Granite Ridge Resources, Inc.
For the period ended Jun 30, 2026. Filed Aug 6, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2026 · Filed Aug 6, 2026
GRNT$5.29+13.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-05-07.
0001928446-26-000016
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-06.
0001928446-26-000051
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 112 previous paragraphs and 119 current paragraphs.
72 unchanged; 35 reworded; 9 added; 3 removed; 2 previous and 3 current paragraphs rearranged.
Tables are not compared: 6 previous and 6 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (9)
Current report
Lease operating expenses were $59.6 million ($9.91 per Boe) for the six months ended June 30, 2026, an increase of 64% from $36.4 million ($6.60 per Boe) during the same period in 2025. The increase was primarily due to an increase in well count due to acquisitions and additional wells successfully drilled and completed, increased saltwater disposal costs as a result of higher water cuts and flowback operations, surface equipment rentals, contract labor, and recognition of minimum volume commitment delinquencies.
Current report
Production taxes were $12.7 million ($2.11 per Boe) for the six months ended June 30, 2026 compared to $11.9 million ($2.16 per Boe) during the same period in 2025. As a percentage of oil and natural gas sales, our production taxes were 5% during both the six months ended June 30, 2026 and 2025.
Current report
Ad valorem taxes were $2.7 million and $4.8 million for thethree and six months ended June 30, 2026, respectively, compared to $1.1 million and $2.9 million during the same periods in 2025.
Current report
Depletion and accretion was $52.7 million ($18.06 per Boe) for the three months ended June 30, 2026, a decrease of 1% from $53.4 million ($18.59 per Boe) during the same period in 2025. Depletion and accretion expense was largely flat between periods, with a slight decrease driven by a shift in the relative cost basis weighting of the depletion pools.
Current report
Total general and administrative expenses were $18.2 million ($3.03 per Boe) for the six months ended June 30, 2026, an increase of 14% from $16.0 million ($2.90 per Boe) during the same period in 2025. The increase was primarily for expenses related to increased legal fees, stock-based compensation, and service fees under the Management Services Agreement with Grey Rock Administration, LLC.
Current report
The following table sets forth the gain (loss) on derivatives for the three and six months ended June 30, 2026 and 2025:
Current report
We recorded a loss on equity investments of $2.2 million for the three months ended June 30, 2026 as a result of a $2.2 million realized loss on sale of common stock. We recorded a loss of $5.8 million for the three months ended June 30, 2025 as a result of a $10.5 million realized loss on sale of common stock and an unrealized gain of $4.7 million from the change in fair value of the common stock held.
Current report
We paid dividends of $14.5 million, or $0.11 per share, and $29.0 million, or $0.22 per share during the three and six months ended June 30, 2026, respectively. For the three and six months ended June 30, 2025, the Company paid dividends of $14.4 million, or $0.11 per share, and $28.8 million, or $0.22 per share, respectively.
Current report
On August 3, 2026, the Company and its lenders entered into the Seventh Amendment to Credit Agreement, which amended the Credit Agreement to increase the pro forma net leverage ratio requirement for purposes of the restricted payment and debt redemption covenants to 1.75 to 1.00 (from 1.50 to 1.00) for the period between August 3, 2026 and January 1, 2027.
Removed paragraphs (3)
Previous report
Ad valorem taxes increased by $0.3 million during the three months ended March 31, 2026 as compared to the same period in 2025, primarily due to additional wells drilled and completed and new wells acquired.
Previous report
The following table summarizes the amounts reported as gain (loss) on derivatives - commodity derivatives in the condensed consolidated statements of operations for the three months ended March 31, 2026, and 2025:
Previous report
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, 2026, the Company had a borrowing base of $375.0 million and elected commitments of $375.0 million.
Reworded paragraphs (35)
Previous wording
Our oil price differential to the NYMEX benchmark price during the three months ended March 31, 2026 and 2025 was a discount of $(2.80) per barrel and a discount of $(2.60) per barrel, respectively. Our natural gas price differential to the average NYMEX price during the three months ended March 31, 2026 and 2025 was a discount of $(2.16) per Mcf and $(0.17) per Mcf, respectively.
Current wording
Our natural gas price differential to the average NYMEX price during the three months ended June 30, 2026 and 2025 was a discount of $(1.83) per Mcf and $(0.87) per Mcf, respectively. For the six months ended June 30, 2026 and 2025, our natural gas price differential to the average NYMEX price was a discount of $(1.93) per Mcf and $(0.55) 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 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 months ended March 31, 2026 and 2025.
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, 2026 and 2025.
Previous wording
For the three months ended March 31, 2026, the average NYMEX oil pricing was $72.74 per barrel of oil, or 1% higher than the average NYMEX price per barrel for the three months ended March 31, 2025. Our settled derivatives decreased our realized oil price per barrel by $4.27 for the three months ended March 31, 2026 and decreased our realized oil price per barrel by $0.05 for the three months ended March 31, 2025. For the three months ended March 31, 2026, our average realized oil price per barrel after reflecting settled derivatives was $65.67 compared to $69.13 for the three months ended March 31, 2025.
Current wording
For the three months ended June 30, 2026, the average NYMEX oil pricing was $95.65 per barrel of oil, or 48% higher than the average NYMEX price per barrel for the three months ended June 30, 2025. Our settled derivatives decreased our realized oil price per barrel by $18.28 for the three months ended June 30, 2026 and increased our realized oil price per barrel by $0.49 for the three months ended June 30, 2025. For the three months ended June 30, 2026, our average realized oil price per barrel after reflecting settled derivatives was $75.65 compared to $61.90 for the three months ended June 30, 2025. For the six months ended June 30, 2026, the average NYMEX oil pricing was $84.29 per barrel of oil, or 24% higher than the average NYMEX price per barrel for the six months ended June 30, 2025. Our settled derivatives decreased our realized oil price per barrel by $11.30 for the six months ended June 30, 2026 and increased our realized oil price per barrel by $0.23 for the six months ended June 30, 2025. For the six months ended June 30, 2026, our average realized oil price per barrel after reflecting settled derivatives was $70.67 compared to $65.34 for the six months ended June 30, 2025.
Previous wording
For the three months ended March 31, 2026, the average NYMEX natural gas pricing was $4.71 per Mcf, or 14% higher than the average NYMEX price per Mcf for the three months ended March 31, 2025. Our settled derivatives decreased our realized natural gas price per Mcf by $0.57 for the three months ended March 31, 2026 and decreased our realized natural gas price per Mcf by $0.01 for the three months ended March 31, 2025. For the three months ended March 31, 2026, our average realized natural gas price per Mcf after reflecting settled derivatives was $1.98 compared to $3.96 for the three months ended March 31, 2025.
Current wording
For the three months ended June 30, 2026, the average NYMEX natural gas pricing was $2.95 per Mcf, or 8% lower than the average NYMEX price per Mcf for the three months ended June 30, 2025. Our settled derivatives increased our realized natural gas price per Mcf by $0.52 and $0.03 for the three months ended June 30, 2026 and 2025, respectively. For the three months ended June 30, 2026, our average realized natural gas price per Mcf after reflecting settled derivatives was $1.64 compared to $2.35 for the three months ended June 30, 2025. For the six months ended June 30, 2026, the average NYMEX natural gas pricing was $3.81 per Mcf, or 4% higher than the average NYMEX price per Mcf for the six months ended June 30, 2025. Our settled derivatives decreased our realized natural gas price per Mcf by $0.06 for the six months ended June 30, 2026 and increased our realized natural gas price per Mcf by $0.01 for the six months ended June 30, 2025. For the six months ended June 30, 2026, our average realized natural gas price per Mcf after reflecting settled derivatives was $1.82 compared to $3.12 for the six months ended June 30, 2025.
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, 2026 increased 4% from the same period in 2025. Oil revenues for the three months ended March 31, 2026 increased by 13% compared to the same period in 2025, driven by an 11% increase in production and a 1% increase in realized prices, excluding the effect of settled derivatives. Natural gas revenues decreased by 20% for the three months ended March 31, 2026 compared to the same period in 2025, driven by a 36% decrease in realized natural gas prices, excluding the effect of settled commodity derivatives, partially offset by a 24% 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, 2026 increased 37% from the same period in 2025. Oil revenues for the three months ended June 30, 2026 increased by 56% compared to the same period in 2025, driven by a 2% increase in production and a 53% increase in realized prices, excluding the effect of settled commodity derivatives. Natural gas revenues decreased by 51% for the three months ended June 30, 2026 compared to 2025, driven by a 52% decrease in realized natural gas prices, excluding the effect of settled commodity derivatives, partially offset by a 1% 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 211.63 net wells on March 31, 2025 to 245.55 net wells on March 31, 2026.
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 227.42 net wells on June 30, 2025 to 249.92 net wells on June 30, 2026.
Previous wording
Lease operating expenses were $29.7 million ($9.57 per Boe) for the three months ended March 31, 2026, an increase of 83% from $16.2 million ($6.17 per Boe) during the same period in 2025. The increase in lease operating expenses per Boe was primarily due to increased saltwater disposal costs as a result of higher water cuts and flowback operations, surface equipment rentals, and contract labor.
Current wording
Lease operating expenses were $30.0 million ($10.27 per Boe) for the three months ended June 30, 2026, an increase of 49% from $20.1 million ($7.00 per Boe) during the same period in 2025. The increase was primarily due to an increase in well count due to acquisitions and additional wells successfully drilled and completed, increased saltwater disposal costs as a result of higher water cuts and flowback operations, surface equipment rentals, and contract labor.
Previous wording
We generally pay production taxes based on realized oil and natural gas sales. Production taxes were $6.1 million ($1.96 per Boe) for the three months ended March 31, 2026 compared to $6.6 million ($2.49 per Boe) during the same period in 2025. As a percentage of oil and natural gas sales, our production taxes were 5% during the three months ended March 31, 2026 and 2025.
Current wording
We generally pay production taxes based on realized oil and natural gas sales. Production taxes were $6.6 million ($2.26 per Boe) for the three months ended June 30, 2026 compared to $5.3 million ($1.86 per Boe) during the same period in 2025. As a percentage of oil and natural gas sales, our production taxes were 4% and 5% during the three months ended June 30, 2026 and 2025, respectively.
Previous wording
Depletion and accretion was $55.0 million ($17.72 per Boe) for the three months ended March 31, 2026, an increase of 13% from $48.4 million ($18.41 per Boe) during the same period in 2025. 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 $107.6 million ($17.89 per Boe) for the six months ended June 30, 2026, an increase of 6% from $101.9 million ($18.50 per Boe) during the same period in 2025. The increase in depletion and accretion expense was primarily due to the increase in production.
Previous wording
For the three months ended March 31, 2026, we recognized impairment expense of $11.2 million on unproved properties in the Permian Basin as a result of a change in operator development plans.
Current wording
For the three and six months ended June 30, 2026, the Company recognized impairment expense of $9.1 million and $20.3 million on unproved properties in the Permian Basin as a result of changes in operator development plans and reassessment of the economic viability of certain acreage in the Permian Basin resulting from unfavorable drilling results and further geologic and reservoir analysis of the acreage. No unproved property impairment was recorded for the three and six months ended June 30, 2025.
Previous wording
The following table provides components of our general and administrative expenses for the three months ended March 31, 2026 and 2025:
Current wording
The following table provides components of our general and administrative expenses for the three and six months ended June 30, 2026 and 2025:
Previous wording
Total general and administrative expenses were $9.1 million ($2.93 per Boe) for the three months ended March 31, 2026, an increase of 22% from $7.5 million ($2.84 per Boe) during the same period in 2025. The increase was primarily due to increased stock-based compensation and management fee expenses during the three months ended March 31, 2026 as compared to the same period in 2025.
Current wording
Total general and administrative expenses were $9.2 million ($3.14 per Boe) for the three months ended June 30, 2026, an increase of 7% from $8.5 million ($2.96 per Boe) during the same period in 2025. The increase was primarily for expenses related to increased legal fees, stock-based compensation, and service fees under the Management Services Agreement with Grey Rock Administration, LLC.
Previous wording
Interest expense was $10.3 million for the three months ended March 31, 2026 compared to $5.0 million for the three months ended March 31, 2025. The increase in interest expense during the three months ended March 31, 2026 as compared to 2025 was primarily due to the issuance of $350.0 million aggregate principal amount of 8.875% senior unsecured notes in November 2025 that was outstanding during the entirety of the three months ended March 31, 2026.
Current wording
Interest expense was $11.1 million for the three months ended June 30, 2026 compared to $5.9 million for the three months ended June 30, 2025. The increase in interest expense during the three months ended June 30, 2026 as compared to 2025 was primarily due to the issuance of $350.0 million aggregate principal amount of 8.875% senior unsecured notes in November 2025 that was outstanding during the entirety of the three months ended June 30, 2026.
Previous wording
We recorded a gain of $6.7 million for the three months ended March 31, 2026 compared to a loss of $10.0 million for the three months ended March 31, 2025 resulting from the change in fair value of common stock held by the Company during the periods.
Current wording
We recorded a gain on equity investments of $4.5 million for the six months ended June 30, 2026. The gain is a result of an unrealized gain of $6.7 million from the change in fair value of the common stock held during the first quarter of 2026 offset by a $2.2 million realized loss on sale of common stock during the second quarter of 2026. We recorded a loss of $15.8 million for the six months ended June 30, 2025. The loss is a result of a $10.5 million realized loss on sale of common stock and an unrealized loss of $5.2 million from the change in fair value of common stock held.
Previous wording
We recorded income tax benefit of $13.6 millionfor the three months ended March 31, 2026 compared to income tax expense of $2.9 million for the three months ended March 31, 2025. 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 $8.9 million and income tax benefit of$4.8 million for the three and six months ended June 30, 2026 compared to $7.8 million and $10.7 million for the three and six months ended June 30, 2025. 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, 2026, we had $350.0 million of principal debt outstanding on 8.875% senior unsecured notes and $90.0 million of debt outstanding under our senior secured revolving credit agreement. We had $314.8 million of liquidity as of March 31, 2026, consisting of $284.7 million of committed borrowing availability under the Credit Agreement and $30.1 million of cash on hand.
Current wording
As of June 30, 2026, we had $350.0 million of principal debt outstanding on 8.875% senior unsecured notes and $125.0 million of debt outstanding under our senior secured revolving credit agreement. We had $293.8 million of liquidity as of June 30, 2026, consisting of $249.7 million of committed borrowing availability under the Credit Agreement and $44.1 million of cash on hand.
Previous wording
We paid dividends of $14.5 million, or $0.11 per share, and $14.4 million, or $0.11 per share, during the first quarter of 2026 and 2025, respectively. Any payment of future dividends will be at the discretion of the Company’s Board of Directors.
Current wording
Any payment of future dividends will be at the discretion of the Company’s Board of Directors.
Previous wording
The following table summarizes our changes in cash for the three months ended March 31, 2026 and 2025:
Current wording
The following table summarizes our changes in cash for the six months ended June 30, 2026 and 2025:
Previous wording
The $17.7 million decrease in operating cash flows during the three months ended March 31, 2026 as compared to the same period in 2025 was primarily due to the increase in realized loss on derivatives during the three months ended March 31, 2026 as compared to the same period in 2025.
Current wording
The $40.2 million decrease in operating cash flows during the six months ended June 30, 2026 as compared to the same period in 2025 was primarily due to realized loss on derivatives of $34.6 million and increase in lease operating expenses of $23.3 million, partially offset by an increase in oil and natural gas sales of $45.4 million during the six months ended June 30, 2026 as compared to the same period in 2025.
Previous wording
Our net cash provided by operating activities included a reduction of $3.4 million and a reduction of $10.6 million for the three months ended March 31, 2026 and 2025, 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 $17.3 million and a reduction of $2.0 million for the six months ended June 30, 2026 and 2025, 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, 2026, our net cash used in investing activities was $68.6 million, which consisted primarily of $60.4 million of capital expenditures for oil and natural gas properties and $9.5 million of acquisitions of oil and natural gas properties, partially offset by proceeds from sale of oil and natural gas properties of $1.2 million.
Current wording
For the six months ended June 30, 2026, our net cash used in investing activities was $130.7 million, which consisted primarily of $122.6 million of capital expenditures for development of oil and natural gas properties and $26.2 million of acquisitions of oil and natural gas properties, partially offset by $15.4 million of proceeds from sale of equity investments.
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, partially offset by $5.0 million of proceeds from sale of equity investments.
Previous wording
For the three months ended March 31, 2026, our net cash provided by financing activities was $25.5 million, primarily due to $40.0 million of borrowings under our Credit Agreement, partially offset by $14.5 million of dividends paid on our common stock.
Current wording
For the six months ended June 30, 2026, our net cash provided by financing activities was $46.0 million, primarily due to $75.0 million of net borrowings under our Credit Agreement, partially offset by $29.0 million of dividends paid on our common stock.
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 by $28.8 million of dividends paid on our common stock.
Previous wording
At March 31, 2026, the Company had outstanding borrowings of $90.0 million and $0.3 million of letters of credit issued and outstanding under the Credit Agreement, resulting in availability of $284.7 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, 2026, the Company had outstanding borrowings of $125.0 million and $0.3 million of letters of credit issued and outstanding under the Credit Agreement, resulting in availability of $249.7 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
(iii)an Asset Coverage Ratio (as defined in the Credit Agreement), commencing with the fiscal quarter ending June 30, 2026, of not less than (a) for each such fiscal quarter ending prior to December 31, 2026, 1.25 to 1.00 and (b) for each such fiscal quarter ending on or after December 31, 2026, 1.50 to 1.00.
Current wording
(iii)an Asset Coverage Ratio (as defined in the Credit Agreement), commencing with the fiscal quarter ended June 30, 2026, of not less than (a) for each such fiscal quarter ending prior to December 31, 2026, 1.25 to 1.00 and (b) for each such fiscal quarter ending on or after December 31, 2026, 1.50 to 1.00.
Previous wording
At March 31, 2026, the Company was in compliance with all covenants required by the Credit Agreement.
Current wording
As of June 30, 2026, we were in compliance with all covenants required by the Credit Agreement.
Previous wording
Interest is due to be paid at the end of each quarter. In addition, the Company will repay quarterly 2.5% of the original principal amount of the notes issued on the closing date beginning on September 30, 2026. If quarterly scheduled repayments are missed, the coupon increases to 11.875% and the Company is restricted from making any dividend payments until all delinquent scheduled repayments have been fulfilled. The Company has $26.3 million included in current liabilities in the consolidated balance sheets related to quarterly principal repayments due within the next 12 months. On or after May 5, 2027 and on or prior to May 5, 2028, the Company may, at its option, redeem, at any time some or all of the 2029 Senior Notes at 103.0% of par, as set forth in the Note Purchase Agreement, plus accrued and unpaid interest, if any. Any redemption of the 2029 Senior Notes prior to May 5, 2027 is subject to payment of a make-whole amount. After May 5, 2028, the Company may redeem some or all of the Senior Notes at 100.0% of the principal amount thereof plus accrued and unpaid interest, if any. The principal remaining outstanding at the time of maturity is required to be paid in full by the Issuer.
Current wording
Interest is due at the end of each quarter. In addition, the Company will repay quarterly 2.5% of the original principal amount of the notes issued on the closing date beginning on September 30, 2026. If quarterly scheduled repayments are missed, the coupon increases to 11.875% and the Company is restricted from making any dividend payments until all delinquent scheduled repayments have been fulfilled. As of June 30, 2026, the Company had $35.0 million included in current liabilities in the condensed consolidated balance sheets related to quarterly principal repayments due within the next 12 months. On or after May 5, 2027 and on or prior to May 5, 2028, the Company may, at its option, redeem, at any time some or all of the 2029 Senior Notes at 103.0% of par, as set forth in the Note Purchase Agreement, plus accrued and unpaid interest, if any. Any redemption of the 2029 Senior Notes prior to May 5, 2027 is subject to payment of a make-whole amount. After May 5, 2028, the Company may redeem some or all of the Senior Notes at 100.0% of the principal amount thereof plus accrued and unpaid interest, if any. The principal remaining outstanding at the time of maturity is required to be paid in full by the Issuer.
Previous wording
The 2029 Senior Notes include certain covenants, which, among other things, requires the maintenance of (i) a net leverage ratio not greater than 3.25 to 1.00 and an (ii) asset coverage ratio greater than or equal to (A) for each Fiscal Quarter ending prior to December 31, 2026, 1.25 to 1.00 and (B) for each Fiscal Quarter ending on or after December 31, 2026, 1.50 to 1.00. The 2029 Senior Notes also contain a total leverage ratio and asset coverage ratio basket for Restricted Payments (as defined in the 2029 Senior Notes), which permits Restricted Payments in the form of cash distributions so long as, subject to certain other conditions, the leverage ratio, after giving pro forma effect to such Restricted Payments, cannot exceed 1.75 to 1.00, and the asset coverage ratio, after giving effect to such Restricted Payments, must be greater than or equal to 1.50 to 1.00. Under the 2029 Senior Notes, the Company must maintain a minimum hedging requirement included within the Senior Notes for oil and natural gas based on our proved developed producing projected volumes for each commodity on a rolling 18-month basis.
Current wording
The 2029 Senior Notes include certain covenants, which, among other things, requires the maintenance of (i) a net leverage ratio not greater than 3.25 to 1.00 and (ii) an asset coverage ratio greater than or equal to (A) for each Fiscal Quarter ending prior to December 31, 2026, 1.25 to 1.00 and (B) for each Fiscal Quarter ending on or after December 31, 2026, 1.50 to 1.00. The 2029 Senior Notes also contain a total leverage ratio and asset coverage ratio basket for Restricted Payments (as defined in the 2029 Senior Notes), which permits Restricted Payments in the form of cash distributions so long as, subject to certain other conditions, the leverage ratio, after giving pro forma effect to such Restricted Payments, cannot exceed 1.75 to 1.00, and the asset coverage ratio, after giving effect to such Restricted Payments, must be greater than or equal to 1.50 to 1.00. Under the 2029 Senior Notes, the Company must maintain a minimum hedging requirement included within the Senior Notes for oil and natural gas based on our proved developed producing projected volumes for each commodity on a rolling 18-month basis.
Previous wording
Our contractual obligations include long-term debt, cash interest expense on debt, derivative liabilities, asset retirement obligations, joint development agreements, and an annual service fee to the Manager. Since December 31, 2025, there have been no material changes in our contractual obligations, other than (i) the $40.0 million increase in long-term debt due to borrowings under the Credit Agreement and (ii) increase in contractually obligated fees under our joint development agreements.
Current wording
Our contractual obligations include long-term debt, cash interest expense on debt, derivative liabilities, asset retirement obligations, joint development agreements, and an annual service fee to the Manager. Since December 31, 2025, there have been no material changes in our contractual obligations, other than (i) the $75.0 million increase in long-term debt due to borrowings under the Credit Agreement and (ii) increase in contractually obligated fees under our joint development agreements.
Previous wording
The Company enters into joint development agreements that outline the terms for the joint evaluation, acquisition, exploration, development, and production of hydrocarbons from jointly owned interests subject to such agreements. These agreements designate a third party as the operator of all jointly owned interests in the applicable development area, while Granite Ridge retains the right to manage and control acquisition costs and strategy, development costs, timing and rig schedules, well design and other development operations in exchange for a fee. The aggregate minimum financial commitment amount over the noncancellable term of these joint development agreements is $15.5 million, which is due over the next two years.
Current wording
The Company enters into joint development agreements that outline the terms for the joint evaluation, acquisition, exploration, development, and production of hydrocarbons from jointly owned interests subject to such agreements. These agreements designate a third party as the operator of all jointly owned interests in the applicable development area, while Granite Ridge retains the right to manage and control acquisition costs and strategy, development costs, timing and rig schedules, well design and other development operations in exchange for a fee. The aggregate minimum financial commitment amount over the noncancellable term of these joint development agreements is $12.4 million, which is due over the next two years.
Previous wording
For 2026, we are budgeting approximately $345 million to $385 million in total planned capital expenditures, including approximately $45 million to $55 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 March 31, 2026 and 2025 totaled $58.3 million and $71.4 million, respectively. Our capital expenditures for the three months ended March 31, 2026 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 2026, we are budgeting approximately $345 million to $385 million in total planned capital expenditures, including approximately $45 million to $55 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, 2026 and 2025 totaled $78.5 million and $77.2 million, respectively, and $136.8 million and $148.6 million during the six months ended June 30, 2026 and 2025, respectively. Our capital expenditures for the six months ended June 30, 2026 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, 2026 and 2025:
Current wording
The following table reflects our expenditures for acquisitions of proved and unproved properties for the three and six months ended June 30, 2026 and 2025:
Previous wording
There have been no material changes in our critical accounting policies and procedures during the three months ended March 31, 2026. 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 2025 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, 2026. 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 2025 Form 10-K.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
Our oil price differential to the NYMEX benchmark price during the three months ended June 30, 2026 and 2025 was a discount of $(1.72) per barrel and $(3.16) per barrel, respectively. For the six months ended June 30, 2026 and 2025, our oil price differential to the NYMEX benchmark price was a discount of $(2.32) per barrel and $(3.01) per barrel, respectively.
Current report — wording carried from elsewhere
Our oil and natural gas sales for the six months ended June 30, 2026 increased 20% from the same period in 2025. Oil revenues increased by 34% compared to the same period in 2025, driven by a 7% increase in production and a 26% increase in realized prices, excluding the effect of settled commodity derivatives. Natural gas revenues decreased by 32% compared to the same period in 2025 as a result of a 40% decrease in realized natural gas prices, excluding the effect of settled commodity derivatives, partially offset by a 12% increase in production.
Current report — wording carried from elsewhere
Interest expense was $21.4 million for the six months ended June 30, 2026 compared to $10.9 million for the six months ended June 30, 2025. The increase in interest expense during the six months ended June 30, 2026 as compared to 2025 was primarily due to the issuance of $350.0 million aggregate principal amount of 8.875% senior unsecured notes in November 2025 that was outstanding during the entirety of the six months ended June 30, 2026.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
Historically, commodity prices have been volatile, and we expect that volatility to continue in the future.
Previous report — wording carried elsewhere
At March 31, 2026, the Company had outstanding borrowings of $90.0 million and $0.3 million of letters of credit issued and outstanding under the Credit Agreement, resulting in availability of $284.7 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.