Granite Ridge Resources, Inc. · NYSE:GRNT
Granite Ridge Resources — Q1 2023 Earnings Presentation
31 slides from Granite Ridge Resources's earnings presentation, May 16, 2023
Slide 1: Granite Ridge Resources Investor Presentation May 2023
GRANITE RIDGE RESOURCES I N V E S T O R P R E S E N T A T I O N | M A Y 2 0 2 3
Slide 2: Q1'23 Results & FY'23 Guidance
Q 1 ’ 2 3 R E S U L T S & F Y ’ 2 3 G U I D A N C E
Slide 3: 1Q '23 Highlights
3 1Q ’23 Highlights Results & Guidance Executive Summary Strategy & Execution Appendix 1. Non-GAAP financial measure, which is defined and reconciled in the Appendix. 2. Includes costs to acquire additional development opportunities and undeveloped acreage acquisitions. 3 • Paid dividend of $15MM •
Slide 4: 2023 Guidance Update
Original 2023 Updated 2023 Net Production (Boe/d) 20,500 22,500 21,000 23,000 Oil % of Production 50% 49% Opportunity Capture and Proved Property Acquisitions ($MM) $45 $45 $45 $45 Development Capital Expenditures ($MM) $215 $225 $230 $260 Total Capital Expenditures ($MM) $260 $270 $275 $305 Net Wel
Slide 5: Executive Summary
24 GRANITE RIDGE EXECUTIVE SUMMARY
Slide 6: Total Shareholder Returns; Non-Op – A Better Way to Invest
Total Shareholder Returns • Capital returns • Fixed dividend – annualized $0.44/share 1 • Stock buybacks – $50MM repurchase plan • Responsible Growth • Active operators – ~11% production growth 2 • Highly scalable – cost structure largely fixed; growth has minimal impact on overhead • Not “flooding
Slide 7: Corporate Philosophy
Corporate Philosophy Results & Guidance Executive Summary Strategy & Execution Appendix Return Capital to Stockholders Cornerstone of a sustainable, resilient business, demonstrated by quarterly dividend and opportunistic buybacks Empower People Employ case-based recruiting to identify talent with t
Slide 8: Benefits of Non-Op
Benefits of Non-Op Results & Guidance Executive Summary Strategy & Execution Appendix 8 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 T
Slide 9: Production, Acreage and Reserves by Basin
Permian 27% DJ 6% Bakken 43% Haynesville 7% Eagle Ford 17% FY '22 Production (19,765 Boe/d) Net Acres (34,563)1 Permian 45% Bakken 9% DJ 8% Haynesville 27% Eagle Ford 11% FY '22 Production (19,765 Boe/d) Q1 '23 Production (23,167 Boe/d) Eagle Ford, 15.2% Haynesville, 13.9% Bakken, 3.9% DJ, 1.8% Perm
Slide 10: Scaled, Diversified Asset Base
Scaled, Diversified Asset Base Results & Guidance Executive Summary Strategy & Execution Appendix Eagle Ford: 16% of PV-10 1 • LTM Spuds 2 : 22 • # of Wells in Process 3 : 9 • Net acreage 4,5: 5,887 • PV-10 1 : $250MM • Active Rigs 6 : 67 Haynesville: 10% of PV-10 1 • LTM Spuds 2 : 11 • # of Wells i
Slide 11: Compelling Value Opportunity
75% 100% S&P E&P Index 17% 7% GRNT Oil & Gas Exploration & Production Oil & Gas Refining & Marketing Integrated Oil & Gas 4.0x 3.8x 3.4x 2.1x S&P E&P Index Peer 1 Peer 2 GRNT EV / TTM Adjusted EBITDA 100% 52% – 48% S&P E&P Index GRNT Public Private 2.9% 7.9% S&P E&P Index GRNT Yield % 0.7x 1.5x 0.3x
Slide 12: Opportunity Set Overview
Opportunity Set Overview 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 primary
Slide 13: Burgers & Beer: Opportunity + Proven Growth
Operator Ownership $75BN Publicly Traded Non-Op Capex $0.8BN Remaining Non-Op Market $24.2BN Non-Op Ownership $25BN 400 450 500 550 600 650 Jan-22 Apr-22 Jul-22 Oct-22 Jan-23 Apr-23 19,765 – 5,000 10,000 15,000 20,000 25,000 2014 2015 2016 2017 2018 2019 2020 2021 2022 Annual Boe/d $6.4BN $1.1BN $0.
Slide 14: Strategic Partnerships: How & Why
$40 $22 $22 $26 $15 $10 $14 $5 2015 2016 2017 2018 2019 2020 2021 2022 $Bn Strategic Partnerships: How & Why 87% Decline Underinvestment & Lack of Private Equity Fundraising 1 Private Companies Account for Nearly 50% of Rigs 2 Results & Guidance Executive Summary Strategy & Execution Appendix Creati
Slide 15: Strategy & Execution
24 GRANITE RIDGE STRATEGY & EXECUTION
Slide 16: Capital Allocation Strategy
1. Future dividends are subject to approval by the Granite Ridge Board of Directors and credit agreement restrictions. Capital Allocation Strategy Results & Guidance Executive Summary Strategy & Execution Appendix Prioritize Highest Shareholder Returns Responsible Growth Pursue “burgers & beer” oppo
Slide 17: Rigorous Deal Sourcing & Evaluation Process
DEAL FUNNEL 2021 – 2023 YTD | Mixed Measures 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 Review an
Slide 18: Organic Growth Fueled by Burgers & Beer
$25 $26 $92 $67 $114 $182 $114 $223 $279 $108 Opportunity Capture Development Forming strategic partnerships and aggregating smaller non-op transactions with near-term development CAPITAL DEPLOYED ($MM) Results & Guidance Executive Summary Strategy & Execution Appendix 18 Organic Growth Fueled by “B
Slide 19: Production Growth & Basin Entry
– 5,000 10,000 15,000 20,000 25,000 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023E Annual Boe/d Production Growth & Basin Entry Results & Guidance Executive Summary Strategy & Execution Appendix Basin Entry 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Eagle Ford Permian Bakken Haynesville D
Slide 20: Appendix
24 GRANITE RIDGE APPENDIX
Slide 21: Hedging
Hedging Results & Guidance Executive Summary Strategy & Execution Appendix 21 Oil 2Q '23 3Q '23 4Q '23 1Q ’24 2Q ’24 3Q ‘24 4Q ‘24 1Q ‘25 Collars Volume (Bo/d) 205 528 319 1,566 1,383 1,245 1,129 - Ceiling $81.60 $81.60 $81.60 $78.13 $78.13 $78.13 $78.13 - Floor $61.50 $61.50 $61.50 $58.63 $58.63 $5
Slide 22: Share Ownership
Share Ownership Results & Guidance Executive Summary Strategy & Execution Appendix 22 An Improving Vehicle for Investors Reducing Concentrated PE Ownership Grey Rock distributed 24.3MM or ~19% of its shares from 10/24/2022 to 5/10/2023 Float & Liquidity Float and trading volume will continue to incr
Slide 23: YE2022 SEC Reserves Summary
10% 57% 7% 16% 10% Bakken Permian DJ Eagle Ford Haynesville 65% 1% PDP 34% PDNP PUD 60% 1% 39% PDP PDNP PUD 50% 50% Oil Gas Net Reserves by Hydrocarbon Net Reserves by Category PV-10 by Category ~51 MMBoe ~51 MMBoe ~$1.6 BN PV-10 by Region ~$1.6 BN Results & Guidance Executive Summary Strategy & Exe
Slide 24: Highly Diversified Upstream Portfolio
Highly Diversified Upstream Portfolio Basin Operator Sample % Private 1 Oil 1 Gas 1 Permian 49% 60% 40% DJ 1% 33% 67% Bakken 31% 76% 24% Eagle Ford 70% 58% 42% Haynesville 51% 0% 100% Total Company 48% 50% 50% Results & Guidance Executive Summary Strategy & Execution Appendix 24 1. Based on 12/31/20
Slide 25: Non-GAAP Reconciliation of Adjusted EBITDAX
28 Results & Guidance Executive Summary Strategy & Execution Appendix $M 1Q ’23 1Q ’22 TTM FY ’22 Net income $36,866 $32,444 $266,766 $262,344 Interest expense 339 525 1,803 1,989 Income tax expense 10,786 — 23,636 12,850 Depletion and accretion expense 33,852 16,125 123,479 105,752 Non-cash stock-b
Slide 26: Non-GAAP Reconciliation of Net Debt
28 Results & Guidance Executive Summary Strategy & Execution Appendix $M 3/31/2023 12/31/2022 12/31/2021 Long-term debt $25,000 — $1,100 Plus: Current portion of long-term debt — — 50,000 Less: Cash 10,930 $50,833 11,854 Net Debt $14,070 ($50,833) $39,246 26 Non-GAAP Reconciliation of Net Debt
Slide 27: Non-GAAP Reconciliation of PV-10
28 Results & Guidance Executive Summary Strategy & Execution Appendix 27 Non-GAAP Reconciliation of PV-10 $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) Stand
Slide 28: Historical Realized Pricing
93% Bakken DJ Eagle Ford Permian 90% 92% 94% 96% 98% 100% 102% 104% J-21 F-21 M-21 A-21 M-21 J-21 J-21 A-21 S-21 O-21 N-21 D-21 J-22 F-22 M-22 A-22 M-22 J-22 J-22 A-22 S-22 O-22 N-22 D-22 GRNT Bakken DJ Eagle Ford Permian Historical Realized Pricing Results & Guidance Executive Summary Strategy & Ex
Slide 29: Commitment to Strong ESG Stewardship
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
Slide 30: Disclaimer
Disclaimer 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 “Exchange
Slide 31: Disclaimer
Disclaimer 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 ind
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