HighPeak Energy(HPK) - 2025 Q1 - Quarterly Results

HighPeak Energy, Inc. First Quarter 2025 Financial and Operating Results First Quarter 2025 Highlights HighPeak Energy reported strong Q1 2025 results with increased sales volumes, $10.7 million free cash flow, $30 million debt reduction, and a $0.04/share dividend, driven by operational efficiencies Q1 2025 Key Financial & Operating Metrics | Metric | Value | Change vs Q4 2024 | | :--- | :--- | :--- | | Sales Volumes | 53.1 MBoe/d | 6% Increase | | Net Income | $36.3 million ($0.26/share) | N/A | | Adjusted Net Income | $42.7 million ($0.31/share) | N/A | | EBITDAX | $197.3 million | N/A | | Lease Operating Expenses (LOE) | $6.61 per Boe | 3% Decrease | | Free Cash Flow | $10.7 million | N/A | | Long-Term Debt Reduction | $30 million | N/A | | Quarterly Dividend | $0.04 per share | Maintained | - Achieved significant drilling and completion efficiency gains, resulting in four additional wells being drilled and completed during the quarter[4][6] - The company narrowed its 2025 production guidance range and increased the midpoint[6][12] CEO Statement on 2025 Strategy CEO Jack Hightower outlined HighPeak's 2025 strategy focusing on efficiency, capital discipline, capital structure optimization, and shareholder value, evidenced by exceeding production targets and maintaining a strong balance sheet - The company's strategy for 2025 is based on four pillars: improving corporate efficiency, maintaining capital discipline, optimizing capital structure, and delivering shareholder value[3] Improving Corporate Efficiency HighPeak exceeded production guidance by drilling over 25% faster, enabling four additional Q1 wells while maintaining development cost alignment - Drilling speed was over 25% faster than previous expectations, enabling the completion of four additional wells in Q1[4] Maintaining Capital Discipline HighPeak moderated its development by idling one rig from May-August due to economic uncertainty, yet expects to meet annual well targets, with future quarterly capex anticipated to be materially lower after Q1 front-loading - One drilling rig will be laid down for four months (May-August) to moderate the development program due to economic uncertainty[5] - Despite the temporary rig reduction, the company remains on track to drill and complete the same number of wells as guided for 2025[5] - Quarterly capital expenditures are expected to be materially lower going forward, as a large portion of the annual budget was spent in Q1[7] Optimizing Capital Structure & Shareholder Value HighPeak focuses on optimizing its capital structure, maintaining a healthy financial position with no near-term debt maturities, and aligning management with shareholders for long-term value creation - The company is in a healthy financial position with no near-term debt maturities and is taking steps to maintain a strong balance sheet[8] - Management, as large owners, is fully aligned with shareholders and focused on long-term value creation[9] Operational and Financial Review HighPeak's Q1 2025 saw sales volumes average 53.1 MBoe/d, with 16 gross wells drilled and 13 turned to production, resulting in $36.3 million net income, $197.3 million EBITDAX, and $179.8 million in capital expenditures, alongside updated 2025 production guidance Q1 2025 Operational & Financial Summary | Metric | Value | | :--- | :--- | | Average Sales Volumes | 53.1 MBoe/d | | Crude Oil / Liquids Mix | 72% / 86% | | Gross Wells Drilled | 16 | | Gross Wells Turned-in-line | 13 | | Net Income | $36.3 million | | EBITDAX | $197.3 million | | Capital Expenditures | $179.8 million | | Updated 2025 Production Guidance | 48,000 – 50,500 Boe/d | Q1 2025 Realized Prices & Costs per Boe | Metric | Value per Boe | | :--- | :--- | | Overall Realized Price | $53.84 | | Lease Operating Expenses | $6.61 | | Workover Expenses | $0.83 | | Production & Ad Valorem Taxes | $3.17 | | G&A Expenses | $1.33 | | Total Cash Costs | $11.94 | | Unhedged EBITDAX Margin | $41.90 | Hedging As of March 31, 2025, HighPeak utilized crude oil swaps, collars, and puts, alongside natural gas swaps extending into 2027, to manage commodity price risk Crude Oil Hedges HighPeak's crude oil hedging strategy for Apr-Jun 2025 includes 5,500 Bbls/day in swaps at $76.37/Bbl, complemented by collars and puts to manage price volatility - For Apr-Jun 2025, the company has 5,500 Bbls/day of WTI crude oil swaps at a fixed price of $76.37/Bbl[17] - For the same period (Apr-Jun 2025), the company also holds collars on 7,989 Bbls/day with a floor of $64.38 and a ceiling of $88.55, and puts on 9,000 Bbls/day with a strike price of $65.78[17] Natural Gas Hedges HighPeak hedged natural gas production through 2025 with swaps at $4.43/MMBtu, adding further positions for 2026 and early 2027 at $4.30/MMBtu in April 2025 - As of March 31, 2025, the company had natural gas swaps for 30,000 MMBtu/day through the end of 2025 at a fixed price of $4.43/MMBtu[18][19] - In April 2025, the company added new natural gas swaps for 2026 and Q1 2027 at a fixed price of $4.30/MMBtu[20] Dividends HighPeak maintained shareholder returns by paying a $0.04 per share quarterly dividend in Q1 2025, totaling $5.0 million, and declared another $0.04 per share dividend payable in June 2025 - Paid a Q1 2025 dividend of $0.04 per share, amounting to $5.0 million[21] - Declared a subsequent quarterly dividend of $0.04 per share, payable on June 25, 2025[21] Financial Statements and Reconciliations Unaudited Condensed Consolidated Financial Statements Unaudited Q1 2025 financial statements show total assets of $3.09 billion, net income of $36.3 million, and net cash from operating activities of $157.1 million Condensed Balance Sheet (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $51,619 | $86,649 | | Total current assets | $152,602 | $195,012 | | Total assets | $3,093,081 | $3,063,288 | | Long-term debt, net | $902,844 | $928,384 | | Total stockholders' equity | $1,633,394 | $1,602,456 | Condensed Statement of Operations (in thousands) | Account | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total operating revenues | $257,448 | $287,764 | | Income from operations | $90,379 | $103,020 | | Net income | $36,335 | $6,438 | | Diluted net income per share | $0.26 | $0.05 | Condensed Statement of Cash Flows (in thousands) | Account | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $157,052 | $171,439 | | Net cash used in investing activities | ($156,594) | ($148,223) | | Net cash used in financing activities | ($35,488) | ($44,351) | | Net decrease in cash | ($35,030) | ($21,135) | Unaudited Summary Operating Highlights Q1 2025 operating highlights show total daily production increased to 53,128 Boe, while the average realized price per Boe decreased to $53.84 due to lower crude oil prices Average Daily Sales Volumes | Product | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Crude oil (Bbls) | 38,222 | 39,959 | | NGLs (Bbls) | 7,724 | 5,147 | | Natural gas (Mcf) | 43,096 | 27,733 | | Total (Boe) | 53,128 | 49,729 | Average Realized Prices | Product | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Crude oil per Bbl | $71.64 | $77.65 | | Natural gas per Mcf | $2.34 | $1.33 | | Total per Boe | $53.84 | $63.59 | Non-GAAP Reconciliations This section reconciles GAAP to non-GAAP metrics, showing Q1 2025 Net Income of $36.3 million reconciled to $197.3 million EBITDAX, $42.7 million Adjusted Net Income, and $10.7 million Free Cash Flow Reconciliation to EBITDAX (Q1 2025, in thousands) | Line Item | Amount | | :--- | :--- | | Net income | $36,335 | | Interest expense | $36,988 | | Income tax expense | $9,939 | | DD&A | $109,325 | | Other adjustments | $5,741 | | EBITDAX | $197,318 | Reconciliation to Free Cash Flow (Q1 2025, in thousands) | Line Item | Amount | | :--- | :--- | | Net cash provided by operating activities | $157,052 | | Add back: net change in operating assets/liabilities | $8,288 | | Additions to crude oil and natural gas properties | ($179,819) | | Changes in working capital for property additions | $25,172 | | Free cash flow | $10,693 | Reconciliation to Adjusted Net Income (Q1 2025) | Line Item | Amount (in thousands) | Per Diluted Share | | :--- | :--- | :--- | | Net income | $36,335 | $0.26 | | Adjustments (Derivative loss, etc.) | $6,363 | $0.05 | | Adjusted net income | $42,698 | $0.31 |