Infinity Natural Resources, Inc. Class A

Hello, and thank you for standing by. My name is Regina, and I will be your conference operator today. At this time, I would like to welcome everyone to the Infinity Natural Resources fourth quarter 2025 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star, then the number one on your telephone keypad. To withdraw your question, press star one again. I would now like to turn the conference over to Tom Marchetti, Vice President of Investor Relations. Please go ahead.

Thank you, Operator. Good morning, and thank you for joining Infinity Natural Resources' fourth quarter and four-year 2025 earnings conference call. On the stage today are Zach Arnold, our President and Chief Executive Officer, and Dave Stuhl, our Executive Vice President and Chief Financial Officer. In a moment, Zach and David will present their prepared remarks for the question and answer session to follow. An updated investor presentation has been posted to the Investor Relations section of our website, and we may reference certain slides during today's discussion. A replay of today's call will be available on our website beginning this evening. Before we begin, I would like to remind everybody that today's call may contain certain forward-looking statements that are subject to risks and uncertainties that could cause actual results that differ materially from those expressed or implied. All statements that are not historical facts are forward-looking statements. Forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond our control, that could cause actual results that differ materially from those forward-looking statements. Please review our earnings release and the risk factors discussed under SEC filings. We will also be referring to certain non-GAAP financial measures. Please refer to our earnings release and investor presentation for important disclosures regarding such measures, including definitions and reconciliations of the most comparable GAAP financial measures.

With that, I will turn the call over to Zach. Thank you, Tom, and good morning, everyone. Before I begin, I'd like to formally welcome Tom Marchetti to our team. Tom will lead our investor relations function and is a great addition to the team. We appreciate everyone joining us today to review Infinity Natural Resources' fourth quarter and full year 2025 results and to discuss our outlook for 2026. Overall, 2025 was another transformational year for Infinity. Importantly, we did what we said we'd do during the IPO process. We continued to add scale. We've significantly increased production. We've grown our operating cash flow. We've expanded our asset base through acquisitions. We've accessed the capital markets, we've entered into strategic partnerships, and we've preserved our operational and financial flexibility. We've been busy. Most importantly, our Appalachian platform continues to deliver strong operational and financial execution across both our extensive Utica position in Ohio and Marcellus position in Pennsylvania. Our results during the fourth quarter and year overall are underpinned by our strong wealth performance across our asset base, as well as the disciplined execution of our development program. Our teams remain focused on improving drilling and completion efficiencies, extending lateral lengths, and maintaining capital discipline as we developed our high-quality asset base. Before reviewing our operational activity for the quarter, it is worth highlighting the strength and flexibility of our development portfolio across Appalachia. We have over 390 locations across our portfolio, representing more than 10 years of inventory when developed on a two-grid program. Our returns in oil and liquids weighted projects are strong, especially true in today's oil environment, and our gas returns are strong as well. Balance. Optionality. It is how we build our business in order to maximize value for our shareholders. Well costs are consistent across our position, whether in our Ohio Utica development or our dry gas Marcellus wells. which allows us to allocate capital efficiently across our development opportunities depending on commodity conditions. In addition, much of our drilling and completion design is standardized across our development program, utilizing common equipment and consumables packages that allow us to efficiently shift activity between Ohio and Pennsylvania. Combined with our extensive drilling inventory across these development areas, This portfolio provides significant operational, commodity, and financial flexibility as we allocate capital across our assets. As a result, our development program can be adjusted to prioritize the highest return opportunities while maintaining disciplined growth. During the fourth quarter, we continued to operate one drilling rig across our base asset. We added a second rig in January, bringing our total operated rig count to two, advancing development across our diversified portfolios. During the fourth quarter, net production averaged 45.3 in BOE per day, bringing full-year production to 35.3 in BOE per day, exceeding the high end of our guidance range for fiscal year 2025. When compared to 2024, the company was able to deliver year-over-year growth of approximately 46%. During the fourth quarter, we flooded nine wells, totaling approximately 142,000 lateral feet while finishing completions activities and turning into sales six wells totaling 103,000 lateral feet, evenly split between Ohio oil weighted projects and Pennsylvania dry gas projects. For the full year, we turned 23 wells into sales, including 12 wells in Pennsylvania and 11 wells in Ohio, reflecting our balanced development approach across our asset base. Our development program continues to emphasize extended lateral development and operational efficiencies that support strong capital returns across both our Utica and Marcellus positions. For calendar year 2025, our average well turned into sales exceeded 15,700 lateral feet. The longer laterals help to reduce our per foot drilling costs. It's not just about drilling longer laterals. It's also about cycle times. keeping those wells online, and having them track our anticipated well performance. We continue to target six to seven-month cycle times on our development projects, ranging from three to five wells, which we believe is one of the fastest cycle times in the industry. With regards to well performance, we placed a lot of wells online in the second half of 2025, and we are pleased with the performance of those wells to date, and they continue to track in line with our tight curve expectations across both development areas. Looking forward, we intend to operate two rigs throughout calendar year 2026. While the world is ever-changing these days, especially with commodities, we anticipate allocating slightly more capital towards natural gas-weighted development based on wells turned into sales during the year. Approximately 30% of our projected wells turned into sales will be on the assets we recently acquired developing our rich gas locations in the Utica Shale of eastern Ohio. Turning to our recent acquisitions, on February 23rd, we closed the previously announced $1.2 billion acquisition of Ohio Utica assets from Intero Resources and Intero Midstream. This transaction is a highly complimentary bolt-on to our existing position in Ohio, adding extensive inventory across multiple phase windows directly adjacent to our legacy acreage, further supporting our long lateral development strategy. Just as importantly, The transactions included ownership in the associated midstream system, which provides us with attractive midstream costs and further reduces well break evens across the acquired assets. We intend to devote a rig to the development of these assets during the year, beginning early in the second quarter, and we expect our first pad from the acquired position to come online during the second quarter. As we begin developing this inventory, We expect to increase production from these assets meaningfully in the coming months and years. Not to be forgotten with all of our activities, we also completed the Chase acquisition, which increased our working interest in our dry gas South Bend field in Pennsylvania. Transactions like this, where we can increase working interest in assets we already operate, are typically among the most attractive investments that we can make using our equity, as they increase our exposure to future development and production without requiring incremental corporate overhead for G&A. This acquisition represents another milestone for Infinity, as it is the first time post-IPO that we have used our equity to acquire assets. Together, these transactions expand our development inventory, increase our participation in high-quality drilling projects, and strengthen the strategic position of our Appalachian platform through enhanced infrastructure and marketing assets. In conjunction with the Antero transaction, Infinity successfully issued $350 million of perpetual convertible preferred stock to two highly respected energy investors, Quantum Capital Group and Carnelian Energy Capital. We believe the strong demand from these investors reflects confidence in both in the quality of the underlying assets and our long-term development strategy. This hybrid equity structure is consistent with our philosophy of maintaining a strong and flexible balance sheet. we were able to raise significant equity capital above our IPO price while reducing outstanding debt and preserving financial and strategic optionality for the company. Importantly, this capital supported our election to increase our participation in the Ohio Utica acquisition to a 60% working interest, deepening our ownership in an asset we know well and believe strongly in, while maintaining balance sheet discipline as we continue to advance development across our Appalachian platform. Looking more broadly at the market environment, we continue to see strong structural demand for natural gas and associated liquids across North America. Recent geopolitical developments in the Middle East have strengthened crude prices across the forward curve through 2030, representing another opportunity for us to demonstrate the value and flexibility of our unique asset base. With our development activities in the fourth quarter, we have significant oil-weighted volumes planned for the first half of 2025. We have taken this opportunity in the commodity markets to lock in attractive oil hedges for 2026 and 2027 using a balance of swaps and collars. Additionally, we are evaluating our development plan as to whether we should accelerate any additional oil projects to take advantage of attractive prices. We cannot predict whether this will be a short-term event, but we will continue to monitor the situation to see if elevated oil prices proved to be longer lasting and warrant additional development of our oil inventory. On a more micro level, and for our Ohio Utica liquids production specifically, we are witnessing increased regional demand dynamics. Codensate and other light hydrocarbons produced from liquids rich plays, such as the Utica, are used both as refinery feedstock and as diluent for heavier crude oils. As production of heavier barrels from regions such as Canada and Venezuela increases, Producers require additional volumes of condensate and other light hydrocarbons to blend those barrels to move them through pipeline systems and into refineries. Given our proximity to regional refining markets and infrastructure, we believe our Ohio Utica liquids production is well positioned to serve this demand. Turning to natural gas, global demand for US LNG continues to expand, and with additional liquefaction capacity expected to come online over the next several years, U.S. natural gas supply is increasingly positioned to serve global energy markets. Domestically, rising electricity demand is expected to drive additional natural gas consumption within the U.S. power sector. Looking ahead, we remain focused on executing a disciplined development program that balances growth with capital efficiency. Our diversified asset base across our Appalachian platform provides flexibility to allocate capital toward the highest return opportunities depending on market conditions. With that, I will turn the call over to David to review our financial results and outlook. Thank you, Zach, and good morning.

Our financial results for the fourth quarter and full year reflect the strong operational execution delivered by our team throughout 2025. During the fourth quarter, net production averaged 45.3 MBOE per day, and we generated adjusted EBITDAX of $94.0 million, representing adjusted EBITDA margins of approximately $3.76 per MCFE, or $22.58 per BOE. During the quarter, we realized average prices of $51.22 per barrel for oil, $3.14 for MCF for natural gas, and $23.56 per barrel per minute natural gas liquid, with realized pricing reflecting regional market conditions and differentials across Appalachia, consistent with our expectations during the quarter. For the full year, adjusted EBITDA totaled $261 million, reflecting continued production growth combined with disciplined cost management. Operating costs during the quarter averaged $5.56 for BOE, reflecting continued operational efficiency and increasing contribution of natural gas production from Pennsylvania within our overall portfolio. We believe that we maintain one of the lowest operating cost structures in Appalachia, supporting our strong capital efficiency metrics. We continue to witness our costs decline approximately 36% during the fourth quarter when compared to the prior year. As we continue to expand our natural gas volumes in Pennsylvania, we would anticipate to experience further decline in our overall cost structure as those volumes are on our wholly owned midstream system. During the fiscal year 2025, we incurred approximately $326 million in capital expenditures, including drilling and completion capex of $274.7 million, land spend of $35.5 million, and midstream and infrastructure investments of approximately $16.1 million. For the full year, development capital expenditures total approximately $290.8 million, consistent with our previously communicated development plan. Our capital allocation framework remains focused on maximizing long-term shareholder value. We prioritize funding high return development opportunities across our Utica and Marcellus assets, expanding our development inventory through targeted acquisitions and maintaining a strong and flexible balance sheet. Additionally, during the fourth quarter, we repurchased approximately 87,000 shares of Infinity Commons stock at an average price of $13.60 per share. For our total repurchases, of approximately $1.2 million during the quarter. We remain opportunistic in executing share repurchases while ensuring that capital returns do not impact our ability to execute our development program or pursue strategic opportunities. As Zach mentioned previously, during the fourth quarter we also completed a $350 million strategic equity investment in the form of a perpetual convertible preferred security. which is convertible into common equity at $21.36 per share, which is above our IPO price, aligning investors with long-term equity value creation. This hybrid structure provides a permanent equity capital that allowed us to repay a portion of the revolver borrowing used to finance the Ohio acquisition, while also supporting the increase in our working interest of the transaction to 60%. Importantly, the structure limits immediate solution to existing shareholders and preserves balance sheet flexibility relative to incremental debt. At year end, we had net debt of approximately $148 million and total liquidity of approximately $227 million. Before turning to our outlook for 2026, it is important to note that our guidance reflects both the operational progress discussed earlier as well as the capital structure initiatives completed during the fourth quarter of 2025 and the first quarter of 2026. Our development program is expected to operate two drilling rigs during 2026, including one rig deployed across our legacy assets in Pennsylvania and Ohio, and one rig dedicated to the recently acquired Ohio Utica assets, beginning early in the second quarter. This level of activity supports continued production growth while maintaining capital discipline and operational flexibility across both areas. Looking ahead, we expect to continue advancing development across all areas within our portfolio and anticipate turning into sales 31 gross wells during calendar year 2026, consistent with the development plan outlined in our investor presentation. In the first quarter of 2026, we expect to turn four oil-weighted wells in line on all Ohio Utica assets. For 2026, we expect net production to average between 345 and 375 MMCFE per day, representing growth of approximately 70% year over year. Development capital expenditures, which are a combination of drilling and completion, as well as midstream capital expenditures, are expected to range between $450 million and $500 million. With that, I will turn the call back to Zach for closing remarks.

Thank you, David. To summarize, 2025 and early 2026 has been a transformative period for Infinity Natural Resources as we continue to execute operationally, scale our Appalachian platform through strategic acquisitions, and reinforce the balance sheet with new long-term equity partners. We enter into 2026 with a strong operational foundation, expanded development inventory, and a strengthened capital structure. Our position across oil-weighted Ohio Utica, rich gas Ohio Utica opportunities, and dry gas Marcellus and Utica development provides the flexibility to continue delivering sustainable growth and value for our shareholders. Operator, please open the line for questions.

We will now begin the question and answer session. To ask a question, press star then the number one on your telephone keypad. We kindly ask that you please limit your questions to one and one follow up. Our first question will come from the line of Michael Ciala with Stevens. Please go ahead.

Hi, good morning. Wanted to ask on your 26 plan, your CAPEX guidance is a fair bit above annual assessments. Can you talk about any changes you made from – you gave some soft guidance back in mid-December when you did the call on the Antero acquisition. Any changes that you've made since then and any things that might be in there that – David, you mentioned midstream is built into that. I wanted to see if you could break that out at all. Thank you.

Hey, Michael. Zach speaking here. Thank you for that question. I think it's a timely one. First and foremost, I would want to point you back to slide 7 and 10 of our investor deck showing how well we performed last year. We've had cost improvements from a DNC perspective and continue to have great capital efficiency and EBITDA margins. So this capital guidance range that we're talking about and that you're trying to interpret is not a reflection of drilling cost concerns. We continue to execute very well there and we're gaining scale. So we expect additional synergies and improvements. What I think is helpful to understand is some things related to the acquisition. First of all, we have an additional 9% of CapEx. Now we took on additional working interest from the Ontario deal than what we knew when we were talking before. Also the first pad out of the gate the English pad, will be completed by us and the capital borne by us. So that's 19,000 lateral feet on three separate wells. So that's a lot of lateral footage with completions activities that are coming to us. Another point on the Ontario deal, we wanted to make sure we had a rig ready to go as quickly as we could, and we didn't want to have the asset closed and be looking for a rig. So as a result of that effort, we picked up the rig before close, and that rig's been drilling on INR projects. effectively running two rigs across our base business for part of this this first quarter so those things are all adding to it um that were a little bit different than when we visited before you talked about midstream i think that's an important component of this too and while we don't break that out we are uh we've more than doubled the size of our midstream with the acquisitions of of antero and we're actively developing in both areas that would require midstream investments And so we'll expect to spend money in both areas, PA and Ohio, as we build out midstream. And I think for us, we don't break it out because it's a little bit fungible and it still gives us some flexibility in our pad selection and where we're deploying capital between drilling wells that don't require midstream. Maybe you add an extra well to that pad versus somewhere where you need to add midstream so you allocate dollars there. A couple other things just to point out too is we want to make sure we maintain flexibility in that capital guidance. for what we did last year, which is pick up working interest. Our land group has been incredibly skilled at the ground game and adding in working interest and lengthening laterals. So we don't want to surprise somebody if we end up with more working interest or longer laterals than we talked about. And now that we're running two rigs, the timing component becomes a little bit magnified, where if those rigs gain pace and start drilling faster because we have rigs that are having shorter rig moves because they're staying in Ohio instead of bouncing back and forth between Ohio to PA, for example, and we pull forward a well into the year. And that's another $10 to $15 million that hits your CapEx budget. And those back-of-the-year CapEx spends don't reflect themselves in 2026 production. So a lot of things going on there. But I think for us, we want to make sure we give ourselves the flexibility to react and be able to plan our business without surprising anybody as other projects come up. And there are certainly capital projects we haven't budgeted before that I think could be interesting, including for the deep tri-gas unit.

I appreciate that detail, Zach. I guess just to clarify, in terms of well costs, you're not anticipating any OFS inflation or anything. You're still anticipating well costs to at least stay flat or maybe even trend down. Is that right? Yes, that is correct. Great. I want to follow up on the, you mentioned the deep Utica, which you've budgeted for this year. Anything more you can add on that play while you decided to, I know you guys have kind of gone back and forth on when you were going to drill that first well. I guess what helped you decide to put it in the 26 plan and what do you think your exposure there is if the play works?

TAB, Mark McIntyre, And you know we wanted to budget for it will still maintain the flexibility to choose to do it or not do it as we see gas prices and other factors. TAB, Mark McIntyre, Maybe will crisis ripple through our decision making process, but we set ourselves up with a rig that's capable and experienced at doing this, one of the things we wanted to do is make sure. we set ourselves up for success to the greatest extent possible. And we're really excited about some of the deep dry gas Utica experience that we've added to our internal staff and to our field staff as well. When we get to the right project and we do have a permit in hand and we have a rig that's capable and experienced drilling this, we'll be positioned to execute.

Hey Michael, this is David Sproul. I think the You can look at the development plan that we have, and the development of that well would be towards the latter half of this year. We would not anticipate that well coming online this year. I think we've always been excited about the Utica. That's not changed. It's changed. There's only been more excitement about what we see in the deep dry gas Utica. There are plenty of offset development activities to us. We've been watching those. So I think for us, it's just consistent with our overall theme of kind of walking before running with regards to developing it. But we are very excited about the prospectivity therein.

Sounds good. Appreciate it, guys.

Our next question comes from the line of Tim Resvin with KeyBank Capital Markets. Please go ahead.

Good morning, folks, and thanks for taking our questions. Michael actually took some of the ones I was going to hit at, but I wanted to dig back in on the Deep Utica first. It looks like you have a spud plan or you may have recently spud that well in the Deep Utica. I know there's a Cooper pad in Armstrong County. Can you give kind of any context? Have you spud this well yet? I recognize you don't plan to complete it this year, but Is that definitely happening or is it still kind of a TBD?

Yeah, so I'll make a sort of technical differentiation here for you. If you're watching stuff online, when you set the conductor, it triggers a regulatory spud. So we view that as really just preparation for a true spud and don't want to get anybody confused as to what's specifically going on. I think what David said a moment ago is most accurate is that We've got it really, the capital towards the back half of this year and production really not coming in until next as we look at it today.

The other thing I'd note here, Tim, for you and everybody listening is if you think about our development in the South Bend field, remember we have multiple horizons that we are targeting. One of the good things about our position that is unique is that we have dry gas Marcellus there and dry gas Deep Utica. And so as we come in and develop Marcellus, we can come back in and develop Deep Utica. So consistent with our approach there, consistent with our view of maintaining optionality, that's kind of what you're seeing when you see that alert from a regulatory spot.

Okay. Okay. Okay. We'll stay tuned. Sounds like nothing imminent on that front. And then I appreciate the comments on CapEx. So, Zach, as my follow-up, you know, we talked about a year ago and you mentioned, you know, Infinity wants to stay nimble, but you can't be schizophrenic, you know, as you sort of chase commodity prices. You know, cycle times seem to be ever shorter and sort of more violent today. How does the board think about that balance? between sort of chasing kind of what you're seeing on the screens in a day, you know, versus the cycle times you have. How nimble can you be and sort of how locked in is this 2026 program?

Sure. So I'll give a little bit of color as to what we've done and what to expect. So we already this year, we turned in line for oil weighted wells. So it feels like that's maybe that's a testament as to why you can't be schizophrenic in your capital deployment, because These wells, you're very excited to have them on. And if we'd have been fully focused on natural gas, we would have missed a lot of this exposure. We anticipate another pad coming online by mid-year. And so like the oil volumes that we're bringing in in this calendar year. As far as how we deploy capital differently, our development plan didn't come together in the last two weeks. Our development plan has been thoughtfully put together, presented to the board. We really like the projects, both in oil and gas. And we always have the slide in our investor deck where you see the returns at different prices. So we'll always evaluate if there's an oil project that we should swap in or tuck in, but that becomes not necessarily always the most prudent thing for us to do. So we'll take some time here. We'll see if these prices stay. That's a big part of the question. Is this a blip? And we don't want to move the rig from a gas project to an oil project and it turn out to be a head fake, which we've seen on the gas side from time to time. continue to have our land teams and our regulatory teams and our our construction teams be prepared for that optionality and we'll see what the next quarter brings okay thank you thank you our next question comes from the line of John Freeman with Raymond James please go ahead thanks good morning guys uh just

Just wanted to flush out maybe sort of how to think about the production cadences as we go through the year. Obviously, it, you know, it appears to be a pretty back half weighted program with, you know, you've only got four of the 31 tills coming on in one queue. And maybe just sort of how to think about how we progress through the rest of the year, just to give us a little bit of help on that side.

Yeah, I think, John, you know, we think back to some of the comments that Zach made earlier. about cycle times, I kind of push you to think about that. When you bring a rig out and you start drilling holes, it's a good rule of thumb for us. It's kind of six months from spud to turn in line for us, six to seven months after that. So to your point, as we ramp up development, much like what you witnessed in 2025, we would anticipate a considerable ramp through the middle of the year. and into the fourth quarter as well. So, you know, we've started the year, albeit relatively slow. We've turned in, as Zach kind of noted already, four wells, four very long oil-weighted wells. We'll start picking up pace with regards to the turn on lines through the balance of the year.

Perfect. Thanks. And then just a quick follow-up on that. How many ducks did you all enter 2026 with?

I think we entered the year with, I mean, the interesting thing here, John, is the timing of where that calendar falls. I think we entered the year with eight ducks that we had, and we were in the process of drilling a couple more wells during where December 31st fell. Of those eight ducks that we carried into the year, we have turned into sales four of them. We turned in two wells in Carroll County, and we turned in two wells in Garcia County. And we're actively completing the remainder.

Got it. Thanks, guys. Nice quarter. Thank you. Appreciate it.

Our next question comes from the line of Sam Cox with RBC Capital Markets. Please go ahead.

Hi. Hi. Good morning. Thanks for taking my question. I just wanted to touch on the rig cadence for 2026. Obviously, given certain macro conditions, what would need to happen to evaluate a potential third operated rig?

You know, that's a great question, Sam. I think for us, we are cognizant of our portfolio and the returns that we have. So we're really excited about that. I think we're probably more likely to maybe consider additional frack crews, I would say, than drilling rigs at this stage. But it's difficult to say. Honestly, three weeks ago, oil prices were, you know, a little bit different than they were during the straight kind of considerations that we're seeing right now. So, you know, if oil prices stay extremely elevated from spot relative, you know, throughout the remainder of the year, something that we would evaluate. But we're not, I want to caution you to think that we're not windsocked here. We're systematically exploiting the reservoirs that we have. in a prudent manner. So, you know, we'd like to maintain optionality. We've built into our forecast the ability to maintain optionality both in natural gas and oil. So we have flexibility to do the right things. But we're going to let other people kind of windsock with the commodities and make that determination. Today, we're just systematically exploiting what we have.

Got it. No, I appreciate that. And then you also recently added some long-term hedges to the disclosure this time. How are you all thinking about your hedging strategy?

Sure. You know, it's always – hedging is always interesting, right? You always look back at the hindsight 2020. You know, would I – everybody – it's not shocking. Everybody would like to have higher hedging prices. I think we're not speculating on – I mean – We're really not speculating on oil prices or natural gas prices. What we do is de-risk our development program. You know, if you look on slide eight, you can see the returns that we have here for oil-weighted or natural gas-weighted projects. So when we can get to a situation, whether it be at swaps or callers, that we can lock in really attractive discounted returns on investment, we will do that. The other thing I'd note is We stay true to our tenants here. We've talked about hedging when the rig shows up. We've talked about hedging when the completion crews show up. Zach was talking about the activities that we had. We entered the year with eight oil-weighted wells that we were completing and turning into sales. And so we've layered on hedges. Obviously, some of those hedges are a little bit lower than maybe the spot is on 2027, but not by much. But we are looking to systematically de-risk our development plan and lock in those returns as we've indicated to our shareholders. And we've done that. So we're pretty proud of what we've done. Got it. Appreciate it, guys. Thanks.

Thank you. Again, to ask a question, press star followed by the number one on your telephone keypad. And our next question will come from the line of Nicholas Pope with Roth Capital. Please go ahead.

Hey, good morning, everyone. Good morning. fourth quarter saw a big jump in oil volumes um just three wells brought online in ohio uh i mean it was obviously the i think the strongest quarter y'all seen just curious if if there was anything i guess performance wise from the wells over there in ohio that y'all saw that kind of really supported that or if it was just really where in the utica you guys were were drilling on the quarter it just it just a really big jump um really solid number so just kind of curious If that was performance, timing, or just location that was kind of driving that really strong oil number.

Well, thank you for noticing. We were really excited with those results, too. And I think the projects that we brought in in the back half of 2026, or 2025, excuse me, were fantastic. Really a testament to the operational team, making sure cycle times were fast and execution of long laterals was done flawlessly. So kudos to them for putting us in a position to talk about these volumes. And then kudos to the land department for making sure that our working interest was high because volumes are important, but having a high working interest in those volumes is even more critical. And I think from a performance perspective, we don't think those performances are anomalies. That's how we expect to perform. And we're very excited the way that those projects have looked in the back view.

That makes sense. Jumping around a little bit, I know you you didn't provide explicit guidance here, but unit operating costs, gathering costs were both down kind of throughout the year. Big acquisition of midstream assets, a lot of capital spend in 2026 implied kind of in the midstream businesses. Directionally trying to understand where those costs are going with that midstream investment. And is there also going to be

of line items kind of growing for midstream revenues outside of kind of the the operating cost line items like how is that going to work what a bucket sure i'm going to take the operating cost question first and then i'll come back to the midstream revenue question second with regards to operating costs what you've witnessed in 2025 is an increased activity in pennsylvania as well as managing our cost down in Ohio. So let me unpack that just a little bit. Remember in Pennsylvania on our gas assets, on Marcella's assets there, we don't have – we own the midstream, so we don't have a meaningful GP&T charge. The second thing is volumetrically the natural gas wells that we put on are significantly larger than the oil-weighted wells that we put into sales in Ohio, just from a petrophysical aspect. So as you think about the blending of that, not only are you blending in a lower cost structure, but you're also blending it in with a higher volume aspect. So naturally, you're seeing some of that decline happen. We have witnessed declines from an LOE in particular basis in Ohio. We've seen consistent GPMT in Ohio. but on a blending aspect you're seeing a decline in quarter over quarter in year over year with regards to our overall cost structure for 2025. we would anticipate that to continue as we bring on more natural gas volumes as well as when we bring on more volumes associated with the acquired properties from entero entero properties again we own the midstream so while there is additional expenditures associated with fractionation activities on some of the wells. We can reduce our overall blended costs or continue to reduce our overall blended costs by integrating those assets there. Turning to the midstream side, we do generate some midstream third-party, midstream revenues on our system. We've done that. You can see that in the line item for revenues that we have for midstream. It is a great opportunity set for us as we think about the future, not only for our assets in Pennsylvania, but our assets that we've acquired from Mantero. We have a very large system. It's currently today, we're capable of moving upwards of 1.2 BCF a day of capacity. So we have a very big midstream system that is definitely on our radar and strategic endeavors to expand volumes associated with third parties onto that system.

Got it. That's all very helpful. I appreciate it. I appreciate the time this morning. Thank you.

And this concludes the question and answer session. I'll hand the call back over to Zach for any closing comments.

Thank you all very much for your interest in Infinity Natural Resources. We're very excited to talk about the quarter and the upcoming year, and we look forward to visiting again soon. Thank you.

This concludes today's call. Thank you all for joining. You may now disconnect.