HighPeak Energy (HPK) Q3 2024 earnings summary

Executive summary

• Achieved net income of $49.9 million ($0.35 per diluted share) for Q3 2024, with EBITDAX of $214.3 million, driven by strong operational execution, cost controls, and improved derivatives, despite lower revenues from weaker prices and volumes.

• Sales volumes averaged 51,346 Boe/d, up 6% sequentially, with 88% liquids and 75% oil, reflecting production outperformance and a high-margin product mix.

• Generated $36.1 million in free cash flow, marking five consecutive quarters of positive free cash flow, supporting debt reduction and share buybacks.

• Reduced long-term debt by $90 million year-to-date and repurchased over 870,000 shares in Q3 2024, with a $0.04/share quarterly dividend paid.

• Advanced the strategic alternatives process and entered a new 10-year crude oil marketing contract with Delek, including a $138.7 million minimum volume commitment.

Financial highlights

• Q3 2024 total operating revenues were $271.6 million, down from $345.6 million in Q3 2023, due to lower realized prices and volumes.

• EBITDAX for Q3 2024 was $214.3 million, with free cash flow of $36.1 million and net income of $49.9 million.

• Average realized oil price was $75.99/Bbl, with total realized price per Boe at $57.49 (excluding derivatives).

• Lease operating expenses were $7.12/Boe, down 10% year-over-year.

• Net debt at September 30, 2024 was $953.8 million; cash and equivalents were $135.6 million.

Outlook and guidance

• Raised full-year 2024 production guidance to 48,000–51,000 Boe/d, up 10% from original guidance and 5% from August.

• Reaffirmed 2024 lease operating expense guidance of $6.50–$7.50/Boe, a 12.5% reduction from original guidance.

• 2024 capital expenditure guidance set at $540–$580 million, with most infrastructure projects completed and Q4 CapEx focused on drilling and completions.

• Two-rig drilling program to be maintained for the remainder of 2024, with monthly reassessment based on market conditions.