Infinity Natural Resources, Inc. Q4 FY2025 earnings call

Operational Activity - 2025

• Net production in Q4 was 45.3 BOE per day, full-year 35.3 BOE per day, +46% YOY.
• Drilled 9 wells in Q4 (142,000 lateral feet), finished completions on 6 wells (103,000 lateral feet).
• Over 390 locations across portfolio, ~10 years of inventory on two-grid program.

Acquisitions

• Closed $1.2 billion Ohio Utica assets acquisition in Feb 2025, adding inventory and midstream system.
• Completed Chase acquisition, increased working interest in South Bend field, first post-IPO equity acquisition.
• Issued $350 million perpetual convertible preferred stock, supporting equity capital raise and acquisition of 60% working interest in Ohio Utica.

Market Environment

• Strong structural demand for natural gas and liquids in NA. Geopolitical events strengthened crude prices. Locked in oil hedges for 2026-2027 and evaluating oil project acceleration.

2026 Outlook

• Intends to operate 2 rigs in 2026, with ~30% of projected wells in newly acquired Ohio Utica rich gas locations. Expect to turn 31 gross wells into sales, with 4 oil-weighted wells in Q1 2026.

During the fourth quarter, net production averaged 45.3 BOE per day, with full-year production at 35.3 BOE per day, exceeding the 2025 guidance range. Fourth quarter adjusted EBITDAX was $94.0 million, with adjusted EBITDA margins of approximately $3.76 per MCFE or $22.58 per BOE. Full-year adjusted EBITDA totaled $261 million. Operating costs averaged $5.56 per BOE in the fourth quarter, with a 36% decline from the prior year. Capital expenditures in 2025 were approximately $326 million, including drilling and completion capex of $274.7 million, land spend of $35.5 million, and midstream and infrastructure investments of $16.1 million. In 2026, the development program is expected to operate two drilling rigs, with net production averaging between 345 and 375 MMCFE per day and development capital expenditures ranging between $450 million and $500 million.

2026 Guidance

• Development program to operate 2 drilling rigs.
• Net production expected to average between 345 and 375 MMCFE per day (70% YOY growth).
• Development capital expenditures range between $450 million and $500 million.
• Anticipates turning 31 gross wells into sales in 2026, with 4 oil-weighted wells in Q1 2026.

Q: On 26 plan CAPEX guidance above annual assessments, any changes since mid-December Antero acquisition?

A: Additional 9% CapEx due to increased working interest from Ontario deal, first pad completion capital, picking up rig before close leading to running two rigs in Q1, midstream investments doubling, flexibility in capital guidance to maintain optionality including for deep tri-gas unit.

Q: On Deep Utica, spud status and completion timeline?

A: Regulatory spud is preparation, true spud not imminent, capital towards back half of 2026, production not until next year, excited about deep dry gas Utica prospectivity with offset activities.

Q: Board balance between chasing commodity prices and cycle times?

A: Development plan thoughtfully put together, evaluated projects in oil and gas, will evaluate oil projects if prices stay, but not schizophrenic, will take time to see if prices stay, maintain optionality.

Q: Rig cadence for 2026, potential third operated rig?

A: More likely to consider additional frack crews than drilling rigs at this stage, evaluate if oil prices stay extremely elevated, but systematically exploit reservoirs in prudent manner, maintain optionality in natural gas and oil.

Q: Hedging strategy?

A: De-risk development program, lock in attractive discounted returns on investment, layer on hedges to de-risk development plan, stay true to hedging tenants like hedging when rig and completion crews show up.

Q: 4th quarter oil volumes jump, performance drivers?

A: Strong results due to operational team's fast cycle times and long lateral execution, high working interest in volumes, performance not anomalies.