Granite Ridge Resources, Inc.

Previous wording

Our oil price differential to the NYMEX benchmark price during the three months ended March 31, 2025 and 2024 was a discount of $(2.60) per barrel and a premium of $0.67 per barrel, respectively. Our natural gas price differential to the average NYMEX price during the three months ended March 31, 2025 and 2024 was a discount of $(0.17) per Mcf and $(0.31) per Mcf, respectively.

Current wording

Our natural gas price differential to the average NYMEX price during the three months ended June 30, 2025 and 2024 was a discount of $(0.87) per Mcf and $(0.09) per Mcf, respectively. For the six months ended June 30, 2025 and 2024, our natural gas price differential to the average NYMEX price was a discount of $(0.55) per Mcf and $(0.20) per Mcf, respectively.

Previous wording

Although we cannot predict the occurrence of events that may affect future commodity prices, or the degree to which these prices will be affected, the prices for any commodity that we produce will generally approximate current market prices in the geographic region of the production. From time to time, we expect that we may hedge a portion of our commodity price risk to mitigate the impact of price volatility on our business.

Current wording

Historically, commodity prices have been volatile, and we expect that volatility to continue in the future. Although we cannot predict the occurrence of events that may affect future commodity prices, or the degree to which these prices will be affected, the prices for any commodity that we produce will generally approximate current market prices in the geographic region of the production. From time to time, we expect that we may hedge a portion of our commodity price risk to mitigate the impact of price volatility on our business.

Previous wording

Prices for various quantities of natural gas and oil that we produce significantly impact our revenues and cash flows. The following table lists average NYMEX spot prices for oil and natural gas for the three months ended March 31, 2025 and 2024.

Current wording

Prices for various quantities of oil and natural gas that we produce significantly impact our revenues and cash flows. The following table lists average NYMEX spot prices for oil and natural gas for the three and six months ended June 30, 2025 and 2024.

Previous wording

For the three months ended March 31, 2025, the average NYMEX oil pricing was $71.78 per barrel of oil, or 7% lower than the average NYMEX price per barrel for the three months ended March 31, 2024. Our settled derivatives decreased our realized oil price per barrel by $0.05 for the three months ended March 31, 2025 and increased our realized oil price per barrel by $0.10 for the three months ended March 31, 2024. For the three months ended March 31, 2025, our average realized oil price per barrel after reflecting settled derivatives was $69.13 compared to $78.27 for the three months ended March 31, 2024.

Current wording

For the three months ended June 30, 2025, the average NYMEX oil pricing was $64.57 per barrel of oil, or 21% lower than the average NYMEX price per barrel for the three months ended June 30, 2024. Our settled derivatives increased our realized oil price per barrel by $0.49 for the three months ended June 30, 2025 and decreased our realized oil price per barrel by $0.38 for the three months ended June 30, 2024. For the three months ended June 30, 2025, our average realized oil price per barrel after reflecting settled derivatives was $61.90 compared to $77.46 for the three months ended June 30, 2024. For the six months ended June 30, 2025, the average NYMEX oil pricing was $68.12 per barrel of oil, or 15% lower than the average NYMEX price per barrel for the six months ended June 30, 2024. Our settled derivatives increased our realized oil price per barrel by $0.23 for the six months ended June 30, 2025 and decreased our realized oil price per barrel by $0.14 for the six months ended June 30, 2024. For the six months ended June 30, 2025, our average realized oil price per barrel after reflecting settled derivatives was $65.34 compared to $77.87 for the six months ended June 30, 2024.

Previous wording

For the three months ended March 31, 2025, the average NYMEX natural gas pricing was $4.14 per Mcf, or 93% higher than the average NYMEX price per Mcf for the three months ended March 31, 2024. Our settled derivatives decreased our realized natural gas price per Mcf by $0.01 for the three months ended March 31, 2025 and increased our realized natural gas price per Mcf by $0.36 for the three months ended March 31, 2024. For the three months ended March 31, 2025, our average realized natural gas price per Mcf after reflecting settled derivatives was $3.96 compared to $2.20 for the three months ended March 31, 2024.

Current wording

For the three months ended June 30, 2025, the average NYMEX natural gas pricing was $3.19 per Mcf, or 54% higher than the average NYMEX price per Mcf for the three months ended June 30, 2024. Our settled derivatives increased our realized natural gas price per Mcf by $0.03 for the three months ended June 30, 2025 and increased our realized natural gas price per Mcf by $0.65 for the three months ended June 30, 2024. For the three months ended June 30, 2025, our average realized natural gas price per Mcf after reflecting settled derivatives was $2.35 compared to $2.63 for the three months ended June 30, 2024. For the six months ended June 30, 2025, the average NYMEX natural gas pricing was $3.66 per Mcf, or 73% higher than the average NYMEX price per Mcf for the six months ended June 30, 2024. Our settled derivatives increased our realized natural gas price per Mcf by $0.01 for the six months ended June 30, 2025 and increased our realized natural gas price per Mcf by $0.50 for the six months ended June 30, 2024. For the six months ended June 30, 2025, our average realized natural gas price per Mcf after reflecting settled derivatives was $3.12 compared to $2.41 for the six months ended June 30, 2024.

Previous wording

Our revenues vary from year to year primarily due to changes in realized commodity prices and production volumes. Our oil and natural gas sales for the three months ended March 31, 2025 increased 38% from the same period in 2024. Oil revenues for the three months ended March 31, 2025 increased by 21% compared to the same period in 2024, driven by a 37% increase in production, partially offset by an 11.5% decrease in realized prices, excluding the effect of settled derivatives. Natural gas revenues increased by 135% for the three months ended March 31, 2025 compared to the same period in 2024, driven by a 116% increase in realized natural gas prices, excluding the effect of settled commodity derivatives, and a 9% increase in production.

Current wording

Our revenues vary from year to year primarily due to changes in realized commodity prices and production volumes. Our oil and natural gas sales for the three months ended June 30, 2025 increased 20% from the same period in 2024. Oil revenues for the three months ended June 30, 2025 increased by 15% compared to the same period in 2024, driven by a 46% increase in production, partially offset by a 21% decrease in realized prices, excluding the effect of settled commodity derivatives. Natural gas revenues increased by 50% for the three months ended June 30, 2025 compared to 2024, driven by a 17% increase in realized natural gas prices, excluding the effect of settled commodity derivatives, and a 28% increase in production.

Previous wording

Production from oil and gas properties increased as a result of drilling success and the acquisition of additional net revenue interests. The number of wells we participated in during the period increased from 181.34 net wells on March 31, 2024 to 211.63 net wells on March 31, 2025.

Current wording

Production from oil and gas properties increased as a result of drilling success and the acquisition of additional net revenue interests. The number of wells we participated in increased from 191.94 net wells on June 30, 2024 to 227.42 net wells on June 30, 2025.

Previous wording

Lease operating expenses were $16.2 million ($6.17 per Boe) for the three months ended March 31, 2025, an increase of 5% from $15.5 million ($7.13 per Boe) during the same period in 2024. The increase was primarily due to an increase in well count due to acquisitions and additional wells successfully drilled and completed. The decrease in lease operating expenses per Boe was primarily due to the increase in production.

Current wording

Lease operating expenses were $20.1 million ($7.00 per Boe) for the three months ended June 30, 2025, an increase of 47% from $13.7 million ($6.50 per Boe) during the same period in 2024. The increase was primarily due to an increase in well count due to acquisitions and additional wells successfully drilled and completed, resulting in an increase in saltwater disposal costs of $1.9 million, or 58%, and an overall increase in service costs.

Previous wording

We generally pay production taxes based on realized oil and natural gas sales. Production taxes were $6.6 million ($2.49 per Boe) for the three months ended March 31, 2025 compared to $4.3 million ($1.98 per Boe) during the same period in 2024. As a percentage of oil and natural gas sales, our production taxes were 5% and 5% during the three months ended March 31, 2025 and 2024, respectively.

Current wording

We generally pay production taxes based on realized oil and natural gas sales. Production taxes were $5.3 million ($1.86 per Boe) for the three months ended June 30, 2025 compared to $5.4 million ($2.59 per Boe) during the same period in 2024. As a percentage of oil and natural gas sales, our production taxes were 5% and 6% during the three months ended June 30, 2025 and 2024, respectively.

Previous wording

Depletion and accretion was $48.4 million ($18.41 per Boe) for the three months ended March 31, 2025, an increase of 18% from $40.9 million ($18.87 per Boe) during the same period in 2024. The increase in depletion and accretion expense was primarily due to the increase in depletion expense resulting from an increase in production between the two periods.

Current wording

Depletion and accretion was $53.4 million ($18.59 per Boe) for the three months ended June 30, 2025, an increase of 28% from $41.6 million ($19.78 per Boe) during the same period in 2024. The increase in depletion and accretion expense was primarily due to the increase in depletion expense resulting from the increase in production.

Previous wording

For the three months ended March 31, 2024, we recognized impairment expense of $0.7 million on unproved properties in the Permian Basin as a result of a change in the operator's drilling plans.

Current wording

No impairment of unproved properties was recorded for the three months ended June 30, 2025 and 2024. In the first quarter of 2024, we recognized impairment expense of $0.7 million on unproved properties in the Permian Basin as the operator of those properties no longer intends to drill certain locations. During the six months ended June 30, 2025 no impairment of unproved properties was recorded.

Previous wording

The following table provides components of our general and administrative expenses for the three months ended March 31, 2025 and 2024:

Current wording

The following table provides components of our general and administrative expenses for the three and six months ended June 30, 2025 and 2024:

Previous wording

The following table sets forth the gain (loss) on derivatives for the three months ended March 31, 2025, and 2024:

Current wording

The following table sets forth the gain (loss) on derivatives for the three and six months ended June 30, 2025 and 2024:

Previous wording

Interest expense was $5.0 million for the three months ended March 31, 2025 compared to $3.2 million for the three months ended March 31, 2024. The increase in interest expense during the three months ended March 31, 2025 as compared to 2024 was primarily due to an increase in the average outstanding balance on the Credit Agreement during 2025.

Current wording

Interest expense was $5.9 million for the three months ended June 30, 2025 compared to $5.8 million for the three months ended June 30, 2024. The increase in interest expense during the three months ended June 30, 2025 as compared to 2024 was primarily due to a higher average outstanding balance on the revolving credit facility, partially offset by a decrease in interest rates during 2025.

Previous wording

We recorded a loss of $10.0 million for the three months ended March 31, 2025 compared to a gain of $7.8 million for the three months ended March 31, 2024 resulting from the change in fair value of the common and preferred stock of Vital Energy.

Current wording

We recorded a loss on equity investments of $5.8 million for the three months ended June 30, 2025. During the second quarter of 2025, the Company divested 342,636 shares of Vital Energy’s common stock and realized a loss on sale of $10.5 million. This was partially offset by an unrealized gain of $4.7 million from the change in fair value of the common stock of Vital Energy during the period. We recorded an unrealized loss of $8.8 million for the three months ended June 30, 2024 from the change in fair value of the common and preferred stock of Vital Energy.

Previous wording

We recorded income tax expense of $2.9 millionfor the three months ended March 31, 2025 compared to $4.8 million for the three months ended March 31, 2024. The effective income tax rate differs from the statutory rate primarily due to the impact of certain discrete items and state income taxes.

Current wording

We recorded income tax expense of $7.8 million and $10.7 million for the three and six months ended June 30, 2025 compared to $1.7 million and $6.5 million for the three and six months ended June 30, 2024. The effective income tax rate differs from the statutory rate primarily due to the impact of certain discrete items and state income taxes.

Previous wording

As of March 31, 2025, we had $250.0 million of debt outstanding under our Credit Agreement. We had $90.8 million of liquidity as of March 31, 2025, consisting of $74.7 million of committed borrowing availability under the Credit Agreement and $16.1 million of cash on hand.

Current wording

As of June 30, 2025, we had $275.0 million of debt outstanding under our Credit Agreement. We had $103.4 million of liquidity as of June 30, 2025, consisting of $99.7 million of committed borrowing availability under the Credit Agreement and $3.7 million of cash on hand.

Previous wording

We paid dividends of $14.4 million, or $0.11 per share, and $14.3 million, or $0.11 per share, during the first quarter of 2025 and 2024, respectively. Any payment of future dividends will be at the discretion of the Company’s Board of Directors.

Current wording

We paid dividends of $14.4 million, or $0.11 per share, and $28.8 million, or $0.22 per share during the three and six months ended June 30, 2025, respectively. For the three and six months ended June 30, 2024, the Company paid dividends of $14.4 million, or $0.11 per share, and $28.7 million, or $0.22 per share, respectively.

Previous wording

The following table summarizes our changes in cash and restricted cash for the three months ended March 31, 2025 and 2024:

Current wording

The following table summarizes our changes in cash and restricted cash for the six months ended June 30, 2025 and 2024:

Previous wording

The $7.4 million increase in operating cash flows during the three months ended March 31, 2025 as compared to the same period in 2024 was primarily due to the increase in oil and natural gas sales during the three months ended March 31, 2025 as compared to the same period in 2024.

Current wording

The $21.3 million increase in operating cash flows during the six months ended June 30, 2025 as compared to the same period in 2024 was primarily due to the increase in oil and natural gas sales during the six months ended June 30, 2025 as compared to the same period in 2024.

Previous wording

Our net cash provided by operating activities included a reduction of $10.6 million and a benefit of $7.1 million for the three months ended March 31, 2025 and 2024, respectively, associated with changes in working capital items. Changes in working capital items adjust for the timing of receipts and payments of actual cash.

Current wording

Our net cash provided by operating activities included a reduction of $2.0 million and a benefit of $6.4 million for the six months ended June 30, 2025 and 2024, respectively, associated with changes in working capital items. Changes in working capital items adjust for the timing of receipts and payments of actual cash.

Previous wording

For the three months ended March 31, 2025, our net cash used in investing activities was $100.0 million, which consisted primarily of $66.7 million of capital expenditures for oil and natural gas properties and $34.7 million of acquisitions of oil and natural gas properties.

Current wording

For the six months ended June 30, 2025, our net cash used in investing activities was $200.5 million, which consisted primarily of $164.5 million of capital expenditures for development of oil and natural gas properties and $44.9 million of acquisitions of oil and natural gas properties.

Previous wording

For the three months ended March 31, 2024, our net cash used in investing activities was $71.0 million, which consisted primarily of $69.7 million of capital expenditures for oil and natural gas properties and $2.6 million of acquisitions of oil and natural gas properties.

Current wording

For the six months ended June 30, 2024, our net cash used in investing activities was $152.6 million, which consisted primarily of $135.9 million of capital expenditures for development of oil and natural gas properties and $20.9 million of acquisitions of oil and natural gas properties.

Previous wording

For the three months ended March 31, 2025, our net cash provided by financing activities was $30.6 million, primarily due to $45.0 million of borrowings under our Credit Agreement, partially offset by $14.4 million of dividends paid on our common stock.

Current wording

For the six months ended June 30, 2025, our net cash provided by financing activities was $40.7 million, primarily due to $70.0 million of net borrowings under our Credit Agreement, partially offset $28.8 million of dividends paid on our common stock.

Previous wording

For the three months ended March 31, 2024, our net cash provided by financing activities was $12.7 million, primarily due to $27.5 million of borrowings under our Credit Agreement, partially offset by $14.3 million of dividends paid on our common stock and $0.4 million of common stock repurchases.

Current wording

For the six months ended June 30, 2024, our net cash provided by financing activities was $22.8 million, primarily due to $55.0 million of borrowings under our Credit Agreement, partially offset by $28.7 million of dividends paid on our common stock and $0.4 million of common stock repurchases.

Previous wording

At March 31, 2025, the Company had outstanding borrowings of $250.0 million and $0.3 million of letters of credit issued and outstanding under the Credit Agreement, resulting in availability of $74.7 million. The Credit Agreement is guaranteed by the restricted subsidiaries of Granite Ridge and is secured by a first priority mortgage and security interest in substantially all of the Company's and its restricted subsidiaries' assets.

Current wording

At June 30, 2025, the Company had outstanding borrowings of $275.0 million and $0.3 million of letters of credit issued and outstanding under the Credit Agreement, resulting in availability of $99.7 million. The Credit Agreement is guaranteed by the restricted subsidiaries of Granite Ridge and is secured by a first priority mortgage and security interest in substantially all of the Company’s and its restricted subsidiaries’ assets.

Previous wording

The borrowing base is redetermined semiannually on or about April 1 and October 1 of each calendar year, and is subject to additional adjustments from time to time, including for asset sales, elimination or reduction of hedge positions and incurrence of other debt. As of March 31, 2025, the Company had a borrowing base of $325.0 million and elected commitments of $325.0 million.

Current wording

The borrowing base is redetermined semiannually on or about April 1 and October 1 of each calendar year, and is subject to additional adjustments from time to time, including for asset sales, elimination or reduction of hedge positions and incurrence of other debt.

Previous wording

On April 29, 2025, the Company and its lenders entered into the Fifth Amendment to the Credit Agreement, which amended the Credit Agreement to, among other things, increase the borrowing base and aggregate elected commitments from $325.0 million to $375.0 million.

Current wording

On April 29, 2025, the Company and its lenders entered into the Fifth Amendment to Credit Agreement, which amended the Credit Agreement to, among other things, (a) increase the borrowing base from $325.0 million to $375.0 million, and (b) increase the aggregate elected commitments from $325.0 million to $375.0 million.

Previous wording

At March 31, 2025, we were in compliance with all covenants required by the Credit Agreement.

Current wording

As of June 30, 2025, we were in compliance with all covenants required by the Credit Agreement.

Previous wording

Our contractual obligations include long-term debt, cash interest expense on debt, derivative liabilities, asset retirement obligations and an annual service fee to the Manager. Since December 31, 2024, there have been no material changes in our contractual obligations, other than the $45.0 million increase in long-term debt due to borrowings under the Credit Agreement.

Current wording

Our contractual obligations include long-term debt, cash interest expense on debt, derivative liabilities, asset retirement obligations and an annual service fee to the Manager. Since December 31, 2024, there have been no material changes in our contractual obligations, other than the $70.0 million increase in long-term debt due to borrowings under the Credit Agreement.

Previous wording

For 2025, we are budgeting approximately $300 million to $320 million in total planned capital expenditures. Our costs incurred on oil and natural gas properties, excluding acquisitions, during the three months ended March 31, 2025 and 2024 totaled $71.4 million and $62.6 million, respectively. Our capital expenditures for the three months ended March 31, 2025 were primarily funded with cash flows from operations and borrowings under the Credit Agreement. We expect to fund planned capital expenditures with cash generated from operations and, if required, borrowings under our Credit Agreement.

Current wording

For 2025, we are budgeting for approximately $400 million to $420 million in total planned capital expenditures, including approximately $120 million of acquisitions of oil and natural gas properties. Our costs incurred on oil and natural gas properties, excluding acquisitions, during the three months ended June 30, 2025 and 2024 totaled $77.2 million and $67.0 million, respectively, and $148.6 million and $129.6 million during the six months ended June 30, 2025 and 2024, respectively. Our capital expenditures for the six months ended June 30, 2025 were primarily funded with cash flows from operations and borrowings under the Credit Agreement. We expect to fund planned capital expenditures with cash generated from operations and, if required, borrowings under our Credit Agreement.

Previous wording

The following table reflects our expenditures for acquisitions of proved and unproved properties for the three months ended March 31, 2025 and 2024:

Current wording

The following table reflects our expenditures for acquisitions of proved and unproved properties for the three and six months ended June 30, 2025 and 2024:

Previous wording

There have been no material changes in our critical accounting policies and procedures during the three months ended March 31, 2025. See our disclosure of critical accounting policies in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Item 8. Financial Statements and Supplementary Data” of our 2024 Form 10-K.

Current wording

There have been no material changes in our critical accounting policies and procedures during the six months ended June 30, 2025. See our disclosure of critical accounting policies in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Item 8. Financial Statements and Supplementary Data” of our 2024 Form 10-K.