HighPeak Energy Inc (HPK, Financial) announced its financial and operating results for the third quarter ended September 30, 2023, on November 6, 2023. The company reported a transformational quarter, with significant increases in production and sales volumes, and the generation of positive free cash flow.
Operational and Financial Highlights
HighPeak's sales volumes during Q3 2023 averaged 52,708 Boe/d, a 25% increase compared to Q2 2023. The company's CEO, Jack Hightower, stated,
We achieved a production milestone of over 50,000 barrels per day which is proof of the high quality of our asset base. Not only did we unlock significant value through increased production, but we also started generating positive free cash flow, a vital sign of our financial health."
The company reported net income of $38.8 million for Q3 2023, or $0.28 per diluted share, and EBITDAX of $266.2 million, or $1.90 per diluted share. HighPeak's cash costs for the third quarter were $13.53 per Boe, and the company's cash margin was $57.74 per Boe.
Refinancing and Hedging
On September 12, 2023, HighPeak completed a $1.2 billion term loan financing, which was used to fully repay the company’s outstanding borrowings of $1.0 billion associated with its prior senior notes and reserve-based credit facility. This comprehensive refinancing streamlines the company’s capitalization, extends its debt maturities to September 30, 2026, and provides long-term liquidity and flexibility to support the company’s strategic plan.
As of September 30, 2023, HighPeak had several outstanding crude oil derivative instruments, providing a measure of protection against price volatility.
Dividends and Future Plans
During Q3 2023, HighPeak’s Board of Directors approved a quarterly dividend of $0.025 per share, or $3.2 million in dividends paid to stockholders during the quarter. The company's primary objectives for the future include generating free cash flow, reducing debt levels significantly, ensuring a net debt to EBITDA ratio well below one turn, and enhancing the return of capital to shareholders.
HighPeak Energy Inc (HPK, Financial) continues to demonstrate strong operational performance and financial stability, making it a company to watch in the energy sector.
Explore the complete 8-K earnings release (here) from HighPeak Energy Inc for further details.
