Granite Ridge Resources (GRNT) risk factors, FY2025 10-K

Risks Related to Our Business and Operations

1. 01As a non-operator, our development of successful operations relies extensively on third parties, which could have a material adverse effect on our results of operation
2. 02The inability of one or more of our operating partners to meet their obligations to us may adversely affect our financial results
3. 03Our business depends on transportation and processing facilities and other assets that are owned by third parties
4. 04The loss of a key member of the Manager’s management team, upon whose knowledge, relationships with industry participants, leadership and technical expertise we rely, could diminish our ability to conduct our operations and harm our ability to execute our business plan
5. 05Oil and natural gas prices are volatile. Extended declines in such prices have adversely affected, and could in the future adversely affect, our business, financial position, results of operations and cash flow
6. 06Drilling for and producing oil and natural gas are high risk activities with many uncertainties that could adversely affect our financial condition or results of operations
7. 07Certain of our undeveloped leasehold acreage is subject to leases that will expire over the next several years unless production is established or operations are commenced on units containing the acreage or the leases are extended27% rewritten
8. 08We could experience periods of higher costs as activity levels fluctuate or if commodity prices rise. These increases could reduce our profitability, cash flow, and ability to complete development activities as planned
9. 09New technologies may cause the current exploration and drilling methods of our operating partners to become obsolete, and such operators may not be able to keep pace with technological developments in the oil and gas industry
10. 10Due to previous declines in oil and natural gas prices, we have in the past taken writedowns of the properties that constitute our oil and natural gas properties. We may be required to record further writedowns of our oil and natural gas properties in the future
11. 11Our estimated reserves are based on many assumptions that may prove to be inaccurate. Any material inaccuracies in these reserve estimates or underlying assumptions will materially affect the quantities and present value of our reserves
12. 12The present value of future net cash flows from our proved reserves is not necessarily the same as the current market value of our estimated proved reserves
13. 13Our future success depends on our ability to replace reserves that our operators produce
14. 14Extreme weather conditions could adversely affect operators’ ability to conduct drilling activities in some of the areas where the Properties are located
15. 15The development of our proved undeveloped reserves may take longer and may require higher levels of capital expenditures than we currently anticipate. Therefore, our undeveloped reserves may not be ultimately developed or produced
16. 16Our acquisition strategy will subject us to certain risks associated with the inherent uncertainty in evaluating properties for which we have limited information
17. 17We may not be able to successfully integrate future acquisitions or realize all of the anticipated benefits from our future acquisitions, and our future results will suffer if we do not effectively manage our expanded operations
18. 18Deficiencies of title to our leased interests could significantly affect our financial condition
19. 19Our derivatives activities could adversely affect our cash flow, results of operations and financial condition
20. 20Decommissioning costs are unknown and may be substantial. Unplanned costs could divert resources from other projects
21. 21We are not insured against all of the operating risks to which our business is exposed
22. 22We conduct business in a highly competitive industry
23. 23We and our operating partners depend on computer and telecommunications systems and other information and operational technology systems, and failures in those systems or cybersecurity threats, attacks and other disruptions could significantly disrupt our business operations
24. 24A variety of stringent federal, tribal, state, and local laws and regulations govern the environmental aspects of the oil and gas business. Any noncompliance with these laws and regulations could subject us to material administrative, civil or criminal penalties, injunctive relief, or other liabilities39% rewritten
25. 25comply with these CAA requirements can result in the imposition of substantial fines and penalties as well as costly injunctive relief. These rules could further increase the cost of development and operation of the PropertiesNew
26. 26Hydraulic fracturing is an important and commonly used process that we anticipate will be engaged in by some or all opportunities in which it invests. Hydraulic fracturing is used to stimulate production of natural gas and/or oil from dense subsurface rock formations45% rewritten
27. 27Specific climate legislation and regulation regarding emissions of carbon dioxide, methane, and other greenhouse gases may develop or be enacted, which could adversely affect the oil and gas industry and demand for the oil and gas produced from the Properties37% rewritten
28. 28Fuel and energy conservation measures, technological advances and negative shift in market perception towards the oil and natural gas industry could reduce demand for oil and natural gas
29. 29Increased attention to ESG matters may impact our business35% rewritten
30. 30We rely on the Manager for various certain key services under the MSA, which could result in conflicts of interest and other unforeseen risks41% rewritten
31. 31extent not addressed by the MSA, we and the Manager have implemented policies as necessary or appropriate to deal with such potential conflictsNew
32. 32We rely to a large degree on the Manager to maintain an effective system of internal control over financial reporting and we may not be able to accurately report our financial results or prevent fraud
33. 33The borrowing base under our Credit Agreement may be reduced in light of commodity price declines, which could limit us in the future

Risks Relating to Ownership of Our Common Stock

1. 34Sales of our common stock by our securityholders (or the perception that such shares may be sold) or issuances by us may cause the market price of our securities to drop significantly, even if our business is doing well65% rewritten
2. 35Future issuances of debt securities and/or equity securities may adversely affect us, including the market price of our common stock, and may be dilutive to our existing stockholders
3. 36Anti-takeover provisions in our organizational documents could delay or prevent a change of control
4. 37Our amended and restated certificate of incorporation contains a provision renouncing our interest and expectancy in certain corporate opportunities
5. 38Changes in applicable tax laws or interpretations thereof or the imposition of new or increased taxes or fees may increase our future tax liabilities and adversely affect our operating results and cash flows29% rewritten
6. 39other changes in tax laws or the imposition of new or increased taxes or fees could increase our future tax liabilities and adversely affect our operating results and cash flowsNew
7. 40The payment of dividends is at the discretion of our Board of Directors, and we cannot assure you that we will continue making dividend payments in the future24% rewritten

General Risks

1. 41The market price of shares of our common stock may be volatile
2. 42In addition, the United States and other countries have imposed sanctions on Russia which increases the risk that Russia, as a retaliatory action, may launch cyberattacks against the United States, its government, infrastructure and businesses
3. 43World health events may materially adversely affect our business