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    WHK
    Earnings call· Jun 2026(Q2 FY26)

    WhiteHawk Minerals Q2 FY26 earnings call WHK

    Aug 13, 2026 Source

    Executive summary

    WhiteHawk Minerals Q2 FY26 — Strong Production Growth and Strategic Acquisitions

    WhiteHawk Minerals delivered robust Q2 FY26 results, marked by significant production growth and strategic acquisitions post-IPO. The company is focused on disciplined growth through its two-pronged acquisition strategy in economic natural gas basins, while maintaining a conservative balance sheet and a strong hedging program to protect downside. Management highlighted macro tailwinds from LNG exports and data center power demand, positioning the company for future natural gas price increases.

    Highlights

    4

    • Net production increased by 57% YoY to approximately 70 million cubic feet equivalents per day.

    • Signed definitive agreements for acquisitions totaling nearly $112 million, expected to add approximately 16 million cubic feet per day in 2027 and $17 million of incremental cash flow.

    • Initiated first quarterly cash dividend at $0.50 per share ($2.00 annualized), implying 1.3x coverage by cash available for distribution.

    • Reduced senior notes to $68.7 million and achieved net debt of $55.5 million with 0.67x leverage at quarter end.

    Concerns

    1

    • The company reported a GAAP net loss of $39.2 million for the quarter, primarily due to nonrecurring IPO and internalization costs.

    Guidance & targets

    8
    CategoryTargetConfidence
    Acquisition cash flow multiple
    6 to 7x
    medium materiality
    High
    Production from new acquisitions
    approximately 16 million cubic feet per day
    medium materiality
    High
    Incremental cash flow from new acquisitions
    approximately $17 million
    medium materiality
    High
    Production hedging coverage
    90%
    high materiality
    High
    Production hedging coverage
    80%
    high materiality
    High
    Production hedging coverage
    60%
    high materiality
    High
    Dividend payout ratio
    at least 75%
    high materiality
    High
    Long-term leverage target
    approximately 1x adjusted EBITDA
    high materiality
    High

    Segment performance

    2
    SegmentRevenueYoYQoQMargin
    Marcellus and Utica Shale (Appalachia)
    This region is a primary focus, benefiting from major operators and expected demand growth from data centers and AI.
    Production contribution: 55% of totalRoyalty interest on gross acreage: 0.51% (out of average 17% royalty rate)Royalty on operator production: 43% of combined gross production from EQT, Range, CNX, Antero
    		————
    Haynesville Shale
    Provides direct access to growing LNG export markets.
    Production contribution: 25% of totalRoyalty on operator production: 45% of combined gross production from Expand, Mitsubishi Adamas, Comstock, Tokyo Gas
    		————

    Operational metrics

    37
    Net production
    70 million57% increase YoY; 9% increase QoQ
    Q2 FY26

    We delivered a strong second quarter with net production of approximately 70 million cubic feet equivalents per day of natural gas. This was an increase of 57% over the same period in 2025 and a 9% increase over the first quarter of 2026.

    Producing wells
    more than 11,500
    Q2 FY26

    We generated this production from our more than 11,500 producing wells.

    Gross line-of-sight wells
    more than 500
    Q2 FY26

    We have more than 500 gross line-of-sight wells, positioning us for solid production from our asset base over the next year.

    Gross identified undeveloped locations
    more than 9,000
    Q2 FY26

    We have then benefited from our more than 9,000 gross identified undeveloped locations across our 3.6 million gross unit acres.

    Royalty on total U.S. natural gas production
    13%
    Q2 FY26

    we receive royalties on 13% of total U.S. natural gas production, making us what I believe is the premier natural gas mineral and royalty owner.

    Strategic acquisition opportunities
    $3 billion to $5 billion
    Future

    we see between $3 billion and $5 billion of strategic acquisition opportunities in front of us in the Marcellus, Utica and Haynesville Shale.

    Ground game acquisition opportunity
    over $30 billionover 35x existing asset base
    Future

    Furthermore, the ground game opportunity where we buy from individual mineral owners is well over 35x our existing asset base or over $30 billion.

    Natural gas demand growth
    7 billion cubic feet per day
    by 2031

    There are 21 announced new or planned natural gas power plants to support data center and AI power demand surrounding our Appalachian assets, which is expected to add 7 billion cubic feet per day of natural gas demand in the Marcellus Shale by 2031.

    LNG export facilities under construction
    14 billion cubic feet per day
    by 2030

    Currently, there are 14 billion cubic feet per day of LNG export facilities under construction, which should be online by 2030.

    Total natural gas demand growth
    21 billion cubic feet per day
    by 2031

    So in total, we expect 21 billion cubic feet per day of natural gas demand growth by 2031, much of which will be met by growth in the Marcellus, Utica and Haynesville Shale.

    Average realized natural gas price
    $3.43
    Q2 FY26

    our average realized natural gas price for the quarter was $3.43 per Mcf, including hedge settlements

    Average realized natural gas price
    $2.42
    Q2 FY26

    compared to a $2.42 per Mcf before the effect of those hedge settlements.

    Henry Hub average price
    $2.90
    Q2 FY26

    For context, Henry Hub first-of-the-month pricing averaged $2.90 per MMBtu.

    Natural gas volumes hedged
    96%
    Q2 FY26

    For the quarter, our natural gas volumes were 96% hedged at $4.02

    Oil volumes hedged
    83%
    Q2 FY26

    while our oil volumes were 83% hedged at $62.

    Operating revenue
    $25.7 million
    Q2 FY26

    Our operating revenue, which includes the realized gains on our hedging instruments, was $25.7 million for the second quarter.

    Total asset cash flow
    $22.4 million10% increase from $20.4 million in Q1 FY26
    Q2 FY26

    Total asset cash flow was $22.4 million for the quarter, including the $3.3 million or $0.52 per Mcfe of operating expenses incurred during the period... Total asset cash flow for the second quarter represented a 10% increase from $20.4 million realized in the first quarter of this year.

    Total revenue (GAAP)
    $29.1 million
    Q2 FY26

    On a GAAP basis, our total revenue was $29.1 million, including an additional $6.7 million in unrealized mark-to-market hedge gains.

    Adjusted EBITDA
    $20.7 million
    Q2 FY26

    Our adjusted EBITDA, which is effectively comprised of our asset cash flows less G&A expenses, was $20.7 million for the second quarter after giving effect to our $1.78 million of G&A expense, which excludes certain nonrecurring IPO and other transaction-related costs.

    Senior notes outstanding
    $75 million
    post-IPO

    Concurrent with the closing of the IPO, we reduced our senior notes to $75 million outstanding, which bore interest at an 8.5% effective rate

    Implied net interest expense
    $1.6 million
    Q2 FY26

    giving an implied net interest expense of $1.6 million for the quarter.

    Series B preferred stock outstanding
    $46 million
    pro forma for IPO

    Also pro forma for the IPO, we have $46 million of Series B preferred stock outstanding, which pays a 10% coupon

    Series B preferred stock coupon payment
    $1.2 million
    Q2 FY26

    or $1.2 million for the quarter.

    Estimated cash income taxes paid
    $550,000
    Q2 FY26

    During the second quarter, we paid $550,000 of estimated cash income taxes during the period related to 2026.

    Cash available for distribution
    $17.4 million
    Q2 FY26

    In total, our cash available for distribution for the second quarter was $17.4 million or $0.63 on a per share basis

    Net loss (GAAP)
    $39.2 million
    Q2 FY26

    resulted in a net loss of $39.2 million

    Quarterly cash dividend rate
    $0.50
    Quarterly

    Our Board approved the initiation of our first quarterly cash dividend at a rate of $0.50 per share or $2 per share on an annualized basis.

    Initial declared dividend (prorated)
    $0.11
    Q2 FY26

    This initial dividend has been prorated for the period from the closing of the IPO on June 10 through quarter end, resulting in an initial declared dividend of $0.11 per share.

    Dividend coverage
    1.3x
    Full quarter basis

    Our $0.50 dividend implies 1.3x coverage by cash available for distribution per share on a full quarter basis

    IPO gross proceeds
    over $220 million
    June 2026

    In June, WhiteHawk completed its IPO, generating gross proceeds of over $220 million, including our exercise of the Greenshoe overallotment.

    Debt repaid with IPO proceeds
    more than $162 million
    Q2 FY26

    With the IPO proceeds, we repaid more than $162 million in debt in total

    Senior notes outstanding
    $68.7 million
    Q2 FY26

    reducing our notes outstanding to $68.7 million at quarter end.

    Series B preferred equity retired
    $37.8 million
    Q2 FY26

    We fully retired $37.8 million of our Series B preferred equity

    Series B preferred equity redeemed
    approximately $10 million
    Q2 FY26

    and additionally redeemed approximately $10 million of our Series B preferred equity.

    Net debt
    $55.5 million
    Q2 FY26

    We exited the quarter with net debt of just $55.5 million

    Undrawn revolving credit facility
    $150 million
    Q2 FY26

    and maintained an undrawn $150 million revolving credit facility.

    Leverage ratio
    0.67x
    Q2 FY26

    As of quarter end, we were 0.67x levered.

    Industry KPIs

    4
    MetricValueDetails
    Realized price differential$3.43per Mcf
    Basin level production volume70 millionMcfe/d
    FCF shareholder distributions$0.50per share
    Distributable cash flow per unit share$0.63per share

    Orderbook & backlog

    1
    Acquisitions signed since IPO$112 millionQ2 FY26

    Expected to add approximately 16 Mcf/d and $17 million incremental cash flow in 2027. Funded by $50 million Series E preferred at closing of SJM II acquisition in late September.

    Deals & partnerships

    1
    San Jacinto (SJM II acquisition)Acquisition of mineral and royalty assets in Marcellus Shale and Haynesville Shale.approximately $112 million

    These acquisitions focused in the Marcellus Shale and Haynesville Shale are expected to add approximately 16 million cubic feet per day in 2027, which we expect will add approximately $17 million of incremental cash flow. Further, we expect these assets to generate even more production and cash flow in 2028, placing the acquisition squarely within and even to the low side of our 6 to 7x acquisition cash flow multiple previously discussed. The vast majority of the $105 million is for an asset in Appalachia, of which WhiteHawk previously owned 20% since 2024. Also includes an asset in the Haynesville.

    Risks & headwinds

    2
    Natural gas price volatilityOngoing

    Henry Hub first-of-the-month pricing averaged $2.90 per MMBtu in Q2 FY26, while company's realized price before hedges was $2.42 per Mcf.

    Mitigation: Substantial portion of expected production hedged on a rolling basis (90% for next 12 months, 80% for following 12 months, 60% for year three) to protect downside and secure predictable cash flows.

    Nonrecurring IPO and internalization costsQ2 FY26 (one-time impact)

    $21.7 million nonrecurring loss on extinguishment of debt, $15.8 million nonrecurring management and incentive fees, and $1.7 million noncash change in fair value of earn-out liability, contributing to a GAAP net loss of $39.2 million.

    Mitigation: These are nonrecurring costs associated with the IPO and internalization of the former external manager, not expected to recur.

    What to watch in Q3 FY26

    4

    SJM II acquisition closing

    late September
    CurrentSigned definitive agreements
    TargetClosed

    Why it matters

    The closing of this $112 million acquisition is expected to significantly contribute to production and cash flow in 2027 and 2028, impacting future growth and valuation.

    In order to fund the approximately $112 million in acquisitions signed since our IPO, we have received commitments to fund a $50 million Series E preferred at closing of the SJM II acquisition in late September.

    Q&A highlights

    6

    Given expectations for materially higher gas prices in the future, will WhiteHawk modify its hedging program, or will it continue with its current rolling hedging strategy, trusting the futures curve?

    Management confirmed they will continue with the established rolling hedging strategy (90%, 80%, 60% coverage for the next three years). They expect to benefit from increased production by operators when gas prices rise, and sometimes lower prices create acquisition opportunities.

    “I think that's what you should continue to expect from us is that we will layer in, as Jeff laid out, 90%, 80%, 60% on a rolling basis.”

    asked by Wayne Cooperman · answered by Daniel Herz

    2 min read5 chapters

    Detailed Narrative

    01

    Strategic Positioning and Asset Base

    WhiteHawk Minerals, recently public, benefits from 3.6 million gross unit acres, primarily in the Marcellus, Utica, and Haynesville Shales. The company's business model involves zero capital expenditures and minimal operating expenditures, allowing it to benefit directly from the development activities of major operators like EQT, Range, CNX, Antero, and Expand. This positions WhiteHawk to generate significant cash flow and dividends for shareholders, leveraging the capital deployment of these large producers.

    02

    Two-Pronged Acquisition Strategy

    The company employs a two-pronged acquisition strategy, focusing on both strategic (larger) acquisitions and ground game acquisitions from individual mineral owners. Since its IPO two months prior, WhiteHawk has signed definitive agreements for nearly $112 million in acquisitions, primarily in the Marcellus and Haynesville Shales. These acquisitions are expected to add approximately 16 million cubic feet per day in 2027 and $17 million in incremental cash flow, aligning with the company's 6-7x acquisition cash flow multiple target.

    03

    Exposure to Economic Basins and Demand Growth

    WhiteHawk's exposure to the Marcellus, Utica, and Haynesville Shales, considered the most economic natural gas basins in the U.S., provides resilience in varying price environments. The company anticipates significant natural gas demand growth, with 21 announced new or planned natural gas power plants supporting data centers and AI demand in Appalachia (7 Bcf/day by 2031) and 14 Bcf/day of LNG export facilities under construction by 2030. This combined demand growth of 21 Bcf/day by 2031 is expected to drive higher natural gas prices.

    04

    Operator Alignment and Data Advantage

    WhiteHawk's production is tied to the largest U.S. natural gas producers, with 43% of combined gross production from EQT, Range, CNX, and Antero in the Marcellus, and 45% from Expand, Mitsubishi Adamas, Comstock, and Tokyo Gas in the Haynesville. The company leverages its massive footprint and data on operators and wells to gain a unique data advantage, even partnering with some operators for "ground game" acquisitions ahead of drilling.

    05

    Financial Discipline and Shareholder Returns

    The company reported Q2 FY26 operating revenue of $25.7 million and adjusted EBITDA of $20.7 million. It initiated a quarterly cash dividend of $0.50 per share ($2.00 annualized), targeting at least 75% payout of cash available for distribution. WhiteHawk maintains a conservative balance sheet with net debt of $55.5 million and 0.67x leverage, aiming for a long-term target of approximately 1x adjusted EBITDA to protect its dividend and maintain acquisition flexibility.

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