Mach Natural Resources LP

What they do

Mach acquires, develops and produces oil, natural gas and NGL reserves in the Anadarko Basin of Western Oklahoma, Southern Kansas and the Texas panhandle; the San Juan Basin of New Mexico and Colorado; and the Permian Basin of West Texas. Its assets are prospective in multiple formations, most notably the Oswego, Woodford and Mississippian, Mancos and Fruitland. The company also owns gathering systems, processing plants and water infrastructure that are integrated with its upstream operations and generate third-party revenue.

Revenue drivers

• Oil sales — Oil accounted for 54% of second quarter 2026 production revenues of $367 million, with average realized price of $95.40 per barrel and output of 22.7 MBbl/d.
• Natural gas sales — Natural gas was 30% of second quarter 2026 production revenues, realized at $1.93 per Mcf; gas made up 69% of the 148.9 Mboe/d production mix.
• NGL sales — NGLs contributed 16% of second quarter 2026 production revenues at an average realized price of $28.99 per barrel, and 16% of production volumes.
• Midstream — Owned gathering, processing and water infrastructure supports upstream operations and earns third-party revenue; midstream operating profit was approximately $5 million in the second quarter of 2026.

Recent performance

For the second quarter of 2026, Mach reported total revenue of $406 million and net income of $98 million, with Adjusted EBITDA of $182 million. Average total net production was 148.9 Mboe/d, consisting of 15% oil, 69% natural gas and 16% NGLs. Lease operating expense was $98 million, or $7.21 per Boe, and gathering and processing expense was $48 million, or $3.54 per Boe. The company generated net cash provided by operating activities of $154 million and incurred $97 million of total development costs, including $80 million upstream. As of June 30, 2026, cash was $41 million with $730 million drawn under a $1.0 billion revolving credit facility.

Strategy

Management is redirecting capital toward oil-weighted projects in the Mid-Continent, including restarting the Oswego drilling program in May 2026. The company spud 9 gross (5.0 net) operated wells and brought online 6 gross (4.2 net) operated wells in the second quarter of 2026. CEO Tom L. Ward said favorable oil prices allowed the company to pivot capital to high-return oil opportunities sourced through acquisitions. Management describes itself as returns-driven, citing cash return on capital invested, and updated full-year 2026 guidance to raise oil production about 4% at the midpoint while deferring Mancos completions to 2027.

Risks

• Distribution coverage — Available cash for quarterly distributions is reduced by operating expenses, cash interest, development costs and cash reserves established by the general partner, so distributions may not be sustained.
• Commodity price volatility — Between January 1, 2025 and June 30, 2026, NYMEX WTI ranged from $55.27 to $112.95 per Bbl and Henry Hub gas from $2.52 to $7.46 per MMBtu, directly affecting revenue.
• Debt covenant restrictions — Restrictive covenants in the New Credit Agreement and other debt agreements limit the partnership's ability to pay distributions on its common units.
• Inflation and supply costs — High inflation could raise costs for drill rigs, workover rigs, tubulars, well equipment and labor, and the company may not recover higher costs through higher commodity prices.

Outlook

Management updated full-year 2026 guidance to increase estimated oil production by approximately 4% at the midpoint, reflecting a shift toward oil drilling. Total Boe and gas production guidance decreased due to the reallocation of drilling capital and the deferral of Mancos completions to 2027. Estimated development costs decreased with changed drilling plans, while lifting costs increased on the revised full-year commodity mix. The company declared a second quarter 2026 distribution of $0.36 per common unit, payable August 31, 2026.