Mach Natural Resources (MNR, Financial) has reported a robust start to 2025, with an average daily production of 80.9 thousand barrels of oil equivalent. The company's strategic moves have enabled it to deliver impressive cash returns within the industry.
Throughout the quarter, MNR successfully lowered its leverage, which has further bolstered its financial position. Despite the challenges posed by the current instability in commodity prices, the company remains committed to its transition toward a natural gas-focused drilling program.
By maintaining a reinvestment rate of under 50%, MNR is dedicated to optimizing its business strategy to enhance value for its unitholders as it moves forward.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 5 analysts, the average target price for Mach Natural Resources LP (MNR, Financial) is $22.90 with a high estimate of $27.50 and a low estimate of $18.00. The average target implies an upside of 70.13% from the current price of $13.46. More detailed estimate data can be found on the Mach Natural Resources LP (MNR) Forecast page.
Based on the consensus recommendation from 5 brokerage firms, Mach Natural Resources LP's (MNR, Financial) average brokerage recommendation is currently 1.4, indicating "Buy" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
MNR Key Business Developments
Release Date: March 14, 2025
- Revenue: Total revenues, including hedges and midstream activities, were $235 million for the fourth quarter.
- Net Income: Reported net income for 2024 was $185 million.
- Adjusted EBITDA: $601 million for the full year 2024; $162 million for the fourth quarter.
- Production: 86,700 BOE per day in the fourth quarter, with a mix of 24% oil, 52% natural gas, and 24% NGLs.
- Average Realized Prices: $70.06 per barrel of oil, $2.31 per Mcf of gas, and $25.82 per barrel of NGLs.
- Free Cash Flow: $81 million generated in the fourth quarter after CapEx of $60.5 million.
- Cash Distribution: $60 million or $0.50 per unit for the fourth quarter.
- Operating Cash Flow: $134 million for the fourth quarter.
- CapEx: $60.5 million for the fourth quarter.
- Debt: Net debt-to-EBITDA reduced to 0.8 times; new $750 million revolving credit facility.
- LOE: $6.17 per BOE in the fourth quarter.
- Free Cash Flow per BOE: $8.43 in 2024.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Mach Natural Resources LP (MNR, Financial) maintains a strong financial position with a low debt-to-EBITDA ratio of 0.8 times, providing flexibility during market volatility.
- The company has successfully acquired over one million acres of land and significant infrastructure, contributing $78 million of EBITDA in 2024.
- MNR achieved a 25% to 35% reduction in LOE costs across all acquisitions, enhancing operational efficiency.
- The company distributed over $1 billion to unitholders since inception, emphasizing its commitment to maximizing cash distributions.
- MNR's strategic acquisitions and disciplined reinvestment rate have resulted in peer-leading PDP decline and reinvestment rates, with a projected 20% PDP decline and a 47% reinvestment rate in 2024.
Negative Points
- Natural gas prices were exceptionally low in 2024, impacting overall revenue despite recent improvements.
- The competitive landscape in the Mid-Continent region is intensifying, with well-capitalized companies increasing competition for asset acquisitions.
- MNR's fourth-quarter contribution was lower than the third quarter, partly due to principal amortization and equity distribution adjustments.
- The company's BOE expense has been increasing, attributed to the integration of Paloma wells, with expectations of flattening in 2025.
- MNR's reliance on acquisitions for growth may face challenges if suitable opportunities do not arise, potentially impacting future distribution accretion.
