NORTHERN OIL & GAS, INC.(NOG)Q2 2026 法說會逐字稿

Greetings, and welcome to NOG's Second Quarter 2026 Earnings Conference Call. The operator provided instructions to participants. As a reminder, this conference is being recorded. It's now my pleasure to introduce your host, Evelyn Infurna, Vice President, Investor Relations. Thank you. You may begin.

Good morning. Welcome to NOG's Second Quarter 2026 Earnings Conference Call. Yesterday after the close, we released our financial results. You can access our earnings release and presentation in the Investor Relations section of our website at noginc.com. We will be filing our June 30, 2026 Form 10-Q with the SEC within the next few days. I'm joined this morning by our Chief Executive Officer, Nick O'Grady; our President, Adam Dirlam; our Chief Financial Officer, Chad Allen; as well as our Chief Technical Officer, Jim Evans. Our agenda for today's call will be as follows: Chad will provide an overview of our financial performance, followed by Adam, who will share an overview of NOG's operations and business development activities. Nick will close with a remark about NOG's positioning and value proposition. After our prepared remarks, the team will be available to answer any questions. Before we begin, let me remind you of our safe harbor language. Please be advised that our remarks today, including the answers to your questions, may include forward-looking statements within the meaning of the Private Securities Litigation Reform Act. These forward-looking statements are subject to risks and uncertainties that could cause actual results to be materially different from the expectations contemplated by our forward-looking statements. Those risks include, among others, matters that we've described in our earnings release as well as in our filings with the SEC, including our annual report on Form 10-K and our quarterly reports on Form 10-Q. We disclaim any obligation to update those forward-looking statements. During today's call, we may discuss certain non-GAAP financial measures, including adjusted EBITDA, adjusted net income and free cash flow. Reconciliations of these measures to the closest GAAP measures can be found in our earnings release. With that, I will turn the call over to Chad.

Thanks, Evelyn. Q2 was a clear demonstration of our diversified portfolio business model. When one region hits turbulence, other aspects of our platform pick up the slack. And this quarter, that showed up directly in the numbers. Adjusted EBITDA was up 17% sequentially and free cash flow is up over 400% from the first quarter. That's the model working as designed. Total production was up 9% year-over-year with record natural gas volumes up 35% year-over-year and 5% sequentially. As previously disclosed, we saw significant curtailments in the second quarter as a result of challenging Waha economics. In a volatile environment, our operating partners in the Permian made prudent decisions to generate excess cash flows. And with improving economic conditions, we've seen volumes come back online including three net turn-in lines that will contribute to the third quarter. Outside of that Waha-driven curtailment, the underlying assets performed well. The Williston and Uinta both topped our internal expectations and our Appalachian volumes set another record with a full quarter of contribution from our Utica joint development, where early well results have been strong. On pricing, our unhedged net realized oil price improved 36% from the first quarter. Gas realizations were 90% of Henry Hub and with our hedges, Waha base included, reached 123%. Strong NGL prices contributed as well. Waha pressures have receded, and we're seeing that trend continue thus far into Q3. On costs, production expenses per BOE were down 4% year-over-year. Budgeted capital expenditures were $196 million, comprised of $151 million of organic D&C and $45 million of ground game activity. Normalized well costs were $761 per lateral foot, essentially in line with the first quarter. Spending this quarter skewed more towards oil-weighted. Permian at 37%, Williston at 33%, Appalachia and Uinta each at 14% and our newly acquired Duvernay position beginning to contribute at 2%. We ended the quarter with over $1 billion of total liquidity. Our balance sheet remains well positioned to fund our development program and continue executing on inorganic opportunities as they arise. Turning to capital allocation and shareholder returns. This is where the free cash flow generation translates directly into returns. We repurchased 2.95 million shares, roughly 3% of shares outstanding at an average price of $20.37 with about 81% of that activity completed before the dividend record date in late June. That repurchase largely offset the shares issued to the Duvernay seller, so we effectively funded a scaled acquisition, while holding share count roughly flat. Subsequent to quarter end, the Board increased our stock repurchase authorization, bringing total capacity to approximately $243 million, a clear signal of how we view the value in our stock at current levels. On the dividend, our Board declared $0.45 per share for the quarter or approximately $48 million paid on July 31. Against the $159 million of free cash flow this quarter alone, the dividend is covered several times over. We view the dividend as a floor, not a ceiling on the capital we return to shareholders. With that, I'll turn the call over to Adam.

Thank you, Chad. We remain as confident as ever in the strength of our assets confirmed through recent results and leading indicators. Looking ahead, we are seeing multiple positive catalysts as drilling activity materially outperformed internal expectations and the D&C list built to almost 52 net wells as operators modestly pulled forward activity in the Permian and Williston. Additionally, we elected to do approximately 17 net wells, which is up almost 20% relative to the trailing 12-month run rate. Ninety percent of those elections were weighted towards our oily basins with normalized AFE costs down 5% from our 2025 average. Moving to business development. Our M&A engine has been firing on all cylinders. We continue to build on our track record of finding premier assets, including our latest with the Duvernay joint development deal that we closed in early June. The Parallax acquisition is a self-funding asset with 20 years' worth of inventory at an average breakeven below $50 and with a price tag of less than $600,000 per location, highly competitive with the basins in the Lower 48. With it, we have strategically and meaningfully expanded our addressable market into Canada, and we will continue to screen for other complementary assets. Our ground game has maintained strong momentum and the barbell approach of sourcing near-term drilling opportunities as well as long-dated inventory continues to be underappreciated. Since we have made a concerted effort to build out our inventory in Appalachia, we've amassed roughly 80 locations through our leasing efforts excluding the acreage that has already converted to development. We believe that NOG is one of the few companies, if not the only one, that budgets for the acquisition of new locations on an annual basis, which allows us to build duration and optionality for the future with core locations that would compete in any portfolio. This overstates the reinvestment rate that is needed and also means NOG is one of the few who is actively replacing its inventory year after year. That said, we can and will adjust how capital is deployed based on dislocations in the market. Capital can be shifted to buybacks or other near-term drilling opportunities or both, as you saw us do in Q2. In the second quarter, we pivoted to more drilling opportunities acquiring over six net wells weighted to the Permian and Bakken that are currently in process. To further put this into perspective, through the first half of '26, our ground game has already capitalized on the same number of drilling opportunities than we did in all of 2025. NOG's opportunity set continues to expand and we will remain dynamic capital allocators, directing capital to wherever it creates the most value as the market presents it. Nick?

Thanks, Adam. Thanks for joining us this morning and your continued interest in our company. I'll cover three pillars that reinforce the strength of our business and build on Chad and Adam's comments. Number one, unrecognized value. We have created an incredible business, and this has fostered a fantastic industry reputation as a partner, acquirer and asset manager and owner. We've built state-of-the-art custom AI-powered management and evaluation tools that are light years ahead of the competition. Most importantly, we have built a high-quality platform with tremendous value that is not being recognized by the public market today. By our conservative internal estimate, the assets we own are worth $7 billion plus, trapped in $4.6 billion enterprise value. Fortunately, we have multiple avenues for this value to be recognized. In the meantime, we'll continue to generate significant free cash flow, pay our dividend and allocate capital to strong forward returns. We will make decisions that allocate capital in a way that will maximize value for our investors long term, whether that's acquiring assets, selling assets or returning cash to shareholders in the form of dividends or share repurchases or a combination of these actions. Number two, cash flow strength. Based on current strip pricing, our assets should generate $1.4 billion to over $1.5 billion of adjusted EBITDA this year. We believe $850 million to $900 million of D&C capital will sustain these production volumes, generating approximately $375 million to over $500 million of free cash flow. Across that range, our dividend remains multiple times covered, leaving free cash flow available to reduce debt, acquire inventory and assets or repurchase shares. A modest spending increase could also grow oil or total volumes, generating more cash flow while ultimately producing a similar free cash flow profile. Number three, acquisition track record. We are a proven disciplined acquirer. Using our advanced tracking systems, we consistently analyze successful acquisitions, opportunities we passed on and bids we did not win. Our acquisitions have performed exceptionally well with our systematic approach generating north of 20% annualized returns on a standard 1x levered basis net of hedging. Monetizing selected assets could accelerate these returns further by bringing value forward. As we remind investors quarter after quarter, our value creation is grounded in long-term strategic thinking. That will never change but a long-term focus does not prevent us from adapting or capitalizing on short-term opportunities, including the fundamental disconnect in our equity today. Our largest quarterly open market repurchase ever demonstrates that approach. Our dividend is solidly covered. Our assets are materially undervalued, and we are capital allocators. When the market presents opportunities, we will act. Over the past seven years, we identified irreplaceable assets at compelling values and the returns have validated that strategy, whether the market recognizes it today or not. Our job is to ensure those successes are recognized and we will work around the clock and analyze every avenue to do so. That's what a company run by investors for investors does. With that, we can turn it over to questions.

The floor is now open for questions.

Nick, my first question is on your capital efficiency. Specifically, it seems like most E&Ps now that we're towards the end of the second quarter reporting, the trend I seem to see out there is many E&Ps talked about higher expected '26 CapEx yet you all were able to reiterate your capital spend and your production, which we view should ramp up nicely going forward. So my question is could you discuss a bit your confidence to be able to reiterate the CapEx and remind us what some of the primary drivers are there?

Yes. Thanks, Neal. I'll talk about a couple of things. One, recall that our guidance all along has sort of made the assumption that we would see a steady pickup in activity throughout the year. Obviously, it's probably happening a little bit faster, but the total quantum isn't changing. The second thing I'd point out is that when we revised guidance when we announced the Duvernay acquisition, we implicitly cut our capital by about $50 million. That's a combination of production efficiency and just the fact that, as we've talked about in the past, when costs came down last year, we said we are an accrual shop, which means we accrue for the cost of those wells, and it takes 180 to 365 days for those reductions in costs to be realized. So if a well cost $10 million, we accrue the full amount at the AFE. If the actual comes in at $9 million, it can take six to 12 months before that money is credited back to us. We are seeing the benefits of that really starting this past quarter. And even if costs do increase some, you'll probably see the tailwinds from that for us for some time.

Great point. And Nick, one more, I don't think I've ever asked you this on the call, but I want to ask, I'd just love to hear your thoughts on what I would call your value disconnect. I mean, it's certainly evident that Northern's stock has been relatively flat year-to-date versus some of the others that have followed oil and now are up 40% to 50%. I'd just love to hear you or any of the team's thoughts on what you think the cause behind this is?

Yes. Now, you're going to get me monologuing. I think, look, at the end of the day, our cash flows and profits are up several hundred million dollars since the beginning of the year, and the stock obviously is not. But I'll be candid about the perception challenge we face: we are a non-op, which means at the end of the day, we buy and invest in oil and gas properties. In the public markets, we are rightfully or wrongfully compared against E&P operators. Their job is to manage production and spending and are judged accordingly. We ultimately should be managed by the investments we make and their value over time. That's tough admittedly when we typically buy and hold assets to life, but managing guidance is not the same thing as creating value. And I think there's a fundamental disconnect in the analyst community today. As many of you know, I spent 15 years on the buy side, and most of that time, the idea was to look at the company's asset value as a driver for ultimate equity value. This did get out of control during the pre-2014 period when companies were valued for acreage without regard to the capital required to keep it, not to mention the fact that much of it wasn't worth what was assumed at the time. And look, I have a ton of respect for the analyst community and the market is at any moment what it is. But today, people rightfully or wrongfully are focused almost solely on quarterly guidance and free cash flow yields as they see them. Eight years ago, on my first call as the CFO, I literally discussed as one of the first people in the space openly moving the company to a self-generating cash position and to pay shareholders a fair and reasonable return. Don't get me wrong, free cash flow is really important. But the definition of it is very tricky and often misrepresented in a depleting business. I'll add that even those that do still attempt NAV may not understand the differences between how we book reserves and inventory as a non-op compared to an operator, which are inherently different in the sense that we can't simply book inventory that we don't control the timing of, and we can't count locations before operators ultimately decide spacing. As Adam mentioned, we're one of the only E&P companies that actually budget for acquisitions in our regular budget every year. Most public E&Ps are not replacing their inventory. So what you call free cash flow is actually in reality a depleting annuity. And I don't think that's a fair comparison, which is why NAV should be an important part of the equation: it is, in the end, effectively a depleting real estate business. So if you look at our reinvestment rate, of course, it's less immediately productive by design, but we continue to stack on assets. That's not capital efficiency as the market views it for the record. Over the last year, we spent over $100 million acquiring potentially north of 80 locations in the Utica. This does nothing but make us screen worse in the "capital efficiency" and "free cash flow" metrics, yet definitively adding asset value to the enterprise, albeit nonproductive at the moment. You can tell the bonuses paid for that land are up, in some cases, 50-plus percent since we began that campaign. So no cash flow, just CapEx, but did we add value? Likely the answer is a resounding yes. As I stated in my prepared comments, screening leverage is another example. If we borrow money and buy an asset, the market has focused on the leverage as a negative when comping, but they don't recognize that now we have an asset that's worth a heck of a lot of money. And I can say with a lot of certainty that the current future values of our Uinta and Utica assets, which were funded with leverage, are greater today than when we purchased them and likely grow further over time as the operators improve and delineate. Again, this is a business model viewpoint we struggle to reconcile at times. We could be unlevered and screen better. We could only spend money on D&C capital and look better by these metrics. But at the end of the day, now we have these assets. And in virtually all cases scarcity and quality has proven that the assets that we purchased are now appreciably more valuable. If we need to monetize them to prove to the market as a mechanism that the value since only cash yields are being used, we're fine with that. At the end of the day, our job is to maximize value. But it's a shame they're not analyzed for what they would be in virtually any private setting. Put it to you this way: if our assets were at the lowest end of our expectations, and we sold half, we'd take in roughly half our float and have zero debt. That implies a stock value more than triple the current levels. So if the market wants to be singularly focused on production volume cadence versus expectations, a leverage multiple and a free cash flow yield, where 75% of the competing stocks are not replacing any inventory, but just depleting away, that's incredibly shortsighted when in reality, we're about owning and harvesting assets at good values. At the same time, we need to ensure the market understands how valuable all the assets we purchased have become. You have an insane dichotomy going on at the moment where people are paying north of $330,000 per acre and assets have never been so sought after at significant premiums to even a few years ago, and yet a public market that wants to give it away. But to be fair, when that happens, the onus is on us to prove it and make no mistake, we will. Back to you.

Thanks for the quick comment.

Our next question comes from Charles Meade from Johnson Rice.

Nick that was a wonderful monologue. In all candor, I appreciate you sharing that point of view. And it's a fashion in the market right now to be lower leverage and maybe you guys aren't there. But the question I want to ask actually touches on this leverage point. And when you talk about allocating capital and putting it in the best places, whether it's the ground game or D&C or things like that, it's easy for me to imagine how you stack up, say, a ground game acquisition versus buying back your own shares. It's a little harder for me to imagine how you consider paying down debt. There seem to be more intangibles, benefits or maybe costs related to paying down debt versus looking at an acquisition or buying your own shares. So can you talk about how you view the desirability or the framework for debt reduction or debt additions?

Sure. I mean, I think there are a couple of ways to delever. Obviously, highly efficient capital, which grows your cash flow, can lower your leverage metrics, and that's important. And that's a big part of the capital allocation. But to be candid, what I'd tell you about our shares, as an example, is that that's a clear and present opportunity that may or may not be there tomorrow, and we're extremely focused on that as you see. Leverage is the easy part because ultimately, I'd tell you that we have incredibly desirable assets. So if we want to solve for leverage, we can do that almost immediately. Chad, do you want to add to that?

No, I think you're right. I mean, obviously, our stock right now where it's trading at close yesterday, it implies a 9% yield. So I mean it's certainly massively accretive for us to continue to attack that. And we'll be prudent about it, and it's a fluid and dynamic situation for us.

Yes. But I mean I think you have to weigh the fact that your leverage is a function of the fact that we've acquired all these assets. So we didn't have to do it the way we did it, but we did it because we knew that they would be more valuable. They are today. And so to the extent that the market wants to discount the value because of the leverage you used to acquire them, that's an easy answer.

Okay. Okay. And then, Adam, I want to go back to something you said in your prepared comments. I believe I heard you say that you've had a lot of recent wells that are outperforming your internal expectations, your type curves. And I wonder if you could just give a little bit more detail on where that's happening across your asset base?

Yes, absolutely. I think we look to Appalachia. We just finished up our West Virginia joint development agreement. We've seen significant outperformance relative to internal expectations there. That was a driver in the gas volumes that you saw this quarter. And we're also seeing it in the Uinta, notably both on the legacy production from the XCL assets as well as the 2026 campaign. Jim, I don't know if there's anything else that is notable that...

Yes, I think you're right — we're really seeing it across all of our basins. Even in the Williston, we continue to see outperformance across operators, as they drill longer laterals and get more efficient. We're not seeing the decline rates that you might expect as you go from a two- to a three- to four-mile lateral. So really, it's across all of our basins that we're outperforming internal expectations.

Yes. And I'd say it's early, but even on our new Ohio program where we really started to just put on our first pads, we've seen really, really strong performance. So kudos to the Infinity guys.

Our next question comes from Phillips Johnston from Capital One.

I have to say that I'm also a fan of the monologue. And I'm actually going to be the guy that asked about the short-term production trends. So my apologies in advance. Your implied oil production guidance for the second half of the year is around 74,000 barrels a day on average, I guess. If we adjust your second quarter volumes upward to account for the shut-ins, it sort of implies your second half production is going to grow by a couple of thousand barrels a day relative to Q2. Obviously, there's a lot of positive momentum given your strong wells in process figure at the end of June, and you talked about the accelerated AFE and election activity. I realize it's still a pretty uncertain operating environment, but it seems like the guidance could be a little conservative with some upside potential. So I just wanted to get your take on that.

Yes, it's definitely possible. I mean, I think it's very fluid. Oil prices are all over the place. So it's too early to declare victory, but obviously, you have the base assets returning to trend. You also have the addition of the Duvernay assets on top of that. One of the things that has been difficult for both you and investors in general is that when oil prices spiked earlier, people asked why weren't we seeing the reaction. The answer was that one of our biggest growth engines is the Permian, and it had been hampered by logistical problems. We tried to be forthright about that — it was going to take a little bit of time. I think some of those challenges have resolved themselves faster than I would have thought. We had pushed and had conversations with operators so there was a good reason for it. We had pushed a lot of that development that had been delayed, starting late in the fourth quarter of last year. We're actually seeing that trend invert, and we're seeing a lot of that activity being brought forward. So it bodes well for the remainder of this year. Again, it's too early to declare total victory and we want to make sure we see it before we really come out and brag about it, but your thoughts in general are correct.

I think we've seen some operators jockeying, figuring out 2027 plans and maybe picking up a rig sooner than otherwise expected, seeing some drilling efficiencies. Depending on how that all shakes out relative to Northern, that would be another thing to keep an eye on.

Okay. Sounds good. On the LOE guidance, you did reduce the full year guidance a little bit. As we look at Slide 4, which is really great disclosure, by the way, there's a pretty wide range of operating costs across your basins. So my question is how you're evolving production mix and the addition of the Duvernay volumes, which obviously have the lowest LOE on the slide, influence your LOE trajectory over the next four to six quarters or so?

Yes. So number one, our LOE line includes LOE, but it also includes gathering, processing and transportation costs. We don't have a separate GP&T line, so some of those costs flow differently than other companies. If production remains flat, LOE will rise over time for any company. Our goal is that as we add growth areas such as the Duvernay and potentially the Uinta over time, those areas should offset the natural upward pressure. If you look at our Williston total production costs and Williston volumes have stayed relatively flat for the last several years, costs that used to be very low have risen with inflation and workover frequency as wells age. A large portion of LOE is fixed, so as wells decline, LOE per BOE naturally goes up, although maintenance capital associated with it goes down as well. So while operating costs go up, capital costs go down and cashflow can remain stable. I think our goal is to try to keep LOE flat to down. As our gas volumes grow, that also helps lower the LOE burden because gas is advantaged in our structure. Our joint development program is more liquids-focused; as that mix evolves and you see increases in Ohio volumes over time, that should help LOE trend down. Keep in mind fuel costs and workover expenses can flow through LOE, and we saw increases historically as wells aged in the Permian and Williston, but that has generally stabilized at this point.

Our next question comes from Noel Parks from Tuohy Brothers.

I appreciated your comments on valuation and in particular your mention that what others call free cash flow is actually a depleting annuity. It got me thinking as you've expanded into different basins and with the realities of valuation, what you do and don't get credit for. I think of the story as being largely a basin arbitrage — you're recognizing opportunities and getting them at a good price that others might overlook. Doesn't basin arbitrage alone, if you continue on that path, naturally help you build value more or less regardless of what the public markets are saying?

Yes. I mean I think there's a public and private view, but we recognize our job is to make sure that value is recognized. So that is part of our job, and that's one of the hardest things to do to be candid, Noel. Slide 4 in our earnings deck provides more visibility and a basin-by-basin look at the company. When we acquired the Uinta assets, we spent a significant amount of time evaluating the basin and understood its competitive economics. When we evaluated Canada over several years and found the light oil portion of the Duvernay, we were encouraged by both the length of inventory and the margins it generates. Slide 4 underscores that when your margin in Uinta is materially higher than in the Permian, the proof is in the economics. In the case of the Duvernay, it's similar — it's a 20-plus year asset with unique economics. We truly seek the best assets and allocate capital accordingly. We're not someone who just does one thing; that can be valuable to certain public market investors who want clarity and simplicity, but we're trying to provide that clarity here and people should recognize it.

Okay. Great. I was also thinking about the gas side of the equation and the move toward some of the larger players adopting an integrated gas model, bringing infrastructure in-house or acquiring infrastructure they had spun out. I'm wondering what your thoughts are — does that trend affect your model? Or is it compatible with your non-op model, especially given associated gas in the Permian?

Yes. We own significant infrastructure in the Uinta, in the Permian and in the Utica. When we acquired the Utica, it implied a higher upfront multiple, but a fully integrated model drops breakeven costs substantially and makes the asset more resilient. Control is critical. Look no further than the Permian, where much of the gas flows through third-party gathering and processing systems and you can run into periods where you simply can't get your gas out. Controlling infrastructure builds a moat: once the system is built, surrounding acreage becomes inherently more valuable to you. That being said, we are open to monetizing infrastructure if the economics are compelling —people approach us about buying assets at significant value — but there's extreme value to having infrastructure and being integrated. We've seen operators like EQT do this successfully in Appalachia. Initially, people may not fully understand it, but over time the value proves out.

Our last question comes from Paul Diamond from Citi.

Just a quick one for you. Last quarter, we saw some Appalachia curtailments in reaction to invasive pricing. As you see the winter approaching or any other operational issues, do you see that occurring anywhere else across your basins? Or is it a warning light for you?

Not at the moment. One of the interesting things about the gas market is there's been a lot of discussion around a potential super El Niño and the strip reflects that. My experience is that weather predictions are often wrong. The market seems to be pricing a potentially strong winter, and usually that can disappoint. Several years ago, significant storms caused huge disruptions around the country, and since then there's been a lot of investment in infrastructure to make systems more resilient. Operational disruptions can occur, but I generally expect the system to be stronger. Quite frankly, for winter and gas, we can be a huge beneficiary should something happen. Last winter's strength happened right after we acquired our Ohio assets and we were able to take advantage of hedges on the book. So volatility can be bad, but it can also be very good.

Got it. Makes perfect sense. And then one larger strategic one quickly. You guys have worked to diversify across basins — roughly 30/30/30 across Williston, Permian, Appalachia, Uinta and Duvernay. How do you see that long-term? Is the idea to be split evenly among those basins or do you see more opportunity in one versus another? How should we think about those knobs turning over time?

I think it's hard to say in some cases and easier in others. The Williston is very mature and may present episodic opportunities, but is a mature basin. The Permian ebbs and flows — there were years with many assets coming to market and we've taken advantage; other times it's quieter. We're a management company focused on economics. Diversity is part of the business model, but we go where opportunities are, and those can change dynamically. There's no rigid desire to be more or less diversified; we'll monetize or buy assets as it makes economic sense. Everything is for sale every day — everything is both for us to buy and for us to sell — and we'll do whatever generates the most value.

I think that's the competitive advantage of the business model: we can expand in basins fairly cost-efficiently. You saw that with our entry into Canada. We've looked at Canada for two years across the Montney and Duvernay, and this quarter we found an asset that checks the box. Our ground game had activity in every basin and competition ebbs and flows depending on timing. Our ability to move quickly and leverage proprietary information and evergreen models enables real-time decisions. We'll continue to source opportunities both in our core basins and elsewhere; we're currently looking at about 15 large asset transactions, many bilateral conversations. We will stay dynamic in sourcing and evaluating opportunities.

We grew our Utica position beyond initial expectations, invested significantly in acreage, and now the phone is ringing with operator interest. It's an important distinction in our model versus an operator. Too much diversity can be challenging for an operator because they must maintain teams, rigs and operations across basins. For a non-operator, it's purely capital allocation: dollars in, dollars out. Diversity may be harder to model and occasionally annoying for analysts, but it doesn't carry the same operational complexities it does for operators.

We have no further questions. I would like to turn the call back to Nick O'Grady for closing remarks.

Thanks, everyone, for joining the call today. We'd like to remind investors to view our new earnings presentation slide supplement, which contains new enhanced disclosures, highlighting our asset value and the incredible investment opportunity. As always, reach out to Investor Relations with questions, and we look forward to continuing the mission. Thanks again.

This concludes today's conference call. Thank you for your participation. You may now disconnect.