Granite Ridge Resources, Inc. Reports Fourth Quarter and Full-Year 2024 Results and Provides Outlook for 2025

Granite Ridge Resources, Inc. (NYSE:GRNT) ("Granite Ridge" or the "Company") today reported financial and operating results for the fourth quarter and full-year 2024 and provided initial guidance for 2025.

Fourth Quarter 2024 Highlights

• Increased total production by 7% to 27,734 Boe/day (53% oil) driven by a 20% increase in oil production
• Reported Net Loss of $11.6 million, or $(0.09) per share, and Adjusted Net Income (non-GAAP) of $22.7 million, or $0.17 per diluted share
• Generated Adjusted EBITDAX (non-GAAP) of $82.6 million
• Invested $93.3 million of capital, placing online 86 gross (4.08 net) wells
• Declared a dividend of $0.11 per share
• Ended the year with total liquidity of $129.1 million and Net Debt to Adjusted EBITDAX of 0.7x

See "Supplemental Non-GAAP Financial Measures" below for descriptions of the above non-GAAP measures as well as a reconciliation of these measures to the associated GAAP (as defined herein) measures.

Luke Brandenberg, President and CEO of Granite Ridge, commented, "Granite Ridge concluded 2024 with outstanding performance across our portfolio, achieving a corporate record for total production ​driven by a 10% increase over the third quarter. Our disciplined investment strategy enabled us to efficiently deploy capital, completing 86 gross wells and executing nearly two dozen transactions across the Permian and Appalachian basins. These actions have bolstered our asset base while maintaining financial flexibility, as demonstrated by our strong liquidity position at year-end and conservative leverage of 0.7x Net Debt to Adjusted EBITDAX."

Mr. Brandenberg concluded, "Our Operated Partnership portfolio surpassed expectations in 2024, reinforcing our confidence in our partners' ability to capture compelling opportunities in the Permian Basin. By collaborating with highly aligned management teams to source, acquire, and develop high-quality assets, we are generating significant value in today's market. We look forward to keeping our investors informed as we continue to execute our strategy."

"Looking ahead, we remain committed to driving sustainable growth and delivering shareholder returns. Our 2025 outlook projects a 16% increase in production at the midpoint, and our declared dividend implies a current yield of over 7%, highlighting the strength of our strategy. With a robust portfolio of high-quality assets, strong partnerships, and a disciplined approach to capital allocation, we are well-positioned to build on our momentum in the coming year."

Financial Results

Net loss for the quarter was $11.6 million, or $(0.09) per diluted share of common stock. Excluding non-cash and special items, Adjusted Net Income (non-GAAP) was $22.7 million for the quarter, or $0.17 per diluted share of common stock. Adjusted EBITDAX (non-GAAP) and cash flow from operating activities for the quarter totaled $82.6 million and $68.2 million, respectively.

Net income for the year was $18.8 million or $0.14 per diluted share of common stock. Excluding non-cash and special items, Adjusted Net Income (non-GAAP) was $73.8 million or $0.57 per diluted share of common stock. Adjusted EBITDAX (non-GAAP) and cash flow from operating activities for the year totaled $290.8 million and $275.7 million, respectively.

Production Results

Total production for the quarter increased 7% from the prior year quarter to 27,734 Boe per day (53% oil), including a 20% increase in oil production to 14,717 barrels ("Bbls") per day. Natural gas production for the quarter totaled 78,104 thousand cubic feet of natural gas ("Mcf") per day.

Total production for the year increased 3% to 24,973 Boe per day (49% oil), including a 8% increase in oil production to 12,248 Bbls per day. Natural gas production for the year totaled 76,350 Mcf per day.

Oil, Natural Gas and Related Product Sales

During the quarter, NYMEX West Texas Intermediate ("WTI") crude oil averaged $70.69 per Bbl, and NYMEX natural gas at Henry Hub averaged $2.44 per Mcf. The Company's average realized price for oil and natural gas, excluding the effect of commodity derivatives, was $65.53 per Bbl (a $5.16 differential to WTI) and $2.45 per Mcf (a 100% realization of Henry Hub), respectively.

Operating Costs

Lease operating expenses were $15.3 million for the quarter, or $5.99 per Boe, a 7% decrease on a per unit basis compared to the prior year quarter. Production and ad valorem taxes were $7.0 million for the quarter, or 6.6% of oil and natural gas sales. During the quarter general and administrative ("G&A") costs totaled $5.9 million, inclusive of $0.6 million of non-cash stock-based compensation.

Lease operating expenses were $57.5 million for the year, or $6.29 per Boe, an 8% decrease on a per unit basis compared to the prior year. Production and ad valorem taxes were $26.0 million for the year, or 6.8% of oil and natural gas sales. G&A costs for the year totaled $24.6 million, inclusive of $2.3 million of non-cash stock-based compensation.

Capital Expenditures and Operational Activity

Capital expenditures for the quarter were $93.3 million comprised of $83.5 million of drilling and completion ("D&C") capital and $9.8 million of property acquisition costs. Total 2024 capital expenditures were $354.4 million comprised of $290.3 million of D&C capital and $64.2 million of property acquisition costs.

The table below provides capital expenditures incurred for oil and natural gas producing activities for the periods indicated:

The table below provides a summary of gross and net wells completed and put on production for the three months and year ended December 31, 2024:

On December 31, 2024, the Company had 202 gross (14.85 net) wells for which drilling was either in-progress or were pending completion.

Liquidity and Capital Resources

As of December 31, 2024, Granite Ridge had $205.0 million of debt outstanding under its Credit Agreement and $129.1 million of liquidity, consisting of $119.7 million of committed borrowing availability and $9.4 million of cash on hand. On November 1, 2024, the Company and its lenders entered into the Fourth Amendment to the Credit Agreement, which amended the Credit Agreement to, among other things, increase the borrowing base and aggregate elected commitments from $300.0 million to $325.0 million.

2024 Proved Reserves

As of December 31, 2024, Granite Ridge's estimated proved reserves totaled 54,315 MBoe, compared to 53,472 MBoe December 31, 2023. The Company's proved reserves are approximately 52% oil and 48% natural gas. Proved developed reserves totaled 38,953 MBoe, or 72% of total proved reserves. The table below provides a summary of changes in total proved reserves for the year ended December 31, 2024, as well as the proved developed reserves balance at the beginning and end of the year.

2025 Guidance

The Company provides initial 2025 guidance and anticipates approximately 28,000 to 30,000 Boe per day of production for 2025, an increase of approximately 16% from 2024.

The following table summarizes the Company's operational and financial guidance for 2025.

Conference Call

Granite Ridge will host a conference call on March 7, 2025, at 10:00 AM CT (11:00 AM ET) to discuss its fourth quarter and full-year 2024 financial and operational results. A brief Q&A session for security analysts will immediately follow the discussion. The telephone number and passcode to access the conference call are provided below:

Dial-in: (888) 660-6093

Intl. dial-in: (929) 203-0844

Participant Passcode: 4127559

To access the live webcast visit Granite Ridge's website at www.graniteridge.com. Alternatively, an audio replay will be available through March 21, 2025. To access the audio replay dial (800) 770-2030 and enter confirmation code 4127559.

Upcoming Investor Events

Granite Ridge management will also be participating in the following upcoming investor events:

• 2025 Louisiana Energy Conference - May 28, 2025

Any investor presentations to be used for such events will be posted prior to the respective event on Granite Ridge's website. Information on Granite Ridge's website does not constitute a portion of, and is not incorporated by reference into this press release.

About Granite Ridge

Granite Ridge is a scaled energy company which aims to provide shareholders with exposure similar to energy private equity through operated partnerships and traditional non-operated assets. We own assets in six prolific unconventional basins across the United States. We aim to deliver a diversified portfolio with best-in-class full cycle returns by investing in a large number of high-graded deals developed by proven public and private operators. We focus on success as measured by total shareholder returns, which we seek to balance with a low leverage profile. For more information, visit Granite Ridge's website at www.graniteridge.com.

Forward-Looking Statements and Cautionary Statements

This press release contains forward-looking statements regarding future events and future results that are subject to the safe harbors created under the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended. All statements other than statements of historical facts included in this press release regarding, without limitation, Granite Ridge's 2025 outlook, financial position, operating and financial performance, business strategy, plans and objectives of management for future operations, industry conditions, and indebtedness covenant compliance are forward-looking statements. When used in this release, forward-looking statements are generally accompanied by terms or phrases such as "estimate," "project," "predict," "believe," "expect," "continue," "anticipate," "target," "could," "plan," "intend," "seek," "goal," "will," "should," "may" or other words and similar expressions that convey the uncertainty of future events or outcomes. Items contemplating or making assumptions about actual or potential future production and sales, market size, collaborations, cash flows, and trends or operating results also constitute such forward-looking statements.

Forward-looking statements involve inherent risks and uncertainties, and important factors (many of which are beyond Granite Ridge's control) that could cause actual results to differ materially from those set forth in the forward-looking statements, including the following: Granite Ridge's financial performance following the business combination, changes in Granite Ridge's strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects and plans, changes in current or future commodity prices and interest rates, supply chain disruptions, infrastructure constraints and related factors affecting our properties, ability to acquire additional development opportunities and potential or pending acquisition transactions, as well as the effects of such acquisitions on the Company's cash position and levels of indebtedness, changes in reserves estimates or the value thereof, operational risks including, but not limited to, the pace of drilling and completions activity on our properties, changes in the markets in which Granite Ridge competes, geopolitical risk and changes in applicable laws, legislation, or regulations, including those relating to environmental matters, cyber-related risks, the fact that reserve estimates depend on many assumptions that may turn out to be inaccurate and that any material inaccuracies in reserve estimates or underlying assumptions will materially affect the quantities and present value of the Granite Ridge's reserves, the outcome of any known and unknown litigation and regulatory proceedings, limited liquidity and trading of Granite Ridge's securities, acts of war, terrorism or uncertainty regarding the effects and duration of global hostilities, including the Israel-Hamas conflict, the Russia-Ukraine war, continued instability in the Middle East, and any associated armed conflicts or related sanctions which may disrupt commodity prices and create instability in the financial markets, and market conditions and global, regulatory, technical, and economic factors beyond Granite Ridge's control, including the potential adverse effects of world health events, affecting capital markets, general economic conditions, global supply chains and Granite Ridge's business and operations, increasing regulatory and investor emphasis on, and attention to, environmental, social and governance matters, Granite Ridge's ability to establish and maintain effective internal control over financial reporting, and the other risks described under the heading "Item 1A. Risk Factors" in Granite Ridge's Annual Report on Form 10-K for the year ended December 31, 2024 to be filed with the Securities and Exchange Commission ("SEC"), as updated by any subsequent Quarterly Reports on Form 10-Q, which Granite Ridge files with the SEC.

Granite Ridge has based these forward-looking statements on its current expectations and assumptions about future events. While management considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond Granite Ridge's control. If one or more of these risks or uncertainties materialize, or if the underlying assumptions prove incorrect, our actual results may vary materially from those expected or projected. Granite Ridge does not undertake any duty to update or revise any forward-looking statements, except as may be required by the federal securities laws.

Use of Non-GAAP Financial Measures

To supplement the presentation of the Company's financial results prepared in accordance with U.S. Generally Accepted Accounting Principles ("GAAP"), this press release contains certain financial measures that are not prepared in accordance with GAAP, including Adjusted Net Income, Adjusted Earnings Per Share, Adjusted EBITDAX, and Net Debt.

See "Supplemental Non-GAAP Financial Measures" below for a description and reconciliation of each non-GAAP measure presented in this press release to the most directly comparable financial measure calculated in accordance with GAAP.

Granite Ridge Resources, Inc.

Supplemental Non-GAAP Financial Measures

The Company reports its financial results in accordance with GAAP. However, the Company believes certain non-GAAP performance measures may provide financial statement users with additional meaningful comparisons between current results, the results of its peers and the results of prior periods. In addition, the Company believes these measures are used by analysts and others in the valuation, rating and investment recommendations of companies within the oil and natural gas exploration and production industry. See the reconciliations throughout this release of GAAP financial measures to non-GAAP financial measures for the periods indicated.

Reconciliation of Net Income to Adjusted EBITDAX

Adjusted EBITDAX is presented herein and reconciled from the GAAP measure of net income because of its wide acceptance by the investment community as a financial indicator.

The Company defines Adjusted EBITDAX as net income before depletion and accretion expense, (gain) loss on derivatives – commodity derivatives, net cash receipts from (payments on) commodity derivatives, interest expense, loss on derivatives – common stock warrants, non-cash stock-based compensation, warrant exchange transaction costs, income tax expense, impairment of long-lived assets, (gain) loss on equity investments and other, net. Adjusted EBITDAX is not a measure of net income or cash flows as determined by GAAP.

The Company's Adjusted EBITDAX measure provides additional information that may be used to better understand the Company's operations. Adjusted EBITDAX is one of several metrics that the Company uses as a supplemental financial measurement in the evaluation of its business and should not be considered in isolation or as an alternative to, or more meaningful than, net income as an indicator of operating performance. Certain items excluded from Adjusted EBITDAX are significant components in understanding and assessing a company's financial performance, such as a company's cost of capital and tax structure, as well as the historic cost of depreciable and depletable assets. Adjusted EBITDAX, as used by the Company, may not be comparable to similarly titled measures reported by other companies. The Company believes that Adjusted EBITDAX is a widely followed measure of operating performance and is one of many metrics used by the Company's management team and by other users of the Company's consolidated financial statements. For example, Adjusted EBITDAX can be used to assess the Company's operating performance and return on capital in comparison to other independent exploration and production companies without regard to financial or capital structure, and to assess the financial performance of the Company's assets and the Company without regard to capital structure or historical cost basis.

The following table provides a reconciliation of the GAAP measure of net income to Adjusted EBITDAX for the periods indicated:

Reconciliation of Debt to Net Debt

The Company provides Net Debt, which is a non-GAAP financial measure. The Company defines Net Debt as long-term debt less cash as of the balance sheet date. The Company's Net Debt to Adjusted EBITDAX provides investors with insight into the Company's leverage as of the measurement date.

The following table provides a reconciliation from the GAAP measure of Debt to Net Debt and Net Debt to Adjusted EBITDAX ratio:

Reconciliation of Net Income to Adjusted Net Income and Adjusted Earnings Per Share

The Company provides Adjusted Net Income and Adjusted Earnings Per Share, which are non-GAAP financial measures. Adjusted Net Income and Adjusted Earnings Per Share represent earnings and diluted earnings per share determined under GAAP without regard to certain non-cash and nonrecurring items. The Company defines Adjusted Net Income as net income as determined under GAAP excluding impairments of long-lived assets, gain on disposal of oil and natural gas properties, (gain) loss on derivatives - commodity derivatives, net cash receipts from (payments on) commodity derivatives, loss on derivatives - common stock warrants, (gain) loss on equity investments, deferred finance cost amortization acceleration, warrant exchange transaction costs, tax impact on above adjustments and changes in deferred taxes and other estimates.

The Company defines Adjusted Earnings Per Share as Adjusted Net Income divided by weighted average number of diluted shares of common stock outstanding.

The Company believes these measures provide useful information to analysts and investors for analysis of its operating results on a recurring, comparable basis from period to period. Adjusted Net Income and Adjusted Earnings Per Share should not be considered in isolation or as a substitute for earnings or diluted earnings per share as determined in accordance with GAAP and may not be comparable to other similarly titled measures of other companies.

The following table provides a reconciliation from the GAAP measure of net income to Adjusted Net Income, both in total and on a per diluted share basis, for the periods indicated:

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