Granite Ridge Resources : Fourth Quarter 2024 Earnings Press Release

About this update from Granite Ridge Resources, Inc.

NEWS RELEASE Granite Ridge Resources, Inc. Reports Fourth Quarter and Full-Year 2024 Results and Provides Outlook for 2025 2025-03-06 DALLAS--(BUSINESS WIRE)-- Granite Ridge Resources, Inc. (NYSE: GRNT) ("Granite Ridge" or the "Company") today reported provided initial guidance for 2025. Fourth Quarter 2024 Highlights Increased total production by 7% to 27,734 Boe/day (53% oil) driven by a 20% increase in oil production Reported Net Loss of $11.6 million, or $(0.09) per share, and Adjusted Net Income (non-GAAP) of $22.7 million, or $0.17 per diluted share Generated Adjusted EBITDAX (non-GAAP) of $82.6 million Invested $93.3 million of capital, placing online 86 gross (4.08 net) wells Declared a dividend of $0.11 per share Ended the year with total liquidity of $129.1 million and Net Debt to Adjusted EBITDAX of 0.7x 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 de Luke Brandenberg, President and CEO of Granite Ridge, commented, "Granite Ridge concluded 2024 with outstanding performance across our portfolio, achieving a corporate record for total production driven by a 10% increase over the third quarter. Our disciplined investment strategy enabled us to e completing 86 gross wells and executing nearly two dozen transactions across the Permian and Appalachian basins. These actions have bolstered our asset base while maintaining liquidity position at year-end and conservative leverage of 0.7x Net Debt to Adjusted EBITDAX." Mr. Brandenberg concluded, "Our Operated Partnership portfolio surpassed expectations in 2024, reinforcing our con highly aligned management teams to source, acquire, and develop high-quality assets, we are generating signi value in today's market. We look forward to keeping our investors informed as we continue to execute our strategy." "Looking ahead, we remain committed to driving sustainable growth and delivering shareholder returns. Our 2025 outlook projects a 16% increase in production at the midpoint, and our declared dividend implies a current yield of over 7%, highlighting the strength of our strategy. With a robust portfolio of high-quality assets, strong partnerships, and a disciplined approach to capital allocation, we are well-positioned to build on our momentum in the coming year." Financial Results Net loss for the quarter was $11.6 million, or $(0.09) per diluted share of common stock. Excluding non-cash and special items, Adjusted Net Income (non-GAAP) was $22.7 million for the quarter, or $0.17 per diluted share of common stock. Adjusted EBITDAX (non-GAAP) and cash million and $68.2 million, respectively. Net income for the year was $18.8 million or $0.14 per diluted share of common stock. Excluding non-cash and special items, Adjusted Net Income (non-GAAP) was $73.8 million or $0.57 per diluted share of common stock. Adjusted EBITDAX (non-GAAP) and cash million, respectively. Production Results Total production for the quarter increased 7% from the prior year quarter to 27,734 Boe per day (53% oil), including a 20% increase in oil production to 14,717 barrels ("Bbls") per day. Natural gas production for the quarter totaled 78,104 thousand cubic feet of natural gas ("Mcf") per day. Total production for the year increased 3% to 24,973 Boe per day (49% oil), including a 8% increase in oil production to 12,248 Bbls per day. Natural gas production for the year totaled 76,350 Mcf per day. Oil, Natural Gas and Related Product Sales During the quarter, NYMEX West Texas Intermediate ("WTI") crude oil averaged $70.69 per Bbl, and NYMEX natural gas at Henry Hub averaged $2.44 per Mcf. The Company's average realized price for oil and natural gas, excluding the e realization of Henry Hub), respectively. Operating Costs Lease operating expenses were $15.3 million for the quarter, or $5.99 per Boe, a 7% decrease on a per unit basis compared to the prior year quarter. Production and ad valorem taxes were $7.0 million for the quarter, or 6.6% of oil and natural gas sales. During the quarter general and administrative ("G&A") costs totaled $5.9 million, inclusive of $0.6 million of non-cash stock-based compensation. Lease operating expenses were $57.5 million for the year, or $6.29 per Boe, an 8% decrease on a per unit basis compared to the prior year. Production and ad valorem taxes were $26.0 million for the year, or 6.8% of oil and natural gas sales. G&A costs for the year totaled $24.6 million, inclusive of $2.3 million of non-cash stock-based compensation. Capital Expenditures and Operational Activity Capital expenditures for the quarter were $93.3 million comprised of $83.5 million of drilling and completion ("D&C") capital and $9.8 million of property acquisition costs. Total 2024 capital expenditures were $354.4 million comprised of $290.3 million of D&C capital and $64.2 million of property acquisition costs. The table below provides capital expenditures incurred for oil and natural gas producing activities for the periods indicated: Three Months Ended Year Ended December 31, December 31, 2024 2023 2024 2023 (in thousands) Property acquisition costs: Proved $ 612 $ 9,365 $ 3,436 $ 36,824 Unproved 9,207 18,172 60,721 42,225 Development costs 83,522 50,844 290,283 283,915 Total costs incurred for oil and natural gas properties $ 93,341 $ 78,381 $ 354,440 $ 362,964 The table below provides a summary of gross and net wells completed and put on production for the three months and year ended December 31, 2024: Three Months Ended Twelve Months Ended December 31, 2024 December 31, 2024 Gross Net Gross Net Permian 31 3.24 133 16.81 Eagle Ford 5 0.26 18 3.36 Bakken 19 0.40 56 1.00 Haynesville - - 6 0.34 DJ 25 0.04 80 1.78 Appalachian 6 0.14 6 0.14 Total 86 4.08 299 23.43 On December 31, 2024, the Company had 202 gross (14.85 net) wells for which drilling was either in-progress or were pending completion. Liquidity and Capital Resources As of December 31, 2024, Granite Ridge had $205.0 million of debt outstanding under its Credit Agreement and $129.1 million of liquidity, consisting of $119.7 million of committed borrowing availability and $9.4 million of cash on hand. On November 1, 2024, the Company and its lenders entered into the Fourth Amendment to the Credit Agreement, which amended the Credit Agreement to, among other things, increase the borrowing base and aggregate elected commitments from $300.0 million to $325.0 million. 2024 Proved Reserves As of December 31, 2024, Granite Ridge's estimated proved reserves totaled 54,315 MBoe, compared to 53,472 MBoe December 31, 2023. The Company's proved reserves are approximately 52% oil and 48% natural gas. Proved developed reserves totaled 38,953 MBoe, or 72% of total proved reserves. The table below provides a summary of changes in total proved reserves for the year ended December 31, 2024, as well as the proved developed reserves balance at the beginning and end of the year. Oil Natural Gas Proved developed and undeveloped reserves at (MBbl) (MMcf) MBoe December 31, 2023 27,317 156,928 53,472 Revisions of previous estimates (1,992) (1,860) (2,302) Extensions and discoveries 3,545 20,043 6,885 Divestiture of reserves (1,718) (10,840) (3,525) Acquisition of reserves 5,518 20,442 8,925 Production (4,483) (27,944) (9,140) Proved developed and undeveloped reserves at December 31, 2024 28,187 156,769 54,315 Oil Natural Gas (MBbl) (MMcf) MBoe Proved developed reserves: December 31, 2023 14,972 96,833 31,111 December 31, 2024 19,269 118,103 38,953 Proved undeveloped reserves: December 31, 2023 12,345 60,095 22,361 December 31, 2024 8,918 38,666 15,362 2025 Guidance The Company provides initial 2025 guidance and anticipates approximately 28,000 to 30,000 Boe per day of production for 2025, an increase of approximately 16% from 2024. The following table summarizes the Company's operational and Annual production (Boe per day) 2025 Guidance 28,000 - 30,000 Oil production (% of total production) 51% - 53% Total capital expenditures ($ in millions) $300 - $320 Lease operating expenses (per Boe) $6.25 - $7.25 Production and ad valorem taxes (% of total revenue) 6% - 7% Cash general and administrative expense ($ in millions) $25 - $27 Conference Call Granite Ridge will host a conference call on March 7, 2025, at 10:00 AM CT (11:00 AM ET) to discuss its fourth quarter and full-year 2024 immediately follow the discussion. The telephone number and passcode to access the conference call are provided below: Dial-in: (888) 660-6093 Intl. 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 March 21, 2025. To access the audio replay dial (800) 770-2030 and enter con 4127559. Upcoming Investor Events Granite Ridge management will also be participating in the following upcoming investor events: 2025 Louisiana Energy Conference - May 28, 2025 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 energy company which aims to provide shareholders with exposure similar to energy private equity through operated partnerships and traditional non-operated assets. We own assets in six proli unconventional basins across the United States. We aim to deliver a diversi returns by investing in a large number of high-graded deals developed by proven public and private operators. We focus on success as measured by total shareholder returns, which we seek to balance with a low leverage pro 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 press release regarding, without limitation, Granite Ridge's 2025 outlook, strategy, plans and objectives of management for future operations, industry conditions, and indebtedness covenant compliance 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, cash 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 di forward-looking statements, including the following: Granite Ridge's combination, changes in Granite Ridge's strategy, future operations, losses, projected costs, prospects and plans, changes in current or future commodity prices and interest rates, supply chain disruptions, infrastructure constraints and related factors a additional development opportunities and potential or pending acquisition transactions, as well as the e 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 a of the 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 e and duration of global hostilities, including the Israel-Hamas con in the Middle East, and any associated armed con and create instability in the economic factors beyond Granite Ridge's control, including the potential adverse e a operations, increasing regulatory and investor emphasis on, and attention to, environmental, social and governance matters, Granite Ridge's ability to establish and maintain e reporting, and the other risks described under the heading "Item 1A. Risk Factors" in Granite Ridge's Annual Report on Form 10-K for the year ended December 31, 2024 to be ("SEC"), as updated by any subsequent Quarterly Reports on Form 10-Q, which Granite Ridge 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 signi uncertainties, most of which are di more of these risks or uncertainties materialize, or if the underlying assumptions prove incorrect, our actual results may vary materially from those expected or projected. 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. Use of Non-GAAP Financial Measures To supplement the presentation of the Company's Accepted Accounting Principles ("GAAP"), this press release contains certain prepared in accordance with GAAP, including Adjusted Net Income, Adjusted Earnings Per Share, Adjusted EBITDAX, and Net Debt. 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 accordance with GAAP. Granite Ridge Resources, Inc. Consolidated Balance Sheets (Unaudited) (in thousands, except par value and share data) December 31, 2024 2023 ASSETS Current assets: Cash $ 9,419 $ 10,430 Revenue receivable 69,692 72,934 Advances to operators 19,959 4,928 Prepaid and other current assets 3,831 1,716 Derivative assets - commodity derivatives 537 11,117 Equity investments 31,783 50,427 Total current assets 135,221 151,552 Property and equipment: Oil and gas properties, successful e 1,540,021 1,236,683 Accumulated depletion (643,051) (467,141) Total property and equipment, net 896,970 769,542 Long-term assets: Derivative assets - commodity derivatives - 1,189 Other long-term assets 4,288 4,821 Total long-term assets 4,288 6,010 Total assets $ 1,036,479 $ 927,104 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable and accrued liabilities $ 99,440 $ 60,875 Other liabilities 546 1,204 Derivative liabilities - commodity derivatives 1,822 - Total current liabilities 101,808 62,079 Long-term liabilities: Long-term debt 205,000 110,000 Derivative liabilities - commodity derivatives 3,679 - Asset retirement obligations 10,693 9,391 Deferred tax liability 79,946 73,989 Total long-term liabilities Total liabilities Stockholders' Equity: Common stock, $0.0001 par value, 431,000,000 shares authorized, 136,417,677 and 136,040,777 issued at December 31, 2024 and 2023, respectively Additional paid-in capital Retained earnings Treasury stock, at cost, 5,683,921 and 5,677,627 shares at December 31, 2024 and 2023, respectively Total stockholders' equity Total liabilities and stockholders' equity 299,318 193,380 401,126 255,459 14 14 655,472 653,174 16,047 54,782 (36,180) (36,325) 635,353 671,645 $ 1,036,479 $ 927,104 Granite Ridge Resources, Inc. Consolidated Statements of Operations (Unaudited) Three Months Ended Year Ended (in thousands, except per share data) December 31, December 31, 2024 2023 2024 2023 Revenues: Oil and natural gas sales $ 106,307 $ 106,798 $ 380,030 $ 394,069 Operating costs and expenses: Lease operating expenses 15,287 15,408 57,461 60,521 Production and ad valorem taxes 7,032 7,897 26,007 27,707 Depletion and accretion expense 49,847 47,574 176,529 160,662 Impairments of long-lived assets 35,637 26,496 36,369 26,496 General and administrative 5,944 6,081 24,649 27,920 Other, net (524) (1,384) (241) 176 Total operating costs and expenses 113,223 102,072 320,774 303,482 Net operating income (loss) (6,916) 4,726 59,256 90,587 Other income (expense): Gain (loss) on derivatives - commodity derivatives (8,803) 19,129 (908) 25,544 Interest expense, net (4,673) (2,409) (18,470) (5,315) Gain (loss) on derivatives - common stock warrants - - - (5,742) Gain (loss) on equity investments 4,132 508 (15,183) 508 Other income - - 271 - Total other income (expense) (9,344) 17,228 (34,290) 14,995 Income (loss) before income taxes (16,260) 21,954 24,966 105,582 Income tax expense (bene (4,638) 4,415 6,207 24,483 Net income (loss) $ (11,622) $ 17,539 $ 18,759 $ 81,099 Net income (loss) per share: Basic $ (0.09) $ 0.13 $ 0.14 $ 0.61 Diluted $ (0.09) $ 0.13 $ 0.14 $ 0.61 Weighted-average number of shares outstanding: Basic 130,210 132,105 130,189 133,093 Diluted 130,210 132,129 130,227 133,109 Granite Ridge Resources, Inc. Consolidated Statements of Cash Flows (Unaudited) Year Ended December 31, (in thousands) 2024 2023 Operating activities: Net income $ 18,759 $ 81,099 Adjustments to reconcile net income to net cash provided by operating activities: Depletion and accretion expense 176,529 160,662 Impairments of long-lived assets 36,369 26,496 (Gain) loss on derivatives - commodity derivatives 908 (25,544) Net cash receipts from (payments on) commodity derivatives 16,363 22,895 Stock-based compensation 2,298 2,162 Amortization of loan origination costs 3,540 1,260 Loss on derivatives - common stock warrants - 5,742 (Gain) loss on equity investments 15,183 (508) Deferred income taxes 5,958 24,274 Other (1,034) (313) Increase (decrease) in cash attributable to changes in operating assets and liabilities: Revenue receivable 3,288 (846) Other receivable 183 103 Accrued expenses (1,153) 4,550 Prepaid and other current assets (1,411) 485 Other payable (47) 350 Net cash provided by operating activities 275,733 302,867 Investing activities: Capital expenditures for oil and natural gas properties (285,796) (282,390) Acquisition of oil and natural gas properties (61,197) (76,810) Deposit on acquisition (887) - Refund of advances to operators 19,655 2,464 Proceeds from the disposal of oil and natural gas properties 13,995 60 Proceeds from the sale of equity investments 3,462 - Net cash used in investing activities (310,768) (356,676) Financing activities: Proceeds from borrowing on credit facilities 110,000 162,500 Repayments of borrowing on credit facilities (15,000) (52,500) Deferred (3,340) (2,616) Payment of expenses related to formation of Granite Ridge Resources, Inc. - (43) Purchase of treasury shares (442) (35,353) Payment of dividends (57,494) (58,587) Proceeds from issuance of common stock - 5 Net cash provided by 33,724 13,406 Net change in cash and restricted cash (1,311) (40,403) Cash and restricted cash at beginning of year 10,730 51,133 Cash and restricted cash at end of year $ 9,419 $ 10,730 Supplemental disclosure of cash Cash paid during the year for interest $ (14,472) $ (4,825) Cash paid during the year for income taxes $ (197) $ (742) Supplemental disclosure of non-cash investing activities: Oil and natural gas properties divested in exchange for equity securities $ - $ 49,920 Oil and natural gas property development costs in accrued expenses $ 36,736 $ (12,325) Advances to operators applied to development of oil and natural gas properties $ 121,922 $ 98,224 Cash and restricted cash: Cash $ 9,419 $ 10,430 Restricted cash included in other long-term assets - 300 Cash and restricted cash $ 9,419 $ 10,730 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 Year Ended December 31, December 31, 2024 2023 2024 2023 Net Sales (in thousands): Oil sales $ 88,730 $ 86,345 $ 327,491 $ 317,099 Natural gas sales 17,577 20,453 52,539 76,970 Total revenues 106,307 106,798 380,030 394,069 Net Production: Oil (MBbl) 1,354 1,130 4,483 4,162 Natural gas (MMcf) 7,186 7,592 27,944 28,266 Total (MBoe)(1) 2,552 2,395 9,140 8,873 Average Daily Production: Oil (Bbl) 14,717 12,280 12,248 11,404 Natural gas (Mcf) 78,104 82,525 76,350 77,442 Total (Boe)(1) 27,734 26,034 24,973 24,311 Average Sales Prices: Oil (per Bbl) $ 65.53 $ 76.43 $ 73.06 $ 76.18 E 0.85 0.59 0.34 1.10 Oil net of settled oil derivatives (per Bbl) (2) 66.38 77.02 73.40 77.28 Natural gas sales (per Mcf) 2.45 2.69 1.88 2.72 E 0.39 0.45 0.53 0.65 Mcf) Natural gas sales net of settled natural gas derivatives (per Mcf) (2) 2.84 3.14 2.41 3.37 Realized price on a Boe basis excluding settled commodity derivatives 41.66 44.60 41.58 44.41 E 1.56 1.70 1.79 2.58 Boe) Realized price on a Boe basis including settled commodity derivatives (2) 43.22 46.30 43.37 46.99 Operating Expenses (in thousands): Lease operating expenses $ 15,287 $ 15,408 $ 57,461 $ 60,521 Production and ad valorem taxes 7,032 7,897 26,007 27,707 Depletion and accretion expense 49,847 47,574 176,529 160,662 Impairments of long-lived assets 35,637 26,496 36,369 26,496 General and administrative 5,944 6,081 24,649 27,920 Costs and Expenses (per Boe): Lease operating expenses $ 5.99 $ 6.43 $ 6.29 $ 6.82 Production and ad valorem taxes 2.76 3.30 2.85 3.12 Depletion and accretion 19.53 19.87 19.31 18.11 Impairments of long-lived assets 13.96 11.06 3.98 2.99 2.33 2.54 2.70 3.15 General and administrative Net Producing Wells at Period-End: 202.40 176.50 202.40 176.50 Natural gas is converted to Boe using the ratio of one barrel of oil to six Mcf of natural gas. The presentation of realized prices including settled commodity derivatives is a result of including the net cash receipts from (payments on) commodity derivatives that are presented in our consolidated statements of cash means by which to re with derivatives in a manner consistent with the presentation generally used by the investment community. Granite Ridge Resources, Inc. Derivatives Information The table below provides data associated with the Company's current derivatives, for the periods indicated:

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