Granite Ridge: 3 Key Takeaways for Long-Term Investors

On its third-quarter 2026 earnings call, held on Nov. 6, 2026, Granite Ridge (NYSE:GRNT) reported that cash flow before working capital changes covered its drilling and completion capital for the quarter. Management expects adjusted free cash flow, defined as operating cash flow before working capital changes minus development capital expenditures, to fund future dividends and capital allocation.

Three things management said stand out.

1. Operator Partnerships Lower Permian Acquisition Costs

Granite Ridge expands its inventory by partnering with private operators who source acreage through direct leasing rather than public auctions. This platform consistently secures Permian Basin drilling locations for less than $2.5 million per net location.

Our operator partnership platform remains the core of our strategy ... and attracts the majority of our 2026 drilling and completion capital.
-- Tyler S. Farquharson, President and Chief Executive Officer

2. Recovering Gas Prices Boost Operating Cash Flow

Natural gas pricing at the Waha hub, a West Texas regional market center, recovered from record low levels as new pipeline capacity opened. That recovery tripled realized natural gas prices sequentially and expanded total quarterly cash flow.

Waha recovered from record lows in the second quarter as new Permian takeaway came on. And our realized price tripled.
-- R. Kyle Kettler, Chief Financial Officer

3. Capital Allocation Shifts to Dividends and Buybacks

Granite Ridge established a clear framework for spending adjusted free cash flow as development capital spending catches up with cash generation. The Board authorized a $35 million share repurchase program while sustaining the company's quarterly dividend.

First, the dividend. We paid $0.11 dividend per share every quarter since becoming a public company. Second, acquisitions that clear our full cycle return threshold at Strip. And third, opportunistic share repurchases.
-- R. Kyle Kettler, Chief Financial Officer

Looking Ahead

Production growth and higher oil weighting mark an operational turning point for the business. Granite Ridge maintains nonoperated positions across six basins with return targets above 25% at current commodity strip prices. Management is watching operational execution, cost inflation, and oil mix targets.

The inflection is underway. Volumes are growing, Oil mix is rising. Gas realizations have recovered, and our cash flow is caught up with our development spending.
-- Tyler S. Farquharson, President and Chief Executive Officer

Management expects cash generation to strengthen further as production expands and legacy commodity hedges expire.

We are excited about where this company is headed and we look forward to delivering on it.
-- Tyler S. Farquharson, President and Chief Executive Officer

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