INR Q3 2026 earnings call transcript, November 10, 2026

Thank you for joining us and welcome to Infinity Natural Resources, third quarter, 2026.

After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. I will now hand the conference over to Tom Marchetti. Vice President of investor relations. Tom, please go ahead.

Thank you operator.

Thank you, Tom, and hello, everyone. We appreciate you joining us to review Infinity Natural Resources' third quarter results. We are almost three quarters since closing our Ohio acquisition, and it is a good moment to take stock. The assets... ...are integrated into our operations. We are growing production. We are putting more volume through our midstream system, and we are delivering the synergies we outlined. Just as important, we have the team, the balance sheet, and the platform in place to ask... ...on the next opportunity that meets our underwriting criteria. That progress is visible in our third quarter results, where we continued to execute on our playbook and delivered both record production and adjusted EBITDAX. In the third quarter, our oil volumes came in ahead of our expectations, increasing 79%. year-over-year to approximately 14,000 barrels per day. Our total volumes averaged nearly 432 million cubic feet equivalent per day, which is a 100% increase from the prior year. Higher volumes in a favorable oil mix through adjusted EBITDAX of nearly $138 million. We also brought our controllable cash costs down sequentially on a per-unit basis. Consistent with expectations, our per-unit GP&T costs declined as more volumes moved through our own midstream system. On the marketing front, our REC zone-free contract is starting to highlight its value. Most of our Ohio gas and over half of our total gas is sold into market.

Thanks, Zach.

Thanks, Kerry.

Before we open the line, I want to leave everyone with a few key... takeaways. We've spent a lot of time this year talking about the opportunity embedded in our platform and the value we believe we can unlock through discipline execution. We have told you previously what to expect from this business and this quarter we delivered it. We demonstrate... We created our ability to improve the performance of the upstream assets we acquired while working on maximizing our midstream infrastructure to drive down per unit cost and capture stronger realizations through our firm transportation capacity.

And most importantly, we continue to build a team that focuses on safety, efficiency, growth, and value creation. These results reinforce the differentiated value of our

integrated growth focus platform. And we're just beginning to unlock that potential. We're going to continue to let our execution and results speak for themselves. Operator, you may now begin the q&a session. We will now begin the question and answer. Please limit yourself to one question and one follow-up. If you'd like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star 1 again. We ask that you pick up your hand. When asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster.

Your first question comes from the line of Scott Hanold with RBC.

Your next question comes from the line of John Ennis with Texas Capital. Your line is open. Please go ahead.

Your next question comes from the line of John Freeman with Raymond James. Your line is open. Please go ahead.

we um a project takes a little bit longer because of uh just the amount of equipment that's required got it thanks zach thank you your next question

good morning folks thank you for taking our questions um i want to start and kind of follow up on the on the recs discussions maybe this is for cap as you settle in the role here you know we can see sort of the benefits um to realizations you know from this antero acquisition in the ft can you talk about any other sort of aspirations you have to sort of support uh marketing efforts to further drive realizations is there anything you see on the horizon or do you think just maximizing that um that ft is is you know the majority of the opportunity in the near term thanks yeah tim i think in the near term obviously maximizing but then you have the the power gem side the equation will be something that that i think people be looking forward as we go into 27 28 and 29. so you know nobody knows what's going to happen around the data center side of the world and all that but i again i think you'll still see capacity coming online it may not be as enthusiastic as people originally thought but i think you're going to see again a continued increase in power gen and that will provide us more opportunities in the end basin to be able to maximize okay so you're starting to look into those now is that what you're saying yes yes sir okay okay i appreciate that the context and as my follow-up um when you all hosted everybody last month at your cell side rig tour you know i believe the commentary was that you're open to you know to

increasing your your footprint anywhere you know within that sort of area that that ohio west virginia pennsylvania area so so maybe jack can you talk about kind of what you're seeing from an m&a perspective maybe looking at the gassy and the oily acreage separately thank you a great question tim thank you and i think first and foremost before you get into m&a deeply you need to make sure you have the balance sheet place and carrie's been helpful in managing that and also the team to evaluate it carrie talked in his opening remarks about some of the expansion we've had at that team level to make sure that we have the right people in the right places to help us analyze things because we have a benefit at INR and that we have an operating experience across the entire basin. We're somewhat agnostic as to where the deals fall. But that also means we need to be able to analyze and evaluate things across the entire basin quickly and Kerry touched on systems and processes. And I think we're going to be focused here near term on making sure that we can evaluate deals faster than our competitors and make sure that we can do deals that work well for us. And for us, it needs to be accretive. on a long-term basis, and it needs to stack in well and help us with either production volumes or inventory depth or midstream utilization. And now that we've got the midstream piece, it gives another flavor to consider when we evaluate M&A.

But as far as where we see deals going, you know, this basin is always a little bit interesting when you see the deal pipeline, but we'll continue to participate in public processes across the entire basin, oily or gas. And we'll also look for private processes. Where we can maybe find an asset that is a better fit for us than the current owner and see if we can negotiate something there. But in the meantime, we remain poised and ready and we will be very conservative in our under. Writing cases to make sure that the investments we make are not scale for scale sake that it is going to be a creative door shareholders. I appreciate the context. Thank you.

Next question comes from the line of Michael Shallow with Stevens. Your line is open. Please go ahead.

your next question comes from the line of paul diamond with city your line is open please go ahead

uh thank you good morning all thanks for taking the call um so earlier this year you guys shifted a bit more towards the oil side versus gas on uh production timing given current market realities can you talk about any any shift you're seeing is there anything in the market that would make you kind of shift backwards or is this cadence kind of what we should carry it forward great question Paul thanks for for asking that's good to connect this morning I think obviously our cadence for 2026 is established and set in stone as we look at 2027 things change quickly you know there are world factors that impact commodity prices so we're taking that into consideration as we finalize our budget and our development views for 2027. I think generally speaking what we do approached in the past is starting from a place of balance in which we develop both oil and gas locations and then you might see us tilt a little bit and try to optimize whichever commodity we think we can hedge and be a little bit stronger so year over year we may be a little bit. less flexible as we just get bigger and each of those projects have a smaller impact, but for today we're happy with the way we allocate a capital in 2026 and we're actively reviewing the 2027 development program to make sure that we can optimize shareholder value. Paul, this is Kerry. I'll add one one comment onto that the 20. 2027 budget is going to be a little different budgeting cycle for us. We are building up from a bottoms up looking at each project on an economic basis. So I think we're really going to be economics driven from our 2027 budget. So.

And that may, that may change how we, how we, how we allocate the capital based upon the economics of each individual project. So I think once we get into a 27, we'll have a pretty good outlook of what we're going to do for the year, where we're going to do it. And obviously from our hedge book point of view, gives us some flexibility as well. From visibility of the cash flows, but I think a little different budgeting cycle than what we've done in the past. And it gets back to my early comments about better data, better transparency, visibility and proactive for the business. So I think those are the things we're working on.

Got it. Appreciate the clarity there. Just one quick one on just talking about Utica development a bit over the last several quarters. You talk about any design differences versus the prior operator. Is it, I know you've talked about mainly profit loading, but has there been any... other, I guess, lesson learned with a couple of quarters of your bill. Yeah, and if you're focused specifically on the acquired Utica assets, I think we were basically backing up and taking a fresh view of the assets. In the right way to develop it. So today, what we've delivered on so far are a couple of U-turn wells that we think were the most capital efficient way to develop some adjacent, somewhat stranded acreage. I think that's a place where we've seen capital savings. I think we've also, so that's a savings component, investing more in some of the completions than the legacy operator did where we've increased water per foot and sand per foot. So sometimes you spend more to make more and that's the case. There and what we're demonstrating on slide 12 was really our ability to do that the more in intense stimulation design, but do so faster than the previous operator. So, but. It keeps us in a position in which we can do more in fewer days and really help us tighten up those cycle times, but we acquired those assets from a world class operator. So there's that means you there's some things that have been done very well.

We're just able to take a fresh view and look for some opportunities to optimize casing designs and completions designs to make the projects our own. Understood. I appreciate your time. I'll do the day.

Thanks, Bob.

We have reached the end of the Q&A session. I will now turn the call back to Zach Arnold for closing remarks.

Thank you all for another quarter here. We appreciate your continued interest and investment in our company, and we look forward to catching up again next quarter. Thank you.

This concludes today's call.

Thank you for

attending. You may now disconnect.