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

Business model and strategy

• Operates as an energy investment firm with a focus on both passive non-op and operator partnership strategies, with 90% of capital now deployed in operator partnerships, up from 50-60% last year.

• Portfolio includes interests in over 3,600 wells across six major U.S. shale basins, with 58% of production from the Permian and a balanced oil/gas mix.

• Targets a 25% full cycle IRR on all investments and maintains a disciplined approach to deal sourcing, evaluating over 1,000 deals annually and closing about 50.

• Transitioned from rapid growth to a more moderate 10% annual production growth, focusing on free cash flow and maintaining leverage at 1.25-1.5x.

• Management and board have demonstrated confidence through insider purchases.

Financial performance and outlook

• Achieved 35,000 BOE/day production in Q1, with a current dividend yield over 9%.

• Trades at a valuation discount to mid-cap peers, attributed to legacy perceptions, shareholder transition, and liquidity factors.

• Plans to deliver at least 10% free cash flow yield annually starting in 2027, based on $65 oil price assumptions.

• Leverage ratio stands at 1.3x, with a shift from zero debt at IPO to a targeted leverage profile.

• Ability to add inventory at $2 million or less per location, compared to $4-8 million in the broader market.

Shareholder and liquidity developments

• Private equity sponsor ownership has declined from 98% at de-SPAC to 51%, expected to reach 10% by next year through direct LP distributions.

• Liquidity has improved, with daily trading volume rising to about 1 million shares.

• No plans for large secondary offerings; share buybacks are considered if returns exceed 25%.

• Increased liquidity and positive free cash flow are expected to help close the valuation gap.