Good morning everyone and thank you for joining us and welcome to Mock Natural Resources third quarter 2026 earnings call. During this morning's call, the speakers will be making forward-looking statements that cannot be confirmed by reference to existing information including statements regarding expectations, projections, future performance, and the assumptions underlying such statements. Please note, a number of factors may cause actual results to differ materially from their forward-looking statements, including the factors identified and discussed in their press release and in other SEC filings. For a further discussion of risks and uncertainties that could cause actual results to differ from those in such forward-looking statements, please read the company's filings with the SEC. We recognize that, except as required by law, they undertake no duty to update any forward-looking statements, and you should not place undue reliance on such statements. They may refer to some non-GAAP financial measures in today's discussion. For reconciliation from non-GAAP financial measures to the most directly comparable GAAP measures, please reference their press release and supplemental tables, which are available on MOC's website, and their 10-Q, which will also be available on their website when filed. Today's speakers are Tom Ward, CEO, and Kevin White, CFO. Tom will give an introduction and overview, and Kevin will discuss Mock's financial results. And then the call will be open for questions. With that, I'll turn the call over to Mr. Tom Ward.

Thank you, Melissa. Welcome to Mock Match Resources Third Quarter Earnings Update. With each quarter, we reiterate the company's four strategic pillars that have guided this since our founding in 2017. The first pillar is disciplined execution. We only purchase cash-flowing assets at a value of PDP, PB10 or less, and do not pay for any leasehold, PUDs, midstream, or infrastructure. In today's market, there's a lack of opportunity for investment at the discount we demand. Even in small packages, We're seeing aggressive bids on oil and bid-ask disagreement on natural gas assets. Therefore, we remain on the sidelines until a market disruption occurs. Our business is cyclical. We feel there will be a time when some other areas, some areas of experience, of areas experience enough distress to allow us to acquire our desired levels again. The second pillar is disciplined reinvestment rate. We maintain a reinvestment rate of less than 50% of our operating cash flow. In 2026, our summer drilling program in the San Juan Mecos Shale made our capex higher in Q2 and Q3 versus the first quarter and the projected amount in the fourth quarter. The higher capex spending for these two quarters resulted in lower distributions paid in August and later this month. The offset will be higher distributions in February and May next year. We have slowed our drilling pace to one Oswego rig in Q4 to meet our internally mandated reinvestment rate of below 50% of operating cash flow. This slowed drilling pace in Q4 will translate to a significant increase in per unit cash distribution. The third pillar is maintain financial strength. We have maintained a goal to be at less than one times leverage prior to using substantial debt to make an acquisition. We project any of the year at 1.4 times. While we do not believe we currently operate in an area of high leverage, we are cognizant that more opportunities will be available to us if we are closer to a turn of leverage so our goal remains in place. The point of this pillar is ultimate flexibility. When the market gives us a chance to buy at attractive prices, we want our balance sheet to be an advantage, not a constraint. The fourth pillar is maximizing distributions to unit holders. This pillar drives all of our decisions. We have distributed nearly $7 to our unit holders since 2024. Very few public companies have yields at Mock's level, and none of them are oil and gas producers. Yields like ours are usually only found at businesses carrying a high amount of leverage that often can't sustain once credit tightens or rates move up against them. Mock was built entirely different. Our distributions and the cash returns we deliver are second to none. and they're the result of the discipline behind our three pillars. Mock was established around a cash return model. We've said many times that we had a belief for several years before forming the company that there would be a time when we could buy cash flowing assets at seldom heralded prices by avoiding the tendency of the industry to look for growth through the drill bit. Our goal is to buy distressed asset at discounted prices that throw off cash. We were fortunate to pick the timing correctly and build a large producing base at bargain prices. We continue to look for those type of assets, but it's become more difficult as more capital is now chasing the same type of cash flowing assets that we propose to buy and others are willing to pay premiums to our model. However, our steadfast approach to value has paid off by giving us a 50-year cash flow stream plus nearly 3 million acres of land that's HBP to hold our production flat by spending less than 50% of our operating cash flow. Therefore, in times of excess capital provided by private equity and ABS companies, we can pivot to rely on drilling to sustain our model. Mock has a history of strong cash returns on capital invested and cash distributions. Over the past five years, we have delivered an industry-leading croquis averaging 35%. This is not only industry-leading, but it's also the top 1% of all public companies in the US. We also have distributed an industry-leading distribution yield of 15% since 2024 through Q3 26. This performance was achieved through different pricing cycles ranging from $94.23 per barrel in 2022 when we achieved a 53% croaking to $64.81 per barrel in 2025 when our croaking was 23%. Since our inception, we've never had a croaking of less than 20%. We cannot find another company with such a strong record of cash returns. As we look to 2027, analysts' expectations are somewhere between $2 and $2.50 per unit of CAD. In that scenario, we are now trading at closer to a 20% yield versus our previous range of 10 to 15%. That gap sits in the unit price, not in the business, as yield is a ratio, and only one side of it is in our control. What we generate and distribute is independent of where our units trade. We will distribute back as much cash as possible and let our unit holders decide if they would like to buy MNR. For any investor with a long-term outlook, our units are a good purchase because we're not in distress and trade outside of any normal yield equity. In other words, we will distribute the same amount of cash no matter where our unit price trades. We have now finished our natural gas drilling until we see some price recovery. The last of seven Manco shale wells were drilled in September. We have one Oswego rig running. That will increase to two Oswego style rigs running in 2027 along with the completion of the seven Manco shale wells in Q2 and Q3 of 2027. This program fits the profile being less than 50% of operating cash flow while focusing on oil drilling. However, as you know, we can adjust our schedule very quickly if we see other opportunities that have potentially higher rates of return. We continue to have high expectations for the natural gas market. We see natural gas demand increasing nearly 15 BCF a day in 2028, with 2027 being a transition time from the loose market today to an adjusted world LNG base price as demand arrives. We expect the San Juan over the next five years to have additional takeaway capacity. These outlets will be installed to get to the premium gas markets of Arizona and the Pacific Coast LNG markets. We currently have a gas delivery agreement in place through 2030 that hedges approximately 60% of our San Juan natural gas. By the time the contract expires in 2030, we will have strategic optionality for our 350 million cubic feet of gas that can be held flat by drilling only five net wells per year. if we choose to increase activity to 10 net wells per year, we could grow mock's net production to more than 500 million cubic feet a day. This is the benefit of buying low decline cash flowing assets that also have fantastic upside potential. The manco show us potential to dominate the mock story in years to come. With regard to oil, we plan to increase by one rig in 2027 to maximize rates of return while staying under our 50% reinvestment rate. The current environment bodes much better for oil reinvestment than natural gas. We have many years of inventory left to focus on oil drilling if that is where the returns remain. Our decision to add oil reserves at a time when the oil market was in turmoil has put us in a good position to shift capital where returns are best. We have built a company that can do well in any environment. We can sit around and wring our hands over our unit price, or we can choose to be comforted by knowing our yield is safe. I choose the latter. The unit price will ultimately take care of itself. I'll now turn the call over to Kevin to discuss the financial results.

Thanks, Tom. For the quarter, our production of 147,000 BOE per day was 15% oil, 69% natural gas and 16% NGLs. Our average realized prices were $84.84 per barrel of oil, $2.17 per MCF of gas, and $30.02 per barrel of NGLs. Of the $360 million total oil and gas revenues, the relative contribution for oil was 49%, 34% for gas, and 17% for NGLs. on the operating expense side. Lease operating expense was $88 million for the quarter or $649 per BOE. Cash G&A was $6 million or 44 cents per BOE. We ended the quarter with $31 million in cash and $250 million of availability under the credit facility. Total revenues including our hedges and midstream activities totaled $319 million. adjusted EBITDA of $183 million and $165 million of operating cash flow. Development capex for the quarter was $126 million, which was 77% of the operating cash flow for the quarter. Year to date, our development capex is 59% of our operating cash flow. In the quarter, we generated $38 million of cash available for distribution. resulting in a distribution of 22 cents per unit, which will be paid on November 30th to holders of record on November 16th. With that quick overview, Melissa, I'll turn the call back to you to open the line for questions.

Thank you. If you'd like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question comes from the line of Neil Dingman with William Blair. Please proceed with your question.

Morning, Tom, the rest of the team. Tom, I appreciate your distribution comments. I think they're well taken. My first question is really on your continued development program specifically was wondering, will the Oswego continue to make up most of the activity next year? or are there potentially other oily plays you would add in this? And then, you know, secondly, I would assume it does seem like you have more than ample Oswego inventory for this continuous program.

Yes, to the latter part, yes. We have a tremendous amount of Oswego locations left to be drilled. That is our primary target for oil. We have and Michael Reel. Tom Reel and Michael Reel a very wide and broad and deep inventory of locations to choose from. And so once you get down to where you only have one or two rigs running, will keep one rig in the Oswego constant and have another rig that comes in and out of the Oswego as we see other areas that can compete with those types of returns. But it is difficult to beat the Oswego returns just because of how little we spend.

Fantastic. And then my second question, I don't know if you're doing this, just really on gas marketing and Specifically, are you considering any additional opportunities around gas? I mean, I know you're not focused there, but you still produce a fair amount of gas. Are there opportunities marketing-wise that you can potentially get a little bit of boost there?

We look at basis hedges. We put some on in San Juan earlier this year. that's got one way. You remember whenever we bought ICAB we already had a marketing arrangement in place that we just bought a stream of cash flow from the BP and ICAB had a long-term marketing agreement. that covers about 60% of our volumes through 2030. So that it really opens up perfectly for us that we become unhedged and bought ICAB. When we bought that, we only paid for that stream of cash. And so at about the time that you're going to have a pipe go more than likely west through Phoenix and around to Baja California to LNG markets, you're going to see a tremendous amount of uplift in the ability to market San Juan gas. So that particular and Michael Reel. Michael Reel and if that comes to fruition, it also would take away some of the restriction around the San Juan basis. So I'm pretty comfortable in the San Juan over the longer term and we didn't pay for any of the upside anyway. So for us to sit and wait and to harvest that when prices do change is a fairly easy decision. Today, it's the difference between where I believe gas prices are in the winter of 26, 27, which could go dramatically even lower to where prices could be in 28 and beyond is really the opportunity around gas companies. And that's why you see the disconnect in sales packages. It would be very difficult for someone to buy at today's strip when there's a belief that things are much better in just a few years. and in the MidCon, you know, that we just have a tremendous amount of takeaway capacity. So there's no restrictions. We don't even need data centers here to be able to get gas out. So that's the difference between the two.

Great details. Thanks, Tom.

Thanks.

Thank you. Our next question comes from the line of Charles Mead with Johnson Rice. Please proceed with your question.

Yes, good morning, Tom, to you and Kevin and the rest of the mock team there. Tom, I want to ask about the 4Q distribution. So it looks like with CapEx going down in oil prices, I mean, we've got a couple months left to see, but still looking strong. It looks like you guys are set up for, and I think you mentioned this in your prepared remarks, that you're expecting a bigger 4Q distribution. My question is, do you consider... a lower distribution for Q as an alternative versus at-the-market shares as a route to de-levering? Or to you, are those just separate buckets and they're not alternatives?

I think I'll let Kevin answer what he believes on it. I look at them as separate buckets.

Yeah, yeah, the same, Charles. I don't... think we would use any part of the distribution in the fourth quarter for either debt reduction or unit repurchases, either one.

Got it. Okay. I don't see us, Charles, as being over levered, especially whenever, I mean, in the near term, because there's really nothing we can buy that requires us to be down to a point that we need to use debt. I mean, I still would love to find an asset that was accreted to our cash avail for distribution and use equity around an acquisition as a way to lower the debt levels. Those just really aren't coming around. And we continue to look, but there's just not many around today to be able to do that.

Got it. And then, Tom, if we could go back to some of your previous answer. This is around just elaborating on your options for oil drilling or oil-weighted drilling aside from Nassau-Vigo. You mentioned the Red Fork in the MidCon. You mentioned the Clear Fork in the Permian. I think you said, which would be new for me, that there's maybe some liquids-weighted opportunities in the San Juan. Could you maybe pick up on that last one? If there's any opportunities that are more liquids-rich in the San Juan and also... just if that's the three other options or if there's anything else.

Yeah, I wasn't referring to San Juan. Enduring has all that tied up for liquids. I was just thinking in the Permian, New Mexico, where we have all the acreage. We picked that up mainly through the Savinole acquisition, scattered amounts of acreage around that have – in every acquisition you can find a few locations that have high rates of return.

So the point is it's New Mexico Permian, not New Mexico San Juan.

Correct.

Right. Got it. That's it for me. Thank you. Thank you, Charles.

Thank you. Our next question comes from line of Derek Whitfield with Texas Capital. Please proceed with your question.

Good morning, Tom and team, and thanks for taking my questions.

Sure.

Tom, I wanted to start first with your 2027 guidance. While I realize you're not providing CAD guidance and commodity prices are subject to change, we are backing into a yield of over 20% at current prices based on your guidance and based on the curves. To kind of put a firm point on it for the benefit of shareholders, is that similar to what you're seeing on your dashboard, A, and then B, You guys are committed to 100% payout of CAD. Just want to be clear on those two points.

I'll say yes. In my prepared remarks, I'm using you guys and agreeing with you that somewhere we have projected between 2 and 250 of CAD next year, looking at what you project. We're not giving guidance on that. But the other, it's a board decision. My personal preference is until I feel a need to be paying down debt, I prefer to wait around a little bit for cash prices to perk up. And it's always my first desire to pay back all the CAD to unit holders and then let unit holders decide what to do with that. that's the way I prefer to run this. And so that's as strong of an answer as I can give you.

I appreciate that. And then on my follow-up, I wanted to come back just onto what's embedded in guidance for 2027. Could you speak to kind of two things? Just on the activity inflation front, what do you have assumed for CapEx? And then secondarily, Given that medium-term, near to medium-term-ish constructive nature on natural gas, how are you thinking about the seven ducks that are in the sand lawn?

We are seeing inflation so far in diesel, and that was my last one. Casey, thank you. Yeah, so those three are dramatically quarter over quarter, so maybe 30% to 50%. So we increased our Oswego drilling AFE by 11% for 2027. that we're not seeing a reduction in pricing. So we assume you might be getting some sand increase soon. That might have to go up a little bit more, but the rates return, if you keep anywhere near the $70 range or so, are still extremely good around our oil drilling. So it wouldn't really affect us there. It might, you know, if prices dramatically reduced, we might have to cut back our drilling program just from a, and Michael Reel. We have a fairly good view into the next year and that still gives us a lot of opportunity if prices were to change to the upside. I like having exposure to higher prices. I think that in both oil and natural gas. There's just as much potential to be higher instead of just looking at it from a viewpoint of that things are only going to be lower from here.

and Tom, just quickly. Oh, San Juan Ducks.

So yeah, sorry. I forgot about the San Juan Ducks. So the San Juan Ducks are in our model. They have a very, once you take away the capital for drilling, it's hard not to complete a well and have a rate of return that's comparative to even our oil drilling. So they are in line right now. If natural gas prices were to fall tremendously, maybe they don't get completed, but more than likely we'll be looking forward into the 27, 28 winter and projecting that we need to be bringing those wells online.

Fantastic. Really appreciate it. Thanks, guys. Thank you.

Thank you. Our next question comes from the line of Michael Schaller with Stevens Inc. Please proceed with your question.

Good morning, Tom. Good morning, Kevin. I want to follow up on 27, just kind of high level. You've given full year guidance. It sounds like oil price stays flat throughout the year. And then should we anticipate gas declines first half and then grows second half if you do complete the Mancos Wells?

Yeah, I mean, oil could be slightly higher year over year. But I mean, in all things we look at, it's just kind of keeping our production basically flat, either up or down below somewhere in plus or minus 5%. So I think that's the way to look at it. But yes, it's difficult with oil. one or two rigs running to grow oil production dramatically, offsetting the declines that we have. And natural gas, it could decline just – the way I would think of it is oil goes up in single digits and gas goes down in single digits.

Okay. Got it. And then I wanted to ask on your slide 24, you look back at your 25 drilling program. You give the rates of return there. That is interesting. The rate to return for the programs all look very good. It looks like there's quite a bit of variability in the Oswego. You've got several wells that are kind of off the charts on the high end of the returns, and then you've got some that are at the very low end as well. Just wondering if there's anything you've learned about the play that helps you avoid that low end, or is that just the variability you have to live with?

Yeah, that's why nobody else does that because everyone has the same look except for they don't go as high with the wells on the left. It's just every play that you draw has variability and I'd say Pato does it. I copied this from Pato because they do it every year. I just think it's very rare for a company to show every well they drill because we drill bad wells and then we drill really good wells and it ultimately ends up that you try to find somewhere in the 20 to 30% rates of return that can really move the company forward. And that's what we look for. We've been able to beat that. and that's, you know, what's really rare about our company is that we paid zero for leasehold, for future leasehold. We bought PDP under a PDP PV10, so we bought a cash flow stream and we paid nothing for the upside. And yet we've spent a billion and a half dollars since inception or since drilling wells on land that was valued as being worthless. So that's my take. And then if you even look at outside parties, I think we have a slide on that that was done last year, that our results are in the top court, well, heck, in the top 5% of everyone that's drilling wells, both in gas and oil. So that's what's kind of interesting. I think that that has to do with having a very small drilling program where you get to pick locations one at a time instead of having this just kind of, we're going to run 10 rigs out here in the Permian and they're all going to be exactly like, well, they're just not. And then you end up, your drilling program takes over your life and then it takes away from being able to keep your LOE down. So all of this is trying to run a company that is not so focused on drilling, but that can pick out very high rates of return drilling from a massive land scale. And that's the secret.

I appreciate the transparency on that slide. I thought it was really interesting. Thanks, Tom.

Thank you.

Thank you. Our next question comes from the line of Jeff Grant with Northland Capital Markets. Please proceed with your question.

Hey, good morning. Tom, I wanted to circle back on the leverage front. Just wanted to confirm here, it sounds like there's not a tremendous urgency to get the leverage down through any proactive measures until, I guess, the M&A market looks a little more enticing. I guess, A, I wanted to confirm that, and B, is it fair that, like, in a world where M&A is more interesting, maybe you can just touch on the main avenues you see to get leverage down to where you guys can be a little bit more on the offense, if you will. Thanks.

Yeah, if I thought there were just a lot of opportunities to go and put together assets at discounts to PDP, PVTN or in a cycle where things are kind of falling apart and we could put money to work, I'd be more aggressive at trying to get leverage down so we can participate. as I look forward, it just doesn't appear to be that way. We're cognizant that we're higher than we want to be. I think, you know, just in 2027 alone in natural gas prices moving somewhere above $3, our leverage kind of takes care of itself. So whenever I look out to 2028, and C.A., what I believe will be a market that goes on the natural gas front that brings us closer to a world price between the TTF and JK, the Japanese Korean market, and the LNG in the U.S. becoming more of a worldwide, I think gas becomes more of a worldwide asset that prices will move up. And that's a lot of ifs in this, but it just makes me not too worried. Yes, we have higher leverage than I want to, but I think it can be managed in the next year. And so it doesn't make us in any got in a hurry to make this something that we would go issue equities or that we need to take away from our distributions.

Got it. That's helpful details. For my follow up, on slide 15 with some of the efficiencies in the Oswego kind of trending up through the last few years, Can you just kind of touch on more recent results? Are those kind of tracking in line with some of the recent improvements? Is there more to go or just any kind of updates relative to that slide would be interesting.

Yeah, it's mainly just drilling longer laterals. So when we first started drilling in the Oswego, we focused on one-mile laterals, not knowing really the nature of the reservoir. And over time, we've been able to have land situations where we can drill longer laterals, and that's just made us more efficient.

got you. Appreciate the time, guys. Thank you. Thank you.

Thank you. Our next question comes from the line of John Freeman with Raymond James. Please proceed with your question. Thank you. Good morning.

Tom, on the comments that you made on the M&A market, you know, you've got pretty wide bid-ask spreads and there's a lot more, you know, parties that are kind of looking at some of the kind of asset profiles that you guys have targeted. all along. Just given the massive sort of acreage position that you've got, does it actually cause y'all to maybe consider divesting some assets if the market's just pretty hot for certain assets that maybe right now, just given the big position y'all got, don't compete for capital? Is that something y'all consider?

Yeah, not too often. We have sold a little bit of acreage in the past, but more than likely we trade. There's usually trades to be made around our positions with others that improves the positions we have and helps others drill their wells. That's what we mainly do in land. The other thing you don't want to do is be giving away your future drilling. Even in western Oklahoma now, there's some formations that are being drilled, new formations that are looking quite good that if we... If we would have sold those in the past looking, we wouldn't have known. We want to keep our inventory. That's basically it. We're in no real need to be bringing in additional CAD. We already have a tremendous amount going forward. But I like the idea of having locations in your back pocket. So whenever oil prices change or gas prices change, you can move a rig around and get those high rates of return. So it's not anything we really focus on.

Understood. And then my follow-up question, appreciate all the detailed numbers and outlook on 27. Just to make sure we sort of capture maybe if there's any fluctuations in the capital next year, just at a high level, should we just think of it as you got like the steady two-rig program in Oklahoma, and then you just got those MACOS completions in 2Q and 3Q. So from a capital standpoint, does that kind of indicate like 1Q and 4Q or kind of lower in 2Q and 3Q kind of bump up in terms of capital, just at a high level.

That's correct. And not necessarily in Oklahoma, but two oil rigs and one gas completion, drilling no new gas wells. Assuming our operating cash flow doesn't change dramatically.

Thank you. Ladies and gentlemen, that concludes our question and answer session, and we'll conclude our call today. We thank you for your interest and participation. You may now disconnect your lines.