I'd like to introduce Will Ulrich with Presidio. Will is the Founder and Co-CEO of Presidio, and he's here to give an update on Presidio and what they're doing. With that, I'll turn it over to him.
Appreciate it. Thank you. We've got some exciting news about Presidio to reveal to you all this morning. After much consideration, our drilling budget for 2026 is still zero dollars, which is a little bit of a different value proposition that we offer than, I think, a lot of other companies that you're going to hear from today. I thought it would be helpful to take some time and walk through, with some specificity, how it's been so successful for us as a private company, and how it's been successful in the first six months here as a public business since going public in March. I'll skip through our Q2 update here. You guys can reference that on the website, but just to get into generally who we are. The Presidio vision. Simple, disciplined approach. We generate steady income from American energy.
Right now, our dividend is set at $1.35. It represents about a 12% yield on our current trading price, producing around 23,000 BOE per day, mainly out of the Western Anadarko Basin, though we've recently acquired an asset in the Arkoma and continue to look to expand into other areas. While we don't drill oil and gas wells ourselves, we do benefit from the drilling that other people do in the sense that we go acquire existing producing oil and gas assets, where right now we're seeing a very robust backlog. We really see no reason to start kind of having any sort of mission creep towards getting away from the core tenets that have made us successful over the last 10 years as a private business. As an investment thesis, what is our value proposition? How are we differentiated from the peers?
We'll go through in a little bit here who we think our peers are. But if you want to think about it from what the investment highlights are, we've got this current and growing dividend. So dividend was set at IPO at $1.35. That's based off of the existing asset base that existed at the IPO. We've made two subsequent acquisitions post-IPO, which we think will enable us to increase the dividend going into the third and fourth quarters. At the same time that we have this existing cash flowing asset base that's low decline, that offers attractive optimization opportunities, we also see this massive white space for acquiring new assets.
If you think about what the backdrop is that we're looking at and what types of assets we're seeing, it's mainly driven by a few big factors. There was an enormous amount of private equity investment about 10 years ago. That money has been invested. A lot of those assets that were once development assets are now PDP, and we believe there's nobody more suited than Presidio to operate that PDP on a go-forward basis. We derive more value from operating PDP than we would from going and drilling new wells. The feedstock for us is not locations, but it's existing producing cash flowing wells that we can go optimize, which is not just something that we say that's theoretical. We have a 10-year track record of optimizing existing producing assets.
We optimize them on day one as a part of an acquisition, where we've been successful cutting 30%-50% of the operating expenses out of an asset in the first few months under our operations. We also continuously optimize those assets. So every few years, we're kind of checking to make sure that we're still right sizing our operations based on where that production has declined. Recently, we've also been focused on production enhancements. Our kind of bread and butter had always been kind of going behind people who were focused on drilling and development, weren't focused on the most efficient operations on a day-to-day basis of those assets. Today, we are able to bring additional production on from those existing assets. There's some pretty unique ways, and this is kind of our you think about our additional value drivers.
This is stuff where I don't think you're really seeing any value in the stock, but our AI production and cost enhancement. We set a goal at the beginning of this year to use artificial intelligence to increase production from our assets by 3%-5% without any capital expenditures. Through Q1, we were able to report that we had about a 1.3% gain. Through Q2, we're able to report that we have about a 2.4% gain. So we're not just using AI as kind of lip service, or we're not using it to automate regulatory filings or our back office. We're using it to really take the human element and 10X the human element to make them more efficient, better at their jobs, and we're seeing it through real increases in production.
At this point, that represents about an incremental $5 million of revenue on a run rate basis for us. We've also gone and looked at workovers, well reactivations. When we buy an asset, like we just bought assets from Canyon Creek in the Arkoma, it was kind of a capital starved business. So they weren't investing in workovers the way that we would have, and we were able to very successfully and very quickly bring about half a dozen wells back online very economically, which is an exciting add that we don't underwrite to really in the acquisition economics. Finally, while I say we don't drill, we're not blind to the fact that the assets that we buy come with additional value from undeveloped lands, and we've been successful monetizing that value in various fashions.
Whether it is a partnership with a major private operator who operates a major farm out on our acreage in the Western Anadarko Basin, where we do not contribute any capital. We contribute the acreage, we get a carry, an override, and essentially earn infinite economics on participating in those wells. Or straight up acreage sales and kind of small term assignments, and we have had success doing that.
Then finally, we have also done some large-scale sales where we did a major exit out of the Cherokee for about $85 million-$90 million 2 years ago. We set all this against the backdrop of what is going on in the energy industry broadly today. I think I heard Bison talking about it a little bit. The investment thesis in energy, I think today, is stronger than it has been in a while. I think that volatility brings the potential for interesting outcomes.
When you add up the geopolitical disruption that we have seen, whether it is LNG flows into Europe as a result of the Ukraine war, issues with the Strait of Hormuz, you couple that with growing domestic demand for power from AI and data centers, additional future demand that we have not even begun to be able to see or really quantify, which may come from this kind of American industrial reinvention. At the backdrop of that, you were losing supply in the sense that major basins have kind of peaked or have plateaued. The quality locations, tier 1, are being drilled up. There is a question, I think of at what point will everything become PDP? Our long-term thesis is at some point everything will be PDP, and we will be the managers of it.
When you think about the long life assets, the types of assets that we own, you have got all this commodity optionality on kind of long-term pricing. A typical E&P business is going to be declining 35%-45% in terms of year one production to the extent they stop drilling. That asset base is shrinking relatively rapidly, giving much smaller kind of optionality on that tail. Whereas our business declines 8% a year. The optionality on the tail, which is beyond the period where we hedge aggressively, is all sitting there. Quick history of the business. My Co-CEO, Chris, and I started it in 2017, hired a team in Fort Worth. In 2018 to 2020, we partnered with Morgan Stanley Energy Partners, who put over $500 million to work buying PDP assets, optimizing them.
We spent the subsequent years with a continuous optimization, but also pioneering the oil and gas ABS space. In 2021, we issued the first large scale, kind of multi-tranche, multi-investor, multi-hedge counterparty deal into the market for about $450 million. We have continued to tap that market over the last several years including most recently, we just refinanced our existing bonds, put in place a new $350 million deal, as well as partnered with Goldman and Citizens Bank on a $1 billion ABS warehouse facility. Whereas we go out and look at these acquisitions and how are we going to fund an acquisition backlog like this? We will be able to put in place essentially an ABS bridge that will sit there on Goldman and Citizens' balance sheet until they go get the deal rated and go sell it off to the typical investors that we have.
We've also closed on our first two acquisitions, and the pipeline is robust, and we see more coming. There's no perfect peer to Presidio in the public market, though I am pleased with where we're trading and how we look against the guys who we think we position against. But it's essentially a new asset class. It's a white space. It borrows, I think, from the royalties and then the guys who I call PDP plus development. If you kind of look at the major qualitative factors here, the strategy around Presidio operated cash flow focused production. Royalties, we all know that's an amazing growing new asset class. They have great margins. They have no CapEx. From that perspective, it's very similar to us. The differences are they don't control their operations like we do.
Also, I think their acquisition market is a little bit more heated. I think we're able to generate more returns buying the existing operated stuff than buying the minerals. But you see kind of where they trade 7% dividend yield. We're at 12% today. Reinvestment rate on cash flow is kind of CapEx over cash flow from operations. We're at 7%. Royalty is obviously at 0%. The PDP plus development guys, so think Diversified, TXO, Mach, Crescent, these are guys who blend operating PDP efficiently, but then they also have reinvestment and development. You're going to see, as a result of that development, higher decline rates. They do trade still at a more attractive yield than us. On average, they're reinvesting 53% of their free cash flow back into the ground.
Finally, a peer group which I don't think we're comparable to, but just wanted to juxtapose us against kind of the typical small mid-cap E&P company. They're going to be investing over 100% back into the ground. Very high decline rates first year, and as a result, we've seen how those businesses trade on a multiples basis compared to, I think, the improving trading around the PDP plus development, the royalties. If you look at where we trade on kind of a free cash flow yield, EBITDA, it sits kind of nicely between the royalties and the PDP plus development guys, which is what I think makes sense. I think that as we mature as a public company, continue to perform, we did go public through a De-SPAC, so there's a little bit of noise that's being cleaned up as we go here.
I would anticipate that our yield will start to trade more closely in line with those other two peer groups. So where we are today, we're in the largely western end of Anadarko Basin. You can see in the Arkoma, our Canyon Creek acquisition there. There's plenty to do, both optimizing that asset as well as what we call land and expand, which is going into an area, a new basin, buying kind of a smaller asset. This is an $83 million deal. Then building a large position around it, which we're actively working on. But our production's going to be 57% gas, 27% NGLs, 16% oil. Then you can see the mix of revenue, just because of the relative pricing, is a little bit more weighted towards oil. The acquisition pipeline is the big value driver for our business.
We're not on the treadmill in the sense that we have a declining PDP that needs drilling to replace it, to provide, whether it's flat production or some small production growth. Our feedstock is going and acquiring new wells, and the opportunity to go do that today is incredibly robust. We're excited about it. We've really softened this. We used to put a kind of list, and then people started coming to me and saying, "That's my deal." Now we basically just group it here. But across basins, you can imagine kind of where these are. These are going to be areas that are largely drilled up. These are going to be areas of the MidCon or the Arkoma or maybe the Southern Midland Basin where we've seen a lot of drilling over the years. Then there's not a lot of future prospects.
It's coupled with they're long-dated investments, companies need to get liquidity, and we can provide that. We can provide it to those sellers either through 100% cash deals, where we can use our ABS warehouse facility, coupled with going and raising equity from the market, where we've said that we'll be active issuers of equity in conjunction with increasing our dividends. Or we've been successful in our first two deals where the sellers have actually just taken back enough cash to essentially pay off their debt that they have outstanding, and they've taken back the rest in shares in Presidio. We've got kind of a multifold ability to finance these deals. Canyon Creek, I had mentioned we're currently at the $1.35. After we kind of close and integrate Canyon Creek here, I think the expectation is we'll recommend that we raise the dividend to a $1.50.
The integration is kind of very core to everything that we do. It starts on day 1. It's really a culture of, we call it the TCB culture. It's taking care of business. These guys, we kind of retrain our field guys to actually be small business owners. They've been out pumping wells, pumping their route. A lot of them don't necessarily know what the financial situation looks like for that route. Maybe they know production numbers loosely. We really give them a full kind of business plan for their route. They have incentive associated with performing and exceeding that business plan. Now we've been able to put AI into their hands where 100% of our pumpers have access to our well intelligence agent every day.
That's helping them to kind of route where they go for that day because we do keep a lean staff and pump by exception. Other areas where we integrate is around chemicals, compression. Our systems, compression for us is essentially downsizing. We're removing compression chemicals. We take over the chemical program and don't allow third parties to really just come in and be delivering chemicals to our well sites. Again, on the labor side, it's really both right-sizing it, but then also retraining that group of guys who we keep to think of themselves as small business owners. Some illustrative acquisition economics, how we think about underwriting deals. You've got the market today where assets are, you can think in terms of kind of P/E 10 to P/E 12 from a seller's perspective as to what they think they're getting.
We then layer on what we do at Presidio, which is that 30%, 40%, 50% cost cut integration case, which typically raises our returns anywhere from 300 to 500 basis points. We then put our ABS financing on top of it, which you can see yourself into the low 20s. Then, once we add on the benefits that we really don't underwrite to necessarily, but are those options that we have outstanding, which I don't think get much value, whether it's AI or finding creative ways to monetize undeveloped assets, you'll see our returns up into the 30s. Our track record as a private company over our eight years investing there was a 53% compounded IRR over eight years. I think we're well within our capabilities to hit these numbers.
I'm going to skip here to asset intelligence for a minute. We've decided that in the beginning, back in 2018, we had this mantra where we said every company's a technology company. The idea there was, if you want to bifurcate Uber between is it a rideshare service company or is it a tech company? It's very difficult because the lines are blurred. Domino's Pizza did a really great job of turning themselves into a tech company where you could track where your pizza was on the app, and it drove a lot of sales. I don't think that anybody back then, and I'm not sure anybody today, ever will blur the lines in an oil and gas company and think that it's a tech company.
We have been able to blur those lines over the last 8 years, and we've done that by building out our own systems. We buy systems if we need to. If there's something that doesn't exist off the shelf, we go and build it. We've been doing it in a shoestring, but we have developed some interesting AI that's been effective in generating real revenue for the business. We're accelerating that here this quarter. We hired Jason Hudak, who's a big deal Silicon Valley dude. He's brought in a team of six people, so we're in the process now of expanding everything we're doing across AI, and trying to create the asymmetric upside. Upside in this physical realm of oil and gas is going to be capped.
Whether it's capped by your inventory that you have or your acquisition economics or your commodity price, in technology, it's essentially uncapped. The system that we're building is all about using technology, where it's detecting anomalies on behalf of humans, it's directing humans to where they can best fix those anomalies. It's providing solutions where we've gone from 50% correct proposed solutions to 90% correct proposed solutions over the last few months because we're giving constant feedback, and we have this constant learning loop. We're pointing it towards actually generating real value. This 3% to 5% production uplift is real. We actually grew production in Q2 over Q1 as a result, and in a PDP decline business, that's pretty exciting to us. That's a free option and a fairly low-cost one in terms of how we've been able to build the team out.
We do have agentic orchestration live across 2,300 wells. Any one of our pumpers or people in the office can open up their AI, our internal AI, and kind of see what any well is doing at any given time, how that compares to the max theoretical production that that well should be generating, also how it compares to the budgeted production, and then kind of go through the Rolodex of proposed solutions in terms of how to fix it. The cool thing there is when you have a large workforce like we do, and it is spread over a large regional area, you have some pumpers who are better than other pumpers. Some maybe have more experience in the industry, some might be newer. What this has done is essentially democratized and uploaded kind of the common knowledge base within the company.
It has lifted the guys who are maybe newer into the field to now be able to make better decisions faster, as opposed to having to kind of learn the old-fashioned way through more of an apprenticeship. They now have access to all of the knowledge of the company instantaneously. Again, people at the center. The idea here is not, for us at least, to go and create a bunch of cost savings by cutting people. It is to take everybody's work and 10x the efficiency. It is to take manual work that was distracting people from actually doing value add work and automating that and allowing them to be making decisions, rather than being just little computers themselves. I think I will wrap with that. We have got the breakout room next door, and we would be happy to entertain questions over there.
Thank you, Will.
Thank you, guys.