Granite Ridge Resources: Mastering the Energy Transition Through Strategic Partnerships and Permian Basin Synergies

In a fragmented energy market marked by shifting capital flows and evolving operational models, Granite Ridge Resources (GGPI) has emerged as a standout player by redefining its approach to growth. The company's Q2 2025 performance underscores a bold strategic pivot under CEO Tyler Parkinson, who has transformed Granite Ridge from a traditional operator into a high-conviction energy investment platform. By leveraging private capital gaps and Permian Basin synergies through non-operated partnerships, the company is generating outsized returns while maintaining financial discipline—a rare combination in today's capital-constrained upstream sector.

The Partnership-Driven Model: A New Paradigm for Energy Growth

Granite Ridge's core innovation lies in its “operated partnership” strategy, which allows it to access high-quality drilling inventory without the operational and capital burdens of direct management. By collaborating with top-tier operators like Admiral Permian Resources and PetroLegacy, the company secures access to 74 net drilling locations in Q2 2025 alone, with 70 of these in the Permian Basin. These partnerships are structured to deliver low-cost, high-return projects, with each location averaging just $1.7 million in acquisition costs.

This model is particularly effective in the Permian, where seven major operators dominate core areas. Granite Ridge's nimble approach enables it to assemble smaller, undervalued deals at competitive prices. For instance, Admiral Permian's 7,000 BOE/day production (22% of Granite Ridge's total output) is a testament to the scalability of this strategy. The company's 2025 capital expenditure plan of $400–$420 million allocates 80% of acquisition capital to the Permian, with 74 net locations expected to extend its drilling inventory runway by three years.

Capitalizing on Private Capital Gaps

The energy sector is currently experiencing a significant private capital gap, with upstream private equity fundraising down 70% since 2018. This void has created an opportunity for Granite Ridge to act as a bridge between traditional energy and the energy transition. By targeting smaller, fragmented assets that larger players overlook, the company is assembling a diversified portfolio of high-margin projects.

For example, Granite Ridge's Q2 2025 acquisition of 5.5 net undeveloped locations immediately added production capacity and future drilling potential. These deals are executed off-market, avoiding the premium pricing typical of public auctions. The company's focus on the Permian and Utica Shale—two of the most capital-efficient basins in North America—ensures that its inventory remains resilient even in volatile commodity environments.

Financial Discipline and Shareholder Returns

Granite Ridge's conservative balance sheet is a critical enabler of its growth strategy. As of June 30, 2025, the company holds $103.4 million in liquidity and maintains a net debt-to-adjusted EBITDA ratio of 0.8x, well within its target range of 1x–1.25x. This flexibility allows it to sustain a 4% dividend yield while pursuing aggressive expansion.

The company's 2025 production guidance of 31,033–33,000 BOE/day—a 28% year-over-year increase—reflects the compounding effect of its partnership-driven model. With a projected 4-rig expansion in the Permian by 2026, Granite Ridge is poised to outperform peers in both production growth and capital efficiency.

Why This Is a High-Conviction Investment

Granite Ridge's strategy aligns with three key market tailwinds:
1. Permian Basin Synergies: The basin's low breakeven costs and high productivity make it a magnet for capital-efficient operators. Granite Ridge's partnerships ensure it captures these benefits without operational overhead.
2. Private Capital Arbitrage: By targeting undervalued assets in a capital-starved market, the company is generating full-cycle returns exceeding 25%, a stark contrast to the risk-adjusted returns of traditional upstream plays.
3. Energy Transition Positioning: Granite Ridge's focus on low-carbon intensity projects in the Permian and Utica positions it to benefit from ESG-driven capital flows while maintaining profitability.

Final Thoughts

Granite Ridge Resources is a masterclass in strategic agility. Its operated partnership model, combined with a disciplined capital allocation framework, has created a flywheel of growth, liquidity, and shareholder returns. As the energy sector continues to fragment, companies like Granite Ridge that can navigate capital gaps and operational complexity will outperform. For investors seeking exposure to the next phase of the energy transition, Granite Ridge offers a compelling, high-conviction opportunity.