GRNT - Earnings call transcript Q3 2024 | Granite Ridge Resources, Inc

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Operator

Good morning, and welcome everyone to Granite Ridge Resources Third Quarter 2024 Earnings Conference Call. [Operator Instructions] I will now turn the call over to [ James Masters ], Investor Relations Representative for Granite Ridge.

James Masters

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 third quarter and an outlook for the remainder of 2024.

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

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

Luke Brandenberg

like grateful a privately in a quarter, partners. key our efforts continue good to I'd for the and is testament James, team's I'm provide results decade. Tyler report and sourcing to to our for arena, we operational exceeded a you team's and quarter few the I will expectations our everyone. of public detailed I'm the success pleased you, Thank capabilities to excellence joining us that internal just our highlight the deal creative have board. third appreciate points. have demonstrate This over of across our but today. morning, our a exceptional underwriting as we overview as to done

budget. over in of gives Our to still us over under rates to early the an of timing has about exceeded program, to and mid-XXs Controlled which plan come years. X stages, inventory locations and XX% in targets thrive. next has to-date the or CapEx We targets by over Though develop now continues its XX production project full return the better, in development XX% we Capital approximately in that X net have Permian control

to XXXX, XX% allocate will Given our even will account of based resources CapEx for success, this plan Capital. of to our And In we nearly to our more in on that I Controlled Capital. inventory, Controlled approximately XXXX, XX% early be dedicated CapEx. anticipate current

locations we $X our plan closed locations where $XX XX million to Basin pick-up inventory drives at additional over $X the adding a ratio Midland in rig aligns of On are primarily transactions and within our new roughly grow the nearly typical development locations position a new this capital. successfully to to million. are program under Capital net These this to early require projected deal with of year. continue This includes entry where next These cost $X year Controlled or total we partner strategic quarter, focused future our our ground. $XXX later front, dozen a in and

third anticipated was for pad an saw we Capital pleased we XX% in X% that our quarter production a in decline production. increase last mentioned I production. Texas. This gas in as Controlled driven actually Loving quarter. that to report gas the wrong were Turning outperformance first by to we to I'm primarily County,

gas leading taper of potentially up the expect some flush off, to fourth production to we to production a to decline quarter-over-quarter gas ahead quarter, XX%. Looking do

than are process add a Capital just on in increase of X color, followed X modest XX net by wells program. to oil those that a be should quarter, in next usual. X currently wrap through production operators net expect XX is more We September as net a this quarterly wells ahead look to under To with it partially in fourth in increase the production. When by results, higher are our our XX.X significant year. going me in stood put X those the out offset Delaware However, to wells the Controlled bit in XX, Of a to up quarter. I'll Basin. first of

our double-digit mentioned call, on As August growth in compared anticipate to we XXXX production XXXX.

to expect not growth production hand mid-teens it oil of XXXX the over with time, guidance production the be the provide note, While Tyler for insights results. are this we range. On into formal our low-XX% that be more XXXX year-over-year in providing at to we projected weighting I'll to to in do

Tyler Farquharson

good and morning, Thanks, everyone. Luke,

daily per year. increase X% last Notably, the For the average reported we quarter, XX,XXX Boe a quarter the from second and quarter our third over production of third day, marking X% volumes prior prior to from oil in from to raising the Boe per total by XX% in the quarter. oil our XX% quarter XX,XXX quarter, day, third increased XX% the percentage up

Our guidance annual remains of Boe to production day range unchanged. per XX.X XX.X

production fourth reported results. Net our more expect than expect to decline we mix oil for the we million third originally as production our quarter production $X.XX share. quarter was versus now low-XXs and guided fourth the oil income $X.X be or slightly XXXX. quarter Overall, in per expect to the year we for quarter exit However, our

in was Year-over-year, quarter, ad valorem sales, million the from income down XX% impact at significantly from to from quarter. Excluding in QX asset representing quarter expense a year despite for $XX.X prior non-cash prior $X.XX Boe, was improvement a guidance. of per approximately the of a pricing X.X% decline items, pricing. Per Adjusted and X%, we feel was the in and million adjusted non-recurring XXXX reaffirming Production unit the due lower operating our were taxes million, in XXXX realized a costs Boe second and in basis. X.X% $X.XX share. per comfortable full EBITDAX from quarter primarily adjusted and operating lease Boe the coming X% in improved the down on or divestitures $XX.X EBITDAX per $XX.X realized increase XX% net $X.XX

XX% for the Boe per to improved highlights G&A quarter. expense, Our the per stock-based This model. business of unit our excluding $X.XX non-cash scalability compensation, by

As costs continue sales and decline. production unit grow, to overhead

is $XX of million Our million annual unchanged. guidance range to $XX

completed and quarter, the our between of placed and or with handful X.X split Permian DJ evenly the in gross operating net During a a wells Basin production Basin XX total the and activity on nearly Bakken. partners the

future of we of September the XX in in on XX, for the In during we during wells we quarter, be Basin. In cost a net closed XX.X As to of mentioned, placed as locations, Permian the had X.X wells in process. XX to an to online Permian $XX.X And we third X transactions, adding net drilling additional to XXXX total quarter. primarily with expect Basin, be XX% placed being production X fourth wells total, net of continue Luke the those nearly to wells million. expect multiple those

guidance Our XXXX unchanged capital acquisition at remains $XX for million.

in We Our of the $XX.X million reaffirm this guidance capital have our with substantial second half of development year our in development capital our midpoint at expectations. Capital the towards capital been quarter third development of the programs. spending million, line was portion expenditures of during the $XXX Controlled a range. Notably, directed

of and significant investments the We cash half first drive in to XXXX. flow production expect these

million year-over-year formal During reflect during we deployed call, growth to sales $XXX during worth guidance, will for XXXX to of provide our nearly expected early we which XXXX. due capital to XXXX strong activity QX in part will turn anticipate

returning continued the paying represents per to a Ridge's annualized as dividend quarterly back hand Finally, of our our This which XX, share cash his dividend in end, value share Granite differentiated price, shareholders. I closing it cash Wednesday's quarter. X.X% quarter another commitment Subsequent our for shareholders value XXXX. we program, $X.XX to Board December November consistent $X.XX proposition, dividend will XXXX to payable record third declared our on per with to Luke Luke? to XX, comments. of on based yield closing now underscores

Luke Brandenberg

direction. As on anniversary a an public opportune we our and celebrate time reflect second our journey future company, is it as to

One moving the Ridge. is forward narrative of my priorities around Granite to key reshape

Granite This integrating categorized allocate are equity. equity expenditure visibility for our the We something to private traded building an companies, are exciting equity's shareholders will By XXXX controlled around it Typically, into liquidity, often we? is private increasing this about projects, XX% invite does and year. this drive non-op. XX% XX% This year, aim of This an with operators business. increased enthusiastic entity, XX% joining a allocate us morning. Ridge but their non-controlled and of private value returns. accurately in control nearly not to of year We projects to next capital with to to with wells. The is controlled our be allocation agility Granite but shareholder in and over our us. development at we for special. Thank what capital a we to create Ridge and control not by join public allocation. a vehicle enhanced capital of alignment control not is Publicly allocation immediate you with long-term principles we combines Granite strings. controlling the proving future you Ridge. model the I'm we about development, routes characteristic we for yet and operate us blend non-op more operate, Ridge to successful. in an all lies do unique We operator promises If strategy. Granite operator, reflect do value purse

call highlights release forward you I soon. or catching conferences of month. seeing next over upcoming in person several earnings a Our on to some the look up

for families questions. all you the As the holiday floor best. Operator, season please wish approaches, the your open I and

Operator

Your Instructions] Hungness from with comes of Bank first Noah the question of [Operator line America.

Noah Hungness

I LOE on just off costs. to start wanted your here

that? well moving range for and kind of into drove what Could in should LOE early you And maybe your talk about into came costs below pretty think about how we guys just guided year. You 'XX? the XQ

Tyler Farquharson

sure. Yes,

in due year workover been at couple less come we've least quarters. costs to we've of seen That's past the this mainly LOE where So expense. guiding to under

probably towards which for lower our will of some the we're expecting think again, range us, in put I end towards at guidance mean. the low end But revert point, our that for would guidance I range, that come now, the to XXXX. of we'd back QX, think the

Noah Hungness

you list those or hoping some it kind Marcellus in Burgers or have I is looked added I then looking at you the guys on some And liquids the was like it's of dry added of is you're you guys or of of that Beers, one in kind it your could on focused? leasehold, hoping And I you us more was Great. basins expand -- Appalachia. in just looking and color could where gas give some if areas, was Utica? & there

Luke Brandenberg

that. Noah, Yes. Happy the Thanks question. is take for Luke. to this

really for that we we Utica partnership So with that we really had a been coming form has opportunity able and are across That's such Harrison. got in minerals. area those. window, were unleased, look unleased a came active that them condensate on first to they we a were they where neat at group us And whenever across and a really focused the more Guernsey

And since, a so opportunity. early the very were that's good up first Utica been They the gosh, I really in days of wave. XXXX. the been in They've there think

it's West a had to quick. area. people If you we're got We're areas cool partner you ton capital finding So the for just got a middle to is the stuff where a -- are, -- gas putting area. of the not have wherever that map, There's this opportunities. and the picture paint good us really to EOG groups capital condensate radical pretty really work to Again, on it's are there. dry out that be the a rich oil opportunity East, a condensate to in I figured window a the to you've

as deal. find we and put it's be work, the have excited to or we're to unleased target more put continue very So to returns. good frankly opportunities at But we stuff about to a we that our long hit would tough excited as find capital

Operator

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

Michael Scialla

Luke, a CapEx could on little if to color controlled I see the you want more give partnerships.

drilling about locations. to now net XX.X inventory up You is the talked

get in still You said many next is something in first locations there the rig And pick-up Basin to determine you Basin or rig? how you that fourth timing of that the in are what or Midland the will more inventory year. you want might quarter need when Do those see a determine else partnership? there? I quarter Midland I will guess, it

Luke Brandenberg

Yes. Mike, thanks for the question.

of pieces couple I if a -- that. on So

we focused. As X have right Basin now. mentioned, is primarily Delaware partners you really a One

full of going keep in we period The on now, rig X mode the net the asset, and position. where but Midland did block-up lease The a nice other for we're time as shakes going some running is or working in, for Midland such our the Delaware goal enough primarily what we focused. have to, partnership, locations of I'd they really Basin our from Basin efficiencies could anyways a real rig initial say, Midland right up on to Basin have initial versus that we now time Basin a was the in interest one build-up X if down. Right try Delaware, out to drive be wanted with we But inventory to going several working keeping rest and we're to transactions. is depending

think we're that strategy Midland right -- than honest, at rig one the and is cool I up than But the this targeting now, be our Basin to early of right increase interest that about we'll the more right again, likely. To year, block find late that we're more likely next, working probably I'll say time. trying piece. things

month have better have And of yard the we'd creative. a that's rig rig out a so it coming that's And immediately. wait be we and than where rather and can a do

late early Midland Delaware Basin. I'd to the year, we'd currently we'll next next, middle of rigs Basin X I pick-up X running the rig So year. Delaware this probably anticipate think go that in Basin. We're in

Michael Scialla

-- it's But produce wells in what development I with analysis, look-back looks forecast. risk. you've out dead timing and production it's get your you like actual on what pretty a wanted -- your production-wise a on underwritten pretty your much there, area. is significant to It you're good. Slide on good Sounds data given will as that chart realize shows X, a obviously, can non-operator, ask a of versus handle with

is versus so, are guess, is, if performance And just it my -- handling you that it incorporate I acquisitions? into timing question you the also it sorry, I or that guess, showing showing -- is performance chart underwrite your these does how as risk timing well well? So when does

Luke Brandenberg

made that good largely publicly you it's to traded gosh, proud about was that about engineers a over it's data -- on a this your why takes number strength the deals? is saw are driver think what a is, well the is thanks a the are private question, big tight that and for slide side. neat I is, basins. A a would we this, multiple point, any do projection that wells equity of of. back for then and of the this a track and rapidly. what firm a a if Basin because so performance since, to and And have, geology over strength thing across actual not does in something that a X,XXX set This wells. of private decade been it's capital real data the asking X,XXX that we quite At Permian piece the day, XXXX. that have good and we've over underwriting have, In basins, for incorporate more these slide being at goes But core many and that that in you for end each the been can goes and change this We've value really in on better is you Yes, Mike, our really chance points really that demonstrate we're good But timing. estimate. this making just just doing the a allocation, of the

there's but not So I continue underwriting. is, lot set a in helped continues just this. that say, for we get team to would the every to day that And this of of our said more and data data have a thing room their Mike, incorporate actuals neat improve. really I'd whole single points improvement, strong we

the that our cornerstone So to a and engineering just of we've our is the had underwriting and business of date. success true we're team, very proud capabilities

Operator

of from Capital comes question the One. with line Your Phillips Johnston next

Phillips Johnston

production. prepared color just good about the of the in of remarks Lots trajectory

Just wanted sure everything. I to make caught

oil. So let's talk

on in your Permian. I guidance large what said X think which kind So growth, in the seems downtick implied call. a expect that obviously, second of sounds heels quarter fourth in you you outsized a might in quarter consistent be increase it suggests QX. what Capital of even oil X% the with like augmented about spuds sort was it sequential of like the QX, Controlled volumes pretty the And is by on guys Then

we're year-over-year QX? what you full in growth or wondering I I of that kind just wanted both? about double-digit year, guess, magnitude And just on talking basis. for then clarify oil if So the think order said to I of a Boe or to applies

Luke Brandenberg

Yes. Great questions. appreciate And I thanks, you dialing in. Phil,

quarter I'll fourth the to from On third first. -- hit quarter

a from, we in of County. pad from off from third outperformance these production could piece flush that rolling Controlled was primarily second side, what gas Loving gas that's to new quarter-over-quarter first Capital quarter XX% anticipate approach third decline some the driven side. A fourth, wells gas to the big frankly, the there and and in of On our

that in do we there. in the roll One in B we're is but the there gassier in drilled underwriting will significant conservative were start XY area of the outperformance C. of zones. of gas generally the an X B where I difference lot pad, X have C the And and we wells say, conservative makers the we points side. data fewer in As, some that the We X C X are off. XY, and And the I'd that data to We anticipate B, X in points and there. approximate saw in in and a had fewer the A,

quarter. gas, at from to again, up looking decline XX% to fourth So third

a uptick but significant On low-single-digits. of actually side, mitigate slight a to some anticipate oil one, we'll decline, I that not see the gas that

$XXX probably lot from until on see year, his I that in next made a mentioned next expect online And not I year. I just think think of million to will a any mentioned, was point spending quarter. which anticipate comments, one. we like in to in the look we come And fourth wells We wells contribution this We As -- we good Tyler to early over to at turn sales WIPs year. X of X the end wells next we XX will have X/XX. those 'XX

quarter. to lot those are going a first so of on And early come

anticipate first quarter, we'll pretty And I jump a so significant see production. in

you'll both I gas the see oil on side. think and that

mentioned you will remarks double-digit think For earlier, mid-teens. mentioned be I in I last growth 'XX, that we quarter. correct. are my

for to going I'm We're basis. a So little bit. looking on that a growth narrow Boe down mid-teens

both oil growth on I in side. think year-over-year primarily but that you'll and gas, the see oil

Controlled And -- are so all excuse be to very in Midland all big all the but focused I program. guess, 'XX, we be Midland which Basin going Capital this driver That's will that's and -- oil-driven point, Delaware it about. growth focused primary a excited me, at is Basin

Phillips Johnston

Okay, end decline amount you just of look maybe where And You of the to you the what terms relative of guys where color. year? rate? came of the good kind That's end great. can growth. a And in expect XX-month then you about have next that kind had talk PDP might of to like year decent

rate just significantly? So has PDP your wondering changed decline if

Luke Brandenberg

increased around I I'd it's right bit. a we're think XX% Yes, now. say,

a asked If it high-XXs, say, ago, would this would may and it's was you have. XX%. I probably around year don't know, year ago, you actually, said me had have I a But I

again, has piece which the And it the up working a a bit. Capital picked Controlled is, higher is program, wells. So interest little big

a a why we of So had in wait wanted certainly help rig do that treadmill that will to going. enough to until to increase over the that's by treadmill bit, it But big we stabilize inventory that keep near-term. we That recognized the a piece time. doing pick-up you to

Operator

of comes Tower Jeff from Your Robertson next line the with Research. question Water

Jeffrey Robertson

of is Controlled most said you wondering I other for Capital the seeing Permian type Controlled of that the that operate opportunities your I'm some your currently you in if partnerships? in basins Capital you're think or Luke, all Basin. of

Luke Brandenberg

And Controlled great at X that's looking right question, a Jeff, now, X. Yes, I'd other Capital to because partnerships. love we basins. X are have or have we

is right focused on near-term of Controlled now, really Capital our program that see development. One challenges the we

And us. so gas tough are for are areas that weighted

drilling economics, gas now more current given Just just is right new wells challenged.

tough. be are that could are are And be some the gas and an teams inventory have so that perspective there could of of lot from created value But that partnership capture quality, on type the interested side out gas very and in there side compelling I have. is a we there areas think high

right dialogue And look Bakken hard we form all spots. a with think in now. opportunity couple potentially and the teams right so that see we well now our X I a is to one in looking Ford as for other would these partnership. lot sense are we're, basins, the I'd other are areas, of assets existing frankly, thing that treasure contribute do in pretty we're Eagle that the a The basins in say, in some of of is at an to of building defined maps

you're not unleased so And finding acreage.

big trading And piece that really so become has game. a

So that basins, is, to advantage have do be acreage of that we partners potential a that really add for used we to take trade. these and could the we can across way Bakken, big lot value a a different have example,

appealing than they want more for a operators with. Sometimes lot these work to of large trade is cash

long-winded absolutely. would So love have some a We saying, and different that's basins. to of way see

Ford based data I'd is just Eagle we'll I Eagle compelling have. Ford there very a out say, Bakken because and think that tougher yes, continue opportunities. But that there's the look. bit to the opportunity set we on is and are fewer

for that side. open program. certainly capital success are more to to allocate the And and on like that date. I'd more We to loved business We've

a these to some provide teams look. to differentiated will solution continue I think can we and management that proven we of

So thank you for asking that.

Jeffrey Robertson

solidify acreage a area like try that X would use of you like help or put follow-up, to participate. too complicated, it complicated basins to of some would Ridge's could Granite that probably partner is in Is it sounds to be some a that leases in an to you of I control but these fair together? as guess,

Luke Brandenberg

focused actually use different skids deal to that in partner with able area area were get No, done not we've and we a where cut as our in on a and And grease to Delaware were trying done. good deal we've and acreage too operator that multiple to complicated. it's they acreage help the currency that Basin a occasions had with the

great So point. no, a it's

is that way If have use think of we in going, both Midland area I there's in can here's getting capturing for we you Delaware everything the Day in with look, said, a our Basin. hey, your it have that true partners we partnership value-add and X that we That's help a that interest. sides. to other that at to that of easily way can facilitate inventory find -- have it. make work parts, a

So it's a great point.

it us is differentiator capital a are think looking I big for partners. as for folks

Operator

further now with time. We that have no call. in you at you disconnect. conclude may participation. does our And your questions this queue And conference that, for Thank today's

Granite Ridge Resources (GRNT) 8 Nov 242024 Q3 Earnings call transcript