Granite Ridge Resources, Inc. · NYSE:GRNT
Granite Ridge Resources — Investor Presentation (September 2023)
28 slides from Granite Ridge Resources's investor presentation, Sep 11, 2023
Slide 1: Granite Ridge Resources Secondary Offering September 2023
GRANITE RIDGE RESOURCES S E C O N D A R Y O F F E R I N G | S E P T E M B E R 2 0 2 3
Slide 2: Disclaimer: Forward-Looking Statements
Disclaimer 2 FORWARD-LOOKING STATEMENTS This investor presentation contains forward-looking statements regarding future events and future results that are subject to the safe harbors created under the Securities Act of 1933 (the “Securities Act”) and the Securities Exchange Act of 1934 (the “Exchang
Slide 3: Disclaimer: Industry and Market Data, SEC Filings
Disclaimer 3 INDUSTRY AND MARKET DATA The information, data and statistics contained herein are derived from various internal and external third-party sources. While Granite Ridge believes such third-party information is reliable, there can be no assurance as to the accuracy or completeness of the i
Slide 4: Total Shareholder Returns, Responsible Growth, Conservative Balance Sheet
Total Shareholder Returns • Capital returns • Fixed dividend – annualized $0.44/share 2 • Stock buybacks – $50MM repurchase plan • Responsible Growth • Active operators – ~13% production growth 3 • Highly scalable – cost structure largely fixed; growth has minimal impact on overhead • Not “flooding
Slide 5: Production, acreage and PV-10 by basin
Permian 27% DJ 6% Bakken 43% Haynesville 7% Eagle Ford 18% FY '22 Production (19,765 Boe/d) Net Acres (35,329)4 Permian 45% Bakken 10% DJ 9% Haynesville 24% Eagle Ford 13% FY '22 Production (19,765 Boe/d) Q2 '23 Production (21,557 Boe/d) Eagle Ford, 15.2% Haynesville, 13.9% Bakken, 3.9% DJ, 1.8% Per
Slide 6: Scaled, Diversified Asset Base
Scaled, Diversified Asset Base 6 Outlined counties contain assets or acreage screened and/or evaluated by Granite Ridge 1. Based on 12/31/22 SEC reserves. PV-10 is a non-GAAP financial measure. Please see the Appendix for a reconciliation to the nearest GAAP measure. 2. Gross spuds 7/1/22 to 6/30/20
Slide 7: Highly Diversified Upstream Portfolio
7 Highly Diversified Upstream Portfolio Basin Operator Sample % Private 1 Oil 2 Gas 2 Permian 41% 60% 40% DJ 1% 33% 67% Bakken 31% 76% 24% Eagle Ford 70% 58% 42% Haynesville 51% 0% 100% Total Company 44% 50% 50% 1. Based on current production. 2. Based on 12/31/2022 SEC net reserves. Overview Assets
Slide 8: Capital Allocation Framework
1. Future dividends are subject to approval by the Granite Ridge Board of Directors and credit agreement restrictions. Capital Allocation Strategy Prioritize Highest Shareholder Returns Responsible Growth Pursue “burgers & beer” opportunities and strategic partnerships where risk-adjusted returns ex
Slide 9: Rigorous Deal Sourcing & Evaluation Process
GRNT’s focus on full-cycle returns results in a highly selective investment process Detailed Engineering / Finance DD Business Development Deal Sourcing 01 02 03 04 05 Employ a boots-on-the-ground and all-hands-on-deck approach to deal sourcing Screen an average of nine new deals each week Very sele
Slide 10: Organic Growth Fueled by Burgers & Beer
$25 $25 $89 $69 $116 $180 $120 $219 $237 $212 Inventory & Production Acquisition Development Forming strategic partnerships and aggregating smaller non-op transactions with near-term development Capital Deployed ($MM) 1 10 Overview Assets Strategy & Execution Appendix 1. Acquisition and development
Slide 11: Opportunity Set Overview
11 Opportunity Set Overview1 GRNT Strategy Format Average Investment Average Working Interest Investment Type Ground Game or “Burgers & Beer” • Core growth engine to consolidate the fragmented non-op market • Smaller, relationship driven deals that come from years of “boots on the ground” in our pri
Slide 12: Burgers & Beer: Opportunity + Proven Growth
92 94 90 122 504 177 184 573 590 602 602 575 – 50 100 150 200 250 300 440 460 480 500 520 540 560 580 600 620 Q1 '22 Q2 '22 Q3 '22 Q4 '22 Q1 '23 Q2 '23 Deal Flow Average Rig Count Est. Operator Ownership $75Bn Est. Publicly Traded Non-Op Capex $0.8Bn Est. Remaining Non-Op Market $24.2Bn Est. Non-Op
Slide 13: Burgers & Beer: Case Study
Unit Map ID Net Acres Total Net Locations 2 Net Locations Developed Net Remaining Inventory $ / Location Operator State Trivette A 393 1.6 0.1 1.5 $0.7MM Mewbourne State Cordell B 367 3.4 1.1 2.3 $1.0MM Mewbourne State CD C 503 4.7 0.4 4.3 $0.5MM Mewbourne State Einhorn D 612 5.2 5.2 - $1.0MM EOG St
Slide 14: Strategic Partnerships: How & Why
$40 $22 $22 $26 $15 $10 $14 $5 2015 2016 2017 2018 2019 2020 2021 2022 $Bn 14 Strategic Partnerships: How & Why 87% Decline Underinvestment & Lack of Private Equity Fundraising 1 Private Companies Account for 50% of Rigs 2 Creating Public Investor Access to the Private Upstream Market Opportunity De
Slide 15: Significant Consolidation Opportunities Within the Non-Op Universe
15 Granite Ridge Has Significant Consolidation Opportunities Within the Non-Op Universe 1. Source – Enverus. 2. Sources – Enverus, TPH&Co. and Granite Ridge proprietary relationships. Cumulative Non-Op M&A Since 20181 Public Non-Op Companies Represent Only 16% Of M&A Investor Group Identified Groups
Slide 16: Benefits of Non-Op
16 Benefits of Non-Op Access Entire Upstream Universe The Granite Ridge “mousetrap” can quickly pivot to pursue high-quality near-term drilling inventory with the best risk adjusted returns across all basins and operators Leveraging Technology and Partners – Highly Scalable Rather than hire an ops t
Slide 17: Appendix
6 GRANITE RIDGE APPENDIX
Slide 18: 2Q '23 Highlights
18 2Q ’23 Highlights 1. Non-GAAP financial measure. Please see the Appendix for a reconciliation to the nearest GAAP measure. 2. Includes costs to acquire additional development opportunities and undeveloped acreage acquisitions. 3. Liquidity consists of $94.7mm of committed borrowing availability u
Slide 19: Share Ownership
19 Share Ownership An Improving Vehicle for Investors Distribution to LPs • The Company completed a distribution to LPs in August 2023 further increasing Granite Ridge’s public float Warrant Exchange • The Company completed a warrant exchange in July 2023 • A total of 2,575,795 shares of common stoc
Slide 20: Compelling Value Opportunity
100% 56% 44% S&P E&P Index GRNT Public Private 2.4% 5.7% S&P E&P Index GRNT Yield % 20 Compelling Value Opportunity 1. S&P Oil & Gas Exploration & Production Select Industry Index (NYSE: XOP) data as of as of 8/9/2023. 2. XOP per State Street Global Advisors. Implied Dividend Yield: Robust & Durable
Slide 21: Commitment to Strong ESG Stewardship
Source: Company filings / websites. Granite Ridge demonstrates explicit board level oversight of ESG, is creating a formal ESG policy and plans to publicly track ESG targets over time. Dedicated ESG Section of Website Explicit Board-Level Oversight of ESG Formal ESG Policy / Principles Standalone An
Slide 22: Historical Realized Pricing
22 Historical Realized Pricing Realized Oil Pricing vs. NYMEX WTI 1 Realized Gas Pricing vs. NYMEX HH 1,2,3 1. Realized pricing charts are based on production month data. 2. Granite Ridge forecasts on a two-stream basis; realized gas pricing Includes NGL revenue. 3. February 2021 realized pricing wa
Slide 23: Hedging
Hedging 23 Oil 3Q '23 4Q '23 1Q ’24 2Q ’24 3Q ‘24 4Q ‘24 1Q ‘25 Swaps Volume (Bo/d) - - 681 527 424 348 - Price - - $80.00 $80.00 $80.00 $80.00 - Collars Volume (Bo/d) 528 4,036 4,072 3,416 2,930 2,586 - Ceiling $81.60 $88.14 $83.18 $82.99 $82.81 $82.69 - Floor $61.50 $67.49 $63.05 $62.88 $62.72 $62
Slide 24: YE2022 SEC Reserves Summary
65% 1% PDP 34% PDNP PUD Reserve Category Oil (MBbls) Gas (MMcf) Equivalent (Mboe) PV10% ($M) 2 PDP 15,376 89,418 30,279 $1,008,786 PDNP 338 1,616 607 21,779 PUD 9,780 59,205 19,648 528,558 Total Proved Reserves 25,494 150,239 50,534 $1,559,123 24 10% 57% 7% 16% 10% Bakken Permian DJ Eagle Ford Hayne
Slide 25: Non-GAAP Reconciliation of Adjusted EBITDAX
28 $M 2Q ’23 2Q ’22 TTM FY ’22 Net income $8,737 $93,284 $182,219 $262,344 Interest expense 1,211 609 2,405 1,989 Income tax expense 4,129 — 27,765 12,850 Depletion and accretion expense 34,969 31,404 127,044 105,752 Non-cash stock-based compensation 375 — 1,434 — Warrant exchange transaction costs
Slide 26: Non-GAAP Reconciliation of Net Debt
28 $M 6/30/2023 12/31/2022 12/31/2021 Long-term debt $55,000 — $1,100 Plus: Current portion of long-term debt — — 50,000 Less: Cash 14,493 $50,833 11,854 Net Debt $40,507 ($50,833) $39,246 26 Non-GAAP Reconciliation of Net Debt Overview Assets Strategy & Execution Appendix
Slide 27: Non-GAAP Reconciliation of Inventory Acquisition
28 27 $M 2Q ’23 2Q ’22 1H ’23 1H ’22 Property acquisition costs: Proved $1,309 $2,895 $19,298 $7,955 Property acquisition costs: Unproved 3,161 12,332 12,791 12,789 Development Costs 58,739 44,124 157,345 105,025 Total costs incurred for oil and natural gas properties $63,209 $59,351 $189,434 $125,7
Slide 28: Non-GAAP Reconciliation of PV10%
28 28 $M FY ’22 FY ’21 FY ’20 Pre-tax present value of estimated future net revenues (Pre-Tax PV10%) $1,559,123 $778,230 $197,146 Future income taxes, discounted at 10% (323,197) (3,879) (1,563) Standardized measure of discounted future net cash flows $1,235,926 $774,351 $195,583 Non-GAAP Reconcilia
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