HighPeak Energy(HPK)2025-03-10 20:26Reserves and Production - As of December 31, 2024, HighPeak Energy's estimated proved reserves were 198,998 MBoe, with 85% being crude oil and NGL, and 54% developed[40]. - The estimated proved reserves increased from 122,958 MBoe in 2022 to 198,998 MBoe in 2024, reflecting a growth of 61.6%[40]. - As of December 31, 2024, HighPeak Energy's total proved reserves reached 198,998 MBoe, a significant increase from 154,162 MBoe in 2023, representing a growth of approximately 29%[50]. - The company's proved undeveloped reserves increased to 90,879 MBoe as of December 31, 2024, up from 74,569 MBoe in 2023, marking a growth of about 22%[52]. - Extensions and discoveries added 33,540 MBoe of new proved undeveloped locations in 2024, contributing to the overall increase in reserves[55]. - The company plans to develop all proved undeveloped reserves within five years from their initial recording date as of December 31, 2024[54]. - Average net sales volumes for crude oil in 2024 were 13,877 MBbl with an average sales price of 0.49/Mcf[60]. - The company drilled 51 productive development wells in 2024, compared to 57 in 2023[68]. - The company drilled 18 exploratory/extension productive wells in 2024, with a net of 14.6, compared to 70 gross and 63.3 net in 2023[68]. Financial Performance - HighPeak Energy plans to fund its anticipated capital expenditures of 490 million for 2025 through cash on hand, operational cash flow, and potential borrowings[38]. - Estimated future net cash flows from proved reserves as of December 31, 2024, are projected at 5,277,582,000 in 2023[58]. - The present value of estimated future net cash flows (PV-10) for total proved reserves as of December 31, 2024, is 2,884,067,000 in 2023[58]. - The average adjusted price realized for crude oil as of December 31, 2024, was 78.13 per barrel in 2023[58]. - Total average production costs for 2024 were 66.80 per Boe in 2023[60]. - Major customers accounted for 76% of revenues in 2024 from DK Trading & Supply, LLC and 18% from Energy Transfer Crude Marketing, LLC[74]. Operational Strategy - The company operates approximately 97% of its net acreage, which consists of 154,368 gross (141,907 net) acres, with 64% held by production[32]. - HighPeak Energy's drilling plan for 2025 includes averaging two drilling rigs and one frac crew[38]. - The company utilizes multi-well pad development to optimize drilling and completion cycle times, aiming to reduce overall costs[32]. - HighPeak Energy's assets are primarily located in the Midland Basin, specifically in Howard and Borden Counties, Texas[30]. - The company plans to retain substantially all of its undeveloped acreage through its development plan, with 28,584 net acres expiring in 2025[65]. Market and Competition - The company faces various risks including market price volatility for crude oil and natural gas, political instability, and regulatory changes[6]. - HighPeak Energy's crude oil and natural gas operations face intense competition from larger companies with greater resources, which may limit its ability to acquire properties and discover reserves[77]. - The company faces indirect competition from alternative energy sources, including wind and solar, which may affect its market position[78]. - Seasonal demand fluctuations affect natural gas prices, typically higher in Q4 and Q1, while crude oil demand peaks in Q2 and Q3[79]. Regulatory Environment - HighPeak Energy believes it is in substantial compliance with applicable laws and regulations, but the regulatory burden increases operational costs and affects profitability[85]. - The company operates under various federal, state, and local regulations that govern drilling, production, and environmental compliance, which may change and impact operations[87]. - The FERC regulates interstate natural gas pipeline transportation rates and service conditions, which may affect the marketing of crude oil and natural gas produced[94]. - The company is subject to strict liability under CERCLA for hazardous substance releases, which could lead to significant cleanup costs and liabilities[108]. - New regulations in Texas may restrict the ability to use hydraulic fracturing or dispose of produced water, potentially adversely affecting the Company's operations[117]. Human Resources and Corporate Governance - As of December 31, 2024, the company employed 47 full-time employees, with no employees covered by collective bargaining agreements, indicating good employee relations[135]. - The company is committed to equal employment opportunities and aims to attract a multitalented workforce[138]. - The company values talent development and offers cross-training and leadership learning opportunities to enhance employee skills[140]. - The company has a diverse board of directors with extensive experience in the oil and gas industry, including the CEO who has over 50 years of experience[144]. - The Chief Financial Officer has over 30 years of experience in corporate finance and has been with the company since its inception in October 2019[148].