Granite Ridge Resources, Inc

Oil and natural gas sales were $149.3 million. GAAP net income was $30 million, or $0.23 per diluted share, compared with $0.19 a year ago. Adjusted net income was $11.1 million, or $0.09 per diluted share. Adjusted EBITDAX was $79.6 million, up from $75.4 million a year ago. Cash flow from operations was $55.6 million, or $69.5 million before working capital changes. Production was 32,044 BOE/d, 51% oil. LOE was $30 million, or $10.27 per BOE, versus $9.57 per BOE in Q1; first-half LOE was $9.91 per BOE. G&A was $9.2 million, or $3.14 per BOE, and production and ad valorem taxes were $9.3 million, or 6% of sales. The company invested $78.5 million in drilling and completions capital and $16.7 million of acquisition capital, with total committed capital of about $28 million including roughly $11 million of expected carry. It ended the quarter with $44.1 million of cash, $125 million drawn on the revolver, $350 million of senior unsecured notes outstanding, and net debt of $418 million, with leverage at approximately 1.4x. For the second half, management expects production to step up modestly in Q3 and more meaningfully in Q4, with oil around 52% of the mix, and said full-year volumes should land toward the lower end of guidance due to timing shifts. On gas, management said Q2 was likely the low point, with Q3 gas sales expected to be north of $30 million before hedged settlements if basis holds where it is today. Full-year LOE guidance was raised to $8.25 to $9.25 per BOE.

Tyler Farquharson framed the quarter as another step toward Granite Ridge’s 2027 free cash flow inflection, saying every dollar invested in 2026 is building toward that outcome. He emphasized the Operated Partnership model as the company’s core advantage because it combines proprietary sourcing, control over capital and timing, and access to high-return inventory that does not come through auction. His tone was confident but disciplined, stressing that the company can flex spending up or down depending on commodity prices while still protecting the dividend and balance sheet.

Kyle Kettler focused on the financials, citing $149.3 million of oil and gas sales, $79.6 million of Adjusted EBITDAX, and $55.6 million of operating cash flow. He highlighted LOE pressure at $10.27 per BOE in the quarter and said guidance was increased to $8.25 to $9.25 per BOE for the year, while also noting that per-unit costs should improve as new volumes ramp and as operational issues around Waha and early-life pads ease. He also reviewed capital deployment, including $78.5 million of D&C spend, $16.7 million of acquisition capital, $44.1 million of cash, $418 million of net debt, and leverage of about 1.4x, underscoring that the balance sheet still gives the company flexibility.

Analysts pressed on what underpins the 2027 free cash flow inflection and what oil price is needed; management said the framework assumes about $65 oil, with Tyler citing a path to a 10% free cash flow yield, 1.25x dividend coverage, leverage around 1.25x, and high-single-digit production growth. Questions also focused on how quickly operated activity can flex and how inventory capture changes once free cash flow arrives; management said upside activity can be accelerated quickly by pulling forward inventory or adding a rig, while downside spend can be reduced below maintenance capital if needed. Analysts asked about LOE and the impact of first-quarter MVC write-offs, and management said Q1 had the write-off while Q2 did not, with the higher LOE driven by water handling, early-life costs, and denominator effects from shut-ins tied to weak Waha pricing.