false 0001792849 0001792849 2022-08-08 2022-08-08 0001792849 hpk:CommonStockCustomMember 2022-08-08 2022-08-08 0001792849 hpk:WarrantCustomMember 2022-08-08 2022-08-08
 


 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 

 
FORM 8-K
 

 
CURRENT REPORT
 
PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
 
Date of report (Date of earliest event reported): August 8, 2022
 

 
HighPeak Energy, Inc.
(Exact name of registrant as specified in its charter)
 

 
Delaware
333-235313
84-3533602
(State or other jurisdiction
of incorporation)
(Commission File Number)
(IRS Employer
Identification No.)
     
421 W. 3rd St., Suite 1000
Fort Worth, Texas 76102
(address of principal executive offices) (zip code)
     
(817) 850-9200
(Registrant’s telephone number, including area code)
 

 
Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
Pre-commencements communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
Securities registered pursuant to Section 12(b) of the Act:
 
Title of Each Class
 
Trading Symbol(s)
 
Name of Each Exchange on Which Registered
Common Stock
 
HPK
 
The Nasdaq Stock Market LLC
Warrant
 
HPKEW
 
The Nasdaq Stock Market LLC
 
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
 
Emerging growth company
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
 


 
 

 
 
Item 2.02
Results of Operations and Financial Condition.
 
On August 8, 2022, the Company issued a press release announcing its financial and operating results for the second quarter ended June 30, 2022. A copy of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated by reference into this Item 2.02 by reference.
 
The information in this Current Report on Form 8-K, including Exhibit 99.1, is being furnished pursuant to Item 2.02 of Form 8-K and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to liabilities of that section, and is not incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act unless specifically identified therein as being incorporated therein by reference.
 
Item 7.01
Regulation FD Disclosure.
 
The information set forth under Item 2.02 is incorporated by reference as if fully set forth herein.
 
Item 9.01.
Financial Statements and Exhibits.
 
 
(d)
Exhibits
 
Exhibit No.
 
Description
     
99.1
 
Press Release dated August 8, 2022.
104
 
Cover Page Interactive Data File (embedded within the Inline XBRL document)
 
2
 
 
SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
HIGHPEAK ENERGY, INC.
 
       
Date: August 8, 2022
     
 
By:
/s/ Steven W. Tholen
 
 
Name:
Steven W. Tholen
 
 
Title:
Chief Financial Officer
 
 
3

ex_407670.htm

Exhibit 99.1

 

 

ex_407670img001.jpg

 

 

HighPeak Energy, Inc. Announces Second Quarter 2022 Results and Operational Updates

 

Fort Worth, Texas, August 8, 2022 (GLOBE NEWSWIRE) - HighPeak Energy, Inc. (“HighPeak” or the “Company”) (NASDAQ: HPK) today announced financial and operating results for the second quarter 2022 and provided current operational updates.  

 

 

Second Quarter 2022 and Current Highlights

 

 

HighPeak legacy second quarter 2022 net sales volumes averaged 21,995 barrels of oil equivalent per day (“Boe/d”), an increase of 83% compared with first quarter 2022, consisting of 86% crude oil and 95% liquids. Company pro forma net production, inclusive of the Hannathon acquisition, averaged approximately 25,400 Boe/d during the second quarter 2022.

 

 

The Company completed an accretive acquisition of approximately 18,600 net acres from Hannathon Petroleum, LLC (“Hannathon”) late in the second quarter 2022. The acquired acreage is largely contiguous to the Company’s existing Signal Peak area and includes significant existing production, cash flow and operational infrastructure.

 

 

EBITDAX (a non-GAAP financial measure as defined and reconciled below) associated with legacy HighPeak second quarter 2022 sales volumes was $135.4 million, an increase of 165% compared with first quarter 2022. The cash flow associated with the acquired Hannathon production from the effective date through the closing date was recognized as a reduction to the purchase price and did not contribute to second quarter 2022 results. On a pro forma basis, inclusive of the Hannathon acquisition, second quarter 2022 Company EBITDAX would have been approximately $155 million.

 

 

As a result of the Company’s recent acquisitions and successful leasing campaign, the Company had more than 97,000 net acres as of June 30, 2022, an increase of approximately 54% compared with year-end 2021.

 

 

Increased the Company’s Revolving Credit Facility borrowing base and aggregate elected commitments from $138.8 million to $400.0 million and added three banks to the bank syndicate.

 

 

Second quarter 2022 realized price of $100.63 per Boe and realized cash operating margin of $87.20 per Boe, or approximately 87% of the realized price, excluding the effects of derivatives.

 

 

HighPeak averaged four (4) drilling rigs throughout the second quarter 2022, added a fifth rig in June 2022 and elected to continue Hannathon’s one rig drilling program upon closing the acquisition. The Company plans to maintain the current six (6) rig drilling program and average approximately three (3) frac fleets throughout the remainder of 2022.

 

 

HighPeak had 52 gross (46.8 net) horizontal wells in various stages of drilling and completion plus two salt-water disposal wells in progress at the end of the second quarter.

 

 

HighPeak CEO, Jack Hightower said “We continued to execute on our growth strategy as evidenced by our significant production and EBITDA increase in the second quarter. Legacy HighPeak oil production was up roughly 88% and EBITDA increased 165% quarter over quarter.

 

 

 

 

Mr. Hightower, continued, “We are just now starting to realize the impact of our decision to increase drilling activity at the first of the year. Our production rates are expected to continue to increase throughout the remainder of the year and into 2023 as we continue to reap the benefits of adding to our rig count several months ago. With that said, we will focus on efficient drilling through larger extended-reach multi-well pads, while maintaining flexibility in our capital program to react as warranted to sustained market conditions. We expect to be one of the only public companies generating meaningful free cash flow while significantly increasing production in 2023.”

 

 

Recent Acquisitions

 

On June 27, 2022, the Company completed the previously announced acquisition from Hannathon and other non-operated working interest owners to acquire their Howard County assets, consisting of approximately 18,600 net acres predominantly contiguous with the Company’s Signal Peak area, substantial existing production and cash flow, for total consideration of $335.5 million, including customary closing adjustments and closing costs, consisting of $238.3 million in cash and 3.52 million shares of HighPeak’s common stock valued at $97.2 million on the date of closing. Additional acquisition highlights include the leveraging of Hannathon’s substantial infrastructure-in-place to accelerate the pace of the Company’s Signal Peak development, the addition of approximately 200 gross top tier drilling locations and an acreage footprint which is 68% held by production and provides for capital efficient, long lateral development with about 90% of the inventory supporting lateral lengths of 10,000 feet or greater. The assets were acquired at roughly three times 2022 estimated EBITDAX with an expected further uplift from synergies estimated at $70 million on a present value basis. The cash portion of the consideration was funded with cash on hand and borrowings under the Company’s recently increased Revolving Credit Facility.

 

During the first half of 2022, the Company completed multiple acquisitions contiguous to its Flat Top operating area which, in aggregate, have added over 14,000 net acres. The acquired properties provide high-margin oil production, a significant number of upside drilling locations and robust in-field infrastructure consisting of a salt-water disposal system, produced fluid gathering pipelines and substantial non-potable water sourcing capacity.

 

Since year-end 2021, the Company’s net acreage position has increased by approximately 54% building from 63,000 net acres to over 97,000 net acres as of June 30, 2022.

 

 

Second Quarter Operational Update

 

The Company’s net sales volumes, excluding the acquired Hannathon production, during the second quarter 2022 averaged 21,995 Boe/d, consisting of approximately 86% oil and 95% liquids. Second quarter production increased 83% compared with the first quarter with oil production up about 88% compared with the first quarter. Production volumes from the Hannathon acquisition will be included in the Company’s financials beginning in the third quarter 2022.

 

During the second quarter of 2022, the Company drilled 29 gross (27.0 net) operated horizontal wells and one salt-water disposal well utilizing approximately four drilling rigs for most of the quarter, adding a fifth rig in June 2022 and a sixth rig upon closing the Hannathon acquisition at the end of June 2022. Also, the Company completed 27 gross (22.8 net) horizontal wells during the second quarter of 2022. At June 30, 2022, the Company was in various stages of completion on 41 gross (35.8 net) horizontal wells, finishing one SWD well and was in the process of drilling 11 gross (11.0 net) horizontal wells and one salt-water disposal well.

 

The HighPeak 60MW electric high-voltage substation was commissioned in May 2022 and as a result the Company is in the process of removing rental generators, reducing both the Company’s lease operating expenses and its carbon emissions. To date, the Company has removed approximately 70% of the rental generators in its Flat Top operating area. The electrification of the substation also enabled HighPeak to power its first drilling rig with highline power in Flat Top, reducing both drilling costs and fuel consumption. The Company’s contracted local sand project became operational in June 2022 and is anticipated to significantly reduce well completion costs and improve completion efficiencies. HighPeak is currently servicing 100% of its stimulation fluid needs for two frac crews in Flat Top with recycled produced fluids and local non-potable water sources. The Company is also using recycled fluids for completion operations in Signal Peak.

 

2

 

Michael Hollis, HighPeak’s President, commented, “Inflationary pressures continue to be thematic, however, we have initiated a number of measures to mitigate the effects of industry wide cost increases on both the capital and operating expense side of the equation including our local sand project, the use of cost saving non-potable water and recycled fluids for our Flat Top frac operations and the commissioning of our electrical substation.”

 

Mr. Hollis further commented, “The HighPeak substation has enabled us to begin removing rental generators which is estimated to reduce lease operating expenses throughout the year, further expanding our industry leading margins while greatly reducing our carbon footprint. We started powering one of our drilling rigs with highline power, saving roughly $90,000 per well at today’s diesel costs. The use of local wet sand is decreasing capital costs per well while also reducing emissions associated with trucking and drying the sand. When fully utilized, wet sand will save approximately $300,000 per well.”

 

 

Second Quarter 2022 Financial Results

 

HighPeak reported net income of $77.6 million for the second quarter of 2022, or net income of $0.64 per diluted share.  Excluding the effects of derivatives and the deferred tax effect thereon (as reconciled below), the Company’s 2022 second quarter net income increased approximately 150% to $87.0 million, or $0.78 per diluted share, compared with $35.9 million, or $0.32 per diluted share, for the first quarter. EBITDAX was $135.4 million, or $1.22 per diluted share, an increase of 165% quarter over quarter. Second quarter EBITDAX was impacted by $37.1 million in derivative settlements.

 

Second quarter 2022 average realized prices were $111.26 per barrel of crude oil, $47.29 per barrel of natural gas liquids and $6.02 per Mcf of natural gas, resulting in an overall realized price of $100.63 per Boe, or 93% of the weighted average of NYMEX crude oil prices, excluding the effects of derivatives. HighPeak’s cash costs for the second quarter were $14.45 per Boe including lease operating expenses of $8.29 per Boe, production and ad valorem taxes of $5.15 per Boe and cash G&A expenses of $1.01 per Boe. The Company’s unhedged cash margin was $86.18 per Boe, or 79% of the weighted average of NYMEX crude oil prices for the quarter.

 

HighPeak’s second quarter 2022 capital expenditures to drill, complete, equip, provide facilities and to build water and power infrastructure were approximately $238.1 million. In addition, the Company incurred capital expenditures of approximately $352.5 million for crude oil and natural gas property acquisitions, $108.4 million of which was non-cash with the issuance of 3,893,634 shares of HighPeak common stock.

 

At June 30, 2022, the Company had $285.0 million in outstanding borrowings under its Revolving Credit Facility, $225.0 million in long-term notes outstanding and $22.4 million of cash on hand.  In June 2022, simultaneously with the closing of the Hannathon acquisition, the Company entered into an amendment of its Revolving Credit Facility and increased the borrowing base and bank commitments to $400.0 million and added three banks to the bank group.

 

 

Hedging Update

 

As of June 30, 2022, the Company hedged 1.99 million barrels of its remaining 2022 crude oil production at an average swap price of $87.53 per barrel and 641,200 barrels of its 2023 crude oil production at an average swap price of $66.04 per barrel. The Company’s crude oil derivative contracts are based on reported settlement prices on the New York Mercantile Exchange (“NYMEX”) for West Texas Intermediate pricing. The Company also hedged 920,000 MMBtu of its remaining 2022 natural gas production and 450,000 MMBtu of its 2023 natural gas production at an average price of $9.00 per MMBtu. The Company’s natural gas derivative contracts are based on reported settlement prices on the NYMEX for Henry Hub pricing.

 

3

 

Dividend

 

In January and April 2022, the Company’s Board of Directors approved a quarterly dividend of $0.025 per share which resulted in a total of $2.4 million and $2.6 million in dividends paid to stockholders on February 25, 2022 and May 25, 2022, respectively. In addition, in July 2022, the Company’s Board of Directors declared a quarterly dividend of $0.025 per share which will result in a total of $2.7 million in dividends paid on August 25, 2022 to stockholders of record on August 1, 2022.

 

 

Conference Call

 

HighPeak Energy will host a conference call and webcast on Tuesday, August 9, 2022 at 10:00 a.m. Central Time for investors and analysts to discuss its second quarter 2022 financial results and operational highlights. 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 www.highpeakenergy.com 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 www.highpeakenergy.com.

 

 

Conference Participation

 

The Company will participate in virtual investor meetings during the upcoming Seaport Research Partners Annual Summer Investor Conference beginning on August 23, 2022.

 

 

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 www.highpeakenergy.com.

 

 

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.

 

These risks and uncertainties include, among other things, volatility of commodity prices, political instability or armed conflict in crude oil or natural gas producing regions such as the ongoing war between Russia and Ukraine, product supply and demand, the impact of a widespread outbreak of an illness, such as the coronavirus disease (“COVID-19”) 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 crude 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 crude 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.

 

4

 

HighPeak Energy, Inc.

Unaudited Condensed Consolidated Balance Sheet Data

(In thousands)

 

   

June 30, 2022

   

March 31, 2022

   

December 31, 2021

 

Cash and cash equivalents

  $ 22,417     $ 35,850     $ 34,869  

Other current assets

    123,566       65,283       52,085  

Crude oil and natural gas properties, net

    1,596,082       1,037,433       725,615  

Other noncurrent assets

    6,707       6,152       6,391  

Total assets

  $ 1,748,772     $ 1,144,718     $ 818,960  
                         

Current liabilities

  $ 272,119     $ 179,646     $ 103,000  

Long-term debt, net

    488,532       203,197       97,929  

Other long-term liabilities

    87,733       67,994       64,968  
                         

Stockholders' equity

                       

Common stock

    11       10       10  

Additional paid-in capital

    909,325       777,501       617,489  

Accumulated deficit

    (8,948 )     (83,630 )     (64,436 )

Total stockholders' equity

    900,388       693,881       553,063  

Total liabilities and stockholders' equity

  $ 1,748,772     $ 1,144,718     $ 818,960  

 

5

 

 

HighPeak Energy, Inc.

Unaudited Condensed Consolidated Statements of Operations

(in thousands, except per share data)

 

   

Three Months Ended June 30,

   

Six Months Ended June 30,

 
   

2022

   

2021

   

2022

   

2021

 

Operating Revenues:

                               

Crude oil sales

  $ 190,926     $ 46,985     $ 277,864     $ 71,855  

Natural gas and NGL sales

    10,502       1,285       15,793       2,132  

Total operating revenues

    201,428       48,270       293,657       73,987  

Operating Costs and Expenses:

                               

Crude oil and natural gas production

    16,595       4,692       26,041       6,919  

Production and ad valorem taxes

    10,301       2,543       15,307       4,207  

Exploration and abandonments

    184       463       393       654  

Depletion, depreciation and amortization

    34,883       16,857       51,907       29,820  

Accretion of discount

    66       37       120       72  

General and administrative

    2,016       1,617       3,956       3,376  

Stock-based compensation

    14,579       1,023       18,555       1,989  

Total operating costs and expenses

    78,624       27,232       116,279       47,037  

Income from operations

    122,804       21,038       177,378       26,950  

Interest and other income

    2             252       1  

Interest expense

    (9,282 )     (152 )     (14,534 )     (206 )

Derivative loss, net

    (11,891 )     (13,596 )     (78,285 )     (13,596 )

Other expense

          (127 )           (127 )

Income before income taxes

    101,633       7,163       84,811       13,022  

Income tax expense

    24,072       1,420       23,760       2,535  

Net income

  $ 77,561     $ 5,743     $ 61,051     $ 10,487  
                                 

Earnings per share:

                               

Basic net income

  $ 0.69     $ 0.06     $ 0.56     $ 0.11  

Diluted net income

  $ 0.64     $ 0.06     $ 0.52     $ 0.10  
                                 

Weighted average shares outstanding:

                               

Basic

    103,178       92,676       99,530       92,634  

Diluted

    111,228       92,676       106,843       92,830  
                                 

Dividends declared per share

  $ 0.025     $     $ 0.050     $  

 

6

 

 

HighPeak Energy, Inc.

Unaudited Condensed Consolidated Statements of Cash Flows

(in thousands)

 

   

Six Months Ended June 30,

 
   

2022

   

2021

 

CASH FLOWS FROM OPERATING ACTIVITIES:

               

Net income

  $ 61,051     $ 10,487  

Adjustments to reconcile net income to net cash provided by operations:

               

Exploration and abandonment expense

    32       369  

Depletion, depreciation and amortization expense

    51,907       29,820  

Accretion expense

    120       72  

Stock based compensation expense

    18,555       1,989  

Amortization of debt issuance costs

    1,781       77  

Amortization of original issue discount on senior notes

    2,741        

Derivative-related activity

    16,442       12,558  

Deferred income taxes

    23,760       2,535  

Changes in operating assets and liabilities:

               

Accounts receivable

    (50,857 )     (16,064 )

Prepaid expenses, inventory and other assets

    (2,571 )     (366 )

Accounts payable, accrued liabilities and other current liabilities

    25,225       5,803  

Net cash provided by operating activities

    148,186       47,280  

CASH FLOWS FROM INVESTING ACTIVITIES:

               

Additions to crude oil and natural gas properties

    (403,177 )     (89,959 )

Changes in working capital associated with crude oil and natural gas property additions

    105,476       15,223  

Acquisitions of crude oil and natural gas properties

    (250,448 )     (2,070 )

Other property additions

    (996 )     (61 )

Net cash used in investing activities

    (549,145 )     (76,867 )

CASH FLOWS FROM FINANCING ACTIVITIES:

               

Proceeds from issuance of senior unsecured notes, net of discount

    210,179        

Borrowings under revolving credit facility

    380,000       14,000  

Repayments under revolving credit facility

    (195,000 )      

Debt issuance costs

    (9,098 )     (1,759 )

Proceeds from exercises of warrants

    7,750       5,466  

Proceeds from subscription receivable from exercise of warrants

          3,596  

Proceeds from exercises of stock options

    120       1,574  

Dividends paid

    (4,959 )      

Dividend equivalents paid

    (427 )      

Stock offering costs

    (58 )      

Net cash provided by financing activities

    388,507       22,877  

Net increase (decrease) in cash and cash equivalents

    (12,452 )     (6,710 )

Cash and cash equivalents, beginning of period

    34,869       19,552  

Cash and cash equivalents, end of period

  $ 22,417     $ 12,842  

 

7

 

 

HighPeak Energy, Inc.

 Unaudited Summary Operating Highlights

 

   

Three Months Ended June 30,

 
   

2022

   

2021

 

Sales Volumes:

               

Crude oil (Bbls)

    1,716,084       723,584  

NGLs (Bbls)

    176,438       45,712  

Natural gas (Mcf)

    654,299       179,503  

Total (Boe)

    2,001,572       799,213  
                 

Daily Sales Volumes:

               

Crude oil (Bbls/d)

    18,858       7,951  

NGLs (Bbls/d)

    1,939       502  

Natural gas (Mcf/d)

    7,190       1,973  

Total (Boe/d)

    21,995       8,783  
                 

Revenues (in thousands):

               

Crude oil sales

  $ 190,926     $ 46,985  

Crude oil derivative settlements

    (37,082 )     (1,038 )

NGL and natural gas sales

    10,502       1,285  

Total Revenues, including derivative settlements

  $ 164,346     $ 47,232  
                 

Average sales prices:

               

Crude oil (per Bbl)

  $ 111.26     $ 64.93  

Crude oil derivative settlements (per Bbl)

    (21.61 )     (1.43 )

NGL (per Bbl)

    47.29       26.77  

Natural gas (per Mcf)

    6.02       2.81  

Total, including derivative contract settlements (per Boe)

  $ 82.11     $ 59.10  
                 

Weighted Average NYMEX WTI ($/Bbl)

  $ 108.77     $ 65.91  

Weighted Average NYMEX Henry Hub ($/Mcf)

    6.99       2.87  

Realization to benchmark

               

Crude oil (per Bbl)

    102 %     99 %

Natural gas (per Mcf)

    86 %     98 %
                 

Operating Costs and Expenses (in thousands):

               

Lease operating expenses

  $ 16,595     $ 4,692  

Production and ad valorem taxes

    10,301       2,543  

General and administrative expenses

    2,016       1,617  

Depletion, depreciation and amortization

    34,883       16,857  
                 

Operating costs per Boe:

               

Lease operating expenses

  $ 8.29     $ 5.87  

Production and ad valorem taxes

    5.15       3.18  

General and administrative expenses

    1.01       2.02  

Depletion, depreciation and amortization

    17.43       21.09  

 

8

 

 

HighPeak Energy, Inc.

 Unaudited Summary Operating Highlights

 

   

Six Months Ended June 30,

 
   

2022

   

2021

 

Sales Volumes:

               

Crude oil (Bbls)

    2,620,296       1,149,764  

NGLs (Bbls)

    284,250       72,161  

Natural gas (Mcf)

    1,090,181       320,594  

Total (Boe)

    3,086,243       1,275,357  
                 

Daily Sales Volumes:

               

Crude oil (Bbls/d)

    14,477       6,352  

NGLs (Bbls/d)

    1,570       399  

Natural gas (Mcf/d)

    6,023       1,771  

Total (Boe/d)

    17,051       7,046  
                 

Revenues (in thousands):

               

Crude oil sales

  $ 277,864     $ 71,855  

Crude oil derivative settlements

    (61,843 )     (1,038 )

NGL and natural gas sales

    15,793       2,132  

Total Revenues, including derivative settlements

  $ 231,814     $ 72,949  
                 

Average sales prices:

               

Crude oil (per Bbl)

  $ 106.04     $ 62.50  

Crude oil derivative settlements (per Bbl)

    (23.60 )     (0.90 )

NGL (per Bbl)

    45.03       27.16  

Natural gas (per Mcf)

    5.28       2.55  

Total, including derivative contract settlements (per Boe)

  $ 75.11     $ 57.20  
                 

Weighted Average NYMEX WTI ($/Bbl)

  $ 103.93     $ 63.26  

Weighted Average NYMEX Henry Hub ($/Mcf)

    6.15       2.80  

Realization to benchmark

               

Crude oil (per Bbl)

    102 %     99 %

Natural gas (per Mcf)

    86 %     91 %
                 

Operating Costs and Expenses (in thousands):

               

Lease operating expenses

  $ 26,041     $ 6,919  

Production and ad valorem taxes

    15,307       4,207  

General and administrative expenses

    3,956       3,376  

Depletion, depreciation and amortization

    51,907       29,820  
                 

Operating costs per Boe:

               

Lease operating expenses

  $ 8.44     $ 5.43  

Production and ad valorem taxes

    4.96       3.30  

General and administrative expenses

    1.28       2.65  

Depletion, depreciation and amortization

    16.82       23.38  
9

 

 

HighPeak Energy, Inc.

Unaudited Reconciliation of Net Income to EBITDAX

(in thousands)

 

   

Three Months Ended June 30,

   

Six Months Ended June 30,

 
   

2022

   

2021

   

2022

   

2021

 

Net income

  $ 77,561     $ 5,743     $ 61,051     $ 10,487  

Interest expense

    9,282       152       14,534       206  

Interest and other income

    (2 )           (252 )     (1 )

Income tax expense

    24,072       1,420       23,760       2,535  

Depletion, depreciation and amortization

    34,883       16,857       51,907       29,820  

Accretion of discount

    66       37       120       72  

Exploration and abandonment expense

    184       463       393       654  

Stock-based compensation

    14,579       1,023       18,555       1,989  

Derivative-related noncash activity

    (25,191 )     12,558       16,442       12,558  
            127             127  

EBITDAX

  $ 135,434     $ 38,380     $ 186,510     $ 58,447  

 

HighPeak Energy, Inc.

Unaudited Net Income Excluding the Effects of Derivatives

(In thousands)

 

   

As
Reported
Three
Months
Ended
June 30,
2022

   

Effect of
Derivatives

   

Three Months
Ended June
30, 2022
Excluding the
Effects of
Derivatives

 

Income before income taxes

  $ 101,633     $ 11,891     $ 113,524  

Income tax expense

    24,072       2,497       26,569  

Net income

  $ 77,561     $ 9,394     $ 86,955  

 

 

 

Investor Contact:

 

Ryan Hightower

Vice President, Business Development

817.850.9204

rhightower@highpeakenergy.com

 

Source: HighPeak Energy, Inc.

 

 

10

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