Chord Energy (NASDAQ: CHRD) used its second quarter 2026 earnings call to reinforce a strategy that has quietly become one of the company’s biggest competitive advantages. Rather than pursuing aggressive production growth, management emphasized a “maintenance-plus” model that focuses on maximizing free cash flow through continuous optimization of existing assets.
At the same time, Chord’s 2026 drilling program continues to generate a healthy inventory of new well permits, demonstrating that the company is selectively adding new development while investing heavily in improving production from its existing well base.
What is Chord’s Maintenance-Plus Strategy?
CEO Danny Brown explained that Chord has operated a maintenance-plus strategy for more than five years.
According to Brown, the strategy has created:
- A large, resilient production base with low decline rates.
- An efficient drilling and completions program.
- Attractive supply costs.
- Sustainable free cash flow generation across multiple commodity price cycles.
Rather than chasing rapid production growth, the company is investing in projects that increase long-term economic returns.
“Chord has operated a maintenance plus program for over five years. This approach has created a large, resilient production base with low declines supported by an efficient drilling and completions program that delivers volumes and an attractive supply cost. This approach has supported sustainable free cash flow generation and robust shareholder returns.”
Leaning Into the “Plus”
Management said the company is now leaning further into the “plus” portion of the strategy.
Those investments include:
- Accelerated workovers
- Chemical treatment programs
- AI optimization of artificial lift
- Faster cycle times
- Longer laterals
- Surface facility debottlenecking
- Production optimization initiatives
These relatively small investments helped Chord increase its 2026 production guidance by approximately 2,000 barrels of oil per day while maintaining capital discipline.
Management acknowledged that these initiatives increase lease operating expenses in the short term but emphasized they produce attractive long-term returns.
“If investing a small amount of incremental LOE in short-cycle opportunities today has a high probability of generating strong risk-adjusted cash flow in the future, that’s exactly the type of investment we want to make.”
New Well Permits Continue to Support Future Development
While Chord is focused on maximizing existing production, its 2026 permit activity shows the company continues to build future drilling inventory.
Chord Energy 2026 New Well Permits by County
| County | Well Permits |
|---|---|
| Williams | 26 |
| McKenzie | 19 |
| Mountrail | 19 |
| Dunn | 15 |
| Burke | 6 |
| Roosevelt | 5 |
| Richland | 4 |
| Jones | 3 |
| Haskell | 3 |
| Tyler | 2 |
| Hamilton | 1 |
| Milam | 1 |
| Callahan | 1 |
| Fisher | 1 |
| Eastland | 1 |
| Kearny | 1 |
| Shackelford | 1 |
| Total | 109 |
More than 72% of Chord’s 2026 permits are concentrated in the four core Bakken counties of Williams, McKenzie, Mountrail, and Dunn, highlighting the company’s continued focus on its highest-quality acreage.
Activity by Field
Chord’s permitting activity is distributed across numerous Bakken fields, giving the company flexibility in future development.
Chord Energy 2026 New Well Permits by Field
| Field | Well Permits |
|---|---|
| Foreman Butte | 12 |
| Cottonwood | 11 |
| Wildcat Primary Field | 9 |
| Lake Trenton | 9 |
| Heart Butte | 9 |
| Enget Lake | 7 |
| Little Knife | 6 |
| Tyrone | 5 |
| Northeast Elm Coulee Wildcat | 5 |
| Lone Tree Lake | 5 |
| Gros Ventre | 4 |
| Ellisville | 4 |
| Elk | 4 |
| Blank / Not Assigned | 4 |
| Wildcat | 3 |
| Bonetrail | 3 |
| Alger | 3 |
| Baker | 2 |
| Spotted Horn | 1 |
| Drakes Branch | 1 |
| Theuvenins Creek (Yegua 1) | 1 |
| Coulee Wildcat | 1 |
| Total | 109 |
The diversity of fields aligns well with management’s comments about continuously optimizing its production base while expanding opportunities through longer laterals and operational efficiencies.
Most Permits Are Still Awaiting Activity
The permit dataset also illustrates where Chord sits in its development cycle.
Status Records Total Well Permits 109 With Activity Date 28 Without Activity Date 81
Approximately 74% of permits do not yet have an activity date recorded, suggesting a significant portion of the company’s drilling inventory has not yet progressed into active drilling or completion operations. This provides visibility into future operational activity as market conditions and capital allocation priorities evolve.
Disciplined Growth Remains the Theme
The maintenance-plus strategy is fundamentally different from the growth-at-all-costs model that characterized much of the shale industry a decade ago.
Instead of maximizing production volumes, Chord is focused on maximizing free cash flow per share. Management highlighted that free cash flow per share has grown roughly 30% since 2024 while maintaining one of the strongest balance sheets in the sector. As leverage declined below its target threshold, the company announced plans to increase shareholder returns to at least 75% of adjusted free cash flow beginning in the third quarter of 2026.
Bottom Line
Chord Energy’s maintenance-plus strategy combines disciplined capital allocation with continuous operational improvement. Rather than relying solely on new drilling, the company is investing in AI, production optimization, workovers, chemical treatments, and longer laterals to extract more value from existing assets.
Its 109 new well permits, concentrated primarily in the Bakken’s core counties, demonstrate that Chord continues to replenish its future drilling inventory while maintaining a disciplined development pace. Together, the earnings call and permit activity illustrate a company focused on sustainable returns, operational excellence, and long-term shareholder value rather than simply increasing production volumes.
Author: phinds