Granite Ridge Resources, Inc.

What they do

Granite Ridge owns oil and natural gas assets in the Permian (Delaware and Midland), Eagle Ford, Bakken, Haynesville, Denver-Julesburg and Appalachian basins. It holds two types of positions: operated partnerships, where it invests alongside private operators and accounts for a significant majority of capital at risk, and traditional non-operated assets, minority interests it can elect to fund well-by-well alongside third-party operators. The company became public in October 2022 through a business combination with Executive Network Partnering Corporation, and GREP Holdings assets contributed by Grey Rock-managed funds.

Revenue drivers

• Oil sales — Oil was 51% of second quarter 2026 production at 16,341 Bbls per day; average realized oil price excluding derivatives was $93.93 per Bbl, up from $61.41 in the prior-year quarter.
• Natural gas sales — Natural gas production was 94,220 Mcf per day in second quarter 2026; realized price excluding derivatives was $1.12 per Mcf versus $2.32 in the prior-year quarter, so gas volumes are large relative to revenue contribution.
• Operated partnerships — Granite Ridge funds development on acreage sourced through partners such as Admiral Permian Resources, retaining control of capital and well design; it is described as the company's principal differentiator.
• Traditional non-operated interests — Minority interests alongside third-party operators where Granite Ridge assesses each well proposal case-by-case; total second quarter 2026 production was 32,044 Boe per day.

Recent performance

Second quarter 2026 oil and natural gas sales were $149.3 million, with net income of $30.0 million, or $0.23 per diluted share, versus $25.1 million, or $0.19 per diluted share, a year earlier. Adjusted Net Income (non-GAAP) was $11.1 million, or $0.09 per diluted share, and Adjusted EBITDAX (non-GAAP) was $79.6 million. Production grew 1% year over year to 32,044 Boe per day (51% oil). Cash flow from operating activities was $55.6 million, including $14.0 million of working capital changes. The company paid a $0.11 per share dividend and reported Net Debt to trailing twelve months Adjusted EBITDAX of 1.4x.

Strategy

Management says 2026 is the final year it expects to invest ahead of cash flow, with a free cash flow inflection targeted for 2027. It plans to keep funding operated partnerships, underwriting every opportunity to a full-cycle return above 25% at strip pricing, and says it replaced inventory faster than it developed it in the first half of 2026. It intends to maintain a conservative balance sheet and a well-covered dividend, targeting durable growth and a double-digit free cash flow yield in its 2027 framework. The company uses commodity derivatives and hedges to protect cash flow across commodity price outcomes.

Risks

• Third-party operator dependence — Granite Ridge has only participated in wells operated by third parties, and its operators set capital budgets, drilling schedules and well design largely outside the company's control.
• Commodity price volatility — Realized gas prices fell to $1.12 per Mcf in the second quarter of 2026 from $2.32 a year earlier, and the company states extended price declines have adversely affected its business.
• Lease expirations — The 10-K states certain undeveloped leasehold acreage is subject to leases expiring over the next several years unless production is established, operations commence, or leases are extended.
• Cost inflation and water handling — Lease operating expenses were $30.0 million, or $10.27 per Boe, in the second quarter of 2026, a 47% per-unit increase driven by higher saltwater disposal costs, flowback operations, surface equipment rentals and contract labor.

Outlook

Management describes 2026 as the last year of investing ahead of cash flow and points to a free cash flow inflection in 2027. It reiterates a 2027 framework of durable growth, a double-digit free cash flow yield and a well-covered dividend, and states the strategy does not depend on a higher commodity price environment. The board declared a regular quarterly dividend of $0.11 per share payable September 14, 2026, subject to future board approval.