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INFINITY NATURAL RESOURCES, INC. (INR)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 revenue was $69.1M, a ~4% beat vs S&P Global consensus of $66.4M; the quarter posted a net loss of $5.5M and Adjusted EBITDAX of $46.2M, supported by liquids-rich production in late Q4 and strong hedges . Q4 revenue consensus from S&P Global: $66.4M; EBITDA consensus: $50.4M; EPS consensus: $0.58*.
  • FY 2024 revenue reached $259.0M with Adjusted EBITDAX of $195.7M; pro forma leverage ended 2024 at 0.0x and pro forma liquidity at $354.3M post-IPO, providing ample capacity to fund 2025 growth .
  • 2025 guidance initiated: D&C capex $240–$280M, midstream capex $9–$12M, and production 32–35 MBoe/d (~40% YoY growth at midpoint); mix tilts toward gas as Pennsylvania wells come online, with per-unit costs expected to decline given owned midstream .
  • Strategic optionality between oil (Ohio Utica volatile oil window) and gas (PA Marcellus/Utica) remains a core narrative; management highlighted rapid cycle times, balanced capital allocation, and an active hedge program (36 Bcf at $3.58/MMBtu; 2.2MM bbl at $71.65/bbl for 2025) as execution pillars .

Values retrieved from S&P Global.*

What Went Well and What Went Wrong

What Went Well

  • Liquids strength and hedges supported margins: “Our all-in realized price…was $32.12 and $29.22 per Boe…despite a 20% reduction in natural gas prices” and a cash hedge gain of ~$28.4M in 2024; 2025 hedges cover ~36 Bcf gas at $3.58/MMBtu and ~2.2MM bbl oil at $71.65/bbl .
  • Capital efficiency and cycle times: 2024 all‑in F&D cost $7.30/Boe and capital efficiency ~3.0x; management emphasized “industry-leading cycle times and payback periods” and rapid pad-to-first-gas execution in PA .
  • Balance sheet reset post-IPO: Pro forma YE’24 leverage 0.0x and liquidity $354.3M (cash ~$29.3M, $325M revolver availability), giving flexibility to fund 2025 growth entirely from free cash flow .

What Went Wrong

  • Q4 net loss of $5.5M vs Q4 2023 net income of $60.2M, with higher per‑Boe GP&T and LOE in Q4 driven by liquids weighting and timing; total per‑Boe operating cost: $19.06 in Q4 2024 vs $18.27 in Q4 2023 .
  • Reported daily production declined YoY in the quarter (23.3 MBoe/d in Q4 2024 vs 27.8 MBoe/d in Q4 2023), reflecting deferred gas completions until Q1’25 and a late‑Q4 tilt to oil wells .
  • Non‑GAAP vs consensus mismatch: S&P Global’s Q4 EBITDA “actual” ($17.2M*) diverged from company’s Adjusted EBITDAX ($46.2M), highlighting differences in measure definitions and derivative treatment; investors should normalize to comparable metrics when benchmarking .

Values retrieved from S&P Global.*

Financial Results

Income Statement and Operating Metrics (Q4 YoY)

MetricQ4 2023Q4 2024
Total Revenues ($USD)$71.757M $69.113M
Operating Income ($USD)$25.065M $28.270M
Net Income ($USD)$60.228M ($5.517)M
Adjusted EBITDAX ($USD)$55.536M $46.180M
Avg Daily Production (MBoe/d)27.8 23.3

Price Realizations and Costs (per Boe) – Q4 YoY

MetricQ4 2023Q4 2024
Oil Realized Price (/Bbl) – Before Derivatives$70.52 $62.81
Gas Realized Price (/Mcf) – Before Derivatives$1.84 $2.35
NGL Realized Price (/Bbl) – Before Derivatives$24.82 $32.31
Oil Realized Price (/Bbl) – After Derivatives$71.34 $65.77
Gas Realized Price (/Mcf) – After Derivatives$2.33 $2.48
NGL Realized Price (/Bbl) – After Derivatives$25.03 $31.84
GP&T ($/Boe)$4.98 $5.34
LOE ($/Boe)$2.96 $3.47
DD&A ($/Boe)$9.59 $8.11
G&A ($/Boe)$0.55 $2.23
Total Operating Costs ($/Boe)$18.27 $19.06

FY 2024 vs FY 2023

MetricFY 2023FY 2024
Total Revenues ($USD)$161.730M $259.022M
Adjusted EBITDAX ($USD)$126.494M $195.719M
Avg Daily Production (MBoe/d)18.9 24.1
EBITDA Margin ($/Boe)$18.33 $22.20
All‑in F&D ($/Boe)$6.11 $7.30

Segment/Region and Mix

MetricFY 2024
Net daily production – Ohio (MBoe/d)18.9
Net daily production – Pennsylvania (MBoe/d)5.2
Production mix – FY (Oil/NGL/Gas)27% oil / 20% NGL / 53% gas
Production mix – Q4 (Oil/Liquids)~30% oil / ~49% liquids

Estimates vs Actuals (S&P Global)

MetricQ4 2024 ConsensusQ4 2024 Actual
Revenue ($USD)$66.372M*$69.113M
EBITDA ($USD)$50.380M*$17.208M*
EPS ($)$0.580*N/A (LLC pre‑IPO; company reports net loss)

Values retrieved from S&P Global.*

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
D&C Capital Expenditure ($USD)FY 2025N/A (initial)$240M – $280M Initiated
Midstream Capital Expenditure ($USD)FY 2025N/A (initial)$9M – $12M Initiated
Total Net Daily Production (MBoe/d)FY 2025N/A (initial)32 – 35 (midpoint ~40% YoY) Initiated
Operated RigsFY 2025N/A (initial)~1.2 rigs; second rig on Marcellus 4‑well pad Initiated
Mix GuidanceFY 2025N/A (initial)>35% of wells gas‑weighted; oil wells >2024 Initiated

Earnings Call Themes & Trends

TopicPrevious Mentions (Q‑2 & Q‑1)Current Period (Q4 2024)Trend
Oil vs Gas Allocation2024 favored oil given weak gas; deferred gas completions to Q1’25 Tilt toward gas in 2025; rapid PA pad build; balanced program Increasing gas weighting with flexibility
Cycle Times & OpsEmphasis on long laterals (~14k ft) and fast pad construction Two rigs initially; continuous TIL cadence; winter execution beat schedule Sustained operational efficiency
Hedging DisciplineActive hedging; 2024 cash hedge gain ~$28.4M 2025 hedges: ~36 Bcf @ $3.58/MMBtu; ~2.2MM bbl @ $71.65/bbl Continues to de‑risk cash flows
Midstream StrategyOwned PA gathering enhances margins Additional pad tie‑ins; midstream capex correlated to pad adds Expanding owned infrastructure
M&A OptionalityCapability across small/large, PDP/greenfield, oil/gas Watching opportunities across windows; bid-ask spreads variable Opportunistic posture maintained
Regulatory/AI/LNG DemandLow breakeven gas positioned for LNG and AI demand Narrative reaffirmed in prepared remarks Supportive macro tailwinds noted

Note: No public Q‑2/Q‑1 transcripts; prior mentions inferred from FY 2024 MD&A/remarks.

Management Commentary

  • “Infinity Natural Resources is positioned as a high‑margin operator with a balanced mix of oil and natural gas assets… our wholly owned midstream infrastructure in Pennsylvania and low‑cost development model continue to drive best‑in‑class capital efficiency and Adjusted EBITDAX margins.” – CEO Zack Arnold, press release .
  • “We intend to grow our production by approximately 40% year‑over‑year… funding our development entirely out of free cash flow.” – CEO Zack Arnold, prepared remarks .
  • “We reported an adjusted EBITDA of $46.2 million… Our adjusted EBITDA margin… increased to $22.20 per Boe.” – CFO David Sproule .
  • “For 2025, we anticipate operational costs to decline on a per‑unit basis due to increased natural gas production in Pennsylvania, where we operate our wholly owned midstream system.” – CFO David Sproule .

Q&A Highlights

  • Capex cadence and rigs: Two rigs early 2025 (Ohio oil, PA gas) drive front‑half weighted spend, tapering to one rig later in the year .
  • Mix shift and per‑unit costs: ~9 gas wells expected TIL in 2025; oil proportion to decline <5% vs 2024; per‑unit costs should fall as PA gas volumes ramp through owned midstream .
  • Midstream capex linkage: Near‑term spend tied to new pad tie‑ins; longer‑term correlation more to pad additions than well totals .
  • Deep Utica timing: Permit in hand; timing under evaluation amid favorable offsets; potential adds in 2026 discussed qualitatively .
  • M&A landscape: Team active across small/large, PDP/greenfield opportunities; flexibility across commodities and regions .

Estimates Context

  • Revenue: Q4 actual $69.1M vs S&P Global consensus $66.4M – modest beat likely driven by stronger NGL realizations and late‑Q4 oil wells turned to sales . Values retrieved from S&P Global.*
  • EBITDA: S&P Global Q4 consensus $50.4M vs S&P Global “actual” $17.2M; company’s Adjusted EBITDAX reported $46.2M – differences reflect metric definitions and derivative treatment; investors should benchmark like‑for‑like (GAAP EBITDA vs non‑GAAP EBITDAX) . Values retrieved from S&P Global.*
  • EPS: Consensus $0.58; company did not report EPS for Q4 due to pre‑IPO corporate structure (LLC), reporting net loss of $5.5M instead . Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Execution remains strong: rapid PA gas ramp and late‑Q4 oil wells underpin a revenue beat; watch Q1/Q2 cadence as gas TILs drive mix and per‑unit cost deflation .
  • Normalize metrics: reconcile GAAP EBITDA vs Adjusted EBITDAX when benchmarking against consensus; hedge impacts and non‑cash derivative marks create divergence .
  • 2025 is growth year with FCF funding: ~40% production growth guidance, zero pro forma leverage, and $354M liquidity provide downside protection and optionality for bolt‑ons .
  • Gas leverage returning: >35% of 2025 wells gas‑weighted; owned PA midstream lowers GP&T and supports margins; sensitivity to Henry Hub/AECO basis remains partially hedged .
  • Catalysts: continued gas pad performance (management hinted at strong early-time rates), additional pad tie‑ins, Deep Utica timing, and potential accretive bolt‑ons in Ohio/PA .
  • Risk watch: service cost inflation, commodity volatility, and execution on midstream expansions/pad tie‑ins; monitor per‑Boe GP&T/LOE trend and G&A normalization as public company .
  • IPO-related developments: overallotment option fully exercised adding $37.4M net proceeds; strengthens cash and flexibility during the ramp .

Appendices

  • Additional highlights:
    • Q4 operational: turned seven Utica wells into sales across late Q4 and January; Q4 D&C capex $56.9M; net cash from operations $30.1M .
    • FY reserves: YE 2024 proved reserves 170.3 MMBoe; PV‑10 $972.5M under SEC pricing .
    • Hedge book detail across 2025–2027 (oil, Henry Hub, basis, NGLs) provided in earnings deck .

Values retrieved from S&P Global.*