The following is a summary of the Mach Natural Resources LP (MNR) Q2 2024 Earnings Call Transcript:
Financial Performance:
Mach Natural Resources reported total revenues of $232 million with oil, gas, and NGLs contributing 65%, 15%, and 20% respectively.
Adjusted EBITDA was $136 million, with operating cash flow of $117 million.
They paid $21 million towards principal on their first lien term loan and declared a quarterly cash distribution of $0.90 per unit.
Business Progress:
Mach averaged 89.3 MBOE per day, exceeding the upper end of guidance, with continuous cost control and efficient drilling.
Divested a portion of Western Anadarko acreage for $38 million to enhance distribution without affecting near-term drilling inventory.
Mach Natural Resources maintains strategic flexibility, planning to expand beyond Mid-Continent to regions with less expensive cash flowing assets.
Opportunities:
Mach controls approximately 1 million acres and plans to expand to other basins where production costs for cash flowing assets are lower, potentially enhancing distributions per unit.
The company is considering acquisitions outside of the Mid-Con basin, reflecting a strategic shift towards areas with cheaper productive assets.
Risks:
The company faces increased competition for deals within Oklahoma, which has inflated costs and could affect future acquisitions.
A very low realized price of $1.33 per Mcf for natural gas impacts revenue, and any continued low prices could harm projected distributions.
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