GRNT - Earnings call transcript Q4 2023 | Granite Ridge Resources, Inc

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Operator

Good morning, and welcome, everyone, to Granite Ridge Resources' Fourth Quarter and Full Year 2023 Earnings Conference Call. [Operator Instructions]I will now turn the call over to Wes Harris, Investor Relations representative for Granite Ridge.

Wes Harris

Thank you, operator, and good morning, everyone. We appreciate your interest in Granite Ridge Resources.

We will begin our call with comments from Luke Brandenberg, our President and Chief Executive Officer, who will provide an overview of key matters for the fourth quarter and full year as well as an outlook for 2024.

the who to results will other turn Chief Farquharson, and then matters. Officer, Financial review will call Tyler over our discuss We our financial open some then will call of projections statements comments to federal will forward-looking certain up provide other the Luke before questions.Today's return contain we within the and conference securities call to closing meaning laws. from these to may cause to differ These statements. that actual in implied uncertainties statements those risks are or and subject expressed results the cautionary review in We'd our ask also that release. statement earnings you any Ridge or events Granite new a obligation revise any intention future disclaims or result to forward-looking or information, as update otherwise. statements whether of Accordingly, on forward-looking you reliance place should undue statements. not conference financial These yesterday's and Securities release in call other measures. references and Commission.This press also certain to are with includes our non-GAAP risks described filings Exchange the and to our Information is measures is in GAAP non-GAAP measures reconciling financial website. most posted direct comparable release financial the our that on earnings available discussed

reminder, conference call.With A as that, Finally, today's Luke. being it made transcript I'll following will recorded. and turn replay over this on website be to a available our call is

Luke Brandenberg

you, your there. many participation to sharing start from level Wes, appreciate today's names with see fronts the everyone new for you high our familiar thank It's plan We in fun Right. Thank to you time a this on call. was both is call of as to screen on for climbs and and us. quarter-over-quarter. My call record to year XXXX for Granite Ridge. joining and zoom each

X risk-adjusted generating, your on legacy made are And the value our bear strides that returns. model, great the we with continue evaluating into just I'm all best the of by of the speed driving and to those with investing to proud that in primary fine-tune investable say opportunities and investors for more above. and company XXXX: going you that make you strengthen to ask up objectives organization, for So me.We have fully I'll looking

touched to organizational on quite private touched, the X heavy sure to not one are members XXX team stepping streams. thanking the that transitioning numbers and implemented done that team the XX lift make the the a virtually new challenge done X corporate to past to ] from member our a created SOx but are put really we I just from it organization. up milestones [ work things by start, months. On additional right.To front, achieved of has has by been added start controls. every they standing to like And this, I'd every for some different a This mean company. public And in

to made whirlwind airline which investor I where year. now the spend front, Airlines to it was, joke past to a money that in where private as go time public of has the more in Northeast the care status about the oil equity, a On and companies, But California with choice. us is XXX in you between. reason to Airlines.With way found public quickly many X,XXX give Southern is, meetings I spots to on like investors it down Northwest from Pacific and the to from Granite I of my to used going been Miami my to the I my a American roughly life Southwest Ridge. over company, on

a reported our volume We in hard per Xx, last not largest up January, and 'XX. have become year kind shareholders coverage from the note up year would make meetings, maintained number over to repurchase a be willing Xx shareholder that secondary is of more million 'XX currently.Trading bought have end the between to offering to place to per us Granite So Ridge continues that at our up is dividend that research or $X.XX $X.XX are from $XX investable. quarter of that end banks and continues from annum investor demonstrated back I was do decisions, conferences, program stock, Xx XXx and to and we to the

more I York Granite from We their a all to the New us for meetings that a take point are personal of occasion, earlier speed larger later, to the still with PM we this generally position. is X Q&A more institutions for like year. from to is trading meetings wood on like the but on data up to they'd for rapid what changing account, the investor pitchbooks with us to Meetings home. Granite and the days challenge volume trip Ridge brought that Another books folks XX fire company.We XX brought to in a than have chop, XX told is one buy are Ridge fund

details the of So more and Ridge story, year.Now to hope continue assets. get addition will will we in XXXX, the to like to execution, share per started Granite in over growth turned I day quarter. the see fourth XX%, pound pavement of X% production the to spread the in consistent We I highlights. to many XX,XXX into a of but Tyler some and including of barrels this for moment, year-over-year the equivalent would you on expecting to oil

XX long. deals of Granite by hydrocarbon not the sit adjusted new recycling drive significantly we acceleration that balance generated reserves XXXX, the value to in cash in on sheet investments made by operating X% XXX our with lower with quickly from year, was proved risk-adjusted returns, from into million solid flow XX did and wells a and flow beat best we opportunities prices that of EBITDAX gross from came in over XXXX in and cash most increased year-over-year.At investments it Ridge, some XXXX roughly execution $XXX Despite partners. While XXXX, of

cash internal about external to the did we what their in partners supporting keep folks, 'XX left from that working We drilling estimate thank to bit before dollars a flow involved, returns. As of $XXX or amazing 'XX, with solid hard dedication.Now changes. million capital that was outstanding for In $XXX everyone CapEx past, operating flow. flat and operating shareholder like of I'd flow had including discretionary we XXXX, million. of to the production That $XXX talk for and maintenance drive necessary work cash I to our professionals year and team completion continued want million to cash

you If yield. it our XX% compare that enterprise is value, a to

Now what for of the the million so around in CapEx, then X long and as opportunities the activity, X of December about about spent Vital million Energy leverage to hit return a projects.Additionally, X of what evaluating and pay by credit call level.Diving enhance recent the X.Xx have million. incremental opportunity $XXX we to into the fourth to shareholder beer X.Xx to our a barrels partnership in deals long-term assets the beat. of non-op quarter while non-offer family XXXX, are a growth typically continue for compelling today. did and the X,XXX with 'XX X.Xx shares This closing X strategy, seller and an the discount Haynesville million development including that in in execution in Ford repurchasing are and Permian dividends, or was we the control to where spend certain in on X period we outlining in worth $XX we $XXX put, operate Simply invested transactions for ended late per million also premium. always million release A $XXX and which our $XX our Eagle million million only approximately we a consisted press $XXX we fourth facility Delaware set that. assets, producing on cash in of equivalent of of the we that reinvest XX that great that million net partner X.X us operating of $XXX of and traditional controlled rate will are fourth quarter, $XX a to the In and around borrowings with the Basin with net our Delaware owner year call facility partners, exactly full open significant and largest The contributed barrels in to X.X draw of and put growth burgers with strategic our in they quarter or not along in until production 'XX.Now day value. acquisitions, our A&D we'll sell and we target, I'll through that developed allowed bounce at wells interest deal was XX Basin our assets the to Eagle development and out credit Henry X.X about expect of sold our justifies, below a or did million turned it for target approximately X we oil net X from wells and gross of including acres for now early tag in the buy over the February, another Ford, X,XXX full gross consideration which 'XX we year of per stock we contributed sale production timing.The X,XXX sales, benefited Vital shares day $XX

point production rates them, than recycle with will strategic mention to development We sold.We about position certainly stock partnerships that we a just the differentiator performs, Vital made and into exit is see expect capital I higher our real rooting as for and every a this for how we're we this return year that company. that on the opportunities call, of

a we group As the in buckets. set opportunity our X reminder,

typically under year sight good in or what the are good The development traditional X. or call line beer. first non-op with deals burgers next operators smaller to These and is in we of areas

sizes, partner. in consolidators. second non-op an either or acquisitions different or typically but consolidating These buying shapes are alongside The operating is and of packages the come

a third this just broadly than partnerships.I The is strategic as deal. bucket would more describe

transaction beer burgers our there and typically at time. on based a generated are relationships, one While deals are

larger type Those end operator is the on partner that we develop about initially AMI control X under of such in our net Our Midland, structures. the The almost in where partners' coming Basin. of strategic AFE. in private a were assets future of scale picked ROFR, spending Delaware benefit it, the drilled inventory, and other talked where up venture strategic through After efforts joint control through to the our we absolutely development a XX% rigs the are partnership out from we gives November year of roughly partnership our or X.X business January, partnerships hand, nailed us most with development wells wells timing. building we

month the sales for levels per completions late barrels X% for late and next early of to XX,XXX in 'XX expect adjusted a XX,XXX XXXX. our begin between second expect approximate oil to this quarter.So the the at the with production or outlook will turning turn assets currently We range to the of to from increase equivalent divestiture Vital. day, midpoint levels We an

usual, will our be production As lumpy.

expect for to to XX% from quarter X% quarter maybe look quarter, a you first the first quarter. quarter as vital controlled more in comparing sale, begin reported third decline CapEx to with second our though We reported.We come our the ramp fourth late bit the anticipate strategic mentioned if like first that that to expect quarter the earlier pad adjust the may fourth of production of I will we online in partner

now, probability $XXX that million production $XXX side, business the sales to $XX see acquisition or that That the to I'll to XX deals completion sight we XX they're and will acquisitions, past, number of number expect agreed to Right we brings drilling $XXX this and wells and efforts to includes turn continue of inventory high closed the to for currently to expect as and million but to in guide between as million, close. have note we sits only year. are attractive CapEx at to not generate increase both million. On that total a of and opportunities.On side, our CapEx we development $XXX to line us development and net the that million

half XX% to a to of year that forward continued eye in of front-half keeping first first over on in with the the the just half that also look loaded of over quarter.We CapEx close and We controlling the costs. slightly just be expect

million. results to that, million corporate year CapEx our are in Our over we couple maintenance X% that ad $XXX outlook production LOE may million to range equivalent, to believe $XX annual $X.XX $XXX taxes to in be other to we it be for that to and is $X.XX relevant of points expect from for financial decline be X% $XX the barrel Tyler? data detail. XXXX current I'll the to turn per cash our in more valorem to Tyler G&A low-XX%.So and million, A discuss production-based with of of oil

Tyler Farquharson

for an momentum year well on morning, good continue of We positioned XXXX. proved fronts Thanks, Granite into multiple XXXX Luke, to and exceptional delivered are performance records Ridge. to company everyone. and be that

the the wells by online. oil and above barrels exceeding our exited of the For year, return to In quarter, company to delivered oil of Overall, shareholder of sheet per were record strong we our high oil balance number our record XX,XXX able while grow year-over-year. XX% our fourth liquidity XX% with day achieved placing we plans. volumes production the full by and guidance continue equivalent year a production and total capital end a deployment and we a

grew prior wells a XX equivalent end.Diving continued oil net new daily during quarter. to XX,XXX bit sales XXXX into look in driven XX% during forward of year's quarter, performance Eagle our placed our Ford Permian to recent XXXX, per to at for record performance results wells with deeper process in in future and quarter are year a the wells from by the average the production the We accomplishments and of barrels proud and our day, turned from strong online

BOE. which was X% third per fourth year expectations. well third guidance with per lease end Adjusting analyst of both $X.XX the environment.Adjusted the year EBITDA guided costs low unit per Production compared full X% range ad BOE, to Per in million our BOE, in per for stock-based was for within of Full cash pricing $X.X of per were fourth of quarter sales.G&A recurring fourth million our to was share X% of G&A of the X% at which quarter, was operating quarter, despite $X.XX $X.XX was lower for for BOE, which substantially $X.XX or to taxes and $X.XX an the came at quarter. $X.XX with decrease valorem included a compensation. $XX.X for this, and the expense the $XXX,XXX were the adjusted was BOE. Our diluted our per line flat expense non-cash EPS quarter $X.XX sales quarter

completed of totaled to shares $XXX December, our across acquisitions XXXX million X.X sale XX per the representing million assets XXXX fully $XX common completed million, million, gross nearly of spending we wells XX% or nearly Energy additional or our X.X summer. stock our contributed divested including approximately activity In XX placed nearly certain Permian of net gross a our on wells year the $XX spending and During of quarter, the operating Basin. the quarter and expected this year for million of An XXX production wells X,XXX during XX% of these XX transactions. net occurring preferred of approximately total day to later Permian expect of producing partners in The shares at and to X.X oil were Full equivalent net results. the in end, acquisitions. was delivery.Capital $XX barrels of monetize progress including with Vital

We dividend. our also ongoing cash quarterly continued

declared quarter, dividend of against represents that yield addition, an dividend XX, annualized shares a basis X.X total the of of we as measured a $X.XX per $XX share a Board X.X% During repurchased on December cash million closing Wednesday's the at an million. cost approximately price.In

XX% and to past XXXX approximately months, our have provided range during increase with over net our to XX a we be anticipate wells few for XX% of We by production of PDP XXXX hedged where and XXXX, our Basin. number being XX to X% per our to gas Finally, of XXXX. we've partner of hedges XXXX.Turning of defensive wells operating we online day we XX,XXX,XXX the a initial oil for expect now approximately guidance the represents added placed to outlook, XXXX BOE production in half in those placed an -- of which XX,XXX online total, from of Delaware our

AFE total resulting expect X% results initial As partner wells XXXX very approximately half we of the placed been delivering that operating the during the a of expectations.Overall, production in of annual online encouraging ahead during activity versus X% Luke summer, outlined, results of our first decline from XXXX. before growth additional with has are performance

be that his and will of of budgeted expenditures Luke back it process expected between capital million hand in closing.I million million, closing to are comments. total the Our for including $XXX acquisitions closed either $XXX now to are or Luke? $XX

Luke Brandenberg

price Thank humbled you, Tyler. recently A and earnings. gentleman I'm that a shared public that to P have mentor for with for me call a you company, it's E

market's job P. the job E. The market P. rewards with the And is always E eventually, consistent is Our the

the and demonstrate the business E, mean way our on that workmanlike focus the splashy patiently the job model, resilient the to fashion, does but not XXXX, a value to P. adaptable, organization continue a returns.Our best market what the allocate investable in So in and E of likely and make for to risk-adjusted the is capital job strengthen business the more continue is

a for execute eventually, Xx self of XXXX, yields has than reward had over half Ridge buying in As we is quite of less will window with continue the We and bargain. But share our had that included. every company a the in turn X%, than debt to over now, price. at market are less open XX% trading higher Granite production growth quarter-over-quarter, currently insider

hope our those that thank support. today's for on Operator? have may current folks on the you questions your And that join answer any shareholders, call. happy you'll that, we're to sidelines, So to us.With we to

Operator

from [Operator Michael Stephens. the line Scialla Instructions] question comes Our of with first

Michael Scialla

you that guidance. you you some budget 'XX the you will based be things know year during I said but you that's only to and but close, know your more. plan, know there expect you be deals about there'll acquired from development ask production to Wanted on your

last I above back, 'XX your guess, last reasonable end of think, that in, acquisitions guidance, have your of things year's from this and year? happen could X% some the I future, contribution this incremental guidance. from -- is what And from deals you So acquired be year looking believe production as is 'XX production that Would it high think a production came production to in that close you'll representation reasonable year? will about you

Luke Brandenberg

Yes. asking more. you're should Thanks question, that. It's have a I Mike. right. little something Good bit clarified for probably But

we we deals are As mentioned, the guide closed. that just

ago, look I that we largely I guided high that, say just of the transactions. that hitting if would -- an up of example, last a so year end incremental And we as X%, ended range roughly the that what range high year -- at new to was

saw So you it our and me in on and thing day year, [ posing generating, new really wouldn't if job, surprise that ] day opportunities. same evaluating this out, day is

guidance So the give it's go set we they is all any organization, net did deals, is such going we're fun the well. almost to most frankly, only to what to vacation more or on is not every at case. if to we year the the But lifeblood as too. that that. of of year the quarter, That's we guiding which of increase justify the not we're that identified grow look goal.The date but and in one goal acquisition spent to That's it, the is certainly we things dollars year last production, update an And do way the is the don't rest to just there, we we'll on continue to But this and capital. date. hope opportunity that deploy continue do continue increase if

head year, new the but from contribution on in continue get won't the to till the a get year. that transaction, the production deals.Now as following do we you may we do hit you as So you nail later

stuff the be X happens in in increase for that most X, next So will the probably production months. X, year

Michael Scialla

right you if you renew buybacks? your then if you I in your a a in share And think not to I did Luke, I heard said wanted prepared you repurchase program. just follow-up, change remarks, as had thinking on see

Luke Brandenberg

to Yes, 'XX. hundreds We dollars of we'd program were back recently trading And of idea a mean, little was, the the implemented I thousands no there that's in we day. too. a of we great initially in buyback the question, gone had float. public, December

buyback so place in there. And to sure make was there bid a to we a really wanted have out

trading started went and the pavement, Trading spread increased, among As secondary to continued a other there on year of did things. pound to to a we the word, be the volume increase bid there. more but out volume

expired window. I we and think of program 'XX that was mentioned, not so think bought open at attractive its because not end And on value, it's terms every renewed, in an own we don't like the I single

fact, our goal counter In We're it's above now a $X.XX we and money share our current trading buy. volume the mouth to of buying is. is insider a putting price.So But personal think share a having still bit we've corporately, the increasing where good significantly had liquidity. a buyback

we there point no if that. right a place there's not have always year, could buyback But dislocation market in So do tremendous look, is That some we right at the one this in now. now, change said, place. in

Operator

[Operator with comes Instructions] Bank question line John from America. of of Abbott Our next the

John Abbott

question is a Our first really question. X-part

think when at do production years how roughly First, in to gave you for XXXX many guidance the is your you inventory of hand, sort part which you XX%. oil, And the second around relates have? for you mix look

look period mix guidance, of over time? the you do of oil you the when a and you mix look inventory trajectory multi-year think at that So about at your how

Luke Brandenberg

Yeah, great question.

So when I think about inventory.

two we're conservative So we and you hit book thing in I'll One parts. I'll tell is, that generally inventory. that

inventory So go that for acquisition is, we what that an that mean say, I time. leasehold, locations make internal only if by at were we of book let's underwriting some

few booked example. we basin, in the and And in and fast just give we C, inventory. have got [ in won't would find years you Springs our ]. and I'll years a you probably development active but more lot B Wolfcamp Loving that the forward If ago, so A But a you've X County, Delaware Bone an you the something bought

we because years we guess, difficult So reserves we're put there terms can had inventory year. guys challenge. book of what I booking.If probably had wells to to as XX-ish out net we've PUDs, I conservative of about current on our think is face run I to it's you guess, X X on that same proved non-op which got know, rate, for in are limited a If based SEC the the mineral a

that's and be is ] transactions in to in And cut, day replenish fluctuation [ bring again, so through lot to year. a oil day best a conservative. a good think our that'd guess.In my terms We're continue have But this XX year. of cut I out, that going point. job, up XX, oil to of you

about, talked we put out month or opportunity alongside we ago, we As in Henry the folks. the press release to tag so the assets to Vital, with a sold

And think so assets. go oily I sold oil the of as the at you'll that because that, our of those we year see cut beginning down

the some actually be XX%. partners to first year, that I of think the We full wells anticipate probably as come that it's I some for think quarter, but the of you'll end the you low-XXs, these the significantly year around see also goes as XX% may where will particularly below, online. the don't one get oily.So of pads, quarter end first of we'll a But have XX% below XX% year for closer new but I'd up that get the year. year, half and by be we're online, coming Haynesville on, strategic at our shooting through relatively more

John Abbott

the for for question, this is Tyler, you. then And follow-up

were they shares tax that you So, with and leakage? the that sold, Granite there -- any event is preferred the owns, Vital that in

Tyler Farquharson

the assets. tax So, gain of during recognize did from those we divestiture XXXX, a

on shares from sell we point, forward, there this and if that sale. So, just some gain later those there's be the leakage would year tax additional moving a

So we them would received expect sell in these XXst. where to December above we

XXXX. a in expect taxable impact would I So small

Operator

Stephens. from the Scialla Our next line of question with comes Michael

Michael Scialla

-- you quarter. did know to couple the on acquisitions of a want fourth Just in Haynesville your get I thoughts

commodity future You thoughts mentioned, that any Luke, coming here wells below you've guess, the is is? where your got online. prices the on your it wells getting with that given are and risk play, $X, in thoughts a to Haynesville some drilled there gas Haynesville where I on

Luke Brandenberg

good a that's question. Yes,

the love the With One gas side, there's that flip ground lot to wells to now acquire sides really necessarily price X the coin. these gas don't in at gas is the environment, at molecules a I'd on to I drill strip. of right inventory prices, not want

the that deals so deal. in was unique Haynesville the fourth a quarter, And

And their an we operator group. had real there We knew their of asset we're to the neat and going and X opportunity have very line with, on it they're They're the up transactions sight have them, We what the an is buy plans both into with we price. development that rigs alongside sub-$X plan. close to thing and like-minded. were, in same all not gas put at drill

really So about.We that was to some that have online. wells we're excited firm just do an opportunity partner fantastic with coming

into But complete some asset because that ducts that dollars just may price I ] think sense. anticipate generally of buy we're I continuing we drilling gas see in the they molecules half it wouldn't on that [ new that came with just speaking, to a it's try cycle basis, of made ton lot a stronger -- a tough. environment. put until to It's we'll Look, ground.

is really with gosh, then look where inventory that. the but you spot. looks doesn't You enter that say, good, the struggle pricing, price We unless run it weird good Xx if strip this spot you current

it. in We This not haven't drill put would buy but we'll But good to other lot of keep we to we looking. keep be partnership, sight did a of good plan. necessarily money had think, to gas than development time have I and in looking the gas, that work a where we'll line and this

Michael Scialla

same Basin you with you've you Midland while in the ask I And strategic partner had I partnerships in on either of think -- new? Permian. mentioned there about Is -- wanted X somebody with to that closed those during for a the the quarter or

Luke Brandenberg

Yes.

that's really Delaware, of the group -- assets, one. they lot most a of referenced out Midland. Loving that a this one our neat But there, of really the are County. So in And We we've it's talked That but back initially time. goal was rig bit, the was working to And about together. really we partnership a it a formalized our that run full early objective 'XX. in

are were inventory guys up. time. such impressive comfortable full keep those to that to that what -- a felt so just And they running build we we we dig able an we And rig could continue

be And drilling so deal X We up running thing that quickly.But year making over spud have the got not hit in to rig to our a sure we us in for more a piece that's we development that control opportunistic for we'll a neat group strategic CapEx, can I've picking that capture deadlines -- of the going big X/X because of budget actually we we right ability partnership be have the just is November. if ended rigs full this but up our pretty that's timing. where of the year. where some now, more,

we to if see strengthen, want continues that's dramatically.On to significant development. side, a down the environment if we just change such great. accelerate will market go the And the flip pause, that So third we that in can

strong there, we a have rig. inventory could pick even and up We another

these next mentioned quarter.So those January. So it's approve it unbelievable going of we we're to wells completed drilled that's wells mean, us. really finished about pumped come I we're drilling us, exciting in how the end and that second are and there. mode guys in get online early net this late I month, executed for first And -- X.X to

I we're doing is what think different.

the bridging continue to why it is forward. how going forward look think share a really us results with the of for and really we having op differentiator non-op. gap a to exciting. be this It's market will driver I on it's between and value more And to

Operator

questions This at concludes no There this are today's time. further call.

may You disconnect. now

Granite Ridge Resources (GRNT) 8 Mar 242023 Q4 Earnings call transcript