Chord Energy Corp (CHRD) - Q1 2026 10-Q Summary
Business Context and Reporting Period
This report covers the quarterly period ended March 31, 2026. Chord Energy Corporation is an independent exploration and production (E&P) company focused on the Williston Basin, with limited non-operated interests in the Marcellus Shale. The company operates as a large accelerated filer. As of May 4, 2026, there were 56,299,183 shares of common stock outstanding.
Key Financial Metrics
| Metric | Q1 2026 | Q1 2025 |
|---|---|---|
| Total Revenues | $1,665.6 million | $1,215.0 million |
| Net Income | $108.6 million | $219.8 million |
| Diluted EPS | $1.90 | $3.66 |
| Operating Cash Flow | $507.5 million | $656.9 million |
| Capital Expenditures | $344.9 million (excl. interest) | $308.9 million |
| Long-Term Debt | $1,480.5 million | $1,479.6 million |
| Cash & Equivalents | $225.8 million | $35.8 million |
| Liquidity (Total) | $2,193.2 million | N/A |
Production & Pricing: Average daily production was 275,615 Boepd (57% oil). Average realized crude oil price was $69.57 per barrel. Lease operating expenses (LOE) were $9.87 per Boe.
Material Changes vs. Prior Period
- Net Income Decline: Net income decreased 51% year-over-year to $108.6 million. This was primarily driven by a $241.5 million net loss on derivative instruments due to an upward shift in the crude oil futures curve, which created significant unrealized losses on hedging contracts.
- Revenue Growth: Total revenues increased 37% to $1.67 billion, driven by a 403% increase in purchased oil and gas sales ($515.0 million vs. $111.6 million) and higher crude oil production volumes.
- Derivative Impact: While spot prices rose significantly (WTI up >50% in Q1 2026 due to geopolitical tensions), the company's hedging program resulted in a substantial mark-to-market loss, contrasting with a $20.3 million derivative loss in Q1 2025.
- Tax Benefit: The effective tax rate was (15.2)% due to a $41.8 million out-of-period tax benefit recognized from correcting a prior period error regarding goodwill impairment and deferred taxes.
Guidance, Outlook, and Risks
- Capital Allocation: The company returned $144.9 million to shareholders in Q1 2026 via dividends ($74.2 million) and share repurchases ($70.7 million). A new dividend of $1.30 per share was declared for payment in June 2026. $881.4 million remains available under the $1.0 billion share repurchase program.
- Liquidity: The company maintains strong liquidity with $225.8 million in cash and $1,967.4 million in unused borrowing capacity under its $2.75 billion credit facility. The borrowing base was reaffirmed in May 2026.
- Market Risks: Management highlights significant volatility in energy markets driven by geopolitical conflicts in the Middle East, OPEC+ policies, and potential trade tariffs. These factors create uncertainty in commodity price forecasting.
- Operational Strategy: The company continues to focus on its "4-mile well program" and capital discipline. Production volumes remain stable, with crude oil averaging 158,027 Bopd.
Investor Verification Checklist
- Derivative Exposure: Verify the extent of unrealized losses on commodity hedges ($223.0 million unrealized loss in Q1) and the company's hedging strategy relative to rising spot prices.
- Tax Adjustment: Confirm the details of the $41.8 million tax benefit and ensure it does not indicate broader accounting control issues, despite management stating the error was immaterial.
- Debt Structure: Review the interest rate exposure on the $1.5 billion in senior unsecured notes (6.0% and 6.75%) versus the variable rate credit facility.
- Working Capital: Note the $165.7 million decrease in operating cash flow due to working capital changes, specifically a $264.8 million increase in accounts receivable.
- Share Repurchases: Monitor the pace of buybacks under the remaining $881.4 million authorization, particularly given the stock price appreciation to ~$126.53 average in Q1.