HighPeak Energy(US:HPK)2025-11-05 21:11Assets and Production - As of September 30, 2025, HighPeak Energy's assets consisted of approximately 154,650 gross (143,496 net) acres, with 70% held by production and an average working interest of 93%[147] - The Company's liquids production accounted for 85% of total production on a Boe basis for the nine months ended September 30, 2025[169] - The Company completed and placed on production 36 gross (35.7 net) horizontal wells during the nine months ended September 30, 2025[171] Financial Performance - The net loss for the three months ended September 30, 2025, was $18.3 million ($(0.15) per diluted share), a decrease of $68.3 million compared to a net income of $49.9 million for the same period in 2024[164] - Total operating revenues for the three months ended September 30, 2025, decreased by 30% to $188,862,000 compared to $271,578,000 in 2024, and for the nine months, revenues decreased by 23% to $646,710,000 from $834,608,000[174] - EBITDAX for the nine months ended September 30, 2025, was $493.2 million, a decrease from $663.4 million for the same period in 2024[204] Sales and Pricing - For the nine months ended September 30, 2025, approximately 85% of sales volumes were attributable to liquids (crude oil and NGL), while 15% were from natural gas[147] - Average realized price per Boe dropped by 25% to $42.91 for the three months ended September 30, 2025, and by 22% to $47.52 for the nine months[174] - Weighted average realized crude oil prices per Bbl decreased to $65.63 for the three months ended September 30, 2025, from $75.99 in 2024, representing a 14% decline[173] Costs and Expenses - Total costs incurred for the nine months ended September 30, 2025, were $399.1 million, including $290.0 million in development costs and $101.9 million in exploration costs[170] - General and administrative expenses increased by 88% to $9,329,000 for the three months ended September 30, 2025, and by 48% to $21,345,000 for the nine months, primarily due to severance and legal costs related to the former CEO's retirement[181] - Exploration and abandonment expenses increased significantly, with plugging and abandonment costs rising by 844% to $1,482,000 for the three months ended September 30, 2025[178] Debt and Liquidity - In August 2025, the Company amended its Term Loan Credit Agreement, upsizing it to $1.2 billion and deferring quarterly amortization payments of $30 million for one year[150] - The company had $1.2 billion outstanding under the Term Loan Credit Agreement as of September 30, 2025[219] - As of September 30, 2025, the company had zero outstanding balance on the Senior Credit Facility Agreement, indicating a strong liquidity position[196] Strategic Alternatives and Future Plans - The Company is evaluating strategic alternatives to maximize shareholder value, including a potential sale, with Texas Capital Securities retained as a financial advisor[163] - The company expects its sources of funding to be adequate to meet its 2025 planned capital expenditures, although future needs cannot be guaranteed[190] - The company's capital budget for 2025 is expected to be approximately $375 to $405 million for drilling and completion, plus $40 to $50 million for field infrastructure, and $33 to $35 million for one-time infrastructure expenditures[191] Market Conditions and Risks - The ongoing geopolitical tensions and tariffs have introduced significant volatility to the crude oil and natural gas sector, impacting operating and capital costs[157] - HighPeak Energy's financial position is heavily dependent on prevailing commodity prices, which are subject to high volatility and uncertainty[159] - The company is subject to interest rate risk, with a potential annual increase in interest expense of approximately $12.0 million for a 1% increase in interest rates[219] Derivative Instruments - The Company recognized a net derivative gain of $25.4 million during the nine months ended September 30, 2025, including a $17.4 million mark-to-market gain[168] - The company reported a noncash loss on derivative instruments of $17.4 million for the nine months ended September 30, 2025, compared to a gain of $11.5 million in 2024[185] - The company uses commodity derivative instruments to hedge price risk associated with anticipated production, providing partial price protection[212]