Granite Ridge Resources, Inc. (NYSE: GRNT) (“Granite Ridge”
or the “Company”) today reported financial and operating
results for the fourth quarter and full-year 2023 and provided
initial guidance for 2024.
Fourth Quarter 2023 Highlights
- Grew production 18% to 26,034 barrels of oil equivalent (“Boe”)
per day (47% oil) versus the prior year quarter
- Reported net income of $17.5 million, or $0.13 per share and
Adjusted Net Income (non-GAAP) of $26.4 million, or $0.20 per
share
- Generated $81.8 million of Adjusted EBITDAX (non-GAAP)
- Deployed $78.4 million of capital
- Placed 80 gross (4.60 net) wells online
- Declared dividend of $0.11 per share of common stock of the
Company
- Completed the sale of certain Permian Basin assets to Vital
Energy, Inc. (NYSE: VTLE)
- Ended 2023 with $140.1 million of liquidity
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 end fourth quarter and full year 2023 with an
average daily production increase of 18% and 23%, respectively. We
also posted a year-over-year increase in proved reserves of 6%.
This was a direct result of our successful multi-pronged strategy
as we thoughtfully grow the business, and I want to thank our full
team for their hard work and dedication as we continue to execute
on additional opportunities to further enhance our asset base. We
continued these efforts in the fourth quarter of 2023 with the
closing of ten unique transactions, including two Haynesville
acquisitions alongside an existing operating partner for a combined
$24 million and two transactions with a Strategic Partner in the
Delaware Basin including aggregate inventory of 1.9 net locations,
acquisition cost of $3 million, and estimated future development
cost of $18 million. While we are typically a buyer of assets, we
are always looking for opportunities to redeploy capital at
attractive valuations. As such, sometimes it makes sense to divest.
This occurred in the fourth quarter with our sale of certain
Permian Basin assets to Vital Energy for consideration that
included common shares and preferred securities.”
Mr. Brandenberg concluded, “Looking forward, we continue to see
a lot of runway in front of us. This view supports our 2024
guidance of an increase of approximately 7% in production at the
midpoint from 2023 levels, after adjusting for the divestiture of
the assets to Vital. We look forward to keeping everyone apprised
of our progress as we continue to execute our proven growth
strategy and support our shareholders through our ongoing quarterly
cash dividend payment program.”
Fourth Quarter 2023 Summary
Oil production for the quarter totaled 12,280 barrels (“Bbls”)
per day, a 8% increase from the prior year quarter. Natural gas
production for the quarter totaled 82,525 thousand cubic feet of
natural gas (“Mcf”) per day, a 29% increase from the prior year
quarter. The Company’s total production for the quarter grew 18%
from the prior year quarter to 26,034 Boe per day. Total production
for the quarter after adjusting for divested assets was
approximately 24,500 Boe per day. The Company’s average realized
price for oil and natural gas, excluding the effect of commodity
derivatives, was $76.43 per Bbl and $2.69 per Mcf,
respectively.
Net income for the quarter was $17.5 million, or $0.13 per
diluted share of common stock. Excluding non-cash and special
items, Adjusted Net Income (non-GAAP) was $26.4 million for the
quarter, or $0.20 per diluted share of common stock.
Adjusted EBITDAX (non-GAAP) for the quarter totaled $81.8
million, compared to $83.2 million for the prior year quarter. Cash
flow from operating activities was $90.2 million, including $7.5
million in working capital changes. Operating Cash Flow (“OCF”)
Before Working Capital Changes (non-GAAP) was $82.6 million. Costs
incurred for development activities and property acquisition costs
totaled $50.8 million and $27.5 million, respectively.
On December 21, 2023, Granite Ridge completed the sale of
certain of its Permian Basin assets to Vital Energy, Inc. (NYSE:
VTLE) (“Vital Energy”) for consideration of 561,752 shares of Vital
Energy’s common stock and 541,155 shares of Vital Energy’s 2.0%
cumulative mandatorily convertible preferred securities. The assets
sold consisted of approximately 1,658 net acres and 45 gross (9.90
net) producing wells in the Permian Basin and contributed
approximately 1,700 Boe per day of production to 2023 results.
Full Year 2023 Summary
Total production increased 23% to 24,311 Boe per day (47% oil),
including a 14% increase in oil production to 11,404 Bbls per day
and a 32% increase in natural gas production to 77,442 Mcf per day.
Total production after adjusting for divested assets was
approximately 22,600 Boe per day. The Company’s average realized
price for oil and natural gas, excluding the effect of commodity
derivatives, was $76.18 per Bbl and $2.72 per Mcf,
respectively.
Net income was $81.1 million, or $0.61 per diluted share of
common stock. Excluding non-cash and special items, Adjusted Net
Income (non-GAAP) was $107.1 million, or $0.80 per diluted share of
common stock.
Adjusted EBITDAX (non-GAAP) and cash flow from operating
activities totaled $305.4 million and $302.9 million, respectively.
OCF Before Working Capital Changes (non-GAAP) was $298.2 million.
Costs incurred for development activities and property acquisition
costs totaled $283.9 million and $79.0 million, respectively.
Operational Activity
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, 2023:
Three Months Ended December
31, 2023
Twelve Months Ended December
31, 2023
Gross
Net
Gross
Net
Permian
38
2.70
123
13.26
Eagle Ford
6
1.60
24
5.84
Bakken
5
—
34
1.47
Haynesville
5
0.20
9
1.13
DJ
26
0.10
124
2.85
Total
80
4.60
314
24.55
On December 31, 2023, the Company had 212 gross (15.99 net)
wells for which drilling was either in-progress or were pending
completion.
2023 Proved Reserves
As of December 31, 2023, Granite Ridge’s estimated proved
reserves totaled 53,472 MBoe, compared to 50,534 MBoe December 31,
2022. The Company’s proved reserves are approximately 51% oil and
49% natural gas. Proved developed reserves totaled 31,111 MBoe, or
58% of total proved reserves. The table below provides a summary of
changes in total proved reserves for the year ended December 31,
2023, as well as the proved developed reserves balance at the
beginning and end of the year.
Oil (MBbl)
Natural Gas
(MMcf)
MBoe
Proved developed and undeveloped
reserves at December 31, 2022
25,494
150,239
50,534
Revisions of previous estimates
(3,928
)
(16,401
)
(6,662
)
Extensions and discoveries
7,150
35,798
13,116
Divestiture of reserves
(1,338
)
(5,253
)
(2,213
)
Acquisition of reserves
4,101
20,811
7,570
Production
(4,162
)
(28,266
)
(8,873
)
Proved developed and undeveloped
reserves at December 31, 2023
27,317
156,928
53,472
Oil (MBbl)
Natural Gas
(MMcf)
MBoe
Proved developed reserves:
December 31, 2022
15,714
91,034
30,886
December 31, 2023
14,972
96,833
31,111
Proved undeveloped reserves:
December 31, 2022
9,780
59,205
19,648
December 31, 2023
12,345
60,095
22,361
Costs Incurred
The tables below provide the costs incurred for oil and natural
gas producing activities for the periods indicated:
Three Months Ended December
31,
Year Ended December
31,
(in thousands)
2023
2022
2023
2022
Property acquisition costs:
Proved
$
9,365
$
14,013
$
36,824
$
26,219
Unproved
18,172
2,320
42,225
22,973
Development costs
50,844
91,741
283,915
256,664
Total costs incurred for oil and natural
gas properties
$
78,381
$
108,074
$
362,964
$
305,856
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.
2024 Guidance
The Company is providing initial 2024 guidance and anticipates
approximately 23,250 to 25,250 Boe per day of production for 2024,
an increase of approximately 7% from 2023, after adjusting for the
divestiture of assets to Vital Energy. 2023 average daily
production from divested assets was approximately 1,700 Boe per
day.
The following table summarizes the Company’s operational and
financial guidance for 2024.
2024 Guidance
Annual production (Boe per day)
23,250 - 25,250
Oil as a % of sales volumes
47 %
Acquisitions ($ in millions)
$35 - $35
Development capital expenditures ($ in
millions)
$230 - $250
Total capital expenditures ($ in
millions)
$265 - $285
Net wells placed on production
22 - 24
Lease operating expenses (per Boe)
$6.50 - $7.50
Production and ad valorem taxes (as a % of
total sales)
7% - 8%
Cash general and administrative expense ($
in millions)
$23 - $26
Conference Call
Granite Ridge will host a conference call on March 8, 2024, at
10:00 AM CT (11:00 AM ET) to discuss its fourth quarter and
full-year 2023 financial and operational results. A brief Q&A
session for security analysts will 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 22, 2024. To access the audio replay dial
(800) 770-2030 and enter confirmation code 4127559.
Upcoming Investor Events
Granite Ridge management will also be participating in the
following upcoming investor events:
- 36th Annual ROTH Conference - March 18, 2024.
- Piper Sandler 24th Annual Energy Conference - March 19,
2024.
- 2024 Louisiana Energy Conference - May 28, 2024.
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, 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, 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 2024
outlook, 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 and potential or pending acquisition transactions, as
well as the effects of 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 affect the quantities and present value
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 effects and duration of global
hostilities, including the Israel-Hamas conflict, the
Russia-Ukraine war, continued instability in the Middle East,
including from the Houthi rebels in Yemen, and any associated armed
conflicts or related sanctions which may disrupt commodity prices
and create instability in the financial markets, and market
conditions and global, regulatory, technical, and economic factors
beyond Granite Ridge’s control, including the potential adverse
effects of world health events, such as the COVID-19 pandemic,
affecting capital markets, general economic conditions, global
supply chains and Granite Ridge’s business and operations, and
increasing regulatory and investor emphasis on, and attention to,
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 EBITDAX, and OCF Before
Working Capital Changes.
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.
Consolidated Balance
Sheets
(Unaudited)
December 31,
(in thousands, except par value and
share data)
2023
2022
ASSETS
Current assets:
Cash
$
10,430
$
50,833
Revenue receivable
72,934
72,287
Advances to operators
4,928
8,908
Prepaid and other expenses
1,716
4,203
Derivative assets - commodity
derivatives
11,117
10,089
Equity investments
50,427
—
Total current assets
151,552
146,320
Property and equipment:
Oil and gas properties, successful efforts
method
1,236,683
1,028,662
Accumulated depletion
(467,141
)
(383,673
)
Total property and equipment, net
769,542
644,989
Long-term assets:
Derivative assets - commodity
derivatives
1,189
—
Other long-term assets
4,821
3,468
Total long-term assets
6,010
3,468
Total assets
$
927,104
$
794,777
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities:
Accrued expenses
$
60,875
$
62,180
Other liabilities
1,204
1,523
Derivative liabilities - commodity
derivatives
—
431
Total current liabilities
62,079
64,134
Long-term liabilities:
Long-term debt
110,000
—
Derivative liabilities - common stock
warrants
—
11,902
Asset retirement obligations
9,391
4,745
Deferred tax liability
73,989
49,749
Total long-term liabilities
193,380
66,396
Total liabilities
255,459
130,530
Stockholders' Equity:
Common stock, $0.0001 par value,
431,000,000 shares authorized, 136,040,777 and 133,294,897 issued
at December 31, 2023 and 2022, respectively
14
13
Additional paid-in capital
653,174
632,075
Retained earnings
54,782
32,388
Treasury stock, at cost, 5,677,627 and
25,920 shares at December 31, 2023 and 2022, respectively
(36,325
)
(229
)
Total stockholders' equity
671,645
664,247
Total liabilities and stockholders'
equity
$
927,104
$
794,777
Granite Ridge Resources,
Inc.
Consolidated Statements of
Operations
(Unaudited)
Three Months Ended December
31,
Year Ended December
31,
(in thousands, except per
share data)
2023
2022
2023
2022
Revenues:
Oil and natural gas sales
$
106,798
$
116,335
$
394,069
$
497,417
Operating costs and expenses:
Lease operating expenses
15,408
14,420
60,521
44,678
Production and ad valorem taxes
7,897
9,848
27,707
30,619
Depletion and accretion expense
47,574
21,656
160,662
105,752
Other
(1,384
)
—
176
—
Impairments of long-lived assets
26,496
—
26,496
—
General and administrative (including
non-cash stock-based compensation of $349 and $2,162 for the three
and twelve months ended December 31, 2023)
6,081
6,476
27,920
14,223
Total operating costs and expenses
102,072
52,400
303,482
195,272
Net operating income
4,726
63,935
90,587
302,145
Other income (expense):
Gain (loss) on derivatives - commodity
derivatives
19,129
5,463
25,544
(25,324
)
Interest expense
(2,409
)
(285
)
(5,315
)
(1,989
)
Gain (loss) on derivatives - common stock
warrants
—
362
(5,742
)
362
Gain on equity investments
508
—
508
—
Total other income (expense)
17,228
5,540
14,995
(26,951
)
Income before income taxes
21,954
69,475
105,582
275,194
Income tax expense
4,415
12,850
24,483
12,850
Net income
$
17,539
$
56,625
$
81,099
$
262,344
Net income per share:
Basic
$
0.13
$
0.43
$
0.61
$
1.97
Diluted
$
0.13
$
0.43
$
0.61
$
1.97
Weighted-average number of shares
outstanding:
Basic
132,105
132,920
133,093
132,923
Diluted
132,129
133,071
133,109
133,074
Granite Ridge Resources,
Inc.
Consolidated Statements of
Cash Flows
(Unaudited)
Year Ended December
31,
(in thousands)
2023
2022
Operating activities:
Net income
$
81,099
$
262,344
Adjustments to reconcile net income to net
cash provided by operating activities:
Depletion and accretion expense
160,662
105,752
Impairments of long-lived assets
26,496
—
(Gain) loss on derivatives - commodity
derivatives
(25,544
)
25,324
Net cash receipts from (payments on)
commodity derivatives
22,895
(42,437
)
Stock-based compensation
2,162
—
Amortization of loan origination costs
1,260
159
(Gain) loss on derivatives - common stock
warrants
5,742
(362
)
Gain on equity investments
(508
)
—
Deferred income taxes
24,274
12,850
Other
(313
)
—
Increase (decrease) in cash attributable
to changes in operating assets and liabilities:
Revenue receivable
(846
)
(24,989
)
Other receivable
103
—
Accrued expenses
4,550
9,838
Prepaid and other expenses
485
(2,095
)
Other payable
350
5
Net cash provided by operating
activities
302,867
346,389
Investing activities:
Capital expenditures for oil and natural
gas properties
(282,390
)
(185,497
)
Acquisition of oil and natural gas
properties
(76,810
)
(49,191
)
Deposit on acquisition
—
(1,899
)
Refund of advances to operators
2,464
1,180
Proceeds from the disposal of oil and
natural gas properties
60
4,845
Net cash used in investing
activities
(356,676
)
(230,562
)
Financing activities:
Proceeds from borrowing on credit
facilities
162,500
21,000
Repayments of borrowing on credit
facilities
(52,500
)
(72,100
)
Deferred financing costs
(2,616
)
(3,237
)
Payment of expenses related to formation
of Granite Ridge Resources, Inc.
(43
)
(18,456
)
Purchase of treasury shares
(35,353
)
(216
)
Payment of dividends
(58,587
)
(10,664
)
Proceeds from issuance of common stock
5
6,825
Net cash provided by (used in)
financing activities
13,406
(76,848
)
Net change in cash and restricted
cash
(40,403
)
38,979
Cash and restricted cash at beginning of
year
51,133
12,154
Cash and restricted cash at end of
year
$
10,730
$
51,133
Supplemental disclosure of cash flow
information:
Cash paid during the year for interest
$
(4,825
)
$
(2,286
)
Cash paid during the year for income
taxes
$
(742
)
$
(98
)
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
$
(12,325
)
$
48,187
Advances to operators applied to
development of oil and natural gas properties
$
98,224
$
103,535
Cash and restricted cash:
Cash
$
10,430
$
50,833
Restricted cash included in other
long-term assets
300
300
Cash and restricted cash
$
10,730
$
51,133
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 December
31,
Year Ended December
31,
2023
2022
2023
2022
Net Sales (in thousands):
Oil sales
$
86,345
$
87,074
$
317,099
$
338,163
Natural gas sales
20,453
29,261
76,970
159,254
Total revenues
106,798
116,335
394,069
497,417
Net Production:
Oil (MBbl)
1,130
1,045
4,162
3,656
Natural gas (MMcf)
7,592
5,891
28,266
21,351
Total (MBoe)(1)
2,395
2,027
8,873
7,215
Average Daily Production:
Oil (Bbl)
12,280
11,359
11,404
10,016
Natural gas (Mcf)
82,525
64,033
77,442
58,496
Total (Boe)(1)
26,034
22,031
24,311
19,765
Average Sales Prices:
Oil (per Bbl)
$
76.43
$
83.32
$
76.18
$
92.50
Effect of gain (loss) on settled oil
derivatives on average price (per Bbl)
0.59
(0.51
)
1.10
(6.48
)
Oil net of settled oil derivatives (per
Bbl) (2)
77.02
82.81
77.28
86.02
Natural gas sales (per Mcf)
2.69
4.97
2.72
7.46
Effect of gain (loss) on settled natural
gas derivatives on average price (per Mcf)
0.45
(0.32
)
0.65
(0.88
)
Natural gas sales net of settled natural
gas derivatives (per Mcf) (2)
3.14
4.65
3.37
6.58
Realized price on a Boe basis excluding
settled commodity derivatives
44.60
57.39
44.41
68.94
Effect of gain (loss) on settled commodity
derivatives on average price (per Boe)
1.70
(1.20
)
2.58
(5.88
)
Realized price on a Boe basis including
settled commodity derivatives (2)
46.30
56.19
46.99
63.06
Operating Expenses (in
thousands):
Lease operating expenses
$
15,408
$
14,420
$
60,521
$
44,678
Production and ad valorem taxes
7,897
9,848
27,707
30,619
Depletion and accretion expense
47,574
21,656
160,662
105,752
General and administrative
6,081
6,476
27,920
14,223
Costs and Expenses (per Boe):
Lease operating expenses
$
6.43
$
7.11
$
6.82
$
6.19
Production and ad valorem taxes
3.30
4.86
3.12
4.24
Depletion and accretion
19.87
10.68
18.11
14.66
General and administrative
2.54
3.19
3.15
1.97
Net Producing Wells at
Period-End:
176.50
132.88
176.50
132.88
(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 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 March 7, 2024, for the periods
indicated:
2024
2025
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
Total
Total
Collar (oil)
Volume (Bbl)
461,524
401,874
361,552
311,496
1,536,446
439,852
Weighted-average floor price ($/Bbl)
$
64.22
$
64.27
$
64.32
$
64.13
$
64.24
$
61.48
Weighted-average ceiling price ($/Bbl)
$
84.99
$
85.11
$
85.24
$
84.97
$
85.07
$
80.65
Swaps (oil)
Volume (Bbl)
62,000
48,000
39,000
32,000
181,000
—
Weighted-average price ($/Bbl)
$
80.00
$
80.00
$
80.00
$
80.00
$
80.00
$
—
Collar (natural gas)
Volume (Mcf)
3,856,000
—
—
1,615,000
5,471,000
2,156,000
Weighted-average floor price ($/Mcf)
$
2.93
$
—
$
—
$
3.57
$
3.12
$
3.57
Weighted-average ceiling price ($/Mcf)
$
4.39
$
—
$
—
$
5.37
$
4.68
$
5.37
Swaps (natural gas)
Volume (Mcf)
—
3,236,000
2,823,000
844,000
6,903,000
1,612,050
Weighted-average price ($/Mcf)
$
—
$
3.22
$
3.22
$
3.22
$
3.22
$
3.20
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 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
depletion and accretion expense, (gain) loss on derivatives –
commodity derivatives, net cash receipts from (payments on)
commodity derivatives, interest expense, (gain) loss on derivatives
– common stock warrants, non-cash stock-based compensation, warrant
exchange transaction, income tax expense, impairment of long-lived
assets, gain on equity investments and other. 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 in
isolation or 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 deletable 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 December
31,
Year Ended December
31,
(in thousands)
2023
2022
2023
2022
Net income
$
17,539
$
56,625
$
81,099
$
262,344
Interest expense
2,409
285
5,315
1,989
Income tax expense
4,415
12,850
24,483
12,850
Other
(1,384
)
—
176
—
Depletion and accretion expense
47,574
21,656
160,662
105,752
Non-cash stock-based compensation
349
—
2,162
—
Impairments of long-lived assets
26,496
—
26,496
—
Warrant exchange transaction costs
—
—
2,456
—
(Gain) loss on derivatives - commodity
derivatives
(19,129
)
(5,463
)
(25,544
)
25,324
Gain on equity investments
(508
)
—
(508
)
—
Net cash receipts from (payments on)
commodity derivatives
4,065
(2,431
)
22,895
(42,437
)
(Gain) loss on derivatives - common stock
warrants
—
(362
)
5,742
(362
)
Adjusted EBITDAX
$
81,826
$
83,160
$
305,434
$
365,460
Reconciliation of Net Cash Provided by Operating Activities
to Operating Cash Flow Before Working Capital Changes and to Free
Cash Flow
The Company provides OCF Before Working Capital Changes, which
is a non-GAAP financial measure. The Company defines OCF Before
Working Capital Changes as net cash provided by operating
activities as determined under GAAP excluding changes in operating
assets and liabilities such as: changes in cash due to changes in
operating assets and liabilities, revenue receivable, other
receivable, accrued expenses, prepaid and other expenses and other
payables. 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. The Company defines Free Cash Flow as
OCF Before Working Capital Changes minus development costs. 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 in isolation or
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 December
31,
Year Ended December
31,
(in thousands)
2023
2022
2023
2022
Net cash provided by operating
activities
$
90,175
$
95,032
$
302,867
$
346,389
Changes in cash due to changes in
operating assets and liabilities:
Revenue receivable
(9,699
)
(2,528
)
846
24,989
Other receivable
(103
)
—
(103
)
—
Accrued expenses
(1,923
)
(4,906
)
(4,550
)
(9,838
)
Prepaid and other expenses
1,369
(4,608
)
(485
)
2,095
Other payable
2,815
(18
)
(350
)
(5
)
Total working capital changes
(7,541
)
(12,060
)
(4,642
)
17,241
Operating Cash Flow Before Working
Capital Changes
82,634
82,972
298,225
363,630
Development costs
50,844
91,741
283,915
256,664
Free Cash Flow
$
31,790
$
(8,769
)
$
14,310
$
106,966
Reconciliation of Net Income to Adjusted Net Income and
Adjusted Earnings Per Share
The Company provides Adjusted Net Income and Adjusted Earnings
Per Share, which 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 defines
Adjusted Net Income as net income as determined under GAAP
excluding impairments of long-lived assets, gain on disposal of oil
and natural gas properties, (gain) loss on derivatives - commodity
derivatives, net cash receipts from (payments on) commodity
derivatives, gain (loss) on derivatives - common stock warrants,
(gain) loss on equity investments, deferred finance cost
amortization acceleration, warrant exchange transaction costs, tax
impact on above adjustments and changes in deferred taxes and other
estimates.
The Company defines Adjusted Earnings Per Share as Adjusted Net
Income divided by weighted average number of diluted shares of
common stock outstanding.
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 December
31,
Year Ended December
31,
(in thousands, except share
data)
2023
2022
2023
2022
Net income
$
17,539
$
56,625
$
81,099
$
262,344
Impairments of long-lived assets
26,496
—
26,496
—
(Gain) loss on derivatives - commodity
derivatives
(19,129
)
(5,463
)
(25,544
)
25,324
Net cash receipts from (payments on)
commodity derivatives
4,065
(2,431
)
22,895
(42,437
)
(Gain) loss on derivatives - common stock
warrants
—
(362
)
5,742
(362
)
(Gain) loss on equity investments
(508
)
—
(508
)
—
Deferred finance cost amortization
acceleration
522
—
522
—
Warrant exchange transaction costs
—
—
2,456
—
Tax impact on above adjustments (a)
(2,610
)
2,325
(7,309
)
2,325
Changes in deferred taxes and other
estimates
—
—
1,223
—
Adjusted net income
$
26,375
$
50,694
$
107,072
$
247,194
Earnings per diluted share - as
reported
$
0.13
$
0.43
$
0.61
$
1.97
Impairments of long-lived assets
$
0.20
$
—
$
0.20
$
—
(Gain) loss on derivatives - commodity
derivatives
$
(0.14
)
$
(0.05
)
$
(0.20
)
$
0.19
Net cash receipts from (payments on)
commodity derivatives
$
0.03
$
(0.02
)
$
0.17
$
(0.32
)
(Gain) loss on derivatives - common stock
warrants
$
—
$
—
$
0.04
$
—
(Gain) loss on equity investments
$
—
$
—
$
—
$
—
Deferred finance cost amortization
acceleration
$
—
$
—
$
—
$
—
Warrant exchange transaction costs
$
—
$
—
$
0.02
$
—
Tax impact on above adjustments (a)
$
(0.02
)
$
0.02
$
(0.05
)
$
0.02
Changes in deferred taxes and other
estimates
$
—
$
—
$
0.01
$
—
Adjusted earnings per diluted
share
$
0.20
$
0.38
$
0.80
$
1.86
Adjusted earnings per share:
Basic earnings
$
0.20
$
0.38
$
0.80
$
1.86
Diluted earnings
$
0.20
$
0.38
$
0.80
$
1.86
(a) Estimated using statutory tax rate in
effect for the period.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240307329137/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
