Granite Ridge Resources(US:GRNT)2023-08-11 18:09Financial Data and Key Metrics Changes - The company reported net income of $0.07 per diluted share and adjusted net income of $0.19 per diluted share for the second quarter [25] - Average daily production for the quarter was 21,500 BOE per day, reflecting a 13% increase year-over-year but a 7% decrease quarter-over-quarter [25] - The company increased the low-end of its 2023 production guidance by 500 barrels of oil equivalent per day, raising the midpoint to 22,250 BOE per day, which represents a 13% increase over 2022 [11][19] Business Line Data and Key Metrics Changes - The company completed and placed on production a total of 79 gross, 5.5 net wells, with 90% of that activity occurring in the DJ and Permian basins [26] - The company anticipates placing 19 to 21 net wells on production for the full year, which remains unchanged [26] Market Data and Key Metrics Changes - The company has screened and/or evaluated over 400 deals year-to-date, representing over $10 billion of potential capital opportunities [8] - The company has repurchased a total of 960,000 shares at a cost of $6 million as part of its stock buyback plan [28] Company Strategy and Development Direction - The company is focusing on strategic partnerships to mitigate concentration risk while aiming for higher expected returns [9] - The company is targeting reinvesting nearly all of its free cash flow, aiming for high-single digits to low-double digit year-over-year production growth [35][71] Management Comments on Operating Environment and Future Outlook - Management expressed optimism about the second half of 2023, expecting production growth due to stronger well performance in the Haynesville and Permian [11][25] - The company noted that the competitive landscape has intensified, making it challenging to secure deals, but they are seeing an increase in deal flow since going public [73] Other Important Information - The company declared a quarterly cash dividend of $0.11 per share, representing an approximate 6.1% dividend yield [28] - The company ended the second quarter with $55 million drawn on its revolving credit facility, with total liquidity of $109 million [29] Q&A Session Summary Question: Inquiry about M&A and strategic partnerships - Management indicated a preference for smaller, one-off deals rather than larger banker marketing processes, and they are exploring opportunities with private equity firms [33][34] Question: Production growth expectations for 2024 - Management anticipates a high-single digit to low-double digit year-over-year production growth, with a focus on reinvesting free cash flow [35] Question: Dividend policy and future increases - Management has not had significant discussions about increasing the dividend, focusing instead on deal flow and capital allocation [46][72] Question: Impact of commodity prices on deal flow - Management noted that optimism about prices in the first half may have led to increased deal activity, and they are investing based on strip pricing [65][66] Question: Visibility into operators' plans for 2024 - Management stated they have good visibility for about nine months, with some uncertainty beyond that due to the adaptability of operators [78]