We believe that a quarterly cash dividend is the cornerstone of a sustainable and resilient business model. Therefore, we plan to prioritize this practice. In addition to fixed dividends, we also return capital through stock buybacks and responsible growth. We work with active operators focused on production growth, while taking care not to flood the market through our investments. Our fixed cost structure has minimal overhead costs — and our highly scalable model allows us to grow without significantly increasing those costs. As a result, we are able to return capital to shareholders on an ongoing basis.

As a non-operator, we lean heavily on our operating partners. By building relationships across multiple disciplines and seeking creative opportunities to be a value-added partner, we can often access more timely data, while mitigating timing and development challenges inherent in non-operating environments. Environmental stewardship is another important aspect of our partnerships. As a non-operator, we seek to partner with operators that have a proven history of responsible environmental policies and practices. In addition to the ethical drivers that motivate this approach, it is also a prudent business decision. If an operator with poor ESG standards loses the social license to operate, we may end up with stranded inventory. Investors care deeply about ESG, and so do we.

Our people are the lifeblood of our organization. We recruit talented people who have the ability and desire to make a positive impact on an organization, but may have been restricted by the bureaucracy of larger companies. We then encourage and incentivize our team to develop and implement ideas that make Granite Ridge better. By empowering, supporting and rewarding our people, we make Granite Ridge a great place to work.

As an owner in over 2,350 gross wells, managed by 60 operators, across seven states and 36 counties or parishes, we have access to an immense amount of data. We continually invest both human and financial capital to further develop our proprietary information systems and make better investment decisions faster. In addition to leveraging data, we also continually analyze the market and adapt as needed. Change is the only constant in the oil and gas industry — and whether it comes from technology, macroeconomic events, political dynamics or investor sentiment, it requires companies to adapt. With a diversified asset base and no long-term contracts or drilling obligations, our business is built to maximize adaptability.  

While we evaluate marketed assets, we typically find higher risk-adjusted returns from aggregating multiple smaller transactions, as opposed to buying larger marketed packages. As such, we seek to capture opportunities at attractive entry costs by targeting non-marketed packages and developing creative partnerships. 

While we cannot eliminate commodity price risk, we do seek to reduce volatility. One strategy we employ is entering into hedging derivative instruments tied to the price of oil or natural gas. We also actively pursue diversification across hydrocarbon, basin, and operator, including both public and private companies. This allows us to mitigate price swings specific to any particular area, company or contract. Our non-operated strategy of investing in a smaller portion of a larger number of high-graded wells allows us to build a diverse portfolio of upstream oil and gas assets across the U.S., capturing accretive opportunities with upside. We focus on investments with high-graded drilling inventory and the potential for gradual growth, rather than simply buying properties based on current production. While development offers a wider range of outcomes, we mitigate risk by partnering with experienced operators in proven areas, because we believe drilling offers superior risk-adjusted returns.

Prudent balance sheet management is a core tenet of risk management and value creation at Granite Ridge. In a challenging commodity price environment, we strive to maintain liquidity, capitalize on accretive opportunities, and stay comfortably within credit covenants across commodity price cycles.