Form 8-K - Current report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

______________________________________________________________________

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934

______________________________________________________________________

Date of Report (Date of earliest event reported): November 7, 2023

______________________________________________________________________

GRANITE RIDGE RESOURCES, INC.

(Exact name of registrant as specified in its charter)


Delaware	001-41537	88-2227812
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)


5217 McKinney Avenue, Suite 400 Dallas, Texas						75205
(Address of principal executive offices)						(Zip Code)

(214) 396-2850

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:


o			Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o			Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o			Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o			Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, par value $0.0001 per share	GRNT	New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company x

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Item 1.01 Entry into a Material Definitive Agreement.

On November 7, 2023, Granite Ridge Resources, Inc., a Delaware corporation (the “Company”), entered into a First Amendment (the “Amendment”) to the Company’s existing Credit Agreement, dated October 24, 2022, by and among the Company, as borrower, Texas Capital Bank, as administrative agent, and the lenders from time to time party thereto (as amended or modified prior to such date, the “Existing Credit Agreement”).

The Amendment, among other things, (a) decreased the borrowing base from $325.0 million to $275.0 million, (b) increased the aggregate elected commitments from $150 million to $240.0 million and (c) increased the applicable margin charged on the loans and other obligations outstanding under the Credit Agreement by 50 basis points across all utilization tiers of the pricing grid.

Other than the foregoing, the material terms of the Existing Credit Agreement remain unchanged.

The foregoing description of the Amendment does not purport to be complete and is qualified in its entirety by reference to the text of the Amendment, a copy of which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated into this Item 1.01 by reference.

Item 2.02 Results of Operations and Financial Condition.

On November 9, 2023, the Company issued a press release announcing its financial and operating results for the quarter ended September 30, 2023 as well as updated 2023 guidance. A copy of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.

The information in this Current Report on Form 8-K, including Exhibit 99.1, is being furnished herewith and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to liabilities of that section, and shall not be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act except to the extent expressly stated in such filing.

Item 2.03 Creation of Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information set forth under Item 1.01 of this Current Report on Form 8-K is incorporated into this Item 2.03 by reference.

Item 9.01 Financial Statements and Exhibits.

(d)Exhibits.


Exhibit No.						Description
10.1*						First Amendment to Credit Agreement, dated as of November 7, 2023, by and among Granite Ridge Resources, Inc., as borrower, Texas Capital Bank, as administrative agent, and the lenders party thereto.
99.1*						Press Release of Granite Ridge Resources, Inc., dated as of November 9, 2023.
104						Cover Page Interactive Data File (embedded within the Inline XBRL document)

*Filed herewith

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


		GRANITE RIDGE RESOURCES, INC.

Date: November 9, 2023	By:	/s/ Luke C. Brandenberg
		Name:	Luke C. Brandenberg
		Title:	President and Chief Executive Officer

Exhibit 10.1

First Amendment to Credit Agreement

This First Amendment to Credit Agreement (this “First Amendment”), dated as of November 7, 2023 (the “First Amendment Effective Date”), is among Granite Ridge Resources, Inc., a Delaware corporation (the “Borrower”); each of the undersigned Restricted Subsidiaries of the Borrower (the “Guarantors”; the Guarantors together with the Borrower, the “Loan Parties”); each of the Lenders (including each of the New Lenders (as defined below)) that is a signatory hereto; and Texas Capital Bank, as administrative agent for the Lenders (in such capacity, together with its successors in such capacity, the “Administrative Agent”) and L/C Issuer.

Recitals

A. The Borrower, the Administrative Agent, the Lenders and the L/C Issuer are parties to that certain Credit Agreement dated as of October 24, 2022 (as amended, restated, supplemented or otherwise modified prior to the date hereof, the “Credit Agreement”), pursuant to which the Lenders have, subject to the terms and conditions set forth therein, made certain credit available to and on behalf of the Borrower.

B. The Borrower has requested that each of U.S. Bank National Association and First-Citizens Bank & Trust Company (each a “New Lender”, and collectively, the “New Lenders”) become a Lender under the Credit Agreement with a Maximum Credit Amount, an Elected Commitment and an Applicable Percentage as of the First Amendment Effective Date in the respective amounts shown on Schedule 2.1 to the Credit Agreement (as amended hereby).

C. The parties hereto desire to enter into this First Amendment to, among other things, (i) evidence the decrease of the Borrowing Base from $325,000,000 to $275,000,000, (ii) evidence the increase by the Increasing Lenders (as defined below) of the Aggregate Elected Commitment Amounts from $150,000,000 to $240,000,000 and (iii) amend the Credit Agreement, in each case, as set forth herein and effective as of the First Amendment Effective Date.

NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

Section 1.Defined Terms. Each capitalized term which is defined in the Credit Agreement, but which is not defined in this First Amendment, shall have the meaning ascribed such term in the Credit Agreement, as amended hereby. Unless otherwise indicated, all section references in this First Amendment refer to the Credit Agreement.

Section 2.Amendments. In reliance on the representations, warranties, covenants and agreements contained in this First Amendment, and subject to the satisfaction of the conditions precedent set forth in Section 4 hereof, the Credit Agreement shall be amended, effective as of the First Amendment Effective Date, in the manner provided in this Section 2.

2.1Additional Definitions. Section 1.1 of the Credit Agreement is hereby amended to add thereto in alphabetical order the following definitions which shall read in their respective entireties as follows:

“First Amendment” means that certain First Amendment to Credit Agreement dated as of the First Amendment Effective Date, among the Borrower,

the other Loan Parties party thereto, the Administrative Agent, the Lenders party thereto and the L/C Issuer.

“First Amendment Effective Date” means November 7, 2023.

2.2Restated Definitions. The following definitions contained in Section 1.1 of the Credit Agreement are hereby amended and restated in their respective entireties to read in full as follows:

“Applicable Margin” means the applicable percentages per annum set forth below, based upon the Utilization applicable from time to time.


Pricing Level	Utilization	Base Rate Loans	SOFR Loans and Letter of Credit Fee	Commitment Fee
1	< 25%	2.000%	3.000%	0.500%
2	> 25% but < 50%	2.250%	3.250%	0.500%
3	> 50% but < 75%	2.500%	3.500%	0.500%
4	> 75% but < 90%	2.750%	3.750%	0.500%
5	> 90%	3.000%	4.000%	0.500%

The Applicable Margin shall immediately and automatically change on any Business Day on which the Utilization changes and, as a result of such change, would result in the Applicable Margin being determined by reference to a different a Pricing Level in the table above; provided that, if at any time Borrower fails to deliver a Reserve Report pursuant to Section 7.1(p), at the election of Administrative Agent or upon Administrative Agent’s election at the direction of the Majority Lenders, the “Applicable Margin” shall mean the rate per annum set forth on the foregoing grid when Utilization is at its highest level until such Reserve Report is delivered.

“Arrangers” means, collectively, TCBI Securities, Inc., BofA Securities, Inc., Capital One, National Association, U.S. Bank National Association and First-Citizens Bank & Trust Company, in each case, in their respective capacities as joint lead arrangers and joint bookrunners hereunder

“Loan Documents” means this Agreement, the First Amendment, the Guaranty, the Security Documents, the Notes, the Issuer Documents, each Fee Letter, the Hedge Intercreditor Agreement, and all other promissory notes, security agreements, intercreditor agreements, mortgages, deeds of trust, assignments, letters of credit, guaranties, and other instruments, documents, certificates and agreements executed and delivered pursuant to or in connection with this Agreement or the Security Documents; provided that the term “Loan Documents” shall not include any Secured Cash Management Agreement or any Secured Hedge Agreement; provided, further, that no Approved Swap Counterparty (in its capacity as such) shall be deemed to be a party or have any

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rights under any Loan Documents other than the Hedge Intercreditor Agreement to which it is a party.

“Sanctioned Country” means, at any time, a country, region or territory which is itself (or whose government is) the subject or target of any Sanctions (which, as of the First Amendment Effective Date, includes the so-called Donetsk People’s Republic, the so-called Luhansk People’s Republic, the Crimea, Zaporizhzhia and Kherson Regions of Ukraine, Cuba, Iran, North Korea and Syria).

2.3Amendments to Definitions. The definition of each of “Sanctioned Person” and “Sanctions” contained in Section 1.1 of the Credit Agreement is hereby amended in each case by replacing the reference to “Her Majesty’s” contained therein with “His Majesty’s”.

2.4Amendments to Section 7.1(x) of the Credit Agreement. Section 7.1(x) of the Credit Agreement is hereby amended in its entirety to read as follows:

(x) Certificate of Responsible Officer – Rolling Hedge Requirement Compliance. Concurrently with any delivery of financial statements under Section 7.1(b), a certificate of a Responsible Officer of Borrower in form and substance reasonably satisfactory to Administrative Agent, certifying that Borrower and its Restricted Subsidiaries are in compliance with Section 7.15 as of the most-recent Specified Hedging Compliance Date and providing supporting information reasonably satisfactory to Administrative Agent demonstrating such compliance.

2.5Amendment to Section 7.15 of the Credit Agreement. Section 7.15 of the Credit Agreement is hereby amended and restated in its entirety to read in full as follows:

Section 7.15 Rolling Hedging Obligation. Commencing with the fiscal quarter ending December 31, 2023, as of the last day of each fiscal quarter (each such date, a “Specified Hedging Compliance Date”), Borrower and its Restricted Subsidiaries shall be party to Acceptable Commodity Hedging Transactions in the form of costless collars, puts or fixed price swaps (and excluding, for the avoidance of doubt, three-way collars) with floor prices and/or strike prices, as applicable, that are not less than eighty-five percent (85%) of the applicable New York Mercantile Exchange forward curve price for crude oil (WTI) or natural gas, as applicable, at the time such Acceptable Commodity Hedging Transactions are entered into, to hedge notional amounts of crude oil and natural gas, as applicable, covering not less than, for each month during the eighteen (18) month period following such Specified Hedging Compliance Date, fifty percent (50%) of the reasonably anticipated production of crude oil and natural gas, calculated separately, from Borrower and its Restricted Subsidiaries’ Proved Oil and Gas Properties constituting proved developed producing reserves as projected for such 18-month period in the most recently delivered Reserve Report prior to such Specified Hedging Compliance Date; provided that the notional volumes hedged under such Acceptable Commodity Hedging Transactions shall be deemed reduced by the notional volumes of any short puts or other similar derivatives having the effect of exposing Borrower or any Restricted Subsidiary to commodity price risk below the “floor” created by such Acceptable Commodity Hedging Transactions of Borrower and its Restricted Subsidiaries for each applicable calendar month.

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2.6Amendment to Section 8.4(a)(iii) of the Credit Agreement. Section 8.4(a)(iii) of the Credit Agreement is hereby amended by replacing the reference to (a) “2.25 to 1.00” contained therein with “2.00 to 1.00” and (b) “20%” contained therein with “25%”.

2.7Amendment to Section 8.4(a)(iv) of the Credit Agreement. Section 8.4(a)(iv) of the Credit Agreement is hereby amended and restated in its entirety to read in full as follows:

(iv) [Reserved];

2.8Amendment to Section 8.4(a)(v) of the Credit Agreement. Section 8.4(a)(v) of the Credit Agreement is hereby amended by replacing the reference to “1.50 to 1.00” contained therein with “1.25 to 1.00”.

2.9Amendment to Section 8.4(b)(iii) of the Credit Agreement. Section 8.4(b)(iii) of the Credit Agreement is hereby amended by (a) deleting the phrase “commencing on the date the financial statements for the fiscal quarter ending December 31, 2022 are delivered to Administrative Agent pursuant to Section 7.1(b)”, (b) replacing the reference to “2.25 to 1.00” contained therein with “2.00 to 1.00”, and (c) replacing the reference to “20%” contained therein with “25%”.

2.10Amendment to Section 8.4(b)(iv) of the Credit Agreement. Section 8.4(b)(iv) of the Credit Agreement is hereby amended by (a) deleting the phrase “commencing on the date the financial statements for the fiscal quarter ending December 31, 2022 are delivered to Administrative Agent pursuant to Section 7.1(b)” and (b) replacing the reference to “1.50 to 1.00” contained therein with “1.25 to 1.00”.

2.11Amendment to Section 8.5(l) of the Credit Agreement. Section 8.5(l) of the Credit Agreement is hereby amended by (a) deleting the phrase “commencing on the date the financial statements for the fiscal quarter ending December 31, 2022 are delivered to Administrative Agent pursuant to Section 7.1(b)”, (b) replacing the reference to “2.25 to 1.00” contained therein with “2.00 to 1.00” and (c) replacing the reference to “20%” contained therein with “25%”.

2.12Amendment to Section 8.5(m) of the Credit Agreement. Section 8.5(m) of the Credit Agreement is hereby amended by (a) deleting the phrase “commencing on the date the financial statements for the fiscal quarter ending December 31, 2022 are delivered to Administrative Agent pursuant to Section 7.1(b)” and (b) replacing the reference to “1.50 to 1.00” contained therein with “1.25 to 1.00”.

2.13Amendment to Section 8.16(f) of the Credit Agreement. Section 8.16(f) of the Credit Agreement is hereby amended by replacing the reference to “Section 7.16” therein with “Section 7.15”.

2.14Replacement of Schedule 2.1 to Credit Agreement. Schedule 2.1 to the Credit Agreement is hereby amended and restated in its entirety in the form of Schedule 2.1 attached hereto, and Schedule 2.1 attached hereto shall be deemed to be attached as Schedule 2.1 to the Credit Agreement. Immediately after giving effect to this First Amendment and any Borrowings made on the First Amendment Effective Date, (a) each Lender (including each New Lender) who holds Loans in an aggregate amount less than its Applicable Percentage of all Loans shall advance new Loans which shall be disbursed to the Administrative Agent and used to repay Loans outstanding to each Lender who holds Loans in an aggregate amount greater than its Applicable Percentage of all Loans, (b) such other adjustments shall be made as the Administrative Agent shall specify so that the Revolving Credit Exposure applicable to each Lender (including each New Lender) equals its Applicable Percentage of the aggregate

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Revolving Credit Exposure of all Lenders and (c) each Lender signatory hereto hereby waives the right to request any break funding payments owing to such Lender that are subject to Section 3.5 of the Credit Agreement as a result of the reallocation of Loans and adjustments described in this Section 2.14.

2.15Cover Page Amendment. The cover page of the Credit Agreement is hereby amended by deleting the reference to “TCBI SECURITIES, INC., BOFA SECURITIES, INC. and CAPITAL ONE, NATIONAL ASSOCIATION, as Joint Lead Arrangers and Joint Bookrunners” in its entirety and replacing it with the following:

TCBI SECURITIES, INC.,

BOFA SECURITIES, INC.,

CAPITAL ONE, NATIONAL ASSOCIATION,

U.S. BANK NATIONAL ASSOCIATION

and

FIRST-CITIZENS BANK & TRUST COMPANY,

as Joint Lead Arrangers and Joint Bookrunners

Section 3.Borrowing Base Decrease and Aggregate Elected Commitment Amounts. In reliance on the representations, warranties, covenants and agreements contained in this First Amendment, and subject to the satisfaction of the conditions precedent set forth in Section 4 hereof, the Administrative Agent and the Lenders party hereto agree that, effective as of the First Amendment Effective Date, the Borrowing Base shall be decreased from $325,000,000 to $275,000,000, and the Borrowing Base shall remain at $275,000,000 until the next Periodic Determination, Special Determination or other redetermination or adjustment to the Borrowing Base thereafter, whichever occurs first pursuant to the terms of the Credit Agreement. The redetermination of the Borrowing Base provided for in this Section 3 shall constitute the Periodic Determination scheduled to occur on or about October 1, 2023 for purposes of Section 2.8(d) of the Credit Agreement. This First Amendment constitutes a New Borrowing Base Notice for purposes of Section 2.8(d) of the Credit Agreement. Notwithstanding anything to the contrary in Section 2.7(b) of the Credit Agreement, the Administrative Agent, the L/C Issuer, the Increasing Lenders and the Borrower agree that the Aggregate Elected Commitment Amounts are hereby increased from $150,000,000 to $240,000,000 to be effective as of the First Amendment Effective Date and such increase shall be deemed to be in conformity with Section 2.7(b) of the Credit Agreement, and that each Lender (including each New Lender) has the Elected Commitment set forth opposite such Lender’s name on Schedule 2.1 to the Credit Agreement (as amended by this First Amendment). As used herein, “Increasing Lender” means each Lender (including each New Lender) whose Commitment immediately after giving effect to this First Amendment exceeds such Lender’s Commitment, if any, that was in effect immediately prior to giving effect to this First Amendment.

Section 4.Conditions Precedent. The effectiveness of this First Amendment is subject to the following:

4.1Counterparts. The Administrative Agent shall have received counterparts of this First Amendment from the Loan Parties, the Lenders constituting the Required Lenders (including the Increasing Lenders) and the L/C Issuer.

4.2Fees. The Administrative Agent shall have received all fees and other amounts due and payable on or prior to the First Amendment Effective Date.

4.3Minimum Hedging Requirement. The Administrative Agent shall have received (a) evidence reasonably satisfactory to the Administrative Agent that Borrower and its Restricted Subsidiaries are party to Acceptable Commodity Hedging Transactions in the form of costless

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collars, puts or fixed price swaps (and excluding, for the avoidance of doubt, three-way collars) with floor prices and/or strike prices, as applicable, that are not less than eighty-five percent (85%) of the applicable New York Mercantile Exchange forward curve price for crude oil (WTI) or natural gas, as applicable, at the time such Acceptable Commodity Hedging Transactions are entered into, to hedge notional amounts of crude oil and natural gas, as applicable, covering not less than, for each month during the eighteen (18) month period following the First Amendment Effective Date, fifty percent (50%) of the reasonably anticipated production of crude oil and natural gas, calculated separately, from Borrower and its Restricted Subsidiaries’ Proved Oil and Gas Properties constituting proved developed producing reserves as projected for such 18-month period in the Reserve Report prepared under the supervision of the chief engineer of Borrower and delivered to the Administrative Agent on October 16, 2023 and setting forth, as of September 30, 2023, the oil and gas reserves attributable to all of the Oil and Gas Properties of Borrower and its Restricted Subsidiaries and (b) a certificate of a Responsible Officer of the Borrower, in form and substance reasonably satisfactory to the Administrative Agent, setting forth that the Loan Parties have satisfied the foregoing hedging requirement described in clause (a) and providing supporting information reasonably satisfactory to the Administrative Agent demonstrating compliance thereof.

4.4Notes. The Administrative Agent shall have received duly executed Notes (or any amendment and restatement thereof, as the case may be) payable to each Lender (including each New Lender) requesting a Note (or amendment and restatement thereof, as the case may be) in a principal amount equal to its Maximum Credit Amount (as amended hereby) dated as of the First Amendment Effective Date.

4.5Other Documents. The Administrative Agent shall have received such other documents as the Administrative Agent or counsel to the Administrative Agent may reasonably request.

Section 5.New Lenders. Each New Lender hereby joins in, becomes a party to, and agrees to comply with and be bound by the terms and conditions of the Credit Agreement as a Lender thereunder and under each and every other Loan Document to which any Lender is required to be bound by the Credit Agreement, to the same extent as if such New Lender were an original signatory thereto. Each New Lender hereby appoints and authorizes the Administrative Agent to take such action as the Administrative Agent on its behalf and to exercise such powers and discretion under the Credit Agreement as are delegated to the Administrative Agent by the terms thereof, together with such powers and discretion as are reasonably incidental thereto. Each New Lender represents and warrants that (a) it has full power and authority, and has taken all action necessary, to execute and deliver this First Amendment, to consummate the transactions contemplated hereby and to become a Lender under the Credit Agreement, (b) it has received a copy of the Credit Agreement and copies of the most recent financial statements delivered pursuant to Section 7.1 thereof, and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this First Amendment and to become a Lender on the basis of which it has made such analysis and decision independently and without reliance on the Administrative Agent or any other Lender, and (c) from and after the First Amendment Effective Date, it shall be a party to the Credit Agreement and be bound by the provisions of the Credit Agreement and the other Loan Documents and have the rights and obligations of a Lender thereunder.

Section 6.Miscellaneous.

6.1Confirmation and Effect. The provisions of the Credit Agreement (as amended by this First Amendment) shall remain in full force and effect in accordance with their terms following the effectiveness of this First Amendment, and the execution, delivery and effectiveness of this First Amendment shall not (a) operate as a waiver of any right, power or

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remedy of any Lender, the L/C Issuer or the Administrative Agent under any of the Loan Documents nor (b) constitute a waiver of any provision of the Credit Agreement or any other Loan Document except, in each case, as expressly provided herein. Each reference in the Credit Agreement to “this Agreement”, “hereunder”, “hereof”, “herein”, or words of like import shall mean and be a reference to the Credit Agreement as amended hereby, and each reference to the Credit Agreement in any other document, instrument or agreement executed and/or delivered in connection with the Credit Agreement shall mean and be a reference to the Credit Agreement as amended hereby.

6.2Ratification and Affirmation of Loan Parties. Each of the Loan Parties hereby expressly (a) acknowledges the terms of this First Amendment, (b) ratifies and affirms its obligations under the Loan Documents to which it is a party, (c) acknowledges and renews its continued liability under the Loan Documents to which it is a party, (d) agrees, with respect to each Loan Party that is a Guarantor, that its guarantee under the Guaranty remains in full force and effect with respect to the Obligations as amended hereby, (e) represents and warrants to the Lenders and the Administrative Agent that each representation and warranty of such Loan Party contained in the Credit Agreement and the other Loan Documents to which it is a party is true and correct in all material respects as of the date hereof, after giving effect to the amendments set forth in Section 2 hereof, except (i) to the extent any such representations and warranties are expressly limited to an earlier date, in which case, on and as of the date hereof, such representations and warranties shall continue to be true and correct in all material respects as of such specified earlier date, and (ii) to the extent that any such representation and warranty is expressly qualified by materiality or by reference to Material Adverse Effect, such representation and warranty (as so qualified) shall continue to be true and correct in all respects, (f) represents and warrants to the Lenders and the Administrative Agent that the execution, delivery and performance by such Loan Party of this First Amendment are within such Loan Party’s corporate, limited partnership or limited liability company powers (as applicable), have been duly authorized by all necessary action and that this First Amendment constitutes the valid and binding obligation of such Loan Party enforceable in accordance with its terms, except as the enforceability thereof may be limited by bankruptcy, insolvency or similar laws affecting creditor’s rights generally, and (g) represents and warrants to the Lenders and the Administrative Agent that, immediately after giving effect to this First Amendment, no Default exists.

6.3Counterparts. This First Amendment may be executed by one or more of the parties hereto in any number of separate counterparts, and all of such counterparts taken together shall be deemed to constitute one and the same instrument. Delivery of this First Amendment by fax or electronic transmission (e.g. “.pdf”) shall be effective as delivery of a manually executed original counterpart hereof. The execution and delivery of this First Amendment shall be deemed to include electronic signatures on electronic platforms approved by the Administrative Agent, which shall be of the same legal effect, validity or enforceability as delivery of a manually executed signature, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act; provided that, upon the request of any party hereto, such electronic signature shall be promptly followed by the original thereof.

6.4No Oral Agreement. This written First Amendment, the Credit Agreement and the other Loan Documents executed in connection herewith and therewith represent the final agreement between the parties hereto or thereto and may not be contradicted by evidence of prior, contemporaneous, or unwritten oral agreements of the parties. There are no subsequent oral agreements between the parties that modify the agreements of the parties in the Credit Agreement and the other Loan Documents.

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6.5Governing Law. This First Amendment (including, but not limited to, the validity and enforceability hereof) shall be governed by, and construed in accordance with, the laws of the State of Texas.

6.6Payment of Expenses. The Borrower agrees to pay or reimburse the Administrative Agent for all of its reasonable out-of-pocket costs and expenses incurred in connection with this First Amendment, any other documents prepared in connection herewith and the transactions contemplated hereby, including, without limitation, the reasonable fees and disbursements of counsel to the Administrative Agent.

6.7Severability. Any provision of this First Amendment which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

6.8Successors and Assigns. This First Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns.

[Signature Pages Follow.]

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The parties hereto have caused this First Amendment to be duly executed as of the day and year first above written.

BORROWER: GRANITE RIDGE RESOURCES, INC.,
a Delaware corporation

By: /s/ Luke C. Brandenberg

Name: Luke C. Brandenberg

Title: President and Chief Executive
Officer

[Signature Page to First Amendment to Credit Agreement

Granite Ridge Resources, Inc.]

GUARANTORS: EXECUTIVE NETWORK PARTNERING CORPORATION,
a Delaware corporation

By: /s/ Luke C. Brandenberg

Name: Luke C. Brandenberg

Title: President and Chief Executive
Officer

GRANITE RIDGE HOLDINGS, LLC,
a Delaware limited liability company

By: /s/ Luke C. Brandenberg

Name: Luke C. Brandenberg

Title: President and Chief Executive
Officer

[Signature Page to First Amendment to Credit Agreement

Granite Ridge Resources, Inc.]

TEXAS CAPITAL BANK,

as Administrative Agent, the L/C Issuer and a Lender

By: /s/ Jared Mills

Name: Jared Mills

Title: Executive Director

[Signature Page to First Amendment to Credit Agreement

Granite Ridge Resources, Inc.]

BANK OF AMERICA, N.A.,

as a Lender

By: /s/ Ajay Prakash

Name: Ajay Prakash

Title: Director

[Signature Page to First Amendment to Credit Agreement

Granite Ridge Resources, Inc.]

CAPITAL ONE NATIONAL ASSOCIATION,

as a Lender

By: /s/ David Lee Garza

Name: David Lee Garza

Title: Vice President

[Signature Page to First Amendment to Credit Agreement

Granite Ridge Resources, Inc.]

PROSPERITY BANK,

as a Lender

By:

Name:

Title:

[Signature Page to First Amendment to Credit Agreement

Granite Ridge Resources, Inc.]

U.S. BANK NATIONAL ASSOCIATION,

as a New Lender

By: /s/ Matthew A. Turner

Name: Matthew A. Turner

Title: Senior Vice President

[Signature Page to First Amendment to Credit Agreement

Granite Ridge Resources, Inc.]

FIRST-CITIZENS BANK & TRUST COMPANY,

as a New Lender

By: /s/ John Feeley

Name: John Feeley

Title: Managing Director

[Signature Page to First Amendment to Credit Agreement

Granite Ridge Resources, Inc.]

SCHEDULE 2.1

[Intentionally omitted.]

Schedule 2.1

Exhibit 99.1

Granite Ridge Resources Inc. Reports Third-Quarter 2023 Results

and Provides Updated Outlook for 2023

Dallas, Texas, November 9, 2023 – Granite Ridge Resources Inc. (“Granite Ridge” or the “Company”) (NYSE: GRNT) today reported financial and operating results for the third quarter 2023 and provided an updated outlook for 2023.

Third Quarter 2023 Highlights

•Grew production 20% to 26,433 barrels of oil equivalent (“Boe”) per day (46% oil), from 22,015 Boe per day (49% oil) for the third quarter of 2022.

•Reported net income of $18.0 million, or $0.13 per share, versus $80.0 million, or $0.60 per share, for the prior year period. Third quarter adjusted net income (non-GAAP) totaled $27.7 million, or $0.21 per share. Non-cash depletion and accretion expense for the third quarter totaled $44.3 million, impacting net income by $0.33 per share.

•Generated $83.2 million of adjusted EBITDAX (non-GAAP).

•Deployed $95.1 million of capital during the quarter, including $11.9 million of inventory acquisitions (non-GAAP).

•Placed 77 gross (8.58 net) wells online.

•Declared dividend of $0.11 per share of common stock.

•Ended the third quarter of 2023 with liquidity of $70.8 million.

2023 Outlook Updates

•Increased full year 2023 midpoint production guidance to 23,250 Boe per day; now expecting to generate 18% midpoint annual production volume growth as compared to the full year 2022.

•Increased the midpoint of total capital expenditures for full year 2023 by $55 million to $350 million primarily to reflect additional acquisitions.

•Increased the midpoint of number of net well placed on production to 22.

See “Supplemental Non-GAAP Financial Measures” below for descriptions of the above non-GAAP measures as well as a reconciliation of these measures to the associated GAAP (as defined herein) measures.

Luke Brandenberg, President and CEO of Granite Ridge, commented, “Our third quarter operational and financial results are another clear indicator that our well-honed strategy of building close and long-standing relationships provides a strong platform for continued success. This was evidenced by the more than 23% increase in growth in daily production levels from the second quarter of 2023, as well as the 11% increase in the sequential quarterly period end net producing well count. This growth is a direct result of our operator partners’ targeted spending campaigns to capitalize on the strong underlying fundamentals supporting the oil and gas industry. In addition, our positive third quarter of 2023 results reflect our unrelenting pursuit in identifying, evaluating and – most importantly – executing targeted opportunities that fit our very selective criteria.”

Third Quarter 2023 Summary

Third quarter 2023 oil production volumes totaled 12,228 barrels (“Bbls”) per day, a 13% increase from the third quarter of 2022. Natural gas production for the third quarter of 2023 totaled 85,228 thousand cubic feet of natural gas (“Mcf”) per day, a 27% increase from the third quarter of 2022. As a result, the Company’s total production for the third quarter of 2023 grew 20% from the third quarter of the prior year to 26,433 Boe per day.

Net income for the third quarter of 2023 was $18.0 million, or $0.13 per diluted share. Excluding non-cash and nonrecurring items, the third quarter 2023 adjusted net income (non-GAAP) was $27.7 million, or $0.21 per diluted share. The Company’s average realized price for oil and natural gas for the third quarter of 2023, excluding the effect of commodity derivatives, was $78.41 per Bbl and $2.58 per Mcf, respectively.

Adjusted EBITDAX (non-GAAP) for the third quarter of 2023 totaled $83.2 million, compared to $99.0 million for the third quarter of 2022. Third quarter of 2023 cash flow from operating activities was $57.0 million, including $22.3 million in working capital changes. Operating cash flow before working capital changes (non-GAAP) was $79.3 million. Costs incurred for development activities totaled $75.7 million for the third quarter of 2023.

Granite Ridge Credit Agreement Amendment

On November 7, 2023, Granite Ridge amended the senior secured revolving credit agreement (the “Credit Agreement”) which, among other things, established a borrowing base of $275.0 million, increased the Company’s aggregate elected commitments from $150.0 million to $240.0 million, and amended the applicable margin charged on the loans and other obligations under the Credit Agreement.

Operational Activity

The table below provides a summary of gross and net wells completed and put on production for the three and nine months ended September 30, 2023:


	Three Months Ended September 30, 2023		Nine Months Ended September 30, 2023
	Gross	Net	Gross	Net
Permian	23	5.46	85	10.59
Eagle Ford	6	1.77	18	4.27
Bakken	12	0.34	29	1.43
Haynesville	4	0.94	4	0.94
DJ	32	0.07	98	2.80
Total	77	8.58	234	20.03

On September 30, 2023, the Company had 196 gross (10.6 net) wells in process.

Costs Incurred

The tables below provide the costs incurred for oil and natural gas producing activities for the periods indicated:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2023		2022		2023		2022
Property acquisition costs:
Proved	$	8,161	$	4,251	$	27,459	$	12,206
Unproved	11,262		7,864		24,053		20,653
Development costs	75,726		59,898		233,071		164,923
Total costs incurred for oil and natural gas properties	$	95,149	$	72,013	$	284,583	$	197,782


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2023		2022		2023		2022



Inventory acquisitions (non-GAAP) (1)	$	11,939	$	25,619	$	36,203	$	57,253
Production acquisitions	8,161		—		26,150		560
Development costs (excluding drilling carry)	75,049		46,394		222,230		139,969
Total costs incurred for oil and natural gas properties	$	95,149	$	72,013	$	284,583	$	197,782

(1) Includes costs to acquire additional development opportunities and undeveloped acreage acquisition.

Commodity Derivatives Update

The Company’s commodity derivatives strategy is intended to manage its exposure to commodity price fluctuations. Please see the table under “Derivatives Information” below for detailed information about Granite Ridge’s current derivatives positions.

Updated 2023 Guidance

The following table summarizes the Company’s updated operational and financial guidance for 2023.


	2023 Guidance		Updated 2023 Guidance
Annual production (Boe per day)	21,500 - 23,000		22,500 - 24,000
Oil as a % of sales volumes	49	%	47	%

Inventory acquisitions and production acquisitions ($ in millions)	$50 - $50		$90 - $90
Development capital expenditures ($ in millions)	$230 - $260		$255 - $265
Total capital expenditures ($ in millions)	$280 - $310		$345 - $355

Net wells placed on production	19 - 21		21 - 23

Lease operating expenses (per Boe)	$6.50 - $7.50		$6.50 - $7.50
Production and ad valorem taxes (as a % of total sales)	7% - 8%		7% - 8%
Cash general and administrative expense ($ in millions)	$20 - $22		$20 - $22

Conference Call

Granite Ridge will host a conference call on November 10, 2023, at 10:00 AM CT (11:00 AM ET) to discuss its third quarter 2023 results. The telephone number and passcode to access the conference call are provided below:

Dial-in: (888) 660-6093

Intl. dial-in: (929) 203-0844

Participant Passcode: 4127559

To access the live webcast visit Granite Ridge’s website at www.graniteridge.com. Alternatively, an audio replay will be available through November 24, 2023. To access the audio replay dial (800) 770-2030 and enter confirmation code 4127559.

Upcoming Investor Events

Granite Ridge management will be participating in the following upcoming investor events:

•Stephens Annual Investment Conference - November 14, 2023.

•Bank of America Global Energy Conference - November 15, 2023.

•Capital One Securities Energy Conference - December 5, 2023.

Any investor presentations to be used for such events will be posted prior to the events on Granite Ridge’s website.

About Granite Ridge

Granite Ridge is a scaled, non-operated oil and gas exploration and production company. We own a portfolio of wells and top-tier acreage across the Permian and four other prolific unconventional basins across the United States. Rather than drill wells ourselves, we increase asset diversity and decrease overhead by investing in a smaller piece of a larger number of high-graded wells drilled by proven public and private operators. We create value by generating sustainable full-cycle risk adjusted returns for investors, offering a rewarding experience for our team, and delivering reliable energy solutions to all – safely and responsibly. For more information, visit Granite Ridge’s website at www.graniteridge.com.

Forward-Looking Statements and Cautionary Statements

This press release contains forward-looking statements regarding future events and future results that are subject to the safe harbors created under the Securities Act of 1933 (the “Securities Act”) and the Securities Exchange Act of 1934 (the “Exchange Act”). All statements other than statements of historical facts included in this release regarding Granite Ridge’s

2023 outlook, dividend plans and practices, financial position, operating and financial performance, business strategy, plans and objectives of management for future operations, industry conditions, and indebtedness covenant compliance are forward-looking statements. When used in this release, forward-looking statements are generally accompanied by terms or phrases such as “estimate,” “project,” “predict,” “believe,” “expect,” “continue,” “anticipate,” “target,” “could,” “plan,” “intend,” “seek,” “goal,” “will,” “should,” “may” or other words and similar expressions that convey the uncertainty of future events or outcomes. Items contemplating or making assumptions about actual or potential future production and sales, market size, collaborations, and trends or operating results also constitute such forward-looking statements.

Forward-looking statements involve inherent risks and uncertainties, and important factors (many of which are beyond Granite Ridge’s control) that could cause actual results to differ materially from those set forth in the forward-looking statements, including the following: the ability to recognize the anticipated benefits of the business combination, Granite Ridge’s financial performance following the business combination, changes in Granite Ridge’s strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects and plans, changes in current or future commodity prices and interest rates, supply chain disruptions, infrastructure constraints and related factors affecting our properties, ability to acquire additional development opportunities or make acquisitions, changes in reserves estimates or the value thereof, operational risks including, but not limited to, the pace of drilling and completions activity on our properties, changes in the markets in which Granite Ridge competes, geopolitical risk and changes in applicable laws, legislation, or regulations, including those relating to environmental matters, cyber-related risks, the fact that reserve estimates depend on many assumptions that may turn out to be inaccurate and that any material inaccuracies in reserve estimates or underlying assumptions will materially affect the quantities and present value of the Granite Ridge’s reserves, the outcome of any known and unknown litigation and regulatory proceedings, legal and contractual limitations on the payment of dividends, limited liquidity and trading of Granite Ridge’s securities, acts of war, terrorism or uncertainty regarding the effects and duration of global hostilities, including the Israel-Gaza conflict, the Russia-Ukraine war, and any associated armed conflicts or related sanctions which may disrupt commodity prices and create instability in the financial markets, and market conditions and global, regulatory, technical, and economic factors beyond Granite Ridge’s control, including the potential adverse effects of the COVID-19 pandemic, or another major disease, affecting capital markets, general economic conditions, global supply chains and Granite Ridge’s business and operations, and increasing regulatory and investor emphasis on environmental, social and governance matters.

Granite Ridge has based these forward-looking statements on its current expectations and assumptions about future events. While management considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond Granite Ridge’s control. Granite Ridge does not undertake any duty to update or revise any forward-looking statements, except as may be required by the federal securities laws.

Use of Non-GAAP Financial Measures

To supplement the presentation of the Company’s financial results prepared in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”), this press release contains certain financial measures that are not prepared in accordance with GAAP, including adjusted net income, adjusted earnings per share, adjusted EBITDAX, operating cash flow before working capital changes, free cash flow and inventory acquisitions.

See “Supplemental Non-GAAP Financial Measures” below for a description and reconciliation of each non-GAAP measure presented in this press release to the most directly comparable financial measure calculated in accordance with GAAP.

INVESTOR RELATIONS AND MEDIA CONTACT: IR@GraniteRidge.com – (214) 396-2850

Granite Ridge Resources Inc.

Condensed Consolidated Balance Sheets

(Unaudited)


(in thousands, except par value and share data)	September 30, 2023		December 31, 2022
ASSETS
Current assets:
Cash	$	6,117	$	50,833
Revenue receivable	82,680		72,287
Advances to operators	11,104		8,908
Prepaid costs and other	450		4,203
Derivative assets - commodity derivatives	2,112		10,089

Total current assets	102,463		146,320
Property and equipment:
Oil and gas properties, successful efforts method	1,311,625		1,028,662
Accumulated depletion	(496,452)		(383,673)
Total property and equipment, net	815,173		644,989
Long-term assets:

Other long-term assets	2,978		3,468
Total long-term assets	2,978		3,468
Total assets	$	920,614	$	794,777
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accrued expenses	$	61,985	$	62,180
Other liabilities	3,454		1,523
Derivative liabilities - commodity derivatives	4,391		431


Total current liabilities	69,830		64,134
Long-term liabilities:
Long-term debt	85,000		—
Derivative liabilities - commodity derivatives	479		—
Derivative liabilities - common stock warrants	—		11,902
Asset retirement obligations	6,498		4,745
Deferred tax liability	108,627		91,592
Total long-term liabilities	200,604		108,239
Total liabilities	270,434		172,373
Stockholders' Equity:
Common stock, $0.0001 par value, 431,000,000 shares authorized, 136,053,725 and 133,294,897 issued at September 30, 2023 and December 31, 2022, respectively	14		13
Additional paid-in capital	610,982		590,232
Retained earnings	51,758		32,388
Treasury stock, at cost, 1,840,427 and 25,920 shares at September 30, 2023 and December 31, 2022, respectively	(12,574)		(229)
Total stockholders' equity	650,180		622,404
Total liabilities and stockholders' equity	$	920,614	$	794,777

Granite Ridge Resources Inc.

Condensed Consolidated Statements of Operations

(Unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands, except per share data)	2023		2022		2023		2022
Revenues:
Oil and natural gas sales	$	108,404	$	136,966	$	287,271	$	381,082
Operating costs and expenses:
Lease operating expenses	16,935		12,330		45,113		30,258
Production and ad valorem taxes	7,790		7,871		19,810		20,771
Depletion and accretion expense	44,267		36,567		113,088		84,096

Abandonments expense	1,560		—		1,560		—
General and administrative (including non-cash stock-based compensation of $379 and $1,813 for the three and nine months ended September 30, 2023)	5,249		2,708		21,839		7,747

Total operating costs and expenses	75,801		59,476		201,410		142,872
Net operating income	32,603		77,490		85,861		238,210
Other income (expense):
Gain (loss) on derivatives - commodity derivatives	(8,129)		3,071		6,415		(30,787)
Interest expense	(1,356)		(570)		(2,906)		(1,704)
Loss on derivatives - common stock warrants	(8)		—		(5,742)		—
Total other income (expense)	(9,493)		2,501		(2,233)		(32,491)
Income before income taxes	23,110		79,991		83,628		205,719
Income tax expense	5,153		—		20,068		—
Net income	$	17,957	$	79,991	$	63,560	$	205,719

Net income per share:
Basic	$	0.13	$	0.60	$	0.48	$	1.55
Diluted	$	0.13	$	0.60	$	0.48	$	1.55
Weighted-average number of shares outstanding:
Basic	134,396		132,923		133,426		132,923
Diluted	134,421		132,923		133,440		132,923

Granite Ridge Resources Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)


	Nine Months Ended September 30,
(in thousands)	2023		2022
Operating activities:
Net income	$	63,560	$	205,719
Adjustments to reconcile net income to net cash provided by operating activities:
Depletion and accretion expense	113,088		84,096

Abandonments expense	1,560		—
(Gain) loss on derivatives - commodity derivatives	(6,415)		30,787
Net cash receipts from (payments on) commodity derivatives	18,830		(40,006)
Stock-based compensation	1,813		—

Amortization of deferred financing costs	490		62
Loss on derivatives - common stock warrants	5,742		—
Deferred income taxes	17,069		—
Other	(146)		—
Increase (decrease) in cash attributable to changes in operating assets and liabilities:
Revenue receivable	(10,545)		(27,517)
Accrued expenses	2,627		4,932
Prepaid and other expenses	1,854		(6,703)
Other payable	3,165		(14)
Net cash provided by operating activities	212,692		251,356
Investing activities:
Capital expenditures for oil and natural gas properties	(237,138)		(143,923)
Acquisition of oil and natural gas properties	(49,427)		(32,858)

Refund of advances to operators	—		971
Proceeds from the disposal of oil and natural gas properties	60		747
Net cash used in investing activities	(286,505)		(175,063)
Financing activities:
Proceeds from borrowing on credit facilities	117,500		16,000
Repayments of borrowing on credit facilities	(32,500)		(67,100)

Cash contributions	—		84
Deferred financing costs	(28)		—
Payment of expenses related to formation of Granite Ridge Resources, Inc.	(43)		—
Purchase of treasury shares	(11,765)		—
Payment of dividends	(44,072)		—
Proceeds from issuance of common stock	5		—
Net cash provided by (used in) financing activities	29,097		(51,016)

Net change in cash and restricted cash	(44,716)		25,277
Cash and restricted cash at beginning of period	51,133		12,154
Cash and restricted cash at end of period	$	6,417	$	37,431

Supplemental disclosure of non-cash investing activities:
Oil and natural gas property development costs in accrued expenses	$	(13,068)	$	17,326
Advances to operators applied to development of oil and natural gas properties	$	88,463	$	55,775
Cash and restricted cash:
Cash	$	6,117	$	37,131
Restricted cash included in other long-term assets	300		300
Cash and restricted cash	$	6,417	$	37,431

Granite Ridge Resources Inc.

Summary Production and Price Data

The following table sets forth summary information concerning production and operating data for the periods indicated:


	Three months ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Net Sales (in thousands):
Oil sales	$	88,210	$	79,051	$	230,755	$	251,088
Natural gas sales	20,194		57,915		56,516		129,994
Total revenues	108,404		136,966		287,271		381,082

Net Production:
Oil (MBbl)	1,125		999		3,038		2,610
Natural gas (MMcf)	7,841		6,158		20,643		15,461
Total (MBoe)(1)	2,432		2,025		6,479		5,187
Average Daily Production:
Oil (Bbl)	12,228		10,859		11,128		9,560
Natural gas (Mcf)	85,228		66,935		75,615		56,634
Total (Boe)(1)	26,433		22,015		23,731		18,999

Average Sales Prices:
Oil (per Bbl)	$	78.41	$	79.13	$	75.96	$	96.20
Effect of gain (loss) on settled oil derivatives on average price (per Bbl)	0.11		(6.95)		1.29		(8.88)
Oil net of settled oil derivatives (per Bbl) (2)	78.52		72.18		77.25		87.32

Natural gas sales (per Mcf)	2.58		9.40		2.74		8.41
Effect of gain (loss) on settled natural gas derivatives on average price (per Mcf)	0.55		(1.32)		0.72		(1.09)
Natural gas sales net of settled natural gas derivatives (per Mcf) (2)	3.13		8.08		3.46		7.32

Realized price on a Boe basis excluding settled commodity derivatives	44.57		67.64		44.34		73.47
Effect of gain (loss) on settled commodity derivatives on average price (per Boe)	1.82		(7.46)		2.91		(7.71)
Realized price on a Boe basis including settled commodity derivatives (2)	46.39		60.18		47.25		65.76

Operating Expenses (in thousands):
Lease operating expenses	$	16,935	$	12,330	$	45,113	$	30,258
Production and ad valorem taxes	7,790		7,871		19,810		20,771
Depletion and accretion expense	44,267		36,567		113,088		84,096
General and administrative	5,249		2,708		21,839		7,747
Costs and Expenses (per Boe):
Lease operating expenses	$	6.96	$	6.09	$	6.96	$	5.83
Production and ad valorem taxes	3.20		3.89		3.06		4.00
Depletion and accretion	18.20		18.06		17.45		16.21
General and administrative	2.16		1.34		3.37		1.49

Net Producing Wells at Period-End:	175.24		123.84		175.24		123.84
(1)Natural gas is converted to Boe using the ratio of one barrel of oil to six Mcf of natural gas. (2)The presentation of realized prices including settled commodity derivatives is a result of including the net cash receipts from (payments on) commodity derivatives that are presented in our condensed consolidated statements of cash flows. This presentation of average prices with derivatives is a means by which to reflect the actual cash performance of our commodity derivatives for the respective periods and presents oil and natural gas prices with derivatives in a manner consistent with the presentation generally used by the investment community.

Granite Ridge Resources Inc.

Derivatives Information

The table below provides data associated with the Company’s derivatives at November 9, 2023, for the periods indicated:


	2023		2024		2025
	Total		Total		Total
Producer 3-way (oil)
Volume (Bbl)	208,488		—		—
Weighted-average sub-floor price ($/Bbl)	$	60.43	$	—	$	—
Weighted-average floor price ($/Bbl)	$	80.00	$	—	$	—
Weighted-average ceiling price ($/Bbl)	$	101.92	$	—	$	—
Collar (oil)
Volume (Bbl)	371,304		1,536,446		273,000
Weighted-average floor price ($/Bbl)	$	67.49	$	64.24	$	63.00
Weighted-average ceiling price ($/Bbl)	$	88.14	$	85.07	$	82.70
Swaps (oil)
Volume (Bbl)	—		181,000		—
Weighted-average price ($/Bbl)	$	—	$	80.00	$	—





Collar (natural gas)
Volume (Mcf)	3,746,650		5,471,000		2,156,000
Weighted-average floor price ($/Mcf)	$	3.72	$	3.14	$	3.59
Weighted-average ceiling price ($/Mcf)	$	5.37	$	4.71	$	5.39
Swaps (natural gas)
Volume (Mcf)	—		6,903,000		450,000
Weighted-average price ($/Mcf)	$	—	$	3.22	$	3.68

Granite Ridge Resources Inc.

Supplemental Non-GAAP Financial Measures

The Company reports its financial results in accordance with GAAP. However, the Company believes certain non-GAAP performance measures may provide financial statement users with additional meaningful comparisons between current results, the results of its peers and the results of prior periods. In addition, the Company believes these measures are used by analysts and others in the valuation, rating and investment recommendations of companies within the oil and natural gas exploration and production industry. See the reconciliations throughout this release of GAAP financial measures to non-GAAP financial measures for the periods indicated.

Reconciliation of Net Income to Adjusted EBITDAX

Adjusted EBITDAX (as defined below) is presented herein and reconciled from the GAAP measure of net income because of its wide acceptance by the investment community as a financial indicator.

The Company defines adjusted EBITDAX as net income, before (1) abandonments expense, (2) depletion and accretion expense, (3) (gain) loss on derivatives – commodity derivatives, (4) net cash receipts from (payments on) commodity derivatives, (5) interest expense (6) (gain) loss on derivatives – common stock warrants (7) non-cash stock-based compensation (8) warrant exchange transaction costs and (9) income tax expense. Adjusted EBITDAX is not a measure of net income or cash flows as determined by GAAP.

The Company’s adjusted EBITDAX measure provides additional information that may be used to better understand the Company’s operations. Adjusted EBITDAX is one of several metrics that the Company uses as a supplemental financial measurement in the evaluation of its business and should not be considered as an alternative to, or more meaningful than, net income as an indicator of operating performance. Certain items excluded from adjusted EBITDAX are significant components in understanding and assessing a company’s financial performance, such as a company’s cost of capital and tax structure, as well as the historic cost of depreciable and depletable assets. Adjusted EBITDAX, as used by the Company, may not be comparable to similarly titled measures reported by other companies. The Company believes that adjusted EBITDAX is a widely followed measure of operating performance and is one of many metrics used by the Company’s management team and by other users of the Company’s consolidated financial statements. For example, adjusted EBITDAX can be used to assess the Company’s operating performance and return on capital in comparison to other independent exploration and production companies without regard to financial or capital structure, and to assess the financial performance of the Company’s assets and the Company without regard to capital structure or historical cost basis.

The following table provides a reconciliation of the GAAP measure of net income to adjusted EBITDAX for the periods indicated:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2023		2022		2023		2022
Net income	$	17,957	$	79,991	$	63,560	$	205,719
Interest expense	1,356		570		2,906		1,704
Income tax expense	5,153		—		20,068		—
Abandonments expense	1,560		—		1,560		—
Depletion and accretion expense	44,267		36,567		113,088		84,096
Non-cash stock-based compensation	379		—		1,813		—

Warrant exchange transaction costs	—		—		2,456		—
(Gain) loss on derivatives - commodity derivatives	8,129		(3,071)		(6,415)		30,787
Net cash receipts from (payments on) commodity derivatives	4,419		(15,099)		18,830		(40,006)
Loss on derivatives - common stock warrants	8		—		5,742		—
Adjusted EBITDAX	$	83,228	$	98,958	$	223,608	$	282,300

Reconciliation of Net Cash Provided by Operating Activities to Operating Cash Flow Before Working Capital Changes and to Free Cash Flow

The Company provides Operating Cash Flow (“OCF”) before working capital changes, which is a non-GAAP financial measure. OCF before working capital changes represents net cash provided by operating activities as determined under GAAP without regard to changes in operating assets and liabilities. The Company believes OCF before working capital

changes is an accepted measure of an oil and natural gas company’s ability to generate cash used to fund development and acquisition activities and service debt or pay dividends. Additionally, the Company provides free cash flow, which is a non-GAAP financial measure. Free cash flow is cash flow from operating activities before changes in working capital in excess of exploration and development costs incurred. The Company believes that free cash flow is useful to investors as it provides measures to compare cash from operating activities and exploration and development costs across periods on a consistent basis.

These non-GAAP measures should not be considered as alternatives to, or more meaningful than, net cash provided by operating activities as indicators of operating performance.

The following tables provide a reconciliation from the GAAP measure of net cash provided by operating activities to OCF before working capital changes and to free cash flow:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2023		2022		2023		2022
Net cash provided by operating activities	$	57,032	$	114,046	$	212,692	$	251,356
Changes in cash due to changes in operating assets and liabilities:
Revenue receivable	27,147		(19,738)		10,545		27,517
Accrued expenses	(1,155)		(1,220)		(2,627)		(4,932)
Prepaid and other expenses	(904)		5,174		(1,854)		6,703
Other payable	(2,832)		167		(3,165)		14
Total working capital changes	22,256		(15,617)		2,899		29,302
Operating cash flow before working capital changes	79,288		98,429		215,591		280,658
Development costs	75,726		59,898		233,071		164,923
Free cash flow	$	3,562	$	38,531	$	(17,480)	$	115,735

Reconciliation of Net Income to Adjusted Net Income and Adjusted Earnings per Share

The Company’s presentation of adjusted net income and adjusted earnings per share that exclude the effect of certain items are non-GAAP financial measures. Adjusted net income and adjusted earnings per share represent earnings and diluted earnings per share determined under GAAP without regard to certain non-cash and nonrecurring items. The Company believes these measures provide useful information to analysts and investors for analysis of its operating results on a recurring, comparable basis from period to period. Adjusted net income and adjusted earnings per share should not be considered in isolation or as a substitute for earnings or diluted earnings per share as determined in accordance with GAAP and may not be comparable to other similarly titled measures of other companies.

The following table provides a reconciliation from the GAAP measure of net income to adjusted net income, both in total and on a per diluted share basis, for the periods indicated:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands, except share data)	2023		2022		2023		2022
Net income	$	17,957	$	79,991	$	63,560	$	205,719

(Gain) loss on derivatives - commodity derivatives	8,129		(3,071)		(6,415)		30,787
Net cash receipts from (payments on) commodity derivatives	4,419		(15,099)		18,830		(40,006)
Loss on derivatives - common stock warrants	8		—		5,742		—
Warrant exchange transaction costs	—		—		2,456		—
Tax impact on above adjustments (a)	(2,850)		—		(4,679)		—
Changes in deferred taxes and other estimates	32		—		1,223		—
Adjusted net income	$	27,695	$	61,821	$	80,717	$	196,500

Earnings per diluted share - as reported	$	0.13	$	0.60	$	0.48	$	1.55

(Gain) loss on derivatives - commodity derivatives	0.06		(0.02)		(0.05)		0.23
Net cash receipts from (payments on) commodity derivatives	0.03		(0.11)		0.14		(0.30)
Loss on derivatives - common stock warrants	—		—		0.04		—
Warrant exchange transaction costs	—		—		0.02		—
Tax impact on above adjustments (a)	(0.01)		—		(0.04)		—
Changes in deferred taxes and other estimates	—		—		0.01		—
Adjusted earnings per diluted share	$	0.21	$	0.47	$	0.60	$	1.48
Adjusted earnings per share:
Basic earnings	$	0.21	$	0.47	$	0.60	$	1.48
Diluted earnings	$	0.21	$	0.47	$	0.60	$	1.48
(a) Estimated using statutory tax rate in effect for the period.

Reconciliation of Total Costs Incurred for Oil and Natural Gas Properties to Inventory Acquisitions

The Company defines inventory acquisitions as costs incurred to acquire additional development opportunities and undeveloped acreage acquisitions and excludes producing property acquisition costs. The Company believes that inventory acquisitions are useful to investors as they provide a measure of Company’s costs incurred for current and future drilling opportunities on a consistent basis.

The following table provides a reconciliation from the GAAP measure of total costs incurred for oil and natural gas properties to inventory acquisitions:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2023		2022		2023		2022
Property acquisition costs:
Proved	$	8,161	$	4,251	$	27,459	$	12,206
Unproved	11,262		7,864		24,053		20,653
Development costs	75,726		59,898		233,071		164,923
Total costs incurred for oil and natural gas properties	95,149		72,013		284,583		197,782
Less: Development costs (excluding drilling carry)	(75,049)		(46,394)		(222,230)		(139,969)
Less: Production acquisitions	(8,161)		—		(26,150)		(560)
Inventory acquisitions (non-GAAP)	$	11,939	$	25,619	$	36,203	$	57,253

Cover Page	Nov. 07, 2023
Cover [Abstract]
Document Type	8-K
Document Period End Date	Nov. 07, 2023
Entity Registrant Name	GRANITE RIDGE RESOURCES, INC.
Entity Incorporation, State or Country Code	DE
Entity File Number	001-41537
Entity Tax Identification Number	88-2227812
Entity Address, Address Line One	5217 McKinney Avenue
Entity Address, Address Line Two	Suite 400
Entity Address, City or Town	Dallas
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	75205
City Area Code	214
Local Phone Number	396-2850
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common stock, par value $0.0001 per share
Trading Symbol	GRNT
Security Exchange Name	NYSE
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Central Index Key	0001928446
Amendment Flag	false