DALLAS, May 9, 2024 (BUSINESS WIRE) --
Granite Ridge Resources Inc. ("Granite Ridge" or the "Company") (NYSE: GRNT) today reported financial and operating results for the first quarter of 2024.
First Quarter 2024 Highlights
Grew production 3% to 23,842 barrels of oil equivalent ("Boe") per day (45% oil), from 23,167 Boe per day for the first quarter of 2023.
Reported net income of $16.2 million, or $0.12 per diluted share, versus $36.9 million, or $0.28 per diluted share, for the prior year period. First quarter Adjusted Net Income (non-GAAP) totaled $15.3 million, or $0.12 adjusted earnings per diluted share (non-GAAP).
Generated $64.5 million of Adjusted EBITDAX (non-GAAP).
Placed 5.07 net wells online.
Declared dividend of $0.11 per share of common stock.
Ended the first quarter of 2024 with liquidity of $123.0 million.
See "Supplemental Non-GAAP Financial Measures" below for descriptions of the above non-GAAP measures as well as a reconciliation of these measures to the associated GAAP (as defined herein) measures.
Luke Brandenberg, President and CEO of Granite Ridge, commented, "Our first quarter 2024 performance is how we hope to start every year as we beat internal projections across the board, captured multiple acquisitions, and saw great execution by our Strategic Partners. We look forward to continuing to demonstrate that what we are building at Granite Ridge is different, repeatable, and resilient as we both grow the business and return capital to shareholders while maintaining conservative leverage."
First Quarter 2024 Summary
First quarter 2024 oil production volumes totaled 10,650 barrels ("Bbls") per day, a 0.7% decrease from the first quarter of 2023. Natural gas production for the first quarter of 2024 totaled 79,151 thousand cubic feet of natural gas ("Mcf") per day, a 6% increase from the first quarter of 2023. As a result, the Company's total production for the first quarter of 2024 grew 3% from the first quarter of the prior year to 23,842 Boe per day.
Net income for the first quarter of 2024 was $16.2 million, or $0.12 per diluted share. Excluding non-cash and special items, the first quarter 2024 Adjusted Net Income (non-GAAP) was $15.3 million, or $0.12 per diluted share. The Company's average realized price for oil and natural gas for the first quarter of 2024, excluding the effect of commodity derivatives, was $78.17 per Bbl and $1.84 per Mcf, respectively.
Adjusted EBITDAX (non-GAAP) for the first quarter of 2024 totaled $64.5 million, compared to $70.7 million for the first quarter of 2023. First quarter 2024 cash flow from operating activities was $68.7 million, including $7.1 million in working capital changes. Operating Cash Flow Before Working Capital Changes (non-GAAP) was $61.6 million. Costs incurred for development activities totaled $62.6 million for the first quarter of 2024.
During the quarter, the Company closed four short-cycle oil and gas acquisitions in the Permian Basin with aggregate inventory of 2.5 net locations, acquisition cost of $6.8 million (inclusive of expected future carry), and estimated future development capital expenditures of $23 million. These acquisitions, and the related development capital and production, were included in the Company's original 2024 guidance.
Traditional Non-Op
Midland and Delaware Basins - three transactions with aggregate inventory of 1.1 net locations, acquisition cost of $3.6 million (inclusive of expected future carry), and estimated future development capital expenditures of $13 million
Controlled Capital through Strategic Partnerships
Delaware Basin - one transaction with inventory of 1.4 net locations, acquisition cost of $3.2 million (inclusive of expected future carry), and estimated future development capital expenditures of $10 million
Operational Activity
The table below provides a summary of gross and net wells completed and put on production for the first quarter 2024:
Three Months Ended March 31, 2024
------------------------------------------
Gross Net
----------- -----------
Permian 17 1.52
Eagle Ford 8 2.90
Bakken 18 0.29
Haynesville 6 0.34
DJ 9 0.02
----------- -----------
On March 31, 2024, the Company had 264 gross (14.3 net) wells in process.
Costs Incurred
The table below provides the costs incurred for oil and natural gas producing activities for the periods indicated:
Three Months Ended March 31,
--------------------------------------------------------------------------------
(in thousands) 2024 2023
------------------------------ ------------------------------
Property acquisition costs:
$ 1,147 $ 17,989
Proved
1,481 9,630
Unproved
Development costs 62,639 98,606
-------------------- ---------- -------------------- ----------
Commodity Derivatives Update
The Company's commodity derivatives strategy is intended to manage its exposure to commodity price fluctuations. Please see the table under "Derivatives Information" below for detailed information about Granite Ridge's current derivatives positions.
2024 Guidance
The following table summarizes the Company's operational and financial guidance for 2024, which is unchanged.
Annual production (Boe per day) 23,250 - 25,250
Oil as a % of sales volumes 47 %
Acquisitions ($ in millions) $35 - $35
Development capital expenditures ($ in millions) $230 - $250
Total capital expenditures ($ in millions) $265 - $285
Net wells placed on production 22 - 24
Lease operating expenses (per Boe) $6.50 - $7.50
Production and ad valorem taxes (as a % of total sales) 7% - 8%
Conference Call
Granite Ridge will host a conference call on May 10, 2024, at 10:00 AM Central Time (11:00 AM Eastern Time) to discuss its first quarter 2024 results. A brief Q&A session for security analysts will immediately follow the discussion. The telephone number and passcode to access the conference call are provided below:
Dial-in: (888) 660-6093
International dial-in: (929) 203-0844
Participant Passcode: 4127559
To access the live webcast visit Granite Ridge's website at www.graniteridge.com. Alternatively, an audio replay will be available through May 26, 2024. To access the audio replay dial (800) 770-2030 and enter confirmation code 4127559.
Upcoming Investor Events
Granite Ridge management will also be participating in the following upcoming investor events:
TPH&Co. Hotter 'N Hell Energy Conference (Houston, TX) - May 15, 2024.
Louisiana Energy Conference (New Orleans, LA) - May 28, 2024.
RBC Capital Markets Global Energy, Power & Infrastructure Conference (New York, NY) - June 4, 2024.
Sidoti Small-Cap Virtual Conference (Virtual) - June 12-13, 2024.
Enercom (Denver, CO) - August 19-21, 2024.
Midwest IDEAS Conference (Chicago, IL) - August 28 - 29, 2024.
Pickering Energy Partners Energy Conference (Austin, TX) - September 16, 2024.
Minerals & Non-Op Assembly (Houston, TX) - October 15, 2024.
Stephens Annual Investment Conference (Nashville, TN) - November 11, 2024.
Any investor presentations to be used for such events will be posted prior to the respective event on Granite Ridge's website. Information on Granite Ridge's website does not constitute a portion of, and is not incorporated by reference into this press release.
About Granite Ridge
Granite Ridge is a scaled, non-operated oil and gas exploration and production company. We own a portfolio of wells and top-tier acreage across the Permian and four other prolific unconventional basins across the United States. Rather than drill wells ourselves, we increase asset diversity and decrease overhead by investing in a smaller piece of a larger number of high-graded wells drilled by proven public and private operators. We create value by generating sustainable full-cycle risk adjusted returns for investors, offering a rewarding experience for our team, and delivering reliable energy solutions to all - safely and responsibly. For more information, visit Granite Ridge's website at www.graniteridge.com.
Forward-Looking Statements and Cautionary Statements
This press release contains forward-looking statements regarding future events and future results that are subject to the safe harbors created under the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended. All statements other than statements of historical facts included in this release regarding, without limitation, Granite Ridge's 2024 outlook, financial position, operating and financial performance, business strategy, plans and objectives of management for future operations, industry conditions, indebtedness covenant compliance, capital expenditures, production and cash flows are forward-looking statements. When used in this release, forward-looking statements are generally accompanied by terms or phrases such as "estimate," "project," "predict," "believe," "expect," "continue," "anticipate," "target," "could," "plan," "intend," "seek," "goal," "will," "should," "may" or other words and similar expressions that convey the uncertainty of future events or outcomes. Items contemplating or making assumptions about actual or potential future production and sales, market size, collaborations, and trends or operating results also constitute such forward-looking statements.
Forward-looking statements involve inherent risks and uncertainties, and important factors (many of which are beyond Granite Ridge's control) that could cause actual results to differ materially from those set forth in the forward-looking statements, including the following: the ability to recognize the anticipated benefits of the business combination, Granite Ridge's financial performance following the business combination, changes in Granite Ridge's strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects and plans, changes in current or future commodity prices and interest rates, supply chain disruptions, infrastructure constraints and related factors affecting our properties, ability to acquire additional development opportunities and potential or pending acquisition transactions, as well as the effects of such acquisitions on the Company's cash position and levels of indebtedness, changes in reserves estimates or the value thereof, operational risks including, but not limited to, the pace of drilling and completions activity on our properties, changes in the markets in which Granite Ridge competes, geopolitical risk and changes in applicable laws, legislation, or regulations, including those relating to environmental matters, cyber-related risks, the fact that reserve estimates depend on many assumptions that may turn out to be inaccurate and that any material inaccuracies in reserve estimates or underlying assumptions will materially affect the quantities and present value of Granite Ridge's reserves, the outcome of any known and unknown litigation and regulatory proceedings, limited liquidity and trading of Granite Ridge's securities, acts of war, terrorism or uncertainty regarding the effects and duration of global hostilities, including the Israel-Hamas conflict, the Russia-Ukraine war, continued instability in the Middle East, including from the Houthi rebels in Yemen, and any associated armed conflicts or related sanctions which may disrupt commodity prices and create instability in the financial markets, and market conditions and global, regulatory, technical, and economic factors beyond Granite Ridge's control, including the potential adverse effects of world health events, such as the COVID-19 pandemic, affecting capital markets, general economic conditions, global supply chains and Granite Ridge's business and operations, and increasing regulatory and investor emphasis on, and attention to, environmental, social and governance matters.
Granite Ridge has based these forward-looking statements on its current expectations and assumptions about future events. While management considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond Granite Ridge's control. Granite Ridge does not undertake any duty to update or revise any forward-looking statements, except as may be required by the federal securities laws, and our ability to establish and maintain effective internal control over financial reporting.
Use of Non-GAAP Financial Measures
To supplement the presentation of the Company's financial results prepared in accordance with U.S. Generally Accepted Accounting Principles ("GAAP"), this press release contains certain financial measures that are not prepared in accordance with GAAP, including Adjusted Net Income, Adjusted Earnings Per Share, Adjusted EBITDAX, Operating Cash Flow Before Working Capital Changes and Free Cash Flow.
See "Supplemental Non-GAAP Financial Measures" below for a description and reconciliation of each non-GAAP measure presented in this press release to the most directly comparable financial measure calculated in accordance with GAAP.
Granite Ridge Resources Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
(in thousands, except par value and share data) March 31, 2024 December 31, 2023
------------------------------------------------------ ------------------------------------------------------
ASSETS
Current assets:
$ 20,782 $ 10,430
Cash
64,831 72,934
Revenue receivable
15,207 4,928
Advances to operators
2,737 1,716
Prepaid and other expenses
7,094 11,117
Derivative assets - commodity derivatives
58,207 50,427
Equity investments
-------------------- -------------- -------------------- -------------------- -------------- --------------------
168,858 151,552
Total current assets
-------------------- -------------- -------------------- -------------------- -------------- --------------------
Property and equipment:
1,301,346 1,236,683
Oil and gas properties, successful efforts method
(508,307 ) (467,141 )
Accumulated depletion
-------------------- -------------- -------------------- -------------------- -------------- --------------------
793,039 769,542
Total property and equipment, net
-------------------- -------------- -------------------- -------------------- -------------- --------------------
Long-term assets:
-- 1,189
Derivative assets - commodity derivatives
4,785 4,821
Other long-term assets
-------------------- -------------- -------------------- -------------------- -------------- --------------------
4,785 6,010
Total long-term assets
-------------------- -------------- -------------------- -------------------- -------------- --------------------
Total assets $ 966,682 $ 927,104
==================== ============== ==================== ==================== ============== ====================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
$ 62,028 $ 60,875
Accrued expenses
4,081 1,204
Other liabilities
-------------------- -------------- -------------------- -------------------- -------------- --------------------
66,109 62,079
Total current liabilities
-------------------- -------------- -------------------- -------------------- -------------- --------------------
Long-term liabilities:
137,500 110,000
Long-term debt
657 --
Derivative liabilities - commodity derivatives
9,589 9,391
Asset retirement obligations
78,809 73,989
Deferred tax liability
-------------------- -------------- -------------------- -------------------- -------------- --------------------
226,555 193,380
Total long-term liabilities
-------------------- -------------- -------------------- -------------------- -------------- --------------------
Total liabilities 292,664 255,459
-------------------- -------------- -------------------- -------------------- -------------- --------------------
Stockholders' Equity:
14 14
Common stock, $0.0001 par value, 431,000,000 shares authorized, 136,424,207 and 136,040,777 issued at March 31, 2024 and December 31, 2023, respectively
653,686 653,174
Additional paid-in capital
56,660 54,782
Retained earnings
(36,342 ) (36,325 )
Treasury stock, at cost, 5,680,255 and 5,677,627 shares at March 31, 2024 and December 31, 2023, respectively
-------------------- -------------- -------------------- -------------------- -------------- --------------------
674,018 671,645
Total stockholders' equity
-------------------- -------------- -------------------- -------------------- -------------- --------------------
Total liabilities and stockholders' equity $ 966,682 $ 927,104
==================== ============== ==================== ==================== ============== ====================
Granite Ridge Resources Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
Three Months Ended March 31,
--------------------------------------------------------------------------------------------------------------------------------
(in thousands, except per share data) 2024 2023
------------------------------------------------------ ------------------------------------------------------
Revenues:
$ 88,996 $ 91,310
Oil and natural gas sales
-------------------- -------------- -------------------- -------------------- -------------- --------------------
Operating costs and expenses:
15,479 13,772
Lease operating expenses
5,749 5,717
Production and ad valorem taxes
40,941 33,852
Depletion and accretion expense
732 --
Impairments of unproved properties
6,492 8,579
General and administrative (including non-cash stock-based compensation of $512 and $1,059 for the three months ended March 31, 2024 and 2023, respectively)
-------------------- -------------- -------------------- -------------------- -------------- --------------------
69,393 61,920
Total operating costs and expenses
-------------------- -------------- -------------------- -------------------- -------------- --------------------
19,603 29,390
Net operating income
-------------------- -------------- -------------------- -------------------- -------------- --------------------
Other income (expense):
(3,161 ) 13,323
Gain (loss) on derivatives - commodity derivatives
(3,159 ) (339 )
Interest expense
-- 5,278
Gain on derivatives - common stock warrants
7,779 --
Gain on equity investments
2 --
Other
-------------------- -------------- -------------------- -------------------- -------------- --------------------
1,461 18,262
Total other income
-------------------- -------------- -------------------- -------------------- -------------- --------------------
Income before income taxes 21,064 47,652
4,837 10,786
Income tax expense
-------------------- -------------- -------------------- -------------------- -------------- --------------------
Net income $ 16,227 $ 36,866
==================== ============== ==================== ==================== ============== ====================
Net income per share:
$ 0.12 $ 0.28
Basic
$ 0.12 $ 0.28
Diluted
Weighted-average number of shares outstanding:
130,136 133,002
Basic
130,160 133,002
Diluted
Granite Ridge Resources Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
Three Months Ended March 31,
--------------------------------------------------------------------------------------------------------------------------------
(in thousands) 2024 2023
------------------------------------------------------ ------------------------------------------------------
Operating activities:
Net income $ 16,227 $ 36,866
Adjustments to reconcile net income to net cash provided by operating activities:
40,941 33,852
Depletion and accretion expense
732 --
Impairments of unproved properties
3,161 (13,323 )
(Gain) loss on derivatives - commodity derivatives
2,708 6,386
Net cash receipts from commodity derivatives
512 1,059
Stock-based compensation
295 163
Amortization of deferred financing costs
-- (5,278 )
Gain on derivatives - common stock warrants
(7,779 ) --
Gain on equity investments
4,820 9,964
Deferred income taxes
(17 ) (137 )
Other
Increase (decrease) in cash attributable to changes in operating assets and liabilities:
8,103 6,433
Revenue receivable
(3,213 ) 4,609
Accrued expenses
530 (260 )
Other receivable
(1,551 ) 325
Prepaid and other expenses
3,187 815
Other payable
-------------------- -------------- -------------------- -------------------- -------------- --------------------
Net cash provided by operating activities 68,656 81,474
-------------------- -------------- -------------------- -------------------- -------------- --------------------
Investing activities:
(69,660 ) (105,556 )
Capital expenditures for oil and natural gas properties
(2,627 ) (24,370 )
Acquisition of oil and natural gas properties
1,282 --
Refund of advances to operators
-------------------- -------------- -------------------- -------------------- -------------- --------------------
Net cash used in investing activities (71,005 ) (129,926 )
-------------------- -------------- -------------------- -------------------- -------------- --------------------
Financing activities:
27,500 25,000
Proceeds from borrowing on credit facilities
(32 ) --
Deferred financing costs
-- (43 )
Payment of expenses related to formation of Granite Ridge Resources, Inc.
(418 ) (1,768 )
Purchase of treasury shares
(14,349 ) (14,640 )
Payment of dividends
-------------------- -------------- -------------------- -------------------- -------------- --------------------
Net cash provided by financing activities 12,701 8,549
-------------------- -------------- -------------------- -------------------- -------------- --------------------
Net change in cash and restricted cash 10,352 (39,903 )
Cash and restricted cash at beginning of period 10,730 51,133
-------------------- -------------- -------------------- -------------------- -------------- --------------------
Cash and restricted cash at end of period $ 21,082 $ 11,230
==================== ============== ==================== ==================== ============== ====================
Supplemental disclosure of non-cash investing activities:
$ 9,168 $ 3,412
Oil and natural gas property development costs in accrued expenses
$ 23,294 $ 26,299
Advances to operators applied to development of oil and natural gas properties
Cash and restricted cash:
$ 20,782 $ 10,930
Cash
300 300
Restricted cash included in other long-term assets
-------------------- -------------- -------------------- -------------------- -------------- --------------------
Cash and restricted cash $ 21,082 $ 11,230
==================== ============== ==================== ==================== ============== ====================
Granite Ridge Resources Inc.
Summary Production and Price Data
The following table sets forth summary information concerning production and operating data for the periods indicated:
Three months ended March 31,
--------------------------------------------------------------------------------------------------
2024 2023
--------------------------------------- ---------------------------------------
Net Sales (in thousands):
$ 75,766 $ 73,475
Oil sales
13,230 17,835
Natural gas and related product sales
-------------------- ------------------- -------------------- -------------------
88,996 91,310
Total revenues
Net Production:
969 965
Oil (MBbl)
7,203 6,720
Natural gas (MMcf)
-------------------- ------------------- -------------------- -------------------
2,170 2,085
Total (MBoe)(1)
Average Daily Production:
10,650 10,722
Oil (Bbl)
79,151 74,667
Natural gas (Mcf)
-------------------- ------------------- -------------------- -------------------
23,842 23,167
Total (Boe)(1)
Average Sales Prices:
$ 78.17 $ 76.14
Oil (per Bbl)
0.10 2.02
Effect of gain on settled oil derivatives on average price (per Bbl)
-------------------- ------------------- -------------------- -------------------
78.27 78.16
Oil net of settled oil derivatives (per Bbl) (2)
1.84 2.65
Natural gas sales (per Mcf)
0.36 0.66
Effect of gain on settled natural gas derivatives on average price (per Mcf)
-------------------- ------------------- -------------------- -------------------
2.20 3.31
Natural gas sales net of settled natural gas derivatives (per Mcf) (2)
41.02 43.79
Realized price on a Boe basis excluding settled commodity derivatives
1.25 3.06
Effect of gain on settled commodity derivatives on average price (per Boe)
-------------------- ------------------- -------------------- -------------------
42.27 46.85
Realized price on a Boe basis including settled commodity derivatives (2)
Operating Expenses (in thousands):
$ 15,479 $ 13,772
Lease operating expenses
5,749 5,717
Production and ad valorem taxes
40,941 33,852
Depletion and accretion expense
6,492 8,579
General and administrative
Costs and Expenses (per Boe):
$ 7.13 $ 6.61
Lease operating expenses
2.65 2.74
Production and ad valorem taxes
18.87 16.24
Depletion and accretion
2.99 4.11
General and administrative
Net Producing Wells at Period-End: 181.34 152.18
------------------------------------------------------------------------------- -------------------- ------------------- -------------------- -------------------- -------------------
Granite Ridge Resources Inc.
Derivatives Information
The table below provides data associated with the Company's derivatives at May 8, 2024, for the periods indicated:
2024 2025 2026
---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- ---------------------------------- ----------------------------------
Second Quarter Third Fourth Total Total Total
Quarter Quarter
---------------------------------- ---------------------------------- ------------------------------ ------------------------------ ---------------------------------- ----------------------------------
Collars (oil)
401,874 361,552 311,496 1,074,922 716,739 --
Volume (Bbl)
$ 64.27 $ 64.32 $ 64.13 $ 65.24 $ 62.46 $ --
Weighted-average floor price ($/Bbl)
$ 85.11 $ 85.24 $ 84.97 $ 85.11 $ 82.02 $ --
Weighted-average ceiling price ($/Bbl)
Swaps (oil)
48,000 39,000 32,000 119,000 -- --
Volume (Bbl)
$ 80.00 $ 80.00 $ 80.00 $ 80.00 $ -- $ --
Weighted-average price ($/Bbl)
Collars (natural gas)
-- -- 1,615,000 1,615,000 8,728,829 7,171,176
Volume (Mcf)
$ -- $ -- $ 3.57 $ 3.57 $ 3.15 $ 3.25
Weighted-average floor price ($/Mcf)
$ -- $ -- $ 5.37 $ 5.37 $ 4.16 $ 4.00
Weighted-average ceiling price ($/Mcf)
Swaps (natural gas)
3,236,000 4,119,952 1,895,588 9,251,540 1,612,050 --
Volume (Mcf)
$ 3.22 $ 3.41 $ 3.55 $ 3.37 $ 3.20 $ --
Weighted-average price ($/Mcf)
Granite Ridge Resources Inc.
Supplemental Non-GAAP Financial Measures
The Company reports its financial results in accordance with GAAP. However, the Company believes certain non-GAAP performance measures may provide financial statement users with additional meaningful comparisons between current results, the results of its peers and the results of prior periods. In addition, the Company believes these measures are used by analysts and others in the valuation, rating and investment recommendations of companies within the oil and natural gas exploration and production industry. See the reconciliations throughout this release of GAAP financial measures to non-GAAP financial measures for the periods indicated.
Reconciliation of Net Income to Adjusted EBITDAX
Adjusted EBITDAX is presented herein and reconciled from the GAAP measure of net income because of its wide acceptance by the investment community as a financial indicator.
The Company defines Adjusted EBITDAX as net income before depletion and accretion expense, (gain) loss on derivatives - commodity derivatives, net cash receipts from (payments on) commodity derivatives, interest expense, (gain) loss on derivatives - common stock warrants, non-cash stock-based compensation, income tax expense, impairment of unproved properties, impairment of long-lived assets, gain on equity investments and other. Adjusted EBITDAX is not a measure of net income or cash flows as determined by GAAP.
The Company's Adjusted EBITDAX measure provides additional information that may be used to better understand the Company's operations. Adjusted EBITDAX is one of several metrics that the Company uses as a supplemental financial measurement in the evaluation of its business and should not be considered in isolation or as an alternative to, or more meaningful than, net income as an indicator of operating performance. Certain items excluded from Adjusted EBITDAX are significant components in understanding and assessing a company's financial performance, such as a company's cost of capital and tax structure, as well as the historic cost of depreciable
Copyright Business Wire 2024
