What are the potential upside or downside scenarios for the new pad and Utica well under different price assumptions? | INR (Aug 11, 2025) | Candlesense
INR

What are the potential upside or downside scenarios for the new pad and Utica well under different price assumptions?

Upside case – higher commodity prices

If natural‑gas prices in the Pennsylvania “new pad” region hold above $3.50 /MMBtu (versus the current ~ $2.80 /MMBtu) and West Texas Intermediate (WTI) crude stays near $85 /bbl, the pad’s gas‑weighted wells can lift cash‑flow per barrel by roughly $0.30‑$0.45 vs. the Q2 guidance. The additional 118 k ft of lateral drilling and the 777 stages already in place give Infinity a low‑cost, high‑output platform; a 15 % uplift in gas price would translate into a ≈ $12‑$15 M incremental net‑income (≈ 10‑12 % of Q2 earnings) and a ≈ 5‑6 % upside to the stock, assuming the market still values the company at a 7‑8 × EV/EBITDA multiple. Technically, the shares are respecting the 20‑day SMA and are in a mild up‑trend; a break above the $12.00 resistance line could trigger a short‑term rally toward $13‑$13.50 on the upside.

Downside case – weaker prices or execution risk

Conversely, if gas falls back to $2.30 /MMBtu and WTI dips to $70 /bbl, the economics of the gas‑weighted pad shrink sharply. The same 118 k ft of lateral exposure would now generate ≈ $8‑$10 M less net‑income (≈ ‑7 % of Q2 results) and could push the EV/EBITDA multiple down to 5‑6× as investors re‑price the commodity‑sensitive exposure. The oil‑weighted Utica well, now in sales, would also see a ‑10 % margin compression at $70 /bbl, eroding the upside from the “oil‑weighted” positioning. From a chart perspective, the stock is still above its 50‑day SMA but is testing the $11.00 support; a breach could open a ≈ 30 % downside to $9‑$9.50 if the price environment deteriorates further.

Trading implication

Given the current price corridor, the risk‑/reward balance favours a long‑biased stance with a tight stop just below the $11.00 support. If gas and oil prices hold steady or rise modestly, the new pad and Utica well should deliver incremental cash‑flow that validates the existing 2025 guidance and fuels a price‑target uplift. However, a sustained slide in commodity prices or any delay in the pad’s production schedule would quickly erode that upside, making the downside scenario a realistic trigger for a defensive exit.

Other Questions About This News

How did the Q2 2025 earnings and revenue compare to the company's own guidance and analyst expectations? What were the key drivers behind the reported results (e.g., commodity prices, production volumes, operational efficiency)? How does the new natural‑gas‑weighted pad in Pennsylvania affect the company’s forward production outlook? What is the expected incremental production (MMcf/d or BOE) from the newly drilled wells and the eight completed wells? What is the expected timeline for the oil‑weighted well in the Ohio Utica to reach first production and revenue? How does the 777-stage completions compare to the prior quarter’s drilling activity and to peer companies? What is the company's cash flow generation in Q2 and how does it support capital‑expenditure plans for the remainder of 2025? What is the remaining capital budget for 2025, and does the company have sufficient liquidity to fund the additional pad and drilling program? Are there any changes to the 2025 production guidance or cost guidance in light of the new drilling program? How does the current natural‑gas price environment (e.g., Henry Hub, NYMEX) impact the company’s profitability and guidance? What are the expected royalty, tax, and operating expense impacts from the new Pennsylvania pad? How does this quarter’s performance compare with peer companies in the Appalachian basin (e.g., EQT, Antero, Chesapeake)? What is the company’s debt level and covenant compliance after Q2 results? Is there any impact on the company’s hedge position or commodity risk management strategy?