0001437749-25-033346
SEC filingLower commodity prices and a 7% volume decline drove a Q3 net loss of $18.3M, compared to net income of $49.9M a year ago.
For the three months ended September 30, 2025, HighPeak Energy reported a net loss of $18.3 million compared to net income of $49.9 million in the same period of 2024. The $68.3 million decline was driven by a $82.7 million decrease in crude oil, NGL, and natural gas revenues, a $25.4 million loss on extinguishment of debt, a $25.4 million decrease in derivative gains, and higher general and administrative expenses, partially offset by lower DD&A, income tax, interest, and production costs. Total operating revenues fell 30% to $188.9 million due to a 25% drop in average realized price per Boe (to $42.91) and a 7% decline in daily sales volumes (to 47,839 Boe/d). Realized crude oil prices averaged $65.63 per Bbl (down 14%), NGL prices fell 18% to $17.40 per Bbl, while natural gas prices surged 155% to $1.07 per Mcf.
Cash provided by operating activities decreased to $120.2 million from $177.1 million. Non-GAAP EBITDAX was $139.9 million versus $214.3 million in the prior-year quarter.
The company operates as a single reporting segment focused on crude oil, NGL, and natural gas exploration and production in the Permian Basin (Midland Basin). Production mix shifted: crude oil volumes fell 18% to 31,594 Bbl/d, but NGL volumes rose 27% to 8,279 Bbl/d and natural gas volumes increased 30% to 47,795 Mcf/d, due to third-party midstream expansions. For the nine months ended September 30, 2025, liquids (crude oil and NGL) accounted for 85% of total sales volumes on a Boe basis. The decline in crude oil volumes reflects reduced drilling activity and natural decline, while increased gas and NGL volumes partially offset the overall production decrease.
HighPeak Energy expects to maintain flexibility in its capital plan amid ongoing commodity price volatility and macroeconomic uncertainty. The 2025 capital budget is forecasted at $375-$405 million for drilling, completion, facilities, and equipping, plus $40-$50 million for field infrastructure and $33-$35 million in one-time infrastructure expenditures. The company currently operates one drilling rig and one frac crew, with plans to average one to two rigs for the remainder of 2025. Management is focused on maximizing returns, improving leverage metrics, and increasing asset value. The strategic alternatives process initiated in January 2023 remains ongoing, with Texas Capital Securities as financial advisor, but no decisions have been made. Key risks include OPEC+ production increases, U.S. trade tariffs, and geopolitical conflicts that could further impact commodity prices and costs.
As of September 30, 2025, HighPeak Energy held cash and cash equivalents of $164.9 million, up from $86.6 million at year-end 2024. Total debt stood at $1.192 billion (net of issuance costs and discounts), compared to $1.048 billion at December 31, 2024, reflecting net borrowings of $143.9 million. Stockholders' equity increased slightly to $1.627 billion from $1.602 billion, supported by net income of $44.2 million in the first nine months, partially offset by dividends and share repurchases. Inventory was $9.9 million, consistent with prior periods.
The company disclosed significant non-cancelable commitments under its crude oil marketing contract with Delek/DKL, with a remaining minimum volume commitment of $119.7 million as of September 30, 2025. This commitment escalates over the contract term but can be offset by cumulative excess deliveries. Additionally, a natural gas gathering agreement requires future aid-in-construction funding of $8.6 million through early 2026. Collectively, these purchase commitments total $128.3 million. The company had no further sand or power purchase obligations after fulfilling earlier agreements.
HighPeak maintained its quarterly dividend at $0.04 per share, paying $15.1 million to common stockholders in the first nine months of 2025. The board authorized a $75 million buyback program in 2024, under which no shares were repurchased in 2025, leaving $39.9 million remaining as of September 30. Debt activity included net borrowings of $143.9 million, primarily from an amended Term Loan Credit Agreement that extended maturity to 2028 and deferred amortization. Capital expenditures totaled $396.4 million, or 61.3% of revenue, reflecting ongoing development in the Permian Basin.
The company operates a single reporting segment focused on exploration and production in the Permian Basin, specifically the Midland Basin in West Texas. Geographic mix is not separately disclosed. Segment revenue for the three and nine months ended September 30, 2025 was $188.9 million and $646.7 million, respectively, down 30.5% and 22.5% year-over-year primarily due to lower crude oil prices. The segment recorded a net loss of $18.3 million in Q3 versus net income of $49.9 million in Q3 2024, reflecting higher interest expense and debt extinguishment costs.