Sep 16, 2026 earnings call — Q4 recovery and Permian minerals acquisition
Q4 revenue was $24.2 million, up 20% sequentially, driven by higher oil and NGL prices.
Revenue $0.0B (est $0.0B) · EPS $0.13 (est $0.01)
Key quotes
"The transaction added approximately 3,420 net royalty acres and over 200 BOE per day of current production across Reagan, Upton, Glasscock, Midland and Martin Counties in Texas."
"Together with stronger oil and NGL realizations, those improvements drove a 20% sequential increase in revenue and more than doubled adjusted EBITDA."
"The Board's latest declaration maintains the quarterly dividend at $0.12 per share for fiscal Q1 2027 and will mark our 52nd consecutive quarterly payment."
Analyst Q&A 6
temporary borrowing base increase; drilling activity
Q (Jeffrey Grampp · Northland): He asked why the borrowing base increase was temporary and what mechanics required it. He also asked if higher oil prices are driving more activity, including potential Chaveroo drilling and capital allocation changes.
A: Ryan said the interim increase was part of the liquidity plan for the acquisition and MidFirst gave an extra amount until they redetermine the entire borrowing base. Kelly said they are interested in moving forward with drilling at Chaveroo and are working with the operator on timing. Ryan noted rising Permian rig counts, steady permitting by big operators, and recent Apache permits in Upton County; Kelly said Haynesville activity is converting wells into PDP.
"So it was really just to provide us additional liquidity and flexibility really for the acquisition because that increase was tied to kind of the amount of the acquisition." — Ryan Stash (CFO)
small mineral deals and CapEx outlook
Q (Nicholas Pope · ROTH Capital): He asked about the opportunity set for smaller royalty/mineral acquisitions and the general landscape for leasing and mineral purchases. He also asked about CapEx run-rate visibility for the next year.
A: Kelly said they still see neat, unmarketed one-off deals and opportunities in SCOOP/STACK, and noted consolidation is bringing more drilling and interest where 2% to 4% working interests fit their CapEx plans. Ryan said the fiscal '27 budget is about $4 million to $6 million, which does not yet include any Chaveroo CapEx; he said the budget assumes some SCOOP/STACK activity but could change based on timing and AFEs already in place.
"I mean, so we put out our budget, Nick, kind of another kind of $4 million to $6 million is what we put kind of for fiscal '27." — Ryan Stash (CFO)
role of minerals and Chaveroo costs
Q (Jeffrey Robertson · Water Tower): He asked whether the company has a target size for the mineral/royalty business or if growth will be opportunistic versus working interest. He also asked if their mineral approach focuses on assets producing now or soon, and two quick questions for Mark on Chaveroo AFE and Barnett heat impacts.
A: Kelly said they want the mineral side bigger when returns make sense, noted minerals can trade at 2 to 4-plus times per barrel depending on commodity and drilling, and said they will remain opportunistic while still investing in attractive working interest deals. She confirmed their mineral approach targets assets currently or soon producing. Mark said preliminary AFE for the Chaveroo wells is about $3.6 million to $3.9 million and reported no production impacts in the Barnett from the heat.
"Yes. Yes, the ones we're running with right now, and this is a preliminary number. It's about $3.6 million to $3.9 million." — J. Bunch (COO)
LOE guidance, SCOOP/STACK data, Delhi and CO2
Q (Charles Fratt · Alliance Global Partners): He asked if the company issued LOE guidance for 2027 and whether the fourth quarter is a good base rate given Midland, SCOOP/STACK, TexMex, and Chaveroo. He also asked about the Delhi transportation contract, CO2 purchases, and potential asset sales.
A: Kelly said they did not issue LOE guidance because as a non-op and with minerals/royalties they lack enough visibility. They said they are excited about 2027 with a bigger mineral contribution and expect improved lifting costs; Ryan noted fourth quarter was about $20 per BOE for the whole asset. On SCOOP/STACK they said data can lag and they keep chasing conversions; on Delhi, Kelly said the prior catch-up is past and they will seek the best contract, Ryan said they got a premium to WTI in fourth quarter, J. Bunch said they are not purchasing more CO2 and have no plans to, and Kelly said they may sell nonproducing assets to high-grade the portfolio.
"Well, we're not going to -- they're not purchasing any more CO2, and there are no plans right now to do that." — J. Bunch (COO)
natural gas differentials and future demand
Q (Sergey Pigarev · Freedom Finance): He asked when gas differentials might normalize and when demand from data centers and LNG might lift benchmark prices. He wanted views on current differentials and Henry Hub.
A: Ryan said much of the prior weakness in differentials was West Coast related after a very warm winter and that West Coast differentials have improved since storage was worked off. He said Barnett differentials have been within historical norms and that the company is fairly well hedged at prices above the strip; he also noted Permian flows to the Gulf Coast have weighed on Henry Hub and that the strip appears to assume a warm winter. Kelly agreed and said she is excited about non-weather incremental demand from LNG, power growth and exports to Mexico over the next several years.
"On the differentials, a lot of what you saw weakness, especially in the fourth quarter was on the West Coast." — Ryan Stash (CFO)
temporary RBL increase and Midland reserves
Q (Jeffrey Robertson · Water Tower): He asked whether the $73 million or $8 million temporary borrowing base increase included the reserves from the Midland acquisition and whether it was based on a year-end 2026 reserve report.
A: Ryan said yes: the additional capacity was for the engineered reserve report on the Midland side and that the full redetermination in a couple of weeks will use their year-end reserve report for all assets. He said the incremental $8 million was effectively driven by the Midland minerals, and Kelly added that it probably relates to the PDP side.
"But that's the way to think about it is the incremental $8 million was effectively driven by the Midland minerals." — Ryan Stash (CFO)