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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

 

FORM 8-K 

 

 

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

 

Date of Report (Date of earliest event reported): August 13, 2024 

 

 

 

Mach Natural Resources LP

(Exact name of registrant as specified in its charter)

 

 

 

Delaware   001-41849   93-1757616
(State or other jurisdiction
of incorporation)
  (Commission File Number)   (IRS Employer
Identification No.)

 

14201 Wireless Way, Suite 300, Oklahoma City, Oklahoma   73134
(Address of principal executive offices)   (Zip Code)

 

 

 

(405) 252-8100

Registrant’s telephone number, including area code

 

Not applicable.

(Former name or former address, if changed since last report.)

 

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class   Trading Symbol(s)   Name of each exchange on which registered
Common units representing limited partner interests   MNR   New York Stock Exchange

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

 

 

 

 

 

 

Item 2.02. Results of Operations and Financial Condition.

 

On August 13, 2024, Mach Natural Resources LP (the “Company”) issued a press release (the “Press Release”) providing information on its results of operations and financial condition for the quarter ended June 30, 2024. The Press Release and certain supplemental financial information are furnished as Exhibit 99.1 and Exhibit 99.2, respectively, to this Current Report on Form 8-K (this “Report”) and are incorporated herein by reference.

 

The information under this Item 2.02 and in Exhibit 99.1 and Exhibit 99.2 to this Report are being furnished and shall not be deemed “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section. The information under this Item 2.02 and in Exhibit 99.1 to this Report shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended (the “Securities Act”).

 

Item 7.01. Regulation FD Disclosure.

 

In addition to providing the results of operations and financial condition for the quarter ended June 30, 2024, the Press Release announced the Company’s declaration of its quarterly distribution for the second quarter of 2024. The full text of the Press Release is furnished as Exhibit 99.1 to this Report and is incorporated herein by reference.

 

The information under this Item 7.01 and in Exhibit 99.1 to this Report are being furnished and shall not be deemed “filed” for the purpose of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that Section. The information under this Item 7.01 and in Exhibit 99.1 to this Report shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act.

 

Item 9.01 Financial Statements and Exhibits.

 

(d) Exhibits.

 

Exhibit No.   Description
99.1   Press Release issued August 13, 2024.
99.2   Supplemental Financial Information.
104   Cover Page Interactive Data File (formatted as Inline XBRL).

 

1

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

  Mach Natural Resources LP
     
  By: Mach Natural Resources GP LLC,
    its general partner
     
Dated: August 13, 2024 By: /s/ Tom L. Ward
    Name:  Tom L. Ward
    Title: Chief Executive Officer

 

2

 

Exhibit 99.1

 

 

 

Mach Natural Resources LP Reports Second Quarter 2024 Results; Declares Quarterly Cash Distribution of $0.90 Per Unit

 

OKLAHOMA CITY, Oklahoma, August 13, 2024 — Mach Natural Resources LP (NYSE: MNR) (“Mach” or the “Company”) today reported financial and operating results for the three months ended June 30, 2024. The Company also announced its quarterly cash distribution and updated its full year 2024 outlook.

 

Second Quarter 2024 Highlights

 

Averaged total net production of 89.3 thousand barrels of oil equivalent per day (“Mboe/d”) exceeded the high-end of guidance

 

Produced an average of 20.9 thousand barrels of oil per day (“MBbl/d”)

 

Lease operating expense of $5.72 per barrel of oil equivalent (“Boe”) was below the low-end of guidance

 

Reported net income and Adjusted EBITDA of $40 million and $136 million, respectively

 

Generated net cash provided by operating activities of $117 million

 

Divested a portion of Western Anadarko acreage for $38 million with no associated production

 

Made first quarterly term loan amortization payment of $21 million

 

Declared a quarterly cash distribution of $0.90 per unit

 

Tom L. Ward, Mach’s Chief Executive Officer, noted, “Mach’s second quarter results reflect the continuation of our 2024 plan. A steady adherence to low leverage and disciplined cash flow management allow us to announce a distribution of $0.90 per unit for the period. Our Company was founded on a distribution-focused strategy, and this quarter’s cash distribution demonstrates Mach’s commitment to rewarding its unitholders while navigating the challenges of the market.”

 

Second Quarter 2024 Financial Results

 

Mach reported total revenue and net income of $240 million and $40 million in the second quarter of 2024, respectively. Additionally, during the second quarter, the average realized price was $79.27 per barrel of oil, $1.33 per Mcf of natural gas, and $23.83 per barrel of natural gas liquids (“NGLs”). These prices exclude the effects of derivatives.

 

At the end of the second quarter, Mach had a cash balance of $145 million and a pro forma net-debt-to- Adjusted-EBITDA ratio of 0.9x.

 

Second Quarter 2024 Operational Results

 

During the second quarter of 2024, Mach achieved average oil equivalent production of 89.3 Mboe/d, which consisted of 23% oil, 53% natural gas and 24% NGLs. Also, for the second quarter of 2024, Mach’s production revenues from oil, natural gas, and NGLs sales totaled $232 million, comprised of 65% oil, 15% natural gas, and 20% NGLs.

 

 

 

 

The Company spud 12 gross (10 net) operated wells and brought online 14 gross (12 net) operated wells in the second quarter of 2024. As of June 30, 2024, the Company had 5 gross (4 net) operated wells in various stages of drilling and completion.

 

Mach’s lease operating expense in the second quarter of 2024 was $46 million, or $5.72 per Boe. Mach incurred $24 million, or $2.93 per Boe, of gathering and processing expenses in the second quarter of 2024. Furthermore, during the second quarter of 2024, production taxes as a percentage of oil, natural gas, and NGL sales were approximately 4.9%, midstream operating profit was approximately $5 million, general and administrative expenses—excluding equity-based compensation of $2 million—was $9 million, and interest expense was $27 million.

 

In the second quarter of 2024, Mach’s total capital expenditures—excluding acquisitions—were $46 million, including $41 million of upstream capital and $5 million of other capital (including midstream and land).

 

Distributions

 

Mach announced today that the board of directors of its general partner declared a quarterly cash distribution for the second quarter of 2024 of $0.90 per common unit. The quarterly cash distribution is to be paid on September 10, 2024, to common unitholders of record as of the close of trading on August 27, 2024.

 

2024 Operating Plan and Guidance

 

Today the Company provided updated guidance for 2024 that incorporates the impact of a rig-count reduction, as well as operational efficiencies achieved year-to-date.

 

During the second quarter, Mach lowered its operated rig count in the Oswego from two rigs to one rig. As a result, the midpoint of full-year capital expenditure guidance is reduced by 15%. Oil volumes for the third quarter 2024 and fourth quarter 2024 are expected to range between 18.6 MBbl/d to 19.9 MBbl/d. Full-year 2024 oil volumes are expected to range between 19.4 MBbl/d to 20.6 MBbl/d. The decision to reduce rig count is fully consistent with the Company’s strategic framework that prioritizes a disciplined reinvestment rate.

 

In order to account for better-than-expected operational efficiencies achieved year-to-date, the midpoint of full- year 2024 guidance for lease operating expense per BOE has been lowered by 3%. In addition, full-year 2024 total oil-equivalent volumes are expected to range between 82.2 Mboe/d to 87.2 Mboe/d, representing a midpoint improved by 1%. Additional details of Mach’s forward-looking guidance are available on the Company’s website at www.machnr.com.

 

Conference Call and Webcast Information

 

Mach will host a conference call and webcast at 8:00 a.m. Central (9:00 a.m. Eastern) on Wednesday, August 14, 2024, to discuss its second quarter 2024 results. Participants can access the conference call by dialing 877-407-2984. A webcast link to the conference call will be provided on the Company’s website at www.ir.machnr.com. A replay will also be available on the Company’s website following the call.

 

About Mach Natural Resources LP

 

Mach Natural Resources LP is an independent upstream oil and gas Company focused on the acquisition, development and production of oil, natural gas and NGL reserves in the Anadarko Basin region of Western Oklahoma, Southern Kansas and the panhandle of Texas. For more information, please visit www.machnr.com.

 

FOR FURTHER INFORMATION, PLEASE CONTACT:

 

Mach Natural Resources LP

Investor Relations Contact: ir@machnr.com

 

2

 

 

Financial Statements and Non-GAAP Financial Measures and Disclosures

 

This press release includes non-GAAP financial measures. Pursuant to regulatory disclosure requirements, Mach is required to reconcile non-GAAP financial measures to the related GAAP information (GAAP refers to generally accepted accounted principles). Reconciliations of these non-GAAP measures, along with other financial and operational disclosures, are provided within the supplemental tables that are available on the Company’s website at www.machnr.com and in the related Form 10-Q filed with the Securities and Exchange Commission (the “SEC”).

 

Adjusted EBITDA and Cash Available for Distribution are non-GAAP financial measures. Such non-GAAP measures are used as a supplemental financial performance measure by our management and by external users of our financial statements, such as industry analysts, investors, lenders, rating agencies and others, to more effectively evaluate our operating performance and our results of operation from period to period and against our peers without regard to financing methods, capital structure or historical cost basis. Such non-GAAP measures are not alternatives to GAAP measures.

 

Such non-GAAP measures should not be considered in isolation or as a substitute for analysis of results as reported under GAAP. Such non-GAAP measures are used as a supplemental financial performance measure by our management and by external users of our financial statements, such as industry analysts, investors, lenders, rating agencies and others, to more effectively evaluate our operating performance and our results of operation from period to period and against our peers without regard to financing methods, capital structure or historical cost basis. Such non-GAAP measures are not alternatives to GAAP measures.

 

Cautionary Note Regarding Forward-Looking Statements

 

This release contains statements that express the Company’s opinions, expectations, beliefs, plans, objectives, assumptions or projections regarding future events or future results, in contrast with statements that reflect historical facts. All statements, other than statements of historical fact included in this release regarding our strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects, plans and objectives of management are forward-looking statements When used in this release, words such as “may,” “assume,” “forecast,” “could,” “should,” “will,” “plan,” “believe,” “anticipate,” “intend,” “estimate,” “expect,” “project,” “budget” and similar expressions are used to identify forward-looking statements, although not all forward-looking statements contain such identifying words. These forward-looking statements are based on management’s current belief, based on currently available information as to the outcome and timing of future events at the time such statement was made. Such statements are subject to a number of assumptions, risk and uncertainties, many of which are beyond the control of the Company. These include, but are not limited to, commodity price volatility; the impact of epidemics, outbreaks or other public health events, and the related effects on financial markets, worldwide economic activity and our operations; uncertainties about our estimated oil, natural gas and natural gas liquids reserves, including the impact of commodity price declines on the economic producibility of such reserves, and in projecting future rates of production; the concentration of our operations in the Anadarko Basin; difficult and adverse conditions in the domestic and global capital and credit markets; lack of transportation and storage capacity as a result of oversupply, government regulations or other factors; lack of availability of drilling and production equipment and services; potential financial losses or earnings reductions resulting from our commodity price risk management program or any inability to manage our commodity risks; failure to realize expected value creation from property acquisitions and trades; access to capital and the timing of development expenditures; environmental, weather, drilling and other operating risks; regulatory changes, including potential shut-ins or production curtailments mandated by the Railroad Commission of Texas, the Oklahoma Corporation Commission and/or the Kansas Corporation Commission; competition in the oil and natural gas industry; loss of production and leasehold rights due to mechanical failure or depletion of wells and our inability to re-establish their production; our ability to service our indebtedness; any downgrades in our credit ratings that could negatively impact our cost of and ability to access capital; cost inflation; political and economic conditions and events in foreign oil and natural gas producing countries, including embargoes, continued hostilities in the Middle East and other sustained military campaigns, the war in Ukraine and associated economic sanctions on Russia, conditions in South America, Central America, China and Russia, and acts of terrorism or sabotage; evolving cybersecurity risks such as those involving unauthorized access, denial-of-service attacks, malicious software, data privacy breaches by employees, insider or other with authorized access, cyber or phishing-attacks, ransomware, social engineering, physical breaches or other actions; and risks related to our ability to expand our business, including through the recruitment and retention of qualified personnel. Please read the Company’s filings with the U.S. Securities and Exchange Commission (the “SEC”), including “Risk Factors” in the Company’s Annual Report on Form 10-K, which is on file with the SEC, for a discussion of risks and uncertainties that could cause actual results to differ from those in such forward-looking statements.

 

As a result, these forward-looking statements are not a guarantee of our performance, and you should not place undue reliance on such statements. Any forward-looking statement speaks only as of the date on which such statement is made, and the Company undertakes no obligation to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise.

 

 

3

 

Exhibit 99.2

 

Three months and six months ended June 30, 2024

Supplemental Information of Mach Natural Resources LP

 

Table of Contents:   Page
Consolidated Balance Sheets   2
Consolidated Statements of Operations   3
Consolidated Statements of Cash Flows   4
Updated 2024 Guidance   5
Non-GAAP Financial Measures and Reconciliations   6
Derivative Contracts   8

 

1

 

 

MACH NATURAL RESOURCES LP

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(in thousands)

 

   June 30,   December 31, 
   2024   2023 
ASSETS        
Current assets:        
Cash and cash equivalents  $144,621   $152,792 
Accounts receivable – joint interest and other, net   28,178    54,155 
Accounts receivable – oil, gas, and NGL sales   118,277    78,051 
Short-term derivative assets   9,110    24,802 
Inventories   27,499    31,377 
Other current assets   7,371    2,425 
Total current assets   335,056    343,602 
Oil and natural gas properties, using the full cost method:          
Proved oil and natural gas properties   2,179,014    2,097,540 
Less: accumulated depreciation, depletion and amortization   (393,653)   (265,895)
Oil and natural gas properties, net   1,785,361    1,831,645 
Other property, plant and equipment   111,641    105,302 
Less: accumulated depreciation   (19,475)   (15,642)
Other property, plant and equipment, net   92,166    89,660 
Long-term derivative assets   3,672    15,112 
Other assets   5,895    7,102 
Operating lease assets   12,887    17,394 
Total assets  $2,235,037   $2,304,515 
LIABILITIES AND EQUITY          
Current liabilities:          
Accounts payable  $37,759   $44,577 
Accounts payable – related party   860    2,867 
Accrued liabilities   53,230    44,529 
Revenue payable   131,887    110,296 
Short-term derivative liabilities   5,967     
Current portion of long-term debt   82,500    61,875 
Current portion of operating lease liabilities   7,468    10,765 
Total current liabilities   319,671    274,909 
Long-term debt   706,909    745,140 
Asset retirement obligations   88,762    85,094 
Long-term portion of operating leases   5,451    6,705 
Other long-term liabilities   1,134    943 
Total long-term liabilities   802,256    837,882 
Commitments and contingencies (Note 10)          
Partners’ capital:          
Partners’ capital   1,113,110    1,191,724 
Total liabilities and partners’ capital  $2,235,037   $2,304,515 

 

2

 

 

MACH NATURAL RESOURCES LP

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

(in thousands, except per common unit data)

 

   Three Months Ended
June 30,
   Six Months Ended
June 30,
 
   2024   2023   2024   2023 
Revenue                
Oil, natural gas, and NGL sales  $231,539   $150,165   $486,779   $312,613 
(Loss) gain on oil and natural gas derivatives   (4,635)   2,688    (33,903)   15,742 
Midstream revenue   6,441    6,786    12,660    13,318 
Product sales   6,649    7,282    13,613    17,421 
Total revenues   239,994    166,921    479,149    359,094 
                     
Operating expenses                    
Gathering and processing   23,831    7,868    55,773    17,510 
Lease operating expense   46,497    27,802    87,257    60,615 
Production taxes   11,302    6,852    24,054    15,526 
Midstream operating expense   2,616    2,569    5,175    5,538 
Cost of product sales   5,786    6,463    11,886    15,575 
Depreciation, depletion, amortization and accretion – oil and natural gas   65,819    28,528    131,191    58,095 
Depreciation and amortization – other   2,242    1,436    4,340    2,793 
General and administrative   9,568    4,195    18,046    7,770 
General and administrative - related party   1,850    1,067    3,700    2,135 
Total operating expenses   169,511    86,780    341,422    185,557 
Income from operations   70,483    80,141    137,727    173,537 
                     
Other (expense) income                    
Interest expense   (27,046)   (1,975)   (53,331)   (3,789)
Other income (expense), net   (3,921)   (357)   (3,178)   (245)
Total other expense   (30,967)   (2,332)   (56,509)   (4,034)
Net income  $39,516   $77,809   $81,218   $169,503 
Net income per common unit:                    
Basic  $0.42        $0.85      
Diluted  $0.42        $0.85      
Weighted average common units outstanding:
Basic   95,009         95,004      
Diluted   95,187         95,129      

 

3

 

 

MACH NATURAL RESOURCES LP

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(in thousands)

 

   Six Months Ended
June 30,
 
   2024   2023 
Cash flows from operating activities        
Net income  $81,218   $169,503 
Adjustments to reconcile net income to cash provided by operating activities          
Depreciation, depletion, amortization and accretion   135,531    60,888 
Loss (gain) on derivative instruments   33,903    (15,742)
Cash receipts (payments) on settlement of derivative contracts, net   3,384    7,245 
Debt issuance costs amortization   3,494    202 
Equity based compensation   3,482    1,294 
Credit losses   647     
(Gain) loss on sale of assets   (309)   (1)
Settlement of asset retirement obligations   (418)   (79)
Changes in operating assets and liabilities (decreasing) increasing cash:          
Accounts receivable   (24,381)   53,913 
Revenue payable   21,592    (2,675)
Accounts payable and accrued liabilities   2,280    (5,133)
Other   361    5,730 
Net cash provided by operating activities   260,784    275,145 
Cash flows from investing activities
Capital expenditures for oil and natural gas properties   (116,441)   (182,427)
Capital expenditures for other property and equipment   (7,032)   (4,953)
Acquisition of assets   (1,258)   (468)
Proceeds from sales of oil and natural gas properties   38,975     
Proceeds from sales of other property and equipment   495    36 
Net cash used in investing activities   (85,261)   (187,812)
Cash flows from financing activities
Repayments of borrowings on term note   (20,625)    
Proceeds from borrowings on credit facility       7,000 
Distributions to unitholders   (161,617)    
Distributions to members       (74,500)
Withholding taxes paid on vesting of phantom units   (570)    
Payment of other financing fees   (882)   (404)
Net cash used in financing activities   (183,694)   (67,904)
Net (decrease) increase in cash and cash equivalents   (8,171)   19,429 
Cash and cash equivalents, beginning of period   152,792    29,417 
Cash and cash equivalents, end of period  $144,621   $48,846 

 

4

 

 

Updated 2024 Guidance:

 

   2024 
    Q3    Q4    Full-Year 
Net Production Guidance               
Oil (MBbls/d)   18.6 - 19.9    18.6 - 19.9    19.4 - 20.6 
NGLs (MBbls/d)   18.4 - 19.5    18.1 - 19.2    19.1 - 20.3 
Natural Gas (MMcf/d)   249 - 265    243 - 258    262 - 278 
Total (Mboe/d)   78.5 - 83.6    77.2 - 82.1    82.2 - 87.2 

 

    Full-Year 2024 
Price Realizations Guidance (excluding derivatives)     
Oil (differential to NYMEX WTI) ($/Bbl)   ($1.50) - ($0.50) 
NGLs (% of WTI)   31% - 35% 
Natural Gas (differential to NYMEX Henry Hub) ($/Mcf)   ($0.36) - ($0.20) 
      
Other Guidance Items     
Lease Operating Expense ($/Boe)   $5.80 - $6.10 
Gathering and Processing ($/Boe)   $3.20 - $3.40 
Production Taxes (% of Oil, natural gas, and NGL sales)   5.0% - 6.0% 
Midstream Operating Profit ($MM)   $15 - $18 
General and Administrative, excluding equity-based compensation ($MM)   $30 - $34 
Interest Expense ($MM)   $88 - $92 
      
Capital Expenditure Guidance ($MM)     
Upstream (D&C and Workovers)   $195 - $210 
Other (Midstream and Land)   $20 - $30 
Total   $215 - $240 

 

5

 

 

Non-GAAP Financial Measures

 

Adjusted EBITDA

 

We include in the tables below the supplemental non-GAAP financial performance measure Adjusted EBITDA and provide our calculation of Adjusted EBITDA and a reconciliation of Adjusted EBITDA to net income, our most directly comparable financial measures calculated and presented in accordance with GAAP. We define Adjusted EBITDA as net income before (1) interest expense, net, (2) depreciation, depletion, amortization and accretion, (3) unrealized (gain) loss on derivative instruments, (4) equity-based compensation expense, (5) credit losses, and (6) (gain) loss on sale of assets.

 

Adjusted EBITDA is used as a supplemental financial performance measure by our management and by external users of our financial statements, such as industry analysts, investors, lenders, rating agencies and others, to more effectively evaluate our operating performance and our results of operation from period to period and against our peers without regard to financing methods, capital structure or historical cost basis. We exclude the items listed above from net income in arriving at Adjusted EBITDA because these amounts can vary substantially from company to company within our industry depending upon accounting methods and book values of assets, capital structures and the method by which the assets were acquired. Adjusted EBITDA is not a measurement of our financial performance under GAAP and should not be considered as an alternative to, or more meaningful than, net income as determined in accordance with GAAP or as indicators of our operating performance. Certain items excluded from Adjusted EBITDA are significant components in understanding and assessing a company’s financial performance, such as a company’s cost of capital and tax burden, as well as the historic costs of depreciable assets, none of which are reflected in Adjusted EBITDA. Our presentation of Adjusted EBITDA should not be construed as an inference that our results will be unaffected by unusual items. Our computations of Adjusted EBITDA may not be identical to other similarly titled measures of other companies.

 

Cash Available for Distribution

 

Cash available for distribution is not a measure of net income or net cash flow provided by or used in operating activities as determined by GAAP. Cash available for distribution is a supplemental non-GAAP financial performance measure used by our management and by external users of our financial statements, such as industry analysts, investors, lenders, rating agencies and others, to assess our ability to internally fund our exploration and development activities, pay distributions, and to service or incur additional debt. We define cash available for distribution as net income less (1) interest expense, net, (2) depreciation, depletion, amortization and accretion, (3) unrealized (gain) loss on derivative instruments, (4) equity-based compensation expense, (5) credit losses, (6) (gain) loss on sale of assets, (7) settlement of asset retirement obligations, (8) cash interest expense, net (9) development costs, and (10) change in accrued realized derivative settlements. Development costs include all of our capital expenditures, other than acquisitions. Cash available for distribution will not reflect changes in working capital balances. Cash available for distribution is not a measurement of our financial performance or liquidity under GAAP and should not be considered as an alternative to, or more meaningful than, net income or net cash provided by or used in operating activities as determined in accordance with GAAP or as indicators of our financial performance and liquidity. The GAAP measures most directly comparable to cash available for distribution are net income and net cash provided by operating activities. Cash available for distribution should not be considered as an alternative to, or more meaningful than, net income or net cash provided by operating activities.

 

6

 

 

Reconciliation of GAAP Financial Measures to Adjusted EBITDA and Cash Available for Distribution

 

   Three Months Ended
June 30,
   Six Months Ended
June 30,
 
($ in thousands)  2024   2023   2024   2023 
Net Income Reconciliation to Adjusted EBITDA:                
Net income  $39,516   $77,809   $81,218   $169,503 
Interest expense, net   25,880    1,570    50,952    3,294 
Depreciation, depletion, amortization and accretion   68,061    29,964    135,531    60,888 
Unrealized (gain) loss on derivative instruments   (124)   2,097    33,099    (8,212)
Equity-based compensation expense   2,300    647    3,482    1,294 
Credit losses   193        647     
Gain on sale of assets   (298)       (309)   (1)
Adjusted EBITDA  $135,528   $112,087   $304,620   $226,766 
Net Income Reconciliation to Cash Available for Distribution:                    
Net income  $39,516   $77,809   $81,218   $169,503 
Interest expense, net   25,880    1,570    50,952    3,294 
Depreciation, depletion, amortization and accretion   68,061    29,964    135,531    60,888 
Unrealized (gain) loss on derivative instruments   (124)   2,097    33,099    (8,212)
Equity-based compensation expense   2,300    647    3,482    1,294 
Credit losses   193        647     
Gain on sale of assets   (298)       (309)   (1)
Settlement of asset retirement obligations   (390)   (8)   (418)   (79)
Cash interest expense, net   (23,654)   (1,490)   (47,458)   (3,092)
Development costs   (45,562)   (88,301)   (125,987)   (192,892)
Change in accrued realized derivative settlements   1,586    (243)   4,188    (285)
Cash available for distribution  $67,508   $22,045   $134,945   $30,418 
Net Cash Provided by Operating Activities Reconciliation to Cash Available for Distribution:      
Net cash provided by operating activities   116,831    127,996   $260,784   $275,145 
Changes in operating assets and liabilities   (3,761)   (17,650)   148    (51,835)
Development costs   (45,562)   (88,301)   (125,987)   (192,892)
Cash available for distribution  $67,508   $22,045   $134,945   $30,418 

 

7

 

 

Derivative Contracts

 

The table below represents a summary of the Company’s derivative contracts as of August 1, 2024:

 

Oil Derivative Contracts                
2024          Q3   Q4 
Oil Volumes (MBbl)             781    706 
Weighted Average Fixed Price (per Bbl)             $72.77    $73.21 
                     
2025   Q1    Q2    Q3    Q4 
Oil Volumes (MBbl)   650    605    284    269 
Weighted Average Fixed Price (per Bbl)   $72.45    $72.94    $71.88    $71.87 
                     
2026   Q1    Q2    Q3    Q4 
Oil Volumes (MBbl)   255    243    -    - 
Weighted Average Fixed Price (per Bbl)   $68.90    $73.98    -    - 
                     
Natural Gas Derivative Contracts
2024             Q3    Q4 
Natural Gas Volumes (Bbtu)             10,653    10,158 
Weighted Average Fixed Price (per Mmbtu)             $2.96    $3.73 
                     
2025   Q1    Q2    Q3    Q4 
Natural Gas Volumes (Bbtu)   4,860    4,680    4,510    4,360 
Weighted Average Fixed Price (per Mmbtu)   $4.34    $3.69    $3.92    $4.36 

 

 

8

 

v3.24.2.u1
Cover
Aug. 13, 2024
Cover [Abstract]  
Document Type 8-K
Amendment Flag false
Document Period End Date Aug. 13, 2024
Entity File Number 001-41849
Entity Registrant Name Mach Natural Resources LP
Entity Central Index Key 0001980088
Entity Tax Identification Number 93-1757616
Entity Incorporation, State or Country Code DE
Entity Address, Address Line One 14201 Wireless Way
Entity Address, Address Line Two Suite 300
Entity Address, City or Town Oklahoma City
Entity Address, State or Province OK
Entity Address, Postal Zip Code 73134
City Area Code 405
Local Phone Number 252-8100
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common units representing limited partner interests
Trading Symbol MNR
Security Exchange Name NYSE
Entity Emerging Growth Company true
Elected Not To Use the Extended Transition Period false

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