in the future of this company most importantly we're committed to creating long-term value for the people who have invested alongside us our strategy is straightforward operate efficiently spend capital wisely and generate strong returns and let the results speak for themselves before we close i want to thank the employees the results we discussed today are a direct reflection of their hard work, commitment, and focus on operating safely and efficiently every day. I'd also like to thank our shareholders for their continued support and confidence in Hype. We don't take that trust lightly and we are committed to earning it every day. With that, operator, we're ready to open the call for questions.

Thank you. As a reminder, if you would like to ask a question, please press star on one on your telephone. You'll hear that automated message advising your hand is raised. If you would like to remove yourself from a queue, press star on one again. We also ask that you wait for your name and company to be announced before proceeding with your question. One moment while we compile the Q&A roster. Our first question is coming from the line of Jeff Robertson of Water Tower Research. Please go ahead.

Thank you. Good morning. Mike, can you talk a little bit about the impact on second quarter production from accelerating some of the completions into the quarter and what you would anticipate for the rest of the year just based on your schedule of additional wells to turn in line?

Absolutely, Jeff. No, great question. Obviously, with a smaller production base and as we move activity around, more specifically on the completion side of the business, you do affect existing production by stimulating wells in a certain area. We refer to that as water out our frack impacted oil volumes so as you can imagine second quarter was going to be a more active completion intense quarter by design and then we pulled four additional completions into that quarter so to your point we watered out our frack impacted even more oil than we had initially anticipated so when you look at our kind of maintenance mode program you will have some lumpiness as we move that frat crew around and have breaks in the schedule you'll see if you were looking at daily volumes you'll see some movement but again we guide on a yearly guide and when you look at the first six months of the year you know we are above that guided range pretty significantly and there's a lot of pieces that go into that, the actual well performance that we're seeing from our development program. And we talked a little earlier about the workover program, but the read-through there is that the budget is set. We just pulled forward some of that opportunity because we had a condition where we had a good frack crew at a good price in a good market, and they were very efficient effective so we went ahead and let them do a little more work but for the whole year what the read through is obviously less capital would be spent in the second half of the year you know the the drilling rig toggle was a little tougher right because it's one rig it's either a on or an off so the plan is to continue to drill with that one rig throughout the entire year And again, you can kind of see in the first six months, we drilled one additional well above what we had planned for the year, just because of the drilling efficiencies throughout the year. So we would expect something similar for the second half of the year, maybe one additional well drilled. But the drilling portion of capital spend is fairly small. I'll think somewhere in the 30% range of a Wells AFE. Now, on the completion side, the read-through there is we will do the budgeted amount of completions throughout the year. We just performed 69% of that work in the first half of the year. So, think less water out volumes as you go throughout the rest of the year, not like what we've had in the first half. as well as some impact from the workover program that we have. So we think volumes will stay strong throughout the last half of the year. And hopefully commodity prices are supportive as well. But at any reasonable oil price, we will generate significant free cash flow throughout the remainder of 2026.

Mike I know it's way too early to talk about or it's too early to talk about 2027 guidance but can you just talk about the cadence in the second half of 2026 and maybe in the stress spilling over into the first part of 2027 and will the setup for next year from a production standpoint be somewhat similar to what you all were thinking when you came into 2026?

Absolutely Jeff so the original plan was to have somewhere in the 10 plus ducts move into 2027 out of this year's program. Being able to drill two additional wells throughout the year just because the rig is that much more efficient just means two additional ducts move into 2027. The fact that we are only going to do the set number of completions we had in the budget. Again, 2027 is set up to look a lot like 2026 as far as capital requirements as well as production volumes.

Just turning to the balance sheet, Mike, you had 146 million of cash at the end of the quarter and scheduled amortization of the term loan at 30 million per quarter starts at the end of the third quarter.

Can you talk a little bit about how you're thinking of liquidity on the balance sheet and paying down or advertising the term loan and the free cash flow build and would you would it be reasonable to expect that you amortize the term loan to the extent can faster than the 30 million per quarter Jeff great question obviously we will amortize at 30 million dollars a quarter now in order to do more than that you know what we have to manage in the future is we need enough cash that you know obviously at today's full prices we are going to generate much more than that $30 million a quarter to be able to meet the amortization and have a cash deal however we need to be you know prepaying too much because you can't get that money back it's not like a revolver where you can reborrow it so you'll see us be a little a little more cautious to paying down above the 30 million dollars for the next quarter or so but again it all depends on what that free cash flow generation per quarter which again mainly driven by what the oil prices are for the quarter which we can't we can't guess right now but no we will definitely do the 30 million quarter and we will have enough cash on hand to be able to weather any kind of

variability over the next year or so think 2027 and beyond thank you mike yes sir thank you jeff thank you one moment for the next question our next question is coming from the line of nicholas pope of roth capital please go ahead morning guys hey nick uh quick questions here um looking at the workover load that y'all had um in 2q you know saw a bit of an uptick you highlighted it that you know there's a lot of work to do there curious how to think about um inventory or like what the run running room is on on those workovers and how the how those manifest themselves either in production or costs where that necessarily shows up in the in in the income statement kind kind of where you all expect to see the benefit and kind of how much like sight you have on the potential for more of those workovers.

Sure. Nick, I would love to tell you that wells never fell and operations are really easy. Now, our job is to always make them look very stable, easy, and, you know, nothing to see here. But in the operations world, you always have things happen. So typically when we choose to do a workover, we won't take a well that's producing just fine and go take that production offline to go do this workover. Eventually something will happen on that well to where you have to do an intervention. Now when you talk about the pace going forward through the first half of this year we've called up most of what we had kind of banked as wells that we could go quickly pull forward so on the go forward basis basis from more or less from now to you know into memorial wells will need to be worked on when we have to be there to do the work that's when we'll do the additional work over expense of the little mini stimulations the acid surfactants all of those things as well as lowering pumps doing things to optimize the reservoirs capability of delivering into that wellbore but again we can't really forecast with exact precision when a well is going to fail because we're always working on the other side of that equation to keep that well producing and keep our LOE cost down so we're kind of on both sides of that equation but I want you to hear the read-through is there will always be opportunity for these workovers from from now until the future the big answer for us and where it shows up on cost it shows up in the LOE side because a lot of that work was something you were going to have to do to you had rods fell and you had to go pull rods and replace things that's all on the LOE side on the capital side we capture if we're doing any kind of mini simulation that we think would increase reserves from that well more hopefully that answered thank you yes sir um and then kind Further on some of the questions that Jeff had, looking at the quarter, the gas weighting obviously had a lot more gas volumes, had the negative gas prices during the quarter.

We're curious what y'all are seeing here in the second half of the year, both with pricing and being able to move that gas, and how much of that kind of that waiting, you know, somewhat transient with some of the work that got brought forward with that high gas volumes and your ability to manage that in the second half of the year.

Great, great setup for me there, Nick. I really appreciate that because I'm actually going to step back a little bit to tell you why the oil percentage went down to 64 percent from our guided range of 67 to 68 percent. A couple reasons, and you kind of saw this in fourth quarter of 2025 where we did a lot of simulations in that quarter in high production areas. So think water out, frack impacted. We did the same thing in the second quarter. So a lot of your high oil content wells, say a well making a couple of three, four hundred barrels a day, is going to be at a slightly higher oil cut than wells that are producing, you know, say 100. And that's important here in a second when I tell you some of the other things we did. So we watered out a lot of high oil cut production. That brings down your oil percent for the quarter. But offsetting that as well, we also worked over several, call it kind of hundred you know 80 to 100 barrel a day older wells that have a higher gas cut not only did we get them back online but we did the mini simulations that increased their production so that was some of the offset that we had in 2020 I'm sorry in second quarter and why our production remain flat in spite of those additional watered out volumes but that will come at a slightly higher gas ratio than new wells that come on very oil rich so that's why it was 64 so what's the read through for the rest of the year again we feel comfortable with our 67 to 68 percent oil cut now that we're halfway through the year and we're i would probably lean a little closer to the 67 percent of the range is what i would expect to happen through the rest of the year now you had a couple other questions about you know the cost that we received you know the entire industry got some pretty horrendous costs of gas in the second quarter very high negative waha differentials and if you look at high peak compared to most of our peers I think our dollar negative $1.50 that we turned in for the second quarter is very respectable compared to all of our other public peers and we'll be at a kind of that top tier portion of of being negative I guess that's a bad way to say it but looking forward so what are what do things look like now with Gulf Coast Express expansion happening or online, Hugh Brinson, you've seen that Waha differential now closer to the minus one dollar from what was minus three to five dollar an MCF. So what does that mean going forward? The negative number that goes into your realized price is a lot smaller for the rest of this year. So we will see much better realizations from our gas going forward and we've taken some steps to help hedge some of that volatility because one thing the Permian operators are extremely good at is filling pipes and pipes are always late so we will see tightness in the future in the late 27 into 28 so we need to prepare for that. But as we sit right now for the next 12 months, gas takeaway is not an issue. We have not had one MCF that we weren't, wasn't able to put into a pipe. We just weren't getting paid for it. We had to pay for them to take it. Going forward, that will be much better in 26, and at least through the first half of 27. Got it.

I appreciate the time. I'll let you move on. Thank you. Thank you, Nick.

Thank you. And there are no more questions in the queue. That does conclude today's program. Thank you all for joining, and you may now