Our next presenting company is WhiteHawk Minerals. They are a natural gas, mineral, and royalty company. The portfolio is primarily in the Marcellus and Haynesville shales. Over 3 million gross acres, more than 10,000 producing wells. Here to share their story is their President and Chief Executive Officer, Daniel Herz. Please welcome Daniel.
Good morning, everyone. Can you hear me?
Great. It is nice to see you all. I have some very good news. You are in the right room. I think you are going to hear a unique story about WhiteHawk Minerals and a unique investment opportunity. Truly one that didn't exist five years ago, and I think the only one that exists today. WhiteHawk Minerals, we took public in June. Today, it is just approaching $1 billion in enterprise value, $750 million market cap. I would say, though, I haven't been here in 15 years, that is, to EnerCom, but it is great to be back. The last time I was here, we had just sold our E&P business, Atlas Energy, to Chevron for about $4.5 billion, generating a 900%-plus return for our investors from our IPO in 2004. We had a pipeline business as well. We were the largest pipeline and processing business in the Permian business.
We sold that in 2014 to Targa for about $7.5 billion, generating a 400% return for our limited partners and another $2 billion for the publicly traded general partner. I share that it is good to be back. I also share that you are in the right place because I think we've had a unique ability to find special opportunities, and I think that is exactly what we have at WhiteHawk Minerals. Let's dig in. The forward-looking language I'll trust you will study at your leisure. The map. The most important thing I've learned at an energy conference is to show the map of your assets. You'll see our assets. We cover, as was mentioned, 3.6 million gross unit acres.
Our thesis when Jeff Slotterback, who is here with me, our Chief Financial Officer, when he and I started WhiteHawk five years ago, was to build the premier natural gas, mineral, and royalty business. Before this, I was CEO of Falcon Minerals, which became Sitio Royalties and was bought by Viper last year for about $4 billion. I noticed running Falcon Minerals, there were no pure-play, core of the core natural gas, mineral, and royalty businesses, number one. Number two, that the mineral and royalty space is by far the best way to be involved in energy. I say that as someone who has been in E&P, who has been in midstream, who sat on the board of an offshore drilling company. I have been across the space.
The reason the mineral and royalty space, in my opinion, is by far the best way to be involved in energy is we have zero capital expenditures and minimal operating expenses. So when prices go up, we do not have the inflationary pressures from rising steel, sand, water, labor. More importantly, as a downside person as I am, we have no CapEx and minimal operating expenses. So Falcon, which was oil, during COVID, was generating cash flow during the second quarter of 2020 and still paying our shareholders a dividend, and that showed the strength of the model. So we saw there were no publicly traded pure-play natural gas royalty businesses, and we thought we could build the premier business. We also knew that private equity firms had amalgamated over the last decade $3 billion-$5 billion in the core of the Marcellus and the core of the Haynesville.
I should mention Atlas Energy pioneered the Marcellus Shale, drilling more wells than any company between 2005 and 2010. So it was an area we were deeply familiar with. The Haynesville we knew very well. Our Head of Corporate Development and Strategy oversaw the Haynesville for Blackstone, the private equity firm. So we had a deep history there as well. So we knew there were a lot of assets. We knew there were few buyers, and so we set out to build WhiteHawk Minerals. In February of 2022, we made our first acquisition. Under the terms of that deal, we had an option from a private equity firm to buy almost half a million acres in the Marcellus Shale in the core. That option was eight months where we could buy each month based on how much we were able to raise.
In 2022, people hated energy, and they certainly hated natural gas. What we did not know was two weeks later, Russia would invade Ukraine, which is exactly what happened. Gas prices tripled, and we immediately bought the entire asset, and then Jeff brilliantly hedged out at $7 gas. That was great. We waited a year, and as gas does, it came back down. Then another private equity firm came to us, this time in the Haynesville Shale. They wanted us to buy a 375,000-acre position. We said, "Sure, but we need an option agreement." They too gave us an option agreement for six months, and we took full advantage of that. I say that really to illustrate the unbelievable opportunity that existed with the lack of competition that we had, where multiple private equity firms gave us options.
This was like what I had heard about in the 1980s or the 1970s when there would be seller financing and you signed a deal and then you got to work. That's how we started to build WhiteHawk, and we've done a series of large transactions, and we've built this position, which I think is unmatched, and certainly unmatched and unmatchable today. 13% of U.S. natural gas production pays WhiteHawk Minerals royalty. We're a material part of U.S. natural gas production, and I'll get specifically into our operators, which are the largest publicly traded operators of natural gas in the U.S. If you like the Marcellus and you like the Haynesville, you like the largest publicly traded natural gas producers, we are, I believe, the best way to own them.
We'll talk a little bit about the trajectory for natural gas, given the massive amount of power demand that's coming, as well as LNG exports. We recently announced, as a public company, our second quarter, which was our first public release in conjunction with our earnings. I think we surprised everyone to the positive, with nine acquisitions in the two months from going public, totaling $111.8 million, covering 700,000 gross unit acres in the core of the Marcellus and in the core of the Haynesville. Those assets we expect to add $17 million of cash flow in 2027, and about $18.5 million in 2028. If you do the math, that's about 6.7 times cash flow multiple in 2027, and about a six times cash flow multiple in 2028. Our analysis actually kind of does the opposite.
It does a complete deep dive on every single well, all of the undeveloped properties. I think we frankly have more information on the Marcellus, the Haynesville, the Utica, than any company in the U.S. We've not only engineered every producing well on our property, we've engineered every undeveloped location on our properties, plus adjacent properties, and then we rank them economically within the inventory of our operators to understand development cadence across our position. Our quarter was fantastic. We generated over $20 million of EBITDA, $0.63 of free cash flow. We announced an annualized dividend of $0.50 per quarter. That's $2 per year. That's 79% payout ratio. Our expectation is to grow cash flow per share. This is how we've built and created value across our companies over the last 20+ years.
We do that through buying world-class assets at what we think are attractive prices, underlying top operators and top plays. We're really just getting started here. We've done a lot to get to where we are, but the opportunity set in front of us is massive. To that point, we have a two-pronged acquisition strategy: strategic and ground game. On the strategic side, I mentioned this, private equity firms have amalgamated $3 billion-$5 billion of core assets in the Marcellus and the Haynesville. They need to exit those assets. There is not a large-scale buyer of our nature out there, so we have minimal competition. That affords us a super attractive opportunity. We also have done $30 billion of energy transactions over the last 20 years, so we're pretty good at executing, in my opinion.
I say that with this much confidence, not because of me, but really because we have an amazing team. The second prong of the strategy is our ground game. This is where we are buying from individual landowners. We own a 0.51% royalty interest across our 3.6 million acres. The average royalty is 17%. That means there is 33 times our assets on our position. If we are worth $1 billion, that is over $30 billion of ground game for us to pursue. We did one strategic transaction in the first two months of being public and eight ground game transactions totaling the $111.8 million. The reason, in part, we are so emphatic about our engineering and our analysis is to give us advantages on both the strategic and the ground game side.
We really have tip-of-the-spear information to understand where operators are most likely to develop, and then we utilize that information to be ahead of their drill bit. In fact, we have so much information covering 13% of U.S. natural gas. The largest publicly traded companies have come to us to partner to be able to acquire alongside them and really for them ahead of their drill bit, knowing where they are going, giving us a further advantage. Again, very pleased. We have run public companies for 20+ years. Execution. Our job is to do that every single day, and coming out of the gate in the first two months, we feel satisfied that we are on the right path. A little bit more detail on the investment highlights.
I would point out here, again, I said it out of the gate, the mineral business, for those, and hopefully a number of you are involved. If you are not, I highly recommend looking much further into it, high margin, capital light, or in our case, capital nonexistent. It is a great business model, and that is really predicated, though, on owning the absolute best assets. I guess it would be okay if you own mediocre assets and people just pay you money like they do us. We get lots of royalty checks, that is great, but what is even better is owning the absolute best of the best. I think it is important, probably the number one number is 13% of U.S. natural gas paying us royalties. The map in the middle that you are looking at is southwestern Pennsylvania. That is the absolute core of the Marcellus Shale.
The red, of course, is the most amount of recovery over the last recent period. The yellow outlines are blocked up position. This is not one of those squiggly, loose graphs. This is literally our acreage position on a per-unit basis. The bottom left chart, second most important number, 49% of EQT's production pays us royalties, 33% of Antero, 49% of Range Resources, and 57% of CNX. Those are your largest producers in the Marcellus Shale. We are a material part of not just their existing production, but their future development activity. Why is that important? Because we have a significant relevance to all of their activity. If you look at the pie chart on the right-hand side, they are material to us. Now we are material to them, but they are 95% of our production in the Marcellus Shale.
If you want to own EQT, if you want to own Antero, I believe, we are the best way to own them with no capital expenditures and minimal operating expenses. It's a similar story in the Haynesville, and I should say 55% of our assets are Marcellus, 25% are Haynesville, and then we have 10% in the MidCon and other. MidCon being Oklahoma. The core of the Haynesville massive position, 57% of EQT. I hope everyone knows EQT. They're the largest natural gas producer in the U.S. 57% of their Haynesville production pays us royalties. I suspect there's probably three people in here who know Adamas. Adamas is the old Aethon. That's Mitsubishi who just bought it to accelerate development for LNG export. Phenomenal situation for us. We're 47% of Adamas and then Comstock. People ask us about the Western Haynesville. We have no exposure.
I actually think we're going to end up finding more of Comstock's production back on our acreage, but we'll see. Tokyo Gas, obviously very good. They're a significant part of our production, those four operators in the Haynesville. I'm sure, hopefully, you've seen this chart before. This just shows we generate a substantial percentage of margin because we have minimal operating expenses, so that's very good relative to gas prices. As I mentioned at Falcon, oil was $15 a barrel. We generated cash flow at low prices. I also mentioned Jeff does a good job at hedging. I've said this, I'm worried I'm going to jinx us. You can see the chart on the right here. We've been paying dividends as a private company for years.
I think for the last 60 months on the hedging side, we've had 58 months out of the 60 of hedge gains. Now how do we do that? We're simply swapping, but we're swapping at a relatively high level, three years out, 90%, 80%, 50% over a rolling three-year period. That's done very well for us, and we're happy because if prices go up, great. We're still happy with our hedges. Our operators will accelerate their development, and that's very good for us, and we'll have more production that'll be unhedged. It wouldn't be an energy conference if we didn't talk about data centers. I heard the one before us, they didn't mention data centers, so maybe you haven't heard them today.
In any case, we are very blessed in Appalachia with massive amounts of gas, and we're extremely excited about the amount of in-basin power generation that's coming to Pennsylvania, Ohio, Virginia, et cetera. In fact, there is 7 billion cubic feet a day of natural gas-fired power generation that is under construction, effectively all under construction, 7 Bcf a day. EQT on their earnings call a few weeks ago, mentioned the potential for as much as 20 Bcf a day. Just to contextualize that, Appalachia produces about 35 Bcf a day. So we're looking at 20% growth in Appalachian production over the next five or so years. That augurs very well for WhiteHawk Minerals and our operators developing more. EQT looks at and talks about 5% compounded annual growth in their production over the next five or so years' range. Even more Antero talking about production growth.
Being connected to the largest operators who are hyper-focused on connecting their gas to power generation is very good for us. It's exciting for Appalachia, which has been pipeline constrained for quite some time. In the Haynesville Shale, we know there's been an increase in exports, in export capacity, and there's another step function changing happening in 2028 and 2029. 14 Bcf a day of growth in LNG exports. That's pretty significant. If you take 14 Bcf a day of LNG growth coupled with 7 Bcf a day of growth in the Marcellus data centers, plus another 3 Bcf of additional power generation, we get to a significant amount of natural gas growth. In total, I see it as 27 billion cubic feet a day of natural gas growth from demand growth from LNG and from power generation. Okay, but the question is, what does that really mean?
I'm the opposite of a permabull in saying gas is going up. I have no idea. I love to study as a person with an economics background. However, we have a business and we want a business where if prices go up, we do well, and if prices go down, we do well. However, I'll indulge myself for a couple of minutes in saying what it means if we have 27 billion cubic feet a day, which arguably is quite conservative, of growth from LNG and power generation and what that means for prices. Well, if we have this 27 Bcf a day of growth, which I think is conservative, where is that gas coming from? Well, let's say 7 Bcf a day is coming from Appalachia in basin, which by the way, should drive compression of basis differential. Very good for pricing for us in Appalachia.
You'll have 7 Bcf from Appalachia. I think you're going to have 10 Bcf a day of pipeline takeaway out of the Permian, which we need. Obviously, Waha prices have been under pressure, to say the least, over the last several years, especially the last year. So we'll have 10 Bcf a day there. That puts us at 17 Bcf a day. This chart is as of, I believe, year-end. Yeah, 2025. So we already have 4 Bcf a day on top of what is at the 107, give or take. So if you put the 17, you're at 21. You're roughly 6 Bcf. Maybe it's 4-6 Bcf a day short. So the question is, what is the marginal cost, and where are we going to get four to Bcf a day as this modest demand growth comes?
I think the Haynesville absolutely is your next most economic play. The question is, what price is going to move Haynesville production from 16 Bcf a day to 20 Bcf a day? Is there inventory to meet that demand or core inventory, of which we have a pretty good glimpse into it at WhiteHawk. It seems clear, not just from me and my economics and our studying of marketing, that $4 sustained gas is required to drive 20 Bcf a day. Actually, the history over the last five or six years show what happens when gas prices come down and where production in the Haynesville goes. So I don't even think we're going to reach 20 Bcf a day in the Haynesville.
I think you'll probably maybe get to 18 Bcf a day. Then I think Oklahoma, I think South Texas and other areas where you would need certainly over $4, if not $4.50 or higher. Ultimately, I'll share with you all. I'm sure no one else will hear this. I'm joking. I'm sure there's some analysts who will write it. I think actually what's going to happen is we're going to see some real volatility in gas in the 2028 through 2031 period, where prices will spike up. Then, of course, we'll see lots of production come online. Then they'll come back down. Then prices will go up. You'll see LNG flows globally change, even electric generation switching from gas back to coal. There's a lot of dynamics at play.
What we have at WhiteHawk, I think is a world-class business paying a $2 dividend, generating roughly $2.60, $2.70 of cash available for distribution. We have a number of ways to win. Our ways to win are executing on our acquisition strategy, driving free cash flow per share and net asset value per share. Our operators accelerating their development cadence, drilling more natural gas prices rising. I really think it's as good of an investment opportunity as it gets. This is our breakdown by various areas. I mentioned this earlier. This is our management team. Jeff and I have worked together, what, Jeff, 19 years? I've been saying that for like three years. I feel like we're at 20 by now. We've been together. Jeff was chief accounting officer of the public companies and then CFO. Matt, we've been together with Matt for eight years.
He was at Blackstone and Jefferies in Houston. Mike Downs was COO of Falcon Minerals. We have an amazing team underneath this on the engineering, on the land, of which I'm very grateful. With that, I'll look for any questions at the breakout session. I hope this was worth your time. It's good to see you all.