Granite Ridge Resources, Inc. Q1 FY2025 earnings call

• The first quarter saw production growth of 23% year-over-year, with adjusted EBITDAX surpassing internal projections. - Strategic focus on geographic and hydrocarbon diversity (50-50 oil/gas) and partnership with top-tier operators contributed to outperformance. - Operated partnership program showed substantial growth, with a partner in the Delaware Basin increasing gross daily operated oil by 400%. - 13.7 net wells turned to sales, oil volumes up 39%, gas volumes up 10%. - LOE reduced to $6.17 per BOE, operating margin improved. - Macro environment: 75% hedged through 2026, leverage at 0.7x net debt to adjusted EBITDA. - 2025 budget: base case $310M CapEx, 16% production growth, $0.11/share quarterly dividend. Operated partnership program to account for ~60% of capital this year. - Successfully increased borrowing base by $50M to $375M, providing enhanced liquidity.

Granite Ridge Resources achieved a production rate of over 29,000 barrels of oil equivalent per day in the first quarter of 2025, a 23% increase from the same period last year. Adjusted EBITDAX was $91 million. The company has a balanced 50-50 split between oil and gas. LOE was $6.17 per BOE, 13% lower than the previous year. Operating margin improved to 87% from 83% in the first quarter of the prior year. Total revenue for the quarter was $122.9 million, with adjusted net income of $28.9 million or 22¢ per share, an 89% year-over-year increase.

• Production guidance: 16% production growth. - Dividend: Maintain $0.11 per share quarterly dividend, offering almost a 9% dividend yield. - Capital allocation: ~60% of CapEx to operated partnerships, with focus on full cycle returns and conservative leverage.

• Market volatility affecting hydrocarbon prices. - Uncertainty in budget and returns due to fluctuating oil and gas prices. - Dependence on partner performance in operated partnerships impacting volumes and returns.

Q: Can you give color on production from 10 acquisitions in Q1, split by basin and oil/gas mix?

A: About 450 barrels for the year, all Delaware production, late in the quarter with impact in Q2+.

Q: Which specific basins are outperforming non-op wells? And factors?

A: Delaware, Utica, Midland Basins; outperformance due to wells coming online sooner and existing wells outperforming.

Q: Evaluation of basins for natural gas?

A: Gas-weighted basins like Haynesville and dry gas Eagle Ford, but everything competes for capital, with non-consenting wells not meeting return hurdles.

Q: Oil cut trend and non-op vs partnership capital split?

A: Oil production close to guidance, gas outperformed; operated partnership capital ~60% of CapEx, aligned with partners and can be deferred.

Q: Partnership wells performance and Midland Basin plans?

A: Operated partnerships performing well, DNC competitive, Midland Basin project planned to start summer, can be deferred.