Chord Energy Corp

Company Overview

Business Model: Chord Energy Corporation is an independent exploration and production (E&P) company primarily engaged in the acquisition, exploration, development, and production of crude oil, natural gas liquids (NGL), and natural gas. Its operations are concentrated in the Williston Basin, with limited non-operated interests in the Marcellus Shale. The Company's mission is to responsibly produce hydrocarbons while exercising capital discipline, operating efficiently, improving continuously, and fostering a rewarding environment for its employees. It aims to generate strong free cash flow and enhance capital returns to shareholders.

Market Position: Chord Energy Corporation holds the largest acreage position of any operator in the Williston Basin, with 1,302,921 net leasehold acres as of December 31, 2025, nearly all of which is held by production. The Company is the top producer in the Williston Basin, exploiting significant resource potential from the Middle Bakken and Three Forks formations. This concentrated acreage position enables cost, recovery, and production efficiencies through repeatable development drilling programs. As of December 31, 2025, the Company operated 5,025 gross (3,937.3 net) producing wells, with an average working interest of 78% in its operated wells. Its net proved reserves were estimated at 917.5 MMBoe, with 69% classified as proved developed and 56% as crude oil. Approximately 89% of its estimated net proved reserves are attributable to operated properties, providing significant operational control.

Recent Strategic Developments:

• Enerplus Corporation Acquisition: On May 31, 2024, Chord Energy Corporation acquired Enerplus Corporation in a stock-and-cash transaction, expanding its operations primarily in the Williston Basin and integrating Enerplus Corporation's results into its financials from that date forward.
• 2025 Williston Basin Acquisition: On October 31, 2025, the Company completed the acquisition of certain developed and undeveloped oil and gas assets in the Williston Basin from XTO Energy Inc. and affiliates for $542.2 million in cash. This acquisition was funded by proceeds from the issuance of 2030 Senior Notes and cash on hand.
• Capital Allocation Framework: The Company maintains a robust capital allocation framework focused on rigorous capital discipline, low reinvestment rates, and returning significant capital to stockholders at mid-cycle oil prices.
• Shareholder Return Program: In the third quarter of 2025, the Board of Directors authorized a new $1.0 billion share repurchase program, replacing a previous program. The Company's return of capital plan includes a base cash dividend of $1.30 per share per quarter ($5.20 per share annualized), supplemented by opportunistic share repurchases and variable dividends.

Geographic Footprint: Chord Energy Corporation's primary operational regions are the North Dakota and Montana areas of the Williston Basin, targeting the Middle Bakken and Three Forks formations. The Company also holds limited non-operated interests in the Marcellus Shale. Substantially all of its revenues are derived from customers within the United States.

Financial Performance

Revenue Analysis

Profitability Metrics:

• Operating Margin: 4.05% (2025) vs. 20.95% (2024)
• Net Margin: 0.91% (2025) vs. 16.16% (2024)

Investment in Growth:

• Capital Expenditures: $1,362.3 million (27.9% of revenue)
• Strategic Investments:
  • 2025 Williston Basin Acquisition: $542.2 million cash consideration.
  • Enerplus Corporation Arrangement: $375.8 million cash paid to shareholders, $395.0 million to settle Enerplus Corporation's credit facility, $102.4 million to settle equity awards, and $5.9 million in retention bonuses.

Capital Allocation Strategy

Shareholder Returns:

• Share Repurchases: $364.5 million (3,491,618 shares) in 2025. As of December 31, 2025, $952.2 million remained under the $1.0 billion share repurchase program authorized in August 2025.
• Dividend Payments: $317.8 million paid in 2025. The Company declared base cash dividends of $5.20 per share of common stock in 2025. On February 25, 2026, a base cash dividend of $1.30 per share of common stock was declared.
• Future Capital Return Commitments: The Company plans to return capital through base dividend payouts, supplemented by opportunistic share repurchases and variable dividends. The targeted percentage of adjusted free cash flow returned is based on leverage: 75%+ for below 0.5x leverage, 50%+ for below 1.0x leverage, and base dividend+ for over 1.0x leverage.

Balance Sheet Position:

• Cash and Equivalents: $189.5 million
• Total Debt: $1,479.6 million (net of unamortized deferred financing costs)
• Net Cash Position: -$1,290.1 million (net debt)
• Debt Maturity Profile:
  • Senior Secured Revolving Line of Credit: Matures November 3, 2029.
  • 6.000% Senior Unsecured Notes: $750.0 million, mature October 1, 2030.
  • 6.750% Senior Unsecured Notes: $750.0 million, mature March 15, 2033.

Cash Flow Generation:

• Operating Cash Flow: $2,040.7 million

Operational Excellence

Production & Service Model: Chord Energy Corporation operates as an E&P company, focusing on continuous improvement in operations and cost structure. Its concentrated acreage in the Williston Basin allows for economies of scale, including drilling longer laterals, developing multiple wells from single pads into multiple formations, and utilizing centralized production and fluid handling facilities. The Company leverages extensive engineering, operational, geologic, and subsurface technical knowledge, along with various technologies for data gathering, information analysis, and production optimization. It employs leading drilling and completion techniques, continuously evaluating internal and peer results to optimize project economics and completion designs.

Supply Chain Architecture: Key Suppliers & Partners: The Company relies on a limited number of midstream providers for a significant portion of its midstream services. It partners with contractors and vendors who adhere to its safety standards and conducts due diligence on third-party service providers, including cybersecurity capabilities, to mitigate risks.

Facility Network:

• Distribution: Crude oil, NGL, and natural gas production is primarily sold to refiners, marketers, and purchasers with access to pipeline and rail facilities. The Company utilizes gathering systems that originate at the wellhead and connect to multiple pipeline and rail facilities.
• Field Offices: The Company owns field offices in Williston, Ray, New Town, Watford City, Keene, Mandaree, and Dickinson, North Dakota.

Operational Metrics:

• Average Daily Production: 276,620 Boepd (56% oil) for 2025.
• Average Daily Crude Oil Production: 154,795 Bopd for 2025.
• Net Proved Reserves: 917.5 MMBoe as of December 31, 2025 (69% proved developed, 56% crude oil).
• Operated Producing Wells: 5,025 gross (3,937.3 net) as of December 31, 2025.
• Williston Basin Net Leasehold Acres: 1,302,921 as of December 31, 2025.
• Gas Capture: Substantially all natural gas production in North Dakota was captured as of December 31, 2025.
• Wells Turned-in-Line (TIL'd): 122 gross (99 net) operated wells in 2025.
• Operated Rigs: 4 operated rigs running as of December 31, 2025, with plans to run four to five operated rigs during most of 2026.
• Proved Undeveloped (PUD) Conversions: $520.3 million in capital expenditures converted 62.5 MMBoe of PUD reserves to proved developed reserves in 2025, representing 24% of the PUD reserves balance at the beginning of the year.

Market Access & Customer Relationships

Go-to-Market Strategy: Distribution Channels:

• Direct Sales: Chord Energy Corporation manages its commodities marketing activities internally, selling crude oil, NGL, and natural gas to a broad array of purchasers. Crude oil is primarily sold through bulk sales at delivery points on gathering systems under short-term, market-based contracts.
• Channel Partners: The Company engages in third-party purchase and sales transactions to optimize transportation costs, blend products to meet pipeline specifications, or cover production shortfalls. It relies on a limited number of midstream providers for gathering, processing, and transportation services.

Customer Portfolio: Enterprise Customers:

• Tier 1 Clients: For the year ended December 31, 2025, Phillips 66 Company and Marathon Petroleum Supply & Trading LLC accounted for approximately 21% and 12%, respectively, of the Company’s total product sales.
• Customer Concentration: While there is concentration with several significant customers, the Company believes the loss of any single purchaser would not materially impact its financial position or results of operations due to the availability of alternative customers and markets.

Competitive Intelligence

Market Structure & Dynamics

Industry Characteristics: The oil and gas industry is characterized by intense competition for property acquisitions, investment capital, oilfield goods and services, marketing of products, and attracting and retaining qualified personnel. The markets for crude oil, NGL, and natural gas are volatile, influenced by supply, demand, and macroeconomic conditions. The industry also competes with other energy sources, such as wind, solar, nuclear, coal, hydrogen, and biofuels.

Competitive Positioning Matrix:

Competitive Response Strategy: The Company's strategy to maintain competitive advantage includes evaluating and selecting suitable properties for acquisition, efficiently developing reserves, effectively marketing hydrocarbons, and attracting and retaining qualified personnel in a highly competitive environment. Its management and technical team's proven track record in large, repeatable development drilling programs is a key strength.

Risk Assessment Framework

Strategic & Market Risks

Market Dynamics: The Company faces significant volatility in crude oil, NGL, and natural gas prices due to global geopolitical tensions, actions by OPEC+ members, and macroeconomic conditions. A substantial or extended decline in commodity prices could adversely affect its business, financial condition, and ability to meet capital expenditure obligations. Technology Disruption: Risks include the failure to effectively integrate disruptive technologies, such as artificial intelligence, which could impact competitive edge, market share, and compliance with evolving legal and regulatory requirements. Customer Concentration: The Company is exposed to credit risk from its concentration of crude oil, NGL, and natural gas receivables with several significant customers.

Operational & Execution Risks

Supply Chain Vulnerabilities: The Company depends on a limited number of midstream providers for services and faces risks from the unavailability or high cost of drilling rigs, equipment, supplies, personnel, and oilfield services, which could delay or adversely affect exploration and development plans. Geographic Concentration: Substantially all of the Company's producing properties and operations are concentrated in the Williston Basin, making it vulnerable to regional economic impacts, production delays, or interruptions from transportation constraints, equipment availability, or adverse weather. Capacity Constraints: Insufficient capacity in transmission, gathering, and processing facilities could lead to substantial price discounts, shut-in wells, or delayed development plans. Limited takeaway capacity can result in significant discounts to realized prices.

Financial & Regulatory Risks

Market & Financial Risks: Adverse developments in financial markets, such as bank failures, increased interest rates, or government shutdowns, could negatively affect liquidity and access to capital. Increased costs of capital could also impact the business. The Company's exploration, development, and exploitation projects require substantial capital expenditures, and its ability to obtain financing on satisfactory terms is crucial. Regulatory & Compliance Risks: E&P operations are subject to extensive federal, tribal, regional, state, and local laws and regulations, including those related to well permitting, production, transportation, environmental protection (e.g., CERCLA, RCRA, CAA, CWA, OPA, SDWA, ESA), and occupational health and safety. Non-compliance can result in substantial penalties, increased costs, and operational restrictions. Regulations concerning hydraulic fracturing and operations on federal lands also pose risks. Data Privacy: The Company faces risks from cybersecurity threats, including unauthorized access, data corruption, and operational disruption, which could lead to investigations, regulatory penalties, and reputational damage.

Geopolitical & External Risks

Geopolitical Exposure: Global geopolitical tensions, such as conflicts in Russia/Ukraine and the Middle East, can create heightened volatility in commodity prices and impact macroeconomic conditions. Trade Relations: Uncertainty in U.S. trade policy, including changes in tariffs, trade agreements, or other restrictions, could adversely affect the Company's financial results.

Innovation & Technology Leadership

Research & Development Focus: Core Technology Areas: Chord Energy Corporation emphasizes continuous improvement and innovation, leveraging extensive engineering, operational, geologic, and subsurface technical knowledge. Its technical team utilizes digital well log, seismic, completion, and production data for reservoir characterization and production optimization. The Company evaluates emerging technologies, including artificial intelligence, to enhance operational efficiency and employs leading drilling and completion techniques to optimize project economics.

Intellectual Property Portfolio: The Company acknowledges the risk of intellectual property infringement related to its use of artificial intelligence tools but does not explicitly detail its patent strategy or licensing programs.

Leadership & Governance

Executive Leadership Team

Leadership Continuity: The Company has knowledge transfer plans in place to ensure human capital continuity and focuses on enterprise risk management, including cybersecurity risk, with oversight from the Board of Directors. Board Composition: The Board of Directors is described as short-tenured, highly capable, and comprised of experienced energy industry professionals with diverse perspectives, with 82% independence. In 2024, the Board established a Safety and Sustainability Committee to oversee ESG strategies.

Human Capital Strategy

Workforce Composition: As of February 13, 2026, Chord Energy Corporation employed 676 full-time employees, supplemented by independent contractors. Its workforce possesses diverse skills across engineering, geology, production, marketing, land, supply chain, health and human safety, human resources, finance, accounting, information technology, and legal, with many employees having highly specialized expertise. Primary operating locations are Houston, Texas, and Williston, North Dakota.

Talent Management: Acquisition & Retention: The Company's total rewards program aims to attract, retain, and motivate employees through competitive compensation, benefits, and an energizing environment. Benefits include retirement plan matching, health insurance, income protection, paid time off, parental leave, flexible work schedules, and wellness services. Hiring plans focus on talent attraction in its primary operating locations. Diversity & Development: Chord Energy Corporation prioritizes diversity of thought, constructive debate, and engaged leadership. It provides leadership training, professional development programs, and safety training for employees at all levels. Safety performance is integrated into the annual compensation program. The Company is an equal opportunity employer and promotes a diverse and inclusive workforce through a robust compliance program and an annual Code of Business Conduct and Ethics Policy certification.

Environmental & Social Impact

Environmental Commitments: Climate Strategy: The Company is committed to continuous improvement in ESG practices, focusing on reducing Scope 1 greenhouse gas (GHG) emissions, particularly methane. It has developed a Marginal Abatement Cost Curve (MACC) to prioritize cost-effective emissions reduction opportunities. As of December 31, 2025, the Company was capturing substantially all of its natural gas production in North Dakota. Supply Chain Sustainability: The Company seeks to partner with contractors and vendors who share its commitment to safety and ESG principles.

Social Impact Initiatives: Chord Energy Corporation is actively involved in its operating communities, supporting charitable organizations through financial resources, time, and talent. Initiatives include sponsoring technical training programs, engineering scholarships, environmental and wildlife rehabilitation, Habitat for Humanity projects, mental health programs, and educational programs like OneGoal and Junior Achievement. The Company promotes employee volunteerism and philanthropy.

Business Cyclicality & Seasonality

Demand Patterns: The Company's operations are subject to seasonal weather conditions, particularly in the Williston Basin, where winter weather can limit or halt drilling, completion, and production activities, increasing costs. Its revenue and profitability are substantially dependent on volatile crude oil, NGL, and natural gas prices, which are influenced by economic, geopolitical, political, and regulatory developments, as well as competition from other energy sources. The Company's business strategy is designed to navigate cyclical industry environments and preserve liquidity.

Regulatory Environment & Compliance

Regulatory Framework: Chord Energy Corporation's E&P operations are extensively regulated by federal, tribal, regional, state, and local laws concerning well permitting, drilling, completion, production, and transportation of crude oil, NGL, and natural gas. This includes regulation by the Federal Energy Regulatory Commission (FERC) for interstate oil and natural gas transportation, state agencies for gathering services, and various environmental and occupational health and safety laws (e.g., CERCLA, RCRA, CAA, CWA, OPA, SDWA, ESA). The Company must also comply with anti-market manipulation laws enforced by FERC, the Commodity Futures Trading Commission (CFTC), and the Federal Trade Commission (FTC). International Compliance: The Company is subject to Canadian federal and provincial tax laws, with Canadian federal tax returns open from 2019 forward. Trade & Export Controls: The Company's business can be impacted by changes in U.S. trade policy, including tariffs, trade agreements, or other restrictions, and potential retaliatory actions by other governments. Legal Proceedings: The Company is involved in an ongoing title dispute with the Mandan, Hidatsa and Arikara Nation (MHA Nation) regarding mineral ownership under the Missouri River riverbed on the Fort Berthold Indian Reservation. It is also party to various other legal and regulatory proceedings in the ordinary course of business.

Tax Strategy & Considerations

Tax Profile: The Company's effective tax rate was 81.7% in 2025, significantly higher than the federal statutory rate of 21%, primarily due to a non-deductible goodwill impairment charge. In 2024, the effective tax rate was 23.7%, higher than the statutory rate due to state income taxes. Geographic Tax Planning: The Company's tax provision includes U.S. federal and state income taxes, as well as Canadian federal and provincial income taxes. It did not record a Canadian deferred tax asset due to the lack of continued operations in Canada. Tax Reform Impact: The One Big Beautiful Bill Act (OBBBA), signed in July 2025, permanently reinstated 100% bonus depreciation and allowed immediate expensing of domestic research and experimentation expenditures, but did not materially impact the Company's effective tax rate for 2025. NOL Carryforwards: As of December 31, 2025, the Company had gross U.S. federal net operating loss (NOL) carryforwards of $1,013.0 million (mostly non-expiring) and gross state NOL carryforwards of $2,001.3 million (expiring between 2025 and 2042). These NOLs are subject to limitations under Section 382 of the Code due to prior ownership changes.

Insurance & Risk Transfer

Risk Management Framework: The Company utilizes a risk management program, including derivative instruments, to address market risks such as commodity price fluctuations and interest rate risk. Insurance Coverage: The Company is not fully insured against all operational risks, including development and completion risks, and pollution and environmental risks are generally not fully insurable. It may elect not to obtain insurance if costs are deemed excessive relative to risks. Risk Transfer Mechanisms: The Company uses fixed-price swaps and two-way and three-way collars to manage commodity price risk for a portion of its future crude oil and natural gas production, aiming to reduce price volatility.