Granite Ridge Resources, Inc. (GRNT) Q1 2026 Earnings Call Summary

1Key Financial Results and Metrics

Production: Average daily production increased 27% year-over-year to 35,100 BOE/day for Q4 2025; full-year average was 32,000 BOE/day.

Revenue: Q4 oil and natural gas sales totaled $105.5 million, essentially flat year-over-year due to lower commodity prices. Full-year sales reached $450.3 million.

Adjusted EBITDAX: Approximately $70 million for Q4 and $315 million for the full year.

Operating Cash Flow: Q4 operating cash flow was $64.5 million; full-year was $296.4 million.

Capital Expenditures: Q4 CapEx was $127.5 million, with total full-year CapEx at $401 million.

Dividend: Maintained quarterly dividend of $0.11 per share.

2Strategic Updates and Business Highlights

Transitioned from a non-operated to a capital allocator model focused on the Permian Basin, partnering with proven management teams.

Executed over 50 transactions in the Permian Basin over the past three years, growing net production to nearly 10,000 BOE/day.

Expanded partnerships with three additional operators, enhancing proprietary deal flow.

Announced partnership with Conduit Power for natural gas-fired power generation, expected to enhance gas pricing.

Appointed Kyle Kettler as Chief Financial Officer, emphasizing a focus on sustainable growth and free cash flow.

3Forward Guidance and Outlook

2026 Production Guidance: Expected to average 35,000 BOE/day, a 9% increase over 2025, with oil making up approximately 51% of total production.

Capital Expenditures: Projected at $315 million for development and an additional $20-30 million for acquisitions.

Free Cash Flow: Anticipated to begin in 2027, with a focus on aligning development capital with expected cash flow.

Maintenance Capital: Estimated at $250 million, allowing for disciplined growth above this level.

4Bad News, Challenges, or Points of Concern

Commodity Pricing: Realized oil prices fell to $55.49 per barrel from $65.53 year-over-year, impacting revenue and cash flow.

Lease Operating Expenses: Increased to $7.72 per BOE in Q4, attributed to rising service costs in the Permian Basin.

Market Conditions: Concerns about the sustainability of oil prices below $60 per barrel and the potential impact on capital deployment and development schedules.

5Notable Q&A Insights

Pricing Dynamics: Weak natural gas realizations were driven by widening Waha pricing; oil differentials were noted but not as pronounced.

Wells Planned for 2026: Anticipated to bring online approximately 29 net wells, down from 38 in 2025, with a shift back towards oil production.

Leverage and Cash Flow Strategy: Transitioning to free cash flow is primarily driven by a desire to maintain conservative leverage rather than a lack of growth opportunities.

Inventory and Competitive Landscape: Continued strong deal flow in the Permian and Utica Shale, with a focus on nimble, unit-by-unit acquisitions rather than large-scale M&A. This summary encapsulates the key aspects of Granite Ridge Resources, Inc.'s earnings call, highlighting both the positive developments and the challenges the company faces moving forward.