Granite Ridge Resources' Q4 2024: Contradictions in Capital Strategy, Production Guidance, and Operational Focus

These are the key contradictions discussed in Granite Ridge Resources' latest 2024Q4 earnings call, specifically including: Controlled Capital Partnerships, Production Guidance, CapEx Guidance and Allocation, and Operational Strategy in Operated Partnerships:



Operated Partnerships and Production Growth:
- Granite Ridge Resources' operated partnerships accounted for 60% of its planned capital expenditures for 2025, increasing from under 50% in 2024.
- The shift is driven by the company's strategy to control capital expenditures and cash flow timing, resulting in higher returns and increased optionality.

Q4 2024 Production Surge:
- The company reported record production of 27,700 Boe per day in Q4 2024, up 10% sequentially and outperforming expectations.
- The outperformance was due to acceleration in traditional non-op business and strong performance in operated partnership units.

2025 Production Outlook:
- Granite Ridge forecasts a 16% annual increase in production for 2025, with an oil weighting of 52%.
- This growth is driven by Permian operated partnerships and high working interest Permian units, particularly from second Delaware focused Operated Partnership rigs.

Financial Performance and Cost Improvements:
- Adjusted EBITDAX for Q4 2024 was $82.6 million, up 10% from the previous quarter, and per unit lease operating expenses decreased by 7% year-over-year to $5.99 per Boe.
- Cost improvements are primarily due to reduced gathering and transportation expenses and decreased workover repair and maintenance costs.

Dividend and Shareholder Returns:
- Granite Ridge maintained its fixed dividend, yielding over 7.5%, and consistently returned capital to shareholders, with a Q4 dividend payment of $0.11 per share.
- The consistent dividend highlights the company's strong financial health and commitment to shareholder value.