Greetings, and welcome to the NOG Fourth Quarter 2025 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It's now my pleasure to introduce you to your host, Evelyn Infurna, Vice President, Investor Relations. Thank you. You may begin.

Good morning. Welcome to NOG's Fourth Quarter and Year-end 2025 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 the website at noginc.com. We will be filing our 2025 10-K 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; and our Chief Technical Officer, Jim Evans. Our agenda for today's call is as follows: Nick will provide introductory remarks, followed by Adam, who will share an overview of NOG's operations and business development activities, and Chad will review our financial results. After our prepared remarks, the team, including Jim, 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 the actual results to be materially different from expectations contemplated by our forward-looking statements. Those risks include, among others, matters that we have 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 these 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'll turn the call over to Nick.

Thank you, Evelyn. Welcome, and good morning, everyone, and thank you for your interest in our company. I'd like to take the time to reflect upon 2025, discuss our plans for 2026 and also share my views in regard to the macro oil and gas environment and how it may affect our company and strategy. While our equity total return was down in 2025, our adjusted EBITDA was actually up 1%, and this was with oil prices down some 14% on average. Our share count was 2% lower year-over-year, our net debt was down modestly year-over-year, all of this despite closing over $340 million of acquisitions, including Ground Game. Our financial results are a testament to our consistent hedging and the decisions we made regardless of market perceptions in the short term, which are manifested in multiple compressions. We were judicious and strategic on how we deployed and allocated capital in 2025. Our natural gas spending increased dramatically and our oil spending declined. NOG is now seeing record natural gas volumes aligned with some of the highest seasonal prices seen in many years, and we and our operating partners have tried to deploy the bare minimum on the oil front to preserve our precious barrels for a better day. Our 2025 ground game focused more on long-term development versus drill bit projects given the fluxing pricing environment. It is our intent to capitalize on attractive land pricing while still maximizing our long-term return on capital as we anticipate incredible return development opportunities on these lands over time. As a result, we grew our footprint organically by over 12,000 acres last year, extremely cost effectively with advantageous and low-risk long-term leases. Our land assembly effort may have made us look less capital efficient in the short term, but it's the exact…

Thank you, Nick. I'll start by reviewing the operational details for Q4, what we're observing in the current environment and how we're thinking about 2026 activity levels, followed by our business development efforts and the broader M&A landscape. As a whole, Q4 came in line with expectations as we saw activity ramp exiting the year. During the quarter, we added 24.2 net wells to production even as a number of our operators deferred completions due to commodity pricing. Deferrals notwithstanding, recent results have topped expectations with Appalachia, the top-performing basin relative to forecast, and the Uinta and Williston fast following. Given the accelerated completion activity in the fourth quarter, we saw our wells in process draw down 7.8 net wells, finishing the year with a total of 45.6 net wells. The Permian currently makes up over 1/3 of the wells in process, while Appalachia makes up just less than 1/4 and the Williston and Uinta make up the rest. In addition to our wells in process, we have 13 net wells that have been elected to but not yet spud, with the Permian making up roughly 2/3 of the total. Lateral lengths remain elevated as operators continue to drive normalized cost down and bolster returns in an effort to counter current commodity prices. As we exited the year, both our wells in process and our elected AFEs were averaging around 13,000 feet with normalized well costs down nearly 5% quarter-over-quarter. In addition, our operators have been high-grading locations, and we elected to over 95% of our well proposals during the quarter with expected returns significantly higher than our hurdle rate. 2025 marks the year where we've seen an acceleration in activity across Appalachia, and we are poised to significantly increase activity levels as we scale and further diversify our asset…

Thanks, Adam. Our fourth quarter financial results and production cadence were down the fairway with no major disruptions. And despite the persistent macro headwinds faced by the industry, NOG's diversified and scaled platform continues to deliver, outperforming internal estimates on production and EBITDA for both the quarter and the year. Fourth quarter total average daily production was 140,000 BOE per day, up 7% from Q3 2025 and up 6% versus Q4 2024. For the year, total average daily production was 135,000 BOE per day, topping the high end of our guidance, up 9% as compared to the full year 2024. The outperformance was driven primarily by a continued ramp in our gas assets. Fourth quarter oil production increased 3% to 75,000 barrels of oil per day sequentially, but was 5% lower year-over-year as some of our Q4 wells were deferred as price sensitivity among our operators became more acute. The ramping of our Appalachian JV drove gas production to record levels for the third consecutive quarter with 392 MMcf per day, up 11% sequentially and up 24% from Q4 2024. For the full year 2025, NOG's oil production was 75,646 barrels per day with gas production coming in at 356 MMcf per day. Moving on to our financial results. Adjusted EBITDA in the quarter was $367 million and free cash flow was $43 million. For the year, adjusted EBITDA was $1.63 billion with free cash flow of $424 million. Adjusted net income in the fourth quarter was $82 million or $0.83 per diluted share, excluding the impact of the $270 million non-cash impairment charge we took in the fourth quarter. For the year, adjusted net income was $453 million or $4.57 per diluted share. GAAP net income was impacted by $703 million in non-cash impairment taken over the course of…

[Operator Instructions] Your first question comes from the line of Neal Dingmann of William Blair.

Nice details again today. Nick, my question, you -- I think it was last night you talked about and mentioned that you have notably more than the typical amount of wells that have been spud -- that have not been spud, but have been consented. I'm just wondering what -- maybe you or Adam, what's your guess as to when these wells are finally drilled and completed? Is it just a matter of when, not if? Or maybe talk about why we're seeing that today.

That's right, Neal. As Adam also noted in his comments, we have a large D&C with -- and about 13 net wells we've consented to that still haven't been spud. We sometimes have given kind of specific TIL timing guidance throughout the year, and we chose not to do that this year. The range is obviously anywhere from 70 to almost 90 wells this year, which is really wide. And we think it would be a disservice to try to predict the behavior, because it's been moving around substantially in real time. As an example, a lot of these proposals were delivered to us in November and early December, and then we've seen significant changes as pricing weakened late in the year and early into this year. The recent geopolitical spike in oil thus far hasn't shown a reversal in that behavior. But I think particularly from our private operators, which is meaningful to us -- but what I can say is if you look at this in history, especially as an accrual accounting shop, we have seen periods of time where we have had to bring forward accruals. We've had -- ironically, we're talking about not spending enough money, but we've had periods where our CapEx has been accelerated, and we've seen those things move really quickly. So that can happen again. I think it's really going to just be dictated a little bit, as I talked about, by right way risk with commodity pricing and specifically oil. And what I would tell you is that we look a little bit different. If you're a -- when you compare us to, say, an operator and you're comparing -- look, I recognize estimates and all these things and changes to estimates. I spend a lot of time on that side of the table. But our optical capital efficiency -- whereas an operator targets a maintenance level of production and then tries to spend as little as possible to achieve that, they may look more capital efficient as things go down. We actually may look the opposite in the sense that we have committed capital, we have accrued capital in many cases, but we're managing significant curtailments or significant deferments. And so we -- and you don't have to believe what I'm saying. You can look back to 2020. If you look in 2020, we looked far less capital efficient on the way down than other companies. And in 2021, we looked far more capital efficient because all of that capital that's in the ground and it's been determined -- that's been committed comes to fruition. So I don't know if that's too much or too little. Or you want to add to that, Adam?

Yes. I guess the only other additional color that I'd add, I think we alluded to it in the prepared remarks, which you've got about 2/3 of those 13 wells in the Permian. And if you're looking at kind of half cycle expected returns, you're looking at something well north of 40%, 45%. You've got 235 gross wells in total as well. So you've got a handful of diversity. And so I think it's really going to boil down to just what the gross level activity levels look like.

Yes. And that's the point, is that I don't think this is a function of economics in the sense that -- all of the activity that we have seen deferred or pushed has been largely economic in this environment. Especially, when you get to our private operators, it's not a question of whether they can make money on it. It's a question of whether they should, right? They'd rather defer those to a better day. I recognize in the shorter term that can have an effect on numbers, but in the long run, you're going to make a -- this is an ROI game and you're going to make a lot more money. You can't eat IRR, as they say.

Yes, great details. And then, Nick, maybe take the M&A question in a different direction again. You guys certainly have been active in -- I just -- it doesn't seem like looking at the stock price that you're getting rewarded for just how much bigger inventory position you have today than, let's say, even a few years ago. And so my question is, on the other side, just given how great right now the seller's market is, especially given what ABS players are paid for mature, would you consider divesting maybe not a lot, but some to -- if the market continues to reward for this?

Yes. I mean, look, we are for sale every day. Our assets are for sale every day. We'll always look at what makes the most economic sense for the company. I alluded to this in my prepared remarks -- prepared comments, excuse me, that we have been evaluating a lot of different outcomes. And without being too forward, I would just say -- we're pretty creative people, right? And I think that's been demonstrated over time. And we've got some creative ideas that could effectively bridge some of the things you're discussing over time.

Your next question comes from the line of Charles Meade of Johnson Rice.

Nick, this is I guess maybe a basic question, but worth -- I want to take a shot at trying to illuminate how you're going to -- how are you going to know and how are we going to know whether you're tracking the low end -- or the low activity scenario or the high activity scenario? I mean there's an obvious -- yes, go ahead.

Yes. No, I recognize it's not a basic question and it's not one that is unexpected because it's obviously an extremely wide set of outcomes. And we are dealing with the fog of war. And like I said, people watch the price of oil and expect behavior to change accordingly. And it does, but it takes a little bit more time, right? You need duration. So when things go down, behavior changes. When things go back up, it takes a while before that behavior changes. And so what I would tell you is, one, the onus is on us. We will communicate throughout the year. And I think, two, there's a complicating factor between the low kind of activity and the high activity, which is that obviously we have an active ground game which can fill that gap. The other thing I'd point out is we are carrying substantial amounts of volume shut in, which is very different than the average operator. A lot of our privates have curtailed volumes. Some of it has been due to pricing. Some of it has been due to Waha issues and just the inability. And some of the deferral of activity has actually been driven by some of the gas issues you're seeing in New Mexico. But what I'd tell you there is that we will continuously try to tighten that band throughout the year and we will try to communicate. And I think -- again, we've tried to take a pretty -- one of the things that I would point out in the high case, which is that what we have done in that case is we've made the assumption, "Okay, a more normal activity," but we're not turning it on, say, today. We're really pushing a lot of that out till later in the year, which is why the oil volumes might optically look a little bit different. But obviously, it would change the actual -- and I don't want to say the exit trajectory because the timing could be very wonky depending on when that stuff comes on, but it could potentially mean that. So -- but I will give some comfort, which is that either one of these scenarios aren't going to affect our maintenance capital levels for the level of volumes you're talking about. So my point being that to the extent we spend more through that ground and we bridge that gap, even if we do see the low scenario, those dollars right now are kind of in between where we're going to be at any -- so as you look towards the following year, stable to growing activity.

The only other piece that I'd add to the deferments is we had about 4 net DUCs get pushed in Q4, and that's something that can get turned on at any time as well. So it's the combination of not only the curtailments, but the DUCs that have near-term catalysts depending on what kind of near-term pricing we're seeing.

Yes. And the one -- I'll just leave one thing because I think optically, we have sort of indicated that we would front half weight some of the capital, even though the capital in total is -- or excuse me, the development in total in both scenarios is considered to be relatively evenly weighted. That front half is 100% driven by ground game activity because we've had atypical success early in the year.

Interesting. That's good detail. Second question, you've drill down on Appalachia. So that was a -- it was a strong 4Q for you. You guys have already closed this Utica deal here in 1Q. Can you give us a sense -- I mean, to the extent you were surprised, or I think, Adam, you said your -- Appalachia was the most ahead of plan of all your geographies in 4Q. Is that carrying over into 1Q? And is the -- and can you give us any -- I know it's early, but anything incremental what you're seeing with the joint Infinity assets?

Yes. So I'll give a brief overview and then let the smarter people in the room finish the conversation. But I just say this, that -- timing plays a role in that and performance, right? So performance has been really, really strong on both our legacy Appalachian assets and on our joint development agreement and obviously, as we perceive, on the forward case in Antero. In case of the Antero assets, I would say you can see it in the purchase price adjustment that we've obviously had a strong -- it performed strongly prior to us taking possession of it. So that's -- or that means we get a reduction in that purchase price. I think as it pertains to the legacy assets, they've continued to surprise us month after month, year after year. They just are incredible. It explains why gas has been depressed for so long because they're so good. And on our joint development JV over the last year, we've seen both timing and performance improvements. But I will tell you that like, for example, it's not a totally linear in the sense that I believe most of the completions that we're expecting are actually in April. So in Q1, in general, it's not going to be some huge thing. However, performance relative to plan versus linear performance are different things. I don't know if you guys want to add to that.

No. I think you nailed it.

Yes. And Charles, I'll just finish with just saying that I think we -- when we look at these assets, right, we have historically always underwritten things based on the prior operator, right? But that doesn't mean that necessarily is what we think we can do with those assets when we take possession. So we have great hopes for the Antero asset that we'll be able to see performance and cost improvements over time.

Your next question comes from the line of Scott Hanold of RBC.

Nick, thinking about the -- I guess, the high case, low case on the budget, can you give us a sense of where some of the uncertainty is more? Is it more on the private operators versus the public? And has any of that started to show itself? Like are you getting a better read right now? So my question comes down to, is there a point in time where you're going to commit to, say, one case or the other? Or do you think that having kind of 2 cases is a reasonable sort of way to look at moving forward?

Yes. I mean I think at this point in time, it's definitely still reasonable, Scott. I think there's going to be a time where it has to meld into one, right? And I think that's what we'll try to do. And obviously, we want to do -- look, we -- we have incredible insight to what we do over a 12- and 24-month period. However, the timing of it, as you've always known in our business model, it's harder to do quarter-to-quarter, right? And so -- and sometimes in a period like this, it becomes -- I mean, if you go back to 2020, we just had to flat out withdraw guidance because we couldn't predict the timing of that. But in the end, it actually wound up -- for example, those decisions -- we saw half of our -- I don't mean to get off topic. But we saw half of our Williston volumes shut in for the better half of 2020. Well, when we went backwards and tested that versus everyone else who tried to keep their production flat, we made an additional $100-plus million in profit by turning those wells back on later on. So what I say is we have good alignment with our operators, but it is going to take some time to get some clarity in terms of some of these things. I can just tell you what -- so you asked about public versus private. On the private side, this is something -- a trend that we saw really in the beginning or really early, probably the middle of last year, where we've seen a slow slowdown, a deferral, curtailments, et cetera, et cetera, et cetera. And that has stayed on. What I'd tell you from a public operator perspective is -- obviously, I'm not -- I am watching all the public companies report, and I would just say that what publicly stated guidance and activity levels look like versus what we are seeing don't necessarily foot, which tells us that that's part of the reason we have 2 sets of guidance in some ways because a lot of what they're saying versus what they would indicate would suggest there's going to be a change in behavior throughout the year.

Got it. And then when you take some of the enhanced governance you've put in place and some of these larger transactions you've done, when you think about 2026 -- I don't know, pick whichever case you want to do or just sort of give an average, like how much of your '26 activity do you think is underpinned by -- this guidance is underpinned by enhanced governance, where you've got some reasonably good predictability?

I'm not sure I have that number off the top of my head, Scott, but we can get back to you on that. Jim is saying he thinks it's around half.

Yes.

Okay. Okay.

Yes. But what I'd say is this, like, look, we have commodity price triggers in almost all of our large joint development agreements. We haven't hit those price triggers. So it wouldn't necessarily change an activity. But I'll use an example. In one of the cases, we went to the operator and said we would really prefer to defer this activity because there's a better time. So it's not just them. Sometimes we ourselves would rather push that activity to a future day where it makes more economic sense.

[Operator Instructions] Your next question comes from the line of Noah Hungness of Bank of America.

To start off here, Nick, I was hoping, could you help us quantify maybe what the EBITDA or free cash flow upside would be from the coiled spring that you've spoken about here. I'd assume, let's say, like $65 of WTI?

Yes, I mean, I -- look, I think there's probably -- it's a bit interesting because right -- I think every $5 a barrel is something like $100...

No, it's about $100 -- between the low and the high, is that what you asked?

Yes.

Yes, it's probably about $100 million to $150 million.

But if you factor in, call it, $5 a barrel, right, you're talking -- that's another $150 million. So that's why in my prepared comments I talked about that. Yes, sort of a low case maintenance capital, which obviously generates more cash at today's strip, and a high case, which actually would generate less, albeit that's an averaging effect because when you look at the annual numbers versus obviously where we're expecting sort of that stuff to come in gradually, you may kind of on a terminal basis look a lot different. But you make the assumption that in the $65 world, which is about $5 delta on the strip today, that's $130 million to $150 million a year of extra cash for us alone. And so where I would go with that is that -- that change means that your free cash flow may be the same or even superior in the high case just because you're -- that's happening in a slightly better environment.

That's helpful. And then for my second question is, in the low versus high activity scenarios, could you maybe talk about how much of the CapEx is related to ground game spend versus your just standard D&C?

Yes. Give me one second. So you're looking at about $150 million to $200 million between the 2.

[Operator Instructions] Mr. O'Grady, there are no more questions in the queue. Do you have any closing remarks?

Yes, please. Thanks. Thanks for joining us today. NOG is well positioned to navigate through the current market volatility. Our assets are performing well. Our liquidity is abundant, and our investment opportunity set remains strong. We're grateful for being aligned with strong and capable operators, and look forward to keeping you informed on our activities and achievements in the coming weeks. Thanks again.

This concludes today's conference call. You may now disconnect.