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    INR
    Earnings call· Jun 2026(Q2 FY26)

    INFINITY NATURAL RESOURCES Q2 FY26 earnings call INR

    Aug 11, 2026 Source

    Executive summary

    Infinity Natural Resources Q2 FY26 — Record Adjusted EBITDAX and Antero Integration Progress

    Infinity Natural Resources delivered a record quarter, driven by strong production growth and successful integration of the Antero assets, which are now transitioning to active development. The company reaffirmed its full-year production and capital expenditure guidance, emphasizing capital efficiency and strategic midstream utilization. Leadership changes were announced to support future growth and M&A opportunities.

    Highlights

    5

    • Net production averaged 348 MMcfe/d, representing 75% year-over-year growth.

    • Achieved highest quarterly adjusted EBITDAX in company history at $115 million.

    • Oil production increased 102% year-over-year to approximately 12.4 thousand barrels per day.

    • NGL realizations increased 70% year-over-year to $32.27 per barrel.

    • Controllable cash operating costs decreased approximately 9% from Q2 2025 to $1.58 per Mcfe.

    Concerns

    2

    • GP&T expense increased due to the inclusion of REX Zone 3 firm transportation costs and increased liquids-weighted development.

    • Upward pressure on service costs, including diesel and steel, is anticipated in H2 FY26.

    Guidance & targets

    3
    CategoryTargetConfidence
    Full-year 2026 Net Production
    345-375 million cubic feet equivalent per day
    high materiality
    High
    Full-year 2026 Development Capital Expenditures
    $450 million and $500 million
    high materiality
    High
    Q3 FY26 Wells Turn-in-Line
    7 wells
    medium materiality
    High

    Operational metrics

    31
    Adjusted EBITDAX
    $115 millioncompany history high
    Q2 FY26

    Highest quarterly adjusted EBITDAX in company history.

    Adjusted EBITDAX Margin
    $3.62roughly double Appalachian peer group average
    Q2 FY26

    Roughly double that of our Appalachian peer group average.

    Net Production
    348 millionup 75% year-over-year
    Q2 FY26
    Oil Production
    12.4 thousandup 102% year-over-year
    Q2 FY26
    Natural Gas Production
    217 millionup 73% year-over-year
    Q2 FY26
    NGL Production
    9.5 thousandup 57% year-over-year
    Q2 FY26
    Production Mix
    62%
    Q2 FY26
    Production Mix
    21%
    Q2 FY26
    Production Mix
    16%
    Q2 FY26
    Natural Gas Realization
    $2.34
    Q2 FY26

    Benefiting from premium market access and transportation portfolio, including REX Zone 3.

    Oil Price Realization
    $85.41
    Q2 FY26
    NGL Realization
    $32.27increased 70% year-over-year
    Q2 FY26

    Reflecting a more favorable production composition and stronger NGL pricing.

    Controllable Cash Operating Costs
    $1.58down approximately 9% from Q2 2025
    Q2 FY26

    Comprised of LOE, GP&T (excluding firm transportation), recurring cash G&A, midstream O&M, and production taxes.

    Lease Operating Expense
    $0.32
    Q2 FY26

    Component of controllable cash operating costs.

    Gathering, Processing & Transportation
    $0.93
    Q2 FY26

    Increased primarily due to REX Zone 3 contract and overall volumes. Excluding firm transportation, it declined quarter-over-quarter.

    Recurring Cash G&A
    $0.20
    Q2 FY26

    Component of controllable cash operating costs.

    Midstream Operations and Maintenance Expenses
    $0.07
    Q2 FY26

    Component of controllable cash operating costs.

    Production Taxes
    $0.06
    Q2 FY26

    Component of controllable cash operating costs.

    Lateral Feet Drilled Per Day
    15%compared to 2025 average
    Q2 FY26

    Increased efficiency in drilling operations.

    In-Zone Geosteering Accuracy
    100%
    Q2 FY26

    Maintained accuracy in drilling operations.

    Completion Cost Reduction
    $50
    Q2 FY26

    Validated a revised completion design.

    Midstream System Utilization
    35%
    Q2 FY26

    Total utilization of the integrated midstream system.

    Midstream System Utilization
    70%increased approximately 30% since Q1
    Q2 FY26

    Percentage of current gross natural gas production flowing through wholly owned system.

    Midstream Gathering Capacity
    1 Bcf
    Q2 FY26

    Total gathering capacity across integrated midstream system.

    Natural Gas Hedged
    81%
    remainder of 2026

    Based on midpoint of guidance.

    Total Volumes Hedged
    70%
    remainder of 2026

    Based on midpoint of guidance.

    Development Cycle Time
    6-7 months
    current

    Provides operational flexibility to adjust activity.

    Wells Online
    10
    Q2 FY26
    Wells Spudded
    9
    Q2 FY26
    Deep Dry Gas Utica Lateral Length
    9,500 feet
    Q2 FY26

    Drilled for the first deep dry gas Utica well.

    Proppant Loading
    1,000 poundsmore than Antero
    current

    Pumping approximately 1,000 pounds of sand per foot more than prior operator.

    Industry KPIs

    5
    MetricValueDetails
    D c efficiency rig activity15%%
    Pipeline throughput storage1 Bcfper day
    Realized price differential$85.41per barrel
    Basin level production volume348 millioncubic feet equivalent per day
    Cost of supply unit cash cost$1.58per Mcfe

    Deals & partnerships

    1
    AnteroAcquisition of Ohio Utica upstream assets and associated midstream system.

    Transitioned from integration to active development, bringing first wells online and beginning drilling operations on new pads. Includes 600 MMcf/d midstream capacity in Ohio.

    Capital programs

    2
    Development Activitiesunderway
    Period spend: $129 million

    Part of total capital expenditures incurred in Q2 FY26.

    Land Activitiesunderway
    Period spend: $8 million

    Part of total capital expenditures incurred in Q2 FY26.

    Risks & headwinds

    2
    Increased Gathering, Processing & Transportation (GP&T) expenseQ2 FY26

    GP&T expense increased to $0.93 per Mcfe in Q2 FY26

    Mitigation: Partially due to REX Zone 3 contract (which provides higher realizations) and increased liquids-weighted development (which yields more revenue per unit). Expects structural decline as volumes grow and flow through own midstream system.

    Upward pressure on service costsSecond half of 2026

    Diesel, steel, and other inputs

    Mitigation: Operational efficiency improvements (e.g., drilling and completion efficiencies) are expected to offset modest upside pressure on pricing, allowing execution within capital expenditure guidance.

    What to watch in Q3 FY26

    4

    Antero Asset Development Synergies

    Coming quarters
    CurrentEliminated pad/road/pipeline construction by combining old drilling pads
    TargetQuantified update on $25 million synergy target

    Why it matters

    Realizing these synergies will significantly improve capital efficiency and project returns from the Antero acquisition.

    Yes, I think it's too early to speak in a lot of detail, but I think first and foremost, there's a lot of synergies that come from the REX contract that we bought with the deal, helping us get our volumes from our legacy pads to a premium market. And then we have maybe just a little bit of a highlight that we'll share more details on in the coming quarters⏳. But the pad that the drilling rig is sitting on now is going to be a combination of 2 pads from the old drilling plan, the Antero drilling plan. So that's allowed us to eliminate pad construction, road construction, and pipeline construction, and put these wells that we're drilling onto an existing pad and lever what's already been built there. So really excited about that, and not going to talk numbers today, but you do that a few times and you really work through that $25 million in synergies quickly.

    Q&A highlights

    7

    Is the oilier skew to summer/fall TILs and gassier TILs in Q4 intentional to capture gas price seasonality, and how is this considered for 2027?

    Management stated they do not chase commodity price whims but execute projects with thoughtful hedging. The current timing is a function of rig cadence, hedging, and a mid-year reorganization to bring oil fracs ahead of gas fracs, not an attempt to time gas prices.

    “I think about it less of trying to time a gas turn-in-line with optionality and more of this is a function of our typical rig cadence matched with thoughtful hedging and the little bit of the reorganization of completions we did in the middle of the year to bring the oil fracs ahead of the gas fracs.”

    asked by Timothy Rezvan · answered by Zack Arnold

    2 min read6 chapters

    Detailed Narrative

    01

    Leadership Transition and Strategic Growth

    Infinity Natural Resources announced significant leadership changes, with David Sproule stepping down as EVP and CFO, and Kerry Bates assuming the role, supported by Andrew Judge as SVP of Finance. These appointments are aimed at strengthening the organizational depth to execute on the company's long-term strategy, particularly in capital raising, transaction management, and M&A evaluation, aligning with the company's growth trajectory.

    02

    Antero Asset Integration and Development

    The company is actively developing its recently acquired Ohio Utica assets from Antero, bringing 10 wells online, including the first 3 rich gas wells from the acquisition. Drilling operations have commenced on new pads, with the second pad completed and a third underway. Management expressed increasing conviction in the long-term value of these assets, particularly their potential to scale upstream production by utilizing the underutilized midstream system.

    03

    Operational Efficiency Gains

    Infinity achieved a step change in drilling and completion efficiency during the quarter, increasing lateral feet drilled per day by 15% compared to the 2025 average while maintaining 100% in-zone geosteering accuracy. A revised completion design in Guernsey County reduced completion costs by $50 per foot through higher proppant loading, extended stage spacing, and fewer frac stages, enhancing capital efficiency and accelerating cash flow.

    04

    Midstream System Utilization and Strategy

    The company's wholly-owned midstream system saw utilization increase by approximately 30% since Q1, with 70% of current gross natural gas production flowing through it. The system boasts 1 Bcf/day gathering capacity (400 MMcf/d in PA, 600 MMcf/d in OH) and is currently operating at 35% total utilization, providing significant capacity for future production growth without substantial incremental investment. This infrastructure also offers premium market access, largely tied to REX Zone 3, and allows for diversification as in-basin sinks develop.

    05

    Hedging Philosophy and Capital Allocation

    Infinity's hedging strategy is project-level, aiming to lock in returns and provide cash flow visibility, with 81% of natural gas and 70% of total volumes hedged for the remainder of 2026. The capital allocation philosophy prioritizes returns over commodities, investing in organic leasing, acquisitions, upstream development, and midstream infrastructure, while maintaining flexibility to adapt to evolving market conditions.

    06

    Deep Dry Gas Utica Exploration

    The company successfully drilled a vertical pilot and a 9,500-foot lateral for its first deep dry gas Utica well in Pennsylvania, collecting subsurface data and core samples for analysis. While the evaluation is ongoing, the team is focused on completing Marcellus wells on the same pad, deferring the Utica completion decision until further analysis of the collected data.

    AI-generated summary of the company’s earnings call. Not investment advice.