Granite Ridge Resources (GRNT) 16th Annual Midwest Ideas Conference summary

Strategic vision and market positioning

• Aims to be the leading public investment platform for U.S. energy development, investing alongside proven management teams to capture undervalued near-term opportunities.

• Focuses on disciplined capital allocation, targeting greater than 25% full-cycle returns on every project.

• Maintains a strong commitment to dividends and a robust balance sheet, with leverage currently at 0.8x net debt to EBITDAX.

• Diversified across six premier basins and 65 operating partners, with a significant concentration in the Permian Basin.

• Commodity mix is balanced at 50% oil and 50% natural gas, providing flexibility through commodity cycles.

Market environment and investment thesis

• U.S. shale activity has declined since 2022, with rig counts and frac spreads well below 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.

• These trends create an undersupplied market and higher commodity prices, presenting investment opportunities.

• While others pull back, the company is investing in short-cycle development with clear return visibility.

Business model and operational approach

• Operates over 3,100 gross wells, generating over $300 million in cash flow as of 2024.

• Screens hundreds of transactions annually, allocating capital to the highest risk-adjusted returns.

• Employs a two-pronged strategy: operator partnerships (growth engine) and traditional non-operated interests (cash cow).

• Operator partnerships involve majority working interests and control over capital deployment, while non-op provides diversification across many wells.