Granite Ridge Resources Q2 Earnings Call Highlights

Granite Ridge Resources NYSE: GRNT reported second-quarter production of 32,044 barrels of oil equivalent per day, with oil representing 51% of the production mix, as the company continued investing in development and inventory additions ahead of an expected free-cash-flow inflection in 2027. President and Chief Executive Officer Tyler Farquharson said 2026 is expected to be the company’s final year of investing beyond free cash flow. He said capital deployed this year is intended to build a larger production base, improve margins and support sustainable free cash flow next year. “The real story is not the quarter, it’s the trajectory,” Farquharson said. “We are getting closer to that inflection.” Chief Financial Officer Kyle Kettler said oil and natural gas sales totaled $149.3 million during the quarter. GAAP net income was $30 million, or $0.23 per diluted share, compared with $0.19 per share a year earlier. Adjusted net income was $11.1 million, or $0.09 per diluted share. Adjusted EBITDA was $79.6 million, up from $75.4 million in the prior-year period. Cash flow from operations totaled $55.6 million, or $69.5 million before working-capital changes. Unhedged realized price: $51.19 per BOE Realized price including settled derivatives: $43.39 per BOE Lease operating expense: $30 million, or $10.27 per BOE Drilling and completions capital: $78.5 million Acquisition capital: $16.7 million Granite Ridge ended the quarter with $44.1 million of cash, $125 million drawn on its revolving credit facility and $350 million of principal outstanding on its 8.875% senior unsecured notes. Net debt was $418 million, and Kettler said leverage stood at approximately 1.4 times. The company closed 27 transactions during the quarter, primarily in the Permian Basin and Utica region. Including future carry obligations, Granite Ridge committed about $28 million of capital and added 21.9 net undeveloped locations to its inventory. Farquharson said the company’s operated-partnership model provides access to acreage and development opportunities sourced through partners’ leasing operations, local relationships and operator networks. The company seeks to provide capital while retaining influence over development timing and capital allocation, he said. During the first half of 2026, Granite Ridge reviewed 363 opportunities, advanced 84 to underwriting and closed 44 transactions. Its operator partnerships accounted for about 78% of first-half deal capital, according to Farquharson. The company ended the quarter with 175 gross wells, or 14 net wells, in process.