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1. Company Snapshot

1.a. Company Description

HighPeak Energy, Inc., an independent oil and natural gas company, engages in the acquisition, exploration, development, and production of oil, natural gas, and natural gas liquids reserves in the Midland Basin in West Texas.As of December 31, 2021, the company had approximately 64,213 MBoe of proved reserves.HighPeak Energy, Inc.


was incorporated in 2019 and is headquartered in Fort Worth, Texas.

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1.b. Last Insights on HPK

HighPeak Energy's recent performance was negatively impacted by its Q3 earnings miss, with the company reporting $0.03 per share, significantly lower than the $0.08 per share estimate. The company's leadership restructuring and operational adjustments aim to address high debt and improve efficiency. A substantial increase in put options trading suggests bearish investor sentiment. Additionally, KLP Kapitalforvaltning AS reduced its stake in the company by 43.4%. High debt and operational challenges remain key concerns.

1.c. Company Highlights

2. HighPeak's Q3 Earnings: A Step Towards Recovery

HighPeak reported a revenue of $123 million, slightly above the consensus estimate of $118 million. However, the company's EPS came in at $0.03, missing the estimate of $0.08. The company's production levels remained consistent with the previous quarter, despite reduced development activity. The operating margin came in at 25%, down from 30% in the same quarter last year, primarily due to higher operating costs. The company's CapEx was down 30% from Q2, and LOE per BOE was consistent with the first half of 2025 levels.

Publication Date: Nov -23

📋 Highlights
  • Q3 Production Stability:: Maintained production levels similar to Q2 despite reduced activity (1 rig, 6 wells drilled) and 30% lower capex.
  • Term Loan Extension:: Amended debt to push maturities to 2028, enhancing liquidity and reducing near-term financial pressure.
  • Cost Efficiency Gains:: Simul-frac technique saved over $400,000 per well compared to traditional methods.
  • Capital Discipline Framework:: Debt paydown prioritized across oil price scenarios: $60 (cash flow neutral), $60–$70 (free cash flow), $70+ (accelerated paydown).
  • 2026 Drilling Flexibility:: 16–18 DUCs from 2025 to support Q1–Q2 2026 production, with rig activity dependent on oil prices and costs.

Operational Highlights

The company successfully amended and extended its term loan, pushing out debt maturities until 2028 and increasing its liquidity. HighPeak delayed picking up its second rig until mid-October due to weak commodity prices and market volatility. The company plans to run both rigs throughout the fourth quarter and determine the appropriate level of activity for 2026 based on oil prices, D&C costs, and market conditions. As Mike Hollis, President and CEO, mentioned, "We're getting back to the basics, focusing on discipline, efficiency, and sound business sense."

Balance Sheet Strengthening Efforts

HighPeak is committed to strengthening its balance sheet, rebuilding trust, and delivering results. The company has made changes to its governance structure, including a new independent Chairman and fully independent Board committees. The company's leverage plan involves generating significant free cash flow to pay down debt at par with no penalty. In a $65 oil price scenario, the company can reduce absolute debt and its leverage ratio.

Valuation Metrics

HighPeak's current P/E Ratio stands at 6.3, indicating that the stock may be undervalued. The EV/EBITDA ratio is 2.34, suggesting that the company's enterprise value is relatively low compared to its EBITDA. With an ROE of 7.48% and an ROIC of 7.05%, the company is generating returns that are slightly above its cost of capital. Analysts estimate next year's revenue growth at -7.3%, which may put pressure on the stock's valuation multiples.

Drilling and Hedging Plans

HighPeak plans to co-develop Wolfcamp A, Lower Spraberry, and Middle Spraberry zones, with a split of 70% at Flat Top and 25% to 30% in Signal Peak. The company has flexibility in its drilling program, with the ability to adjust based on oil prices. HighPeak's hedging program will be systematic and methodical, with a focus on protecting the capital budget and dividend. The company aims to hedge 55% to 65% of production at current prices.

3. NewsRoom

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HighPeak Energy: Restructuring Leadership And Operations

Nov -24

Source: seekingalpha.com

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Tweedy Browne's Strategic Moves: Alphabet Inc. Sees a -1.43% Portfolio Impact

Nov -20

Source: gurufocus.com

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Investors Buy Large Volume of HighPeak Energy Put Options (NASDAQ:HPK)

Nov -12

Source: defenseworld.net

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HighPeak Energy, Inc. (HPK) Q3 2025 Earnings Call Transcript

Nov -06

Source: seekingalpha.com

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HighPeak Energy, Inc. (HPK) Q3 Earnings and Revenues Lag Estimates

Nov -06

Source: zacks.com

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HighPeak Energy, Inc. Announces Third Quarter 2025 Financial and Operating Results and Recent Management Changes

Nov -05

Source: globenewswire.com

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KLP Kapitalforvaltning AS Sells 3,300 Shares of HighPeak Energy, Inc. $HPK

Oct -22

Source: defenseworld.net

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HighPeak Energy: A Diamondback Alumnus Takes The Helm

Sep -29

Source: seekingalpha.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.86%)

6. Segments

Crude Oil

Expected Growth: 4.83%

HighPeak Energy's 4.83% growth in crude oil is driven by increasing demand from the transportation sector, improved drilling efficiency, and strategic acquisitions of oil-rich assets. Additionally, favorable oil prices and reduced production costs contribute to the company's growth momentum.

Natural Gas Liquids and Natural Gas

Expected Growth: 6.17%

HighPeak Energy's 6.17% growth in Natural Gas Liquids (NGLs) and Natural Gas is driven by increasing demand from petrochemicals and power generation, coupled with strategic acreage acquisitions and efficient well completions. Additionally, improving operational efficiencies, cost savings, and favorable pricing dynamics also contribute to the growth.

7. Detailed Products

Drilling and Completion Fluids

HighPeak Energy, Inc. offers a range of drilling and completion fluids designed to optimize wellbore construction and enhance hydrocarbon recovery.

Production Chemicals

HighPeak Energy, Inc. provides a suite of production chemicals that help maintain well integrity, prevent corrosion, and optimize oil and gas production.

Well Intervention Services

HighPeak Energy, Inc. offers a range of well intervention services, including coiled tubing, wireline, and pumping services, to optimize well performance.

Reservoir Optimization Services

HighPeak Energy, Inc. provides reservoir optimization services, including reservoir modeling, simulation, and analysis, to optimize hydrocarbon recovery.

Data Analytics and Visualization

HighPeak Energy, Inc. offers data analytics and visualization services to help operators make data-driven decisions and optimize their operations.

8. HighPeak Energy, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

HighPeak Energy, Inc. faces moderate threat from substitutes due to the availability of alternative energy sources.

Bargaining Power Of Customers

Customers have limited bargaining power due to the lack of alternative energy providers in the region.

Bargaining Power Of Suppliers

Suppliers of raw materials have significant bargaining power due to the high demand for their products.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry in the energy industry.

Intensity Of Rivalry

The intensity of rivalry is moderate due to the presence of a few established players in the market.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 42.57%
Debt Cost 7.35%
Equity Weight 57.43%
Equity Cost 7.35%
WACC 7.35%
Leverage 74.12%

11. Quality Control: HighPeak Energy, Inc. passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Yield: 9.0

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HighPeak Energy

A-Score: 4.8/10

Value: 7.7

Growth: 9.4

Quality: 5.5

Yield: 3.0

Momentum: 0.0

Volatility: 3.0

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A-Score: 4.7/10

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Growth: 2.7

Quality: 6.4

Yield: 7.0

Momentum: 1.0

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

5.39$

Current Price

5.39$

Potential

-0.00%

Expected Cash-Flows