Chord Energy Corporation

Good morning, ladies and gentlemen, and welcome to the Cord Energy Third Quarter 2025 Earnings Conference Call. At this time, online is our 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 Wednesday, November 5th, 2025. I would now like to turn the conference over to Mr. Bob Bakanoskis. Please go ahead.

Thanks, Anis, and good morning, everyone. This is Bob Bakanowskis, and today we are reporting our third 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 to 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 our current investor presentation, which you can find on our website. And with that, I'll turn the call over to our CEO, Danny Brown.

Thank you, Bob. Good morning, everyone, and thanks for joining our call. Last night, we issued our third quarter press release and presentation. The materials covered key strategic, operational, and financial details. Over the next few minutes, I plan to highlight a few key items, and after that, we'll open it up for Q&A, where I'll invite other members of the team to provide additional insights. Starting with third quarter results, Core delivered another consecutive quarter of solid operating performance with free cash flow above expectations and strong returns to shareholders. Adjusted free cash flow for the third quarter was approximately $230 million, and we returned 69% 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 the combination with Interplus closed last year, Cord has reduced diluted shares outstanding by approximately 11%. Cord's execution and asset performance continue to trend favorably to expectations. Faster cycle times, lower levels of downtime, and strong well performance have led us to raise oil volume guidance for the second time this year before including the impacts of XTO. Cord also continues to drive efficiency across the business. On the drilling and completion side, we brought online three new four-mile wells since our last update. All came in below initial cost estimates, and early production data is encouraging. Cord has made tremendous progress on its four-mile program this year, confirming initial design concepts and continuing to de-risk execution. We expedited the program versus initial expectations at the beginning of the year and continue to expect seven four-mile wells turned in line by year-end. The favorable performance we're seeing increases the likelihood of leaning into the four-mile program in 2026 and beyond. Given the strong progress we've made year-to-date, we would expect four-mile wells to be up to 40% of the operated program in 2026. Three-mile wells could make up another 40%. pushing Cord towards approximately 80% longer lateral development next year. Additionally, this year, Cord further improved capital efficiency by de-risking the execution of various alternate-shaped wells. Year-to-date, Cord has drilled 11 and tilled 8 alternate-shaped wells. Execution has been strong, with costs trending below initial estimates. While alternative shapes will be a small part of the long-term program, they are a useful tool to improve economics in certain DSUs. Turning to other continuous improvement initiatives, we are pleased to announce progress in improving our marketing cost structure as the team has been working hard to simplify and optimize contracts across oil, gas, and water. Slide 7 of our investor presentation shows expected savings of $30 million to $50 million a year. About half of these savings were realized in 2025. Slide 6 shows CORD's overall progress in enhancing free cash flow generation across the organization with CORE driving $120 million of improvement in 2025 from controllable items, including higher production, lower LOE, less capital, and improved marketing costs. Slide 11 highlights that free cash flow per share has grown over 20% 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%, all on normalized pricing. That's impressive performance, maybe even more impressive when considering we preserved the balance sheet along the way. Turning to the XTO transaction, I'm pleased to report that we closed the transaction on October 31st and as a result have adjusted fourth quarter production up by 4,000 barrels of oil per day. Additionally, we added capital of $15 million to full year 2025 in order to begin supporting the resulting higher maintenance production levels in 2026. In short, we are excited about integrating these high-quality assets. The acquisition is in one of the best areas of the Williston Basin, has significant overlap with CORD's existing footprint, and supports long lateral development. This is CORD's fifth Williston Basin deal in five years and is consistent with our long-term strategic objectives. In addition to the XTO deal, we also added inventory this year through our leasing efforts and smaller tract acquisitions. Over the years, Cord has been successful in maintaining its low-cost inventory depth through adopting new technologies and driving efficiency in the base business while supplementing these improvements with opportunistic M&A. Shifting focus to our development activity, Cord continues to plan on bringing in a second FRAC crew in a few weeks. Cord's cycle times have improved significantly this year, pushing back the start date of this second crew from which gave us the opportunity to lower capital by averaging fewer frack spreads versus the original plan. And we accomplished this while raising production expectations twice. As we look to 2026, our preliminary expectation is maintaining oil volumes of approximately 157,000 to 161,000 barrels per day, while holding E&P capital flat in 2026 versus 2025, plus approximately $40 million for maintaining the XTO volumes. This would result in total 2026 capex of roughly $1.4 billion. To put this in perspective, in early 2024, the pro forma capital budget to deliver lower production levels was approximately $1.5 billion. In contrast, Cord's preliminary 2026 expectations reflect approximately 4% higher oil volumes for roughly $100 million less in capital. Clearly, Cord's capital efficiency has improved. Commodity volatility remains high, and Cord will continue to monitor conditions closely. We have significant flexibility to reduce activity if macro conditions warrant. However, any decision to adjust activity would reflect a thoughtful patient evaluation and won't be driven by sentiment in any given week. Cord has worked diligently to improve the parts of the business that we can control while maintaining significant downside protection through its operational flexibility and strong balance sheet. In the spirit of transparency with our stakeholders, we also recently published CORD's 2024 Sustainability Report, which includes performance metrics on a pro forma basis reflecting the InterPlus combination. Thank you to the team for putting this together, as it does a great job discussing our business and highlighting our efforts on emissions reductions, workforce health and safety, corporate governance, philanthropy, and other topics. Cord remains committed to delivering affordable and reliable energy and to do so in a sustainable and responsible manner. The external landscape has fluctuated significantly over my years as an E&P executive, but this commitment has always been and will continue to be an important element of Cord's strategy. Our goal is to drive continuous improvement in everything we do. To close, slide 14 highlights Cord's performance versus peers on a total return basis. As you can see, our long-term performance versus peers has been strong. Importantly, we did this through improving EBITDA and cash generation relative to enterprise value. It did not get much help for multiple expansion. On that note, today, Cord's valuation remains attractive versus peers, despite the long-term equity outperformance. Cord has an established history of strong capital allocation, consistent operations, and high cash returns. These positives are coupled with resilience and low price periods and significant upside potential to the next constructive oil cycle may court a unique and attractive investment opportunity. With that, I'll turn the call over to Anas for questions.