Good morning, ladies and gentlemen, and welcome to the Chord Energy Second Quarter 2025 Earnings Conference Call. This call is being recorded on Thursday, August 7, 2025. I would now like to turn the conference over to Bob Bakanauskas.

Thanks, everyone. This is Bob Bakanauskas, and today, we are reporting our second quarter 2025 financial and operational results. We are delighted to have you on the call. I'm joined today by Danny Brown, our CEO; Michael Lou, our Chief Strategy Officer and Chief Commercial Officer; Darrin Henke, our COO; Richard Robuck, our CFO; as well as other members of the team. Please be advised that our remarks, including the answers to your questions, include statements that we believe to be 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 those currently disclosed in our earnings releases and conference calls. Those risks include, among others, matters that we have described in our earnings releases as well as in our filings with the Securities and Exchange Commission, 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 this conference call, we will make reference to non-GAAP measures, and reconciliations to the applicable GAAP measures can be found in our earnings releases and on our website. We may also reference the current investor presentation, which you can find on our website. And with that, I'll turn the call over to our CEO, Danny Brown.

Thanks, Bob. Good morning, everyone, and thanks for joining our call. Over the next few minutes, I plan to provide a brief overview of our second quarter performance and resulting return of capital and then briefly touch upon some of our current initiatives before passing it to Darrin, who will provide more color on our operations. Darrin will then hand it over to Richard for more details on our financial results before we open it up for Q&A. So turning to the second quarter results. Chord delivered great performance with solid operating results, yielding free cash flow above expectations, which supported robust shareholder returns. Specifically, second quarter oil volumes were above the top end of guidance, reflecting strong execution, well performance, and less downtime while capital was favorable to guidance, largely reflecting improved program efficiencies. My thanks to our entire organization for delivering favorable results once again and in particular, to our folks in North Dakota, who did a great job navigating unusually high rain in May, positioning us to surpass expectations. This strong performance led to adjusted free cash flow for the second quarter of approximately $141 million, and we returned 92% of this free cash flow to shareholders. Notably, after our base dividend of $1.30 per share, all incremental capital return was utilized for share repurchases. Since closing the Enerplus transaction, Chord has reduced its share count by approximately 10% through early August. Given our view on the intrinsic value of our shares relative to how they currently trade in the market, we expect a continued focus on share repurchases in the current environment. Chord has been successful in driving strong per share growth while paying out significant dividends to shareholders and keeping the balance sheet in good shape. Turning to operations. The Chord team has demonstrated exceptional performance across all areas of the business. Cycle times have been reduced, well performance continues to be robust and downtime levels are better than anticipated. These improvements to the business gave us additional operational flexibility and allowed us to reduce full year capital by $50 million versus the original budget while exceeding expectations on the production side. Consistent with our initial 2025 plan and given current commodity prices, Chord intends to redeploy a second frac crew in the fourth quarter. This should give us an early start on the 2026 program and we would expect volumes to trough in the fourth quarter of 2025 and grow off of those levels in early 2026. We'll give some preliminary thoughts on the 2026 program in November, but I'm very pleased with the progress we've made since announcing our 3-year plan and our ability to deliver volumes more efficiently, resulting in higher free cash flow. And while I'm pleased with our current performance, I'm even more pleased that we have the opportunity and several ongoing initiatives to further improve the business. On the 4-mile lateral front, given encouraging early results, we've expedited the program and now anticipate having seven wells online by year-end. Currently, we have four wells drilled and costs have consistently been below our original expectations. We also have one well, the Rystedt, which has been producing since February. Performance from this well continues to be strong, and it recently began natural decline after more than 4 months of flat or increasing production. Darrin will get into a little more detail on the program. But suffice it to say, we like what we're seeing and are preserving the flexibility to lean into the 4-mile program in 2026. Next, I'd like to provide a brief update on some of our continuous improvement initiatives aimed at increasing free cash flow. We've made progress reducing all of these areas and are on track to exceed original production guidance with less capital and better margins. The free cash flow outlook has improved, and when including the effect of share repurchases, our expectations for free cash flow per share has grown. That's impressive performance, maybe even more impressive when considering we preserve the balance sheet along the way. A key component of Chord's ongoing continuous improvement focus is the use of data analytics, machine learning and artificial intelligence in various areas of the business. And I'd like to highlight just a few of the projects we've been working on. We're using AI and machine learning to optimize our production decisions and enhance efficiency. We are rolling out dynamic and interactive dashboards to provide real-time business performance insights, and we are in the early innings of what's possible with these initiatives. Lastly, a few words on sustainability before handing it to Darrin. Chord continues to make progress on our sustainability initiatives with a focus on safety and minimizing environmental impact. We plan to publish an updated sustainability report in the fall. To summarize, Chord is performing and offers a unique value proposition to investors. I couldn't be more pleased with the state of the business as we are in a fabulous position to generate substantial value now and in the coming years. And with that, I'll turn it to Darrin.

Thanks, Danny. The Chord team is consistently improving the organization and enhancing performance. I would like to take this opportunity to discuss the notable progress being made across all operations. Our 2025 CapEx guidance stands at $1.35 billion, a dramatic improvement in efficiency year-over-year. Chord has driven strong efficiency gains through various strategies resulting in better economics and higher production. On the drilling side, we've seen notable efficiency improvements with spud-to-rig release times down about a day year-over-year. Our completions operation is driving faster cycle times, and cleanout times have improved as well. Chord has best-in-class facility costs, and we continue to explore additional technologies to drive further efficiencies. We're prioritizing high-impact targets to get wells back on production and reduce the cost of workover repairs. Now to give you an update on Chord's 4-mile program. As Danny mentioned, we have expedited the program and now expect seven 4-mile wells turned in line by the end of the year. The Rystedt well has been online since February. Volume and pressure indications are encouraging, and our tracer study indicates strong performance. Relative to a 2-mile well, 4-mile wells are expected to recover significantly more EUR with lower upfront costs. If we continue to exceed expectations, we are likely to implement many more in 2026 and beyond. To sum it up, Chord has an impressive track record of consistent execution and strong returns. We look forward to delivering on our long-term outlook. I'll now turn it over to Richard.

Thanks, Darrin. I'll round out our conversation with some final thoughts. Danny covered our volume performance, which was above expectations. Looking at pricing, oil differentials in the second quarter averaged $2.15 below WTI, and our full year guidance reflects a positive outlook. Our lease operating expenses were $10.02 per Boe. Chord has achieved notable improvements in reducing cycle times for high-capacity wells which led to some higher costs but also had positive impacts on volumes. Our cash G&A expenses were below guidance, and we have now reduced cash G&A guidance for the full year. We have lowered the full year cash tax range, reflecting the impacts of recent tax legislation. In closing, Chord's execution and delivery remain best-in-class. I am looking forward to additional progress as our team relentlessly pursues continuous improvements and innovative solutions. With that, I'll hand the call back over to the Operator for questions.

Your first question comes from Scott Hanold, RBC Capital Markets.

You all talked a couple of times about seeing some good stuff from the 4-mile wells and integrating more of that into 2026 potentially. Could you provide us some context on what level of investment in these 4-mile wells from a risk-reward perspective makes sense? And what's that needs to be done on the permitting front in order to make that a bigger part?

The permitting activity is well underway for next year and beyond relative to 4 miles. We're setting ourselves up with the optionality for 4 miles, but also 3 miles or 2 miles, whatever the case may be for the original plan.

We're really encouraged with the early results. You can actually withstand some reasonably expected degradation of performance from the fourth mile and still have this be the right economic decision from an IRR perspective. So we're really encouraged with the early results. It looks like we're already over 97% of what 2 miles would deliver.

My follow-up is just on the Marcellus. Obviously, it's a noncore position that I didn't hear much of an update on today, but can you give us your most recent thoughts on where that fits into the stack of initiatives with regards to monetization?

Marcellus is a great asset. It's in the core of that basin but it's not core to our portfolio. We're focused on making sure that we deliver maximum value from that asset.

Wanted to start out on the Rystedt well, get a bit more detail than what you already highlighted in the prepared remarks. Any main takeaways or observations from the drilling of the well, the completion of the well, the flowback, the productivity in the first 6 months?

The execution on the Rystedt went almost flawlessly. We were able to drill the well with one bottom hole assembly, and overall, the drilling performance has gone better than expected. We've only completed one well so far, the Rystedt, which has outperformed its type curve by 30%. We just need to get a few more under our belt to evaluate performance fully.

As you all have done the work looking at how your acreage footprint sits today, if you all were to kind of go ahead with a more material shift towards 4-mile laterals, how much incremental net lateral footage expansion would that entail?

You can expect areas on the periphery of the basin to start to compete for capital. We will continue working through the permitting and planning to ensure we can comfortably prosecute a more aggressive 4-mile program.

Congrats on a strong 2Q update. What are your thoughts on how low you could drive your corporate level breakeven given the breakthroughs you're experiencing with 4-mile laterals?

If you think about 50% of our inventory moving over to a 4-mile lateral perspective, we'd be looking at a $5 improvement across the organization.

How material could the cost gains be relative to what you've accomplished to date? What are some of the biggest needle movers for you?

It's early and nascent in this process, but we've had 31 projects underway to drive improvements across every aspect of our business. The pace that this is moving is quick and we're already seeing exciting impacts.

What is the cost of actually implementing these AI initiatives, and what are the advantages of looking at internal versus external solutions?

The cost of implementation is quite small. We spent a lot of time organizing clean data over the last few years. The low cost of these initiatives is exciting because it allows our teams to take ownership of their workflows.

We're also working with outside vendors and looking at how they improve our workflows. We're trying to implement the best practices from these initiatives into our operations.

When you look at 2026, what are the factors you're considering for activity levels?

From a 4Q oil production perspective, we're focused on generating strong free cash flow per share growth rather than absolute production growth. We'll grow off the trough in 2025.

How much CapEx are you saving by doubling the 4-mile lateral program this year? Do you have any thoughts on the range of annual CapEx savings?

For this year, the amount of capital saved is relatively small. We need to focus on incremental savings as we move towards a more substantial 4-mile program.

How should we think about the lower CapEx level for 4-mile laterals? Are you seeing any further incremental improvement there?

Every incremental foot you drill is the most efficient foot. As we get smarter with repetition, we expect to see incremental benefits.

What milestones are you waiting for to get to the 50% of your program? What are the gating factors?

Mechanically, we need to ensure that we can get this done repeatedly. We've only completed one well so we need to complete a few more to evaluate performance fully.

Is it fair to think that most of the capital shift will be spent in '25 with the production impact being a bit of a tailwind into '26?

A good portion of it is being spent in '25, and while we will benefit from it in '26, we're bringing our completion activities back in Q4 this year.

There are no further questions from our phone lines. I would now like to turn the call back over to Danny Brown for some closing remarks.

Thanks for your attention today. I extend my sincere appreciation to all our employees and contractors for their continued dedication. Chord is well-positioned for success and to deliver significant value for our shareholders. Through our strategic initiatives and the strength of our team, we've created a valuable asset. Chord has a substantial production base with low decline rates, and we’re looking forward to generating value in the future. Thank you for joining our call.

Ladies and gentlemen, this concludes your conference call for today. We thank you for participating, and we ask that you please disconnect your lines. Have a great day.