Chord Energy Corporation (CHRD) Earnings & Analysis

Latest quarter

Chord Energy reported Q3 FY2026 revenue of $1.7 billion, up from $1.3 billion a year earlier. On the consensus basis, revenue was 1.93% above expectations, although both reported revenue and the estimate rounded to $1.4 billion. Adjusted earnings per share were $6.08, above the $5.89 consensus estimate.

Diluted earnings per share rose to $3.29 from $2.26 a year earlier, while operating margin increased to 29.6% from 13.0%. In its filing, Chord attributed net income primarily to higher realized oil prices and production volumes and the net effects of derivatives.

Compared with the preceding quarter, Chord’s filing said crude oil revenue fell as lower realized prices outweighed higher volumes sold. Natural gas liquids and natural gas revenue increased, helped by higher prices and volumes. The filing also reported a $246.0 million quarterly loss on derivatives.

Free cash flow was $781.4 million, compared with $218.5 million a year earlier. CEO Michael Lou separately reported $442 million of adjusted free cash flow and said most was returned to shareholders.

Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.

What management said on the call

On his first earnings call as CEO, Michael Lou said Chord’s priorities were to maintain capital discipline, improve performance and evaluate investments against shareholder returns. He said the company had returned most of its quarterly adjusted free cash flow to shareholders, using repurchases for capital returns beyond its $1.30-per-share base dividend.

Lou said production from existing wells had exceeded expectations and that Chord was testing chemical treatments across a broad group of wells. He expected the company to decide which treatments to include in its 2027 program by early next year. COO Darrin Henke said Chord was also testing chemicals in the laboratory for use in well completions.

Asked about longer wells, Henke said four-mile wells were performing as expected and drilling costs for them were down about 9% since the beginning of the first quarter. He cautioned that Chord was “probably a year away from really figuring out” the full contribution from the fourth mile. Henke said fracturing efficiency, measured in feet per day, had risen over 20% year to date, helping offset low- to mid-single-digit inflation.

Lou said Chord had seen more favorable pricing because of external factors and lower marketing fees. He expected recent contract changes to deliver $35 million to $55 million in annual savings, incremental to earlier initiatives. He also said Chord increased its capital outlook for more operated and non-operated activity and an additional $20 million of midstream investment.

In response to a question about the production schedule, Henke said December would be the lowest month in the fourth-quarter guide and that the pattern would continue into the first quarter. He said production would then start to climb in the second and third quarters. Lou said Chord planned to provide details of its 2027 program in February.

Guidance

Chord now expects 2026 oil production of approximately 163,000 barrels per day, compared with the 161,000 barrels per day forecast on its previous call. Lou said Chord had raised its oil-volume guidance twice during the year.

Chord also increased its 2026 capital outlook to approximately $1.5 billion. Lou said the updated outlook included more operated and non-operated activity and an additional $20 million of midstream investment.