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]

Core Viewpoint - Granite Ridge Resources, Inc. (GRNT) shows potential for significant upside, with a mean price target of $7.56 indicating a 35.2% increase from the current price of $5.59 [1] Price Targets - The average price target consists of five estimates ranging from $7 to $8.80, with a standard deviation of $0.82, suggesting a consensus among analysts [2] - The lowest estimate indicates a 25.2% increase, while the highest suggests a 57.4% upside [2] Analyst Sentiment - Analysts exhibit strong agreement on GRNT's ability to report better earnings than previously predicted, which supports the expectation of stock upside [4][10] - Over the last 30 days, the Zacks Consensus Estimate for the current year has increased by 5.5%, with one estimate moving higher and no negative revisions [11] Zacks Rank - GRNT holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate factors, indicating strong potential for near-term upside [12]

Granite Ridge Resources, Inc. (GRNT) appears an attractive pick given a noticeable improvement in the company's earnings outlook. The stock has been a strong performer lately, and the momentum might continue with analysts still raising their earnings estimates for the company. The upward trend in estimate revisions for this company reflects growing optimism of analysts on its earnings prospects, which should get reflected in its stock price. After all, empirical research shows a strong correlation between t ...

Financial Data and Key Metrics Changes - In Q4 2024, production reached a record 27,000 BOE per day, up 10% sequentially, with an increase in oil cut from 50% to 53% [30] - For the full year 2024, total production increased to 25,000 BOE per day, finishing near the high end of guidance [30] - Adjusted net income for Q4 was $22.7 million or $0.17 per diluted share, while the net loss was $11.6 million or $0.09 per diluted share [31] - Adjusted EBITDAX for Q4 was $82.6 million, a slight increase year-over-year from $81.8 million [31] - Full-year adjusted EBITDAX was $290.8 million, down from $305.4 million in 2023 due to lower realized commodity prices [32] Business Line Data and Key Metrics Changes - Gas production increased by 4% in Q4 2024, while oil production rose by 16% [24] - The company invested approximately $120 million in strategic partnerships and controlled capital in 2024 [15] - In 2024, nearly half of the capital was allocated to operated partnerships, expected to increase to nearly 60% in 2025 [18] Market Data and Key Metrics Changes - The company anticipates robust production growth of 16% or 29,000 barrels of oil equivalent per day in 2025, driven largely by Permian operated partnerships [25] - Gas prices have increased by 24% year-to-date, while oil prices have decreased by about 6% [50] Company Strategy and Development Direction - The company is transitioning to a model that emphasizes operated partnerships, allowing for greater control over capital allocation and development timing [16] - The strategy aims for full-cycle returns of greater than 25% [19] - The company is focused on non-dilutive capital to expedite the development of existing inventory [28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in funding the capital plan and fixed dividend from internally generated cash flow and existing liquidity [27] - The company is optimistic about the economic conditions for its projects, contingent on hydrocarbon prices remaining stable [49] - Management highlighted the importance of diversification in mitigating risks associated with market volatility [50] Other Important Information - The company reported a per unit lease operating expense of $5.99 per BOE in Q4, which is 7% lower than the same quarter last year [33] - The company has consistently returned capital to shareholders, paying a quarterly dividend of $0.11 per share [38] Q&A Session Summary Question: Factors determining the potential $60 to $80 million CapEx - Management indicated that market conditions are the primary factor influencing the decision to spend this CapEx, with a focus on hydrocarbon pricing [45][46] Question: Plans for adding a rig in the Midland Basin - Management confirmed that both rigs are currently in the Delaware Basin, with plans to start drilling in the Midland Basin by mid-year [58] Question: Opportunities in the natural gas market - Management acknowledged the supportive macro environment for natural gas and expressed optimism about their inventory in the Haynesville and dry gas Eagle Ford [66][67] Question: Impairment in Q4 2024 - Management explained that the impairment was related to maturing assets in the Williston Basin, where less capital has been invested [84][85] Question: Guidance for 2025 and potential well cancellations - Management stated that they control 60% of the expected wells through the Operative Partnership Program and are monitoring market conditions closely [101][102]

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]