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HighPeak Energy, Inc. Announces First Quarter 2023 Financial and Operating Results and Updated Development Plan

FORT WORTH, Texas, May 10, 2023 (GLOBE NEWSWIRE) -- HighPeak Energy, Inc. (“HighPeak” or the “Company”) (NASDAQ: HPK) today announced financial and operating results for the quarter ended March 31, 2023 and provided an updated development plan.  


  • Produced average sales volumes of 37,222 barrels of crude oil equivalent per day (“Boe/d”), consisting of 85% crude oil and 94% liquids.
  • Generated net income of $50.3 million and EBITDAX (a non-GAAP financial measure defined and reconciled below) of $173.9 million.
  • Realized average price of $66.80 per Boe, or approximately 88% of the weighted average of NYMEX WTI crude oil prices, excluding the effects of derivatives.
  • Achieved a cash margin of $52.56 per Boe, or approximately 79% of the first quarter average realized price, excluding the effects of derivatives.
  • Ended the first quarter with 64 gross (61.3 net) horizontal wells in various stages of drilling and completion; and, throughout the quarter, turned in line 32 gross (25.8 net) horizontal wells.

Development Outlook and Revised Guidance

HighPeak revised its development outlook for 2023 by reducing its drilling rig count from four (4) to two (2) rigs effective June through the remainder of 2023. The Company previously reduced the number of completion crews from four (4) to two (2) and will continue to run an average of two (2) through the remainder of 2023 to complete the operational DUCs generated by the previous six (6) rig program. This revised plan is expected to reduce 2023 capital expenditures by approximately $250 million from the original capital budget.

In early 2024, HighPeak expects to increase its drilling activity back to a four (4) rig program and maintain two (2) completion crews while entirely funding all activity through operating cash flow. The Company continues to regularly monitor market conditions and the state of the overall economy and may accelerate drilling activity if commodity prices warrant.

 2023 2024
Production (Boe/d)  
• Average production rate  45,000 – 51,000 60,000 – 66,000
• Exit production rate55,000 – 61,00068,000 – 76,000
Capex ($MM)  
• Gross Operated Wells TIL105 – 115105 – 110
• Capital Expenditures, D,C,E&F$900 – $975$850 – $900
• Capital Expenditures, Infra/Land/Other $50 – $60$20 – $30
• Total Capital Expenditures$950 – $1,035 $870 – $930
Unit Measures ($/Boe)  
• Lease Operating Expenses $6.50 – $7.50 $5.75 – $6.75
• General & Administrative $0.75 – $1.00  $0.60 – $0.80

HighPeak Chairman and CEO, Jack Hightower, said, “Given the current economic environment and the volatility of commodity prices year to date, adjusting to a more conservative development approach strengthens our financial position by reducing our capital budget and accelerates our timeline to reach free cash flow to the third quarter. Slowing down our development cadence for the remainder of the year while maintaining production guidance close to our initial range is a testament to the high quality of our asset base. In addition, we plan to increase to a four-rig program in early 2024, which we anticipate funding entirely through cash flow from operations while increasing production and generating substantial free cash flow. The reduction in drilling activity demonstrates the Company's commitment to financial discipline and delivering long-term value for its shareholders. We remain focused on our long-term development strategy to maximize value either through sustained operations or strategic alternatives.”

First Quarter Operational Update and Financial Results

During the first quarter of 2023, the Company drilled 25 gross horizontal wells utilizing an average of five drilling rigs. The Company completed 32 gross producing wells. At March 31, 2023, the Company had 49 gross wells in various stages of completion and was in the process of drilling 15 gross wells.

The Company’s sales volumes during the first quarter of 2023 averaged 37,222 Boe/d, consisting of approximately 85% crude oil and 94% liquids. HighPeak reported net income of $50.3 million for the first quarter of 2023, or $0.39 per diluted share, and EBITDAX of $173.9 million, or $1.34 per diluted share. 

First quarter average realized prices were $76.07 per barrel of crude oil, $27.04 per barrel of NGL and $2.21 per Mcf of natural gas, resulting in an overall realized price of $66.80 per Boe, or 88% of the weighted average of NYMEX crude oil prices, excluding the effects of derivatives. HighPeak’s cash costs for the first quarter were $14.25 per Boe, including lease operating expenses of $8.57 per Boe, workover expenses of $1.26 per Boe, production and ad valorem taxes of $3.67 per Boe and cash G&A expenses of $0.75 per Boe. The Company’s cash margin was $52.56 per Boe, or 69% of the weighted average of NYMEX crude oil prices for the quarter, excluding the effects of derivatives.

HighPeak’s first quarter 2023 capital expenditures to drill, complete, equip, provide facilities and to build water and power infrastructure were approximately $379.1 million. In addition, the Company incurred capital expenditures of approximately $5.5 million primarily related to leasehold acquisitions.

At March 31, 2023, the Company had $895.0 million in long-term debt and $47.5 million of cash on hand. 

HighPeak President Michael Hollis commented, “HighPeak is a differentiated growth story. Our first quarter production increased more than 200 percent year over year. Our plan for the second half of 2023 is to run two drilling rigs and keep two full frac crews busy by completing our existing DUCs generated with our previous six rig program. On average, one frac crew can service two drilling rigs. Maintaining two frac crews equates to bringing the same number of wells online as we would with four rigs.   The plan is to go back to four rigs around the end of the year to keep the completion cadence level-loaded throughout 2024. We project an additional 30 percent growth of average production in 2024 over this year’s average with our new development plan. With free cash flow, we have the optionality to reduce debt, increase shareholder returns, or accelerate our production growth, all of which increases the value of the Company for strategic alternatives.”


As of March 31, 2023, the Company had crude oil swaps in place to hedge 822,000 barrels of its remaining 2023 crude oil production, or 2,989 barrels of oil per day, at an average swap price of $69.32 per barrel. In addition, the Company had deferred premium put options in place for the remainder of 2023 and 2024 totaling 1.93 million barrels and 1.37 million barrels or 7,011 and 3,743 barrels of oil per day, respectively, with deferred premiums of $5.00 per barrel and strike prices averaging $58.43 and $51.50 for the remainder of 2023 and 2024, respectively. In addition, in April 2023, the Company entered into an additional deferred premium put option contract for 5,000 barrels of oil per day from January 2024 through September 2024 at a strike price of $56.15 per barrel with deferred premiums of $5.00 per barrel. The Company’s crude oil derivative contracts are based on reported settlement prices on the New York Mercantile Exchange for West Texas Intermediate pricing.


During the first quarter of 2023, the Company’s Board of Directors approved quarterly dividends of $0.025 per share which resulted in a total of $2.8 million in dividends paid to stockholders during the quarter. In addition, in April 2023, the Company’s Board of Directors declared a quarterly dividend of $0.025 per share which will result in a total of $2.8 million in dividends paid to stockholders on May 25, 2023.  

Conference Call

HighPeak Energy will host a conference call and webcast on Thursday, May 11, 2023, at 10:00 a.m. Central Time for investors and analysts to discuss its results for the first quarter of 2023 as well as provide an overview of recent activities and its updated 2023 operating plan. Conference call participants may register for the call here. Access to the live audio-only webcast and replay of the earnings release conference call may be found here. A live broadcast of the earnings conference call will also be available on the HighPeak Energy website at under the “Investors” section of the website. A replay will also be available on the website following the call.

When available, a copy of the Company’s earnings release, investor presentation and Quarterly Report on Form 10-Q may be found on its website at

About HighPeak Energy, Inc.

HighPeak Energy, Inc. is a publicly traded independent crude oil and natural gas company, headquartered in Fort Worth, Texas, focused on the acquisition, development, exploration and exploitation of unconventional crude oil and natural gas reserves in the Midland Basin in West Texas. For more information, please visit our website at

Cautionary Note Regarding Forward-Looking Statements

The information in this press release contains forward-looking statements that involve risks and uncertainties. When used in this document, the words “believes,” “plans,” “expects,” “anticipates,” “forecasts,” “intends,” “continue,” “may,” “will,” “could,” “should,” “future,” “potential,” “estimate” or the negative of such terms and similar expressions as they relate to HighPeak Energy, Inc. (“HighPeak Energy,” the “Company” or the “Successor”) are intended to identify forward-looking statements, which are generally not historical in nature. The forward-looking statements are based on the Company's current expectations, assumptions, estimates and projections about the Company and the industry in which the Company operates. Although the Company believes that the expectations and assumptions reflected in the forward-looking statements are reasonable as and when made, they involve risks and uncertainties that are difficult to predict and, in many cases, beyond the Company's control. For example, the Company’s review of strategic alternatives may not result in a sale of the Company, a recommendation that a transaction occur or result in a completed transaction, and any transaction that occurs may not increase shareholder value, in each case as a result of such risks and uncertainties.

These risks and uncertainties include, among other things, the results of the strategic review being undertaken by the Company’s Board and the interest of prospective counterparties, the Company’s ability to realize the results contemplated by the 2023 and 2024 guidance contained herein, volatility of commodity prices, product supply and demand, the impact of a widespread outbreak of an illness, such as the coronavirus disease pandemic, on global and U.S. economic activity, competition, the ability to obtain environmental and other permits and the timing thereof, other government regulation or action, the ability to obtain approvals from third parties and negotiate agreements with third parties on mutually acceptable terms, litigation, the costs and results of drilling and operations, availability of equipment, services, resources and personnel required to perform the Company's drilling and operating activities, access to and availability of transportation, processing, fractionation, refining and storage facilities, HighPeak Energy's ability to replace reserves, implement its business plans or complete its development activities as scheduled, access to and cost of capital, the financial strength of counterparties to any credit facility and derivative contracts entered into by HighPeak Energy, if any, and purchasers of HighPeak Energy's oil, natural gas liquids and natural gas production, uncertainties about estimates of reserves, identification of drilling locations and the ability to add proved reserves in the future, the assumptions underlying forecasts, including forecasts of production, expenses, cash flow from sales of oil and gas and tax rates, quality of technical data, environmental and weather risks, including the possible impacts of climate change, cybersecurity risks and acts of war or terrorism. These and other risks are described in the Company's Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K and other filings with the SEC. The Company undertakes no duty to publicly update these statements except as required by law.

Reserve engineering is a process of estimating underground accumulations of hydrocarbons that cannot be measured in an exact way. The accuracy of any reserve estimate depends on the quality of available data, the interpretation of such data and price and cost assumptions made by reserve engineers. Reserves estimates included herein may not be indicative of the level of reserves or PV-10 value of oil and natural gas production in the future, as they are based on prices significantly higher than current commodity prices. In addition, the results of drilling, testing and production activities may justify revisions of estimates that were made previously. If significant, such revisions could impact HighPeak’s strategy and change the schedule of any further production and development drilling. Accordingly, reserve estimates may differ significantly from the quantities of oil and natural gas that are ultimately recovered.

Use of Projections

The financial, operational, industry and market projections, estimates and targets in this press release (including production, operating expenses and capital expenditures in future periods) are based on assumptions that are inherently subject to significant uncertainties and contingencies, many of which are beyond the Company’s control. The assumptions and estimates underlying the projected, expected or target results are inherently uncertain and are subject to a wide variety of significant business, economic, regulatory and competitive risks and uncertainties that could cause actual results to differ materially from those contained in the financial, operational, industry and market projections, estimates and targets, including assumptions, risks and uncertainties described in “Cautionary Note Regarding Forward-Looking Statements” above. These projections are speculative by their nature and, accordingly, are subject to significant risk of not being actually realized by the Company. Projected results of the Company for 2024 are particularly speculative and subject to change. Actual results may vary materially from the current projections, including for reasons beyond the Company’s control. The projections are based on current expectations and available information as of the date of this release. The Company undertakes no duty to publicly update these projections except as required by law.

Drilling Locations

The Company has estimated its drilling locations based on well spacing assumptions and upon the evaluation of its drilling results and those of other operators in its area, combined with its interpretation of available geologic and engineering data. The drilling locations actually drilled on the Company’s properties will depend on the availability of capital, regulatory approvals, commodity prices, costs, actual drilling results and other factors. Any drilling activities conducted on these identified locations may not be successful and may not result in additional proved reserves. Further, to the extent the drilling locations are associated with acreage that expires, the Company would lose its right to develop the related locations.

HighPeak Energy, Inc.
Unaudited Condensed Consolidated Balance Sheet Data
(In thousands)

  March 31, 2023 December 31, 2022
Current assets:      
Cash and cash equivalents $47,536  $30,504 
Accounts receivable  80,980   96,596 
Inventory  15,759   13,275 
Prepaid expenses  1,004   4,133 
Derivatives  —      17 
Total current assets  145,279   144,525 
Crude oil and natural gas properties, using the successful efforts method of accounting:      
Proved properties  2,669,752   2,270,236 
Unproved properties  97,910   114,665 
Accumulated depletion, depreciation and amortization  (341,045)  (259,962)
Total crude oil and natural gas properties, net  2,426,617   2,124,939 
Other property and equipment, net  3,556   3,587 
Other noncurrent assets  7,067   6,431 
Total assets  $2,582,519  $2,279,482 
Current liabilities:      
Current portion of long-term debt, net $215,295  $—    
Accounts payable - trade  133,246   105,565 
Accrued liabilities  132,071   91,842 
Revenues and royalties payable  29,500   15,623 
Accrued interest  15,087   13,152 
Other accrued liabilities  14,021   15,600 
Derivatives  11,265   16,702 
Advances from joint interest owners  10,217   7,302 
Operating leases  726   343 
Total current liabilities  561,428   266,129 
Noncurrent liabilities:      
Long-term debt, net  645,469   704,349 
Deferred income taxes  145,671   131,164 
Asset retirement obligations  7,763   7,502 
Derivatives  797   691 
Operating leases  400   —    
Commitments and contingencies      
Stockholders' equity      
Common stock  11   11 
Additional paid-in capital  1,013,100   1,008,896 
Retained earnings (accumulated deficit)  207,880   160,740 
Total stockholders' equity  1,220,991   1,169,647 
Total liabilities and stockholders' equity  $2,582,519  $2,279,482 

HighPeak Energy, Inc.
Unaudited Condensed Consolidated Statements of Operations
(in thousands, except per share data)
  Three Months Ended March 31,
  2023 2022
Operating revenues:      
Crude oil sales $215,696  $86,938 
NGL and natural gas sales  8,098   5,291 
Total operating revenues  223,794   92,229 
Operating costs and expenses:      
Crude oil and natural gas production  32,942   9,446 
Production and ad valorem taxes  12,297   5,006 
Exploration and abandonments  2,164   209 
Depletion, depreciation and amortization  81,131   17,024 
Accretion of discount  118   54 
General and administrative  2,502   1,940 
Stock-based compensation  4,054   3,976 
Total operating costs and expenses  135,208   37,655 
Income from operations  88,586   54,574 
Interest and other income  30   250 
Interest expense  (26,972)  (5,252)
Derivative gain (loss), net  3,120   (66,394)
Income (loss) before income taxes  64,764   (16,822)
Income tax expense (benefit)  14,507   (312)
Net income (loss) $50,257  $(16,510)
Earnings (loss) per share:      
Basic net income (loss) $0.41  $(0.17)
Diluted net income (loss) $0.39  $(0.17)
Weighted average shares outstanding:      
Basic  111,055   95,841 
Diluted  117,765   95,841 
Dividends declared per share $0.025  $0.025 


HighPeak Energy, Inc.
Unaudited Condensed Consolidated Statements of Cash Flows
(in thousands)
  Three Months Ended March 31,
  2023 2022
Net income (loss) $50,257  $(16,510)
Adjustments to reconcile net income (loss) to net cash provided by operations:      
Exploration and abandonment expense  1,950   32 
Depletion, depreciation and amortization expense  81,131   17,024 
Accretion expense  118   54 
Stock-based compensation expense  4,054   3,976 
Amortization of debt issuance costs  2,668   645 
Amortization of original issue discounts on 10.000% Senior Notes and 10.625% Senior Notes  4,290   893 
Derivative-related activity  (5,314)  41,633 
Deferred income taxes  14,507   (312)
Changes in operating assets and liabilities:      
Accounts receivable  15,617   (6,789)
Prepaid expenses, inventory and other assets  (2,567)  (941)
Accounts payable, accrued liabilities and other current liabilities  23,295   10,242 
Net cash provided by operating activities  190,006   49,947 
Additions to crude oil and natural gas properties  (379,103)  (165,099)
Changes in working capital associated with crude oil and natural gas property additions  65,062   20,644 
Acquisitions of crude oil and natural gas properties  (5,463)  (6,348)
Other property additions  (18)  (96)
Net cash used in investing activities  (319,522)  (150,899)
Borrowings under Credit Agreement  150,000   15,000 
Proceeds from exercises of stock options  148   75 
Proceeds from exercises of warrants  2   779 
Debt issuance costs  (544)  (6,449)
Dividends paid  (2,776)  (2,382)
Dividend equivalents paid  (282)  (214)
Proceeds from issuance of 10.000% Senior Notes and 10.625% Senior Notes, net of discount  —      210,179 
Repayments under Credit Agreement  —      (115,000)
Stock offering costs  —      (55)
Net cash provided by financing activities  146,548   101,933 
Net increase in cash and cash equivalents  17,032   981 
Cash and cash equivalents, beginning of period  30,504   34,869 
Cash and cash equivalents, end of period $47,536  $35,850 

HighPeak Energy, Inc.
Unaudited Summary Operating Highlights
   Three Months Ended March 31,
  2023 2022
Sales Volumes:       
Crude oil (Bbls)  2,835,618   904,212 
NGLs (Bbls)  295,186   107,812 
Natural gas (Mcf)  1,315,034   35,882 
Total (Boe)  3,349,976   1,084,671 
Daily Sales Volumes:       
Crude oil (Bbls/d)  31,507   10,047 
NGLs (Bbls/d)  3,280   1,198 
Natural gas (Mcf/d)  14,611   4,843 
Total (Boe/d)  37,222   12,052 
Revenues (in thousands):       
Crude oil sales $215,696  $86,938 
Crude oil derivative settlements  (2,194)  (24,761)
NGL and natural gas sales  8,098   5,291 
Natural gas derivative settlements  —      —    
Total revenues, including derivative settlements $221,600  $67,468 
Average sales prices:       
Crude oil (per Bbl) $76.07  $96.15 
Crude oil derivative settlements (per Bbl)  (0.77)  (27.38)
NGL (per Bbl)  27.04   41.33 
Natural gas (per Mcf)  2.21   4.16 
Natural gas derivative settlements (per Mcf)  —      —    
Total, including derivative contract settlements (per Boe) $66.15  $62.20 
Weighted Average NYMEX WTI ($/Bbl)  $76.12  $94.75 
Weighted Average NYMEX Henry Hub ($/Mcf)   3.39   4.89 
Realization to benchmark       
Crude oil  100%  101%
Natural gas  65%  85%
Operating Costs and Expenses (in thousands):       
Lease operating expenses $28,720  $9,345 
Expense workovers  4,222   101 
Production and ad valorem taxes  12,297   5,006 
General and administrative expenses  2,502   1,940 
Depletion, depreciation and amortization  81,131   17,024 
Operating costs per Boe:       
Lease operating expenses $8.57  $8.62 
Expense workovers  1.26   0.09 
Production and ad valorem taxes  3.67   4.61 
General and administrative expenses  0.75   1.79 
Depletion, depreciation and amortization  24.22   15.69 

HighPeak Energy, Inc.
Unaudited Reconciliation of Net Income to EBITDAX
(in thousands)


  Three Months Ended March 31,
  2023 2022
Net income (loss) $50,257  $(16,510)
Interest expense  26,972   5,252 
Interest and other income  (30)  (250)
Income tax expense (benefit)  14,507   (312)
Depletion, depreciation and amortization  81,131   17,024 
Accretion of discount  118   54 
Exploration and abandonment expense  2,164   209 
Stock based compensation  4,054   3,976 
Derivative related noncash activity  (5,314)  41,633 
EBITDAX $173,859  $51,076 

HighPeak Energy, Inc.
Unaudited Cash Margin Reconciliation
(in thousands, except per Boe data)
   Three Months Ended March 31,
  2023 2022
Crude oil, NGL and natural gas sales revenue $223,794  $92,229 
Less: Lease operating expenses  (28,720)  (9,345)
Less: Workover expenses  (4,222)  (101)
Less: Production and ad valorem taxes  (12,297)  (5,006)
Less: General and administrative expenses  (2,502)  (1,940)
Cash Margin $176,053  $75,837 
Divide by: Sales volumes (MBoe)  3,350.0   1,084.7 
Cash Margin per Boe, excluding effects of derivatives $52.56  $69.92 
Cash Margin $176,053  $75,837 
General and administrative expenses $2,502  $1,940 
Divide by: Sales volumes (MBoe)  3,350.0   1,084.7 
Cash Operating Margin per Boe, excluding effects of derivatives $53.31  $71.71 

Investor Contact:

Ryan Hightower
Vice President, Business Development

Source: HighPeak Energy, Inc.

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