HighPeak Energy, Inc. Q1 FY2025 earnings call

• Production: Averaged over 53,000 Boes per day, beating guidance and consensus estimates, with a 6% increase vs Q4. - EBITDA: Generated almost $200 million, up ~10% vs Q4 at similar oil prices. - Operating efficiencies: Spud-to-spud timing improved from 14 days to ~11 days over the past 2 quarters, a >20% faster pace. - Drilling/completion: Q1 D&C costs in line with 2025 expectations; drilled 20 wells vs initial plan of 12, spud 20 and rig released 16. - Infrastructure CapEx: First half weighted with majority in Q1, implementation smooth and within budget. - DUC inventory: Work in progress well count increased to 28; accelerated completion of a four-well pad in Q1. - Market impact: Tariffs increased OTCG costs by ~3% (OTCG ~8% of AFE), but overall well costs saw low single-digit declines except for OTCG. - Simu-frac: Plan to implement on a four-well pad, expecting ~$1 million savings per pad in D&C E&F, with benefits like reduced production watering out time and earlier production bring-in.

HighPeak Energy achieved a strong first quarter performance. Production averaged over 53,000 Boes per day, which was a 6% increase compared to Q4. The company generated almost $200 million of EBITDA during the quarter, representing a roughly 10% increase from the fourth quarter at nearly the same weighted average oil price. Cash margins remained healthy, and lease operating expenses decreased by approximately 3% quarter-over-quarter. In terms of revenue contribution, the production and EBITDA figures highlight the key financial performance of the company during the quarter.

• Development plan modification: Dropping one of two rigs from May to August, adjusting completion schedule to track operational DUCs. - Activity levels: Still expect to complete same number of wells as originally guided, stay within 2025 capital budget. - Flexibility: Can further modify development program if market conditions worsen, with flexibility in land/operations to adjust budget and rig usage.

• Tariffs: Increased cost of OTCG products by ~3% due to tariffs, as OTCG goods make up ~8% of typical AFE. - Market volatility: Worsening market environment or further commodity price weakness could require additional development program modifications.

Q: Talk about the impact of simul-frac and productivity comparison in Borden County.

A: Simul-frac can reduce fracking time for four wells from 25-28 days to 11-14 days, saving ~$1 million per pad in D&C E&F. In Borden County, eight wells are producing, a new four-well pad in flowback is performing like previous wells, and the first simul-frac pad will be implemented in the next couple of weeks.

Q: Update on Middle Spraberry, impact on 2025 development plan, production guidance, and balance sheet.

A: There are ~200 Middle Spraberry wells in the Flat Top inventory; expect 200 additional wells to move into sub-$50 breakeven over the next year or so. Modified development plan adjusts rigs and completion schedule. Production guidance raised to 48,000 Boe days due to strong Q1 performance and efficiencies. On balance sheet, infrastructure investment is in place, leading to less maintenance capital requirements and potential for more free cash flow, with flexibility to optimize capital structure and reduce leverage using free cash flow.