Chord Energy Corp (CHRD)

Chord Energy Corporation is an independent exploration and production company engaged in the acquisition, exploration, development and production of crude oil, NGL and natural gas primarily in the Williston Basin with limited non-operated interests in the Marcellus Shale. The industry is highly competitive, with competition based on acquiring properties, obtaining investment capital, securing oil field goods and services, marketing crude oil, NGL and natural gas products and attracting and retaining qualified personnel. Certain competitors possess and employ financial, technical and personnel resources substantially greater than Chord's, which can be particularly important in the areas in which Chord operates.

Chord's competitive strengths include a substantial leasehold position and existing production in one of North America's leading unconventional crude oil resource plays, operating control over the majority of its portfolio, a balance sheet among best-in-class, and an incentivized management team with proven operating and acquisition skills. As of December 31, 2025, Chord had 1,302,921 net leasehold acres in the Williston Basin, which is the largest acreage position of any operator in the Williston Basin, approximately all of which is held by production. Chord is the top producer in the Williston Basin. The company's management team has a proven record of accomplishment in identifying, acquiring and executing large, repeatable development drilling programs and has substantial experience in the Williston Basin.

Chord generates revenue through the sale of crude oil, NGL and natural gas production, as well as through purchased oil and gas sales derived from marketing activities primarily to optimize transportation costs, for blending to meet pipeline specifications or to cover production shortfalls. The company's crude oil and natural gas production is sold to purchasers under short-term (less than 12-month) contracts at market-based prices, while NGL production is sold under long-term (more than 12-month) contracts at market-based prices. Chord manages its commodities marketing activities in-house, enabling it to market and sell to a broad array of potential purchasers.

Chord's revenue streams are disaggregated into crude oil revenues, NGL revenues, natural gas revenues, and purchased oil and gas sales. For the year ended December 31, 2025, crude oil revenues were $3,546,890 thousand ¹, NGL revenues were $138,277 thousand ², natural gas revenues were $211,973 thousand ³, and purchased oil and gas sales were $979,986 thousand ⁴. Total revenues for the year ended December 31, 2025 were $4,877,126 thousand ⁵. The company's average daily production for the year ended December 31, 2025 was 276,620 Boepd ⁶, with average daily crude oil production of 154,795 Bopd ⁷. Average sales prices for crude oil without derivative settlements were $62.78 per Bbl ⁸, for NGL were $7.22 per Bbl ⁹, and for natural gas were $1.40 per Mcf ¹⁰ for the year ended December 31, 2025.

On May 31, 2024, Chord acquired Enerplus Corporation in a stock-and-cash transaction. On October 31, 2025, Chord completed the 2025 Williston Basin Acquisition from XTO Energy Inc. and affiliates for total cash consideration of $542.2 million ¹¹. During the year ended December 31, 2025, Chord repurchased 3,491,618 shares of common stock at a weighted average price of $104.39 per common share for a total cost of $364.5 million ¹² (excluding accrued excise taxes). In August 2025, the Board of Directors authorized a new share repurchase program of up to $1.0 billion ¹³, replacing the previous $750 million program. As of December 31, 2025, $952.2 million ¹⁴ remained under this program. Chord paid $5.20 per share base cash dividends for the year ended December 31, 2025 ¹⁵. On March 13, 2025, Chord paid an aggregate of $409.1 million ¹⁶ to purchase and satisfy and discharge $400.0 million ¹⁷ of its 6.375% senior unsecured notes due June 1, 2026, resulting in a loss on debt extinguishment of $3.5 million ¹⁸. During the year ended December 31, 2025, Chord recorded a non-cash goodwill impairment charge of $539.3 million ¹⁹.

For the year ended December 31, 2025, Chord reported net income of $44.5 million ²⁰, a decrease of 95% compared to $848.6 million ²¹ for the year ended December 31, 2024, primarily due to decreased realized oil prices and the non-cash goodwill impairment charge. Total revenues decreased to $4,877.1 million ²² from $5,251.1 million ²³ in the prior year. Net cash provided by operating activities was $2,040.7 million ²⁴ for the year ended December 31, 2025. Capital expenditures (excluding capitalized interest) were $1,357.9 million ²⁵ for the year.

Chord plans to TIL approximately 135 to 165 gross operated wells in 2026 with an average working interest of approximately 75%. The company expects to run four to five operated rigs during the majority of 2026. Planned 2026 capital expenditures are expected to be approximately $1.35 billion to $1.45 billion ²⁶.

Chord's growth strategy is centered on its substantial leasehold position in the Williston Basin, which as of December 31, 2025 comprised 1,302,921 net leasehold acres, the largest acreage position of any operator in the basin, approximately all of which is held by production. The company is currently exploiting significant resource potential from the Middle Bakken and Three Forks formations across a substantial portion of its acreage. Chord believes the locations, size and concentration of its acreage creates an opportunity to achieve cost, recovery and production efficiencies through the development of its project inventory. The company's management team has a proven record of accomplishment in identifying, acquiring and executing large, repeatable development drilling programs.

Chord's business strategy is focused on rigorous capital discipline and generating significant, sustainable free cash flow. The company intends to efficiently execute its development program and optimize capital allocation, while evaluating its performance and focusing on continuous improvement. Chord has established a strong capital allocation framework with the objective of balancing stockholder returns and reinvestment of capital, focusing on conservative capital allocation, delivering low reinvestment rates and returning significant capital to stockholders at mid-cycle oil prices. The company expects to return a certain percentage of adjusted free cash flow each quarter, with the targeted percentage based on free cash flow generated during the previous quarter and projected leverage under a specific framework: below 0.5x leverage, 75%+ of Adjusted FCF; below 1.0x leverage, 50%+ of Adjusted FCF; and greater than 1.0x leverage, base dividend plus ($5.20 per share annualized).

Chord's management team is focused on maintaining a solid risk management process to preserve a strong balance sheet and protect its cash generation capabilities. The company's business is designed to navigate challenging environments while preserving sufficient liquidity in an effort to be opportunistic in low commodity price cycles. As of December 31, 2025, Chord had $2,156.7 million ²⁷ of liquidity available, including $189.5 million ²⁸ of cash and cash equivalents and $1,967.2 million ²⁹ of unused borrowing base capacity available under the Credit Facility. The company has no near-term debt maturities and has a hedging program to minimize downside risk.

Chord's capital allocation framework includes a return of capital program designed to provide peer-leading, sustainable stockholder returns. The return of capital plan includes a base cash dividend of $1.30 per share per quarter ($5.20 per share annualized) and a $1 billion share repurchase program, which the Board of Directors authorized during the third quarter of 2025. As of December 31, 2025, $952.2 million ³⁰ remained under this share repurchase program. Chord plans to return capital through the base dividend payout, supplemented by opportunistic share repurchases and variable dividends. The company's planned 2026 capital expenditures are expected to be approximately $1.35 billion to $1.45 billion ³¹.

Chord's operations are subject to a series of risks arising out of the threat of climate change, energy conservation measures or initiatives that stimulate demand for alternative forms of energy that could result in increased operating costs, restrictions on drilling and reduced demand for the crude oil and natural gas that Chord produces. The company's financial results could be impacted by uncertainty in U.S. trade policy, including uncertainty surrounding changes in tariffs, trade agreements or other trade restrictions imposed by the U.S. or other governments. A substantial or extended decline in commodity prices, for crude oil and, to a lesser extent, NGL and natural gas, may adversely affect Chord's business, financial condition or results of operations and its ability to meet its capital expenditure obligations and financial commitments. The ability or willingness of OPEC+ to set and maintain production levels has a significant impact on oil prices.

Management's message emphasizes a strategy focused on rigorous capital discipline and generating significant, sustainable free cash flow by executing on strategic priorities of maximizing returns, maintaining financial strength, committing to excellence, and being responsible stewards. Key themes include a strong capital allocation framework balancing stockholder returns and reinvestment, with a return of capital program including a base cash dividend of $1.30 per share per quarter ($5.20 per share annualized) and a $1 billion share repurchase program authorized during the third quarter of 2025. Management highlights the company's scale and high-quality assets in the Williston Basin, which allow it to generate significant, sustainable cash flow to support maximizing returns at mid-cycle oil prices. The company expects to return a certain percentage of adjusted free cash flow each quarter, with the targeted percentage based on free cash flow generated during the previous quarter and projected leverage under a specific framework: below 0.5x leverage, 75%+ of Adjusted FCF; below 1.0x leverage, 50%+ of Adjusted FCF; and greater than 1.0x leverage, base dividend plus ($5.20 per share annualized).

For the year ended December 31, 2025, total revenues were $4,877,126 thousand ³² compared to $5,251,082 thousand ³³ for the year ended December 31, 2024. Net income was $44,459 thousand ³⁴ for 2025 versus $848,627 thousand ³⁵ for 2024. Diluted earnings per share were $0.74 ³⁶ for 2025 compared to $16.02 ³⁷ for 2024. Operating income was $197,425 thousand ³⁸ for 2025 versus $1,100,067 thousand ³⁹ for 2024. Net cash provided by operating activities was $2,040,657 thousand ⁴⁰ for 2025 compared to $2,097,227 thousand ⁴¹ for 2024. As of December 31, 2025, Chord had $189,531 thousand ⁴² in cash and cash equivalents and total long-term debt of $1,479,581 thousand ⁴³. A significant one-time item affecting 2025 results was a non-cash goodwill impairment charge of $539,324 thousand ⁴⁴, which reduced net income. The effective tax rate was 81.7% ⁴⁵ for 2025 compared to 23.7% ⁴⁶ for 2024, with the 2025 rate being higher primarily due to the impact of the goodwill impairment charge.

A substantial or extended decline in commodity prices, for crude oil and, to a lesser extent, NGL and natural gas, may adversely affect Chord's business, financial condition or results of operations and its ability to meet its capital expenditure obligations and financial commitments. The company's operations are subject to a series of risks arising out of the threat of climate change, energy conservation measures or initiatives that stimulate demand for alternative forms of energy that could result in increased operating costs, restrictions on drilling and reduced demand for the crude oil and natural gas that Chord produces. Chord's financial results could be impacted by uncertainty in U.S. trade policy, including uncertainty surrounding changes in tariffs, trade agreements or other trade restrictions imposed by the U.S. or other governments. The ability or willingness of OPEC+ to set and maintain production levels has a significant impact on oil prices. Chord's estimated net proved reserves are based on many assumptions that may turn out to be inaccurate, and any significant inaccuracies in these reserve estimates or underlying assumptions will materially affect the quantities and present value of its reserves.