Granite Ridge Resources (GRNT) investor relations material

Strategic vision and investment approach

• Aims to be the leading public investment platform for US energy development by investing alongside proven management teams and targeting over 25% full cycle returns on every project.

• Maintains a disciplined, repeatable strategy focused on returns, balance sheet strength, and consistent value sharing with shareholders.

• Diversifies across six premier basins and 65 operating partners, with a strong concentration in the Permian Basin, and a balanced commodity mix of 50% oil and 50% natural gas.

• Raised full-year production guidance by 10% after strong Q2 results, achieving 28% year-over-year production growth and significant cash flow growth.

• Maintains a leverage ratio of 0.8x net debt to trailing twelve months EBITDAX, below its target range and peers, and offers an 8–9% dividend yield.

Market environment and opportunity

• US shale activity has dropped since early 2022, with rig counts and frac spreads down 30–45% from pre-COVID levels, leading to stalled supply growth.

• Industry-wide, reinvestment rates are rising and well productivity is declining as tier one inventory is depleted, creating an undersupplied market and higher commodity prices.

• Sees opportunity in this environment by focusing on short-cycle development and consistently achieving 25% IRRs while others pull back.

Business model and capital allocation

• Operates over 3,100 gross wells, generating over $300 million in cash flow as of February 2024, and screens hundreds of transactions annually to allocate capital to the highest risk-adjusted returns.

• Employs a two-pronged strategy: operated partnerships (majority working interest, control over capital and timing) and traditional non-operated interests (minority stakes for diversification).

• Since 2017, delivered a 47% CAGR in production while keeping leverage below 1x net debt to EBITDAX, demonstrating capital efficiency and disciplined growth.

• Maintains development CapEx under $80 million for nine consecutive quarters while growing production at a 17% CAGR.

• Keeps deal sizes small (under $10 million on average) to avoid concentration risk and compounds results deal by deal.