Mach eyes Oswego rig addition if oil prices stay high
Mach Natural Resources LP, Oklahoma City, will shift a rig from working on natural gas production to oil production in the second half of this year if current prices hold, chief executive officer Tom Ward told investors last week.
The asset allocation shift, Ward said on a Mar. 13 conference call to discuss Mach’s fourth-quarter results, needs crude to stay above $70/bbl. At those levels, the operator can commit to adding to its work in the Oswego formation of its holdings in the Mid-Continent, the basin that accounts for about 55% of the company’s production. Since 2021, Ward told analysts, Mach Natural Resources has completed more than 250 Oswego locations and has consistently booked returns of more than 50%.
A second Oswego rig would come at the expense of investment in the Deep Anadarko, one of two plays (along with the San Juan in northern New Mexico and southern Colorado) that the operator prioritized last year as it sought to produce more dry gas. Ward said Mach would expect to spend about $25 million on the second Oswego rig and could layer in other investments if the commodity markets make sense for it to do so.
“I would love for prices to stay where they are and give us a little more operating cash flow and maybe bring on another oil rig to drill some of the Red Fork locations that we had or even the Southern Oklahoma assets that we’ve not yet been able to get to,” Ward said. “It all depends of staying within our 50% of operating cash flow. […] If our cash flow can move up a bit, we would put […] maybe a second rig in […] to be bringing on more oil if it’s staying in the 70s.”
And changes to the Deep Anadarko or Oswego spending plans won’t affect Mach’s 2026 total production and capital spending targets. Building on their $1.3 billion acquisition last year of Sabinal Energy and IKAV Energy assets, Ward and his team are still planning to hold production level around the fourth quarter’s 154,000 boe/d level (22,000-24,000 b/d of oil) and for capex to come in between $315 million and $360 million.
In the fourth quarter, Mach produced $73.1 million in net income on revenues of $388 million. For the full year, those numbers were $143 million (down from 2024’s $189 million) and nearly $1.2 billion, respectively.
Shares of Mach (Ticker: MNR) rose 2% on Mar. 13 and were down slightly to $13.67 in midday trading on Mar. 16. Shares are basically flat over the past 6 months and the company’s market capitalization is now about $2.3 billion.
About the Author
Geert De Lombaerde
Senior Editor
A native of Belgium, Geert De Lombaerde has more than two decades of business journalism experience and writes about markets and economic trends for Endeavor Business Media publications Healthcare Innovation, IndustryWeek, FleetOwner, Oil & Gas Journal and T&D World. With a degree in journalism from the University of Missouri, he began his reporting career at the Business Courier in Cincinnati and later was managing editor and editor of the Nashville Business Journal. Most recently, he oversaw the online and print products of the Nashville Post and reported primarily on Middle Tennessee’s finance sector as well as many of its publicly traded companies.