Chord Energy (NASDAQ:CHRD) executives used the company’s fourth-quarter 2025 earnings call to emphasize what they described as an “exceptional” year of operational execution, cost reductions, and capital discipline, while reiterating a 2026 plan centered on maintenance-level oil production and continued shareholder returns.
2025 performance: production outperformance and lower spending
Chief Executive Officer Danny Brown said 2025 oil volumes exceeded original guidance by more than 1,000 barrels per day, while capital spending came in about $60 million below the company’s initial plan. Brown also highlighted that since combining with Enerplus in 2024, Chord has lowered its capital spending by nearly $100 million while planning to deliver 6,000 barrels per day more oil production in 2026.
Shareholder returns and fourth-quarter free cash flow
Chord highlighted its multi-year return-of-capital record. Brown said the company has returned $6.7 billion of capital to shareholders since 2021—an amount he noted is higher than its current market capitalization—while also growing the business and maintaining leverage “well below” peers.
For the fourth quarter, Brown said oil volumes were at the high end of guidance and capital was below the low end, helped by cost control. He reported adjusted free cash flow of $175 million, which he said “substantially” exceeded expectations. Chord returned roughly 50% of that amount to shareholders during the quarter, using its $1.30 per share base dividend and directing incremental capital return to share repurchases.
Longer laterals, inventory updates, and break-even improvements
A major theme of the call was Chord’s shift to longer laterals. Brown said the company achieved its goal of converting 80% of its inventory to long laterals by year-end 2025, earlier than expected. He said the change, along with execution improvements, has lowered Chord’s cost of supply and improved capital efficiency.
Management also discussed inventory upgrades. Brown said Chord replaced “low break-even inventory” in 2025 primarily through improvements to the organic portfolio, with additional help from select M&A. He added that the weighted average break-even of the company’s inventory fell by more than 10% in 2025, driven by efforts including conversion to four-mile laterals and lower capital and operating costs. Brown said Chord currently has “10+ years” of low break-even inventory.
In response to analyst questions, Brown said inventory improvement is occurring “across the basin” and not confined to one area, citing the company’s approximately 1.3 million net acre position. He said continued work on development geometry, incorporation of new assets into the development program, and better well operations are contributing to improved returns and a reassessment of what qualifies as economic inventory.
2026 outlook: maintenance production, $1.4 billion capital plan, and free cash flow framework
Brown reiterated that Chord’s 2026 plan aligns with the preliminary outlook issued in November. The company expects a low- to no-growth oil program with average production of 157,000 to 161,000 barrels of oil per day and capital spending of $1.4 billion. Brown said the company’s estimates were unchanged despite severe weather in North Dakota early in the year.
Operationally, Chord plans to run five rigs, one full-time frac crew, and one “spot” crew that is scheduled to roll off around the end of the summer. Management expects about 80% of 2026 completions to be longer laterals, split relatively evenly between three-mile and four-mile wells.
At benchmark prices of $64 per barrel oil and $3.75 per MMBtu natural gas, Brown said Chord expects to generate about $700 million of free cash flow in 2026.
On decline rates, Brown said 2026 decline rates look broadly similar to 2025 on an annual basis. Over time, he said the company could see a modest shallowing of corporate declines as longer laterals represent a greater share of production, though he characterized the impact as small—“very small single-digit percentages”—but helpful from a reinvestment-rate perspective.
Operational levers: chemicals, marketing contracts, and water investment
During Q&A, management highlighted several areas of ongoing optimization:
- Chemicals and surfactants: COO Darrin Henke said Chord has pumped 19 chemical and surfactant treatments and is evaluating results. He said the company is currently focused on production-side applications and is also studying use in completions. Henke added the company has “nearly 5,000 wells” in its PDP base, creating a large potential application set if results support wider use.
- Marketing and midstream costs: Chief Strategy and Commercial Officer Michael Lou said the basin’s midstream system is mature and many long-term contracts have come up or are coming up for renewal. As those contracts near term, he said Chord has been able to secure new contracts at lower cost points across oil, gas, and water, with management seeing additional opportunity ahead.
- Water disposal spending: Lou said some 2026 midstream capital is targeted at water disposal, partly reflecting a shift toward areas with lower gas-oil ratios that also have “slightly higher water.” He said disposal capacity overall is “totally fine,” but emphasized that water handling is localized and can require investment closer to wellbores to support overall E&P returns.
On weather impacts, management said winter conditions did affect some first-quarter activity, including road access and operational suspensions, but did not alter the company’s expected annual capital profile. Brown said Chord still expects capital activity to rise through the third quarter and pull back in the fourth quarter, consistent with prior expectations, and praised the team’s ability to restore production after winter events.
Brown also addressed the company’s longer-term plan, saying Chord’s operational resilience can mute activity volatility relative to other producers. He said significantly lower oil prices could prompt a re-evaluation of activity levels, but management is currently comfortable with the plan and its free cash flow and shareholder return profile.
Closing the call, Brown said Chord views its asset base as “increasingly rare,” describing a low-decline, high oil-cut production base paired with a deep inventory of “highly economic, conservatively spaced” oil-weighted locations.
About Chord Energy (NASDAQ:CHRD)
Chord Energy Corporation (NASDAQ: CHRD), formerly known as Oasis Petroleum Inc, is an independent exploration and production company focused on the acquisition, development and production of crude oil, natural gas and natural gas liquids. Headquartered in Houston, Texas, Chord Energy emerged from financial restructuring in early 2021 and rebranded in October 2022 to reflect its renewed strategic vision.
The company’s core operations are concentrated in two prolific U.S. resource plays: the Williston Basin across North Dakota and Montana, and the Delaware Basin spanning parts of West Texas and southeastern New Mexico.
