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INFINITY NATURAL RESOURCES, INC. (INR)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 revenues were $74.48M, down sequentially from Q1 ($85.17M) but up year over year vs Q2 2024 ($70.44M); production rose 25% Q/Q to 33.1 MBoe/d on Pennsylvania Marcellus gas wells, while mix shifted more heavily to gas, pressuring per‑Boe margins .
  • Versus S&P Global consensus, INR missed on revenue ($83.39M est. vs $74.48M actual, −10.7%) and on “Primary EPS” ($0.46 est. vs −$1.89 actual); however, company‑reported GAAP EPS was $1.18, reflecting an Up‑C structure/NCI and methodology differences that can create variance versus data providers .
  • Guidance unchanged: 2025 net production 32–35 MBoe/d; D&C capex $240–$280M; midstream capex $9–$12M. Management accelerated a gas project into Q3 and reiterated operational flexibility across oil and gas assets .
  • Key catalysts: accelerating gas development (near‑term volume growth), improving in‑basin demand (AI/power gen), and clarity on commodity mix trajectory; near‑term overhangs include lower realized prices per Boe, per‑Boe margin compression, and consensus misses .

What Went Well and What Went Wrong

  • What Went Well

    • Production growth +25% Q/Q to 33.1 MBoe/d; five Marcellus wells from late Q1 drove volumes, and one Utica oil well turned to sales in May; four more PA gas wells and two OH oil wells turned to sales in July, supporting 2H ramp .
    • Balance sheet/liquidity: net debt ≈$28.1M, liquidity $321.9M as of 6/30/25, providing flexibility to pursue accretive growth .
    • Operational flexibility highlighted: “Our unique asset composition provides us with the agility to adjust development timing and weighting as market conditions evolve” — Zack Arnold, CEO .

  • What Went Wrong

    • Mix shift to gas compressed economics: Adjusted EBITDAX fell to $49.6M (from $57.2M in Q1) and Adjusted EBITDAX margin to $16.48/Boe, with management citing greater gas weighting as the driver .
    • Midstream constraints delayed two oil wells in Q2 (since remediated in July); management noted temporary curtailment and a reroute that is now resolved .
    • Consensus misses: revenue (−10.7%) and S&P Primary EPS miss (−$2.34), which may add modeling uncertainty given Up‑C/NCI per‑share methodology differences vs company GAAP EPS ($1.18) .

Financial Results

MetricQ2 2024Q1 2025Q2 2025
Total Revenues ($M)$70.44 $85.17 $74.48
Net Income (Loss) ($M)$24.07 $(128.36) $71.95
GAAP EPS (Company)N/A (pre‑IPO) $(2.27) $1.18
Adjusted EBITDAX ($M)$49.83 $57.25 $49.64
Adjusted EBITDAX Margin ($/Boe)N/A$23.96 $16.48
Avg Daily Production (MBoe/d)25.93 26.55 33.11

Segment/Revenue Composition

Revenue Component ($M)Q2 2024Q1 2025Q2 2025
Oil, Gas & NGL Sales$70.07 $84.18 $72.47
Midstream Activities$0.38 $0.98 $2.01
Total Revenues$70.44 $85.17 $74.48

Operating Cost and Realized Price KPIs

KPIQ2 2024Q1 2025Q2 2025
Gathering/Processing/Transportation ($/Boe)$5.12 N/A (Q1 table in $)$4.82
Lease Operating ($/Boe)$2.80 N/A (Q1 table in $)$2.09
Production & Ad Valorem Taxes ($/Boe)$0.22 N/A (Q1 table in $)$1.02
DD&A ($/Boe)$8.36 N/A (Q1 table in $)$7.85
G&A ($/Boe)$1.46 N/A (Q1 table in $)$1.75
Oil Realized (after derivatives, $/Bbl)$66.53 $64.70 $65.00
Gas Realized (after derivatives, $/Mcf)$1.83 $3.30 $2.53
NGL Realized (after derivatives, $/Bbl)$27.33 $25.27 $18.22

Volume & Mix KPIs

KPIQ2 2024Q1 2025Q2 2025
Oil (MBbls)677 742 559
Gas (MMcf)7,407 6,519 11,420
NGL (MBbls)448 561 551
Total (MBoe)2,360 2,389 3,013
Avg Daily Production (MBoe/d)25.93 26.55 33.11

Balance Sheet & Cash Flow

  • Net debt ≈$28.1M; liquidity $321.9M as of 6/30/25; cash $6.3M, revolver borrowings $34.4M .
  • Net cash from operations: $144.63M for six months ended 6/30/25; capex (6M) of $194.55M .
  • Q2 capex: $80.6M (D&C $70.4M; midstream $2.7M; land $7.5M) .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net Production (MBoe/d)202532–35 (3/27/25) 32–35 (8/11/25) Maintained
D&C Capex ($M)2025240–280 (3/27/25) 240–280 (8/11/25) Maintained
Midstream Capex ($M)20259–12 (3/27/25) 9–12 (8/11/25) Maintained

Management also noted the acceleration of a PA natural gas project into Q3; capex phasing expected to ease in Q4 as two‑rig/two‑frac 1H effects roll off, with one rig/one frac set‑up maintained through year‑end .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4’24 and Q1’25)Current Period (Q2’25)Trend
Commodity mix & marginsQ1: 26.5 MBoe/d, 31% oil; bringing forward a gas project; Adjusted EBITDAX $57.2M; margin $23.96/Boe . Q4: 2025 plan anticipates 1.2 rigs; balanced oil/gas .Gas weighting increased; production +25% Q/Q; Adjusted EBITDAX $49.6M; margin $16.48/Boe due to greater gas mix .Higher gas mix; margin per Boe down.
Operational flexibilityQ1: “pivot between oil and natural gas development” . Q4: diversified Utica/Marcellus plan .“Agility to adjust development timing and weighting” across assets; accelerated PA gas pad .Reinforced.
Capex cadence & rigsQ4/Q1: plan for ~1.2 rigs in 2025 .Maintain one rig/one frac rest of year; Q4 capex to step down as 1H effects fade .Steadier cadence into Q4.
Midstream & egressQ1: on schedule; constructive gas macro .Temporary Q2 third‑party constraint resolved; subsequent wells flowing unconstrained .Risk addressed.
In‑basin demand (AI/power)Not emphasized in Q4 PR.CEO cites AI/power as supportive for in‑basin demand and pricing differentials .Increasingly constructive.
M&A / ground gameQ4: IPO proceeds strengthened balance sheet .Added bolt‑on acreage; prepared to pursue accretive deals with strong balance sheet .Opportunistic posture.
CostsQ1: cold weather impacted costs .Per‑unit costs trending lower with gas program; some LOE true‑ups from non‑ops in Ohio .Improving per unit; monitor LOE.

Management Commentary

  • “Our net production for the quarter averaged 33.1 Mboe/d, representing a 25% increase from the first quarter of this year… primarily driven by our Marcellus natural gas development in Pennsylvania.” — Zack Arnold, CEO .
  • “Our unique asset composition provides us with the agility to adjust development timing and weighting as market conditions evolve — a key competitive advantage that we successfully displayed yet again this quarter.” — Zack Arnold .
  • “Adjusted EBITDA of $49.6 million… margin fell to 16.48 per Boe, driven predominantly by a greater weighting towards natural gas production during the period.” — David Sproule, CFO .
  • “We have approximately $28 million in net debt outstanding [and] liquidity of $322 million.” — David Sproule .

Q&A Highlights

  • 2026 program and capex trajectory: Management does not expect capex to decrease vs 2025; will continue to focus on development and free cash flow balance, with flexibility across oil and gas .
  • M&A and bolt‑ons: Active ground game to consolidate working interest and lengthen laterals; prepared to use balance sheet for accretive assets as opportunities arise .
  • LOE and costs: Expect G&P/T and other per‑unit costs to trend lower as PA gas volumes build; Q2 included prior‑period true‑ups from non‑ops in Ohio not expected to recur .
  • Midstream constraints: A temporary third‑party issue in Ohio (reroute required) limited two oil wells in Q2; resolved in July with wells flowing unconstrained .
  • Mix guidance and modeling: Company acknowledges modeling complexity; expects growth in Q3 and Q4; did not provide a commodity mix percentage but outlined turn‑in‑line schedules for oil and gas wells through year‑end .

Estimates Context

  • S&P Global consensus (Q2 2025): Revenue $83.39M* vs actual $74.48M (miss −$8.91M, −10.7%); Primary EPS $0.46* vs S&P “Primary EPS” actual −$1.89* (miss −$2.34). Company‑reported GAAP EPS was $1.18, reflecting Up‑C/NCI impacts and methodology differences versus data providers .
  • Implications: Street models likely to raise volumes (higher PA gas throughput) but lower realized pricing/margins per Boe given gas mix; increased midstream revenue contribution is modest relative to commodity sales .

Values with asterisks (*) were retrieved from S&P Global.

Key Takeaways for Investors

  • Near‑term volume growth intact: acceleration of PA gas pad plus July turn‑in‑lines support sequential growth in Q3 and Q4 despite Q2 midstream hiccup now resolved .
  • Mix shift matters: greater gas weighting boosted volumes but reduced Adjusted EBITDAX per Boe; monitor realized gas/NGL pricing and hedges vs strip .
  • Balance sheet optionality: minimal net debt and >$320M liquidity enable continued organic development and selective M&A without stressing leverage .
  • 2025 guide reaffirmed: steady execution with one rig/one frac through year‑end; capex to step down in Q4 as 1H two‑rig effects fade .
  • Consensus reset likely: revenue miss and EPS methodology variances vs company GAAP suggest estimate dispersion; focus on production trajectory, per‑unit costs, and EBITDAX as cleaner performance gauges .
  • Structural tailwinds: management sees AI/power‑gen‑driven in‑basin demand improving regional gas differentials over time, a potential medium‑term re‑rating catalyst .

Appendix: Q2 vs Estimates (S&P Global)

MetricQ2 2025 ConsensusQ2 2025 ActualSurprise
Revenue ($M)$83.39*$74.48 −$8.91 (−10.7%)*
Primary EPS (S&P)$0.46*−$1.89*−$2.34*
GAAP EPS (Company)N/A$1.18 Informational

Values with asterisks (*) were retrieved from S&P Global.

Additional Operational Detail

  • Production mix Q2 2025: ~19% oil, 18% NGLs, 63% gas; OH 19.5 MBoe/d and PA 13.6 MBoe/d .
  • Q2 pricing (before derivatives): Oil $56.45/Bbl; Gas $2.67/Mcf; NGL $18.93/Bbl; after derivatives: Oil $65.00; Gas $2.53; NGL $18.22 .
  • Six‑month 2025 cash from ops: $144.63M; six‑month capex: $194.55M .

Sources: Q2 2025 8‑K/press release and exhibits ; Q2 2025 earnings call transcript –; Q1 2025 8‑K/press release –; Q4 2024 8‑K/press release . Values with asterisks (*) were retrieved from S&P Global.