Infinity Natural Resources (NYSE:INR) said its first quarter was marked by a significant expansion of its Appalachian footprint, following the late-February closing of its acquisition of Antero’s Ohio Utica assets and the addition of working interests in Pennsylvania through the Chase acquisition.
President and Chief Executive Officer Zack Arnold told analysts that the transactions increased the company’s operated well count from 154 to 395 and expanded its midstream system to more than 250 miles of gathering and water pipelines. He said the assets position Infinity for “disciplined growth through the end of the decade,” while the company preserved balance sheet flexibility through financing that included perpetual preferred securities and senior notes.
“The more time we spend with the Antero assets, the more excited we become about the opportunity, especially the midstream infrastructure,” Arnold said.
Production rises sharply year over year
Infinity reported average net production of 299 million cubic feet equivalent per day in the first quarter, up 88% from the prior-year period. Oil production totaled about 9,600 barrels per day, up 16% year over year, while natural gas production averaged 195 million cubic feet equivalent per day, up 169%. Natural gas liquids production rose 25% to 7,800 barrels per day.
Natural gas accounted for 65% of total production during the quarter, with oil representing 19% and NGLs representing 16%.
Arnold said Infinity turned four wells to sales in the volatile oil window during the quarter, totaling 53,000 lateral feet. The company also added a second frac crew and a second rig, stimulated 11 wells and drilled 10 wells to total depth, which Arnold described as a company record.
One frac crew was deployed to the acquired Antero assets roughly 30 days after closing, and Infinity expects to turn the first three wells from that acquisition to sales during the second quarter. The company also plans to move a rig onto the newly acquired assets later in the quarter.
For the balance of 2026, Arnold said Infinity expects to run one dedicated rig on legacy assets, drilling both volatile oil and dry gas wells, and one rig on the newly acquired assets.
Financial results and 2026 guidance
Executive Vice President and Chief Financial Officer David Sproule said Infinity generated approximately $155 million in revenue and $97 million of adjusted EBITDA in the first quarter. The company reported adjusted EBITDA margins of approximately $3.61 per Mcfe, which Sproule said the company believes is “best in class in the Appalachian Basin.”
Natural gas prices averaged $4.86 per MMBtu during the period, while regional differentials remained steady at $0.69 per MMBtu. Oil price realizations were $65.77 per barrel, and oil differentials tightened to slightly less than $7 per barrel. Sproule said the company expects oil differentials to remain around $7 to $8 per barrel in the second quarter.
Controllable cash operating costs totaled $1.43 per Mcfe in the quarter. Sproule said costs reflected the effects of an “extremely cold winter,” including higher rental and snow removal costs, as well as annual compensation true-ups. On a year-over-year basis, controllable cash operating costs declined about 18%.
First-quarter capital expenditures were approximately $123 million, including $112 million for development activity and $11 million for land activity. During the quarter, Infinity raised $550 million in senior notes and $350 million of preferred equity, which Sproule said allowed the company to repay all outstanding debt under its revolving credit facility and increase liquidity.
At quarter-end, Infinity had net debt of approximately $477 million and total liquidity of approximately $929 million. Pro forma net leverage on a trailing 12-month basis was 1.3 times, with management expecting leverage to decline toward its target level over the year.
The company maintained its 2026 outlook for average net production of 345 to 375 million cubic feet equivalent per day, implying approximately 70% year-over-year growth. Infinity expects gas production of 235 to 255 million cubic feet equivalent per day and oil and liquids production of 18,000 to 20,000 barrels per day. Development capital expenditures are expected to range from $450 million to $500 million.
Midstream system seen as strategic advantage
Arnold highlighted the acquired midstream infrastructure as a key part of Infinity’s strategy. He said the system includes 140 miles of gathering lines, 90 miles of water lines, six compressor stations, 43 compressors and nearly 80,000 horsepower.
According to Arnold, the system is currently operating at less than a quarter of available capacity, creating room to support both Infinity’s development and third-party volumes. The company received third-party volumes on the system for the first time during the quarter and expects to focus on increasing those volumes.
Approximately 75% of Infinity’s natural gas volumes currently flow through its owned midstream system, and Arnold said that share is expected to increase as development ramps. He said the infrastructure provides a structural cost advantage by reducing or eliminating the need for incremental midstream capital on new development.
During the question-and-answer session, Arnold said Infinity would prioritize its own volumes on the system, while third-party volumes could initially come through units the company develops where other operators or interests are present. Management said the system includes a 600 million cubic feet per day pipe and that the company is “highly incentivized” to fill it, while noting that third-party revenue is currently small.
Commodity mix and development timing
Arnold said Infinity remains constructive on the longer-term outlook for both liquids and natural gas. He cited strong Appalachian oil and liquids markets, supported by domestic and international refining and chemical demand. Beginning in April, the company increased its take-in-kind NGL volumes to gain greater control over realized pricing for propane, butane and pentane.
For natural gas, Arnold cited demand growth from LNG exports, gas-fired power generation, in-basin data centers and longer-term industrial development.
Infinity has accelerated completion activity in its volatile oil window to capture stronger near-term returns, including pulling four oil-weighted wells into the second quarter from later in the year. Arnold said those barrels are mostly unhedged. At the same time, management said the company retains flexibility to pivot toward natural gas if market conditions warrant.
Infinity expects to turn in line a four-well pad in the volatile oil window in the coming days, representing 55,000 lateral feet. It also expects to bring to market its first barrels from the Antero acquisition later in the quarter through a three-well pad in its rich gas area totaling 53,000 lateral feet.
In response to analyst questions, Arnold said the company’s first-quarter development activity should be more visible in second-quarter production, while wells coming online in June are expected to contribute at full rates in July.
Analysts ask about M&A, costs and future growth
On potential acquisitions, Sproule said Infinity remains active but selective. He said the company is focused on integrating the Antero assets while maintaining flexibility to evaluate additional assets that fit its portfolio.
Arnold said the company is identifying optimization opportunities on the acquired Antero producing base, including work involving bottomhole assemblies and plunger lifts. He also said increased completion activity could improve the company’s ability to reuse water, which may benefit lease operating expenses.
Sproule said LOE rose to about $0.33 per Mcfe in the first quarter, largely reflecting winter weather, but said overall costs are expected to decline through the year as volumes grow and the company benefits from the lower-cost structure of the acquired assets.
Asked about a planned 10,000-foot Utica test, Arnold said the company has a rig on location and will drill a vertical pilot to collect data. He said Infinity does not intend to drill the well horizontally or complete it during the current calendar year, describing the work as the first step in an evaluation process.
Management also said production is expected to increase each quarter through the rest of 2026, with the fourth quarter expected to be the highest production quarter of the year. Looking beyond 2026, the company said it does not expect to sustain growth rates of 70% to 80%, but it expects growth to remain elevated compared with peers while reinvestment trends lower over time.
About Infinity Natural Resources (NYSE:INR)
We are a growth oriented, free cash flow generating, independent energy company focused on the acquisition, development, and production of hydrocarbons in the Appalachian Basin. We are focused on creating shareholder value through the identification and disciplined development of low-risk, highly economic oil and natural gas assets while maintaining a strong and flexible balance sheet. Additionally, we have proven our ability to grow our acreage position through organic leasing efforts and accretive acquisitions.
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