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Mach Natural Resources LP (MNR)
NYSE:MNR
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Mach Natural Resources LP
(NYSE:MNR)
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Rating:70Outperform
Price Target:
$15.00
▲(8.62% Upside)
Action:ReiteratedDate:03/17/26
The score is driven primarily by strong cash-flow performance and a supportive valuation (low P/E and very high dividend yield). Offsetting this are earnings-quality volatility (2025 net income at $0 despite strong cash flow), moderate leverage, and technically overbought momentum that raises near-term pullback risk; earnings-call guidance is constructive but acknowledges meaningful execution and cost risks.
Positive Factors
Strong cash generation
Sizable, consistent operating and free cash flow provides durable internal funding for distributions, reinvestment, and M&A. This cash generation underpins financial flexibility, enables debt paydown or accretive deals without heavy new equity, and supports long-term capital returns.
Accretive acquisitions and scale
Transformational, accretive acquisitions increase scale and diversify asset mix, boosting distributable cash over time. Measured, accretive M&A can improve production base, raise EBITDA capacity and reduce per-unit cost exposure, enhancing sustainable cash returns to holders.
Disciplined reinvestment & high ROIC
A sub-50% reinvestment target paired with a low decline rate and >30% cash return on capital indicates capital-efficient operations. This allocation framework supports steady distributions and organic growth while preserving flexibility across cycles, improving long-term payout durability.
Negative Factors
Earnings-quality volatility
A zero reported net income in 2025 while EBIT, EBITDA and cash flow remain strong suggests significant non-cash items or one-offs. This divergence reduces clarity on recurring profitability and complicates forecasting, governance of distributions, and investor assessment of true economic performance.
Elevated post-deal leverage
Higher absolute debt and above-target debt/EBITDA increase sensitivity to commodity cycles and refinancing conditions. Until EBITDA growth or paydown reduces leverage, balance sheet capacity for further M&A or larger distributions is constrained and downside risk to cash returns rises in stress scenarios.
Natural gas concentration & price exposure
A production mix dominated by natural gas creates structural revenue and cash-flow sensitivity to seasonal storage, weather and LNG demand pace. Management's own caution on gas pricing means sustained weak gas markets could depress cash generation and strain distribution coverage versus oil-biased peers.
Mach Natural Resources LP (MNR) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.31B
Dividend Yield17.48%
Average Volume (3M)358.82K
Price to Earnings (P/E)10.1
Beta (1Y)0.63
Revenue Growth9.33%
EPS GrowthN/A
CountryUS
Employees505
SectorEnergy
Sector Strength52
IndustryOil & Gas Exploration & Production
Share Statistics
EPS (TTM)0.43
Shares Outstanding168,218,770
10 Day Avg. Volume371,121
30 Day Avg. Volume358,818
Financial Highlights & Ratios
PEG Ratio-0.24
Price to Book (P/B)0.62
Price to Sales (P/S)1.33
P/FCF Ratio6.14
Enterprise Value/Market Cap1.49
Enterprise Value/Revenue3.03
Enterprise Value/Gross Profit8.25
Enterprise Value/Ebitda6.19
Forecast
1Y Price Target
$18.00Price Target Upside30.34% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering6
EPS Forecast (FY)1.27
Revenue Forecast (FY)$1.40B
Mach Natural Resources LP Business Overview & Revenue Model
Company DescriptionMach Natural Resources LP, an independent upstream oil and gas company, focuses on the acquisition, development, and production of oil, natural gas, and natural gas liquids reserves in the Anadarko Basin region of Western Oklahoma, Southern Kansas, and the panhandle of Texas. The company was incorporated in 2023 and is headquartered in Oklahoma City, Oklahoma.
How the Company Makes MoneyMNR makes money primarily by producing and selling hydrocarbons—crude oil, natural gas, and natural gas liquids—from its operated and/or owned interests in wells and associated acreage. Revenue is recognized based on (1) production volumes attributable to MNR’s working and/or net revenue interests and (2) the realized sales prices for each commodity, which are influenced by market benchmarks (e.g., regional oil and gas indices), quality differentials, and location/transport constraints.
Key revenue streams typically include:
- Crude oil sales: Cash flow generated from selling produced oil to purchasers/marketers, often priced off a benchmark with regional differentials.
- Natural gas sales: Revenue from gas sold into pipelines or to marketers, priced off natural gas indices and subject to basis differentials.
- NGL sales: Income from NGLs (such as ethane, propane, butane, and natural gasoline) recovered from natural gas processing and sold to NGL purchasers, typically priced using NGL market indices.
MNR’s net revenue is reduced by common upstream value-chain costs and arrangements, which can include:
- Royalties and production taxes: Payments to mineral owners and governments based on a percentage of production or revenue.
- Gathering, processing, and transportation (midstream) fees: Charges to move and process hydrocarbons from the wellhead to sales points (including fees paid to third-party midstream providers).
- Marketing arrangements: Contracts with purchasers/marketers that can affect realized pricing and timing.
Earnings and cash flow are significantly affected by commodity price volatility, production performance (including drilling, completion, and decline rates), operating costs (lease operating expenses), and capital allocation decisions (development drilling vs. acquisitions vs. maintenance). Information on specific counterparties/partnerships, exact basin exposure, hedging program details, or fee structures is null.
Mach Natural Resources LP Earnings Call Summary
Earnings Call Date:Mar 12, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 18, 2026
Earnings Call Sentiment Positive
The call was overall positive: management reported very strong reserve growth (reserves more than doubled to 705 MMBOE), solid quarterly EBITDA and operating cash flow, historically high returns on capital and sustained distributions, while outlining clear operational plans across Deep Anadarko, San Juan (Mancos) and Oswego. However, notable challenges were reiterated — a pullback in return on capital in 2025, modest quarter-end cash, leverage above the company’s 1.0x target (currently ~1.3x), localized gas basis volatility and high costs/complexity in Deep Anadarko that may require partners or asset monetization. Management emphasized disciplined capital allocation, a 50% reinvestment cap, and a conservative hedging posture, balancing distribution objectives with modest growth. Given the strong operating and financial highlights that outweigh the manageable but meaningful risks, the sentiment is Positive.Q4-2025 Updates
Positive Updates
Strong Reserve Growth
Year-end 2025 proved reserves more than doubled from March to 705 million BOE (>
100% increase). Additions from development exceeded 2025 production by 18%.
Consistent and Generous Distributions
Total distributions of $1.3 billion since 2018; delivered distributions totaling $5.67 per unit from 2024 through the last announced distribution of $0.53. Reported distribution for the quarter was $0.53 per unit (paid). Company cites an annualized yield of 15%.
Robust Cash Generation and Profitability
Quarterly adjusted EBITDA was $187 million and operating cash flow was $169 million. Cash available for distribution for the quarter was $89 million. Total oil & gas revenues were $331 million and total revenues including hedges and midstream were $388 million.
Hedge Contribution to Revenue
Hedging contributed $42 million in the quarter, representing approximately 10.8% of total reported revenues ($42M of $388M).
Attractive Historical Returns on Capital
Average cash return on capital greater than 30% over the last five years; even during down-cycle 2025 the company delivered a 23% cash return on capital (a multi-year track record of high returns).
Strong Development Economics in Key Plays
Oswego program: >250 locations drilled/completed since 2021 with consistent returns above 50% historically. San Juan Mancos: three-mile lateral projected to recover ~24 Bcf at a targeted cost of $15M (goal to lower to ~$13M in 2026). Deep Anadarko: estimated ultimate recovery ~19.5 Bcf per location (~6.5 Bcf per mile lateral, range 5–8 Bcf/mile).
Disciplined Capital Allocation and Acquisition Discipline
Policy of never acquiring assets above PDP PV-10 (accomplished 23 times). Target reinvestment rate no more than 50% to maximize distributions. Long-term target debt/EBITDA of 1.0x to enable opportunistic M&A.
Operational Additions and Production
Brought on three additional Deep Anadarko locations since last release that combined produced ~40 million cubic feet of gas per day. Reported quarter production was 154,000 BOE/d.
Liquidity and Credit Availability
Ended the quarter with $43 million of cash and $338 million of availability under the credit facility, preserving financial optionality.
Negative Updates
Leverage Above Long-Term Target
Debt/EBITDA at ~1.3x (management target is 1.0x). Company is effectively on the sidelines for larger M&A until leverage is reduced to target levels.
Reduced Return on Capital in 2025
Average cash return on capital fell to 23% in 2025 versus >30% average over the prior five years (a decline of several percentage points during the down cycle).
Lower Realized Gas Price
Quarterly average realized gas price was $2.54/Mcf, below the Bloomberg fair value referenced for Henry Hub ($4.42 in 2025), which pressures gas revenue despite gas being ~44% of oil & gas revenue.
High Development Intensity / CapEx Share of Cash Flow
Development CapEx was $77 million in the quarter (46% of quarterly operating cash flow) and full-year development costs were $252 million (47% of operating cash flow), leaving less excess cash to accelerate debt paydown or expand drilling without partners.
Deep Anadarko Complexity and Cost
Deep Anadarko wells are technically challenging (true vertical depths 14k–17k feet plus ~15k feet lateral, total depths 29k–32k feet) with projected drill & complete costs of $14–15 million per location — a capital-intensive program that management may need a partner to scale while reducing balance sheet pressure.
Widening Gas Basis Differentials
Management widened natural gas basis assumptions given recent widening in Anadarko and San Juan basis. Local basis volatility (driven by weather and regional dynamics) is impacting realized gas spreads.
Operational Variability in Oswego
Oswego wells show a wide variance in returns (instances of very high returns but also wells with 10–20% returns), indicating reservoir heterogeneity and execution/placement risk despite strong aggregate performance.
Limited Near-Term Cash Buffer
Quarter-end cash of $43 million is modest relative to planned drilling and investment; the company highlighted potential need to monetize acreage or bring partners (especially in non-HBP Deep Anadarko acreage) to reduce debt, though management is reluctant to sell midstream assets that generate steady cash flow.
Program Cuts / Deferred Activity
Some 2026 activity (e.g., Fruitland coal wells) was removed/shifted due to operating cash flow constraints — reflecting limited near-term flexibility to pursue all identified high-return opportunities.
Company Guidance
Guidance for 2026 emphasizes disciplined capital return and reinvestment: target reinvestment rate ≤50% while slightly growing BOE, a rolling hedge program of 50% in year‑1 and 25% in year‑2, and a long‑term net debt/EBITDA target of 1.0x (currently ~1.3x) with a corporate decline of ~17%. Operational plans call for drilling 7–8 Mancos dry‑gas wells (TVD ~7,000 ft; 2–3 mile laterals), targeting a $13M D&C cost (down from $15M for a 3‑mile well that recovers ~24 Bcf with a 60% first‑year decline), while Deep Anadarko locations are projected at $14–15M each with an estimated ultimate recovery of ~19.5 Bcf (~6.5 Bcf/mile; 5–8 Bcf/mile range); the company will move Deep Anadarko from two rigs to one (drilling season Apr 1–Nov) and may return an Oswego oil rig in H2 if WTI stays >$70. The plan contemplates spending “over a couple hundred million” in Deep Anadarko this year but cutting CapEx via the rig reduction, all while preserving distributions (historical distributions include $1.3B since 2018 and $5.67/unit since 2024 with a $0.53/unit most recent payout and a ~15% annualized yield); Q4/2025 context: 154,000 BOE/d (17% oil, 68% gas), 2025 year‑end reserves 705 MMBOE, realized prices $58.14/bbl oil, $2.54/Mcf gas, $21.28/bbl NGLs, total oil & gas revenue $331M (hedges $42M; total revenue incl. midstream $388M), adjusted EBITDA $187M, OCF $169M, development CapEx $252M in 2025 (47% of OCF) and quarterly D&C $77M (46% of OCF).Mach Natural Resources LP Financial Statement Overview
Summary
Strong and consistent operating cash flow (~$492M–$554M in 2022–2025) and sharply improved free cash flow in 2024–2025 support the business. However, 2025 reported net income of $0 despite positive EBIT and strong cash flow raises earnings quality/volatility concerns, and debt is sizable (~$1.15B) even with improved leverage ratios.Income Statement
Revenue has expanded meaningfully over time (2021–2025 annual revenue rising from ~$392M to ~$1.18B), including solid growth in 2025 (+14.9%). Profitability was very strong in 2022–2024 (high operating and net margins), but earnings quality looks less consistent in the most recent year as 2025 shows net income at $0 despite positive operating profit (EBIT ~$245M) and strong EBITDA (~$525M). Overall, the trajectory is growth-positive, but reported bottom-line volatility in the latest period reduces confidence in durability.62
Positive
Balance Sheet
The balance sheet has scaled up substantially, with assets growing to ~$3.78B and equity to ~$2.35B in 2025. Leverage is moderate in 2025 (debt-to-equity ~0.49), improved versus 2023–2024 (~0.69 and ~0.64), but absolute debt has increased (to ~$1.15B in 2025), which raises sensitivity to commodity swings and refinancing conditions. Returns on equity were strong in 2021–2024, but profitability metrics are weaker/unclear in 2025 (ROE shown as 0%), tempering the otherwise improved leverage profile.58
Neutral
Cash Flow
Cash generation is a key strength: operating cash flow has been consistently robust (~$492M–$554M in 2022–2025), and free cash flow improved sharply in 2024–2025 (2025 free cash flow ~$507M, up strongly versus 2024). Cash flow also covers earnings well in most years (operating cash flow to net income generally >1x), supporting funding flexibility. The main watch-out is variability in free cash flow over time (notably weaker in 2023) and the mismatch in 2025 where net income is reported at $0 while cash flow remains high, suggesting earnings volatility versus cash results.74
Positive
| Breakdown | Dec 2025 | Dec 2024 | Mar 2024 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 1.09B | 969.63M | 762.31M | 937.41M | 392.50M |
| Gross Profit | 310.73M | 331.83M | 386.80M | 547.84M | 216.33M |
| EBITDA | 546.86M | 560.74M | 495.38M | 610.28M | 180.72M |
| Net Income | 142.98M | 185.18M | 346.56M | 516.84M | 138.37M |
Balance Sheet | |||||
| Total Assets | 3.78B | 2.34B | 2.30B | 887.44M | 525.38M |
| Cash, Cash Equivalents and Short-Term Investments | 42.63M | 105.78M | 152.79M | 29.42M | 59.27M |
| Total Debt | 1.16B | 766.17M | 824.49M | 99.71M | 85.80M |
| Total Liabilities | 1.79B | 1.14B | 1.11B | 294.21M | 246.68M |
| Stockholders Equity | 2.35B | 1.20B | 1.19B | 593.23M | 278.70M |
Cash Flow | |||||
| Free Cash Flow | 236.41M | 284.98M | 176.94M | 310.52M | 157.45M |
| Operating Cash Flow | 506.96M | 505.29M | 491.74M | 553.54M | 198.46M |
| Investing Cash Flow | -899.16M | -306.32M | -1.03B | -372.66M | -194.74M |
| Financing Cash Flow | 329.06M | -245.99M | 658.79M | -210.74M | -4.58M |
Mach Natural Resources LP Technical Analysis
Positive
13.81
Price Trends
12.18
Positive
11.68
Positive
12.29
Positive
Market Momentum
0.44
Negative
64.87
Neutral
79.07
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MNR, the sentiment is Positive. The current price of 13.81 is above the 20-day moving average (MA) of 13.29, above the 50-day MA of 12.18, and above the 200-day MA of 12.29, indicating a bullish trend. The MACD of 0.44 indicates Negative momentum. The RSI at 64.87 is Neutral, neither overbought nor oversold. The STOCH value of 79.07 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for MNR.
Mach Natural Resources LP Peers Comparison
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
84 Outperform | $1.33B | 18.58 | 17.61% | 12.53% | -12.51% | -59.55% | |
76 Outperform | $1.77B | 11.74 | 12.05% | 13.84% | -2.71% | -113.80% | |
70 Outperform | $2.31B | 10.15 | 8.09% | 17.48% | 9.33% | ― | |
65 Neutral | $15.17B | 7.61 | 4.09% | 5.20% | 3.87% | -62.32% | |
| ― | $1.07B | 13.61 | 4.32% | 7.51% | -14.84% | -16.23% | |
65 Neutral | $2.55B | -3.89 | -20.26% | ― | -0.02% | -473.61% | |
59 Neutral | $3.12B | 14.44 | 10.00% | ― | 31.67% | ― |
* Energy Sector Average
MNR
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.