Chord Energy Corporation (CHRD) Q3 2026 Earnings Call Transcript

Operator: Good morning, ladies and gentlemen, and welcome to the Cord Energy Third Quarter 26 Earnings Conference Call. At this time, all lines are in a listen-only mode. If at any time during this call, you require immediate assistance, please press 0 for the operator. This call is being recorded on Thursday, 11/05/2026. I would now like to turn the conference over to Bob Bakanauskas, Vice President, Finance. Please go ahead.

Bob Bakanauskas: Thanks, Julie. Good morning, everyone. This is Bob Bakanauskas. And today, we are reporting our third quarter 2026 financial and operational results. We are delighted to have you on the call. I am joined today by Michael H. Lou, our CEO Darrin J. Henke, our COO, Richard N. Robuck, our CFO, as well as other members of the team. Please be advised that our remarks, including the answers to your questions, include statements we believe to be forward looking statements within the meaning of the Private Securities Litigation Reform Act. These forward looking statements are subject to risks and uncertainties that could cause actual results to be materially different from those currently disclosed in our earnings releases and in our conference calls. Those risks include, among others, matters that we have described in our earnings releases, as well as in our filings with the Securities and Exchange Commission. Including our annual report on Form 10-K, our quarterly reports on Form 10-Q. We disclaim any obligation to update these forward looking statements. During this conference call, we will make reference to non GAAP measures, reconciliations to the applicable GAAP measures can be found in our earnings releases and on our website. We may also reference our current investor presentation you can find on our website. And with that, I will turn the call over to our CEO, Michael H. Lou.

Michael H. Lou: Thanks, Bob. Good morning, everyone. Thank you for joining us. Last night, we issued our third quarter press release and presentation with details on our strategy, operations and financial performance. As this is my first earnings call as CEO, I will start with a few thoughts on Cord's progress over the past several years and our priorities going forward. I will then review our quarterly results, and outlook before we open the call up for questions. For more than 5 years, I have had the pleasure of working closely with Danny Brown to build a strong foundation for Cord. Danny's an incredible leader and a good friend, and I wish him all the best in his next adventure. Over the past 5 years, through volatile energy markets, the core team has strengthened our competitive position and delivered value for our shareholders. Today, Cord is a more resilient company positioned to withstand downturns and create value through the cycle. Continuous improvement has been central to that progress. Our talented team is committed to getting better every day and our results reflect that commitment. As shown on slide 9 in our presentation, we have grown free cash flow per share by roughly 35% over the past 2 years, on a price neutral basis through disciplined capital allocation and driving operational excellence. Over a 5-year period, Cord has driven 11% annual growth in oil production per share. This growth has been delivered while we have built a large resilient production base with low declines, which translates to a low reinvestment rate and higher free cash flow generation. We have also preserved a deep low cost inventory, improved its quality through optimized spacing, longer laterals, faster cycle times, and disciplined acquisitions. Over the past 5 years, we have completed 5 acquisitions in the Williston Basin, becoming the largest acreage holder and producer in the Bakken. These transactions varied in size and scope, but we successfully integrated the assets and captured substantial efficiencies. We also streamlined our portfolio by divesting non core assets at attractive valuations and reinvesting the proceeds in areas of competitive strength. Together, these efforts have generated strong sustainable free cash flow which alongside sizable share repurchases significantly increased production per share. We achieved this growth while returning substantial cash to shareholders through dividends and maintaining a strong balance sheet. Looking ahead, our priorities remain consistent. We will apply the same capital discipline to organic investments and acquisitions. We will continue to improve performance across the business and evaluate every investment through the lens of shareholder returns. A strong balance sheet will underpin this approach, providing downside protection and the flexibility to pursue opportunities countercyclically. Turning to the third quarter. We delivered solid operating performance generated free cash flow above expectations, and returned substantial capital to shareholders. We also advanced strategic initiatives that we believe will strengthen the business and enhance long term free cash flow generation. Adjusted free cash flow was $442 million, the majority of which we returned to shareholders. Beyond our base dividend of $1.30 per share, all capital return was through share repurchases. Since announcing the Enerplus combination in February 2024, we have reduced fully diluted shares outstanding by approximately 10.8 million shares or approximately 17%. Said another way, we have repurchased more than half of the equity issued for that transaction in a little more than 2 years. Throughout 2026, the core team has driven wins across the organization. This leads us to a fourth quarter volume guidance that is well above both our August expectations and consensus estimates. We have also been seeing more favorable pricing reflecting external factors and lower marketing fees. We updated our capital outlook to reflect increased operated and non operated activity and an additional $20 million of investment in midstream projects. The operated activity is up a bit due to drilling and completion efficiencies, which are leading to a couple more TILs on the year. And the nonoperated activity has picked up over the last few months as well. Turning to continuous improvement initiatives. Cord has made further progress in reducing our marketing costs as the team continues to simplify and optimize contracts across oil, gas, and water. Our latest efforts are expected to deliver $35 million to $55 million in annual savings. These savings are incremental to those announced a year ago, bringing the total annual savings approximately $85 million. On the production side, Core continues to have success with a wide variety of projects aimed at optimizing its large PDP base. The team has done an amazing job getting more out of the base and that production continues to outperform. 1 of the things the team has been focused on and continues to test are various chemical treatments across a broad population of wells and we expect to determine which treatments to incorporate into our full year 2027 program by early next year. Our drilling and completions team continues to improve execution and set new records. We are making progress drilling more of our 4-mile wells in a single run, while frac productivity is improving and clean outs continue to reach total depth. As of quarter end, the company has turned in line 47 total 4-mile wells. Execution and production results continue to be in line with expectations. Slide 6 in our presentation shows the progress of all the continuous improvement projects across the company. The core team has delivered $225 million of incremental free cash flow generation over the past 2 years from controllable items including higher production, better capital efficiency, and improved marketing costs. Thank you to each person on the core team. This is an incredible team effort that has driven a ton of shareholder value. So far in 2026, we have raised oil volume guidance twice. Supported by strong execution and base production optimization. Looking ahead, we are confident in our ability to sustain strong production levels into 2027, and plan to provide detail of our next year's program in February. Finally, we recently published Cord's recently published 2025 sustainability report as part of our commitment to transparency. I want to thank the team for its work on the report, which highlights our efforts in emissions reduction, work health and safety, corporate governance, philanthropy, and other areas. We remain committed to producing affordable, reliable, energy in a responsible and sustainable manner. With that, I will hand the call over to Julie for questions.

Operator: Thank you. Ladies and gentlemen, if you would like to ask a question, Your first question comes from Josh Silverstein from UBS. Please go ahead.

Josh Silverstein: Yes. Thanks. Good morning, guys. Nice update on the operational front here. You know, with the better base performance, longer laterals, the faster cycle times, you know, and going more and more toward the 4-mile laterals now, You talked about maybe what the company's maintenance CapEx requirements look like. You know, it seems like it is structurally coming a bit lower, especially with some of the other cost savings.

Michael H. Lou: Yeah. Josh, thanks for the question. Clearly, the team's done an incredible job this year. You will notice that we have increased guidance a couple times this year on the oil side. On production starting at 159 thousand going to 163 thousand. A lot of that is kind of productivity and efficiencies kind of throughout the program. Base business has done a great job of, outperforming on just every well that we currently have in the ground. On top of that, the 4-mile laterals has driven efficiencies. We have certainly seen small amount of inflation this year that we have been able to counteract with continued efficiencies this year. So all been really positive. You know that our capital program is kind of on a on a blended basis now, 1.46 billion. So it is up a little bit because of the additional capital that we are spending a little bit on midstream with some of those opportunities coming around. Our efficiencies on the DNC side that allows us to do a few more TILs on the operating side. And, a little bit more non-op. We have had about 30% increase in rig count in the basin over the last the second half of this year. So we are certainly seeing some other operators picking up activity and we are participating in a little bit more on the non-op side. So all that leads to capital now kind of at that $1.4 billion level. it is a little bit higher than where we are at the beginning of the year, but, our production is up as well. So, that is that is a good, kind of level, for this year.

Josh Silverstein: Got it. And then just wanted to think about how you are balancing, you know, the free cash flow allocation, a very strong year for oil pricing. You know, you highlighted the continuation of the buyback into the fourth quarter as well. Just given where the balance sheet is, should we still think about maybe 75% of free cash flow going to shareholder returns? Do you want to build off some cash just in case oil prices continue to come lower? How are you thinking about that rate of return?

Michael H. Lou: Yes. Good question. On capital allocation side, obviously, we have been. I think we have had a strong focus on that over the last over the last 5 years, and we will continue to have that going forward. And as you mentioned, we have got a lot of different levers that we can think about, whether it is this year, certainly since the early part of this year with oil prices up. 1 of the things is thinking about are there short cycle kind of projects that we can bring forward volumes? You are seeing a lot of that in a lot of the base work that our team's done. We have we have been able to do some good acquisitions. We have, in that frame, though, we have been bringing our, even after the most recent acquisition late last year, brought our balance sheet back to under a 0.5 turn of leverage. So now we are back into that 75%-plus of return going back to shareholders. So we will continue to lean into that side. And then with a good sales of noncore assets in the Marcellus, that should close later this year. We will be in the a great position no matter what the cycle brings. Obviously, we are seeing some volatility in oil prices over the last short while here. But we will. We think we are going to continue to be in a constructive environment, and we are in great shape on that front.

Operator: Okay. Your next question comes from Scott Hanold from RBC. Please go ahead.

Scott Hanold: Yes. Thanks. Good morning. And, Michael, congrats on the promotion.

Michael H. Lou: Thanks. The court entity Yeah.

Scott Hanold: No worries. You have been with the Cord entity a long time. And you gave just some high level thoughts on, you know, Core's future, but I would be more interested to hear like, strategically, do you do you see the business any different? And, you know, if you can layer in thoughts about, like, does it make sense for Cord, you know, to stay within the Bakken or, you know, longer term, you know, do you see optionality of stepping out at any point in time?

Michael H. Lou: Yeah. Scott, I do not think really changes from the way we have been messaging it over the last few years. I think that, we are we are the largest producer in the basin right now. We also have kind of a vast acreage position kind of across the basin. The nice thing for us is that we see for 13% to 14% of the basin today in terms of production We have still got a lot of room to run to continue to consolidate the basin. We think there is some interesting opportunities that present themselves over the next few years, and we wanna be kind of sure that we have a balance sheet that is ready for that, that we think that we are probably the natural consolidator in the basin. We think that we can drive more efficiencies than anybody else. We have more overlap than anybody else in a number of these positions. So we think that there is just like a lot of opportunities in front of us in the basin. We will always look at things outside the basin, but we have been doing that for 5 years. If you look at kind of track record, we have done 5 deals, and they have all been within the Williston. that is where we can. We know what we can drive in terms of value. So I do not think the change will be any different. In the meantime, you know, our focus continues to be on what we have in front of us. And we have talked about that continuous improvement side, and we have gotta get better every day on our asset. And that would as we do that, it gives us more of the right to be the consolidator in the basin going forward. So there is going to be a continued focus on just getting better every day. in that continuous improvement side. Appreciate that.

Scott Hanold: My follow-up question is a little bit on 2027. I know you are gonna give guidance next year, so I will not kinda pin you down to that or anything like this. But your base production has improved quite a bit this year. It looks like at least 3 thousand barrels a day. As you kind of think of the current environment we are in, and your prior view of 59 being sort of that baseline level for you all, how do you think about that base improvement? Should we add that to the prior 159 thousand? Is that how we should think about it, or is. Does that provide you an opportunity to flex down in case something on the macro side becomes uncertain?

Michael H. Lou: Yeah. I think we will always look at what the right thing to do is on that capital allocation side. And, obviously, if our shares, we think are in a great place to buy back right now, but if you saw massive weakness in an oil price and capital costs do not come down and the same proportion. And, should we should we allocate more to buybacks, or should we allocate more to the drill bit? We will make all those decisions going forward. Right now, there is good visibility on some of those production improvements and we see good visibility on kind of holding that new, call it, 163 thousand flat going forward. So that is, I think, what we are looking for next year. But we are seeing that base for performance really being replicated longer term. that is great. Thank you. Thanks, Scott.

Operator: Your next question comes from Gabe Daoud from Truist. Please go ahead.

Gabe Daoud: Thanks, operator. Good morning, Michael, and congrats on the promotion. I was hoping we can maybe yeah. Sure. So we can maybe start with the-- the marketing upside that you guys have articulated through some renegotiations. Guess, curious if you can maybe frame where. What the realized run rate is today and how much additional benefit maybe kicks in next year and what drives the ramp towards, like, that high end number that you guys highlighted?

Richard N. Robuck: Got it. Sure. Yeah. that is a great question. I think we have been talking for some time, this is Richard, for some time now about the fact that this organization was put together over the past decade and a half a bunch of consolidation in the basin where there is small players that have come together then we brought together obviously the kind of the 3 largest companies in the basin. And over time, each 1 of those organizations was putting in marketing contracts Most of those got put in place in the early 2010 through 2015 and they were kind of 10- to 20-year deals. And then over time, start to expire. And with the consolidation, you just have a lot more flexibility: 1, to pivot around with your rigs to pick and choose the best places to drill from a rock perspective as well as a marketing economics perspective. Then 2, you have the ability to put together and optimize around the contracts that you do have. And that whole while as we were consolidating the basin, a lot more midstream infrastructure was being put in place and being built by all the different midstream folks that you know well that are playing in the basin. And so, our efforts with the expiring contracts and then just the consolidation we have done, we have had a ton of success. We announced the incremental uptick today. The way we have articulated that is like on an annualized run rate basis. So, a fair amount of what we announced on an incremental basis today is gonna be worked through this year, early next year. And then there is probably a quarter of it that is still to come in the late 2027, 2028 time frame. So, there is still stuff that we have put into place that will not occur until a little bit out in time. But the marketing team has done an amazing job optimizing on that front and we still see that there is room to go from the perspective that there is still contracts that are coming due and the team is trying to optimize around that.

Gabe Daoud: Okay. Thanks, Richard. that is. A quick follow-up to So most of it lands in the GP and T line item. Is that fair?

Richard N. Robuck: So there is maybe more downward pressure on the $2.60 per Mcfe. Yes. Mean, piece of it is there, obviously. Yeah. I do not-- I am not trying to be okay, but it is there. But you also see it in realizations as well, The NGLs and gas side. So, that is a component of it. You will see it in the GP&T and then to a lesser extent you will see it on the LOE side. As we work on the water contracts as well. Got it. Okay. No, I understand. Just given the contract structure, it could land in different buckets, but that is helpful.

Gabe Daoud: Then my follow-up, guys, is just maybe an update on your 4-mile lateral program. You noted 47 have been turned in line to date. Just any maybe updated learnings on the productivity Is it still more or less tracking how you thought the wells would do relative to 2-milers?

Darrin J. Henke: Yeah, Gabe. This is Darrin. Yes. The 4-mile wells are performing right like we would expect. We are drilling a little bit quicker than what we were earlier in the year. Our drilling costs are down about 9% since the beginning of the first quarter. And the production performance is as expected at this point. You know, we are probably a year away from really figuring out what is the full contribution on that last mile, that fourth mile. But to date, all of our tracers are showing, recovery clear to the clear to the toe. We have cleaned out every single 1 of our 4-mile wells to the toe, and everything's. The team's just performing flawlessly. So no surprises there at this point. Okay. Awesome. Thanks, Gabe. Thanks, everyone.

Operator: Thanks. Your next question comes from Kevin McCarthy from Pickering Energy Partners. Please go ahead.

Kevin MacCurdy: Congratulations, Michael. My first question is on the non-op. Maybe you can give a little bit more color on the size of the non op increase. And are there indications that, that is going to kind of persist into 2027? Yes.

Michael H. Lou: The. I mean, think about this. We had about a 30% increase in the rig count, towards the second half of the year. A lot of other operators with the higher oil prices picking up rig activity. And so what it is doing is it is driving some of that late in year non op activity that is driving that. You know, with a healthy oil price, would assume that some of that stays into next year. Obviously, we can through a full year program, we can flex a little bit, with our operated program. To kinda manage that. But some of this late in year stuff is a little bit more difficult to manage. But they are good projects. Right? I mean, we are we are in a constructive oil price. This is in areas that are good areas that we want to participate. They are good returning projects. So, we will participate here at the end of the year. that is a little bit of that color.

Kevin MacCurdy: Great. I appreciate that. that is helpful. And as a follow-up-- and I do not want to get too cute on forward guidance, but does the additional CapEx that you are spending in fourth quarter and maybe those the 2 new turn-in-lines and the non op, does that help the kind of decline that we have seen in the first quarter over the past couple of years at Cord maybe kind of keeping your production more level loaded?

Darrin J. Henke: Kevin, I think that is a great question. But the reality is we dropped that second frac crew and so we have been coming down. Our entry rate, if you will, for even the fourth quarter is, I would say higher to lower. So December is going to be the lowest month of our fourth quarter guide and that is gonna trail into the first quarter as well. And then we will start the frac crew but we are doing primal fracs and multi well pads. And so, really will not see I would say, like the pickup until the second quarter. So like in the past, you will see Q1 dip, and then it will start to climb in the second and third quarter And that is a typical program, the way that we have been laying out over the last few years.

Kevin MacCurdy: Okay. that is helpful. Thanks, guys. Thanks, Kevin.

Operator: Your next question comes from Bertrand Donnes from William Blair. Please go ahead.

Bertrand Donnes: Congrats, Michael. Looking forward to seeing what you do with the assets. Thanks, Bertrand. And then on the pull forward of CapEx on the midstream side, I just want to make sure I understood. I think I heard it described as kind of supporting next year's program, but then obviously, guys are holding flat for now at least. Is was that spend to support the flat production program, or does that set you up for potential growth next year?

Michael H. Lou: Yeah. That midstream capital is think about, what Richard was talking about in terms of work with, other midstream guys. We have got contracts that are coming up and, we can blend and extend. We can renegotiate. We can go with new providers. We can-- there is a lot of different things we can do in areas that we feel like we are not getting the best the best rates we can do some of that ourselves as well. What we found is that there is some of these areas where, we are doing some of that ourselves. And it is just a little bit higher, as we think about stuff that we are setting up for 27. So that is just support the current program.

Bertrand Donnes: Got it. So it sounds like it was gonna happen anyway. You are just moving the. Where the capital is coming from? Is that right?

Michael H. Lou: Yeah. I mean, some of this, can happen or if you get good third party rates, like, we are happy to go with third parties too. So it is just some of it is just opportunities based on what we are seeing in the market and whether or not we are getting kind of you know, aggressive fare rates from others or, if we should do some of that ourselves. Got it. Makes sense. And then kind of around M&A, but not directly. Our understanding that Cord is not the only company that is maybe looking to make an acquisition or expand in the Bakken. Is there any interest because you have 10-plus years of inventory that maybe pulling in a JV or a carry and maybe have your CapEx budget unchanged, but have someone else kind of foot the bill for that tail end inventory at the end of your stack. Yeah. Good question. I mean, it is always about capital allocation. So if we find, good ways to think about getting better returns for our shareholders, we will consider everything. We are. We look at all sorts of stuff all the time. I think it is also fair to say, you know, when you look at the best operators in the basin, we would say we are the best operators. So I think we really like to drill and complete our own wells because of the, you know, strong economics that we deliver. But there are times on a PV basis you might think about it differently, but that is definitely a consideration on how good the team is doing here. Got it. Thanks, team.

Operator: Thanks. Your next question comes from Noah Hungness from Wells Fargo. Please go ahead.

Noah Hungness: Michael, congrats on the new role. Thanks, Noah. For my first question here, I wanted to ask on just well cost inflation, which is how you are seeing leading-edge well costs for your 2-, 3- and 4-milers You know, what are they now and how has, cycle times kinda offset some of that inflation?

Darrin J. Henke: Yes. So, this is Darrin. Year to date, we seen kind of a low to mid single-digit type inflation, and due to the team's performance, we have been able to offset that with efficiency gains. So, as far as specific drill times, you know, I mentioned earlier that we have reduced our drilling costs on our 4-mile wells by about 9% since the beginning of the first quarter. And our frac efficiency year to date, as far as when you think about how many feet per day that we are fracking, that is gone up over 20% year-to-date as well. So we are actually fracking over 1 mile a day on average at this current time. So, definitely seeing inflation, but the team's done a great job offsetting it with efficiencies and depends upon the commodity price environment year and what environment we are in, but our teams have done a great job historically of offsetting inflation, with efficiency and would not expect anything different at this time looking forward.

Noah Hungness: that is helpful. And then my second question is. there is a clarification question. Around the second frac crew that you guys spoke about that could come back in late 2026 or early 2027. Could you just maybe talk about what would drive it to come back earlier rather than later?

Darrin J. Henke: Really just a function of availability. Know, the frac crews are tight in our industry, and we have contracted that crew. it is it is been awarded, and it is really just working with that service provider on their timing and availability. Relative to the work that they already have scheduled through the roughly through the end of the year.

Noah Hungness: And if it does come back in late 26, does that impact the TIL count that you guys provided on slide 23? Or are the or would the TILs still be in 2027?

Darrin J. Henke: Sorry. Yes. Would think about that in terms of frac has a lot of work to do before you bring it online, so it is not gonna change that piece of the business. Cool. Thank you. Thanks.

Operator: Your next question comes from Oliver Huang from TPH. Please go ahead.

Oliver Huang: Good morning. Just a quick 1 on hedge philosophy. About where I certainly provided some risk free We are-- Sorry, Oliver.

Richard N. Robuck: You are you are kinda breaking up here. If you could repeat the question? Otherwise, we may have to pick it up offline. You kind of broke up there. Could you try to repeat it?

Oliver Huang: Given you have been layering on for several quarters now, Leverage is pretty low. Or just in terms of targets that you would want to get to for 2027 and 2028?

Richard N. Robuck: Yeah. Oliver, this is Richard. We are struggling to hear you. My hope is that everybody else can hear us, and so I am gonna proceed along those lines. And you can follow-up with your question if I did not if I did not address it to what you were looking for. But generally, we have had the same hedge philosophy over the past few years, is when oil prices are higher, hedge more and when oil prices lower, hedge less. And then over in the near term, we are gonna hedge a little bit more. And then over time, we are gonna hedge a little bit less. And so, obviously with the strength of the balance sheet that we have, we do not have a need to protect the way that others might need to protect if they have a higher leverage. So we are in a really great position there, but we think that it is just prudent to have the discipline on the front end to say if you know, if oil is moving up, start leaning in and when it is moving down, lean out. So it prevents you from times like where, like, when we entered the year and oil was at $57 and it seemed to be just from $57 to $60, flat forever, to not go layer in a bunch of hedges. And then to bet that somehow like a conflict like we are you know, living in sort of today would last forever as well. So we just have a. We just have a discipline hedge program that is instructed both by our balance sheet as well as you know, just try not to speculate on where oil price is trading.

Oliver Huang: And maybe a question for Darrin.

Richard N. Robuck: Oliver, we are. We cannot hear you here, and I think it sounds like the date. Everybody else is gonna hear us fine. So it is probably best if we just try to catch up with you offline. Okay. Sounds good. Sounds good. Thanks, sir. Yep.

Operator: Your next question comes from John Holliday Abbott from Wolfe Research. Please go ahead.

John Holliday Abbott: Hey. Good morning, and thank you for taking our questions. Couple of quick ones for us. I want to go back to the non-op here. So you know, you talked about the if you look at your overall production that you have currently, how much of that is non op?

Michael H. Lou: Approximately. it is. Yeah. it is probably in the, you know, 10% to 15% neighborhood. Alright. that is helpful.

John Holliday Abbott: Then the second question is gonna be on chemicals. You will give us an update in February about what you may proceed with What treatments are you doing right now that seem to hold the most promise? As you sort of look out there? Why not? What are you waiting for in terms of data? You have been doing this for a little bit of time. How much data do you actually need to sort of make the decision to go forward?

Darrin J. Henke: Yeah. So we pump a number of chemical treatments, and we talk about it on Page 7 in our deck. Acid jobs and solvents, surfactants, combination treatments, And we have we have. On the production side, we have we have done hundreds of these type of jobs. And we are evaluating the productivity of those and evaluations. which 1 will give us the best ultimate returns on the on the dollars invested On the completion side, while we have not pumped any chemicals as part of our completion jobs to date, We have been testing several chemicals in a lab situation. And likely will result in pumping chemical jobs on completions in 2027. it is. We are still evaluating that, but anyways, testing it in the lab. And, course, we are always studying what our competitors are doing, not only in the Bakken, but in the Permian, the Eagle Ford, etcetera. As well. So we will definitely be early adopters as we continue to evaluate it on the completion side and having great results on the on the production side. Thank you very much for taking our questions. Thanks, John.

Operator: Ladies and gentlemen, as a reminder, if you would like to ask a question. Your next question comes from Geoff Jay from Daniel Energy Partners. Please go ahead.

Geoff Jay: Hey, guys. Just a really quick 1 for me. You mentioned that, that frac crews were tight. I am wondering what you are seeing on the service inflation side kind of apart from fuel pass throughs and consumables.

Darrin J. Henke: Yeah. On average, we mentioned earlier, you know, kinda in the low to mid single digits is what we have seen so far this year. Some things are more, some things are less, but that is kind of where it is shaking out at this time. And not certain where 2027 will be at this time. I think it is really going to be a function of commodity price and activity levels. Okay. Thank you.

Operator: And there are no further questions at this time. I will turn the call over to Michael H. Lou, CEO, for closing remarks.

Michael H. Lou: Thanks, Julie. Once again, I am honored to lead Cord and build on the strong foundation we have established. I look forward to working with our employees, communities, and other stakeholders to build on that progress. We have an incredibly talented team committed to executing our strategy and creating long term value for our shareholders. Continuous improvement will remain a core objective. Additionally, Chord will maintain capital discipline while driving free cash flow per share and preserving a strong balance sheet. Thank you for your continued interest in Cord and for joining us this morning. We look forward to speaking to many of you in the coming weeks. Thank you.

Operator: Ladies and gentlemen, this concludes today's conference call. You may now disconnect.