Granite Ridge Resources, Inc. · NYSE:GRNT
Granite Ridge Resources — SPAC Merger (May 2022)
30 slides from Granite Ridge Resources's SPAC merger presentation, May 16, 2022
Slide 1: Granite Ridge Resources Investor Presentation
Granite Ridge Resources Investor Presentation | MAY 2022 Exhibit 99.2
Slide 2: Disclaimer: Forward-Looking Statements
Disclaimer FORWARD-LOOKING STATEMENTS The information in this presentation and the oral statements made in connection therewith include “forward-looking statement” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Ex
Slide 3: Disclaimer: Important Information for Investors and Shareholders
Disclaimer IMPORTANT INFORMATION FOR INVESTORS AND SHAREHOLDERS In connection with the proposed business combination, Granite Ridge intends to file with the SEC a Registration Statement on Form S-4 that will include a proxy statement of ENPC, and a prospectus of Granite Ridge, which are jointly refe
Slide 4: Disclaimer: Use of Non-GAAP Financial Measures
Disclaimer USE OF NON-GAAP FINANCIAL MEASURES This presentation includes certain financial measures that are not calculated in accordance with U.S. generally accepted accounting principles (“GAAP”). These measures include (i) EBITDA, (ii) net debt, (iii) free cash flow and (iv) PV-10. These non- GAA
Slide 5: Key Investment Highlights
Based on NYMEX strip pricing as of 5/11/22 Free cash flow (FCF) defined as operating cash flow less net capex Depending on redemptions Key Investment Highlights Premiere non-operated oil & gas company diversified across 5 leading basins with ~$425 million1 of 2022E EBITDA Strong 2022E free cash flow
Slide 6: Transaction Summary
Transaction Summary ($ in millions, except per share values) Transaction creates a scaled, publicly-traded, non-operated upstream platform with an unlevered balance sheet and immediate free cash flow generation Note: Capitalization table assumes no redemptions from SPAC investors. Excludes impact of
Slide 7: Sustainable free cash flow generation with commitment to return capital
Based on NYMEX strip pricing as of 5/11/22 Depending on redemptions Includes operating expense, cash G&A, administrative fee, net interest expense and production taxes pro forma for the business combination Sustainable free cash flow generation with commitment to return capital to shareholders 20.5
Slide 8: Scaled, Diversified Asset Base with High Quality Operators
Scaled, Diversified Asset Base with High Quality Operators Internal reserves with 4/1/22 effective date and NYMEX strip pricing as of 5/11/22 Internal reserves 4/22 estimated production 4/1/21 to present Defined as gross AFE and DUC As of 5/6/22 Excludes shallow zone acreage High Quality Operating P
Slide 9: Deep bench of attractive inventory resilient across hydrocarbon prices
Granite Ridge’s deep bench of attractive inventory is resilient across hydrocarbon prices High Return and Durable Inventory Across Portfolio Source: Internal reserves utilizing $80.00/Bbl WTI and $4.00/MMBtu HHUB and $60.00/Bbl WTI and $3.50/MMBtu HHUB Includes AFE and Undeveloped inventory 1 Single
Slide 10: Financial Projections
Financial Projections Note: EV / EBITDA based on $1,320mm enterprise value Development plan based on 4/1/22 effective date Based on NYMEX strip pricing as of 5/11/22 Based on 30-day average Bloomberg consensus pricing as of 5/11/22 Assumes WTI price of $90.00/Bbl and HHUB price of $4.50/MMBtu beyond
Slide 11: Sustainable Return of Capital Framework
Sustainable Return of Capital Framework Source: Management estimates utilizing internal reserves Note: Assumes dividend beginning 4Q22 Future dividends are subject to approval by the Granite Ridge board of directors Flat $45/Bbl case assumes gas price of $2.75/MMBtu, flat $55/Bbl case assumes gas pr
Slide 12: Unlevered 2022E Free Cash Flow Yield at Various Prices
Unlevered 2022E Free Cash Flow Yield at Various Prices Resilient Cash Flows Provide Strong Yields Source: Internal reserves, public filings, Bloomberg and FactSet as of 5/11/22 Note: Peer group includes CDEV, DEC-GB, ESTE, HPK, LPI, NOG, OAS / WLL, REPX, ROCC and SBOW Based on NYMEX strip pricing as
Slide 13: Attractive Entry Point Valuation Relative to Peers
Attractive Entry Point Valuation Relative to Peers Source: Public filings, FactSet as of 5/11/22 and management estimates utilizing NYMEX strip pricing as of 5/11/22 Note: Peer group includes CDEV, DEC-GB, ESTE, HPK, LPI, NOG, OAS / WLL, REPX, ROCC and SBOW; adjusted for announced transactions Inclu
Slide 14: Unmatched Value in Non-Operated Space
Unmatched Value in Non-Operated Space Source: Public Filings, FactSet as of 5/11/22, Grey Rock management estimates utilizing 5/11/22 NYMEX strip pricing Represents 2021 exit production; NOG’s 1Q22 production basin split was 64% Bakken, 20% Permian and 16% Marcellus Represents production growth from
Slide 15: Strong Fundamentals at an Attractive Entry Point
Strong Fundamentals at an Attractive Entry Point Source: Company filings, FactSet as of 5/11/22 Note: US independents include APA, AR, BRY, CDEV, CHK, CIVI, CLR, CNX, COP, CPE, CRC, CRGY, CRK, CTRA, DEC-GB, DEN, DVN, EOG, EQT, ESTE, FANG, GPOR, HES, HPK, KOS, LPI, MGY, MRO, MTDR, MUR, NOG, OAS / WLL
Slide 16: Public Investors Will Continue to Benefit from Grey Rock's Expertise
Public Investors Will Continue to Benefit from Grey Rock’s Oil and Gas Expertise Going Forward Management Services Agreement (“MSA”) governed by terms through April 30, 2028, with a fixed annual fee Corporate / Back-Office Support Legal Land Accounting / Finance Engineering Business Development Serv
Slide 17: Shareholder-Aligned Management Team and Board
Shareholder-Aligned Management Team and Board Luke Brandenberg CEO Co-Chairman Co-Chairman Director Director Independent Director Independent Director Independent Director Technical P P Financial P P P P P P P Energy P P P P P P P Industry Diversity P P P P P P P Emily Fuquay Head of Legal Eric Holl
Slide 18: Deal Funnel
Deal Funnel Rigorous Deal Sourcing Process To Find Compelling “Ground Game” Transactions 2021 – 2022 YTD | Mixed Measures Granite Ridge will benefit from sharing deals with Grey Rock’s private equity platform Final Negotiations Detailed Engineering / Finance DD Initial Screen On Basin, Size, Operato
Slide 19: Organic Growth Augmented by Ground Game
Organic Growth Augmented by Ground Game By Grey Rock Fund I, II and III 2022 figure represents acquisitions of $4mm and expected drilling and completion capital expenditures of $161mm Executing on ground game acquisitions with near-term D&C opportunities Grey Rock’s aggressive ground game consistent
Slide 20: Commitment to Strong ESG Stewardship
Commitment to Strong ESG Stewardship Source: Company filings / websites Granite Ridge demonstrates explicit board-level oversight of ESG, will maintain a formal ESG policy and plans to publicly track ESG targets over time through Annual ESG Reports Grey Rock considers operators’ ESG standards to ens
Slide 21: Key Investment Highlights
Based on NYMEX strip pricing as of 5/11/22 Free cash flow (FCF) defined as operating cash flow less net capex Depending on redemptions Key Investment Highlights Premiere non-operated oil & gas company diversified across 5 leading basins with ~$425 million1 of 2022E EBITDA Strong 2022E free cash flow
Slide 22: Appendix
6 GRANITE RIDGE APPENDIX
Slide 23: Granite Ridge Reserves
Granite Ridge Reserves Internal Reserves estimate utilizing NYMEX Strip Pricing as of 5/11/22. Oil: 2022E: $99.49/Bbl; 2023E: $88.48/Bbl; 2024E: $80.07/Bbl; 2025E: $74.21/Bbl; 2026E: $70.29/Bbl; Thereafter: $70.29/Bbl; Gas: 2022E: $6.83/Mcf; 2023E: $5.35/Mcf; 2024E: $4.23/Mcf; 2025E: $4.03/Mcf; 2026
Slide 24: Sources and Uses
Sources and Uses Note: Assumes no redemptions from SPAC investors Excludes interest earned in the trust. SPAC cash amount subject to change depending on the actual interest earned Assumes sponsors retain 0.867mm promote shares at close, remaining promote shares and performance shares to be forfeited
Slide 25: Traditional SPAC Comparison vs. ENPC
Traditional SPAC Comparison vs. ENPC Note: Traditional SPAC represents a $414mm SPAC, similar sized SPAC as ENPC for comparison Sponsor promote under traditional SPAC calculated assuming sponsor retains 20% of outstanding shares of the SPAC on an as-converted basis Assumes sponsor warrants purchased
Slide 26: Ownership Analysis Across Redemption Levels
Ownership Analysis Across Redemption Levels Note: Assumes $10.00 share price at merger close. Excludes impact of 10.35 million public warrants. Values may not add to totals due to rounding. Certain SPAC Sponsor loans will be repaid at closing Does not reflect the requirement pursuant to the ENPC cer
Slide 27: Illustrative Fully Diluted Share Count
Illustrative Fully Diluted Share Count Note: Assumes zero redemptions from SPAC shareholders. Values may not add to totals due to rounding Assumes treasury share method for SPAC public warrants 10.35 million SPAC investors warrants issued as part of the ENPC IPO with strike price of $11.50 and redem
Slide 28: Summary of Hedges
Summary of Hedges Note: Represents hedges for June 2022 onward Weighted average floor / ceiling Short put price Oil Hedges Gas Hedges Overview of Oil and Gas Hedges 1 1 2 1 1 2 23
Slide 29: Historical Financials and Non-GAAP Reconciliation
28 Historical Financials and Non-GAAP Reconciliation Reconciliation of Historical Quarterly Financial to EBITDA ($ in thousands) 24 Note: Represents aggregate of Grey Rock Fund I, II and III prior to pro forma adjustments for ENPC
Slide 30: Corporate contacts
Corporate contacts Investor Relations Name: Emmie Watts Email: ew@enpc.co