Chord Energy Corporation

Good morning, ladies and gentlemen, and welcome to the Cord Energy Second Quarter 2025 Earnings Conference Call. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Thursday, August 7, 2025. I would now like to turn the conference over to Bob Bakanowskis. Please go ahead.

Thanks, Anis, and good morning, everyone. This is Bob Bakanowskis, and today we're reporting our second quarter 2025 financial and operational results. We are delighted to have you on the call. I am joined today by Danny Brown, our CEO, Michael Liu, our Chief Strategy Officer and Chief Commercial Officer, Darren Hanke, our COO, Richard Roebuck, our CFO, as well as other members of the team. Please be advised that our remarks, including the answers to your questions, include statements that we believe to be forward-looking statements within the meaning of the Private Securities Litigation Reform Act. These forward-looking statements are subject to risks and uncertainties that could cause actual results to be materially different from those currently disclosed in our earnings releases and conference calls. Those risks include, among others, matters that we have described in our earnings releases as well as in our filings with the Securities and Exchange Commission, including our annual report on Form 10-K and our quarterly reports on Form 10-Q. We disclaim any obligation to update these forward-looking statements. During this conference call, we will make reference to non-GAAP measures and reconciliations to the applicable GAAP measures can be found in our earnings releases and on our website. We may also reference the current investor presentation, which you can find on our website. And with that, I'll turn the call over to our CEO, Danny Brown.

Thanks, Bob. Good morning, everyone, and thanks for joining our call. Over the next few minutes, I plan to provide a brief overview of our second quarter performance and resulting return of capital, and then briefly touch upon some of our current initiatives before passing it to Darren, will provide more color on our operations. Darren will then hand it over to Richard for more details on our financial results before we open it up for Q&A. So, turning to the second quarter results, CORD delivered great performance with solid operating results yielding free cash flow above expectations, which supported robust shareholder returns. Typically, second quarter oil volumes were above the top end of guidance, reflecting strong execution, well performance, and less downtime. While capital was favorable to guidance, largely reflecting improved program efficiencies. My thanks to our entire organization for delivering favorable results once again, and in particular, to our folks in North Dakota, who did a great job navigating unusually high rain in May, positioning us to surpass expectations. This strong performance led to adjusted free cash flow for the second quarter of approximately $141 million, and we returned 92% of this free cash flow to shareholders. Notably, after our base dividend of $1.30 per share, all incremental capital return was utilized for share repurchases. Since closing the Interplus transaction, Cord has reduced its share count by approximately 10% through early August. Given our view on the intrinsic value of our shares relative to how they currently trade in the market, we expect a continued focus on share repurchases in the current environment. Cord has been successful in driving strong per-share growth while paying out significant dividends to shareholders and keeping the balance sheet in good shape. Turning to operations, the core team has demonstrated exceptional performance across all areas of the business. Cycle times have been reduced, weld performance continues to be robust, and downtime levels are better than anticipated. These improvements to the business gave us additional operational flexibility and allowed us to reduce full-year capital by $50 million versus the original budget, while exceeding expectations on the production side. Consistent with our initial 2025 plan, and given current commodity prices, Cord intends to redeploy a second frac crew in the fourth quarter. This should give us an early start on the 2026 program, and we would expect volumes to trough in the fourth quarter of 2025 and grow off of those levels in early 2026. We'll give some preliminary thoughts on the 2026 program in November, but I'm very pleased with the progress we've made since announcing our three-year plan and our ability to deliver volumes more efficiently, resulting in higher free cash flow. And while I'm pleased with our current performance, I'm even more pleased that we have the opportunity and several ongoing initiatives to further improve the business. On the four-mile lateral front, given encouraging early results, we've expedited the program and now anticipate having seven wells online by year end. Currently, we have four wells drilled, and costs have consistently been below our original expectations. We also have one well, the Riestead, which has been producing since February. Performance from this well continues to be strong, and it recently began natural decline after more than four months of flat or increasing production. Darren will get into a little more detail on the program, but suffice it to say we like what we're seeing and are preserving the flexibility to lean into the four-mile program in 2026. Next, I'd like to provide a brief update on some of our continuous improvement initiatives aimed at increasing free cash flow. Slide 11 outlines the approximately $3 billion of controllable cost across the business between operated D&C capital, lease operating expenses, marketing expenses, and G&A. So far in 2025, we've made progress reducing all of these areas and are on track to exceed original production guidance with less capital and better margins. Slide 6 outlines the improvement we made for 2025 free cash flow relative to February guidance, normalizing for price levels. The free cash flow outlook has improved 20% since February, and when including the effect of share repurchases, slide 7 highlights that our expectations for free cash flow per share has grown 25% since February. Going back slightly further to when we announced the Interplus transaction, pro forma free cash flow per share is up more than 35%, again, all on normalized pricing. That's impressive performance, maybe even more impressive when considering we preserved the balance sheet along the way. And my sincere thanks to the Cord team for driving this level of improvement. A key component of Cord's ongoing continuous improvement focus is the use of data analytics, machine learning, and artificial intelligence in various areas of the business. And I'd like to highlight just a few of the projects we've been working on. On the production side, Cord is working to optimize ESP to rod lift conversion decisions by using AI and machine learning to generate production profiles, forecast ESP run life, and calibrate economic decisions for our wells. Similarly, CORD is enhancing gas lift efficiency by employing an algorithm to model optimization curves and inform economic decision making. On the reservoir side, CORD is implementing a machine learning model to identify geologic contributions of production in EUR across various parts of the basin, while from a planning perspective, we're using new optimization tools to more efficiently run our work over fleet and plan for frack protect to avoid unnecessary expense and downtime. The company is also rolling out dynamic and interactive dashboards, which will give our teams, including our lease operators, real-time business performance insights. The pace of innovation and adoption has been swift, and these tools support improved value of delivery to our shareholders by harnessing the power of technology to increase efficiency and insight and to improve our capital allocation decision-making, with not just better data, but also with better models that are easier to use. We are in the early innings of what's possible, but we're already seeing an impact and are excited about what the future holds. Lastly, a few words on sustainability before handing it to Darren. At Cord, we believe oil and natural gas will remain essential to meet the world's energy needs for the foreseeable future. Cord is proud of our work providing reliable and affordable sources of energy while maintaining a commitment to operating in a sustainable and responsible manner. Cord continues to make progress on our already strong sustainability initiatives with a focus on putting safety first, minimizing our environmental impact, and being a good partner in our communities. I should mention that Cord's safety and gas capture performance are off to a great start this year. We plan to publish an updated sustainability report in the fall, which will reflect the full integration of Cord and Interplus. So, to summarize, Cord is performing and offers a unique value proposition to investors. I couldn't be more pleased with the state of the business as we are in a fabulous position to generate substantial value now and in the coming years. And with that, I'll turn it to Darren.