GRNT

Granite Ridge is a non-operated/operated E&P built as an energy-PE-style distribution vehicle across six basins. FY2025 headline growth flatters the story: revenue rose 18.5% to $450M and net income rose to $24.4M, but that was driven almost entirely by a 31% jump in oil production (and Permian ramp), not price. The MD&A shows realized oil fell 16% to $61.63/Bbl and the company is running production hard to offset natural decline. Beneath the volume growth, unit economics deteriorated — LOE rose to $7.27/Boe from $6.29, depletion and G&A both climbed, and the company booked $44.7M of impairments, dragging operating income down 21.7% even as revenue grew. That's the classic late-cycle E&P squeeze: more barrels at lower prices and higher costs.

The balance sheet is the sharper concern. Long-term debt jumped 86.6% to $383M to fund acquisitions and drilling, cash sits at just $14.8M, and retained earnings are a $17.3M deficit. Meanwhile the company paid $57.7M in dividends — more than double its $24.4M of net income — implying a ~10% yield at $4.42 that is comfortably covered by the $296M of operating cash flow but NOT by earnings, and increasingly leaning on the balance sheet. That's sustainable while oil holds and cash flow is strong, but it leaves little margin if commodity prices weaken further.