Financial Performance - Granite Ridge Resources, Inc. reported quarterly earnings of $0.17 per share, exceeding the Zacks Consensus Estimate of $0.14 per share, but down from $0.20 per share a year ago, representing an earnings surprise of 21.43% [1] - The company posted revenues of $106.31 million for the quarter ended December 2024, missing the Zacks Consensus Estimate by 0.79%, and down from $106.8 million year-over-year [2] - Over the last four quarters, the company has surpassed consensus EPS estimates two times but has not beaten consensus revenue estimates [2] Stock Performance - Granite Ridge Resources, Inc. shares have declined approximately 13.2% since the beginning of the year, compared to a decline of 0.7% for the S&P 500 [3] - The current consensus EPS estimate for the upcoming quarter is $0.19 on revenues of $120.03 million, and for the current fiscal year, it is $0.73 on revenues of $481 million [7] Industry Outlook - The Oil and Gas - Exploration and Production - United States industry is currently in the top 12% of over 250 Zacks industries, indicating a favorable outlook [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, suggesting that the industry outlook can significantly impact stock performance [5][8] Future Expectations - The estimate revisions trend for Granite Ridge Resources, Inc. is currently favorable, leading to a Zacks Rank 2 (Buy) for the stock, indicating expected outperformance in the near future [6] - The upcoming earnings call will be crucial for assessing the sustainability of the stock's price movement based on management's commentary and future earnings expectations [3][4]

Financial Performance and Risks - The borrowing base under the Credit Agreement may be reduced due to commodity price declines, potentially limiting future borrowing capacity[216] - The ongoing military conflicts and geopolitical tensions have led to increased volatility in oil and natural gas prices, impacting the company's financial performance[243] - The company is exposed to market risk due to fluctuations in commodity prices, which may necessitate additional commodity price risk management arrangements[392] - A 10% increase in average commodity prices would have decreased the fair value of commodity derivatives by $19.3 million for the year ended December 31, 2024[392] - The company may incur significant unrealized losses from derivative financial instruments if market prices increase while contracts remain in place[392] - Investor concerns regarding the financial systems could lead to less favorable commercial financing terms, impacting the company's ability to acquire financing on acceptable terms[249] Corporate Governance and Control - The company is controlled by Grey Rock Fund III, which holds a majority of the voting common stock, exempting it from certain corporate governance requirements[232] - The Board of Directors does not have a majority of independent directors, which may limit protections for stockholders compared to companies complying with all NYSE governance requirements[233] - Anti-takeover provisions in the company's organizational documents could delay or prevent a change of control, limiting stockholders' ability to obtain a premium for their shares[224] Share Issuance and Dividends - The maximum number of shares reserved for future issuance under the Granite Ridge 2022 Omnibus Incentive Plan is 6.5 million, representing approximately 4.9% of the outstanding shares post-Business Combination[218] - As of December 31, 2024, there are 5.0 million shares of common stock remaining available for future awards under the Incentive Plan[218] - Future issuances of securities for investments or acquisitions could result in significant dilution to existing stockholders[219] - The company paid dividends of $57.5 million, or $0.44 per share, in 2024, and $58.6 million, or $0.44 per share, in 2023, but future dividend payments are at the discretion of the Board of Directors[237] Debt and Tax Liabilities - The company had total indebtedness of $205.0 million outstanding under its Credit Agreement at December 31, 2024, with a one percent increase in interest rates resulting in an additional annual interest expense of approximately $2.1 million[394] - Changes in U.S. tax laws, including a 15% corporate alternative minimum tax and a 1% excise tax on stock repurchases, may increase future tax liabilities and adversely affect operating results and cash flows[234] - The company is subject to various complex and evolving tax laws, which could be interpreted or changed, potentially increasing tax liabilities[236] Growth and Exemptions - The company qualifies as an "emerging growth company," allowing it to take advantage of certain exemptions from disclosure requirements, which may affect investor attractiveness[220] - The company may incur debt and/or issue equity that ranks senior to common stock, potentially diluting existing stockholders[223] - The company may utilize interest rate derivatives to manage interest rate exposure, although it had no outstanding interest rate derivative contracts at December 31, 2024[395]

Financial Performance - Granite Ridge reported a net loss of $11.6 million for Q4 2024, or $(0.09) per diluted share, while Adjusted Net Income was $22.7 million, or $0.17 per diluted share[5]. - For the full year 2024, net income was $18.8 million, or $0.14 per diluted share, with Adjusted Net Income at $73.8 million, or $0.57 per diluted share[6]. - Net income for the year ended December 31, 2024, was $18,759,000, a decrease of 76.9% compared to $81,099,000 in 2023[34]. - The company reported a net loss of $11.6 million for Q4 2024, contrasting with a net income of $17.5 million in Q4 2023, while the annual net income for 2024 was $18.8 million compared to $81.1 million in 2023[46]. - Adjusted net income for the year ended December 31, 2024, was $73,776 thousand, down 30.9% from $107,072 thousand in 2023[51]. - Adjusted earnings per diluted share for Q4 2024 was $0.17, a decrease of 15% from $0.20 in Q4 2023[51]. Production and Sales - Total production for Q4 2024 increased by 7% year-over-year to 27,734 Boe per day, with oil production rising by 20% to 14,717 Bbls per day[7]. - Granite Ridge's 2025 guidance anticipates production of approximately 28,000 to 30,000 Boe per day, representing a 16% increase from 2024[17]. - Oil and natural gas sales for the year ended December 31, 2024, were $380,030,000, down 3.5% from $394,069,000 in 2023[33]. - Oil sales increased to $88.7 million in Q4 2024 from $86.3 million in Q4 2023, with annual oil sales rising to $327.5 million from $317.1 million[37]. - Average daily oil production rose to 14,717 Bbl in Q4 2024, up 20% from 12,280 Bbl in Q4 2023, while total production for the year increased to 9,140 MBoe from 8,873 MBoe[37]. Expenses and Liabilities - Total capital expenditures for 2024 were $354.4 million, with $93.3 million spent in Q4 alone[12]. - Lease operating expenses for Q4 2024 were $15.3 million, or $5.99 per Boe, a 7% decrease on a per unit basis compared to the prior year[10]. - Total current liabilities rose to $101,808,000 in 2024, up 63.9% from $62,079,000 in 2023[31]. - Long-term debt increased to $205,000,000 in 2024 from $110,000,000 in 2023, marking an increase of 86.4%[31]. - Operating expenses for Q4 2024 totaled $49.8 million, compared to $47.6 million in Q4 2023, with lease operating expenses slightly decreasing to $15.3 million from $15.4 million[37]. Assets and Reserves - Total assets increased to $1,036,479,000 in 2024 from $927,104,000 in 2023, representing an increase of approximately 11.8%[31]. - Proved reserves increased to 54,315 MBoe as of December 31, 2024, up from 53,472 MBoe a year earlier, with approximately 52% being oil[15]. Cash Flow and Liquidity - As of December 31, 2024, Granite Ridge had total liquidity of $129.1 million and a Net Debt to Adjusted EBITDAX ratio of 0.7x[14]. - The company reported a net cash provided by operating activities of $275,733,000 for the year ended December 31, 2024, compared to $302,867,000 in 2023, a decrease of 8.9%[34]. - The company's net debt as of December 31, 2024, was $195.6 million, with a net debt to Adjusted EBITDAX ratio of 0.7[47][48]. Derivatives and Impairments - The company experienced a loss on derivatives of $8,803,000 in Q4 2024, compared to a gain of $19,129,000 in Q4 2023[33]. - Impairments of long-lived assets increased to $35,637 thousand in Q4 2024 from $26,496 thousand in Q4 2023, reflecting a rise of 34.5%[51]. - The company reported a loss on derivatives related to commodity derivatives of $8,803 thousand in Q4 2024, compared to a gain of $(19,129) thousand in Q4 2023[51]. Future Outlook - The company plans to continue focusing on operational efficiency and cost management to improve financial performance in the upcoming periods[42]. - The company has significant derivative contracts in place for 2025 and 2026, including oil collars with a total volume of 3,431,379 Bbl and natural gas collars totaling 11,201,989 Mcf[40].

Core Viewpoint - Granite Ridge Resources, Inc. (GRNT) has experienced a bearish price trend recently, losing 5.6% over the past two weeks, but the formation of a hammer chart pattern suggests a potential trend reversal as buying interest may be increasing [1][2]. Technical Analysis - The hammer chart pattern indicates a possible bottom formation with reduced selling pressure, suggesting a bullish outlook for the stock [2][4]. - A hammer pattern typically forms during a downtrend, where the stock opens lower, makes a new low, but then closes near or above the opening price, indicating a shift in control from bears to bulls [3][4]. Fundamental Analysis - There is a strong consensus among Wall Street analysts to raise earnings estimates for GRNT, which supports the bullish case for the stock [2][6]. - The consensus EPS estimate for the current year has increased by 14% over the last 30 days, reflecting analysts' optimism about the company's earnings potential [7]. Zacks Rank - GRNT currently holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises, indicating a strong likelihood of outperforming the market [8]. - A Zacks Rank of 2 is a reliable indicator of improving company prospects and potential trend reversals [8].

Core Viewpoint - Wall Street anticipates a year-over-year decline in earnings for Granite Ridge Resources, Inc. (GRNT) despite higher revenues, with actual results being crucial for stock price movement [1][2]. Earnings Expectations - The upcoming earnings report is expected to show earnings of $0.14 per share, reflecting a 30% decrease year-over-year, while revenues are projected at $107.15 million, a slight increase of 0.3% from the previous year [3]. - The consensus EPS estimate has been revised 19.35% higher in the last 30 days, indicating a positive reassessment by analysts [4]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates a positive Earnings ESP of +11.11% for Granite Ridge Resources, suggesting a likelihood of beating the consensus EPS estimate [10][11]. - The company holds a Zacks Rank of 2 (Buy), further supporting the expectation of an earnings beat [11]. Historical Performance - In the last reported quarter, Granite Ridge Resources exceeded the expected earnings of $0.13 per share by delivering $0.14, resulting in a surprise of +7.69% [12]. - Over the past four quarters, the company has surpassed consensus EPS estimates in two instances [13]. Industry Context - In the Zacks Oil and Gas - Exploration and Production - United States industry, Amplify Energy is expected to report earnings of $0.25 per share, reflecting a significant year-over-year decline of 76.6%, with revenues projected at $80.09 million, up 1.4% [17]. - Amplify Energy's consensus EPS estimate has been revised 30.8% higher recently, but it has an Earnings ESP of 0.00%, making predictions about beating the consensus EPS estimate uncertain [18].

Group 1 - The article promotes a free two-week trial for the investment group Distressed Value Investing, which offers exclusive research on various companies and investment opportunities [1] - The investment group focuses on value opportunities and distressed plays, particularly in the energy sector [2] - The author, Aaron Chow, has over 15 years of analytical experience and previously co-founded a mobile gaming company that was acquired by PENN Entertainment [2] Group 2 - The article emphasizes that past performance is not indicative of future results and does not provide specific investment recommendations [3] - It clarifies that the analysts contributing to the platform may not be licensed or certified by any regulatory body [3]

Group 1 - Granite Ridge Resources (NYSE: GRNT) plans to invest nearly $150 million in capital during 2024 for wells expected to turn-to-sales in early 2025 [2] - This investment is projected to result in a significant cash burn of approximately $65 million after dividends in Q4 2024 [2] - The company is focused on value opportunities and distressed plays, particularly in the energy sector [2]

Financial Data and Key Metrics Changes - The company reported average daily production of 25,200 Boe per day, marking a 9% increase over the second quarter and 5% from the third quarter last year [13] - Net income for the quarter was $9.1 million or $0.07 per share, with adjusted net income at $18.5 million or $0.14 per share [15] - Adjusted EBITDAX for the quarter was $75.4 million, representing a 10% increase from the prior quarter despite a 6% decline in realized pricing on a Boe basis [15][16] - Per unit lease operating cost improved significantly to $5.62 per Boe, a 14% improvement from the previous quarter [16] - The company reaffirmed its annual production guidance range of 23.3 Boe to 25.3 Boe per day [14] Business Line Data and Key Metrics Changes - The Controlled Capital program has exceeded production targets by approximately 15% and CapEx has come in about 15% under budget [7] - The company plans to allocate nearly 50% of its CapEx to Controlled Capital in 2024, increasing to approximately 60% in 2025 [8] - The company closed over a dozen transactions this quarter, adding nearly 16 net locations at a total cost of $31 million [8] Market Data and Key Metrics Changes - The company expects a quarter-over-quarter gas production decline of up to 10% in the fourth quarter, partially offset by a modest increase in oil production [10] - The oil production percentage increased to 50% in the third quarter, up from 47% in the prior quarter [13] Company Strategy and Development Direction - The company aims to reshape its narrative as a publicly traded private equity firm, blending control over development with private equity's agility [22][24] - The focus is on capital allocation strategy, with a significant portion of capital directed towards Controlled Capital development programs [19][24] Management's Comments on Operating Environment and Future Outlook - Management anticipates double-digit production growth in 2025 compared to 2024, with year-over-year production growth expected to be in the mid-teens [12][45] - The company is optimistic about the future, highlighting the potential for significant production and cash flow growth in early 2025 due to investments made in 2024 [20][24] Other Important Information - The company continued its quarterly cash dividend program, paying $0.11 per share in the third quarter, with another dividend declared for December 2024 [21] - The company expects to provide formal 2025 guidance during the Q4 call [20] Q&A Session Summary Question: What drove the lower LOE costs and expectations for Q4? - Management indicated that lower LOE costs were primarily due to less workover expense, expecting Q4 costs to come in towards the lower end of the guidance range [26] Question: Can you provide details on the new leasehold in Appalachia? - The company is focused on the Utica condensate window, particularly in Guernsey and Harrison, and is excited about the partnership opportunities in that area [27][28] Question: Can you elaborate on the Controlled CapEx partnerships and inventory? - The company has two partners, with five or six net locations in the Midland Basin and plans to pick up a rig in late 2024 or early 2025 [33][34] Question: How does the production performance compare to underwriting? - The production performance chart does not incorporate timing but shows actual performance against projections, highlighting the strength of the company's underwriting capabilities [38][39] Question: What is the expected decline rate for PDP? - The company indicated that the PDP decline rate has increased to around 40%, influenced by the Controlled Capital program [47] Question: Are there opportunities for Controlled Capital in other basins? - The company is exploring opportunities in the Bakken and Eagle Ford basins, although gas-weighted areas are currently challenging due to economics [52][54]

GRANITE RIDGE INVESTOR PRESENTATION | NOVEMBER 2024 GRNT LISTED NYSE Granite Ridge at a Glance Key Statistics ($MM except per share metrics) | --- | --- | |------------------------------------------------|-------------| | | | | Ticker / Exchange | GRNT / NYSE | | Share Price (as of 11/6/2024) | $6.35 | | Market Capitalization | $830 | | Enterprise Value 1 | $1,002 | | TTM Adjusted EBITDAX 2 | $290 | | Dividend Yield 3 | 6.9% | | Vital Energy, Inc Shares Held on Balance Sheet | 4 $29 | 3Q '24 Production (25, ...

Company Performance - Granite Ridge Resources, Inc. reported quarterly earnings of $0.14 per share, exceeding the Zacks Consensus Estimate of $0.13 per share, but down from $0.21 per share a year ago, representing an earnings surprise of 7.69% [1] - The company posted revenues of $94.08 million for the quarter ended September 2024, missing the Zacks Consensus Estimate by 2.36% and down from $108.4 million year-over-year [2] - Over the last four quarters, the company has surpassed consensus EPS estimates two times but has not beaten revenue estimates [2] Stock Outlook - The stock has gained approximately 5.5% since the beginning of the year, while the S&P 500 has increased by 24.3% [3] - The current consensus EPS estimate for the upcoming quarter is $0.12 on revenues of $102.05 million, and for the current fiscal year, it is $0.55 on revenues of $378.05 million [7] - The estimate revisions trend for Granite Ridge Resources is currently unfavorable, resulting in a Zacks Rank 4 (Sell), indicating expected underperformance in the near future [6] Industry Context - The Oil and Gas - Exploration and Production - United States industry is currently in the bottom 6% of over 250 Zacks industries, suggesting a challenging environment for stocks in this sector [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact investor sentiment and stock performance [5]