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HighPeak Energy, Inc. (HPK)·Q1 2025 Earnings Summary

Executive Summary

  • Beat-and-raise quarter: HPK delivered 53.1 MBoe/d (+6% q/q), revenue of $257.45M (+9.6% q/q), GAAP diluted EPS $0.26 (vs $0.06 in Q4), and EBITDAX $197.3M; adjusted diluted EPS was $0.31. Management narrowed 2025 production guidance to 48,000–50,500 Boe/d and raised the midpoint, citing stronger well performance and efficiency gains .
  • Consensus beat: Q1 revenue and adjusted EPS (S&P Primary EPS) exceeded S&P Global consensus; EBITDA modestly ahead. Revenue $257.45M vs $247.91M*, EPS $0.31 vs $0.245*, EBITDA $199.95M* vs $197.22M* (limited coverage: 2 EPS and 3 revenue estimates) . Values retrieved from S&P Global.*
  • Capital discipline with tactical slowdown: Despite faster drilling (spud-to-spud down to ~11 days) and four extra wells, HPK will lay down one rig May–Aug and introduce simul-frac to lower costs, while keeping 2025 capex within prior guidance .
  • Cost/efficiency momentum: LOE fell 3% q/q to $6.61/Boe; unhedged EBITDAX/boe $41.90 (78% of realized price). Free cash flow was $10.7M in a front-loaded capex quarter; long-term debt reduced $30M .
  • Technical note: The company issued an amended press release correcting the “Repayments under Term Loan Credit Agreement” line in Q1 financing cash flows to $(30)M; operations and guidance unchanged .

What Went Well and What Went Wrong

  • What Went Well

    • Operational outperformance: “Production averaged over 53,000 BOE/d, beating guidance and consensus estimates,” with EBITDA up ~10% q/q at similar oil prices .
    • Efficiency gains: “Spud-to-spud timing has dropped from 14 days to about 11 days… over 20% faster,” supporting more wells drilled/completed without cost inflation .
    • Guidance tightened higher: 2025 production narrowed to 48,000–50,500 Boe/d, midpoint increased on strong well performance and deflationary capex/opex trends .

  • What Went Wrong

    • YoY pricing headwind: Total operating revenues fell ~10.5% YoY to $257.45M despite volume growth, driven by lower realized prices per Boe ($53.84 vs $63.59 YoY) .
    • Tariff risk on OCTG: Management flagged new tariff uncertainty; tubular goods costs up ~3% for the rest of 2025 with a potential ~2% AFE impact if 25% tariffs applied broadly (mitigated by U.S.-made steel) .
    • Non-cash derivative loss: Q1 posted a $7.93M net derivative loss, partially offset by stronger operations; adjusted EPS used to normalize this impact .

Financial Results

Actuals across periods (oldest → newest):

MetricQ1 2024Q4 2024Q1 2025
Total Operating Revenues ($M)$287.76 $234.81 $257.45
Diluted EPS (GAAP, $)$0.05 $0.06 $0.26
Adjusted Diluted EPS (non-GAAP, $)—$0.19 $0.31
EBITDAX ($M, non-GAAP)$233.26 $179.43 $197.32
Avg Daily Sales Volumes (MBoe/d)49.73 50.22 53.13
Oil Mix (% of volumes)—86% liquids/72% oil 86% liquids/72% oil
LOE ($/Boe)$6.30 $6.81 $6.61
Realized Price ($/Boe)$63.59 $50.83 $53.84
Free Cash Flow ($M, non-GAAP)$49.70 —$10.69
DC&E + Infra Capex ($M)—$152.50 $179.82

Q1 2025 vs S&P Global consensus (Primary/Adjusted basis where applicable):

MetricQ1 2025 Consensus*Q1 2025 Actual*Beat/Miss
Revenue ($M)$247.91*$257.45*Beat*
Primary EPS ($)$0.245*$0.31*Beat*
EBITDA ($M)$197.22*$199.95*Beat*
EPS - # of Estimates2*——
Revenue - # of Estimates3*——

Values retrieved from S&P Global.*

KPIs and operating metrics:

KPIQ1 2024Q4 2024Q1 2025
Oil (Bbl/d)—35,926 38,222
NGL (Bbl/d)—7,289 7,724
Gas (Mcf/d)—42,007 43,096
Unhedged EBITDAX/boe ($/Boe)$52.68 $39.35 $41.90
Cash costs ($/Boe)—$11.48 $11.94
Dividend per share ($)$0.04 $0.04 $0.04 (declared for June)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Average Production Rate (Boe/d)FY 202547,000 – 50,500 48,000 – 50,500 Raised lower bound; midpoint higher
DC&E Capex ($M)FY 2025$375 – $405 Within prior range (no change) Maintained
Infrastructure/Other Capex ($M)FY 2025$40 – $50 Within prior range (no change) Maintained
Total Capex ($M)FY 2025$448 – $490 (incl. one-time $33–$35) Within prior range (no change) Maintained
LOE ($/Boe)FY 2025$7.00 – $7.50 Reaffirmed trajectory (no change) Maintained
G&A ($/Boe)FY 2025$1.25 – $1.35 No change Maintained
DividendQuarterly$0.04/sh (ongoing) $0.04/sh declared for June 25, 2025 Maintained
Rig/Frac cadence2025 programAvg 2 rigs, ~1 frac crew Temporarily 1 rig (May–Aug) with completions pauses; add simul-frac Program adjusted; activity unchanged overall

Earnings Call Themes & Trends

TopicQ3 2024 (prior-2)Q4 2024 (prior-1)Q1 2025 (current)Trend
Capital discipline“Beat and raise” on production; continued FCF; debt paydown and buybacks 2025 plan: flat prod on lower capex; focus on capital structure optimization Lay down a rig May–Aug; pace activity within budget; flexibility to slow further if macro weakens Tightening spend, preserving balance sheet
Operational efficiencyUnhedged EBITDAX/boe $45.68; cost reductions vs peers; structural cost edge vs Midland core Emphasis on maintaining peer-leading margins via infrastructure buildout Spud-to-spud down to ~11 days; LOE down 3% q/q; simul-frac to step-change completions cost Improving
Well performance/InventoryMiddle Spraberry test (Kallus) exceeded expectations; Wolfcamp A eastward extension strong Added reserves; 345% reserve replacement; delineation continues Borden County and Middle Spraberry wells tracking ~20% better early-time; sub-$50 breakevens expanding Positive
Tariffs/macro——OCTG tariffs could lift AFEs ~2% at 25% tariff; HPK largely uses U.S.-made steel, mitigating impact New headwind, manageable
Capital structure—Plan to optimize (HY bond + RBL) to reduce interest, increase FCF Reiterated intent; use RBL to pay down at par during no-call period Execution pending
ESG/infrastructureBuilding low-pressure gas system, electrification, solar farm benefits Ongoing expansion supports margins Infrastructure front-loaded in Q1; expect lower quarterly capex thereafter Completed front-load; benefits accrue
Hedging—Added HH gas swaps in Feb’25 Oil collars/puts and HH swaps in place; added further 2026 gas hedges in April Risk-managed

Management Commentary

  • “Our production averaged over 53,000 BOE/d, beating guidance and consensus estimates… EBITDA increased ~10% q/q at nearly the same oil price” — Michael Hollis, President .
  • “Spud-to-spud timing has dropped from an average of 14 days to about 11 days… These drilling efficiencies are sticky” .
  • “Effective immediately, we are dropping 1 of our 2 rigs for a period of 4 months, May through August… we still expect to complete the same number of wells as originally guided” .
  • “Simul-fracking represents a dollar bill sized step change… ~$0.25M per 15,000’ well, or $1M per 4-well pad ($1/ft)” .
  • “We remain committed to optimizing our capital structure… no near-term debt maturities… proactive steps to keep our balance sheet strong” .

Q&A Highlights

  • Simul-frac impact: Completing 4 wells in 11–14 days vs 25–28 previously; savings of $0.25M per well ($1M per 4-well pad), with ancillary benefits (shorter offset downtime, earlier production) .
  • Borden County/Middle Spraberry: Early results across three zones (Wolfcamp A, Lower and Middle Spraberry) tracking ~20% better early-time; path to move ~200 Middle Spraberry locations into sub-$50/bbl breakeven over next year .
  • Guidance cadence: Raised floor to 48,000 Boe/d largely on Q1 outperformance; conservative stance keeps room to “beat and raise” if simul-frac benefits materialize .
  • Capital structure roadmap: Aim for “normal way” HY bond plus sizable, underdrawn RBL to facilitate par paydowns with FCF during no-call window .

Estimates Context

  • Q1 2025 beats on revenue and adjusted EPS: Revenue $257.45M vs $247.91M*, Primary EPS $0.31 vs $0.245*, EBITDA $199.95M* vs $197.22M*; coverage limited (2 EPS / 3 revenue estimates) . Values retrieved from S&P Global.*
  • Implications: Raised production guidance midpoint and efficiency gains (simul-frac, lower LOE) support upward bias to out-quarter EBITDA/EPS assumptions if oil prices hold; temporary rig laydown and macro/ tariff uncertainty temper activity pace .

Key Takeaways for Investors

  • Execution remains solid: q/q growth in revenue, EPS, volumes; strong unit margins and LOE deflation despite YoY price headwinds .
  • Beat-and-raise setup: Narrowed FY25 production range with higher midpoint; Q2 should reflect Q1 completions timing and early simul-frac benefits .
  • Cost structure advantage: Structural shallowness, lower frac pressures, localized inputs, and infrastructure underpin sustainable DC&E and LOE advantages vs peers .
  • Tactical prudence: Temporary rig laydown preserves balance sheet through macro/tariff volatility while leveraging efficiency gains to hold activity levels within plan .
  • Free cash flow inflects as capex normalizes: With front-loaded infrastructure spend in Q1, management expects materially lower quarterly capex going forward within guidance, supporting FCF and deleveraging .
  • Capital structure is a 2025–2026 catalyst: Management intends to transition to HY + RBL, enabling par paydowns of RBL with FCF during no-call period; reduces interest burden and increases FCF conversion .
  • Risk monitor: OCTG tariffs (modest AFE impact), oil price volatility, and small-sample Street coverage on estimates (volatility in consensus) .
Note on estimates: All asterisked values are retrieved from S&P Global (Capital IQ) consensus/actuals feed.