Granite Ridge Resources (GRNT) Sidoti September Small-Cap Virtual Conference summary

Company overview and strategy

• Operates a non-operator model in the upstream oil and gas sector, focusing on diversification across major Lower 48 basins, with a primary presence in the Permian Basin and recent expansion into the Utica.

• Holds fractional interests in over 3,000 producing wells, prioritizing drill bit exposure over traditional PDP acquisitions unless significant upside exists.

• Maintains a roughly 50/50 oil and gas production and reserves split, with partnerships spanning both public and private operators.

• Conservative leverage approach to ensure balance sheet health and capitalize on distressed opportunities during market downturns.

• Trades at a discount to peers due to a concentrated shareholder base, with ongoing efforts to broaden ownership and increase trading float.

Growth initiatives and capital allocation

• Pays a fixed dividend with a current yield over 7% and targets approximately 7% annual growth.

• Focuses on reinvesting cash flow into asset growth to achieve scale before considering dividend increases.

• Increased capital expenditure guidance by nearly $60 million, mainly for the controlled capital program, with expectations for double-digit production growth next year.

• Controlled capital strategy involves forming partnerships with proven private operators, such as Admiral Permian, to invest in high-return, concentrated opportunities.

• Strategic partnerships are expected to become a larger share of production, aiming to bridge the valuation gap between non-op and operated models.

Market positioning and competitive landscape

• Peer group includes public non-op companies like Vitesse and Northern, though direct competition is limited due to differentiated strategies and asset focus.

• Most competition comes from private entities, allowing acquisition of assets at attractive returns due to lower competition.

• Research coverage has expanded, daily trading volume has increased twelvefold, and the company was added to the Russell 2000 Index.

• Executive and board members actively purchase shares, signaling confidence in long-term prospects.