Granite Ridge Resources Q2 2026 Results: Net Income Up 20% YoY to $30.0M
Granite Ridge Resources reported Q2 2026 net income of $30.0 million ($0.23 per diluted share), up from $25.1 million ($0.19 per diluted share) in Q2 2025, on oil and natural gas sales of $149.3 million. Adjusted EBITDAX (non-GAAP) rose to $79.6 million from $75.4 million year-over-year, while daily production grew 1% to 32,044 Boe per day. Capital expenditures totaled $95.2 million, and the Board declared a quarterly dividend of $0.11 per share payable September 14, 2026. Full-year 2026 production guidance is set at 34,000–36,000 Boe per day, with total capital expenditures guided at $345–$385 million.
*this image is generated using AI for illustrative purposes only.
Granite Ridge Resources, Inc. reported financial and operating results for the second quarter of 2026, delivering net income of $30.0 million, or $0.23 per diluted share, compared to $25.1 million, or $0.19 per diluted share, in the second quarter of 2025. Oil and natural gas sales for the quarter were $149.3 million, and Adjusted EBITDAX (non-GAAP) totaled $79.6 million, up from $75.4 million in the prior year period. The company also declared a quarterly cash dividend of $0.11 per share, payable on September 14, 2026 to shareholders of record as of August 28, 2026.
Second Quarter 2026 Financial Highlights
The following table summarizes key financial and operating metrics for the second quarter of 2026 compared to the second quarter of 2025:
| Metric: | Q2 2026 | Q2 2025 |
|---|---|---|
| Oil and natural gas sales: | $149.3 million | $109.2 million |
| Net income: | $30.0 million | $25.1 million |
| Net income per diluted share: | $0.23 | $0.19 |
| Adjusted Net Income (non-GAAP): | $11.1 million | — |
| Adjusted Earnings Per Diluted Share (non-GAAP): | $0.09 | — |
| Adjusted EBITDAX (non-GAAP): | $79.6 million | $75.4 million |
| Cash flow from operating activities: | $55.6 million | — |
| Operating Cash Flow Before Working Capital Changes (non-GAAP): | $69.5 million | — |
| Daily production (Boe/day): | 32,044 | 31,576 |
| Net Debt to TTM Adjusted EBITDAX: | 1.4x | — |
| Dividend per share: | $0.11 | — |
Cash flow from operating activities was $55.6 million for the quarter, including $14.0 million in working capital changes. Operating Cash Flow Before Working Capital Changes (non-GAAP) was $69.5 million.
Production and Pricing
Second quarter 2026 daily production grew 1% year-over-year to 32,044 barrels of oil equivalent ("Boe") per day, with oil comprising 51% of volumes. Oil production averaged 16,341 barrels ("Bbls") per day, a 2% increase from the second quarter of 2025, while natural gas production totaled 94,220 thousand cubic feet ("Mcf") per day, a 1% increase from the prior year period.
The company's average realized price for oil, excluding the effect of commodity derivatives, was $93.93 per Bbl in the second quarter of 2026, compared to $61.41 per Bbl in the second quarter of 2025. The average realized natural gas price was $1.12 per Mcf, compared to $2.32 per Mcf in the prior year period.
Operating Costs
Lease operating expenses were $30.0 million in the second quarter of 2026, or $10.27 per Boe, a 47% increase on a per unit basis compared to the second quarter of 2025. The increase was attributed to higher saltwater disposal costs resulting from increased water cuts and flowback operations, surface equipment rentals, and contract labor. Production and ad valorem taxes were $9.3 million for the quarter, representing 6% of oil and natural gas sales. General and administrative expenses totaled $9.2 million, or $3.14 per Boe, inclusive of $1.3 million of non-cash stock-based compensation.
Capital Expenditures and Operational Activity
Capital expenditures for the quarter totaled $95.2 million, comprising $78.5 million of drilling and completions capital and $16.7 million of property acquisition costs. The company closed 27 acquisitions primarily in the Permian and Appalachian Basins, adding an aggregate inventory of 21.9 net undeveloped locations. A total of 7.2 net wells were turned in-line ("TIL") during the quarter, compared to 4.9 net wells TIL in the second quarter of 2025.
The following table summarizes gross and net wells completed and TIL for the three and six months ended June 30, 2026:
| Basin: | Q2 2026 Gross | Q2 2026 Net | H1 2026 Gross | H1 2026 Net |
|---|---|---|---|---|
| Permian: | 43 | 6.5 | 62 | 7.6 |
| Eagle Ford: | 1 | — | 4 | 0.1 |
| Bakken: | 12 | 0.3 | 14 | 0.3 |
| Haynesville: | 2 | — | 3 | 0.1 |
| DJ: | 1 | 0.1 | 7 | 0.1 |
| Appalachian: | 22 | 0.3 | 28 | 0.4 |
| Total: | 81 | 7.2 | 118 | 8.6 |
At June 30, 2026, the company had 175 gross (14.0 net) wells in process.
Liquidity and Capital Resources
As of June 30, 2026, Granite Ridge had $350.0 million of principal debt outstanding on 8.875% senior unsecured notes and $125.0 million of debt outstanding under its senior secured revolving credit agreement. The company had $293.8 million of liquidity, consisting of $249.7 million of committed borrowing availability under the credit agreement and $44.1 million of cash on hand. Net Debt to Trailing Twelve Months Adjusted EBITDAX was 1.4x.
2026 Full-Year Guidance
The following table summarizes the company's operational and financial guidance for 2026:
| Parameter: | 2026 Guidance |
|---|---|
| Annual production (Boe per day): | 34,000 – 36,000 |
| Oil as a % of sales volumes: | 50% – 52% |
| Acquisitions: | $45 – $55 million |
| Development capital expenditures: | $300 – $330 million |
| Total capital expenditures: | $345 – $385 million |
| Lease operating expenses (per Boe): | $8.25 – $9.25 |
| Production and ad valorem taxes (% of total sales): | 6% – 7% |
| Cash general and administrative expense: | $25 – $27 million |
Grey Rock Distribution
Grey Rock Investment Partners, which beneficially owns approximately 50% of Granite Ridge's outstanding common stock, has informed the company that it intends to distribute a portion of its shares to the limited partners of one of its affiliated funds in the third quarter of 2026, representing the first of multiple expected tranches. The distribution is expected to be an in-kind distribution of existing shares by Grey Rock to its limited partners. The company will not issue any new shares and will not receive any proceeds from the distribution. If distributions reduce Grey Rock's beneficial ownership to less than 50% of the company's voting power, Granite Ridge will transition to governance as a non-controlled company under NYSE listing standards, including a majority-independent Board and independent compensation and nominating and corporate governance committees.
How might the 47% year-over-year increase in lease operating expenses impact Granite Ridge's ability to meet its full-year guidance for LOE per Boe of $8.25–$9.25?
What are the potential market implications if Grey Rock's share distribution reduces its ownership below 50%, triggering a transition to a non-controlled company structure with a majority-independent board?
Given the significant divergence between rising oil prices and falling natural gas prices, how does the company plan to hedge against further volatility in natural gas markets while maintaining its target oil production mix?
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