FORT WORTH, Texas, Nov. 09, 2020 (GLOBE NEWSWIRE) -- HighPeak Energy, Inc. (NASDAQ: HPK), today announced operating and financial results for the third quarter 2020.

Third Quarter 2020 Highlights

• Consummated the business combination with the HighPeak Funds on August 21, 2020 and raised an additional $102 million by issuing new equity through the business combination and the forward purchase agreement resulting in approximately 91.5 million shares outstanding.
• Brought back online the majority of our horizonal production beginning in late July 2020, which was previously curtailed in mid-April due to low commodity prices. Production returned as expected with all wells producing at or above pre-shut-in rates within a few weeks of bringing the wells back online.
• Initiated completion activities on twelve (12) drilled uncompleted wells (“DUCs”), including four (4) wells which had been drilled and completed prior to the closing of our business combination and eight (8) DUCs. Two (2) of the wells were turned online by quarter end.
• Commenced a one-rig drilling program in late September. Drilled one (1) horizontal Ellenburger salt-water disposal well in Howard County and plan to spud approximately five (5) oil wells by year end.
• Began constructing a company owned water disposal system in our Flat Top operating area providing future disposal and recycling opportunities.

“We raised over $100 million of equity at the closing of our business combination in an extremely challenging market which exemplifies the quality and upside potential of our asset base. We are excited and fortunate to be able to fund our initial development program with cash on our balance sheet and no debt. Our initial focus following the closing of the business combination is completing and turning online our drilled uncompleted well inventory and commencing a one-rig drilling program. In September we drilled the first horizontal saltwater disposal well in the Ellenburger formation in Howard County, which speaks to the ingenuity and skill set of our top tier technical team,” stated Jack Hightower, Chairman and Chief Executive Officer.

Third Quarter 2020 Operational and Financial Results

• Net loss for the period from August 22, 2020 through September 30, 2020 (the “Successor Period”) was $11.5 million, or $0.13 per diluted share. Net income for the Successor Period, excluding $14.5 million of non-cash stock-based compensation, was $540,000, or $0.01 per diluted share.
• Production averaged 3,200 barrels of oil equivalent (“BOE”) per day including 3,104 barrels of oil per day, or 97% of the production stream, for the Successor Period.
• Lease operating expense per BOE and production and ad valorem taxes per BOE averaged $5.24 and $2.01, respectively, for the Successor Period. General and administrative expenses for the Successor Period were approximately $0.8 million.
• EBITDAX (a non-GAAP financial measure) for the Successor Period was $3.1 million. See Reconciliation of Net Income to EBITDAX below.

• Cash flows provided by operating activities for the Successor Period were $1.2 million.
• Cash on the balance sheet at the end of the quarter was $54.9 million with no debt.

Michael Hollis, HighPeak Energy President, said, “Due to low oil prices, we paused our development plan and shut in the production of all of our horizontal wells in April. The wells were returned to production starting in late July and quickly returned to their pre-shut-in rates. As we continue to bring our DUC’s online through the fourth quarter, we expect production to exceed 10,000 barrels of oil equivalent per day in early 2021. Our current total well costs including drilling, completion, equipping and facilities (“D,C,E&F”) are approximately $500/foot which provide for attractive rates of return in this low commodity price environment. HighPeak has made the decision to implement the necessary infrastructure investments that will allow us to deliver best-in-class capital efficiency, realized pricing, and production expenses. I could not be prouder for what our organization has accomplished in such a short time and how they have leaned into the challenges brought on by this unprecedented pandemic considering how much it has affected our industry.”

Quarterly Report on Form 10-Q

HighPeak Energy’s financial statements and related footnotes will be available in its Quarterly Report on Form 10-Q for the quarter ended September 30, 2020, which is expected to be filed with the U.S. Securities and Exchange Commission (the “SEC”) on November 12, 2020.

About HighPeak Energy, Inc.

HighPeak Energy, Inc. is a publicly traded independent oil and natural gas company, headquartered in Fort Worth, Texas, focused on the acquisition, development, exploration and exploitation of unconventional oil and natural gas reserves in the Midland Basin in West Texas. For more information, please visit our website at www.highpeakenergy.com.