Granite Ridge Resources (GRNT) EnerCom Denver – The Energy Investment Conference summary

Business model and investment approach

• Invests in upstream oil and natural gas assets through operated partnerships and non-operated interests, targeting a 25% asset rate of return.

• Focuses on diversified assets across six major unconventional U.S. basins, with a portfolio approach to evaluating returns.

• Entry cost for new locations averages $1.4 million, below recent market transactions, supporting attractive economics.

• Development inventory includes 88 net locations with $800 million in planned spending over several years.

• Total investment since inception exceeds $2 billion, with a shift from private to public structure in 2022.

Financial performance and growth outlook

• Achieved 13% compounded growth since 2023, with expectations to maintain high single-digit growth going forward.

• Cash flow return on invested capital is strong, with a strategy of frequent, smaller acquisitions to maintain return consistency.

• Guidance projects single-digit growth, a balanced oil/gas mix, and $300+ million in annual development and acquisition spending.

• Targeting transition to cash flow positive operations by 2027, with a focus on scaling and capital discipline.

Strategic initiatives and market positioning

• Aims for a free cash flow yield above 10% and dividend coverage of at least 1.25x by 2027, while maintaining production growth.

• Trades at a lower valuation multiple (2.7x) compared to mid-cap and Permian peers, with expectations for rerating as cash flow improves.

• Operated partnership model provides control and repeatable returns, with several partners at different development stages.

• Legacy non-operated assets remain part of the portfolio but are not the current focus for capital allocation.