Mach Natural Resources recorded lower fourth quarter net income but still intends to press ahead in 2025 with $280 million in capital expenditures on well exploration and development.
The Oklahoma City company reported financial and operating results for the three and twelve months ended December 31, 2024. In addition,Mach improved its available free cash flow in 2025 as a result of lowering the midpoint of its interest expense by $22 million.
Mach reported fourth quarter net income of $37 million compared to $67 million in the third quarter of last year. It also had total revenue of $235 million for the quarter, down from the $256 million reported in the third quarter. The company generated net cash provided by operating activities of $111 million.
During the fourth quarter, the average realized price was $70.06 per barrel of oil, $2.31 per thousand cubic feet of natural gas, and $25.82 per barrel of natural gas liquids (“NGLs”). These prices exclude the effects of derivatives.
For the full year 2024, the company had total revenue of $970 million and net income of $185 million.
Tom L. Ward, Chief Executive Officer commented, “Everything we do at Mach is calibrated for one purpose: to maximize distributions while maintaining a disciplined reinvestment rate. With this as our measure of success, we are pleased with our 2024 results. We paid $3.20 per unit in distributions and achieved a 24% total shareholder return.”
Mach intends to invest $260 million to $280 total capital for development and forecasts full year total net production ranging from 79 MBoe/d to 83 MBoe/d.
Fourth-Quarter 2024 Highlights
- Delivered total net production of 86.7 thousand barrels of oil equivalent per day (“Mboe/d”)
- Lease operating expense of $6.17 per barrel of oil equivalent (“Boe”)
- Reported net income and Adjusted EBITDA(1) of $37 million and $162 million, respectively
- Generated net cash provided by operating activities of $134 million
- Incurred total development costs of $60 million
- Successfully integrated two acquisitions of oil and gas assets located in (i) the Anadarko Basin of Kansas and Oklahoma and (ii) the Ardmore Basin of Oklahoma
Full-Year 2024 Highlights
- Delivered total net production of 86.7 Mboe/d
- Lease operating expense of $5.69 Boe was below the low-end of guidance
- Reported net income and Adjusted EBITDA(1) of $185 million and $601 million, respectively
- Generated net cash provided by operating activities of $505 million
- Incurred total development costs of $239 million, resulting in a reinvestment rate of 47%
- Paid cash distributions to the Company’s unitholders of $310 million, or $3.20 per unit
- Achieved cash return on capital invested of 25%
- Reported total proved reserves(3) of 337 million barrels of oil equivalent (“MMBoe”) with a present value of SEC proved reserves discounted at 10% (“PV-10”) of $1.9 billion (2)(3)
Recent Highlights
- Closed a bolt-on acquisition for a purchase price of approximately $30 million with total proved reserves of 10 MMBoe and a PV-10 of approximately $64 million
- Completed a public offering (the “Offering”) resulting in gross proceeds of $230 million including the fully exercised over-allotment option
- Proceeds from the Offering were used to partially pay down the Company’s term loan, lowering our pro forma net-debt-to-Adjusted-EBITDA ratio from 1.0x at December 31, 2024 to 0.8x
- Entered into a new revolving credit facility with an initial borrowing base of $750 million
- Repaid in full and terminated the Company’s term loan credit agreement and senior secured revolving credit agreement
- Declared a quarterly cash distribution of $0.50 per unit for the fourth quarter of 2024
During the fourth quarter of 2024, Mach achieved average oil equivalent production of 86.7 Mboe/d, which consisted of 24% oil, 52% natural gas, and 24% NGLs. Also, for the fourth quarter of 2024, Mach’s production revenues from oil, natural gas, and NGLs sales totaled $241 million, comprised of 56% oil, 24% natural gas, and 20% NGLs.
The Company spud 11 gross (9 net) operated wells and brought online 10 gross (8 net) operated wells in the fourth quarter of 2024. As of December 31, 2024, the Company had 6 gross (5 net) operated wells in various stages of drilling and completion.
Mach’s lease operating expense in the fourth quarter of 2024 was $49 million, or $6.17 per Boe. Mach incurred $27 million, or $3.36 per Boe, of gathering and processing expenses in the fourth quarter of 2024. Furthermore, during the fourth quarter of 2024, production taxes as a percentage of oil, natural gas, and NGL sales were approximately 4.9%, midstream operating profit was approximately $4 million, general and administrative expenses—excluding equity-based compensation of $2 million—was $8 million, and interest expense was $24 million.
In the fourth quarter of 2024, Mach’s total development costs were $60 million, including $56 million of upstream capital and $4 million of other capital (including midstream and land).
