GPOR - NYSE

Greetings, and welcome to the Gulfport Energy Corporation Second Quarter 2025 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce Jessica Antle, Vice President of Investor Relations.

Thank you, and good morning. Welcome to Gulfport Energy Corporation's Second Quarter 2025 Earnings Conference Call. I am Jessica Antle. Speakers on today's call include John Reinhart, President and Chief Executive Officer; Michael Hodges, Executive Vice President and Chief Financial Officer; and in addition, Matthew Rucker, Executive Vice President and Chief Operating Officer, will be available for the Q&A portion of today's call. I would like to remind everybody that during this conference call, the participants may make certain forward-looking statements relating to the company's financial condition, results of operations, plans, objectives, future performance and business. We caution you that the actual results could differ materially from those that are indicated in these forward-looking statements due to a variety of factors. Information concerning these factors can be found in the company's filings with the SEC. In addition, we may reference non- GAAP measures. Reconciliations to the comparable GAAP measures will be posted on our website. An updated Gulfport presentation was posted yesterday evening to our website in conjunction with the earnings announcement. At this time, I would like to turn the call over to John Reinhart, President and CEO.

Thank you, Jessica, and thank you for joining our call today. We're excited to announce several strategic initiatives alongside our second quarter results, highlighting our focus on enhancing the underlying fundamental value of the company and delivering long- term value to our shareholders. First, we are pleased to share our plans to allocate up to $100 million toward discretionary acreage acquisitions in the coming months, securing future drilling opportunities and strengthening our inventory runway in the core of the Utica Shale. The announcement further demonstrates our commitment to identifying, capturing and developing high-quality, low breakeven resources. This level of reinvestment marks Gulfport's highest leasehold spend in over 6 years, bringing our 3-year allocation of discretionary land spending to nearly $200 million. Together with our Marcellus delineation focus, these efforts are cumulatively targeting approximately 6.5 years of incremental inventory runway since the beginning of 2023. Next, we are increasing our share repurchase program authorization by 50% from $1.0 billion to $1.5 billion to facilitate our ongoing investment in our equity. The company opportunistically purchased $65 million of Gulfport common shares during the quarter and has already returned $125 million to our shareholders in the first half of 2025. Finally, our announcement to redeem all of our outstanding preferred stock has the potential to meaningfully accelerate our share repurchase efforts, allowing Gulfport to take advantage of the current undervalued nature of our equity while simplifying our capital structure in a way that is accretive to our key per share cash flow metrics moving forward. We remain committed to upholding our strong balance sheet and the initiatives announced today demonstrate our disciplined capital allocation and the strength of our current and projected financial position. Gulfport delivered a solid second quarter, marked by high single-digit quarterly production growth, strong operating cost performance and consistent operational execution, resulting in capital spending and cash flow results that beat analyst expectations. Operationally, the company executed across all 5 of our development areas and experienced strong well performance despite a series of unplanned third-party midstream challenges. Our average daily production totaled 1.006 billion cubic feet equivalent per day, an increase of 8% over the first quarter of 2025 and includes a quarterly impact of approximately 40 million cubic feet per day from midstream outages and constraints. These issues included downtime following weather-related infrastructure disruptions and unplanned processing plant outages, which we are pleased to report have both been restored and normal production operations have resumed in these areas. In addition, short-term constraints associated with compression and gas quality are being prioritized with mitigating projects underway by our midstream partners that target further increases to midstream capacity. While these production targets -- while these production impacts have been resolved or are actively being mitigated, the cumulative effect of these occurrences result in our full year total net production to trend toward the low end of our previously stated production guidance range. Offsetting these impacts, we continue to execute at high levels of efficiency and have seen very strong well results across our development program during the first half of the year. Our Kage development, a 4-well Utica condensate pad in Southwest Harrison County continues to perform very well under our revised managed pressure flowback strategy. We took the completion, production and facilities learnings from our nearby highly productive Lake development, which facilitated increased initial production rates at the Kage pad, allowing us to maximize returns in the current commodity environment while also preserving long-term well productivity. Following 120 days online, the Kage development continues to exhibit strong oil performance and has delivered approximately 65% more cumulative oil than Gulfport's Lake pad as shown in our investor deck on Slide 12. These results, in combination with the strong performance of both Gulfport and nearby peer activity reinforce the prospective nature of this acreage and the development optionality that it possesses. During the second quarter, the company also brought online a 4- well Utica wet gas pad in Northwest Belmont County. This pad marks the first pad turned to sales as a product of our discretionary acreage acquisitions and is located in an area of the play where we have secured over 2 years of nearby inventory. This area of the play produces at well-level production rates comparable to our Utica dry gas development on a volume equivalent basis, but with enhanced cash flows and economics driven by the associated liquids production. Assuming $3.50 natural gas and $65 oil and our corporate cost structure as provided in our guidance, we forecast the first 12 months of production in this area of the play, generating approximately 30% more revenue than our top-tier dry gas development. When considering this leasing activity began in late 2023, the development underscores the strategic value of our discretionary acreage acquisition efforts and reinforces the continued development of this high-return wet gas area of the play for years to come. On the land front, through June 30, 2025, we have invested roughly $17 million on maintenance, leasehold and land investment, focused on bolstering our near-term drilling programs with increases of working interest and lateral footage in units we plan to drill near term. As previously noted, the company is also providing further detail regarding the discretionary acreage acquisitions being pursued over the coming months. We have been actively pursuing these opportunities, primarily in the dry gas and wet gas windows of the Utica and have invested approximately $7 million during the second quarter of 2025 as part of our plan to allocate $75 million to $100 million in total during the second half of 2025 and into early 2026. Upon successful completion of our plans, we anticipate this level of spend will add more than 2 years of core drilling inventory at our current development pace, reinforcing our ongoing commitment to organically grow our undeveloped well counts and increase development optionality. In summary, we're pleased with the progress made in the first 6 months of 2025 and the strategic announcements today demonstrate our continued focus on what lies ahead. While navigating a dynamic commodity environment, we are committed to continuing delivering on our financial and strategic objectives, driving continued efficiency across our operations, delivering value to our shareholders through equity repurchases and bolstering the company's already high-quality resource base, all positioning the company for long-term success. Now I'll turn the call over to Michael to discuss our financial results.

Thank you, John, and good morning, everyone. Despite a volatile commodity backdrop, our pattern of execution here at Gulfport remained unchanged as we generated more than 70% adjusted free cash flow growth quarter-over-quarter, and we were unwavering in our commitment to return significant value to our shareholders. Net cash provided by operating activities before changes in working capital totaled approximately $198 million during the second quarter, more than funding our capital expenditures and common share repurchases while maintaining our balance sheet strength. We reported adjusted EBITDA of approximately $212 million during the quarter and generated adjusted free cash flow of $64.6 million, bolstered by cash operating costs and capital expenditures coming in better than analyst expectations. With nearly 3/4 of our anticipated full year capital spending complete and a strong hedge book, locking in a significant portion of our revenues for the remainder of the year, we expect adjusted free cash flow to accelerate and financial momentum to increase over the second half of 2025, paving the way for the strategic initiatives that were announced alongside our second quarter results last night. Our all-in realized price for the second quarter was $3.61 per Mcfe, including the impact of cash settled derivatives. This realized unit price is $0.17 above the NYMEX Henry Hub index price, highlighting the benefit of Gulfport's differentiated hedge position, the pricing uplift of our liquids production and our marketing portfolio for natural gas that includes direct access to premium Gulf Coast markets. As many of our peers have discussed, natural gas demand is rising, fueled by LNG expansion and increased power generation needs driven by the expected growth of AI-related infrastructure in the Northeast. This evolving landscape presents exciting opportunities for both Gulfport and our in-basin peers, and we are actively engaging in conversations that would potentially supply natural gas to local power plants or other similar projects to meet this rising demand. When coupled with our direct exposure to the growing LNG corridor through our TGP 500 and Transco 85 firm transportation agreements that I referred to previously, our advantaged marketing position provides Gulfport access to both of the key growth areas of gas demand, ultimately improving our gas price realizations, netbacks and cash flows. Turning to the balance sheet. Our financial position strengthened even further this quarter with trailing 12-month net leverage as of June 30 of approximately 0.85x, down from the prior quarter and benefiting from our increasing EBITDA that our business has delivered over the past year. Said another way, our financial momentum at Gulfport is rising as leverage has decreased by more than 10% since the beginning of the year, and we have returned more than our adjusted free cash flow to our shareholders over the same period without adding debt to the balance sheet. During the second quarter, we paid off the remaining balance of our previously tendered 8% senior notes due 2026, further strengthening our balance sheet with our nearest debt maturity now extending to 2028. As of June 30, 2025, our liquidity totaled $885 million, comprised of $3.8 million of cash plus $881.1 million of borrowing base availability. Our ample liquidity position provides tremendous flexibility from a financial perspective as we are positioned to be opportunistic when situations arise that allow us to capture value for our stakeholders as demonstrated through the leasehold acquisition and shareholder return initiatives we announced alongside our earnings. As John mentioned previously, we announced the opportunistic redemption of all outstanding shares of Gulfport's preferred stock alongside our second quarter results last night. This transaction, assuming full cash redemption, has the potential to meaningfully accelerate our equity repurchases, simplify our capital structure and further demonstrates our confidence in the attractive value proposition that Gulfport's equity represents. We have been assessing the right timing for this transaction for some time and the combination of our consistently declining financial leverage, rising forecasted free cash flow and the expectation of a strong natural gas commodity environment in late 2025 and 2026 made this timing ideal. In addition to the benefits I mentioned already, redeeming the preferred stock eliminates the preferred dividend and allows us to retire the underlying common equity without affecting our public float. The optional redemption will be effective on September 5, 2025. Based on 31,356 preferred shares outstanding as of June 30 and assuming full cash redemption, we estimate the potential to retire roughly 2.2 million underlying common shares, equivalent to more than 10% of our diluted share count for approximately $379 million based on our closing stock price from last night. The strength of our balance sheet and liquidity position allows us to execute this cash flow accretive transaction while remaining in a strong financial position. And assuming full cash redemption, the growth in our forecasted adjusted free cash flow in the coming quarters should allow us to achieve our leverage target of approximately 1x in either late 2025 or early 2026. To support the redemption of the preferred stock and enable the company to continue our ongoing equity repurchase program, our Board has also increased the stock repurchase authorization by 50% to $1.5 billion. As of June 30, we had repurchased approximately 6.2 million shares of common stock at an average price of $113.48, lowering our share count by approximately 18% at a weighted average price more than 30% below our current share price. Since launching the program in March of 2022 and assuming the full cash redemption of the preferred stock and our repurchases through June 30 of this year, we could surpass $1 billion in cumulative equity repurchases by the end of the third quarter of 2025. We believe our committed approach to share repurchases over the past few years has delivered tremendous value to our shareholders, and we will remain opportunistic rather than programmatic, allowing us to allocate capital dynamically when we believe the current valuation does not reflect the strength of our underlying fundamentals. And as such, repurchasing shares at today's level represents a highly attractive use of capital. Finally, given the level of Gulfport's expected free cash flow generation over the coming years and changes to tax rules with recently passed legislation, we wanted to provide a quick update on Gulfport's current tax position. We benefit from our significant NOL position and its impact on our near-term cash tax liabilities. At current strip prices, we expect our cash tax position to be negligible and potentially 0 for 2025 and believe the amount of cash taxes owed will be less than 5% of our anticipated free cash flow for the next 2 years. In closing, we remain focused on delivering long-term shareholder value as reflected in our continued return of capital through strategic equity repurchases and the announcement of our preferred stock redemption. Our operational performance has remained strong, and we are reinvesting in our inventory base to strengthen future opportunities, leaving the company well positioned to benefit from the improving macro trends for natural gas that should deliver meaningful cash flow growth for the company going forward. With that, I will turn the call back over to the operator to open up the call for questions.

[Operator Instructions] Our first question is from

First, just wanted to ask on the leasehold spend, which is a little bit higher this year or quite a bit higher this year than what you've done in the last 2 years. Can you talk a little bit more about where you're adding those locations geographically within the Utica and where they'll fit into your development schedule going forward?

Yes,

Maybe one for Michael. Could you talk a little bit more about the mechanics of the preferred stock redemption? How you see that going? Will you just -- if it's all cash redeemed, would you just lean on the revolver in the near term? And maybe also, how do you view buying back stock in the open market at this point when you have this potential big preferred stock redemption in front of you next month?

Yes.

Our next question is from David Deckelbaum with TD Cowen.

Congrats on the quarter. I just wanted to ask, Michael, perhaps just to elaborate a bit on the post redemption world for Gulfport. Your leverage, I guess, would be just under 1 turn. So heading into '26, I guess, how do you think about the allocation of free cash towards shareholders versus deleveraging? Or is -- are we kind of at a comfortable leverage target post the redemption?

Yes. David, great question. I think we've talked in the past about 1x leverage feels right for our company. And from our perspective, that could be 1/10 above, 1/10 below. We don't really differentiate to that level of detail. But I think to your point, I think there's capacity now to absorb the preferred stock redemption in cash. And as we move forward, the cash flow generation into next year will be pretty exciting. I mentioned that in my prepared comments as well. Obviously, we're looking at a pretty strong strip next year. We've got a lot of efficiency gained over the last couple of years on the capital side. So we'll still be generating a lot of free cash flow. I think from a philosophical perspective, I don't think anything has changed. I think we'll still look at opportunities like John went through on the inventory side. If there's opportunities to add high-quality locations, those are extremely attractive, especially when you can turn them into sales as quickly as we have, for example, on this first Northwest Belmont County location this quarter. So those are very attractive to us. And then we'll see how the equity performs. I think we still believe there's a pretty significant opportunity there. Hopefully, that starts to narrow. But as we sit here today, we'd be significant buyers of the equity next year as well. So like I said, unchanged. We feel like this is really an extension of what we've been doing in the last couple of years, just an opportunity for us to lean in a bit here with a singular transaction. So I don't think anything changes in terms of our philosophy going forward.

That's helpful, Michael. And maybe for Matt or John, just the success that we've seen at the Kage pad for managed flowback or pressure management, how do we think about now just the competitive returns of that condensate area, particularly, should we expect to see more activity directed there as a percentage of the portfolio also just given kind of the context of the macro backdrop right now as we head into '26?

Yes. Thanks, David. This is Matt. Yes, we've seen very good results in that area, both at the Lake and the Kage, taking our learnings from the Lake on the Kage, kind of modifying our flowback strategy there. We talked about that on the oil side and the advantages we see there. Listen, it's a strong part of our portfolio. It's still above 70% IRR threshold. It does currently trail in this environment, the other high-quality areas that we have, but it's part of our mix. We like a nice balanced portfolio that we can be pretty flexible in any given calendar year. So we'll continue to watch the commodities and where those go and heading into '26, certainly, at the current moment, we're probably more bullish on the gas side and pivoting around that. But we haven't set those targets yet on the budget side, and we'll continue to work that as we get closer to '26.

Our next question is from Jacob Roberts with Tudor, Pickering, Holt & Company.

I wanted to revisit the discretionary spend. I think in the past, you guys have talked about a willingness to pursue kind of more transformative opportunities. And I hate to call $75 million to $100 million small scale, but is there an implication here that a much larger scale opportunities are unavailable or more unlikely?

I appreciate the question, Jake. No, I wouldn't read into anything. What I'll say is we've been pretty consistent, at least since our arrival here over the past 3 years, where we're going to protect the balance sheet, keep leverage low, increase efficiencies, lower cost and buy shares with the free cash flow and reinvest into the company with additional inventory. So the way I would look at it, it's kind of the same strategy from a lot of different perspectives that has a lot of benefits. But as long as you follow those key tenants, I think that positions you with a very healthy company with a lot of options. So we're very pleased with the prospects we have out there with this organic acquisition program, and we're going to continue to apply cash because it's a very high return and a good use of free cash flow along with buying our undervalued shares.

Great. And then maybe a follow-up sort of to David's question. I wanted to ask about the SCOOP side of the portfolio. I know you've wrapped up the program for the year, but we were just hoping if you could kind of rank that maybe against that 70% IRR you mentioned and how you view the asset against the current commodity backdrop.

Yes. No, I appreciate the question, Jake. Certainly, it is a continued part of our portfolio. We're still at those levels of a pad or 2 a year, nothing firm on '26 yet, but we did turn in line a 2-well SCOOP pad that we mentioned in the first quarter there where we completed activities and some deep Woodford was a little bit of a liquids component there that certainly, from our standpoint, is robust in nature from returns. It does stack up with the Utica. It is a little bit more capital intensive on a per well basis. So we fit that within our portfolio in any given calendar year. But we've always been happy with our returns in the SCOOP. It's a matter of how it fits in our overall budget portfolio and where we allocate capital. So we'll continue to develop in that basin, and we keep an eye as well on just some other strat out there that sits in our inventory that we haven't developed recently. Springer, Sycamore and some of our nearby competitors certainly have continued to delineate that around us, and it's a little bit more liquids heavy of a component, which currently doesn't compete as well with some of the other areas. But those are things we keep an eye on and have the ability, again, to be very diverse and flexible in our development programs.

Our next question is from Carlos Escalante with Wolfe Research.

I guess my first question, I would like to focus on the power contracting momentum that basin has seen recently. So with so much of that going on, I wonder if you can offer any color on any possibility that Gulfport participates in something similar. And a second part to that question, if I may, all else equal, would you choose to grow your volumes or take a better basis once all these new projects create a new in-basin demand sync?

Yes, I'll take the first part of that question, at least initially here, Carlos. I think the answer is yes. I think we will be in a position to participate now. I think if you think about Gulfport relative to some of the other guys that have announced long-term agreements, anchor agreements with large projects, we're probably not of that size and scale, right? So I think we are seeing more inbound interest in finding volumes for those types of projects. I think for us being a SMID-cap that's -- even though our financial health is pristine in my opinion, we're not investment grade. So I think for us, we're likely to work through intermediaries. We're likely to be part of some kind of an aggregation strategy for one of those sources that are looking to build some gas position rather than just supply it entirely ourselves. But I can tell you that just in the last quarter, for example, we've seen significantly more interest in that. And if you think about all that going on, whether you're directly partnered with some of those projects or not, we expect that you'll see rising in-basin prices just alongside of that demand, right? So whether you're directly involved, which we think, again, we likely will be at least on some level, or whether you just see the local basis start to tighten over time as molecules in the basin become more in demand. We think that's a net-net positive for the company. Now for second part of your question, maybe could you ask that again? I'm not sure I completely understood the second part there, Carlos.

Yes. If these projects do come to fruition in basin, whether you participate or not, that will inevitably create either some kind of growth potential or better basis differentials or -- differentials. So just wonder if you had to pick based on your strategy which one would Gulfport feel more comfortable in applying moving forward?

Yes. I mean I think -- and John can jump in if he has additional perspective. But I think for us anyway, we've been fairly consistent with kind of a relatively flat production profile, 0% to 5%. I mean, I think as you look out the forward curve, the macro environment, we believe, is bullish for gas. We think it's improving. On the other hand, it's still got a three handle on it in a number of the out years. For us to project significant growth at those levels is unlikely even with some narrowing basis like you mentioned. So I think there's -- certainly, in my belief, there's an opportunity for that to happen. But I think for Gulfport to significantly change our existing strategy would require some much larger macro move than what we're currently seeing. So maybe I'd say I think we're less likely to grow into that. I think we're more likely to benefit, at least from the way you pose the question from the rising prices and the narrowing differentials over time.

Got you. I appreciate that. And then for my follow-up, I hate to beat the dead horse with the preferred, but can you perhaps walk us in more detail, making a very gross assumption that all your preferred equity owners decide to pursue the buyback option, the immediate buyback option. Assuming that, how do you envision you will treat the preferred equity as soon as it is converted to the common stock and that in the context of your buyback authorization for the second half of 2024?

Yes. Yes. Good question, Carlos. So in that scenario, like I mentioned earlier, the financial leverage for the business is about 0.85x. So we're very low levered. We've got tremendous liquidity available under our RBL. So we would absorb that cash repurchase likely under the RBL would be at least my initial strategy there. Leverage would tick up temporarily. And then if you look at the next 2 quarters of 2025 and into the first part of 2026, there's a lot of free cash flow and EBITDA growth, at least that we forecast based on current prices. So we would be looking then to kind of monitor our free cash flow and adjust accordingly. I think there's opportunities there to continue the share repurchase program, but we would also be targeting around that 1 turn of leverage that I mentioned earlier over the next few quarters. So I think that's the way we would look at it, and we'll just have to make that adjustment once we know the results here in about a month.

Our next question is from Peyton Dorne with UBS.

This is Peyton. I know it's a bit early to lay out the 2026 plan in detail, but I wonder if you could provide a bit more color on the trajectory of volumes to start the year, just given the activity slowdown over this back half of the year.

Yes, Peyton, I appreciate the question. I think if you think about the cadence of the production profile, which is what I believe you're asking about, we're really looking for an uptick in Q3, just call it, around 10% plus or minus in total volumes and relatively flat in Q4 leading into '26. we certainly haven't compiled and communicated '26 guidance. But what I would tell you is we've been very focused on gas and wet gas. And even in the wet gas areas, these have been highly prolific gas-weighted wells, which have certainly a longer- dated plateau period and a staunch year kind of production profile moving forward. So if you think about the cadence kind of ending the year kind of flattish and going into '26, we feel real good about it. And we'll certainly communicate more on the '26 plans as we get those -- the budgets and the forecast lined out here in the beginning of the year.

All right. Great. And then just keeping the theme on the repurchases. Last night and today, one of the themes you highlighted on the preferred redemption was preserving Gulfport's public float and the trading liquidity. And just knowing that strategy, when we think about kind of the capital returns in 2026 and beyond, would you maybe consider instituting a base dividend and not solely relying on buybacks for the returns or changing up the strategy just a bit to maybe preserve that liquidity as we go forward?

It's a great question, Peyton. I appreciate you asking. It's something we certainly monitor as a management team and discuss with our Board of Directors. I think we've had a lot of success with our share repurchase program over the last 3 years. I think if you look back, we're -- like I mentioned in some of my prepared comments, we're more than 30% ahead on a kind of a cumulative investment based on where the stock trades today. So I think we're really satisfied with that. I think the market really likes the consistency of that. I know other folks talk about share repurchases. Gulfport has been very consistent in delivering on that. So I think for us, and you still have to keep in mind, we do have a large shareholder that's sold some blocks in the past, and we think that's a great opportunity for the company to be able to buy those non- floating shares that you were describing as a way to, again, capture equity value. And so I still see that out there potentially on the horizon at some point. So anyway, I think I would say that, yes, we're monitoring it. I think for now, the strategy is probably going to be similar going forward. And certainly, if that changes, we would let you all know. But I think we're really satisfied with the results so far.

Our next question is from Noah Hungness with Bank of America.

I guess for my first question here, I wanted to follow up a bit on Peyton's question on kind of '26 CapEx cadence. Is there -- I know it's too early to get guidance, but just in terms of how it's weighted versus front half and back half, should we think that it's a similar weighting like what we saw this year in '25?

Yes. No, this is John. Appreciate the question. Yes, again, it's pretty early to be commenting on '26. But what I can tell you is that by and large, the company is planning a front-loaded capital program. I would say this year was a little bit exasperated simply because some of the well types that we were drilling, they were very short-cycle wells. So it kind of accelerated even a front-loaded capital program just a little bit more than our historic kind of pace. So -- but somewhere in the -- I don't want to again give some guidance, but I would say somewhere where we landed this year and the last year, probably in the medium point is where I would expect us to land. We like the front-loaded capital program simply because it's very capital efficient. And also last year, we did have the exasperated effects of just having a lot of liquids production, which had a short plateau. So shifting towards gas, it just changes your production profile corporately, and we're going to be very mindful as we put together the '26 plans to be able to capitalize on the different quarterly cadence and make sure that we maximize cash flow for the company.

Great. That's very helpful. And then for my second question, could you just give us any color on how much production is sidelined right now due to some of the lingering midstream constraints? And then once those constraints are alleviated, is it something as simple as you guys can just open up the choke a bit and fill that new capacity?

Yes. This is John. I appreciate that question as well. So with regards to the quantity, what I'll tell you is, as I quoted in my prepared remarks before, the vast majority of these have been mitigated. A lot of the early issues were weather-related kind of plant outages. There was a slip on the side of a hill with a gathering line. We're very pleased with the midstream partners' response, their reactions. They jumped on it. It was mitigated and production in those areas are back up to expected production rates. What I'll tell you is the lingering or ongoing projects that the midstream companies have provided to offset and mitigate some of the production capacity or said another way, the compression adds that they're adding as well as gas quality equipment. Those remain ongoing. And although they're a minority part of the overall downtime, these projects will be completed towards the end of the quarter and into the fourth quarter. And so what we wanted to do was make sure that everybody was calibrated with our low end of the guide range. So that way, you can kind of look at our quarterly uptick in our flat Q4 to narrow in on where our production is forecasted to be considering the cumulative impact of all of those impacts. So very pleased with the midstream providers' responses to these. They prioritized them and jumped on them. And it really did mitigate what could have been a more meaningful impact to the company.

Our next question is from Tim Rezvan with KeyBanc Capital Markets.

I wanted to follow up on

Yes. Tim, it's Michael. I mean, I think to answer your question, there's always things we have to be aware of, and there's also ways to work through those things. So there's opportunities where we can put plans in place ahead of windows and protect the company from that perspective. So I think, yes, is the answer to your question, there are ways that we can still work through common share repurchases even when we have these other transactions going on. And we also are being mindful of kind of what this redemption results in from a cash perspective. And so as we get that information later in the quarter, we should be able to then toggle our own intentions from that point forward. So I think the answer to both your questions is yes, there's opportunities there, but also things we need to be aware of.

Okay. Okay. I appreciate that context. And then just a follow-up, one more on the discretionary acreage acquisitions. You didn't guide to it at the start of the year and then you came out with a number a little bit bigger. John, can you sort of frame the opportunity set? Is this something you think can be perpetual? I know you need to have a seller to be a buyer. But how do we think about kind of this ground game of bolt-ons? Is that something that can be continued several years?

Yes, Tim, thanks for the question. I think I would point you to the last 3 years, we've ran a pretty land scouring program looking for these opportunities. And what I'll tell you is we've been extremely successful with prospecting and finding good opportunities adjacent to our current inventory and leasehold foothold. These prospects have ranged through Belmont, Monroe County and primarily in the wet gas area and the dry gas. So that's the high graded and these are the active targeted acquisitions that we're pursuing. What I'll tell you is we're pretty pleased and we've been pleased with the opportunity set just overall in general in the basin. We're certainly going to move towards acreage and inventory that we can shift to the left of the skyline and drill really quick. But I'll tell you that there's still significant and sufficient opportunities as you go throughout Monroe and Belmont up in the wet gas, dry gas. And even, quite frankly, we're agnostic to Southwest PA or even further north in Ohio. So plenty of opportunities out there. Very happy with the land teams' progress. They continue to assess and move very quickly on these opportunities to secure them. And we put the bid to them within 2 years, which really amps up the returns for this program. So it's a really good use of cash. So I appreciate the question. A lot of prospects out there and the land teams have done a good job identifying, securing them and the ops teams really are focused on prioritizing turning the bid on them and getting these converted to cash flow and producing assets.

There are no further questions at this time. I'd like to hand the floor back over to John Reinhart for any closing comments.

Thank you, everybody, for taking the time to join our call today. Should you have any questions, please don't hesitate to reach out to our Investor Relations team. This concludes our call. Have a great day.