Estimate Update; Upcoming Fireside Chat
During 2023, Granite Ridge executed its portfolio management strategy to grow the asset base and enhance its organic development growth opportunities. FY23 production increased 23% Y/Y, far ahead of management’s initial expectations. 4Q23 production averaged 26,036 BOE/d, including 12,283 b/d of oil. Production benefited from the execution of Granite Ridge’s operator partners and asset performance. Granite Ridge took advantage of tag-along rights in assets operated by affiliates of Henry Energy to divest certain Permian Basin assets at a valuation management believes was appealing. The company received 561,752 shares of Vital Energy common stock and 541,155 shares of Vital’s 2.0% cumulative mandatorily convertible preferred stock in exchange for its interests in the Henry assets. The equity has a current market value of $55.6 million. Management aims to monetize the Vital equity in the open market and recycle the proceeds in incremental development opportunities that offer a higher economic return. We expect industry consolidation and budget pressures caused by commodity price uncertainty to generate opportunities for Granite Ridge to execute its capital allocation strategy targeting acquisitions and the formation of strategic asset-level partnerships with value-creating operators. The midpoint of Granite Ridge’s FY24 production guidance reflects a 7% Y/Y gain after adjusting for the Permian Basin assets sold during 4Q23. FY24 production is expected to range from 23,250-25,250 BOE/d (47% oil). 1H24 volumes are expected to decline from 4Q23, reflecting the asset sales before growing in 2H24 as the impact of new well completions in the Delaware Basin gains momentum. Our updated FY24 estimates imply that Granite Ridge will draw on its existing RBL credit facility to fund the capital program and common stock dividend. Total liquidity at YE23, including the market value of Vital Energy equity, was $196 million. Join us at 2:00 pm ET on Wednesday, March 13, 2024, for a fireside chat with CEO Luke Brandenberg. We will discuss Granite Ridge’s strategy to drive total shareholder returns from its income-oriented business model composed of non-operated interests in oil & gas properties located in major US producing regions. Register for the event here.
Water Tower Research is built on the foundation of democratizing information flow. We bridge the growing information gap between companies and investors through our investor engagement strategies and open-access research platform.
Our research analysts are Wall Street veterans with the experience and knowledge to work with companies and investors in tandem. We provide access to the information and content that anchors the due diligence process for both professional money managers and individual investors. We leverage traditional research distribution channels and the best of modern digital strategies and tactics to amplify this information flow globally to engage all categories of investors and stakeholders.
Information flow is the foundation for creating investor awareness, knowledge, and engagement. Our mission is to help companies and investors have the tools they need and achieve their goals.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.