HighPeak Energy Reports $95.1 Million Net Income for 2024, Down from $215.9 Million in 2023

HighPeak Energy, Inc. reported net income of $95.1 million ($0.67 per diluted share) for the year ended December 31, 2024, a decrease of $120.8 million compared to the $215.9 million reported in 2023. This decrease primarily resulted from a $76.3 million increase in depletion, depreciation, and amortization (DD&A) expense due to higher sales volumes and a higher DD&A rate, a $74.1 million increase in net derivative instrument losses, and a $41.9 million decrease in crude oil, NGL, and natural gas revenues due to lower average realized commodity prices, partially offset by higher sales volumes. Increased interest expense, general and administrative expenses, and production taxes also contributed to the decline in net income.

Significant changes compared to the previous fiscal year include a 10% increase in average daily sales volumes to 49,960 Boepd, driven by the company's horizontal drilling program. However, weighted average realized crude oil prices decreased by 2% to $76.42 per barrel (excluding derivatives), while weighted average realized natural gas prices decreased by 69% to $0.49 per Mcf. The company's cash provided by operating activities decreased by 9% to $690.4 million. In September 2023, HighPeak completed a debt refinancing, securing a $1.2 billion term loan and a $100 million senior revolving credit facility, both maturing in 2026.

During 2024, HighPeak Energy drilled 51 productive development wells and 18 productive exploratory/extension wells. The company also completed a crude oil marketing agreement with Delek, committing to minimum delivery volumes of 23,500 Bopd for ten years, although excess volumes can offset this commitment. As of December 31, 2024, HighPeak Energy held approximately 154,368 gross (141,907 net) acres, with approximately 64% held by production. The company employed 47 full-time employees. The company's estimated proved reserves increased to 198,998 MBoe as of December 31, 2024, from 154,162 MBoe in 2023 and 122,958 MBoe in 2022.

HighPeak Energy's 2025 capital expenditure plan anticipates $448 to $490 million in spending, to be funded through cash on hand, cash flow from operations, borrowings under the senior credit facility, and potential future debt or equity offerings. The company's strategic alternatives review process, which includes a potential sale of the business, is ongoing. The company noted several risk factors, including commodity price volatility, capital expenditure requirements, debt obligations, regulatory changes, geopolitical instability, and competition. The company also highlighted the uncertainties inherent in reserve estimations and the potential for future impairments.