Granite Ridge Resources, Inc. (GRNT)·Q4 2024 Earnings Summary

Executive Summary

• Q4 2024 delivered record production of 27,734 Boe/d (53% oil), up 10% sequentially and 7% YoY; oil volumes rose 16% QoQ and 20% YoY, aided by accelerated Permian turn‑ins and early outperformance in operated partnerships .
• GAAP loss of $11.6M (-$0.09/share) driven by $35.6M impairments and derivative losses; non‑GAAP Adjusted Net Income was $22.7M ($0.17/share) and Adjusted EBITDAX was $82.6M, slightly above Q4 2023 .
• 2025 initial guidance calls for 16% production growth to 28–30k Boe/d (51–53% oil) on $300–$320M capex; management may add $60–$80M 4Q‑weighted development capex if markets and financing terms remain supportive (little 2025 production impact, benefits 1H26) .
• Balance sheet/liquidity remain conservative: YE24 liquidity $129.1M; net debt/Adj. EBITDAX 0.7x; quarterly dividend maintained at $0.11/share (implied 7%+ yield commentary) .

What Went Well and What Went Wrong

• What Went Well

  • Sequential production beat: “record 27.7k Boe/d” with oil mix rising to 53%; management cited earlier‑than‑expected non‑op Permian wells and early operated partnership outperformance as key drivers .
  • Cost execution: LOE $5.99/boe (down 7% YoY) and production taxes 6.6% of sales; per‑unit cash G&A fell 14% YoY in the quarter, reflecting operating leverage and mix .
  • Strategy traction: operated partnership model scaling (two rigs in the Delaware; Midland program to spud mid‑2025), with management targeting >25% full‑cycle returns and projecting 16% 2025 production growth .

• What Went Wrong

  • GAAP earnings impact: $35.6M impairments (Bakken maturing PDP asset and marginal inventory) plus derivative losses and higher interest expense drove a $11.6M net loss despite solid operational execution .
  • Gas price headwinds: Q4 realized gas price $2.45/Mcf; while up QoQ, it remains far below 2023 levels; Q4 2024 gas sales were still down YoY despite volume recovery .
  • Limited estimate context: S&P Global consensus data was unavailable at time of analysis (API rate‑limit), preventing quantitative beat/miss assessment versus Street estimates (see Estimates Context).

Financial Results

Headline P&L/Operations (YoY and QoQ)

Revenue Mix and Realized Prices

Operating KPIs and Capital

Notes: Q3 2024 costs and wells used for sequential comparison context as reported. Q4 2023 detailed wells data were not separately disclosed; Q3 2024 table shown for trend .

Guidance Changes

Management also outlined a potential incremental $60–$80M of 4Q‑weighted development capex in 2025, contingent on market conditions and non‑dilutive financing; limited impact to 2025 production, but supports early 2026 volumes .

Earnings Call Themes & Trends

Management Commentary

• Strategy and value proposition: “We are a publicly traded private equity firm… applying an investment‑driven approach to oil and gas development,” increasingly via operated partnerships where GRNT holds majority working interest and controls development timing .
• 2024 execution and drivers: “Gas production actually increased by 4% [QoQ], complemented by a 16% increase in oil production… acceleration in our traditional non‑op business… [and] early outperformance in a couple of our operated partnership units” .
• 2025 outlook and capex optionality: “We are guiding to a total CapEx range of $300–$320M… I could see a path towards an additional $60–$80M in development CapEx this year,” largely 4Q‑weighted, funding sought on non‑dilutive terms .
• Risk management: “Protecting our investments with 90% of our current production hedged through 2026… target leverage of less than 1.25x net debt to adjusted EBITDAX” .

Q&A Highlights

• Incremental 2025 capex ($60–$80M): Deployment depends on hydrocarbon pricing and access to non‑dilutive liquidity; would mainly benefit early 2026 volumes with negligible 2025 impact .
• Rig program and basin mix: Two rigs in Delaware now; Midland Basin spuds targeted mid‑year pending operational coordination and partner alignment .
• Q4 impairment: Williston/Bakken impairment tied to maturing PDP‑heavy asset with limited incremental capex; inventory previously booked but marginal at current prices .
• Guidance sensitivity: 60% of 2025 turn‑to‑sales controlled via operated partnerships, enabling pace adjustments if oil weakens; much of non‑op 2025 activity already in process .
• Gas opportunity set: Expect at least ~1 net Haynesville well online late 3Q/4Q 2025; potential for acceleration if prices hold; Delaware volumes are “pretty darn gassy,” aiding realizations .

Estimates Context

• Wall Street consensus (S&P Global) for Q4 2024 EPS and revenue was unavailable due to S&P Global API rate‑limit at time of query; as such, we cannot quantify beat/miss versus Street for Q4 2024. Values that would normally be retrieved from S&P Global could not be accessed; if needed, we can refresh once API access is restored. Values retrieved from S&P Global*

Key Takeaways for Investors

• Mix‑led growth with tighter cost control: Oil‑weighted growth (53% in Q4) and lower per‑unit costs underpin resilient cash generation despite commodity volatility .
• Operated partnership flywheel: Greater control over capex/timing supports mid‑teens growth in 2025 and sets up a free cash flow inflection as programs mature; market may not fully credit the transition yet .
• Balance sheet and hedge profile de‑risk plan: 0.7x net debt/Adj. EBITDAX and extensive hedging (through 2026) provide flexibility to pursue optional capex without diluting shareholders .
• Watch 2H25/1H26 cadence: Potential $60–$80M incremental capex would primarily lift early‑2026 volumes; near‑term growth in 2H25 expected as second Delaware rig contributes .
• Gas optionality returning: Expect steady gas through 3Q25 with a 4Q25 uptick from Haynesville/dry gas Eagle Ford turn‑ins; sustained gas price strength could drive faster non‑op activity .
• Dividend support: $0.11/sh quarterly dividend maintained; management targeting robust cash returns alongside production growth .
• Risks: Commodity price volatility (oil and gas), potential impairments on marginal inventory, and timing of non‑op turns; however, controlled capex and hedging mitigate execution risk .

Supporting Detail

• Financial results: Full Q4 2024 8‑K press release with P&L, balance sheet, cash flow, production, costs, and non‑GAAP reconciliations .
• Q4 2024 earnings call: Prepared remarks and Q&A covering drivers, guidance, hedging, leverage, and capex optionality and –.
• Prior quarters for trend: Q3 2024 8‑K (revenue $94.1M; EPS $0.07; Adjusted EBITDAX $75.4M; LOE $5.62/boe) and transcript; Q2 2024 transcript for early trajectory and capex mix – –.