Were the two strategic acquisitions (San Jacinto) part of the nine opportunities identified before the IPO, and how do they compare to past acquisitions?

Daniel Herz confirmed that these acquisitions were part of the "immediate opportunities" identified pre-IPO. He noted that WhiteHawk had previously owned 20% of the Appalachian asset since 2024, allowing for thorough due diligence, and had been monitoring the Haynesville asset for several years. “Yes, this was part of what I would characterize as $0.5 billion of immediate opportunities in front of us that we had identified on the page that you're talking about.”

How does WhiteHawk balance its goal of 1x leverage with potential future acquisitions, especially if current acquisitions might push leverage slightly above that target?

Daniel Herz stated they have attractive tools for growth and are targeting below 1x leverage. He expects the base business and ground game acquisitions to grow EBITDA, bringing leverage below 1x over time. “We're targeting below 1x leverage. I would think about I would think about our business, the base business and then the ground game acquisitions and beyond our ability and really our expectation to grow our EBITDA.”

How does the trend of large producers integrating midstream infrastructure affect WhiteHawk's investment decisions and positioning?

Daniel Herz emphasized that WhiteHawk benefits from this trend due to its alignment with large, well-capitalized operators who achieve the highest natural gas prices. WhiteHawk incurs no midstream capital costs but benefits from the pricing achieved by its operators' integrated models. “We spend no capital, obviously, on midstream acquisitions or infrastructure of size, but we benefit from their pricing that they're able to achieve.”

WHK

WhiteHawk Minerals (WHK) Q2 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q2 FY26)· Energy· Aug 13, 2026

Source: earnings call transcript

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

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

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

Guidance & targets

Category	Target	Timeline	Confidence
Acquisition cash flow multiple	6 to 7x medium materiality	Future acquisitions	High
Production from new acquisitions	approximately 16 million cubic feet per day medium materiality	FY27	High
Incremental cash flow from new acquisitions	approximately $17 million medium materiality	FY27	High
Production hedging coverage	90% high materiality	Next 12 months	High
Production hedging coverage	80% high materiality	Following 12 months (Year 2)	High
Production hedging coverage	60% high materiality	Year 3	High
Dividend payout ratio	at least 75% high materiality	Ongoing	High
Long-term leverage target	approximately 1x adjusted EBITDA high materiality	Long-term	High

Segment performance

Segment	Revenue	YoY	QoQ	Margin
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	—	—	—	—

Orderbook & backlog

Acquisitions signed since IPO $112 million Q2 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

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

Natural gas price volatility Ongoing

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 costs Q2 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

SJM II acquisition closing

late September

Current Signed definitive agreements

Target Closed

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.

Find out whether WHK delivers this. Inve re-checks your case every morning.

Q&A highlights

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 read 5 chapters

Detailed narrative

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.

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.

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.

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.

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.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.