HighPeak Energy(US:HPK)2024-03-06 21:10Reserves and Production - As of December 31, 2023, HighPeak Energy's estimated proved reserves were 154,162 MBoe, a significant increase from 122,958 MBoe in 2022, representing a 25% growth[43]. - The composition of the proved reserves as of December 31, 2023, was 91% crude oil and NGL, with 52% classified as developed reserves[43]. - HighPeak Energy reported 74,569 MBoe of proved undeveloped reserves as of December 31, 2023, up from 61,700 MBoe in 2022, indicating a growth of about 21%[54][55]. - The company added 42,440 MBoe of extensions and discoveries related to new proved undeveloped locations in 2023, showcasing ongoing exploration success[57]. - The company drilled 57 productive development wells in 2023, compared to 28 in 2022, marking a 104% increase[70]. - Average net sales volumes for crude oil increased to 13,885 MBbl in 2023 from 7,562 MBbl in 2022, representing an increase of 83%[62]. - Total average net daily sales volumes reached 45,577 Boepd in 2023, up from 24,485 Boepd in 2022, an increase of 86%[62]. Financial Performance - Estimated future net cash flows from proved reserves as of December 31, 2023, were $5,277,582,000, down from $6,889,267,000 in 2022, indicating a decrease of approximately 23%[60]. - The present value of estimated future net cash flows (PV-10) for total proved reserves was $2,884,067,000 as of December 31, 2023, compared to $3,872,045,000 in 2022, a decline of about 26%[60]. - The average adjusted price realized for crude oil as of December 31, 2023, was $78.13 per barrel, compared to $94.59 per barrel in 2022, reflecting a decrease of approximately 17%[60]. - Development capital expenditures for converting proved undeveloped reserves to proved developed reserves were $481.5 million in 2023, compared to $391.3 million in 2022, reflecting a 23% increase[56]. Operational Strategy - HighPeak Energy operated approximately 98% of its net acreage, which totaled 143,187 gross (131,636 net) acres, with 64% held by production[34]. - The company plans to average two drilling rigs and one frac crew during 2024, down from three drilling rigs and one frac crew at the end of 2023[41]. - The company has the discretion to modify its capital program based on various factors, including drilling success and market conditions[42]. - HighPeak Energy's drilling and completion activities are focused on optimizing crude oil and natural gas recoveries to enhance return on investment[34]. Market and Competition - HighPeak Energy faces intense competition in the crude oil and natural gas industry, with larger competitors having greater resources and capabilities to acquire properties and explore during low market prices[78]. - The company competes with alternative energy sources, such as wind and solar, which may impact its market position[79]. - Seasonal demand fluctuations affect natural gas prices, typically higher in Q4 and Q1, while crude oil demand peaks in Q2 and Q3[80]. Regulatory Environment - The regulatory environment significantly impacts operations, with compliance costs potentially increasing due to changing federal, state, and local laws[86]. - The company believes it is in substantial compliance with applicable laws, but future regulatory changes could affect profitability and operational costs[89]. - The company is subject to new EPA regulations requiring the reduction of volatile organic compounds from certain crude oil and natural gas wells, which may increase development costs[121]. - The company may incur significant costs if new endangered species designations restrict land use for crude oil and natural gas development[133]. Employee and Corporate Governance - As of December 31, 2023, the company employed forty-eight full-time employees dedicated to operating its assets[138]. - The company is committed to fostering a diverse workforce and providing equal employment opportunities based on merit[141]. - The company has a strong focus on talent development and retention, promoting cross-training and leadership learning[143]. - The company’s board includes experienced executives with extensive backgrounds in the oil and gas industry, such as CEO Jack Hightower with over 50 years of experience[146].