Granite Ridge Resources (GRNT) Q2 2026 Earnings Report

The call emphasized strong operational progress: rising production, disciplined inventory capture through Operated Partnerships, improving EBITDAX, solid cash generation, conservative leverage, and a clear 2027 plan for a free cash flow inflection. The principal near-term headwinds are elevated LOE and weak Permian gas realizations (Waha basis), which pressured per-unit economics in H1 and forced a modest upward LOE guidance revision. Management provided mitigation pathways (LOE trending down as volumes ramp, basis hedges through Q1 2028, and improving takeaway capacity) and reiterated the durability of the strategy and dividend, leading to a net-positive outlook.

The company reiterated 2026 as the last outspend year and guided to a 2027 free-cash-flow inflection, targeting a ~10% free cash flow yield, ~1.25x dividend coverage, leverage around 1.25x and high-single-digit production growth in 2027 (commodity planning case: ~$65/bbl oil), while maintaining a roughly $250M maintenance capital reference; for 2026 they raised LOE guidance to $8.25–$9.25/BOE (Q2 LOE was $10.27/BOE; H1 LOE $9.91/BOE), expect Q3 volumes to step up modestly and a more meaningful Q4 ramp with oil ≈52% of mix and exit production approaching 40,000 BOE/d, and see per-unit costs declining in H2 as new volumes dilute fixed costs; other metrics called out: Q2 production 32,044 BOE/d (51% oil), Q2 oil & gas sales $149.3M, unhedged realized price $51.19/BOE ($43.39/BOE including settled hedges), Adjusted EBITDAX $79.6M, cash from operations $55.6M ($69.5M before working capital), Q2 gas sales $9.6M (management expects >$30M in Q3 if Basis holds), basis hedges through Q1 2028, D&C capex $78.5M and acquisition cash $16.7M in Q2 (total committed ~$28M adding 21.9 net locations), and ending liquidity/capital structure of $44.1M cash, $125M drawn on revolver, $350M senior notes (net debt ~$418M; current leverage ~1.4x).