Core Insights - The article promotes a free two-week trial for the investment group Distressed Value Investing, which provides exclusive research on various companies and investment opportunities [1] - The group focuses on value opportunities and distressed plays, particularly in the energy sector, and is led by an experienced analyst with over 15 years in the field [2] Group 1 - Distressed Value Investing offers access to a portfolio of historic research that includes over 1,000 reports on more than 100 companies [1] - The founder of the group, Aaron Chow, has a background in mobile gaming and has co-founded a company that was acquired by PENN Entertainment [2] - The group emphasizes both value and distressed investment opportunities, with a significant focus on the energy sector [2]

Core Insights - The company is prioritizing strengthening its balance sheet and building long-term shareholder value over immediate dividend payments, indicating a strategic shift towards financial stability and operational efficiency [1][2][3] - The 2026 development plan is conservative, focusing on maintaining cash flow and maximizing free cash flow while ensuring operational efficiency and cost discipline [5][10][27] - The company recognizes the increasing scarcity of tier one shale inventory and aims to preserve and develop high-quality drilling locations to enhance long-term value [9][24][28] Financial Strategy - The company has suspended its dividend, which is expected to increase annual liquidity by approximately $20 million to $25 million, allowing for debt reduction and liquidity improvement [2][10] - A right-sized capital budget has been established to ensure development programs remain within cash flow, even in lower price environments [2][5] - The capital budget for 2026 is nearly 50% lower than the previous year, with a focus on capital efficiency and maximizing production per dollar invested [7][10] Operational Focus - The 2026 plan includes drilling about 30 wells and bringing 36 to 38 wells online, designed to operate within cash flow and cover financial obligations even if oil prices are in the mid to upper $50s [5][8] - The company is investing in optimizing existing production through targeted initiatives, which are expected to generate strong returns on invested capital without the capital intensity of new well drilling [15][26] - The production is averaging more than 46,000 BOE per day, exceeding the midpoint of the 2026 guidance range by approximately 10% [7][8] Market Positioning - The current market environment rewards companies for durable free cash flow and balance sheet strength rather than headline production growth, leading the company to focus on return on capital employed [9][24] - The company holds over 2,600 total drilling locations across premium formations, providing a significant competitive advantage in terms of inventory depth [23][25] - The strategic value of remaining core drilling locations is expected to increase as tier one shale inventory becomes scarcer, positioning the company favorably for future growth [24][28]

Financial Data and Key Metrics Changes - The company is focusing on protecting profitability, maximizing cash flow, and strengthening its balance sheet rather than pursuing growth for its own sake [5][6] - The annual capital budget has been right-sized to ensure the development program stays within cash flow, even in a softer price environment [6][7] - The capital budget for 2026 is nearly 50% lower than the previous year, with an estimated 65% increase in production per dollar invested [7][8] Business Line Data and Key Metrics Changes - The 2026 development plan is anchored around one drilling rig and one completion crew, allowing for the drilling of about 30 wells and bringing 36-38 wells online [6][7] - Production is averaging more than 46,000 BOE per day, which is roughly 10% above the midpoint of the 2026 guidance range [8] Market Data and Key Metrics Changes - The current market environment rewards mid-cap E&Ps for durable free cash flow, balance sheet strength, and high-quality inventory depth, rather than production growth [8][9] - The scarcity of Tier one shale inventory across the Permian Basin is increasing the strategic value of companies with significant high-return drilling inventory [18][21] Company Strategy and Development Direction - The company aims to build a resilient, valuable entity that delivers for shareholders over the long term, focusing on returns and resilience rather than headline growth [20][21] - Key priorities include protecting liquidity, moderating drilling activity, and investing in optimizing existing production [10][11] - The company is committed to generating sustainable free cash flow to strengthen the balance sheet and potentially lower the cost of capital in the future [12][20] Management's Comments on Operating Environment and Future Outlook - Management emphasizes the importance of return on capital employed over production growth, advocating for disciplined development to preserve high-quality inventory [9][10] - The company is positioned to thrive in the current environment, with a focus on debt reduction and improving financial footing [7][10] Other Important Information - The dividend has been suspended to increase annual liquidity by an estimated $20-$25 million, allowing for better capital deployment [6][10] - The company has more than 2,600 total drilling locations across various formations, providing over 30 years of high-return inventory [18][19] Q&A Session Summary Question: Can you provide more details on cost reduction and production optimization efforts? - Management highlighted ongoing optimization in drilling and completion processes, including faster drilling and completion times, and improvements in chemical programs and artificial lift methods [24][25] Question: What is the split of wells across development areas for 2026? - Approximately 70% of capital will be spent in the Flat Top area, with 30% in Signal Peak, primarily focused on Wolfcamp A and Lower Spraberry [28][29] Question: How does the corporate decline curve look for 2026? - The corporate decline rate is expected to decrease from 38% at the beginning of 2026 to around 36% by the end of the year, which will reduce the maintenance CapEx needed to hold production flat [36][37] Question: Is there a plan for share distributions in 2026 and 2027? - Management indicated flexibility in distribution timing, with the possibility of extending distributions into 2027 based on market conditions [45][46]

Financial Data and Key Metrics Changes - The company is focusing on protecting profitability, maximizing cash flow, and strengthening its balance sheet rather than pursuing growth for its own sake [5][6] - The annual capital budget has been right-sized to ensure the development program stays within cash flow, even in a softer price environment [6] - The company suspended its dividend, which is expected to increase annual liquidity by an estimated $20-$25 million [6][7] - Production is averaging more than 46,000 BOE per day, which is roughly 10% above the midpoint of the 2026 guidance range [8] Business Line Data and Key Metrics Changes - The capital budget for 2026 is nearly 50% lower than the previous year, while unit lease operating expenses per BOE are modestly higher due to targeted initiatives [7][8] - The development program is built for capital efficiency, highlighted by an estimated 65% increase in production per dollar invested [8] Market Data and Key Metrics Changes - Mid-cap E&Ps are currently rewarded for durable free cash flow, balance sheet strength, and meaningful high-quality inventory depth, rather than headline production growth [8][9] - The scarcity of Tier One shale inventory across the Permian Basin is increasing the strategic value of companies that hold significant high-return drilling inventory [18][19] Company Strategy and Development Direction - The company aims to build a resilient, valuable entity that delivers for shareholders over the long term, focusing on returns and resilience rather than headline growth [20][21] - The capital allocation philosophy prioritizes high-return investments, preserving premium inventory, and generating sustainable free cash flow [11][12] - The 2026 development plan is intentionally conservative, anchored around one drilling rig and one completion crew, with plans to drill about 30 wells and bring 36-38 wells online [6][7] Management's Comments on Operating Environment and Future Outlook - The management emphasizes the importance of financial discipline and operational excellence in navigating the current geopolitical and commodity landscape [5][6] - The company is positioned to thrive not just for the next couple of quarters but for years to come, with a focus on debt reduction and liquidity improvement [6][10] - The guiding principle is that return on capital employed matters more than production growth, allowing for the preservation and expansion of high-quality inventory [9][10] Other Important Information - The company has more than 2,600 total drilling locations across various formations, representing decades of high-return inventory [18][19] - The existing production base is a reliable source of cash flow, underpinning the business today [19][20] Q&A Session Summary Question: Can you provide more details on cost reduction and production optimization efforts? - The company has implemented various optimization strategies in drilling and completion processes, leading to faster drilling and completion times, as well as cost savings [25][26] Question: What is the split of wells across development areas for 2026? - Approximately 70% of capital will be spent in the Flat Top area, with 30% in Signal Peak, primarily focusing on Wolfcamp A and Lower Spraberry [30][31] Question: What is the expected corporate decline curve for 2026? - The corporate decline rate is expected to decrease from 38% at the beginning of 2026 to around 36% by the end of the year, which will reduce the CapEx needed for maintenance [38][39] Question: Will there be any structural changes regarding water handling in 2026? - The existing water system is efficient and paid for, which helps lower capital intensity while optimizing production [40][41] Question: Any updates on planned distributions in 2026 and 2027? - The company has extended the distribution timeline to allow for a healthier market environment, with flexibility in timing throughout 2026 [45][46]

INVESTOR PRESENTATION MARCH 2026 1 78.156.207 169.206.233 Disclaimer •FORWARD-LOOKING STATEMENTS •The information in this presentation and in any oral statements made in connection herewith contains forward-looking statements that involve risks and uncertainties. When used in connection with this document, the words "believes," "plans," "expects," "anticipates," "forecasts," "intends," "projects," "continue," "may," "will," "could," "should," "future," "potential," "estimate" or the negative of such terms a ...

Group 1 - The article discusses the analysis of oil and gas companies, specifically focusing on HighPeak Energy and similar firms, highlighting the importance of understanding their balance sheets, competitive positions, and development prospects [1] - The industry is characterized as a boom-bust, cyclical sector, requiring patience and experience for successful investment [2] - The investing group, Oil & Gas Value Research, seeks out under-followed oil companies and midstream firms that present compelling investment opportunities [2] Group 2 - The article emphasizes the value of an active chat room within the investing group, where members can discuss recent information and share investment ideas [2]

Core Insights - Premarket trading is showing notable activity with significant price movements indicating potential trading opportunities before the market opens [1] Premarket Gainers - Tilly's, Inc. (TLYS) is up 63% at $2.63 - Bumble Inc. (BMBL) is up 25% at $3.55 - Petco Health and Wellness Company, Inc. (WOOF) is up 16% at $2.80 - Lightwave Logic, Inc. (LWLG) is up 15% at $5.82 - TMD Energy Limited (TMDE) is up 15% at $2.65 - Laird Superfood, Inc. (LSF) is up 11% at $2.77 - Build-A-Bear Workshop, Inc. (BBW) is up 10% at $48.20 - AIFU Inc. (AIFU) is up 9% at $2.09 - BitFuFu Inc. (FUFU) is up 7% at $2.21 - Mexco Energy Corporation (MXC) is up 6% at $12.59 [3] Premarket Losers - Netskope, Inc. (NTSK) is down 15% at $10.25 - FreeCast, Inc. (CAST) is down 14% at $6.82 - Paranovus Entertainment Technology Ltd. (PAVS) is down 14% at $1.95 - ESGL Holdings Limited (OIO) is down 11% at $3.31 - Acurx Pharmaceuticals, Inc. (ACXP) is down 10% at $5.39 - UiPath, Inc. (PATH) is down 7% at $11.45 - Aptera Motors Corp. (SEV) is down 7% at $3.19 - HighPeak Energy, Inc. (HPK) is down 5% at $5.55 - 60 Degrees Pharmaceuticals, Inc. (SXTP) is down 5% at $3.06 - Bit Origin Ltd (BTOG) is down 5% at $2.59 [4]

Core Insights - HighPeak Energy, Inc. reported a quarterly loss of $0.21 per share, significantly worse than the Zacks Consensus Estimate of a loss of $0.04, marking an earnings surprise of -500.00% [1] - The company generated revenues of $165.84 million for the quarter ended December 2025, missing the Zacks Consensus Estimate by 13.45% and down from $234.81 million year-over-year [2] - HighPeak Energy's stock has increased by approximately 16% since the beginning of the year, contrasting with a 0.9% decline in the S&P 500 [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is -$0.03 on revenues of $195.2 million, and for the current fiscal year, it is -$0.08 on revenues of $805.05 million [7] - The trend of estimate revisions for HighPeak Energy was unfavorable prior to the earnings release, resulting in a Zacks Rank 4 (Sell) for the stock, indicating expected underperformance in the near future [6] Industry Context - The Oil and Gas - Exploration and Production - United States industry is currently ranked in the bottom 30% of over 250 Zacks industries, suggesting that stocks in the top 50% outperform those in the bottom 50% by more than 2 to 1 [8] - Another company in the same industry, Mach Natural Resources LP, is expected to report quarterly earnings of $0.26 per share, reflecting a year-over-year decline of 58.1% [9]

Reserves and Production - As of December 31, 2025, HighPeak Energy's estimated proved reserves were 173,891 MBoe, with 83% being crude oil and NGL, and 17% natural gas[42]. - The estimated proved reserves for 2024 were 198,998 MBoe, indicating a decrease of 12.6% in reserves from 2024 to 2025[42]. - As of December 31, 2025, HighPeak Energy's total proved reserves are 173,891 MBoe, consisting of 114,198 MBbl of crude oil, 30,444 MBbl of NGL, and 175,494 MMcf of natural gas[51]. - Proved undeveloped reserves decreased to 77,764 MBoe as of December 31, 2025, from 90,879 MBoe in 2024, reflecting conversions and revisions[52]. - Extensions and discoveries added 10,666 MBoe of proved undeveloped reserves in 2025, while 12,250 MBoe were converted to proved developed reserves[56]. - The company plans to develop all proved undeveloped reserves within five years from the date they were recorded[55]. Financial Performance - HighPeak Energy plans to fund its anticipated capital expenditures of $255 to $285 million for 2026 through cash on hand, operational cash flow, and potential borrowings[40]. - The estimated future net cash flows for proved reserves as of December 31, 2025, are $3,688,213,000, with a present value of $2,056,997,000[59]. - HighPeak Energy incurred development capital expenditures of $366.1 million in 2025, aimed primarily at converting proved undeveloped reserves to proved developed reserves[54]. - Average realized price for crude oil in 2025 was $65.43 per Bbl, down 14.1% from $76.42 in 2024[61]. - Operating costs per Boe rose to $13.90 in 2025, an increase of 8.5% from $12.83 in 2024[61]. Drilling and Operations - HighPeak Energy's drilling plan primarily focuses on the Wolfcamp A, Lower Spraberry, and Middle Spraberry formations, utilizing multi-well pad development to optimize costs[34]. - The company expects to average one drilling rig and one frac crew during 2026, depending on market conditions[40]. - The company drilled 27 productive development wells in 2025, a decrease of 47.1% from 51 in 2024[70]. - HighPeak Energy operates approximately 98% of its net acreage, which consists of about 154,472 gross (142,560 net) acres, with 72% held by production[34]. - The company has approximately 1,719 net undeveloped acres that are either held by production or developed and currently nonproducing[72]. Market and Pricing - The average WTI spot price for crude oil as of December 31, 2025, was $65.34 per barrel, while the average HH spot price for natural gas was $3.387 per MMBtu[42]. - HighPeak Energy's average adjusted prices realized for crude oil over the remaining lives of its assets were $65.32 per barrel as of December 31, 2025[42]. - Seasonal demand for natural gas is typically higher in Q4 and Q1, while crude oil demand peaks in Q2 and Q3, affecting pricing and operational results[82]. Regulatory Environment - Compliance with federal, state, and local regulations significantly impacts operational costs and profitability, with potential penalties for non-compliance[88]. - The regulatory environment is subject to frequent changes, making it difficult to predict future compliance costs[91]. - The company is subject to various conservation laws that limit production and drilling activities within its assets[93]. - The FERC regulates interstate natural gas pipeline transportation rates, which can affect marketing and revenues from crude oil and natural gas sales[96]. - The company believes it has sufficient rights-of-way grants and permits to operate its business effectively[86]. Employee and Safety - The company employs 50 full-time employees as of December 31, 2025, with no employees covered by collective bargaining agreements[135]. - The company is committed to maintaining a safe working environment and has implemented safety programs to improve its safety culture[136]. - The company is subject to the Occupational Safety and Health Act (OSHA) and must comply with various safety regulations[131]. Strategic Considerations - The company is actively reviewing strategic alternatives to enhance its operational efficiency and market positioning[29]. - The ongoing geopolitical tensions, particularly the war between Russia and Ukraine, are impacting crude oil and natural gas market dynamics[29]. - The company is facing challenges related to inflation rates and monetary policy responses, which could affect economic growth and capital access[29]. - Recent management changes may influence the company's strategic direction and operational effectiveness[29]. - Supply chain issues and the availability of goods and services are critical factors affecting operational efficiency[29].

Financial Performance - HighPeak Energy reported a net income of $19.0 million for full-year 2025, or $0.14 per diluted share, while the fourth quarter net loss was $25.2 million, or ($0.21) per diluted share[15]. - HighPeak Energy's total operating revenues for the year ended December 31, 2025, were $863.4 million, a decrease of 22.8% from $1.12 billion in 2024[36]. - The company reported a net loss of $25.2 million for the three months ended December 31, 2025, compared to a net income of $9.0 million in the same period of 2024[36]. - Net income for the year ended December 31, 2025, was $18,963,000, a significant decrease from $95,069,000 in 2024[38]. - Total cash provided by operating activities for the year was $511,597,000, down from $690,391,000 in 2024, reflecting a decline of approximately 26%[38]. - Free cash flow for the year ended December 31, 2025, was negative at $(37,841,000), compared to positive free cash flow of $89,677,000 in 2024[45]. - EBITDAX for the year ended December 31, 2025, was $607,056,000, down from $842,855,000 in 2024, indicating a decline of approximately 28%[44]. - The company reported a net loss of $(25,213,000) for Q4 2025, compared to a net income of $8,981,000 in Q4 2024[42]. Production and Reserves - Average daily production for 2026 is projected to be between 41,000 and 44,000 Boe/d, with oil comprising 67% to 68% of the production mix[8]. - HighPeak's total proved reserves as of December 31, 2025, were estimated at 174 million Boe, with 66% being crude oil[11]. - Average daily crude oil sales volumes decreased to 28,039 Bbls in Q4 2025 from 35,926 Bbls in Q4 2024, representing a decline of approximately 22%[40]. - Total proved reserves as of December 31, 2024, were 198,998 MBoe, with a decrease due to production and revisions[49]. Costs and Expenses - The company's cash costs for full-year 2025 were $15.33 per Boe, including lease operating costs of $6.78 per Boe[16]. - HighPeak Energy's total operating costs and expenses for the year ended December 31, 2025, were $710.5 million, a decrease of 8.4% from $776.0 million in 2024[36]. - The average realized price for crude oil in 2025 was $65.43 per Bbl, resulting in an overall realized price of $48.98 per Boe, or 75% of the weighted average of NYMEX crude oil prices[16]. - Average realized price for crude oil per Bbl dropped to $58.95 in Q4 2025 from $70.46 in Q4 2024, a decrease of about 16%[40]. Capital Expenditure and Future Plans - The company plans to average one drilling rig and one completion crew in 2026, with a capital expenditure budget reduced by nearly 50% year-over-year, totaling $255 - $285 million[4][8]. - The company has multiple decades of high-return inventory supported by a life-of-field infrastructure system designed to maximize returns for shareholders[6]. - HighPeak suspended its dividend to increase annual liquidity by an estimated $20-$25 million[3]. - The company is expanding its hedging program to mitigate commodity price volatility and capture attractive pricing[3]. - The company plans to participate in the 38th Annual Roth Conference from March 23-25, 2026, to discuss its strategic initiatives and market outlook[24]. - HighPeak's guidance for 2026 remains subject to significant uncertainties, including commodity price volatility and regulatory risks[30]. Assets and Liabilities - HighPeak's current assets increased to $259.9 million as of December 31, 2025, from $195.0 million in 2024, primarily due to an increase in cash and cash equivalents[34]. - The company's proved properties increased to $4.48 billion in 2025, up from $3.96 billion in 2024, reflecting ongoing development efforts[34]. - HighPeak's total liabilities decreased to $1.36 billion in 2025 from $1.46 billion in 2024, indicating improved financial management[34]. - Cash and cash equivalents at the end of the period increased to $162,075,000 from $86,649,000 at the beginning of the period[38].