third quarter 2026
Filed Nov 5, 2026Granite Ridge reported third-quarter net loss of $10.1 million while Adjusted EBITDAX reached $107.3 million, raised capital activity, and authorized a $35.0 million share repurchase program.
Oil and natural gas sales, oil production, Adjusted EBITDAX and Adjusted Free Cash Flow increased, but the company recorded a GAAP net loss driven in part by a $52.7 million loss on commodity derivatives and reported higher lease operating expense per Boe.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Q3 2026 oil and natural gas salesGAAP | $177.2M | – | – |
| Q3 2026 oil salesGAAP | $147.2M | – | – |
| Q3 2026 natural gas and related product salesGAAP | $29.99M | – | – |
| Q3 2026 net operating incomeGAAP | $59.26M | – | – |
| Q3 2026 net income (loss)GAAP | −$10.05M | – | – |
| Q3 2026 basic earnings (loss) per shareGAAP | $ (0.08) | – | – |
| Q3 2026 diluted earnings (loss) per shareGAAP | $ (0.08) | – | – |
| Q3 2026 Adjusted Net Incomenon-GAAP | $22.65M | – | – |
| Q3 2026 Adjusted Earnings Per Diluted Sharenon-GAAP | $ 0.17 | – | – |
| Q3 2026 Adjusted EBITDAXnon-GAAP | $107.3M | – | – |
| Q3 2026 net cash provided by operating activitiesGAAP | $87.68M | – | – |
| Q3 2026 Operating Cash Flow Before Working Capital Changesnon-GAAP | $96.57M | – | – |
| Q3 2026 Adjusted Free Cash Flownon-GAAP | $13.70M | – | – |
| Q3 2026 lease operating expensesGAAP | $30.05M | – | – |
| Q3 2026 lease operating expenses per Boeother | $ 9.43 | – | a 17% increase on a per unit basis |
| Q3 2026 production and ad valorem taxesGAAP | $10.27M | – | – |
| Q3 2026 depletion and accretion expenseGAAP | $64.22M | – | – |
| Q3 2026 general and administrative expenseGAAP | $10.23M | – | – |
| Q3 2026 total operating costs and expensesGAAP | $117.9M | – | – |
| Q3 2026 loss on derivatives - commodity derivativesGAAP | −$52.70M | – | – |
| Q3 2026 interest expense, netGAAP | −$11.90M | – | – |
| Q3 2026 capital expenditures for oil and natural gas propertiesGAAP | $82.87M | – | – |
| Q3 2026 total costs incurred for oil and natural gas propertiesother | $109.9M | – | – |
| Q3 2026 average daily productionother | 34,641 Boe per day | – | 9% |
| Q3 2026 average daily oil productionother | 18,957 Bbl | – | 17% |
| Q3 2026 average daily natural gas productionother | 94,087 Mcf | – | in line |
| Q3 2026 average sales price, oilother | $ 84.41 per Bbl | – | – |
| Q3 2026 average sales price, natural gasother | $ 3.46 per Mcf | – | – |
| Nine months ended September 30, 2026 oil and natural gas salesGAAP | $454.7M | – | – |
| Nine months ended September 30, 2026 net income (loss)GAAP | −$27.09M | – | – |
| Nine months ended September 30, 2026 Adjusted EBITDAXnon-GAAP | $257.8M | – | – |
| Nine months ended September 30, 2026 net cash provided by operating activitiesGAAP | $201.6M | – | – |
| Nine months ended September 30, 2026 Adjusted Free Cash Flownon-GAAP | $22.34M | – | – |
| Trailing Twelve Months Adjusted EBITDAX ended September 30, 2026non-GAAP | $327.3M | – | – |
| Net Debt to Trailing Twelve Months Adjusted EBITDAX Ratio at September 30, 2026non-GAAP | 1.3 | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Oil salesAverage sales price for oil was $ 84.41 per Bbl, compared to $ 61.62 per Bbl, and average daily oil production was 18,957 Bbl compared to 16,222 Bbl. | $147.2M | – | – |
| Natural gas and related product salesAverage sales price for natural gas was $ 3.46 per Mcf, compared to $ 2.39 per Mcf, while average daily natural gas production was 94,087 Mcf compared to 94,217 Mcf. | $29.99M | – | – |
2026 outlook
- NoteAnnual production (Boe per day): 34,000 - 35,000
- NoteOil as a % of sales volumes: 51.5% - 52.5%
- NoteAcquisitions ($ in millions): $45 - $55
- NoteDevelopment capital expenditures ($ in millions): $300 - $330
- NoteTotal capital expenditures ($ in millions): $345 - $385
- NoteLease operating expenses (per Boe): $9.25 - $9.75
- NoteProduction and ad valorem taxes (as a % of total sales): 6% - 7%
- NoteCash general and administrative expense ($ in millions): $28 - $30
Capital returns
- Paid dividend of $0.11 per share of common stock.
- The Board declared a regular quarterly dividend of $0.11 per share payable on December 14, 2026 to shareholders of record as of November 27, 2026.
- The Board approved a share repurchase program permitting repurchases of up to $35.0 million of common stock through December 31, 2027.
- Nine months ended September 30, 2026 payment of dividends: $ 43,483 (in thousands).
- Nine months ended September 30, 2026 purchase of treasury shares: $ 30 (in thousands).
What drove it
- Daily production grew 9% to 34,641 Boe per day, with oil representing 55% of production.
- Oil production increased 17% to 18,957 Bbl per day, while natural gas production was 94,087 Mcf per day compared with 94,217 Mcf per day.
- Oil and natural gas realized prices excluding commodity derivatives were $84.41 per Bbl and $3.46 per Mcf, respectively, compared to $61.62 per Bbl and $2.39 per Mcf.
- The company placed 9.2 net wells online and closed 20 acquisitions, adding an aggregate inventory of 8.0 net undeveloped locations.
- Capital expenditures were $109.9 million, comprised of $90.8 million of drilling and completions capital and $19.0 million of property acquisition costs.
- Arete Creek Resources spud its first well under the operated partnership in October, and the company expects it to run one rig in 2027.
Concerns
- The company reported Q3 2026 net loss of $ (10,051) (in thousands), versus net income of $ 14,523 (in thousands) in the prior-year quarter.
- Q3 2026 loss on derivatives - commodity derivatives was $ (52,698) (in thousands), compared with a $ 5,224 (in thousands) gain in the prior-year quarter.
- Lease operating expenses per Boe were $ 9.43, a 17% increase on a per unit basis, due to increased saltwater disposal costs from higher water cuts and flowback operations, related surface equipment rentals, and contract labor.
- Interest expense, net was $ (11,902) (in thousands), compared with $ (6,069) (in thousands) in the prior-year quarter.
- Nine months ended September 30, 2026 net cash provided by operating activities was $ 201,612 (in thousands), compared with $ 231,914 (in thousands) in the prior-year period.
What to watch
- Delivery against 2026 annual production guidance of 34,000 - 35,000 Boe per day and oil as a percentage of sales volumes guidance of 51.5% - 52.5%.
- Execution against $300 - $330 million of development capital expenditures and $345 - $385 million of total capital expenditures guidance.
- Lease operating expenses against the $9.25 - $9.75 per Boe guidance range after Q3 expense of $9.43 per Boe.
- Commodity-derivative effects, following a Q3 loss on derivatives - commodity derivatives of $ (52,698) (in thousands).
- The pace of activity from the Arete Creek Resources partnership, which the company expects to run one rig in 2027.
- Use of the newly authorized share repurchase program of up to $35.0 million through December 31, 2027.
Balance sheet and cash flow
- Cash at September 30, 2026: $ 42,718 (in thousands).
- Liquidity at September 30, 2026: $287.4 million, consisting of $244.7 million of committed borrowing availability and $42.7 million of cash on hand.
- Principal debt outstanding at September 30, 2026: $341.3 million on 8.875% senior unsecured notes and $130.0 million under the senior secured revolving credit agreement.
- Current portion of long-term debt at September 30, 2026: $ 35,000 (in thousands).
- Long-term debt, net, at September 30, 2026: $ 424,327 (in thousands).
- Net Debt at September 30, 2026: $ 416,609 (in thousands).
- Q3 2026 net cash provided by operating activities: $ 87,684 (in thousands), including $8.9 million in working capital changes.
- Nine months ended September 30, 2026 net cash provided by operating activities: $ 201,612 (in thousands).
- Nine months ended September 30, 2026 net cash used in investing activities: $ (201,363) (in thousands).
- Nine months ended September 30, 2026 net cash provided by financing activities: $ 27,623 (in thousands).
- Cash at end of the nine months ended September 30, 2026: $ 42,718 (in thousands).
Analysis
Granite Ridge reported a mixed third quarter. Oil and natural gas sales were $ 177,205 (in thousands), compared with $ 112,671 (in thousands) in the prior-year quarter, as average daily production rose 9% to 34,641 Boe per day and oil production increased 17% to 18,957 Bbl. Oil and natural gas realized prices excluding derivatives also improved to $ 84.41 per Bbl and $ 3.46 per Mcf, respectively. Natural gas production was essentially unchanged at 94,087 Mcf per day versus 94,217 Mcf per day.
Management, verbatim
Our reported third quarter Adjusted EBITDAX was the highest in our history as a public company, and it gives a clear view of where our business is heading. In 2027, the roll-off of our lower-priced 2026 hedges, anticipated production growth and a higher oil weighting build on that record without relying on today’s oil prices, and at current strip prices we expect adjusted free cash flow to comfortably cover the dividend and grow our business.
Tyler Farquharson, President and CEO of Granite Ridge
Finally, our Board has authorized the repurchase of up to $35 million of our common stock through 2027 giving us another way to return capital to shareholders alongside our dividend.
Tyler Farquharson, President and CEO of Granite Ridge
Not in the filing
stated, not guessed- Prior-quarter comparisons were not reported for the presented Q3 2026 financial and operating metrics.
- Prior guidance was not provided, so no comparison of actual results with prior guidance is available.
- Revenue guidance was not reported.
- Gross margin and gross-margin guidance were not reported.
- Operating-expense guidance other than lease operating expenses, production and ad valorem taxes, and cash general and administrative expense was not reported.
- Tax-rate guidance was not reported.
- GAAP free cash flow was not reported.
Written by an AI language model from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure is checked against the filing text, and a metric the filing does not print, or whose value, prior period and change do not add up, is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. Consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.