Q4 2023 Granite Ridge Resources Inc Earnings Call

March 8, 2024

[music].

Operator: Good morning, and welcome everyone to Granite Ridge Resources' fourth quarter and full year 2023 earnings conference call. At this time all participants are in a listen only mode. A question and answer session will follow the formal presentation. To ask a question at that time, simply press the star followed by the number one on your telephone keypad. I will now turn the call over to Wes Harris, Investor Relations Representative for Granite Ridge.

To ask a question at that time simply press the star followed by the number one on your telephone keypad.

I will now turn the call over to Wes Harris Investor Relations representative for granite Ridge.

Wes Harris: Thank you, operator and good morning, everyone. We appreciate your interest in Granite Ridge Resources. We will begin our call with comments from Luke Brandenberg, our President and Chief Executive Officer, who will provide an overview of key matters for the fourth quarter and full year, as well as an outlook for 2024. We will then turn the call over to Tyler Farquharson, our Chief Financial Officer, who will review our financial results and discuss all that matters. Luke will then return to provide some closing comments before we open the call up for questions.

We will begin our call with comments from Luke Brandenburg are our president and Chief Executive Officer, who will provide an overview of key matters for the fourth quarter and full year as well as an outlook for 2024 will then turn the call over to Tyler Parker, Our Chief Financial Officer, who will review, our financial results and discuss that.

That matters Luke will then return to provide some closing comments before we open the call up for questions.

Wes Harris: Today's conference call will contain certain projections and other forward looking statements within the meaning of Federal Securities laws. These statements are subject to risks and uncertainties that may cause actual results to differ from those expressed or implied in these statements. We ask that you also review the cautionary statement in our press release. Granite Ridge disclaims any intention or obligation to update or revise any forward looking statements, whether as a result of new information, future events or otherwise. Accordingly, you should not place undue reliance on forward looking statements. These and other risks are described in yesterday's press release.

We ask that you also review the cautionary statement in our bodies. Lease. Granite ridge disclaims any intention or obligation to update or revise any forward looking statements. Whether as a result of new information.

Lease. Granite ridge disclaims any intention or obligation to update or revise any forward looking statements. Whether as a result of new information.

Granite ridge disclaims any intention or obligation to update or revise any forward looking statements. Whether as a result of new information.

Whether as a result of new information.

Future events or otherwise accordingly, you should not place undue reliance on forward looking statements. These and other risks are described in yesterday's press release.

Wes Harris: These and other risks are described in yesterday's press release. And our filings with the Securities and change Commission. This conference call also includes references to certain non-GAAP financial measures. Information reconciling non-GAAP financial measures discussed to their most direct comparable GAAP financial measures is available in our earnings release that is posted on our website. Finally as a reminder, this conference call is being recorded. A replay and transcript will be made available on our website following todays call. With that I'll turn it over to Luke.

And our filings with the Securities and change Commission. This conference call also includes references to certain non-GAAP financial measures infer. Information reconciling non-GAAP financial measures discussed to their most direct comparable GAAP financial measures is available in our earnings release that is posted on our website. Finally, as a reminder, this conference call is being recorded. A replay and transcript will be made available on our website following todays call with that I'll turn it over to Luke.

This conference call also includes references to certain non-GAAP financial measures infer. Information reconciling non-GAAP financial measures discussed to their most direct comparable GAAP financial measures is available in our earnings release that is posted on our website. Finally, as a reminder, this conference call is being recorded. A replay and transcript will be made available on our website following todays call with that I'll turn it over to Luke.

Information reconciling non-GAAP financial measures discussed to their most direct comparable GAAP financial measures is available in our earnings release that is posted on our website. Finally, as a reminder, this conference call is being recorded. A replay and transcript will be made available on our website following todays call with that I'll turn it over to Luke.

Finally, as a reminder, this conference call is being recorded. A replay and transcript will be made available on our website following todays call with that I'll turn it over to Luke.

A replay and transcript will be made available on our website following todays call with that I'll turn it over to Luke.

Luke Brandenberg: Alright, Thank you, Wes. And thank you to everyone for joining today's call. It's fun to see both familiar and new names on the screen in our c- participation clients quarter over quarter. We appreciate each of you sharing your time with us. 2023 was a record year on many fronts for Granite Ridge. My plan for this call is to start high level and zoom in from there. So, for those of you that are fully up to speed and just looking to fine tune your model, I'll ask that you bear with me. We had three primary objectives going into 2023: Strengthen the organization, make the company more investable and continue our legacy of driving value for investors by generating, evaluating and investing in opportunities with the best risk adjusted returns. And I'm proud to say it will make great strides on all of the above.

2023 was a record year on many fronts for granite ridge by playing for this call is to start high level and zoom in from there. So for those of you that are fully up to speed and just looking to fine tune your model I'll ask that you bear with me. We have three primary objectives going into 2023 strengthen the organization make the company more investable and continue our legacy of driving value for investors by generating evaluating and investing in opportunities with the best risk adjusted returns and I'm proud to say it will make great strides on all of the above.

We have three primary objectives going into 2023 strengthen the organization make the company more investable and continue our legacy of driving value for investors by generating evaluating and investing in opportunities with the best risk adjusted returns and I'm proud to say it will make great strides on all of the above.

Luke Brandenberg: On the organizational front, it has been quite the heavy lift transitioning from a private to public company. This is touched virtually every member of the organization. And by "touched" I really mean created additional work streams. I'd like to start by thanking everyone on our team for stepping up to the challenge to make sure that things are not just done, but they're done right. Put some numbers to this, we added seven new team members in the past 12 months, and from a standing start, achieved nine corporate cross milestones and implemented 140 different controls.

This is touched virtually every member of the organization and Bob touched I really mean created additional work streams I'd like to start by thanking everyone on our team for stepping up to the challenge to make sure that things are not just done but they're done right. It. Put some numbers to this we added seven new team members in the past 12 months and from a standing start achieved nine corporate Sox milestones and implemented 140 different controls.

Put some numbers to this we added seven new team members in the past 12 months and from a standing start achieved nine corporate Sox milestones and implemented 140 different controls.

Luke Brandenberg: On the investor front, it has been a world end of the year. I joked that in my past live and private equity, I used to go to where the oil was, which made southwest airlines my airline of choice choice. But as a public company, I will now spend more time go into where the money is. With over 150 meetings from southern California to the Pacific Northwest and from the northeast down to Miami and many spots in between, I quickly found my way to status on American Airlines. With roughly 3,700 public companies, it is on us to give investors like you a reason to care about Granite Ridge.

With over 150 meetings from southern California to the Pacific Northwest and from the northeast down to Miami and many spots in between are quickly found my way to status on American Airlines. With roughly 3700 public companies. It is on us to give investors like you a reason to care about granite ridge.

With roughly 3700 public companies. It is on us to give investors like you a reason to care about granite ridge.

Luke Brandenberg: So, between investor meetings, banks that are kind to have us at the conferences and a secondary offering that demonstrated that our largest shareholder continues to be willing to make the hard decisions. Granite Ridge continues to become more investable. We maintained our $0,11 per quarter dividend, or $0,44 cents per annum, and brought that $36 million dollars of stock. And I will note that we did not have a purchase program in place currebtly. Trading volume was up 10X from last January, research coverage is up from 1 to 4, and the number of reported shareholders is up over 5X from year end '22 to year end '23. Another data point I like is from a trip to New York for investor meetings earlier this year.

We maintained our 11 cents per quarter dividend or <unk> 44 cents per annum. Trading volume was up 10 X from last January research coverage is up from one to four and the number of reported shareholders is up over five X from year end 'twenty two at year end 'twenty three. Another data point I like is from a trip to New York for Investor meetings earlier this year.

Trading volume was up 10 X from last January research coverage is up from one to four and the number of reported shareholders is up over five X from year end 'twenty two at year end 'twenty three. Another data point I like is from a trip to New York for Investor meetings earlier this year.

Another data point I like is from a trip to New York for Investor meetings earlier this year.

Luke Brandenberg: We've brought 25 pitch books with us for 10 meetings, and two days later we brought all 25 books home. Meetings are changing from what is Granite Ridge to more rapid fire Q&A with folks that are generally up to speed on the company. We [inaudible] on more than one occasion, the PM of larger institutions told us that they'd like to buy Granite Ridge and a personal account, but the trading volume is a challenge for the fund to take position. So, in addition to consistent execution, we will continue to pound the pavement to spread the Granite Ridge story. And I hope to see many of you this year.

Meetings are changing from what is granite ridge to more rapid fire Q&A with folks that are generally up to speed on the company. We still have what the job on more than one occasion, the PM of larger institutions told us that they'd like to buy granite ridge and a personal account, but the trading volume is a challenge for the fund to take position so. So in addition to consistent execution, we will continue to pound the pavement to spread the granite Ridge story and I hope to see many of you this year.

We still have what the job on more than one occasion, the PM of larger institutions told us that they'd like to buy granite ridge and a personal account, but the trading volume is a challenge for the fund to take position so. So in addition to consistent execution, we will continue to pound the pavement to spread the granite Ridge story and I hope to see many of you this year.

So in addition to consistent execution, we will continue to pound the pavement to spread the granite Ridge story and I hope to see many of you this year.

Luke Brandenberg: Now, onto the assets. Tyler will get into more of the details in a moment, but I would like to share some of the highlights. We started 2023 expecting 9% year-over-year production growth and turned in 23%, including over 26,000 barrels of oil equivalent per day for the fourth quarter. While some of that beat was from new investments made in 2023, most of it came from acceleration and solid execution from our operating partners. Despite significantly lower hydrocarbon prices in 2023 over 2022, we generated $305 million of adjusted EBITDA and increased proved reserves by 6% year-over-year.

Taylor will get into more of the details in a moment, but I would like to share some of the highlights. We started 2023 expecting 9% year over year production growth and turned in 23%, including over 26000 barrels of oil equivalent per day for the fourth quarter. While some of that beat was from new investments made in 2023, most of it came from acceleration and solid execution from our operating partners. Despite significantly lower hydrocarbon prices in 2023 over 2022, we generated $305 million of adjusted EBITDAX and increased proved reserves by 6% year over year.

We started 2023 expecting 9% year over year production growth and turned in 23%, including over 26000 barrels of oil equivalent per day for the fourth quarter. While some of that beat was from new investments made in 2023, most of it came from acceleration and solid execution from our operating partners. Despite significantly lower hydrocarbon prices in 2023 over 2022, we generated $305 million of adjusted EBITDAX and increased proved reserves by 6% year over year.

While some of that beat was from new investments made in 2023, most of it came from acceleration and solid execution from our operating partners. Despite significantly lower hydrocarbon prices in 2023 over 2022, we generated $305 million of adjusted EBITDAX and increased proved reserves by 6% year over year.

Despite significantly lower hydrocarbon prices in 2023 over 2022, we generated $305 million of adjusted EBITDAX and increased proved reserves by 6% year over year.

Luke Brandenberg: At Granite Ridge we drive value by quickly recycling that cash flow into opportunities with the best risk adjusted returns. With the investments and 308 gross wells in 2023, roughly 20 to 30 deals a year, cash flow does not sit on the balance sheet long. As in the past, I want to thank everyone involved, including our amazing internal folks, outstanding operating partners and solid team of supporting external professionals for their continued hard work and dedication. Now I'd like to talk a bit about what we did with that cash flow. In 2023, we had $298 million of operating cash flow before working capital changes.

With the investments and 308 gross wells in 2023, roughly 20% to 30 deals a year cash flow does not sit on the balance sheet long. As in the past I want to thank everyone involved including our amazing internal folks outstanding operating partners and solid team of supporting external professionals for their continued hard work and dedication. Now I'd like to talk a bit about what we did with that cash flow. By 2023, we had $298 million of operating cash flow before working capital changes.

As in the past I want to thank everyone involved including our amazing internal folks outstanding operating partners and solid team of supporting external professionals for their continued hard work and dedication. Now I'd like to talk a bit about what we did with that cash flow. By 2023, we had $298 million of operating cash flow before working capital changes.

Now I'd like to talk a bit about what we did with that cash flow. By 2023, we had $298 million of operating cash flow before working capital changes.

By 2023, we had $298 million of operating cash flow before working capital changes.

Luke Brandenberg: We estimate that maintenance Capex for the year are drilling the completion dollars necessary to keep production flat from '22 to '23 with $175 million. That left $123 million of discretionary cash flow to drive shareholder returns. If you compare that to your enterprise value, it is a 14% yield. Now, what we did with $123 million in '23, was to take $59 million in dividends, then $36 million repurchasing shares, and reinvest $29 million in growth projects. Additionally, we spent an incremental $151 million of cash and credit facility borrowings for $180 million invested for growth. And ended the year with leverage of only 0.3X, below our target of 0.5X or around $150 million.

If you compare that to your enterprise value it is a 14% yield. Now, what we did with $123 million and 23, what's about $59 million in dividends. And then $36 million repurchasing shares and reinvest $29 million and growth projects. Additionally, we spent an incremental $151 million of cash and credit facility borrowings for $180 million invested for growth and ended the year with leverage of only <unk> <unk> below our target of four five X or around $150 million at.

Now, what we did with $123 million and 23, what's about $59 million in dividends. And then $36 million repurchasing shares and reinvest $29 million and growth projects. Additionally, we spent an incremental $151 million of cash and credit facility borrowings for $180 million invested for growth and ended the year with leverage of only <unk> <unk> below our target of four five X or around $150 million at.

And then $36 million repurchasing shares and reinvest $29 million and growth projects. Additionally, we spent an incremental $151 million of cash and credit facility borrowings for $180 million invested for growth and ended the year with leverage of only <unk> <unk> below our target of four five X or around $150 million at.

Additionally, we spent an incremental $151 million of cash and credit facility borrowings for $180 million invested for growth and ended the year with leverage of only <unk> <unk> below our target of four five X or around $150 million at.

Luke Brandenberg: In 2024, so long as the opportunities there justifies, I would expect that we will continue to draw on our credit facility until we hit that 0.5X target, and then we'll bounce around $150 million level. Diving into the fourth quarter, now we put out a press release in early February outlining our A&D activity, including three acquisitions, 2 in the [inaudible] and 1 in the [inaudible]. Five opportunities developed through our traditional non-op, or what we call our burgers and beer strategy, including 3 in the [inaudible] and 2 in the [inaudible]. And two deals with a strategic partner in the Delaware Basin, where we have controlled Capex, where we are the largest interest owner and have full control over development timing. The fourth quarter also benefited from another great period of execution by our operating partners, in which they turned 80 gross or 4.6 net wells for sales, which contributed to the production beat.

Diving into the fourth quarter now we put out a press release in early February outlining our A&D activity, including three acquisitions during the Haynesville and one in the Eagle Ford. Five opportunities developed through our traditional non op or what we call our burgers and beer strategy, including three in the Delaware two in the Eagle Ford and two deals with a strategic partner in the Delaware Basin, we call controlled Capex, where we are the largest interest owner and have full control over development timing. The fourth quarter also benefited from another great period of execution by our operating partners in which they turned 80 gross or $4 six net wells to sales, which contributed to the production beat.

Five opportunities developed through our traditional non op or what we call our burgers and beer strategy, including three in the Delaware two in the Eagle Ford and two deals with a strategic partner in the Delaware Basin, we call controlled Capex, where we are the largest interest owner and have full control over development timing. The fourth quarter also benefited from another great period of execution by our operating partners in which they turned 80 gross or $4 six net wells to sales, which contributed to the production beat.

The fourth quarter also benefited from another great period of execution by our operating partners in which they turned 80 gross or $4 six net wells to sales, which contributed to the production beat.

Luke Brandenberg: A recent significant development was our closing in late December on the sale of certain [inaudible] basin assets to vital energy for a consideration of about $1.1 million shares of vital stock, worth about $54 million today. The assets we sold consisted of approximately 1,658 net acres and 45 gross or 9.9 net producing wells. They contributed about 1,700 barrels of oil equivalent per day of production for the full year '23 and approximately 1,500 barrels per day for the fourth quarter of '23. Now, while we are typically not a seller of assets, we are always open to evaluating compelling rate of return transactions that enhance shareholder value. This deal did exactly that. Simply put, our long term partnership with the Henry family allowed us to buy in at a non-op discount and tag along to sell at an operator premium.

Assets. We sold consisted of approximately 1658 net acres and 45 gross or nine nine net producing wells. They contributed about 700 barrels of oil equivalent per day of production for the full year 'twenty three and approximately 500 barrels per day for the fourth quarter of 2003. Now while we are typically not a seller of assets. We are always open to evaluating compelling rate of return transactions that enhance shareholder value. This deal did exactly that simply put our long term partnership with the Henry family allowed us to buy in at a non op discount in <unk>. Tag along to sell at an operator premium.

Now while we are typically not a seller of assets. We are always open to evaluating compelling rate of return transactions that enhance shareholder value. This deal did exactly that simply put our long term partnership with the Henry family allowed us to buy in at a non op discount in <unk>. Tag along to sell at an operator premium.

Tag along to sell at an operator premium.

Luke Brandenberg: We will see how vital stock performs, we're certainly rooting for them. And I expect that we exit that position this year and recycle the capital into development opportunities with higher rates of return and the production that we sold. We made a point to mention strategic partnerships in just about every call, and this is a real differentiator for our company. As a reminder, we group our opportunity set to three buckets. The first is traditional non-op, or what we call burgers and beer. These are typically smaller deals, under good operators and good areas, with line of sight to development in the next year or two.

We made a point to mention strategic partnerships in just about every call. As this is a real differentiator for our company as a reminder, we group our opportunity set the three buckets. The first is traditional non op or what we call burgers and beer. <unk> are typically smaller deals under good operators and good areas with line of sight to development in the next year or two.

<unk> are typically smaller deals under good operators and good areas with line of sight to development in the next year or two.

Luke Brandenberg: The second is acquisitions, for consolidating the consolidators. These come in different shapes and sizes, but are typically either packages of non-op or buying alongside an operating partner. The third bucket of strategic partnerships, I would broadly describe this as more than just the deal. While our burgers and beer deals are generated based on relationships, they're typically one transaction at a time. Our strategic partnerships on the other hand, are of a larger scale, where we benefit from our partners' future business development efforts through ROE for AMI or joint venture type structures. The strategic partnership we talk about most is what the private operator out of Midlands, where our partnership gives us control of the asset, such that we control development timing.

The third bucket of strategic partnerships I would broadly describe this is more than just the deal. While our burgers and beer deals are generated based on relationships, they're typically one transaction at a time. Our strategic partnerships on the other hand, or a larger scale, where we benefit from our partners' future business development efforts through ROE for Ami or joint venture type structures. The strategic partnership we talk about most is what the private operator out of Midlands, where our partnership gives us control of the asset such that we control development timing.

While our burgers and beer deals are generated based on relationships, they're typically one transaction at a time. Our strategic partnerships on the other hand, or a larger scale, where we benefit from our partners' future business development efforts through ROE for Ami or joint venture type structures. The strategic partnership we talk about most is what the private operator out of Midlands, where our partnership gives us control of the asset such that we control development timing.

Our strategic partnerships on the other hand, or a larger scale, where we benefit from our partners' future business development efforts through ROE for Ami or joint venture type structures. The strategic partnership we talk about most is what the private operator out of Midlands, where our partnership gives us control of the asset such that we control development timing.

The strategic partnership we talk about most is what the private operator out of Midlands, where our partnership gives us control of the asset such that we control development timing.

Luke Brandenberg: After spending almost a year building inventory, we picked up two rigs in November to initially develop 5,5 net wells in the Delaware Basin. Those wells were drilled through the end of January and our partner absolutely nailed it, coming in roughly 15% under ASC. We expect completions will begin late this month or early next, and the turned to sales late in the second quarter. So, turning to our outlook for 2024, we currently expect production levels to range between 23,250, and 25,250 barrels of oil equivalent per day. An approximate 7% increase at the midpoint from the '23 levels, adjusted for the divestiture of the assets to vital.

Those wells were drilled through the end of January and our partner absolutely nailed it coming in roughly 15% under ASC we. We expect completions will begin late this month or early next or the turned to sales late in the second quarter. So turning to our outlook for 2024, we currently expect production levels to range between 23250, and 25250 barrels of oil equivalent per day, an approximate 7% increase at the midpoint from the 23 levels adjusted for the divestiture of the assets to vital.

We expect completions will begin late this month or early next or the turned to sales late in the second quarter. So turning to our outlook for 2024, we currently expect production levels to range between 23250, and 25250 barrels of oil equivalent per day, an approximate 7% increase at the midpoint from the 23 levels adjusted for the divestiture of the assets to vital.

So turning to our outlook for 2024, we currently expect production levels to range between 23250, and 25250 barrels of oil equivalent per day, an approximate 7% increase at the midpoint from the 23 levels adjusted for the divestiture of the assets to vital.

Luke Brandenberg: As usual, our production will be lumpy. We expect a bit of decline from the fourth quarter to the first quarter, maybe 5%, if you adjust for the vital sale, though that may look more like 10% of comparing fourth quarter reported first quarter reported. We expect production will begin to ramp in the third quarter, as we anticipate our first controlled Capex pad with our strategic partner that I mentioned earlier to come online late in the second quarter. On the acquisition side - and I'll note that this number includes both inventory and production acquisitions - as we have in the past, we only guide the deals that are closed or their agreed to and not a high probability to close.

We expect production will begin to ramp in the third quarter as we anticipate our first controlled capex pad with our strategic partner that I mentioned earlier to come online late in the second quarter. On the acquisition side. And I'll note that this number includes both inventory and production acquisitions as we have in the past we only guide the deals that are closed or their agreed to and not a high probability to close right.

On the acquisition side. And I'll note that this number includes both inventory and production acquisitions as we have in the past we only guide the deals that are closed or their agreed to and not a high probability to close right.

And I'll note that this number includes both inventory and production acquisitions as we have in the past we only guide the deals that are closed or their agreed to and not a high probability to close right.

Luke Brandenberg: Right now that number sits at $35 million, but we expect that will increase as our business development efforts continue to generate attractive opportunities. On the development Capex side, we currently see line of sight to between $230 million and $250 million of drilling and completion. And expect to turn 22 to 24 net wells to sales for the year. That brings us to total Capex of $265 million to $285 million. We expect that to be slightly front half loaded with just over 50% of the Capex in the first half of the year and just over half of that in the first quarter. We also look forward to keeping a continued close eye on controlling costs.

On the development Capex side, we currently see line of sight to between $230 million and $250 million of drilling and completion and expect to turn 22 to 24 net wells to sales for the year. That brings us to total capex of $265 million to $285 million, we expect that to be slightly front half loaded with just over 50% of the capex in the first half of the year and just over half of that in the first quarter. We also look forward to keeping a continued close eye on controlling costs.

That brings us to total capex of $265 million to $285 million, we expect that to be slightly front half loaded with just over 50% of the capex in the first half of the year and just over half of that in the first quarter. We also look forward to keeping a continued close eye on controlling costs.

We also look forward to keeping a continued close eye on controlling costs.

Luke Brandenberg: Our current outlook for LOE is $650 to $750 per barrel of oil equivalent, production and [inaudible] taxes range from 7% to 8% and cash G&A of $23 million to $26 million. A couple of other data points that may be relevant for the year are that we believe 2024 maintenance Capex to be $175 million to $200 million. And we expect our production base corporate annual decline to be in the low 40%. So with that, I'll turn it over to Tyler to discuss our financial results in more detail. Tyler?

$650 to $7 50 per barrel of oil equivalent production and AD valorem taxes range from 7% to 8% and cash G&A of $23 million to $26 million. A couple of other data points that may be relevant for the year or that we believe 2020 for maintenance capex to be $175 million to $200 million and we. Our production base corporate annual decline to be in the low 40%. So with that I'll turn it over to Tyler to discuss our financial results in more detail. Miller.

A couple of other data points that may be relevant for the year or that we believe 2020 for maintenance capex to be $175 million to $200 million and we. Our production base corporate annual decline to be in the low 40%. So with that I'll turn it over to Tyler to discuss our financial results in more detail. Miller.

Our production base corporate annual decline to be in the low 40%. So with that I'll turn it over to Tyler to discuss our financial results in more detail. Miller.

So with that I'll turn it over to Tyler to discuss our financial results in more detail. Miller.

Miller.

Tyler Farquharson: Thanks, Luke. And good morning, everyone. 2023 proved to be an exceptional year of performance for Granite Ridge. We delivered company records on multiple fronts and are well positioned to continue that momentum into 2024. For the full year, we delivered oil production above the high end of our guidance while placing a record number of wells online. Overall, we were able to grow our oil volumes by 14% and our total production by 23% year-over-year. In the fourth quarter, we achieved a company record exceeding 26,000 barrels of oil equivalent per day and exited the year with a strong balance sheet and liquidity to continue our capital deployment and shareholder return plans. We are proud of our accomplishments during 2023 and look forward to future performance in 2024 with a record 16 net wells in process at year end.

For the full year, we delivered oil production above the high end of our guidance, while placing a record number of wells online overall, we were able to grow our oil volumes by 14% and our total production by 23% year over year. In the fourth quarter, we achieved a company record exceeding 26000 barrels of oil equivalent per day and exited the year with a strong balance sheet and liquidity to continue our capital deployment and shareholder return plans. We are proud of our accomplishments during 2023 and look forward to future performance in 2024 with a record 16 net wells.

In the fourth quarter, we achieved a company record exceeding 26000 barrels of oil equivalent per day and exited the year with a strong balance sheet and liquidity to continue our capital deployment and shareholder return plans. We are proud of our accomplishments during 2023 and look forward to future performance in 2024 with a record 16 net wells.

Process at year end.

Tyler Farquharson: Diving a bit deeper into our results for the quarter. Our average daily production grew 18% from the prior year's quarter to 26,000 barrels of oil equivalent per day, driven by continued strong performance from recent wells turned to sales, and new wells placed online in the Permian and Eagle Ford during the quarter. Our adjusted EBITDA was $81.8 million for the quarter, which was substantially flat with the third quarter, despite a lower pricing environment. Adjusted EPS was $0,20 per diluted share for the fourth quarter, in line with analyst expectations. Per unit lease operating costs were $6.43 per DOE. An 8% decrease compared to the third quarter. Full year came in at $6 82 per BOE, which was well within our guided range of $6 50 to $7 50 per Boe.

Our average daily production grew 18% from the prior year's quarter to 26000 barrels of oil equivalent per day, driven by continued strong performance from recent wells turned to sales and new wells placed online in the Permian and Eagle Ford during the quarter. Our adjusted EBITDA was $81 8 million for the quarter, which was substantially flat with the third quarter, despite a lower pricing environment. Adjusted EPS was <unk> 20 per diluted share for the fourth quarter in line with analyst expectations. Per unit lease operating costs were $6 43 per Boe.

Our adjusted EBITDA was $81 8 million for the quarter, which was substantially flat with the third quarter, despite a lower pricing environment. Adjusted EPS was <unk> 20 per diluted share for the fourth quarter in line with analyst expectations. Per unit lease operating costs were $6 43 per Boe.

Adjusted EPS was <unk> 20 per diluted share for the fourth quarter in line with analyst expectations. Per unit lease operating costs were $6 43 per Boe.

Per unit lease operating costs were $6 43 per Boe.

An 8% decrease compared to the third quarter full year came in at $6 82 per BOE, which was well within our guided range of $6 50 to $7 50 per Boe.

Tyler Farquharson: Full year came in at $6.82 per BOE, which was well within our guided range of $6.50 to $7.50 per BOE. Production in [inaudible] taxes for both the fourth quarter and full year were 7% of sales at the low end of our guidance of 7% to 8% of sales. G&A expense for the fourth quarter was $2.54 per BOE, which included 349,000 of non-cash, stock based compensation. Adjusting for this our recurring cash G&A expense was $5.7 million or $2.39 per BOE. During the quarter, our operating partners completed and placed on production a total of 80 gross, or 4.6 net wells with nearly 60% of the activity occurring in the Permian basin. An additional 212 gross, or 16 net wells, were in progress at year end, representing nearly 70% of our expected 2024 delivery.

Production in Avalon taxes for both the fourth quarter and full year were 7% of sales at the low end of our guidance of 7% to 8% of sales. G&A expense for the fourth quarter was $2 54 per BOE, which included 349000 of noncash stock based compensation adjusting for this our recurring cash G&A expense was $5 7 million or $2 39 per Boe. During the quarter, our operating partners completed and placed on production a total of 80 gross or four six net wells with nearly 60% of the activity occurring in the Permian basin. An additional 212 gross or 16 net wells were in progress at year end, representing nearly 70% of our expected 2020 for delivery.

G&A expense for the fourth quarter was $2 54 per BOE, which included 349000 of noncash stock based compensation adjusting for this our recurring cash G&A expense was $5 7 million or $2 39 per Boe. During the quarter, our operating partners completed and placed on production a total of 80 gross or four six net wells with nearly 60% of the activity occurring in the Permian basin. An additional 212 gross or 16 net wells were in progress at year end, representing nearly 70% of our expected 2020 for delivery.

During the quarter, our operating partners completed and placed on production a total of 80 gross or four six net wells with nearly 60% of the activity occurring in the Permian basin. An additional 212 gross or 16 net wells were in progress at year end, representing nearly 70% of our expected 2020 for delivery.

An additional 212 gross or 16 net wells were in progress at year end, representing nearly 70% of our expected 2020 for delivery.

Tyler Farquharson: Capital spending during the quarter was $78 million, including $28 million of acquisitions. Full year spending totaled $363 million, including $79 million of acquisitions across nearly 30 transactions. In December, we completed the sale of certain of our Permian assets to vital energy for approximately $1.1 million shares of common and preferred stock and expect to fully monetize these shares later this summer. The divested 9.9 net producing wells contributed approximately 1,700 barrels of oil equivalent per day to our 2023 results. We also continued our ongoing quarterly cash dividend. During the quarter, the board declared an $0,11 per share cash dividend that on an annualized basis represents a 7.3% dividend yield, measured against Wednesday's closing price.

Shares of common and preferred stock and expect to fully monetize these shares later this summer. The divested nine nine net producing wells contributed approximately 700 barrels of oil equivalent per day to our 2023 results. We also continued our ongoing quarterly cash dividend during the quarter. The board declared an <unk> 11 per share cash dividend that on an annualized basis represents a seven three <unk>.

The divested nine nine net producing wells contributed approximately 700 barrels of oil equivalent per day to our 2023 results. We also continued our ongoing quarterly cash dividend during the quarter. The board declared an <unk> 11 per share cash dividend that on an annualized basis represents a seven three <unk>.

<unk> dividend yield measured against Wednesday's closing price. In addition, as of December 31, we repurchased a total of $5 7 million shares at a cost of approximately $36 million finally over the past few months. We've added a number of defensive hedges to where we now have approximately 60% of our oil and 50 <unk>.

<unk> dividend yield measured against Wednesday's closing price.

Tyler Farquharson: In addition, as of December 31st we repurchased a total of $5.7 million shares at a cost of approximately $36 million. Finally, over the past few months we've added a number of defensive hedges to where we now have approximately 60% of our oil and 50% of our gas PDP hedged for 2024. Turning to our 2024 outlook, we provided our initial 2020 for guidance and anticipate a production range of 23,250 to 25,250 BOE per day of production for 2024, which represents an increase of approximately 7% from 2023. In total, we expect 22 to 24 net wells to be placed online during 2024 with half of those wells being placed online by our operating partner in the Delaware Basin.

<unk> of our gas PDP hedged for 2024. Turning to our 2024 outlook, we provided our initial 2020 for guidance and anticipate a production range of 23250 to 25250 BOE per day of production for 2024, which represents an increase of approximately 7% from 2023. In total we expect 22 to 24 net wells to be placed online during 2024 with half of those wells being placed online by our operating partner in the Delaware Basin.

Turning to our 2024 outlook, we provided our initial 2020 for guidance and anticipate a production range of 23250 to 25250 BOE per day of production for 2024, which represents an increase of approximately 7% from 2023. In total we expect 22 to 24 net wells to be placed online during 2024 with half of those wells being placed online by our operating partner in the Delaware Basin.

In total we expect 22 to 24 net wells to be placed online during 2024 with half of those wells being placed online by our operating partner in the Delaware Basin.

Tyler Farquharson: As Luke outlined, the initial results from that activity has been very encouraging with our operating partner delivering results ahead of AFE performance expectations. Overall, we expect a production decline of 5% during the first half of 2024, before additional wells were placed online during the summer, resulting in total annual growth of approximately 7% versus 2023. Our total capital expenditures are expected to be between $265 and $285 million, including $35 million of budgeted acquisitions that are either closed or in the process of closing. I will now hand it back to Luke for his closing comments. Luke.

Overall, we expect a production decline of 5% during the first half of 2024 before additional wells were placed online during the summer, resulting in total annual growth of approximately 7% versus 2023. Our total capital expenditures are expected to be between 265% and $285 million, including $35 million of budgeted acquisitions that are either closed or in the process of closing. I will now hand, it back to Luc for his closing comments Luke.

Our total capital expenditures are expected to be between 265% and $285 million, including $35 million of budgeted acquisitions that are either closed or in the process of closing. I will now hand, it back to Luc for his closing comments Luke.

I will now hand, it back to Luc for his closing comments Luke.

Luke Brandenberg: Thank you, Tyler. A gentleman that I am humbled to call a mentor recently shared with me that as a public company, you have P for price and E for earnings. Our job is tthe E. The market's job as the P. And eventually, the market always rewards consistent E with P. So, what does that mean for 2024? Focus on the E. And likely not in a splashy way, but in a workman-like fashion. Continue to demonstrate the value of our adaptable, resilient business model. Continue to strengthen the organization and make the business more investable and patiently allocate capital to the best risk adjusted returns.

A gentleman that I am humbled to call a mentor recently shared with me that as a public company you have P for price and ether earnings our job is to eat the market's job as the Pea and eventually the market always rewards consistent E with Pete. So what does that mean for 2024. Focus on the E. And likely not in a splashy way better than a workmanlike fashion <unk>. To demonstrate the value of our adaptable resilient business model continue to strengthen the organization and make the business more investable and patiently allocate capital to the best risk adjusted returns.

So what does that mean for 2024. Focus on the E. And likely not in a splashy way better than a workmanlike fashion <unk>. To demonstrate the value of our adaptable resilient business model continue to strengthen the organization and make the business more investable and patiently allocate capital to the best risk adjusted returns.

Focus on the E. And likely not in a splashy way better than a workmanlike fashion <unk>. To demonstrate the value of our adaptable resilient business model continue to strengthen the organization and make the business more investable and patiently allocate capital to the best risk adjusted returns.

And likely not in a splashy way better than a workmanlike fashion <unk>. To demonstrate the value of our adaptable resilient business model continue to strengthen the organization and make the business more investable and patiently allocate capital to the best risk adjusted returns.

To demonstrate the value of our adaptable resilient business model continue to strengthen the organization and make the business more investable and patiently allocate capital to the best risk adjusted returns.

Luke Brandenberg: Our job is the E, the market's job as the P. As we continue to execute quarter over quarter, eventually the market will reward our company. They're currently yield's over 7%, have less than half a turn of debt and have production growth of over 20% with a higher share price. But for now, trading at less than three times, Granite Ridge is quite the bargain. We had insider buying in every open window in 2023, myself included. So, to our current shareholders, thank you for your support. And to those on the sidelines, we hope that you'll join us. With that, we're happy to answer any questions that folks may have on today's call. Operator?

As we continue to execute quarter over quarter eventually the market will reward our company. They're currently yields over 7% is less than half a turn of debt and have production growth of over 20% with a higher share price but. But for now trade. Trading at less than three times granite ridge is quite the bargain. We had insider buying in every open window in 2023 myself included. So to our current shareholders. Thank you for your support and to those on the sidelines, we hope that you'll join us. With that we're happy to answer any questions that folks may have on today's call operator.

But for now trade. Trading at less than three times granite ridge is quite the bargain. We had insider buying in every open window in 2023 myself included. So to our current shareholders. Thank you for your support and to those on the sidelines, we hope that you'll join us. With that we're happy to answer any questions that folks may have on today's call operator.

Trading at less than three times granite ridge is quite the bargain. We had insider buying in every open window in 2023 myself included. So to our current shareholders. Thank you for your support and to those on the sidelines, we hope that you'll join us. With that we're happy to answer any questions that folks may have on today's call operator.

We had insider buying in every open window in 2023 myself included. So to our current shareholders. Thank you for your support and to those on the sidelines, we hope that you'll join us. With that we're happy to answer any questions that folks may have on today's call operator.

So to our current shareholders. Thank you for your support and to those on the sidelines, we hope that you'll join us. With that we're happy to answer any questions that folks may have on today's call operator.

With that we're happy to answer any questions that folks may have on today's call operator.

Operator: The floor is now open for your questions. To ask a question at this time, simply press star followed by the number one on your telephone keypad. We ask that you please limit yourself to one question and one follow up question. We will now take a moment to compile our roster. Our first question comes from the line of Michael Scalia with Stephens. Please go ahead.

We ask that you. Please limit yourself to one question and one follow up question, we will now take a moment to compile a roster. Our first question comes from the line of Michael scalar with Stephens. Please go ahead.

Our first question comes from the line of Michael scalar with Stephens. Please go ahead.

Michael Scialla: Good morning, guys. I wanted to ask about your '24 guidance. I know you said that's based on your development plan, but you know there'll be some production from things you acquired during the year and you only budget deals that you expect to close but you know it will be more. So, as you think about '24 production guidance, I guess looking back, '23 production came in, I think 8% above your high end of year - last year's guidance. Would it be reasonable to believe you'll have some production contribution from things you acquire this year? And is that incremental production from last year from acquisitions in the deals that will close in the future? Is that a reasonable representation of what could happen this year?

Good morning, guys. I wanted to ask about your 'twenty guidance. I know you said that's based on your development plan. But you know there'll be some production from things you acquired during the year and you only budget deals that you expect to close but you know it will be more so. You'd think about. 24 production guidance I guess looking back. 23 production came in I think 8% above your high end of year. Last year's guidance. Would it be reasonable to believe youll have some. Production contribution from things you acquire this year and is that incremental production from last year from acquisitions in the deals. Deals that will close in the future or is that a reasonable representation of what could happen this year.

I wanted to ask about your 'twenty guidance. I know you said that's based on your development plan. But you know there'll be some production from things you acquired during the year and you only budget deals that you expect to close but you know it will be more so. You'd think about. 24 production guidance I guess looking back. 23 production came in I think 8% above your high end of year. Last year's guidance. Would it be reasonable to believe youll have some. Production contribution from things you acquire this year and is that incremental production from last year from acquisitions in the deals. Deals that will close in the future or is that a reasonable representation of what could happen this year.

I know you said that's based on your development plan. But you know there'll be some production from things you acquired during the year and you only budget deals that you expect to close but you know it will be more so. You'd think about. 24 production guidance I guess looking back. 23 production came in I think 8% above your high end of year. Last year's guidance. Would it be reasonable to believe youll have some. Production contribution from things you acquire this year and is that incremental production from last year from acquisitions in the deals. Deals that will close in the future or is that a reasonable representation of what could happen this year.

But you know there'll be some production from things you acquired during the year and you only budget deals that you expect to close but you know it will be more so. You'd think about. 24 production guidance I guess looking back. 23 production came in I think 8% above your high end of year. Last year's guidance. Would it be reasonable to believe youll have some. Production contribution from things you acquire this year and is that incremental production from last year from acquisitions in the deals. Deals that will close in the future or is that a reasonable representation of what could happen this year.

You'd think about. 24 production guidance I guess looking back. 23 production came in I think 8% above your high end of year. Last year's guidance. Would it be reasonable to believe youll have some. Production contribution from things you acquire this year and is that incremental production from last year from acquisitions in the deals. Deals that will close in the future or is that a reasonable representation of what could happen this year.

24 production guidance I guess looking back. 23 production came in I think 8% above your high end of year. Last year's guidance. Would it be reasonable to believe youll have some. Production contribution from things you acquire this year and is that incremental production from last year from acquisitions in the deals. Deals that will close in the future or is that a reasonable representation of what could happen this year.

23 production came in I think 8% above your high end of year. Last year's guidance. Would it be reasonable to believe youll have some. Production contribution from things you acquire this year and is that incremental production from last year from acquisitions in the deals. Deals that will close in the future or is that a reasonable representation of what could happen this year.

Last year's guidance. Would it be reasonable to believe youll have some. Production contribution from things you acquire this year and is that incremental production from last year from acquisitions in the deals. Deals that will close in the future or is that a reasonable representation of what could happen this year.

Would it be reasonable to believe youll have some. Production contribution from things you acquire this year and is that incremental production from last year from acquisitions in the deals. Deals that will close in the future or is that a reasonable representation of what could happen this year.

Production contribution from things you acquire this year and is that incremental production from last year from acquisitions in the deals. Deals that will close in the future or is that a reasonable representation of what could happen this year.

Deals that will close in the future or is that a reasonable representation of what could happen this year.

Luke Brandenberg: Yes, good question, Mike and good morning, Thanks for asking that, it's something I probably should have clarified a little bit more, but you're right. As we mentioned, we just got the deals that are closed and so, if I look at last year as an example, I would say that roughly - what we guided to a year ago, we ended up hitting the high range, but high end of the range or just that incremental 8%. That was largely new transactions. So, it wouldn't surprise me if you saw that same thing this year. In our day, job day and day out, as really generating, evaluating and closing on new opportunities. So, we hope the opportunity set is there. [inaudible] continue to deploy capital.

I would say that roughly. What we. <unk> two a year ago, we ended up hitting the high range. The high end of the range or just that that incremental 8% that was largely new transactions. So it wouldn't surprise me. If you saw that same thing this year in our day job day in and day out as really generating evaluating and closing on new opportunities. So we hope the opportunity set is there.

What we. <unk> two a year ago, we ended up hitting the high range. The high end of the range or just that that incremental 8% that was largely new transactions. So it wouldn't surprise me. If you saw that same thing this year in our day job day in and day out as really generating evaluating and closing on new opportunities. So we hope the opportunity set is there.

<unk> two a year ago, we ended up hitting the high range. The high end of the range or just that that incremental 8% that was largely new transactions. So it wouldn't surprise me. If you saw that same thing this year in our day job day in and day out as really generating evaluating and closing on new opportunities. So we hope the opportunity set is there.

And as such we will continue to deploy capital.

Luke Brandenberg: That's the goal. The goal is to continue to grow that. What we did last year and we'll continue to do this year is just every quarter, give updates. Updates on acquisition, dollars spent to date or identified to date, and if they justify an increase in net production, we will go ahead and increase that guidance too. But the way that we look at, we're almost guiding as if we all go on vacations for the rest of the year, and don't do any more deals, which is certainly not the case. That will be the lifeblood of the organization, but frankly, it's one of the most fun things as well. So, you hi the nail on the head, as we continue to do deals. Now, as we get later in the year, you may do a new transaction, but you won't get production contribution from that until the following year. So, most of the increase in production for the year are probably be stuff that happens in the next 3, 4, 5 months.

Update on acquisition dollars spent to date or identified to date and if they justify an increase in net production will go ahead and increase that guidance too, but the way that we look at it we're almost guiding as if we all go on vacations rest of the year and don't. Do any more deals which is certainly not the case. That will be the lifeblood of the organization, but frankly, it's one of the most fun things as well so. Nail on the head as we continue to do deals now as we get later in the year. You may do a new transaction, but you won't get production contribution from that until the following year. So most of the increase in production for the year are probably be stuff that happens in the next 345 months.

Do any more deals which is certainly not the case. That will be the lifeblood of the organization, but frankly, it's one of the most fun things as well so. Nail on the head as we continue to do deals now as we get later in the year. You may do a new transaction, but you won't get production contribution from that until the following year. So most of the increase in production for the year are probably be stuff that happens in the next 345 months.

That will be the lifeblood of the organization, but frankly, it's one of the most fun things as well so. Nail on the head as we continue to do deals now as we get later in the year. You may do a new transaction, but you won't get production contribution from that until the following year. So most of the increase in production for the year are probably be stuff that happens in the next 345 months.

Nail on the head as we continue to do deals now as we get later in the year. You may do a new transaction, but you won't get production contribution from that until the following year. So most of the increase in production for the year are probably be stuff that happens in the next 345 months.

You may do a new transaction, but you won't get production contribution from that until the following year. So most of the increase in production for the year are probably be stuff that happens in the next 345 months.

Michael Scialla: Yes, that's helpful. And then, as a follow up, Luke, I heard you right in your prepared remarks, I think you said you did not renew your repurchase program. Just wanted to see if you had a change in thinking on share buybacks.

And then as a follow up it looks I heard you right in your prepared remarks, I think you said you did not renew your repurchase program just wanted to see if you had a <unk>. And thinking on share buybacks, yes.

And thinking on share buybacks, yes.

Luke Brandenberg: Yes, that's a great question too. We implemented that buyback program initially back in December of '22. And the idea there was, we had recently gone public, we had little to no float, I mean, we were trading in the hundreds of thousands of dollars a day. And so, we wanted to have a buyback in place really to make sure there was a bid out there. As the year went on, and we continued to [inaudible], spread the word, we did a second [inaudible] to increase trading volume, among the other things. Trading volume increase has started be more of a bid out there. And so, that program expired on its own, in terms - at the end of '23 and was not renewed. Not because we don't think it's attractive value, we think like I mentioned, we bought in every single open window, in fact, we've had insider buying $6.25 a share. A significantly above the current price. So, [inaudible], we're putting our personal money where our mouth is. But corporately.

Trading volume increase there started to be more of a bid out there and so that program expired on its own terms at the end of 'twenty three and was not renewed not because we don't think it's attractive value thick like I mentioned, we bought in every single open window in fact, we've had insider buying. $6 25, a share significantly above the current price. So we still think it's goodbye, we're putting our personal money, where our mouth is but corporately.

$6 25, a share significantly above the current price. So we still think it's goodbye, we're putting our personal money, where our mouth is but corporately.

Luke Brandenberg: But corporately, having a shared buyback is now a bit counter to the goal of increase in trading volume and liquidity. So, we did not have one in place right now. That said look, if there is a tremendous dislocation in the market at some point this year, we could always change that. But right now, there is no buyback in place.

Luke Brandenberg: corporately. Having a share buyback is now a bit counter to the goal of increase in trading volume and liquidity. So we did not have one in place right. Now that said look if there is a tremendous dislocation in the market at some point this year. Could always change that but right now there is no buyback in place.

Having a share buyback is now a bit counter to the goal of increase in trading volume and liquidity. So we did not have one in place right. Now that said look if there is a tremendous dislocation in the market at some point this year. Could always change that but right now there is no buyback in place.

Could always change that but right now there is no buyback in place.

Michael Scialla: I appreciate the color. Thank you.

Luke Brandenberg: Thank you, Mike.

Operator: Again, the floor is now open for your questions. To ask a question at this time, simply press the star followed by the number one on your telephone keypad. Our next question comes from the line of John Abbott with Bank of America. Please go ahead.

Our next question comes from the line of John Abbott with Bank of America. Please go ahead.

John Abbot: Good morning, Luke and Tyler. My first question is it really a two part question. First, when you look at your inventory on hand, how many years do you think you have? And the second part, sort of relates to the production mix guidance you gave for 2024, for oil, which is roughly around 47%. So, when you look at your inventory and you look at that mix guidance, how do you think about the directors that the trajectory of the oil mix over a multiyear period of time?

Hey, Good morning question is. Our first question is it really a two part question first when you look at your inventory on hand, how many years do you think you have. And the second part so it relates to the production mix guidance you gave for 2024. For oil, which is roughly around 47%. So when you look at your inventory and you look at that mix guidance, how do you think about the <unk>. The directors that the E. The trajectory of the oil mix over a multiyear period of time.

Our first question is it really a two part question first when you look at your inventory on hand, how many years do you think you have. And the second part so it relates to the production mix guidance you gave for 2024. For oil, which is roughly around 47%. So when you look at your inventory and you look at that mix guidance, how do you think about the <unk>. The directors that the E. The trajectory of the oil mix over a multiyear period of time.

And the second part so it relates to the production mix guidance you gave for 2024. For oil, which is roughly around 47%. So when you look at your inventory and you look at that mix guidance, how do you think about the <unk>. The directors that the E. The trajectory of the oil mix over a multiyear period of time.

For oil, which is roughly around 47%. So when you look at your inventory and you look at that mix guidance, how do you think about the <unk>. The directors that the E. The trajectory of the oil mix over a multiyear period of time.

The directors that the E. The trajectory of the oil mix over a multiyear period of time.

The trajectory of the oil mix over a multiyear period of time.

Luke Brandenberg: Yeah, great question. So, when I think about inventory, I'll hit that in two parts. One thing that I'll tell you is, we're generally conservative when we book inventory. So, what I mean by that is, if we go make an acquisition of some leasehold, let's say, we only book internal inventory for locations that we're underwriting at that time. And so, I'll give you an example, if we bought something in the Delaware Basin, Loving County, three years ago we probably would've just booked a bone springs [inaudible], but you fast forward a few years and you've got a lot more active development in the B and C.

We're generally conservative when we book inventory so what I mean by that is if we go make an acquisition of some leasehold, let's say, we only book internal inventory for locations that we're underwriting at that time and so I'll give you. An example, if we bought something in the Delaware Basin Loving County, three years ago. We probably would've just booked a bone springs wolfcamp, a but you fast forward a few years and you've got a lot more active development in the B and C.

We probably would've just booked a bone springs wolfcamp, a but you fast forward a few years and you've got a lot more active development in the B and C.

Luke Brandenberg: You will find that in our inventory. So, I think it is a conservative booking. If I had to guess, as you know, the SDC kinda of proved reserves that we put out there are difficult for non-op because we're limited on what we can book, in terms of mineral guidance [inaudible] challenge. If I had to guess, we've probably got four to five years of inventory, based on our current run rate, which is that 23-ish net wells a year. I think that's conservative and again, our job day in and day out is to continue to replenish that through 2030 transactions a year, but that'd be my best guess.

Proved reserves that we put out there are difficult for non op because. We're limited on what we can book in terms of mineral guidance stays the same challenge. I had to guess, we've probably got four to five years of inventory. Based on our current run rate, which is that 23 ish net wells a year I. I think thats conservative and again, our job day in and day out is to continue to replenish that through 2030 transactions a year, but that'd be my best guess.

We're limited on what we can book in terms of mineral guidance stays the same challenge. I had to guess, we've probably got four to five years of inventory. Based on our current run rate, which is that 23 ish net wells a year I. I think thats conservative and again, our job day in and day out is to continue to replenish that through 2030 transactions a year, but that'd be my best guess.

I had to guess, we've probably got four to five years of inventory. Based on our current run rate, which is that 23 ish net wells a year I. I think thats conservative and again, our job day in and day out is to continue to replenish that through 2030 transactions a year, but that'd be my best guess.

Based on our current run rate, which is that 23 ish net wells a year I. I think thats conservative and again, our job day in and day out is to continue to replenish that through 2030 transactions a year, but that'd be my best guess.

I think thats conservative and again, our job day in and day out is to continue to replenish that through 2030 transactions a year, but that'd be my best guess.

Luke Brandenberg: In terms of oil cuts. So, you bring up a good point, we're going to have a lot of fluctuation we will look at this year, as we talked about and we put out in the press release a month or so ago. We sold assets to vital alongside the opportunity to to tag with the Henry folks. And so because of that, I think that you'll see our oil go down at the beginning of the year since we sold those oily assets. We also have some relatively new Haynesville wells coming online. But as the year goes on, particularly as some of these pads through one of our strategic partners come online, I think we had more oily.

Alongside the opportunity to to tag with the Henry folks and so because of that I think that youll see our oil go down at the beginning of the year. We sold those oily assets. We also have some relatively new haynesville wells coming online, but as the year goes on particularly as some of these pads through one of our strategic partners come online I think we had more oily.

Luke Brandenberg: So, we're shooting a 47 for the year, but I don't think you'll see a quarter where its actually 47. And anticipate the first half of the year will be below that, first quarter may be significantly below, probably low 40 by the end of the year, you get closer to that 50% in and around that 47 for the full year.

John Abbot: Very, very helpful. And then, for the follow up question, Tyler, this is for you. So, with the vital shares and preferred that you - that Granite owns. In the event that they were sold, is there any tax leakage?

So with the vital shares and preferred that you. At granite owns. In the event that use of doses. In the event that they were sold are there is there any tax leakage.

At granite owns. In the event that use of doses. In the event that they were sold are there is there any tax leakage.

In the event that use of doses. In the event that they were sold are there is there any tax leakage.

In the event that they were sold are there is there any tax leakage.

Tyler Farquharson: So, during 2023, we did recognize a tax gain from the divestiture of those assets. So, moving forward, if we sell those shares later this year and there's a gain from that point there would be some additional tax leakage just on the sale. We would expect to sell these above where we received them in December 21st. So, I would expect a small taxable impact in 2024.

'twenty three we did recognize a tax gain from the divestiture of those assets so moving forward. If we sell those shares later this year and Theres a gain from that point there would be some additional. Tax leakage is just on the sale. Would expect to sell these above. We received them in December December 21. So I would expect a small. Taxable impact in 2024.

If we sell those shares later this year and Theres a gain from that point there would be some additional. Tax leakage is just on the sale. Would expect to sell these above. We received them in December December 21. So I would expect a small. Taxable impact in 2024.

Tax leakage is just on the sale. Would expect to sell these above. We received them in December December 21. So I would expect a small. Taxable impact in 2024.

Would expect to sell these above. We received them in December December 21. So I would expect a small. Taxable impact in 2024.

We received them in December December 21. So I would expect a small. Taxable impact in 2024.

So I would expect a small. Taxable impact in 2024.

Taxable impact in 2024.

John Abbot: Appreciate it. Thank you very much for taking our questions.

Luke Brandenberg: You got it. Thanks, John.

Operator: Our next question comes from the line of Michael Scialla with Stephens. Please go ahead.

Our next question comes from the line of Michael <unk> with Stephens. Please go ahead.

Michael Scialla: I just wanted to get your thoughts on - you did a couple of Haynesville acquisitions in the fourth quarter, you mentioned, Luke, you've got some Haynesville wells coming online. I guess, given where gas prices are below $2, your thoughts on the Haynesville here, thoughts on any future wells getting drilled in that place, is there a risk to that commodity where it is?

No you did a couple of Haynesville acquisitions in the fourth quarter, you mentioned look you've got some haynesville wells coming online. I guess, given where gas prices are below $2 or your thoughts on the haynesville here. Thoughts on any future wells getting drilled in that place is there a risk to that. Commodity where it is.

I guess, given where gas prices are below $2 or your thoughts on the haynesville here. Thoughts on any future wells getting drilled in that place is there a risk to that. Commodity where it is.

Thoughts on any future wells getting drilled in that place is there a risk to that. Commodity where it is.

Commodity where it is.

Luke Brandenberg: Yes, that's a good question. With this gas price environment, it's two sides to that coin. One is, I don't really want to drill a lot of gas wells right now, flip side I'd love to acquire gas inventory molecules in the ground - at these prices, not necessarily at the strip and so - The Haynesville deal in the fourth quarter, that was a unique deal, we have operator that we're very close with, we had an opportunity to buy and alongside them. Both transactions with the same group, and the neat thing there is we have real line of sight into their development plan, we knew what their plans were.

The Haynesville deal in the fourth quarter that was a unique. Deal we have. Operator that we're very close with we had an opportunity to buy and alongside them both transactions with the same group and the neat thing. There is we have real line of sight into their development plan, we knew what their plans were in.

Deal we have. Operator that we're very close with we had an opportunity to buy and alongside them both transactions with the same group and the neat thing. There is we have real line of sight into their development plan, we knew what their plans were in.

Operator that we're very close with we had an opportunity to buy and alongside them both transactions with the same group and the neat thing. There is we have real line of sight into their development plan, we knew what their plans were in.

Luke Brandenberg: They are like minded, they are not going to put three rigs on the asset and drill it all up at sub-2 dollars gas price. So, that was really just an opportunity to partner with fantastic firm that we're excited about. We do have some wells coming online, I think that asset came with some docs that they may complete just because on a half-cycle basis made a ton of stuff. But generally speaking, I wouldn't anticipate that we will put a lot of new drilling dollars into that until we see stronger gas price environment. Look, we're continuing to try to buy molecules in the ground. It's tough, you enter that weird spot where if you run strip pricing, then you say, gosh, this inventory looks really good. But it doesn't look good unless the price is three times the current spot.

But generally speaking I wouldnt anticipate that we will put a lot of new drilling dollars into that until we see stronger gas price environment look we're continuing to try to buy molecules in the ground. It's time, you enter that weird spot, where if you run strip pricing then you say gosh. This inventory looks really good but it doesn't look good unless the price is three times the current spot.

It's time, you enter that weird spot, where if you run strip pricing then you say gosh. This inventory looks really good but it doesn't look good unless the price is three times the current spot.

Luke Brandenberg: We struggled with that. So, we haven't put a lot of money to work in gas other than this, but we did have that partnership and we had good line of sight in the development plan. So, we keep looking. We'll keep looking. This is a good time to buy gas, I think, but not necessarily to drill it. That makes sense and wanted to ask about I think you closed on <unk>. Two strategic partnerships during the quarter in the Permian. That was the same partner you've had there for a while in Midland basin or either of those with the with somebody new. Yes. One that we referenced there it's a group out of Midland and most of our assets are really in the Delaware a lot 11 county, but thats a neat one we've talked about it a bit but we really initially formalize that partnership back in early 'twenty three and the objective was to run a rig full time that was really our goal working together and so we those guys.

Keep looking and we'll keep looking this is a good time to buy gas I think but not necessarily to drill it. That makes sense and wanted to ask about I think you closed on <unk>. Two strategic partnerships during the quarter in the Permian. That was the same partner you've had there for a while in Midland basin or either of those with the with somebody new. Yes. One that we referenced there it's a group out of Midland and most of our assets are really in the Delaware a lot 11 county, but thats a neat one we've talked about it a bit but we really initially formalize that partnership back in early 'twenty three and the objective was to run a rig full time that was really our goal working together and so we those guys.

That makes sense and wanted to ask about I think you closed on <unk>. Two strategic partnerships during the quarter in the Permian. That was the same partner you've had there for a while in Midland basin or either of those with the with somebody new. Yes. One that we referenced there it's a group out of Midland and most of our assets are really in the Delaware a lot 11 county, but thats a neat one we've talked about it a bit but we really initially formalize that partnership back in early 'twenty three and the objective was to run a rig full time that was really our goal working together and so we those guys.

Michael Scialla: That makes sense. And I wanted to ask about, I think you closed on two strategic partnerships during the quarter, in the Permian. That was the same partner you've had there for a while in Midland basin or either of those with somebody new? Yes. One that we referenced there it's a group out of Midland and most of our assets are really in the Delaware a lot 11 county, but thats a neat one we've talked about it a bit but we really initially formalize that partnership back in early 'twenty three and the objective was to run a rig full time that was really our goal working together and so we those guys.

Two strategic partnerships during the quarter in the Permian. That was the same partner you've had there for a while in Midland basin or either of those with the with somebody new. Yes. One that we referenced there it's a group out of Midland and most of our assets are really in the Delaware a lot 11 county, but thats a neat one we've talked about it a bit but we really initially formalize that partnership back in early 'twenty three and the objective was to run a rig full time that was really our goal working together and so we those guys.

That was the same partner you've had there for a while in Midland basin or either of those with the with somebody new. Yes. One that we referenced there it's a group out of Midland and most of our assets are really in the Delaware a lot 11 county, but thats a neat one we've talked about it a bit but we really initially formalize that partnership back in early 'twenty three and the objective was to run a rig full time that was really our goal working together and so we those guys.

Luke Brandenberg: Yes. This is the one that we referenced there, it's a group out of Midland - most of our assets are really in the Delaware, in a lot of [inaudible] County, but thats a neat one. We've talked about it a bit, but we really, initially formalize that partnership back in early '23 and the objective was to run a rig full time. That was really our goal working together. And so, those guys, it's impressive what they continue to dig up. We were able to build an inventory, such that we felt comfortable that we can keep a rig running full time. And so, we ended up picking up a rig in November. We actually have two rigs running right now, but that's more opportunistic, just making sure that we can hit some drilling deadlines, where we've captured the deal because of the ability to spud quickly.

Yes. One that we referenced there it's a group out of Midland and most of our assets are really in the Delaware a lot 11 county, but thats a neat one we've talked about it a bit but we really initially formalize that partnership back in early 'twenty three and the objective was to run a rig full time that was really our goal working together and so we those guys.

One that we referenced there it's a group out of Midland and most of our assets are really in the Delaware a lot 11 county, but thats a neat one we've talked about it a bit but we really initially formalize that partnership back in early 'twenty three and the objective was to run a rig full time that was really our goal working together and so we those guys.

Its impressive what they continue to dig up.

Luke Brandenberg: We were able to. Building inventories such that we felt comfortable that we can keep a rig running full time and so we ended up picking up a rig in November we actually have two rigs running right now, but that's more opportunistic just making sure that we can hit some drilling deadlines, where we've captured the deal because of the ability to spud quickly.

Building inventories such that we felt comfortable that we can keep a rig running full time and so we ended up picking up a rig in November we actually have two rigs running right now, but that's more opportunistic just making sure that we can hit some drilling deadlines, where we've captured the deal because of the ability to spud quickly.

Luke Brandenberg: That group, it's going to be a pretty big piece of our budget this year. About a third of our Capex, if not more, for the year will be in that strategic partnership, where the neat thing for us is we have full control over development timing. So, if we see a significant change in the environment, such that we want to pause, that's great, and that third will go down dramatically. On the flip side, if the market continues to strengthen, we can accelerate development, we have strong inventory there and [inaudible] you can pick up another rig.

It's going to be a pretty big piece of our budget this year and about a third of our capex if not more for the year will be in that strategic partnership where the neat thing for US is we have full control over development timing. So if we see a significant. Significant change in the environment, such that we want to pause that. Great and that third will go down dramatically. The flip side, if the market continues to strengthen we can accelerate development, we have strong inventory there and what can you pick up another rig.

Significant change in the environment, such that we want to pause that. Great and that third will go down dramatically. The flip side, if the market continues to strengthen we can accelerate development, we have strong inventory there and what can you pick up another rig.

Great and that third will go down dramatically. The flip side, if the market continues to strengthen we can accelerate development, we have strong inventory there and what can you pick up another rig.

The flip side, if the market continues to strengthen we can accelerate development, we have strong inventory there and what can you pick up another rig.

Luke Brandenberg: That's exciting for us. I mentioned that we drilled the first that's about 5,5 net well, let us finish drilling in January. I mean, unbelievable, how these guys executed, we're really pumped. And those wells are going to get completed at the end of this month, early next, when come online, late second quarter. So, we're in a prove it mode there. I think what we're doing is different, I think it's exciting. It's really bridging the gap between op and non-op. We look forward to having more results to share with the market on why this is really a differentiator and how it'll continue to be a driver of value for us going forward.

This month early next when come online late second quarter. So we're in a prove it mode. There I think what we're doing is different I think it's exciting it's really bridging the gap between op and non op. We look forward to having more results to share with the market on why this is really a differentiator and how it'll continue to be a driver of value for us going forward.

We look forward to having more results to share with the market on why this is really a differentiator and how it'll continue to be a driver of value for us going forward.

Michael Scialla: Sounds good, thank you.

Luke Brandenberg: Thanks, Mike.

Operator: There are no further questions at this time. This concludes today's call. You may now disconnect.

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Q4 2023 Granite Ridge Resources Inc Earnings Call

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