HighPeak Energy Q1 2025 Results (Amended)

HighPeak Energy’s Strategic Moves: Navigating the Future of Oil and Gas

HighPeak Energy, a key player in the oil and gas sector, recently announced its first-quarter 2025 financial and operating results, signaling critically important strategic shifts. With increased production guidance and a focus on operational efficiency, how is HighPeak positioning itself for long-term success amidst global economic uncertainties? Let’s delve into the details of HighPeak’s performance and explore the potential future trends shaping the industry.

First Quarter 2025: A Snapshot of Success

The first quarter of 2025 proved fruitful for HighPeak Energy, showcasing impressive growth and strategic advancements. Sales volumes averaged approximately 53.1 thousand barrels of crude oil equivalent per day (MBoe/d), marking a 6% increase from the previous quarter. This surge in production underscores the company’s enhanced operational capabilities and its ability to capitalize on market demands.

Net income reached $36.3 million, or $0.26 per diluted share, while EBITDAX (Earnings Before Interest, Taxes, Depreciation, Amortization, and Exploration expenses) stood at $197.3 million, or $1.40 per diluted share. Adjusted net income was $42.7 million, or $0.31 per diluted share. These figures highlight HighPeak’s financial strength and its proficiency in managing costs effectively.

Did You Know? According to the U.S. Energy Details Governance (EIA), the global demand for oil is projected to increase in the coming years, driven by economic growth in developing nations. highpeak’s strategic positioning allows it to tap into this growing market.

Efficiency Gains and Cost Management

One of HighPeak’s key achievements was the reduction of lease operating expenses, which averaged $6.61 per Boe, excluding workover expenses—a 3% decrease compared to the fourth quarter of 2024. This advancement reflects the company’s commitment to optimizing its operations and reducing costs, enabling it to maintain profitability even during periods of price volatility.

The company also generated free cash flow of $10.7 million, reduced long-term debt by $30 million, and paid $0.04 per share in dividends. These actions demonstrate HighPeak’s dedication to financial discipline and shareholder value.

Drilling and Completion Efficiency

HighPeak realized significant gains in drilling and completion efficiency, allowing it to drill and complete four additional wells during the first quarter. This achievement is a testament to the company’s technological advancements and its ability to streamline operations.

Pro Tip: Investing in advanced drilling technologies can substantially reduce operational costs and increase production efficiency. companies should explore innovative solutions to stay competitive in the oil and gas industry.

updated Production Guidance and Future Outlook

Recent events include a narrowed 2025 production guidance range,with an increased midpoint. On May 12, 2025, the Company’s Board of Directors declared a quarterly dividend of $0.04 per common share outstanding, payable in June 2025.These strategic decisions reflect HighPeak’s confidence in its future performance and its commitment to delivering value to shareholders.

According to Jack Hightower, Chairman and CEO, HighPeak’s four pillars of success for 2025 include improving corporate efficiency, maintaining capital discipline, optimizing the capital structure, and delivering shareholder value. These pillars guide the company’s strategic decisions and ensure its long-term sustainability.

Maintaining Capital Discipline Amidst Uncertainty

In response to global economic uncertainty and its impact on oil prices, HighPeak has moderated its advancement program by laying down one rig for four months, from May through August. Despite this pause, the company remains on track to drill and complete the same number of wells in its 2025 guidance, thanks to the gains made through operational efficiencies.

This proactive approach demonstrates highpeak’s ability to adapt to changing market conditions and maintain capital discipline. The company’s flexibility allows it to adjust its budget and operations as needed, ensuring it remains resilient in the face of volatility.

Optimizing Capital Structure for Long-Term Growth

HighPeak remains committed to optimizing its capital structure and is poised to execute its plan once the market stabilizes. The company is in a healthy financial position with no near-term debt maturities and is taking proactive steps to keep its balance sheet strong.

This financial stability provides HighPeak with the flexibility to pursue strategic opportunities and invest in long-term growth initiatives. By maintaining a strong balance sheet, the company can weather economic downturns and emerge even stronger.

Shareholder Value and Asset Strength

Given the current global macro-economic backdrop, HighPeak emphasizes the importance of remaining nimble and prudent, which its high-quality asset base allows. Management, as large owners of the Company, is fully aligned with shareholders and has a long-term outlook on value creation.

while markets might potentially be volatile, the essential value of HighPeak’s asset base remains strong, providing a solid foundation for future growth and profitability.

Operational Update: Sales volumes and Drilling Activities

HighPeak’s sales volumes during the first quarter of 2025 averaged 53.1 MBoe/d, a six percent increase over the fourth quarter of 2024. First quarter sales volumes consisted of approximately 72% crude oil and 86% liquids.

The Company averaged two drilling rigs and one frac crew during the first quarter, drilled 16 gross (16.0 net) horizontal wells and turned-in-line 13 gross (12.9 net) producing wells. On March 31, 2025, the Company had 28 gross (28.0 net) horizontal wells in various stages of drilling and completion.

The company updated its 2025 production guidance range to 48,000 – 50,500 Boe/d.

Financial Results: Net Income and EBITDAX

HighPeak reported net income of $36.3 million for the first quarter of 2025, or $0.26 per diluted share, and EBITDAX of $197.3 million, or $1.40 per diluted share. HighPeak reported adjusted net income of $42.7 million for the first quarter of 2025, or $0.31 per diluted share.

First quarter average realized prices were $71.64 per Bbl of crude oil,$24.21 per Bbl of NGL and $2.34 per Mcf of natural gas, resulting in an overall realized price of $53.84 per Boe, or 75% of the weighted average of NYMEX crude oil prices, excluding the effects of derivatives.

Cash Costs and Capital Expenditures

HighPeak’s cash costs for the first quarter were $11.94 per Boe, including lease operating expenses of $6.61 per boe, workover expenses of $0.83 per Boe, production and ad valorem taxes of $3.17 per Boe and G&A expenses of $1.33 per Boe. As a result, the Company’s unhedged EBITDAX per Boe was $41.90 per Boe, or 78% of the overall realized price per Boe for the quarter, excluding the effects of derivatives.

HighPeak’s first quarter 2025 capital expenditures to drill,complete,equip,provide facilities and for infrastructure were $179.8 million.

Hedging Strategies

As of March 31, 2025, HighPeak had outstanding crude oil derivative instruments with weighted average crude oil prices and premiums payable per Bbl. These hedging strategies help the company mitigate price volatility and ensure stable revenues.

Effective hedging can protect producers from market downturns, providing a safety net during periods of low prices. Companies should carefully consider their hedging strategies to optimize their financial performance.

Did You Know? hedging involves the use of financial instruments like futures contracts to protect against price fluctuations. It’s a common practice in the oil and gas industry to manage risk.

Key Metrics at a Glance

The table below summarizes key metrics from HighPeak Energy’s first quarter 2025 results:

Metric	Value	Change from Q4 2024
Sales Volumes	53.1 MBoe/d	+6%
Net Income	$36.3 Million	N/A
EBITDAX	$197.3 Million	N/A
Lease Operating Expenses	$6.61 per Boe	-3%
Capital Expenditures	$179.8 Million	N/A

Reader Engagement

What strategies do you think HighPeak Energy should prioritize to enhance its long-term financial health and operational efficiency? How might global events impact HighPeak’s strategic decisions and future performance?

Frequently Asked Questions (FAQs)

Q: What is EBITDAX?

A: EBITDAX stands for Earnings Before Interest, Taxes, Depreciation, Amortization, and Exploration expenses. It is a non-GAAP financial measure used to assess a company’s operating performance.

Q: What is HighPeak Energy’s production guidance for 2025?

A: HighPeak Energy updated its 2025 production guidance range to 48,000 – 50,500 Boe/d.

Q: How is HighPeak Energy managing capital discipline?

A: HighPeak Energy is moderating its development program by laying down one rig for four months in response to global economic uncertainty.

Given the recent sales volume increase and efficiency gains,what are the key risks HighPeak energy faces in maintaining this momentum in the near future?

HighPeak Energy’s Strategic Moves: An Interview with Financial Analyst,Evelyn Reed

Welcome to Archyde News. Today, we have the pleasure of speaking with Evelyn reed, a seasoned financial analyst specializing in the energy sector. Evelyn, thank you for joining us.

Evelyn Reed: Thank you for having me.

First Quarter Performance and Strategic Shifts

Archyde: HighPeak Energy recently released its first-quarter 2025 results, showcasing significant strategic moves.Sales volumes increased, and they are achieving efficiency gains. What are your initial thoughts on these results, and how do they position HighPeak in the current market, evelyn?

Evelyn Reed: The first quarter results are quite encouraging. The 6% increase in sales volumes, coupled with the reduction in lease operating expenses, signals effective operational execution. HighPeak is demonstrating its ability to manage costs and capitalize on market demands. they are focusing on generating free cash flow while paying down debt, crucial for long-term resilience.

Efficiency and Cost Management Insights

Archyde: HighPeak highlighted a 3% decrease in lease operating expenses. How significant is this, and what does it say about their operational strategy?

Evelyn Reed: That’s a very positive sign. Lease operating expenses often make up a significant portion of overall costs. This reduction shows HighPeak’s commitment to optimizing its operations. It also gives them more flexibility to adapt to fluctuating oil prices by maintaining profitability.

Capital discipline in an Uncertain Market

Archyde: Given the current global economic uncertainties, HighPeak has decided to moderate its development program. How effective is this approach in these volatile times?

Evelyn Reed: Moderating the development program is a pragmatic move,demonstrating their commitment to capital discipline. By laying down a rig for four months, HighPeak is adjusting to market conditions. They can maintain their well completion targets due to the increase in efficiency. It shows a proactive approach in managing risk. This approach allows HighPeak to remain flexible, preserving capital, and ensuring its financial strength.

Optimizing Capital Structure and Shareholder Value

Archyde: The company is focused on both optimizing its capital structure and delivering shareholder value. How do these strategies align with the current industry outlook?

Evelyn Reed: Both initiatives are very important. Optimizing its capital structure, including managing debt and maintaining a healthy balance sheet, provides stability. This is crucial in a volatile market. Simultaneously returning dividends and paying down debt, enhances shareholder value reflects HighPeak’s long-term outlook. This approach builds investor confidence and ensures long-term sustainability.

Future Outlook and Strategic Pillars

Archyde: HighPeak’s Chairman and CEO, Jack Hightower, mentioned four pillars of success. How do these pillars help the path forward, specifically improving corporate efficiency, maintaining capital discipline, optimizing the capital structure, and delivering shareholder value?

Evelyn Reed: These pillars form a solid foundation for future growth. Improving corporate efficiency involves enhancing operational processes and cutting costs. Maintaining capital discipline involves managing spending and adapting to the market conditions. Optimizing the capital structure is about managing debt to retain financial flexibility. Delivering shareholder value, via dividends, reflects a long-term perspective. Together, these pillars help the company improve performance and adapt to the current market.

Investment Strategies and Industry Insights

Archyde: from a financial perspective, what’s essential for highpeak to consider moving forward, given the global macro-economic conditions and its production guidance?

Evelyn Reed: HighPeak must remain nimble and prudent. this includes closely monitoring market conditions and adjusting drilling and completion activities as necessary. Further exploration in efficiency gains and technological advancements woudl be beneficial. a good hedging strategy to mitigate any price volatility.

Analysis of Sales Volumes and Financial metrics

Archyde: The report mentions sales volumes averaging 53.1 MBoe/d in the first quarter of this year. How significant is the increase from the previous quarter, and what factors could have contributed to this growth?

Evelyn Reed: A 6% increase in sales volume is important.this likely involves increased production capacity and the company’s ability to streamline operations,as well as benefiting from the overall increase in oil and gas demand.

Reader Engagement and Final Thoughts

Archyde: Evelyn, thank you for sharing your insightful perspectives.what are your thoughts concerning HighPeak’s potential strategic focus to refine the firm’s operational efficiency, long-term financial health?

Evelyn Reed: HighPeak should prioritize improving their operational efficiency, further strengthening fiscal discipline, and capital allocation strategies. They must ensure their balance sheet is robust and is in a position to capitalize on opportunities as they come. With a focus on shareholder value, HighPeak is well-positioned to navigate the uncertainties.

Archyde: Thank you again, Evelyn.

Evelyn Reed: My pleasure.

Archyde: what strategies do you think HighPeak Energy should prioritize to enhance its long-term financial health and operational efficiency, given the global events impacting the oil and gas market? Share your thoughts in the comments below.