HighPeak Energy (HPK) Q2 2024 earnings summary

Executive summary

• Achieved Q2 2024 average production of 48,531 Boe/d, up 15% year-over-year, with 89% liquids and strong operational execution.

• Net income for Q2 2024 was $29.7 million ($0.21 per diluted share), with adjusted net income of $39.4 million ($0.28 per diluted share).

• EBITDAX reached $215.8 million, free cash flow was $13.4 million, and this marked the fourth consecutive positive quarter.

• Reduced long-term debt by $30 million, paid a $0.04/share dividend, and repurchased over 413,000 shares in Q2, demonstrating commitment to shareholder value.

• Strategic alternatives review, including a potential sale, remains ongoing.

Financial highlights

• Q2 2024 operating revenues totaled $275.3 million, up from $240.8 million in Q2 2023.

• Lease operating expenses decreased to $6.79/Boe from $8.39/Boe year-over-year, with a 12.5% reduction in LOE guidance.

• EBITDAX for Q2 2024 was $215.8 million, with a margin of $50.07/Boe, over 65% higher than the peer group average.

• Free cash flow for Q2 2024 was $13.4 million, with net debt/annualized EBITDAX at 1.1x.

• Weighted average realized crude oil price per barrel was $81.39 in Q2 2024.

Outlook and guidance

• 2024 production guidance raised to 45,000–49,000 Boe/d (from 43,000–47,000), a 4.5% increase from initial guidance.

• Lowered 2024 lease operating expense guidance to $6.50–$7.50/Boe (from $7.50–$8.50/Boe).

• 2024 capital budget is $540–$580 million, with a focus on infrastructure and drilling.

• Two drilling rigs and one frac crew are planned for the remainder of 2024, with activity levels assessed monthly.

• Confident in achieving higher production volumes and lower costs for the rest of 2024.