Core Insights - Granite Ridge Resources, Inc. will report its third quarter 2025 financial and operating results on November 6, 2025, after market close, followed by a conference call on November 7, 2025 [1][2] Financial Performance - In the second quarter of 2025, Granite Ridge achieved a 37% increase in daily production, reaching 31,576 barrels of oil equivalent (Boe) per day, with 51% being oil, compared to 23,106 Boe per day in the second quarter of 2024 [5] - The company reported a net income of $25.1 million, or $0.19 per diluted share, for the second quarter of 2025, a significant increase from $5.1 million, or $0.04 per diluted share, in the same period last year [5] Company Overview - Granite Ridge is a scaled energy company focused on providing shareholders with exposure similar to energy private equity through operated partnerships and traditional non-operated assets, owning assets in six prolific unconventional basins across the United States [3] - The company aims to deliver a diversified portfolio with best-in-class full cycle returns by investing in a large number of high-graded deals developed by proven public and private operators, focusing on total shareholder returns while maintaining a low leverage profile [3]

Granite Ridge Resources (GRNT) FY Conference Summary Company Overview - Granite Ridge Resources is positioned as a leading public investment platform for U.S. energy development, focusing on disciplined capital allocation and shareholder value creation [3][5][45] - The company operates with a diversified asset base across six premier basins, with a significant concentration in the Permian Basin, which accounts for nearly two-thirds of its production [7][8] Core Strategies - The investment strategy includes partnerships with proven management teams to capture undervalued opportunities, targeting a greater than 25% full cycle return on investments [5][17] - Granite Ridge employs two main strategies: operated partnerships for control and growth, and traditional non-operated interests for diversification and cash flow [22][39] Financial Performance - Production growth of 28% year-over-year, with a raised full-year production guidance by 10% after the second quarter earnings [9][42] - The company maintains a strong balance sheet with a leverage ratio of 0.8x net debt to trailing twelve months EBITDAX, underlevered compared to peers [10][56] - Current fixed dividend yield is approximately 8% to 9%, with the company trading at about 2.6x this year's EBITDA [11][41] Market Dynamics - U.S. shale activity has significantly decreased since February 2022, with rig counts down 30% and frac spreads down 45% compared to pre-COVID levels, leading to stalled supply growth [13][16] - Rising reinvestment rates and declining well productivity indicate a deteriorating asset base industry-wide, suggesting an undersupplied market and potential for higher commodity prices [14][15][16] Investment Opportunities - Granite Ridge is capitalizing on the current market environment by focusing on short cycle developments with clear returns, while others in the industry are contracting [17][36] - The company has screened over 650 transactions in the past year, indicating a robust business development pipeline [19][42] Recent Developments - New partnerships with Admiral Permian Resources and Petro Legacy Energy have been established, with significant capital invested and production contributions expected [33][34][36] - The company plans to close more than 50 deals in 2025, expanding its inventory by 74 net locations, which equates to approximately three years of inventory at current drilling rates [42][44] Competitive Positioning - Granite Ridge ranks in the top quartile among small-cap energy companies in terms of return on capital employed, production growth, leverage, and dividend yield [41] - The company’s unique business model differentiates it from traditional oil and gas producers, allowing it to maintain growth while managing debt conservatively [45][62] Conclusion - Granite Ridge Resources is strategically positioned to leverage current market conditions for growth, with a disciplined approach to capital allocation and a commitment to shareholder value through dividends and strong financial management [46][47]

Group 1 - Granite Ridge Resources (GRNT) is projected to grow production by nearly 30% in 2025 compared to 2024 [2] - The company's leverage is expected to increase from 0.7x [2] - The focus of the investment group Distressed Value Investing is on value opportunities and distressed plays, particularly in the energy sector [2]

Financial Data and Key Metrics Changes - In Q2 2025, the company generated total oil and gas sales revenue of $109.2 million, a 20% increase compared to Q2 2024, driven by a 37% increase in production to 31,576 BOE per day [21] - Net income for the quarter was $25.1 million or $0.19 per share, reflecting strong operational performance [22] - Operating cash flow before working capital changes was $69.5 million, providing robust liquidity for capital programs and dividends [22] - The leverage ratio remains conservative at 0.8 times net debt to adjusted EBITDA, despite long-term debt increasing by $25 million to $275 million [24] Business Line Data and Key Metrics Changes - The company turned 4.9 net wells to sales in Q2 2025, with oil production increasing by 46% to 16,009 barrels per day and natural gas production rising by 28% to 93,404 Mcf per day [7][21] - Lease operating expenses increased to $20.1 million or $7 per BOE, compared to $13.7 million or $6.5 per BOE in Q2 2024, reflecting elevated service costs [22][23] Market Data and Key Metrics Changes - The company raised its full-year production guidance by 10% to between 31,000 and 33,000 BOE per day, resulting in year-over-year growth of 28% [10][25] - Capital expenditure guidance was also raised to a range of $400 million to $420 million, driven mainly by new unbudgeted acquisitions expected to close in 2025 [10][25] Company Strategy and Development Direction - The company aims to become the leading public investment platform for energy development, focusing on operating partnerships and capitalizing on undervalued opportunities [12] - The strategy includes maintaining a balance between growth and returns while safeguarding financial flexibility [19] - The company plans to advance its operator partnership program, which will account for approximately 65% of development capital spend this year [19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's future, highlighting a proven strategy, high-quality asset base, and a talented team ready to execute [20] - The current environment is seen as constructive for acquisitions, with a lack of private equity capital in the space allowing for attractive smaller transactions [40] - The company anticipates continued growth into 2026, with a focus on adding inventory and managing leverage [52] Other Important Information - The company has identified nearly $60 million of new inventory acquisitions, with $40 million in the Permian Basin and $20 million from organic acreage leasing in the Utica Shale [12] - The company recorded a $23.9 million gain on derivatives primarily due to the decline in oil prices during the period [24] Q&A Session Summary Question: What is driving the higher oil mix in the second half of the year? - Management indicated that growth is predominantly coming from the Permian Basin, which has a higher oil mix compared to existing assets [31] Question: What is the board's appetite for adding to the net debt balance? - Management stated they are comfortable with a leverage ratio of 1 to 1.25 times and will continue to outspend cash flow to add inventory [35] Question: What gives confidence to lean into growth and acquisitions at this time? - The lack of private equity capital and the ability to aggregate smaller transactions at attractive prices are key factors [40] Question: How does the company balance adding inventory, growth, and managing leverage? - Management is currently leaning into growth and scale, prioritizing adding duration to inventory while maintaining a strong balance sheet [43] Question: What are the expectations for the 2026 program with operated partnerships? - Management expects to potentially run four rigs in 2026, with capital expenditure spending similar to or more than the current year [47] Question: What are the plans for exploring credit markets? - Management is considering increasing the RBL size and exploring options to term out some debt, including traditional high yield markets [54]

Company Overview - Granite Ridge aims to be the leading public investment platform for US energy development[3] - The company targets 25% full cycle returns, mid-teens annual growth, an attractive dividend, and low leverage[4] - Granite Ridge has a diversified asset portfolio across 6 premier basins, with 65 operating partners and 3,100 gross wells, balanced between 50% oil and 50% natural gas[5,6] - Q2 2025 production was 31,576 Boe/d[6] Financial Performance & Strategy - The company's dividend yield is 9.1%[6] - Granite Ridge is trading at a value price of 2.6x EV / 2025 EBITDA[6] - The company maintains a strong balance sheet with a leverage ratio of 0.8x[6] - Production growth target for 2025 is 28%[6] Market Trends & Investment Approach - US rig count is approximately 30% lower, and frac spreads are approximately 45% lower, indicating reduced activity levels in drilling and completion[10,12] - Granite Ridge invests in near-term development projects underwritten to achieve >25% full-cycle returns[13] - The company has invested over $1.8 billion over the past 10 years[33]

Core Viewpoint - Granite Ridge Resources reported strong Q2 2025 results with GAAP revenue exceeding analyst estimates, but non-GAAP EPS fell short of expectations due to increased operating costs and a lower well count [1][6][14] Financial Performance - GAAP revenue for Q2 2025 was $109.2 million, surpassing the estimate of $107.3 million, and reflecting a year-over-year increase of 20.4% from $90.7 million in Q2 2024 [2][6] - Non-GAAP EPS was $0.11, missing the forecast of $0.12 and down 15.4% from $0.13 in Q2 2024 [2][6] - Adjusted EBITDAX rose to $75.4 million, a 10.4% increase year-over-year [2] - Net income increased significantly to $25.1 million, up 392.2% from $5.1 million in Q2 2024 [2][7] - Operating cash flow before working capital changes was $69.5 million, a 7.3% increase from $64.8 million in Q2 2024 [2] Production and Operations - The company achieved record production growth, with output reaching 31,576 barrels of oil equivalent per day, a 37% increase from the prior year [5] - Oil production grew by 46% to 16,009 barrels per day, while natural gas production increased by 28% [5] - The company placed 4.9 net wells online during the quarter, with a total of 44 gross wells in the Permian Basin [5][9] - Granite Ridge's asset acquisitions during the quarter added 5.5 net undeveloped locations, extending its drilling runway by an estimated three years [5] Strategic Focus - The company operates in six major U.S. basins, emphasizing geographic and product mix diversification to provide stability [3] - Recent efforts have prioritized expanding inventory in the Permian Basin, which now accounts for approximately 69% of total proved reserves [4] - Risk management through commodity price hedging and conservative leverage is a key strategy to control cash flow volatility [4][11] Cost Management - Lease operating expenses increased to $7.00 per barrel of oil equivalent, up from $6.50 in Q2 2024, primarily due to rising service costs [6][12] - General and administrative expenses were impacted by $2.8 million in nonrecurring costs [12] Capital Allocation and Guidance - The company maintained its quarterly dividend at $0.11 per share, signaling a focus on returning capital to shareholders [13][16] - Management raised full-year 2025 production guidance to 31,000–33,000 barrels of oil equivalent per day, reflecting a 10% increase at the midpoint from previous estimates [14] - The updated capital expenditure plan for 2025 is set at $400–$420 million, focusing on both development and acquisition spending [14]

Group 1 - Granite Ridge Resources, Inc. reported quarterly earnings of $0.11 per share, missing the Zacks Consensus Estimate of $0.13 per share, and down from $0.13 per share a year ago, representing an earnings surprise of -15.38% [1] - The company posted revenues of $109.22 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 0.87%, and up from $90.65 million year-over-year [2] - Granite Ridge Resources, Inc. shares have lost about 24.3% since the beginning of the year, while the S&P 500 has gained 7.9% [3] Group 2 - The earnings outlook for Granite Ridge Resources, Inc. is uncertain, with current consensus EPS estimates at $0.14 for the coming quarter and $0.68 for the current fiscal year, with revenues expected to be $105.7 million and $449.98 million respectively [7] - The Zacks Industry Rank for Oil and Gas - Exploration and Production - United States is currently in the bottom 28% of over 250 Zacks industries, indicating potential challenges for the sector [8]

[Cautionary Note Regarding Forward-Looking Statements](index=2&type=section&id=CAUTIONARY%20NOTE%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) This section advises readers that the report contains forward-looking statements regarding financial position, performance, strategy, and industry conditions, which involve inherent risks and uncertainties - Forward-looking statements cover financial position, operating performance, business strategy, and future operations, identified by terms like "estimate," "expect," "anticipate," and "will"[7](index=7&type=chunk) - Key risks include changes in current or future commodity prices and interest rates, supply chain disruptions, infrastructure constraints, ability to acquire additional development opportunities, changes in reserves estimates, operational risks, geopolitical risk, cyber-related risks, and changes in applicable laws or regulations[8](index=8&type=chunk)[9](index=9&type=chunk)[12](index=12&type=chunk) [Part I – Financial Information](index=5&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) This part presents the company's unaudited condensed consolidated financial statements, including balance sheets, statements of operations, changes in equity, and cash flows, along with detailed notes [Item 1. Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) This section provides the unaudited condensed consolidated financial statements of Granite Ridge Resources, Inc. for the periods ended June 30, 2025, and December 31, 2024 [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The condensed consolidated balance sheets show the company's financial position at June 30, 2025, and December 31, 2024, indicating an increase in total assets and liabilities, with a slight increase in stockholders' equity | (in thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total assets | $1,104,963 | $1,036,479 | | Total liabilities | $462,497 | $401,126 | | Total stockholders' equity | $642,466 | $635,353 | - Cash **decreased significantly** from **$9,419 thousand** at December 31, 2024, to **$3,743 thousand** at June 30, 2025[16](index=16&type=chunk) - Long-term debt **increased** from **$205,000 thousand** at December 31, 2024, to **$275,000 thousand** at June 30, 2025[16](index=16&type=chunk) [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The condensed consolidated statements of operations show a **significant increase** in net income for both the three and six months ended June 30, 2025, compared to the same periods in 2024, **primarily driven by** higher oil and natural gas sales and a gain on commodity derivatives | (in thousands, except per share data) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Oil and natural gas sales | $109,219 | $90,652 | $232,150 | $179,648 | | Total operating costs and expenses | $88,484 | $68,765 | $168,880 | $138,158 | | Net operating income | $20,735 | $21,887 | $63,270 | $41,490 | | Gain (loss) on derivatives - commodity derivatives | $23,925 | $(785) | $9,068 | $(3,946) | | Net income | $25,081 | $5,101 | $34,893 | $21,327 | | Basic EPS | $0.19 | $0.04 | $0.27 | $0.16 | | Diluted EPS | $0.19 | $0.04 | $0.27 | $0.16 | - Net income for the three months ended June 30, 2025, **increased by 391.7%** to **$25,081 thousand** from **$5,101 thousand** in the prior year[18](index=18&type=chunk) - Net income for the six months ended June 30, 2025, **increased by 63.6%** to **$34,893 thousand** from **$21,327 thousand** in the prior year[18](index=18&type=chunk) [Condensed Consolidated Statements of Changes in Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Equity) The condensed consolidated statements of changes in equity show an increase in **total stockholders' equity** from **$635.353 million** at January 1, 2025, to **$642.466 million** at June 30, 2025, **primarily due to** net income offsetting common stock dividends | (in thousands) | As of January 1, 2025 | As of June 30, 2025 | | :--- | :--- | :--- | | Total Stockholders' Equity | $635,353 | $642,466 | | Net income (Q1+Q2 2025) | $16,047 (Retained Earnings start) -> $22,128 (Retained Earnings end) | $34,893 (Total Net Income for 6 months) | | Common stock dividend declared (6 months) | $(28,812) | $(28,812) | - Common stock dividends declared were **$14.389 million** for Q1 2025 and **$14.423 million** for Q2 2025, **totaling $28.812 million** for the six months ended June 30, 2025[19](index=19&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) The condensed consolidated statements of cash flows indicate a net decrease in cash and restricted cash of **$5.676 million** for the six months ended June 30, 2025, compared to a net increase of **$3.112 million** for the same period in 2024, **primarily due to** increased cash used in investing activities, partially offset by higher cash provided by operating and financing activities | (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $154,134 | $132,842 | | Net cash used in investing activities | $(200,533) | $(152,579) | | Net cash provided by financing activities | $40,723 | $22,849 | | Net change in cash and restricted cash | $(5,676) | $3,112 | | Cash and restricted cash at end of period | $3,743 | $13,842 | - Capital expenditures for oil and natural gas properties **increased** to **$164.533 million** in 2025 from **$135.874 million** in 2024[21](index=21&type=chunk) - Acquisitions of oil and natural gas properties **significantly increased** to **$44.861 million** in 2025 from **$20.868 million** in 2024[21](index=21&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures for the condensed consolidated financial statements, covering the nature of operations, significant accounting policies, derivative instruments, fair value measurements, acquisitions and divestitures, stock incentive plans, income taxes, debt, equity, related party transactions, risk concentrations, earnings per share, subsequent events, and supplementary data [1. Nature of Operations](index=9&type=section&id=1.%20Nature%20of%20Operations) Granite Ridge Resources, Inc. is a Delaware corporation operating as a scaled energy company focused on providing shareholders with exposure similar to energy private equity through operated partnerships and traditional non-operated assets across multiple North American basins - Granite Ridge operates as a scaled energy company, offering exposure similar to energy private equity through operated partnerships and non-operated assets[23](index=23&type=chunk) - The company's operations are **primarily in multiple basins throughout North America**[23](index=23&type=chunk) [2. Summary of Significant Accounting Policies](index=9&type=section&id=2.%20Summary%20of%20Significant%20Accounting%20Policies) This section outlines the significant accounting policies used in preparing the condensed consolidated financial statements, including the basis of presentation, consolidation, use of estimates, segment reporting, successful efforts method for oil and gas properties, accounting for equity investments, and revenue recognition [Interim Financial Statements, Basis of Presentation, Consolidation, and Significant Estimates](index=9&type=section&id=Interim%20Financial%20Statements%2C%20Basis%20of%20Presentation%2C%20Consolidation%2C%20and%20Significant%20Estimates) The interim financial statements are prepared in conformity with U.S. GAAP, include wholly-owned subsidiaries, and involve **significant management estimates**, **particularly for** reserves, depletion, impairment, and fair value measurements - Financial statements are prepared in conformity with U.S. GAAP and include consolidated accounts of the Company and its wholly-owned subsidiaries[25](index=25&type=chunk) - **Significant estimates** are made for reserves, depletion

[Executive Summary & Business Outlook](index=1&type=section&id=Executive%20Summary%20%26%20Business%20Outlook) [Second Quarter 2025 Highlights](index=1&type=section&id=Second%20Quarter%202025%20Highlights) Granite Ridge Resources, Inc. reported strong second quarter 2025 results, with daily production increasing 37% year-over-year to 31,576 Boe per day, net income significantly rose to $25.1 million, and the company declared a quarterly cash dividend of $0.11 per share - Grew daily production **37%** to **31,576 barrels of oil equivalent ("Boe") per day** (**51% oil**), from **23,106 Boe per day** for the second quarter of 2024[6](index=6&type=chunk) - Reported net income of **$25.1 million**, or **$0.19 per diluted share**, versus **$5.1 million**, or **$0.04 per diluted share**, for the prior year period[6](index=6&type=chunk) - Generated **$75.4 million** of Adjusted EBITDAX (non-GAAP)[6](index=6&type=chunk) - Invested **$77.2 million** in development capital expenditures and **$10.1 million** in acquisition capital[6](index=6&type=chunk) - Declared dividend of **$0.11 per share** of common stock[6](index=6&type=chunk) - Net Debt to Trailing Twelve Months Adjusted EBITDAX (non-GAAP) of **0.8x**[6](index=6&type=chunk) [CEO Commentary](index=1&type=section&id=CEO%20Commentary) Tyler Farquharson, President and CEO, affirmed the validation of Granite Ridge's business model through strong Q2 production and cash flow, maintaining its strategy of allocating capital to high risk-adjusted returns, driving consistent growth, and returning capital to shareholders - Quarterly results continue to validate the business model, with production and cash flow again exceeding expectations[3](index=3&type=chunk) - Increased production by **37%** year-over-year to **31,576 Boe per day**, driven by a **46%** rise in oil production and a **28%** rise in natural gas production[4](index=4&type=chunk) - Strategy remains unchanged: underwrite development projects with full-cycle returns exceeding **25%**, deliver consistent growth, and return capital to shareholders through a quarterly dividend[4](index=4&type=chunk) [Guidance Update](index=1&type=section&id=Guidance%20Update) Granite Ridge raised its full-year production guidance by 10% at the midpoint to 31,000–33,000 Boe per day, reflecting strong well performance, and increased capital expenditure guidance to $400–$420 million, primarily to fund approximately $120 million in acquisitions that will add 74 net locations - Raised full-year production guidance by **10%** at the midpoint to **31,000–33,000 barrels of oil equivalent per day**, achieving **28%** year-over-year growth[4](index=4&type=chunk)[5](index=5&type=chunk) - Increased capital expenditure guidance to **$400–$420 million**, primarily to fund acquisitions expected to close in 2025[4](index=4&type=chunk)[5](index=5&type=chunk) - Plans to deploy approximately **$120 million** in acquisition capital, adding **74 net locations**, with a significant portion allocated to the Permian Basin and Appalachia[6](index=6&type=chunk)[7](index=7&type=chunk) - These acquisitions have secured **three additional years** of inventory at an entry cost of approximately **$1.7 million per location**[7](index=7&type=chunk) [Financial & Operational Review](index=2&type=section&id=Financial%20%26%20Operational%20Review) [Financial Results](index=2&type=section&id=Financial%20Results) Granite Ridge reported Q2 2025 oil and natural gas sales of $109.2 million, with net income surging to $25.1 million, or $0.19 per diluted share, from $5.1 million in the prior year, and Adjusted EBITDAX increasing to $75.4 million - Oil and natural gas sales for the second quarter of 2025 were **$109.2 million**[8](index=8&type=chunk) - Net income was **$25.1 million**, or **$0.19 per diluted share**, compared to **$5.1 million**, or **$0.04 per diluted share**, for the prior year period[6](index=6&type=chunk)[8](index=8&type=chunk) - Adjusted Net Income (non-GAAP) was **$14.0 million**, or **$0.11 per diluted share**[6](index=6&type=chunk)[8](index=8&type=chunk) - Adjusted EBITDAX (non-GAAP) for Q2 2025 totaled **$75.4 million** compared to **$68.3 million** for Q2 2024[9](index=9&type=chunk) - Cash flow from operating activities was **$78.0 million**, including **$8.6 million** in working capital changes[9](index=9&type=chunk) [Production Results](index=2&type=section&id=Production%20Results) Second quarter 2025 saw significant production growth, with oil production increasing 46% to 16,009 Bbls per day and natural gas production rising 28% to 93,404 Mcf per day, resulting in total daily production growth of 37% year-over-year to 31,576 Boe per day - Oil production volumes totaled **16,009 barrels ("Bbls") per day**, a **46%** increase from the second quarter of 2024[10](index=10&type=chunk) - Natural gas production totaled **93,404 thousand cubic feet of natural gas ("Mcf") per day**, a **28%** increase from the second quarter of 2024[10](index=10&type=chunk) - The Company's daily production for the second quarter of 2025 grew **37%** from the second quarter of the prior year to **31,576 Boe per day**[10](index=10&type=chunk) [Oil, Natural Gas and Related Product Sales](index=2&type=section&id=Oil%2C%20Natural%20Gas%20and%20Related%20Product%20Sales) In Q2 2025, Granite Ridge's average realized price for oil, excluding derivatives, was $61.41 per Bbl, a decrease from $77.84 per Bbl in Q2 2024, while the average realized price for natural gas increased to $2.32 per Mcf from $1.98 per Mcf year-over-year - Average realized price for oil, excluding commodity derivatives, was **$61.41 per Bbl** in Q2 2025, compared to **$77.84 per Bbl** in Q2 2024[11](index=11&type=chunk) - Average realized price for natural gas, excluding commodity derivatives, was **$2.32 per Mcf** in Q2 2025, compared to **$1.98 per Mcf** in Q2 2024[11](index=11&type=chunk) [Operating Costs](index=2&type=section&id=Operating%20Costs) Lease operating expenses increased to $20.1 million ($7.00 per Boe) in Q2 2025, up from $13.7 million ($6.50 per Boe) in Q2 2024, primarily due to higher service and saltwater disposal costs, while general and administrative expenses totaled $8.5 million, including $2.8 million in nonrecurring severance and capital markets expenses - Lease operating expenses were **$20.1 million** (**$7.00 per Boe**) for Q2 2025, compared to **$13.7 million** (**$6.50 per Boe**) in Q2 2024, primarily due to an overall increase in service costs, particularly saltwater disposal costs[12](index=12&type=chunk) - Production and ad valorem taxes were **$6.4 million** for the quarter, or **6% of oil and natural gas sales**[12](index=12&type=chunk) - General and administrative expenses totaled **$8.5 million**, or **$2.96 per Boe**, inclusive of **$2.8 million** of nonrecurring severance and capital markets expenses[12](index=12&type=chunk) [Capital Expenditures and Operational Activity](index=3&type=section&id=Capital%20Expenditures%20and%20Operational%20Activity) Total capital expenditures for Q2 2025 amounted to $87.3 million, with $77.2 million allocated to development and $10.1 million to property acquisitions, resulting in 4.9 net wells turned in-line, a decrease from 9.1 net wells in Q2 2024 - Capital expenditures for the quarter were **$87.3 million**, comprised of **$77.2 million** of development capital and **$10.1 million** of property acquisition costs[13](index=13&type=chunk) - The Company closed **nine acquisitions** in the Permian and Utica Basins, adding an aggregate inventory of **5.5 net undeveloped locations**[13](index=13&type=chunk) - The Company had **4.9 net wells** turned in-line ("TIL") during the second quarter of 2025, compared to **9.1 net wells** TIL in the second quarter of 2024[13](index=13&type=chunk) | (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Property acquisition costs: Proved | $ — | $ 1,677 | $ 13,341 | $ 2,824 | | Property acquisition costs: Unproved | 10,069 | 17,115 | 31,090 | 18,596 | | Development costs | 77,185 | 66,951 | 148,587 | 129,590 | | **Total costs incurred for oil and natural gas properties** | **$ 87,254** | **$ 85,743** | **$ 193,018** | **$ 151,010** | - At June 30, 2025, the Company had **125 gross (16.0 net) wells** in process[14](index=14&type=chunk) [Liquidity and Capital Resources](index=3&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 30, 2025, Granite Ridge maintained $103.4 million in liquidity, comprising $99.7 million of committed borrowing availability and $3.7 million of cash on hand, with $275.0 million of debt outstanding under its Credit Agreement - As of June 30, 2025, Granite Ridge had **$275.0 million** of debt outstanding under its Credit Agreement[15](index=15&type=chunk) - The Company had **$103.4 million** of liquidity, consisting of **$99.7 million** of committed borrowing availability and **$3.7 million** of cash on hand[15](index=15&type=chunk) [Commodity Derivatives Update](index=3&type=section&id=Commodity%20Derivatives%20Update) Granite Ridge employs a commodity derivatives strategy to manage its exposure to fluctuations in commodity prices, with detailed information on current derivative positions provided in the 'Derivatives Information' section of the report - The Company's commodity derivatives strategy is intended to manage its exposure to commodity price fluctuations[16](index=16&type=chunk) [2025 Updated Guidance](index=4&type=section&id=2025%20Updated%20Guidance) Granite Ridge updated its 2025 operational and financial guidance, raising annual production to 31,000-33,000 Boe per day and increasing total capital expenditures to $400-$420 million, which includes $120 million for acquisitions | Annual production (Boe per day) | 31,000 - 33,000 | | :--- | :--- | | Oil as a % of sales volumes | 51% - 53% | | Acquisitions ($ in millions) | $120 - $120 | | Development capital expenditures ($ in millions) | $280 - $300 | | Total capital expenditures ($ in millions) | $400 - $420 | | Lease operating expenses (per Boe) | $6.25 - $7.25 | | Production and ad valorem taxes (as a % of total sales) | 6% - 7% | | Cash general and administrative expense ($ in millions) | $25 - $27 | [Corporate Information & Disclosures](index=4&type=section&id=Corporate%20Information%20%26%20Disclosures) [Conference Call](index=4&type=section&id=Conference%20Call) Granite Ridge will host a conference call on August 8, 2025, at 10:00 AM CT to discuss its second quarter 2025 results, followed by a Q&A session, with dial-in and webcast details provided for access - Granite Ridge will host a conference call on **August 8, 2025, at 10:00 AM CT (11:00 AM ET)** to discuss its second quarter 2025 results[19](index=19&type=chunk) - Dial-in: **(888) 660-6093**, Intl. dial-in: **(929) 203-0844**, Participant Passcode: **4127559**. Live webcast available at www.graniteridge.com[19](index=19&type=chunk) [Upcoming Investor Events](index=4&type=section&id=Upcoming%20Investor%20Events) Granite Ridge management is scheduled to participate in three investor events in August and September 2025: Enercom The Energy Investment Conference, Three Part Advisors Midwest IDEAS Conference, and Pickering Energy Conference - Enercom The Energy Investment Conference (Denver, CO) - **August 19, 2025**[23](index=23&type=chunk) - Three Part Advisors Midwest IDEAS Conference (Chicago, IL) - **August 26, 2025**[23](index=23&type=chunk) - Pickering Energy Conference (Austin, TX) - **September 30, 2025**[23](index=23&type=chunk) [About Granite Ridge](index=4&type=section&id=About%20Granite%20Ridge) Granite Ridge is a scaled energy company that offers shareholders exposure similar to energy private equity through operated partnerships and traditional non-operated assets across six prolific unconventional basins in the United States, aiming for diversified portfolios with best-in-class full-cycle returns and a low leverage profile - Granite Ridge is a scaled energy company which aims to provide shareholders with exposure similar to energy private equity through operated partnerships and traditional non-operated assets[21](index=21&type=chunk) - Owns assets in **six prolific unconventional basins** across the United States[21](index=21&type=chunk) - Aims to deliver a diversified portfolio with best-in-class full cycle returns by investing in a large number of high-graded deals developed by proven public and private operators, balancing with a low leverage profile[21](index=21&type=chunk) [Forward-Looking Statements and Cautionary Statements](index=4&type=section&id=Forward-Looking%20Statements%20and%20Cautionary%20Statements) This press release contains forward-looking statements subject to inherent risks and uncertainties, including changes in commodity prices, operational risks, geopolitical factors, and regulatory changes, which could cause actual results to differ materially, and Granite Ridge does not undertake to update these statements unless required by federal securities laws - 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 and the Securities Exchange Act of 1934[22](index=22&type=chunk) - 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[24](index=24&type=chunk) - Key risks include changes in strategy, commodity prices, interest rates, supply chain disruptions, infrastructure constraints, ability to acquire development opportunities, changes in reserves estimates, operational risks, geopolitical risk, and changes in applicable laws or regulations[24](index=24&type=chunk) - 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[25](index=25&type=chunk) [Financial Statements (Unaudited)](index=6&type=section&id=Financial%20Statements%20%28Unaudited%29) [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, Granite Ridge's total assets increased to $1,104.96 million from $1,036.48 million at December 31, 2024, primarily driven by an increase in oil and gas properties, while total liabilities also increased to $462.50 million, with long-term debt rising to $275.0 million | (in thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **ASSETS** | | | | Total current assets | $ 108,964 | $ 135,221 | | Total property and equipment, net | 989,218 | 896,970 | | Total long-term assets | 6,781 | 4,288 | | **Total assets** | **$ 1,104,963** | **$ 1,036,479** | | **LIABILITIES AND STOCKHOLDERS' EQUITY** | | | | Total current liabilities | $ 82,474 | $ 101,808 | | Total long-term liabilities | 380,023 | 299,318 | | **Total liabilities** | **$ 462,497** | **$ 401,126** | | Total stockholders' equity | 642,466 | 635,353 | | **Total liabilities and stockholders' equity** | **$ 1,104,963** | **$ 1,036,479** | [Condensed Consolidated Statements of Operations](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For Q2 2025, oil and natural gas sales increased to $109.2 million from $90.7 million in Q2 2024, and net income significantly rose to $25.1 million ($0.19 per diluted share) from $5.1 million ($0.04 per diluted share) in the prior year, largely due to a substantial gain on commodity derivatives | (in thousands, except per share data) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Oil and natural gas sales | $ 109,219 | $ 90,652 | $ 232,150 | $ 179,648 | | Total operating costs and expenses | 88,484 | 68,765 | 168,880 | 138,158 | | Net operating income | 20,735 | 21,887 | 63,270 | 41,490 | | Gain (loss) on derivatives - commodity derivatives | 23,925 | (785) | 9,068 | (3,946) | | Income before income taxes | 32,858 | 6,779 | 45,550 | 27,842 | | Income tax expense | 7,777 | 1,678 | 10,657 | 6,515 | | **Net income** | **$ 25,081** | **$ 5,101** | **$ 34,893** | **$ 21,327** | | Net income per diluted share | $ 0.19 | $ 0.04 | $ 0.27 | $ 0.16 | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2025, net cash provided by operating activities increased to $154.1 million from $132.8 million in the prior year, net cash used in investing activities rose to $200.5 million, primarily due to increased capital expenditures and acquisitions, while net cash provided by financing activities also increased to $40.7 million | (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $ 154,134 | $ 132,842 | | Net cash used in investing activities | (200,533) | (152,579) | | Net cash provided by financing activities | 40,723 | 22,849 | | Net change in cash and restricted cash | (5,676) | 3,112 | | Cash and restricted cash at end of period | $ 3,743 | $ 13,842 | [Supplemental Data](index=9&type=section&id=Supplemental%20Data) [Summary Production and Price Data](index=9&type=section&id=Summary%20Production%20and%20Price%20Data) In Q2 2025, total revenues reached $109.2 million, with oil sales at $89.5 million and natural gas sales at $19.8 million, average daily production was 31,576 Boe, comprising 16,009 Bbl/day of oil and 93,404 Mcf/day of natural gas, with average realized oil prices decreasing year-over-year, while natural gas prices increased | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | **Net Sales (in thousands):** | | | | Oil sales | $ 89,462 | $ 77,493 | | Natural gas and related product sales | $ 19,757 | $ 13,159 | | **Total revenues** | **$ 109,219** | **$ 90,652** | | **Average Daily Production:** | | | | Oil (Bbl) | 16,009 | 10,940 | | Natural gas (Mcf) | 93,404 | 72,997 | | **Total (Boe)** | **31,576** | **23,106** | | **Average Sales Prices (excluding derivatives):** | | | | Oil (per Bbl) | $ 61.41 | $ 77.84 | | Natural gas sales (per Mcf) | $ 2.32 | $ 1.98 | | Realized price on a Boe basis excluding settled commodity derivatives | $ 38.01 | $ 43.12 | | **Operating Expenses (per Boe):** | | | | Lease operating expenses | $ 7.00 | $ 6.50 | | Production and ad valorem taxes | $ 2.24 | $ 3.27 | | Depletion and accretion | $ 18.59 | $ 19.78 | | General and administrative | $ 2.96 | $ 3.15 | [Derivatives Information](index=10&type=section&id=Derivatives%20Information) As of August 7, 2025, Granite Ridge has various commodity derivatives in place for Q3, Q4 2025, and 2026, including oil collars, natural gas collars, and natural gas swaps, to manage price exposure and mitigate market fluctuations | | Third Quarter | Fourth Quarter | Total 2025 | 2026 | | :--- | :--- | :--- | :--- | :--- | | **Collar (oil)** | | | | | | Volume (Bbl) | 802,210 | 698,000 | 1,500,210 | 2,104,980 | | Weighted-average floor price ($/Bbl) | $ 61.95 | $ 60.00 | $ 61.04 | $ 60.00 | | Weighted-average ceiling price ($/Bbl) | $ 78.51 | $ 77.13 | $ 77.87 | $ 70.44 | | **Collar (natural gas)** | | | | | | Volume (Mcf) | 2,441,757 | 3,820,615 | 6,262,372 | 10,506,446 | | Weighted-average floor price ($/Mcf) | $ 3.00 | $ 3.43 | $ 3.26 | $ 3.48 | | Weighted-average ceiling price ($/Mcf) | $ 3.75 | $ 4.23 | $ 4.04 | $ 4.25 | | **Swaps (natural gas)** | | | | | | Volume (Mcf) | 2,762,450 | 831,350 | 3,593,800 | 4,351,400 | | Weighted-average price ($/Mcf) | $ 3.67 | $ 3.67 | $ 3.67 | $ 3.68 | [Supplemental Non-GAAP Financial Measures](index=11&type=section&id=Supplemental%20Non-GAAP%20Financial%20Measures) [Use of Non-GAAP Financial Measures](index=11&type=section&id=Use%20of%20Non-GAAP%20Financial%20Measures) Granite Ridge utilizes non-GAAP financial measures, including Adjusted Net Income, Adjusted EPS, Adjusted EBITDAX, and Operating Cash Flow Before Working Capital Changes, to provide additional meaningful comparisons for financial statement users and analysts, supplementing GAAP results and aiding in valuation and investment recommendations - 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[40](index=40&type=chunk) - 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[40](index=40&type=chunk) - Non-GAAP measures include **Adjusted Net Income**, **Adjusted Earnings Per Share**, **Adjusted EBITDAX**, **Trailing Twelve Months Adjusted EBITDAX**, **Operating Cash Flow Before Working Capital Changes**, and **Net Debt**[26](index=26&type=chunk) [Reconciliation of Net Income to Adjusted EBITDAX](index=11&type=section&id=Reconciliation%20of%20Net%20Income%20to%20Adjusted%20EBITDAX) Adjusted EBITDAX, a non-GAAP measure, is defined as net income before depletion, unrealized derivative gains/losses, interest, taxes, stock-based compensation, impairments, and equity investment losses, with Q2 2025 Adjusted EBITDAX at $75.4 million, up from $68.3 million in Q2 2024, and Trailing Twelve Months Adjusted EBITDAX at $324.9 million - **Adjusted EBITDAX** is defined as net income before depletion and accretion expense, unrealized (gain) loss on derivatives – commodity derivatives, interest expense, net, non-cash stock-based compensation, income tax expense, impairment of unproved properties, impairment of long-lived assets, loss on equity investments, and other, net[42](index=42&type=chunk) | (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net income | $ 25,081 | $ 5,101 | $ 34,893 | $ 21,327 | | Interest expense, net | 5,914 | 5,817 | 10,929 | 8,977 | | Income tax expense | 7,777 | 1,678 | 10,657 | 6,515 | | Depletion and accretion expense | 53,412 | 41,592 | 101,857 | 82,533 | | Non-cash stock-based compensation | 395 | 583 | 1,048 | 1,095 | | Unrealized (gain) loss on derivatives - commodity derivatives | (22,954) | 4,736 | (8,210) | 10,605 | | Loss on equity investments | 5,795 | 8,774 | 15,766 | 995 | | **Adjusted EBITDAX** | **$ 75,420** | **$ 68,281** | **$ 166,820** | **$ 132,779** | - Trailing Twelve Months Adjusted EBITDAX was **$324,885 thousand** for the period ended June 30, 2025[45](index=45&type=chunk) [Reconciliation of Debt to Net Debt](index=12&type=section&id=Reconciliation%20of%20Debt%20to%20Net%20Debt) Net Debt, a non-GAAP financial measure, is calculated as long-term debt less cash, and as of June 30, 2025, Net Debt was $271.3 million, resulting in a Net Debt to Trailing Twelve Months Adjusted EBITDAX ratio of 0.8x, providing insight into the Company's leverage - **Net Debt** is defined as long-term debt less cash as of the balance sheet date[46](index=46&type=chunk) | (in thousands except for ratio) | June 30, 2025 | | :--- | :--- | | Long-term debt | $ 275,000 | | Cash | 3,743 | | **Net Debt** | **$ 271,257** | | Net Debt to Trailing Twelve Months Adjusted EBITDAX Ratio | 0.8 | [Reconciliation of Net Income to Adjusted Net Income and Adjusted Earnings Per Share](index=12&type=section&id=Reconciliation%20of%20Net%20Income%20to%20Adjusted%20Net%20Income%20and%20Adjusted%20Earnings%20Per%20Share) Adjusted Net Income and Adjusted Earnings Per Share are non-GAAP measures that exclude certain non-cash and nonrecurring items from GAAP net income, with Q2 2025 Adjusted Net Income at $14.0 million, or $0.11 per diluted share, compared to $17.2 million ($0.13 per diluted share) in Q2 2024 - **Adjusted Net Income** represents earnings determined under GAAP without regard to certain non-cash and nonrecurring items, including impairments, unrealized derivative gains/losses, loss on equity investments, deferred financing cost amortization acceleration, and certain nonrecurring general and administrative expenses and tax impact on above adjustments[47](index=47&type=chunk) - **Adjusted Earnings Per Share** is defined as **Adjusted Net Income** divided by weighted average number of diluted shares of common stock outstanding[48](index=48&type=chunk) | (in thousands, except share data) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net income | $ 25,081 | $ 5,101 | $ 34,893 | $ 21,327 | | Unrealized (gain) loss on derivatives - commodity derivatives | (22,954) | 4,736 | (8,210) | 10,605 | | Loss on equity investments | 5,795 | 8,774 | 15,766 | 995 | | Deferred financing cost amortization acceleration | — | 2,167 | — | 2,167 | | Nonrecurring general and administrative expenses - severance costs | 1,732 | — | 1,732 | — | | Nonrecurring general and administrative expenses - capital markets transaction costs | 1,112 | — | 1,112 | — | | Tax impact on above adjustments (a) | 3,235 | (3,606) | (2,350) | (3,335) | | **Adjusted Net Income** | **$ 14,001** | **$ 17,172** | **$ 42,943** | **$ 32,491** | | Earnings per diluted share - as reported | $ 0.19 | $ 0.04 | $ 0.27 | $ 0.16 | | **Adjusted Earnings Per Diluted Share** | **$ 0.11** | **$ 0.13** | **$ 0.33** | **$ 0.25** | [Reconciliation of Net Cash Provided by Operating Activities to Operating Cash Flow Before Working Capital Changes](index=13&type=section&id=Reconciliation%20of%20Net%20Cash%20Provided%20by%20Operating%20Activities%20to%20Operating%20Cash%20Flow%20Before%20Working%20Capital%20Changes) Operating Cash Flow (OCF) Before Working Capital Changes is a non-GAAP measure that excludes the impact of changes in operating assets and liabilities from net cash provided by operating activities, with Q2 2025 OCF Before Working Capital Changes at $69.5 million, compared to $64.8 million in Q2 2024 - **OCF Before Working Capital Changes** is defined as net cash provided by operating activities as determined under GAAP excluding changes in operating assets and liabilities[51](index=51&type=chunk) - 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[51](index=51&type=chunk) | (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net cash provided by operating activities | $ 78,043 | $ 64,186 | $ 154,134 | $ 132,842 | | Total working capital changes | (8,584) | 644 | 2,037 | (6,412) | | **Operating Cash Flow Before Working Capital Changes** | **$ 69,459** | **$ 64,830** | **$ 156,171** | **$ 126,430** |

Group 1 - Granite Ridge Resources, Inc. (NYSE: GRNT) shares have increased nearly 20% from their all-time low set in April 2025 [1] - The company's strategy involves extensive investment across the U.S. oil and gas sector [1] Group 2 - The Busted IPO Forum focuses on small-cap stocks that have been public for 18 months to 6 years and are significantly below their offering price [1]