations are finalized. CFO Alan Shepard added that the capital allocation process is unchanged by the stock price and that all capital return options, including buybacks, remain open due to balance sheet strength.

Zachary Parham inquired about Vital Energy's hedging strategy, noting the recent additions for the second half of 2025 and the lack of 2026 hedges. He also asked about the production and CapEx trajectory into 2026, given the expected spending decline in late 2025.

Answer

CEO Mikell Pigott explained that hedges were added for the remainder of 2025 to lock in free cash flow and ensure debt reduction targets are met, aligning with peak Q4 production. He reiterated a general strategy to be ~75% hedged a year out. COO Katie Hill stated the 2026 plan is for flat year-over-year volume and capital, with significant flexibility and cost savings expected as service contracts roll off in late 2025 and early 2026.

Zachary Parham asked for more details on the 140 new inventory locations in deeper zones and inquired about the potential for acquiring more stranded acreage blocks using horseshoe lateral drilling techniques.

Answer

President and CEO Mikell Pigott directed attention to the presentation deck, highlighting successful tests in the Wolfcamp B and C formations where longer laterals enhance economics. He affirmed that the team is actively focused on acquiring 'white space' acreage adjacent to their current positions, citing the recent 8-mile project as a prime example of creating significant value by converting potential 5,000-foot wells into more economical 10,000-foot wells.

Zachary Parham asked about the cost profile of the new Barnett wells and how they compete for capital against established Delaware and Midland Basin wells. He also requested specifics on the Cave Bear pad, including its development strategy, well spacing, and the zones targeted.

Answer

CEO Mikell Pigott addressed the Barnett wells, stating it's too early to determine their final cost structure as the initial wells were drilled inefficiently for testing purposes. He highlighted the strong initial production of over 1,000 bbl/d and explained the next step is to test a smaller, cheaper frac design. COO Katie Hill clarified that the Cave Bear pad was a 10-well project developed across the A and B zones. While Vital's completion design was used, the wells were drilled by Point at a tighter spacing (5 wells per section) than Vital plans for future development.