HighPeak Energy Reports Significant Increase in Net Income for Q1 2025

HighPeak Energy, Inc. reported a significant increase in financial performance for the first quarter of 2025, with net income reaching $36.3 million, or $0.26 per diluted share, compared to $6.4 million, or $0.05 per diluted share, in the same period of 2024. This $29.9 million increase in net income was primarily driven by a $45.1 million reduction in losses from derivative instruments, which fell from $53.0 million to $7.9 million, alongside a $21.5 million decrease in depletion, depreciation, and amortization (DD&A) expenses. The DD&A rate decreased by 21% due to a significant increase in proved reserves at the end of 2024. However, total operating revenues decreased by 11% to $257.4 million, attributed to a 15% decline in average realized commodity prices per barrel of oil equivalent (Boe), despite a 7% increase in daily sales volumes.

Operationally, HighPeak Energy's average daily sales volumes increased to 53,128 Boepd from 49,729 Boepd year-over-year, primarily due to higher natural gas and natural gas liquids (NGL) sales volumes resulting from third-party midstream expansions. The company successfully completed and placed 13 gross horizontal wells into production during the quarter, all located in its Flat Top area. As of March 31, 2025, HighPeak operated approximately 98% of its net acreage, which spans about 154,810 gross acres in the Midland Basin of West Texas.

In terms of strategic developments, HighPeak Energy incurred $2.5 million in acquisition costs during the quarter to acquire additional contiguous undeveloped acreage. The company also divested non-core properties for $570,000. The company continues to maintain a flexible capital plan, with a capital budget for 2025 projected between $375 million and $405 million, which includes drilling, completion, and infrastructure costs. The company plans to fund these expenditures through cash on hand, operating cash flow, and available borrowing capacity under its Senior Credit Facility Agreement.

Looking ahead, HighPeak Energy's outlook remains cautious due to ongoing volatility in commodity prices influenced by geopolitical tensions, including the war in Ukraine and conflicts in the Middle East. The company is closely monitoring market conditions and adjusting its capital expenditures accordingly. The management emphasized the importance of maintaining operational performance and financial stability while maximizing returns and improving leverage metrics. The company is also engaged in a strategic alternatives process to explore options for maximizing shareholder value, although no definitive actions have been taken as of yet.