Granite Ridge Resources Sees 20% Rally Amid US Expansion Plans

Granite Ridge Resources, an oil and gas exploration and production company, has seen its shares rally 20% from its all-time low in April 2025. The company's approach is to invest in various U.S. assets, with a focus on the Permian Basin. Granite Ridge aims to generate strong returns through a disciplined and patient investment strategy, as well as a focus on cost control.

Granite Ridge Resources, Inc. (NYSE: GRNT), an oil and gas exploration and production company, has seen its shares rally by nearly 20% from their all-time low in April 2025. The company's stock, which traded as low as $4.52, has since rebounded to just over $5.25 per share, reflecting a significant turnaround in investor sentiment.

Granite Ridge Resources operates primarily in the U.S., focusing on the Permian Basin, where it holds a substantial portion of its assets. The company's strategy involves investing in various oil and gas exploration and production opportunities across key basins, including the Permian, Eagle Ford, Bakken, Denver-Julesburg, Haynesville, and Appalachian. The company's approach is to generate strong returns through a disciplined and patient investment strategy, with a focus on cost control and operational efficiency.

The company's recent financial performance has been mixed. In the first quarter of 2025, Granite Ridge Resources reported earnings of $0.22 per share and Adjusted EBITDAX of $91.4 million, representing gains of 83%, 42%, and 38% year-over-year in earnings per share, Adjusted EBITDAX, and revenue, respectively. However, the company's shares have not reflected this improvement in performance, with the stock price remaining relatively stable despite the recent rally.

One of the key factors driving Granite Ridge Resources' stock performance is the company's dividend yield. The company has maintained a consistent dividend policy, paying nine consecutive $0.11 per share quarterly dividends from its diversified asset base. This has contributed to the company's stock yield, which has increased from 6.2% in July 2024 to 9.7% in April 2025, and has since decreased to 8.2% as of May 2025.

The company's balance sheet has also been a point of concern for some investors. Granite Ridge Resources' debt has increased from $140 million to $250 million in the past 15 months, with more than half of this debt utilized for dividend payments. This has led to some analysts expressing caution about the company's prospects, with both Bank of America and Evercore ISI maintaining Hold ratings on the stock.

Despite these concerns, Granite Ridge Resources continues to focus on growing its asset base and increasing its production. The company's management has reiterated its guidance for daily production of 29,000 BoE (52% oil) in fiscal 2025, with capex of $310 million, of which ~60% will be earmarked for operated partnerships.

In conclusion, Granite Ridge Resources' stock performance has been mixed, with shares rallying 20% from their all-time low in April 2025. The company's focus on the Permian Basin, disciplined investment strategy, and consistent dividend policy have contributed to its recent performance. However, concerns about the company's debt levels and analysts' cautious outlook have tempered investor enthusiasm. As the company continues to grow its asset base and production, investors will be watching closely to see how these factors impact the stock's performance in the coming quarters.

References:
[1] https://www.marketbeat.com/earnings/reports/2025-8-7-granite-ridge-resources-inc-stock/
[2] https://seekingalpha.com/article/4804512-granite-ridge-resources-new-dividend-play-for-my-portfolio