Granite Ridge Resources(GRNT) - 2025 Q2 - Quarterly Report

Cautionary Note Regarding Forward-Looking Statements 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] - 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][9][12] Part I – Financial Information 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 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 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] - Long-term debt increased from $205,000 thousand at December 31, 2024, to $275,000 thousand at June 30, 2025[16] Condensed Consolidated Statements of Operations 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] - 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] Condensed Consolidated Statements of Changes in Equity 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] Condensed Consolidated Statements of Cash Flows 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] - Acquisitions of oil and natural gas properties significantly increased to $44.861 million in 2025 from $20.868 million in 2024[21] Notes to Condensed Consolidated Financial Statements 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 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] - The company's operations are primarily in multiple basins throughout North America[23] 2. Summary of Significant Accounting Policies 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 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] - Significant estimates are made for reserves, depletion