Granite Ridge Resources Inc. (“Granite Ridge” or the
“Company”) (NYSE: GRNT) today reported financial and operating
results for the second quarter 2023 and provided an updated outlook
for 2023.
Second Quarter 2023 Highlights
- Grew production 13% to 21,557 barrels of oil equivalent (“Boe”)
per day (48% oil), from 19,090 Boe per day for the second quarter
of 2022.
- Reported net income of $8.7 million, or $0.07 per share, versus
$93.3 million, or $0.70 per share, for the prior year period.
Second quarter adjusted net income (non-GAAP) totaled $25.6
million, or $0.19 per share.
- Generated $69.7 million of adjusted EBITDAX (non-GAAP).
- Deployed $63.2 million of capital during the quarter, including
$7.5 million of inventory acquisitions (non-GAAP).
- Placed 79 gross (5.54 net) wells online.
- Declared dividend of $0.11 per share of common stock.
- Added to the Russell 3000 Index on June 23, 2023.
- Ended the second quarter of 2023 with liquidity of $109.2
million.
2023 Outlook Updates
- Increased full year 2023 midpoint production guidance to 22,250
Boe per day; now expecting to generate 13% midpoint annual
production volume growth as compared to the full year 2022.
- Increased the midpoint of total capital expenditures for full
year 2023 by $5 million to $295 million to reflect additional
acquisitions.
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 defined
herein) measures.
Luke Brandenberg, President and CEO of Granite Ridge, commented,
“We were pleased to post a 13% increase in year-over-year
production during the second quarter of 2023. Driving the growth
was a combination of targeted, high-value acquisitions and
development activities in key onshore basins across the U.S. In
addition, we ended this year’s second quarter with ownership in
approximately 158 net producing wells – a 28% increase from the
same time last year. We are fortunate to work with a collective
group of operators that have proven track records of prudently
growing their operational footprint to maximize production and
returns. The result has been outsized returns for our investors as
we execute our well-defined growth strategy.
“As we look to the remainder of this year and into 2024, we will
continue to develop and leverage our deep local relationships to
identify and execute on additional opportunities to further expand
our business. As in the past, all decisions will be made through a
lens of focusing on our highest risk-adjusted rate-of-return
opportunities in our deep inventory of prospects. We are encouraged
by the positive industry fundamentals we see before us and look
forward to enhancing our asset position and continuing to support
our operators in their efforts to sustainably grow their respective
businesses, which also benefits our shareholders.”
Second Quarter 2023 Summary
Second quarter 2023 oil production volumes totaled 10,418
barrels (“Bbls”) per day, a 13% increase from the second quarter of
2022. Natural gas production for the second quarter of 2023 totaled
66,835 thousand cubic feet of natural gas (“Mcf”) per day, a 13%
increase from the second quarter of 2022. As a result, the
Company’s total production for the second quarter of 2023 grew 13%
from the second quarter of the prior year to 21,557 Boe per
day.
Net income for the second quarter of 2023 was $8.7 million, or
$0.07 per diluted share. Excluding non-cash and nonrecurring items,
the second quarter 2023 adjusted net income (non-GAAP) was $25.6
million, or $0.19 per diluted share. The Company’s average realized
price for oil and natural gas for the second quarter of 2023,
excluding the effect of commodity derivatives, was $72.86 per Bbl
and $3.04 per Mcf, respectively.
Adjusted EBITDAX (non-GAAP) for the second quarter of 2023
totaled $69.7 million, compared to $113.6 million for the second
quarter of 2022. Second quarter of 2023 cash flow from operating
activities was $74.2 million, including $7.4 million in working
capital changes. Operating cash flow before working capital changes
(non-GAAP) was $66.8 million. Costs incurred for development
activities totaled $58.7 million for the second quarter of
2023.
During the second quarter of 2023, the Company issued 2,471,738
shares of common stock in exchange for 9,887,035 warrants. The
purpose of the warrant exchange was to simplify the Company’s
capital structure and reduce the potential dilutive impact of the
warrants, thereby providing the Company with more flexibility for
financing its operations in the future.
Operational Activity
The table below provides a summary of gross and net wells
completed and put on production for the three and six months ended
June 30, 2023:
Three Months Ended June 30,
2023
Six Months Ended June 30,
2023
Gross
Net
Gross
Net
Permian
16
2.36
62
5.13
Eagle Ford
3
0.04
12
2.50
Bakken
7
0.53
17
1.09
Haynesville
0
0.00
0
0.00
DJ
53
2.61
66
2.73
Total
79
5.54
157
11.45
On June 30, 2023, the Company had 186 gross (12.2 net) wells in
process.
Costs Incurred
The tables below provide the costs incurred for oil and natural
gas producing activities for the periods indicated:
Three Months Ended June
30,
Six Months Ended June
30,
(in thousands)
2023
2022
2023
2022
Property acquisition costs:
Proved
$
1,309
$
2,895
$
19,298
$
7,955
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
$
125,769
Three Months Ended June
30,
Six Months Ended June
30,
(in thousands)
2023
2022
2023
2022
Inventory acquisitions (non-GAAP) (1)
$
7,526
$
21,534
$
24,264
$
31,634
Production acquisitions
—
—
17,989
560
Development costs (excluding drilling
carry)
55,683
37,817
147,181
93,575
Total costs incurred for oil and natural
gas properties
$
63,209
$
59,351
$
189,434
$
125,769
(1) Includes costs to acquire additional
development opportunities and undeveloped acreage acquisition.
Commodity Derivatives Update
The Company’s commodity derivatives strategy is intended to
manage its exposure to commodity price fluctuations. Please see the
table under “Derivatives Information” below for detailed
information about Granite Ridge’s current derivatives
positions.
Updated 2023 Guidance
The following table summarizes the Company’s updated operational
and financial guidance for 2023.
2023 Guidance
Updated 2023 Guidance
Annual production (Boe per day)
21,000 - 23,000
21,500 - 23,000
Oil as a % of sales volumes
49 %
49 %
Inventory acquisitions and production
acquisitions ($ in millions)
$45 - $45
$50 - $50
Development capital expenditures ($ in
millions)
$230 - $260
$230 - $260
Total capital expenditures ($ in
millions)
$275 - $305
$280 - $310
Net wells placed on production
19 - 21
19 - 21
Lease operating expenses (per Boe)
$6.50 - $7.50
$6.50 - $7.50
Production and ad valorem taxes (as a % of
total sales)
7% - 8%
7% - 8%
Cash general and administrative expense ($
in millions)
$20 - $22
$20 - $22
Conference Call
Granite Ridge will host a conference call on August 11, 2023, at
10:00 AM CT (11:00 AM ET) to discuss its second quarter 2023
results. 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 August 26, 2023. To access the audio replay dial
(800) 770-2030 and enter confirmation code 4127559.
Upcoming Investor Events
Granite Ridge management will be participating in the following
upcoming investor events:
- EnerCom Denver Energy Conference - August 14-16, 2023.
- Barclays CEO Energy-Power Conference - September 5-7,
2023.
- Minerals & Royalty Assembly - October 10, 2023.
Any investor presentations to be used for such events will be
posted prior to the events on Granite Ridge’s website.
About Granite Ridge
Granite Ridge is a scaled, non-operated oil and gas exploration
and production company. We own a portfolio of wells and top-tier
acreage across the Permian and four other prolific unconventional
basins across the United States. Rather than drill wells ourselves,
we increase asset diversity and decrease overhead by investing in a
smaller piece of a larger number of high-graded wells drilled by
proven public and private operators. We create value by generating
sustainable full-cycle risk adjusted returns for investors,
offering a rewarding experience for our team, and delivering
reliable energy solutions to all – safely and responsibly. 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 (the “Securities
Act”) and the Securities Exchange Act of 1934 (the “Exchange Act”).
All statements other than statements of historical facts included
in this release regarding Granite Ridge’s 2023 outlook, dividend
plans and practices, financial position, operating and financial
performance, business 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, and trends or 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 differ
materially from those set forth in the forward-looking statements,
including the following: the ability to recognize the anticipated
benefits of the business combination, Granite Ridge’s financial
performance following the business combination, changes in Granite
Ridge’s strategy, future operations, financial position, estimated
revenues and losses, projected costs, prospects and plans, changes
in current or future commodity prices and interest rates, supply
chain disruptions, infrastructure constraints and related factors
affecting our properties, ability to acquire additional development
opportunities or make acquisitions, 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 affect the quantities and present value
of the Granite Ridge’s reserves, the outcome of any known and
unknown litigation and regulatory proceedings, legal and
contractual limitations on the payment of dividends, limited
liquidity and trading of Granite Ridge’s securities, acts of war or
terrorism and market conditions and global, regulatory, technical,
and economic factors beyond Granite Ridge’s control, including the
potential adverse effects of the COVID-19 pandemic, or another
major disease, affecting capital markets, general economic
conditions, global supply chains and Granite Ridge’s business and
operations, and increasing regulatory and investor emphasis on
environmental, social and governance matters.
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 significant business,
economic, competitive, regulatory and other risks, contingencies
and uncertainties, most of which are difficult to predict and many
of which are beyond Granite Ridge’s control. 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 financial
results prepared in accordance with U.S. Generally Accepted
Accounting Principles (“GAAP”), this press release contains certain
financial measures that are not prepared in accordance with GAAP,
including adjusted net income, adjusted earnings per share,
adjusted EBITDAX, operating cash flow before working capital
changes, free cash flow and inventory acquisitions.
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 financial
measure calculated in accordance with GAAP.
Granite Ridge Resources
Inc.
Condensed Consolidated Balance
Sheets
(Unaudited)
(in thousands, except par value and
share data)
June 30, 2023
December 31, 2022
ASSETS
Current assets:
Cash
$
14,493
$
50,833
Revenue receivable
55,532
72,287
Advances to operators
22,917
8,908
Prepaid costs and other
1,354
4,203
Derivative assets - commodity
derivatives
10,104
10,089
Total current assets
104,400
146,320
Property and equipment:
Oil and gas properties, successful efforts
method
1,218,096
1,028,662
Accumulated depletion
(452,303
)
(383,673
)
Total property and equipment, net
765,793
644,989
Long-term assets:
Other long-term assets
3,142
3,468
Total long-term assets
3,142
3,468
Total assets
$
873,335
$
794,777
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities:
Accrued expenses
$
51,510
$
62,180
Other liabilities
1,235
1,523
Derivative liabilities - commodity
derivatives
157
431
Total current liabilities
52,902
64,134
Long-term liabilities:
Long-term debt
55,000
—
Derivative liabilities - commodity
derivatives
156
—
Derivative liabilities - common stock
warrants
681
11,902
Asset retirement obligations
6,052
4,745
Deferred tax liability
106,219
91,592
Total long-term liabilities
168,108
108,239
Total liabilities
221,010
172,373
Stockholders' Equity:
Common stock, $0.0001 par value,
431,000,000 shares authorized, 135,949,232 and 133,294,897 issued
at June 30, 2023 and December 31, 2022, respectively
14
13
Additional paid-in capital
609,909
590,232
Retained earnings
48,610
32,388
Treasury stock, at cost, 971,701 and
25,920 shares at June 30, 2023 and December 31, 2022,
respectively
(6,208
)
(229
)
Total stockholders' equity
652,325
622,404
Total liabilities and stockholders'
equity
$
873,335
$
794,777
Granite Ridge Resources
Inc.
Condensed Consolidated
Statements of Operations
(Unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
(in thousands, except per share
data)
2023
2022
2023
2022
Revenues:
Oil and natural gas sales
$
87,557
$
150,267
$
178,867
$
244,116
Operating costs and expenses:
Lease operating expenses
14,406
9,515
28,178
17,928
Production and ad valorem taxes
6,303
7,726
12,020
12,900
Depletion and accretion expense
34,969
31,404
68,821
47,529
General and administrative (including
non-cash stock-based compensation of $375 and $1,434 for the three
and six months ended June 30, 2023)
8,011
2,267
16,590
5,039
Total operating costs and expenses
63,689
50,912
125,609
83,396
Net operating income
23,868
99,355
53,258
160,720
Other income (expense):
Gain (loss) on derivatives - commodity
derivatives
1,221
(5,462
)
14,544
(33,858
)
Interest expense
(1,211
)
(609
)
(1,550
)
(1,134
)
Loss on derivatives - common stock
warrants
(11,012
)
—
(5,734
)
—
Total other income (expense)
(11,002
)
(6,071
)
7,260
(34,992
)
Income before income taxes
12,866
93,284
60,518
125,728
Income tax expense
4,129
—
14,915
—
Net income
$
8,737
$
93,284
$
45,603
$
125,728
Net income per share:
Basic
$
0.07
$
0.70
$
0.34
$
0.95
Diluted
$
0.07
$
0.70
$
0.34
$
0.95
Weighted-average number of shares
outstanding:
Basic
132,866
132,923
132,933
132,923
Diluted
132,880
132,923
132,941
132,923
Granite Ridge Resources
Inc.
Condensed Consolidated
Statements of Cash Flows
(Unaudited)
Six Months Ended June
30,
(in thousands)
2023
2022
Operating activities:
Net income
$
45,603
$
125,728
Adjustments to reconcile net income to net
cash provided by operating activities:
Depletion and accretion expense
68,821
47,529
(Gain) loss on derivatives - commodity
derivatives
(14,544
)
33,858
Net cash receipts from (payments on)
commodity derivatives
14,411
(24,907
)
Stock-based compensation
1,434
—
Amortization of deferred financing
costs
327
21
Loss on derivatives - common stock
warrants
5,734
—
Deferred income taxes
14,662
—
Other
(145
)
—
Increase (decrease) in cash attributable
to changes in operating assets and liabilities:
Revenue receivable
16,602
(47,255
)
Accrued expenses
1,472
3,712
Prepaid and other expenses
950
(1,529
)
Other payable
333
153
Net cash provided by operating
activities
155,660
137,310
Investing activities:
Capital expenditures for oil and natural
gas properties
(182,293
)
(84,992
)
Acquisition of oil and natural gas
properties
(29,516
)
(20,744
)
Refund of advances to operators
—
750
Proceeds from the disposal of oil and
natural gas properties
—
748
Net cash used in investing activities
(211,809
)
(104,238
)
Financing activities:
Proceeds from borrowing on credit
facilities
72,500
11,000
Repayments of borrowing on credit
facilities
(17,500
)
(9,400
)
Cash contributions
—
84
Deferred financing costs
(28
)
—
Payment of expenses related to formation
of Granite Ridge Resources, Inc.
(43
)
—
Purchase of treasury shares
(5,857
)
—
Payment of dividends
(29,263
)
—
Net cash provided by financing
activities
19,809
1,684
Net change in cash and restricted
cash
(36,340
)
34,756
Cash and restricted cash at beginning of
period
51,133
12,154
Cash and restricted cash at end of
period
$
14,793
$
46,910
Supplemental disclosure of non-cash
investing activities:
Oil and natural gas property development
costs in accrued expenses
$
(13,903
)
$
3,835
Advances to operators applied to
development of oil and natural gas properties
$
53,379
$
31,617
Cash and restricted cash:
Cash
$
14,493
$
46,610
Restricted cash included in other
long-term assets
300
300
Cash and restricted cash
$
14,793
$
46,910
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 June
30,
Six Months Ended June
30,
2023
2022
2023
2022
Net Sales (in thousands):
Oil sales
$
69,070
$
99,453
$
142,545
$
172,038
Natural gas sales
18,487
50,814
36,322
72,078
Total revenues
87,557
150,267
178,867
244,116
Net Production:
Oil (MBbl)
948
840
1,913
1,611
Natural gas (MMcf)
6,082
5,383
12,802
9,303
Total (MBoe)(1)
1,962
1,737
4,047
3,162
Average Daily Production:
Oil (Bbl)
10,418
9,231
10,569
8,901
Natural gas (Mcf)
66,835
59,154
70,729
51,398
Total (Boe)(1)
21,557
19,090
22,357
17,467
Average Sales Prices:
Oil (per Bbl)
$
72.86
$
118.40
$
74.51
$
106.79
Effect of gain (loss) on settled oil
derivatives on average price (per Bbl)
1.94
(11.61
)
1.98
(10.07
)
Oil net of settled oil derivatives (per
Bbl) (2)
74.80
106.79
76.49
96.72
Natural gas sales (per Mcf)
3.04
9.44
2.84
7.75
Effect of gain (loss) on settled natural
gas derivatives on average price (per Mcf)
1.02
(1.37
)
0.83
(0.93
)
Natural gas sales net of settled natural
gas derivatives (per Mcf) (2)
4.06
8.07
3.67
6.82
Realized price on a Boe basis excluding
settled commodity derivatives
44.63
86.51
44.20
77.20
Effect of gain (loss) on settled commodity
derivatives on average price (per Boe)
4.09
(9.86
)
3.56
(7.88
)
Realized price on a Boe basis including
settled commodity derivatives (2)
48.72
76.65
47.76
69.32
Operating Expenses (in
thousands):
Lease operating expenses
$
14,406
$
9,515
$
28,178
$
17,928
Production and ad valorem taxes
6,303
7,726
12,020
12,900
Depletion and accretion expense
34,969
31,404
68,821
47,529
General and administrative
8,011
2,267
16,590
5,039
Costs and Expenses (per Boe):
Lease operating expenses
$
7.34
$
5.48
$
6.96
$
5.67
Production and ad valorem taxes
3.21
4.45
2.97
4.08
Depletion and accretion
17.82
18.08
17.01
15.03
General and administrative
4.08
1.31
4.10
1.59
Net Producing Wells at
Period-End:
157.57
123.35
157.57
123.35
(1)
Natural gas is converted to Boe
using the ratio of one barrel of oil to six Mcf of natural gas.
(2)
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 condensed consolidated
statements of cash flows. This presentation of average prices with
derivatives is a means by which to reflect the actual cash
performance of our commodity derivatives for the respective periods
and presents oil and natural gas prices 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 derivatives at August 10, 2023, for the periods
indicated:
2023
2024
2025
Third Quarter
Fourth Quarter
Total
Total
Total
Producer 3-way (oil)
Volume (Bbl)
228,572
208,488
437,060
—
—
Weighted-average sub-floor price
($/Bbl)
$
60.42
$
60.43
$
60.43
$
—
$
—
Weighted-average floor price ($/Bbl)
$
79.12
$
80.00
$
79.54
$
—
$
—
Weighted-average ceiling price ($/Bbl)
$
100.61
$
101.92
$
101.23
$
—
$
—
Collar (oil)
Volume (Bbl)
48,618
371,304
419,922
1,007,846
—
Weighted-average floor price ($/Bbl)
$
61.50
$
67.49
$
66.79
$
61.92
$
—
Weighted-average ceiling price ($/Bbl)
$
81.60
$
88.14
$
87.38
$
81.86
$
—
Collar (natural gas)
Volume (Mcf)
2,530,000
2,086,650
4,616,650
3,301,000
1,406,000
Weighted-average floor price ($/Mcf)
$
4.25
$
4.49
$
4.36
$
3.26
$
3.63
Weighted-average ceiling price ($/Mcf)
$
5.90
$
6.34
$
6.10
$
4.86
$
5.42
Swaps (natural gas)
Volume (Mcf)
—
—
—
4,303,000
—
Weighted-average price ($/Mcf)
$
—
$
—
$
—
$
3.24
$
—
Granite Ridge Resources Inc.
Supplemental Non-GAAP Financial Measures
The Company reports its financial results in accordance with
GAAP. However, the Company believes certain non-GAAP performance
measures may provide financial statement users with additional
meaningful comparisons between current results, the results of its
peers and the results of prior periods. In addition, the Company
believes these measures are used by analysts and others in the
valuation, rating and investment recommendations of companies
within the oil and natural gas exploration and production industry.
See the reconciliations throughout this release of GAAP financial
measures to non-GAAP financial measures for the periods
indicated.
Reconciliation of Net Income to Adjusted EBITDAX
Adjusted EBITDAX (as defined below) is presented herein and
reconciled from the GAAP measure of net income because of its wide
acceptance by the investment community as a financial
indicator.
The Company defines adjusted EBITDAX as net income, before (1)
exploration and abandonments, (2) depletion and accretion expense,
(3) (gain) loss on derivatives – commodity derivatives, (4) net
cash receipts from (payments on) commodity derivatives, (5) (gain)
loss on disposal of oil and natural gas properties, (6) interest
expense (7) (gain) loss on derivatives – common stock warrants (8)
non-cash stock-based compensation (9) warrant exchange transaction
costs and (10) income tax expense. Adjusted EBITDAX is not a
measure of net income or cash flows as determined by GAAP.
The Company’s adjusted EBITDAX measure provides additional
information that may be used to better understand the Company’s
operations. Adjusted EBITDAX is one of several metrics that the
Company uses as a supplemental financial measurement in the
evaluation of its business and should not be considered as an
alternative to, or more meaningful than, net income as an indicator
of operating performance. Certain items excluded from adjusted
EBITDAX are significant components in understanding and assessing a
company’s financial performance, such as a company’s cost of
capital and tax structure, as well as the historic cost of
depreciable and depletable assets. Adjusted EBITDAX, as used by the
Company, may not be comparable to similarly titled measures
reported by other companies. The Company believes that adjusted
EBITDAX is a widely followed measure of operating performance and
is one of many metrics used by the Company’s management team and by
other users of the Company’s consolidated financial statements. For
example, adjusted EBITDAX can be used to assess the Company’s
operating performance and return on capital in comparison to other
independent exploration and production companies without regard to
financial or capital structure, and to assess the financial
performance of the Company’s assets and the Company without regard
to capital structure or historical cost basis.
The following table provides a reconciliation of the GAAP
measure of net income to adjusted EBITDAX for the periods
indicated:
Three Months Ended June
30,
Six Months Ended June
30,
(in thousands)
2023
2022
2023
2022
Net income
$
8,737
$
93,284
$
45,603
$
125,728
Interest expense
1,211
609
1,550
1,134
Income tax expense
4,129
—
14,915
—
Depletion and accretion expense
34,969
31,404
68,821
47,529
Non-cash stock-based compensation
375
—
1,434
—
Warrant exchange transaction costs
2,456
—
2,456
—
(Gain) loss on derivatives - commodity
derivatives
(1,221
)
5,462
(14,544
)
33,858
Net cash receipts from (payments on)
commodity derivatives
8,025
(17,132
)
14,411
(24,907
)
Loss on derivatives - common stock
warrants
11,012
—
5,734
—
Adjusted EBITDAX
$
69,693
$
113,627
$
140,380
$
183,342
Reconciliation of Net Cash Provided by Operating Activities
to Operating Cash Flow Before Working Capital Changes and to Free
Cash Flow
The Company provides Operating Cash Flow (“OCF”) before working
capital changes, which is a non-GAAP financial measure. OCF before
working capital changes represents net cash provided by operating
activities as determined under GAAP without regard to changes in
operating assets and liabilities. The Company believes OCF before
working capital changes is an accepted measure of an oil and
natural gas company’s ability to generate cash used to fund
development and acquisition activities and service debt or pay
dividends. Additionally, the Company provides free cash flow, which
is a non-GAAP financial measure. Free cash flow is cash flow from
operating activities before changes in working capital in excess of
exploration and development costs incurred. The Company believes
that free cash flow is useful to investors as it provides measures
to compare cash from operating activities and exploration and
development costs across periods on a consistent basis.
These non-GAAP measures should not be considered as alternatives
to, or more meaningful than, net cash provided by operating
activities as indicators of operating performance.
The following tables provide a reconciliation from the GAAP
measure of net cash provided by operating activities to OCF before
working capital changes and to free cash flow:
Three Months Ended June
30,
Six Months Ended June
30,
(in thousands)
2023
2022
2023
2022
Net cash provided by operating
activities
$
74,186
$
81,246
$
155,660
$
137,310
Changes in cash due to changes in
operating assets and liabilities:
Revenue receivable
(10,169
)
33,236
(16,602
)
47,255
Accrued expenses
3,137
(3,042
)
(1,472
)
(3,712
)
Prepaid and other expenses
(885
)
1,582
(950
)
1,529
Other payable
482
8
(333
)
(153
)
Total working capital changes
(7,435
)
31,784
(19,357
)
44,919
Operating cash flow before working
capital changes
66,751
113,030
136,303
182,229
Development costs
58,739
44,124
157,345
105,025
Free cash flow
$
8,012
$
68,906
$
(21,042
)
$
77,204
Reconciliation of Net Income to Adjusted Net Income and
Adjusted Earnings per Share
The Company’s presentation of adjusted net income and adjusted
earnings per share that exclude the effect of certain items are
non-GAAP financial measures. Adjusted net income and adjusted
earnings per share represent earnings and diluted earnings per
share determined under GAAP without regard to certain non-cash and
nonrecurring items. The Company believes these measures provide
useful information to analysts and investors for analysis of its
operating results on a recurring, comparable basis from period to
period. Adjusted net income and adjusted earnings per share should
not be considered in isolation or as a substitute for earnings or
diluted earnings per share as determined in accordance with GAAP
and may not be comparable to other similarly titled measures of
other companies.
The following table provides a reconciliation from the GAAP
measure of net income to adjusted net income, both in total and on
a per diluted share basis, for the periods indicated:
Three Months Ended June
30,
Six Months Ended June
30,
(in thousands, except share
data)
2023
2022
2023
2022
Net income
$
8,737
$
93,284
$
45,603
$
125,728
(Gain) loss on derivatives - commodity
derivatives
(1,221
)
5,462
(14,544
)
33,858
Net cash receipts from (payments on)
commodity derivatives
8,025
(17,132
)
14,411
(24,907
)
Loss on derivatives - common stock
warrants
11,012
—
5,734
—
Warrant exchange transaction costs
2,456
—
2,456
—
Tax impact on above adjustments (a)
(4,602
)
—
(1,829
)
—
Changes in deferred taxes and other
estimates
1,191
—
1,191
—
Adjusted net income
$
25,598
$
81,614
$
53,022
$
134,679
Earnings per diluted share - as
reported
$
0.07
$
0.70
$
0.34
$
0.95
(Gain) loss on derivatives - commodity
derivatives
(0.01
)
0.04
(0.11
)
0.25
Net cash receipts from (payments on)
commodity derivatives
0.06
(0.13
)
0.11
(0.19
)
Loss on derivatives - common stock
warrants
0.08
—
0.04
—
Warrant exchange transaction costs
0.02
—
0.02
—
Tax impact on above adjustments (a)
(0.04
)
—
(0.01
)
—
Changes in deferred taxes and other
estimates
0.01
—
0.01
—
Adjusted earnings per diluted
share
$
0.19
$
0.61
$
0.40
$
1.01
Adjusted earnings per share:
Basic earnings
$
0.19
$
0.61
$
0.40
$
1.01
Diluted earnings
$
0.19
$
0.61
$
0.40
$
1.01
(a) Estimated using statutory tax rate in
effect for the period.
Reconciliation of Total Costs Incurred for Oil and Natural
Gas Properties to Inventory Acquisitions
The Company defines inventory acquisitions as costs incurred to
acquire additional development opportunities and undeveloped
acreage acquisitions and excludes producing property acquisition
costs. The Company believes that inventory acquisitions are useful
to investors as they provide a measure of Company’s costs incurred
for current and future drilling opportunities on a consistent
basis.
The following tables provide a reconciliation from the GAAP
measure of total costs incurred for oil and natural gas properties
to inventory acquisitions:
Three Months Ended June
30,
Six Months Ended June
30,
(in thousands)
2023
2022
2023
2022
Property acquisition costs:
Proved
$
1,309
$
2,895
$
19,298
$
7,955
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
125,769
Less: Development costs (excluding
drilling carry)
(55,683
)
(37,817
)
(147,181
)
(93,575
)
Less: Production acquisitions
—
—
(17,989
)
(560
)
Inventory acquisitions (non-GAAP)
$
7,526
$
21,534
$
24,264
$
31,634
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230810090911/en/
INVESTOR RELATIONS AND MEDIA CONTACT: IR@GraniteRidge.com
– (214) 396-2850
Grafico Azioni Granite Ridge Resources (NYSE:GRNT)
Storico
Da Dic 2024 a Gen 2025
Grafico Azioni Granite Ridge Resources (NYSE:GRNT)
Storico
Da Gen 2024 a Gen 2025
