Christopher Baker's questions to Granite Ridge Resources Inc (GRNT) leadership • Q4 2024
Question
Christopher Baker of Evercore ISI inquired about the long-term strategy for the operated partnership model, particularly regarding the anticipated free cash flow inflection and how the company might address the market's current lack of valuation credit for it.
Answer
Executive Luke Brandenberg acknowledged the cash flow outspend inherent in ramping up rig activity but confirmed a positive free cash flow inflection is coming as partnerships mature, likely within the next year for the first one. He noted that despite the market's focus on growth, the company remains conservative on leverage. The strategy is to continue adding partners and rigs, accepting the near-term cash outspend to build a self-sustaining program that will eventually generate significant free cash flow.