HighPeak Energy Q2 2026 Earnings Report

HighPeak Energy EPS Results

• Actual EPS: $0.59
• Consensus EPS: $0.02
• Beat/Miss: Beat by +$0.57
• One Year Ago EPS: $0.10

HighPeak Energy Revenue Results

• Actual Revenue: $272.42 million
• Expected Revenue: $240.03 million
• Beat/Miss: Beat by +$32.39 million
• YoY Revenue Growth: +25.80%

HighPeak Energy Announcement Details

• Quarter: Q2 2026
• Date: 8/10/2026
• Time: After Market Closes
• Conference Call Date: Tuesday, August 11, 2026
• Conference Call Time: 11:00AM ET

HighPeak Energy (NASDAQ:HPK) (NASDAQ: HPK) is a Delaware‐incorporated independent oil and natural gas exploration and production company. The firm focuses on the acquisition, development and exploitation of onshore petroleum assets in the continental United States. Its operations encompass the full upstream value chain, including exploration, drilling, completion and production activities aimed at maximizing hydrocarbon recovery and operational efficiency.

The company’s primary business activities include identifying and acquiring conventional and unconventional oil and gas properties, applying advanced drilling and completion technologies, and managing midstream logistics to optimize product flow. HighPeak Energy’s portfolio consists of interests in multiple onshore basins, where it pursues stacked pay opportunities to develop crude oil, natural gas and natural gas liquids. The company regularly evaluates prospective acreage for bolt‐on acquisitions to expand its resource base and enhance long‐term reserves.

HighPeak Energy’s management team brings decades of upstream industry experience, combining technical, operational and financial expertise. The company emphasizes disciplined capital allocation, environmental stewardship and community engagement as it grows its position in key U.S. resource plays. With a focus on cost control and sustainable operations, HighPeak Energy seeks to deliver reliable energy production while adhering to rigorous safety and regulatory standards.

HighPeak Energy Q2 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: First-half production averaged 45,500 BOE per day, above the high end of guidance, while unit lease operating expense was $7.56 per BOE—approximately 13% below the guided level.
• Positive Sentiment: HighPeak accelerated completion activity to capture favorable frac pricing and efficiency gains, putting 24 wells completed and 20 wells turned to sales in the first half; this should support meaningfully lower capital spending and stronger free cash flow in the second half of 2026.
• Positive Sentiment: A low-cost workover program restored production and improved older-well productivity, generating attractive returns and helping offset temporary production impacts from accelerated completions.
• Positive Sentiment: Stronger realized oil prices and steady production drove sequential growth in adjusted EBITDA and free cash flow despite approximately $55 million of net cash hedge losses; management said a larger share of future production remains exposed to spot prices.
• Neutral Sentiment: Management plans to make the scheduled $30 million quarterly term-loan amortization but will be cautious about additional prepayments to preserve liquidity, while improved gas takeaway should reduce the severe Waha pricing discounts seen in the second quarter.

Presentation

[Operator]

Good day, and welcome to HighPeak Energy 2026 second quarter earnings conference call. At this time, all participants are in a listen only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Also, the call is being recorded. I would now like to turn the call over to Steven Tholen, Chief Financial Officer. Please go ahead.

[Steven Tholen, CFO at HighPeak Energy]

Good morning, everyone, and welcome to HighPeak Energy second quarter 2026 earnings call. Representing HighPeak today are President and Chief Executive Officer, Michael Hollis, Executive Vice President, Daniel Silver, Senior Vice President, Chris Mundy, and I am Steven Tholen, the Chief Financial Officer. During today's call, we may refer to our August investor presentation and press release, which can be found on HighPeak's website.

[Steven Tholen, CFO at HighPeak Energy]

Today's call participants may make certain forward-looking statements relating to the company's financial condition, results of operations, expectations, plans, goals, assumptions, and future performance. Please refer to the cautionary information regarding forward-looking statements and related risks in the company's SEC filings, including the fact that actual results may differ materially from our expectations due to a variety of reasons, many of which are beyond our control.

[Steven Tholen, CFO at HighPeak Energy]

We will also refer to certain non-GAAP financial measures on today's call. Please see the reconciliations in the earnings release and in our August investor presentation. I will now turn the call over to our President and Chief Executive Officer, Mike Hollis.

[Michael Hollis, President and CEO at HighPeak Energy]

Thank you, Steve. Good morning, everyone, and thank you for joining us today to discuss our second quarter 2026 results. It was another strong quarter for HighPeak. Our team continued to do what they have consistently done, execute the development plan, operate efficiently, spend capital responsibly, and focus on creating long-term value for our shareholders.

[Michael Hollis, President and CEO at HighPeak Energy]

Production during the quarter was essentially flat with the first quarter, and once again, came in above the high end of our guidance range. That performance reflects the quality of our assets and more importantly, the ability of our operations team to consistently deliver results. From a capital spending perspective, the second quarter was expected to be our highest spending quarter of the year when we built our 2026 plan. During the quarter, we also chose to pull forward some completion activity that was originally scheduled later in the year.

[Michael Hollis, President and CEO at HighPeak Energy]

We saw an opportunity to lock in attractive frac pricing and continue working with a simul-frac crew that has been generating meaningful efficiency gains, faster cycle times, and lower costs. When we see opportunities to improve returns and create additional value, we're going to take advantage of them. Advancing that work allowed us to do exactly that while staying within the disciplined framework we've used throughout the year.

[Michael Hollis, President and CEO at HighPeak Energy]

As a result, we expect capital spending to decline meaningfully during the second half of 2026, which is consistent with our original plan and reflects the amount of development work completed during the first six months of the year. On the cost side, our team continued to make solid progress. Drill, complete, and equip cost remained in line with expectations, and we continued to drive operational improvements across the field.

[Michael Hollis, President and CEO at HighPeak Energy]

Lease operating expense performance was particularly strong with the first half unit LOE coming in approximately 13% below the midpoint of our full year guidance. It's worth noting that these results include the impact of an expanded workover program that we intentionally pursued during the quarter. As commodity prices improved, we identified opportunities to invest modest amounts of capital into low cost, high return workovers that brought meaningful production back online, as well as enhanced the productivity capability of those wells, all while generating attractive economics.

[Michael Hollis, President and CEO at HighPeak Energy]

We'll discuss that program in more detail later because it highlights the kind of practical return-focused decision-making that drives value at HighPeak. Financially, stronger realized oil prices, combined with consistent production, drove sequential growth in both adjusted EBITDA and free cash flow. We achieved those results despite absorbing approximately $55 million of net cash hedge losses during the quarter.

[Michael Hollis, President and CEO at HighPeak Energy]

Looking ahead, a larger percentage of our expected production remains exposed to spot prices, which positions us to benefit if commodity prices remain supported by the ongoing uncertainty in the global supply market. Bottom line, we are pleased with where the company stands today. Our priorities have not changed.

[Michael Hollis, President and CEO at HighPeak Energy]

We're going to continue developing our assets safely and efficiently, allocating capital with discipline, keeping a close eye on cost, and building a stronger business quarter over quarter. That's how we've operated for multiple years now, and that's how we'll continue creating value for our shareholders. Turning to slide five and six of our investor presentation. These slides highlight the progress we've made against our 2026 development plan throughout the first half of the year. The operations team continues to execute at a high level across the board.

[Michael Hollis, President and CEO at HighPeak Energy]

On the drilling side, we kept driving efficiencies and drilled 17 of our planned 29 wells during the first six months of the year. On the completion side, we completed 24 of our planned 33 wells for the year, reflecting the decision to pull forward a portion of our second-half completion activity and take advantage of favorable market conditions.

[Michael Hollis, President and CEO at HighPeak Energy]

As we've discussed, the accelerated completion schedule allowed us to capitalize on attractive service costs and continue working with a high-performing simul-frac crew that has consistently delivered strong results. Despite some additional fully expected frac impact oil volumes, production was supported in the quarter by the success of our workover program and the associated oil volumes from that work. We've already turned 20 wells into sales this year, which puts us in a strong position to achieve our full-year target of 37 turn-in-lines.

[Michael Hollis, President and CEO at HighPeak Energy]

When we built our 2026 development plan, we expected roughly 60% of the year's capital to be spent in the first half. Because we elected to accelerate a portion of our completion activity, first half spending ultimately moved into the mid to upper 60% range of our annual budget. That wasn't unplanned spending. It was capital deployed against productive work that generated value and advanced our development program ahead of schedule. The benefit of that strategy is that a significant amount of this year's development work is now behind us.

[Michael Hollis, President and CEO at HighPeak Energy]

We've put ourselves in a position to maintain strong production levels while materially reducing capital spending in the second half of the year. That's exactly the kind of setup we like. We get the benefit of the work completed earlier in the year, lower capital requirements going forward, and the opportunity to generate stronger free cash flow through the balance of 2026. Most importantly, we're accomplishing that while staying disciplined, executing the plan, and continuing to focus on long-term value creation for our shareholders.

[Michael Hollis, President and CEO at HighPeak Energy]

Turning to the base production optimization. One of the best examples of value creation during the quarter was the successful work of our workover program. As commodity prices improved, we saw an opportunity to put additional capital to work in parts of the business where the returns were compelling and the risk was low. Our team went well by well across the asset base and identified opportunities where a relatively small investment could bring meaningful production back online, as well as enhance the productive capability of those wells. Again, all while generating attractive economics.

[Michael Hollis, President and CEO at HighPeak Energy]

We like these projects because they're straightforward, capital efficient, pay back quickly. In many cases, we're investing a fraction of what it costs to drill a new well while getting production back online in a much shorter timeframe. From a returns perspective, these are some of the highest value opportunities we have available. The workover program is not a replacement for our development program, it's a complement to it.

[Michael Hollis, President and CEO at HighPeak Energy]

We're continuing to develop our inventory, but we're also making sure we maximize the value of every asset that we already own. That's just good oil field management. At HighPeak, we've always believed capital should go where it can generate the strongest returns, whether that's drilling a new well, completing a DUC, putting capital into a workover, we're going to evaluate every opportunity the same way. The goal is simple.

[Michael Hollis, President and CEO at HighPeak Energy]

Invest wisely, increase production, generate more free cash flow, and create long-term value. This quarter's workover results are another example of our team's operational focus and disciplined approach to capital allocation. We identified an opportunity, moved quickly to capture it, and delivered strong return on that investment. Now, looking ahead to the rest of 2026, we're in a good position.

[Michael Hollis, President and CEO at HighPeak Energy]

A large portion of our expected oil production is exposed to market pricing, which gives us a greater participation if commodity prices remain strong. At the same time, we're not in the business of speculating. We're in the business of generating cash flow and protecting returns. That's why we continue to maintain a solid hedge position with the majority of our oil hedges sitting in the mid-$60 per barrel range. Those hedges provide meaningful downside protection while still allowing us to benefit from a stronger price environment.

[Michael Hollis, President and CEO at HighPeak Energy]

We take a practical and disciplined approach to risk management. During the quarter, we added a number of positions designed to reduce volatility and protect cash flow where we saw the opportunity to do so at attractive levels. Specifically, we added NYMEX WTI roll swaps to manage calendar spread exposure and Waha basis swaps to help reduce our exposure to fluctuations in West Texas natural gas pricing.

[Michael Hollis, President and CEO at HighPeak Energy]

The objective is pretty simple. We want to protect the balance sheet, preserve cash flow, and maintain the financial flexibility to continue executing our development plan regardless of where commodity prices move in the near term. We believe that's the right approach for our shareholders. We want meaningful upside when markets are strong, but we also want to make sure that we're protecting the business during periods of volatility. This approach positions HighPeak to continue generating value for shareholders in any market environment.

[Michael Hollis, President and CEO at HighPeak Energy]

Turning to our first half 2026 operational and financial scorecard. I think this slide tells a pretty simple story. Our team went out and executed. Across the board, we either met or exceeded the goals we set for ourselves while continuing to stay disciplined on cost, capital, and operations. Production averaged 45,500 BOEs per day during the first six months of the year, exceeding the high end of our guidance range.

[Michael Hollis, President and CEO at HighPeak Energy]

That's a direct result of strong well performance, disciplined execution of our development program, and the ongoing work our team is doing to maximize the value of our existing production base. On the cost side, the results were equally strong. Unit LOE averaged $7.56 per BOE, which came in approximately 13% below our guided level. That's not the result of a one-time event or simply getting lucky.

[Michael Hollis, President and CEO at HighPeak Energy]

It's the result of years of work focused on building more efficient operation through infrastructure improvements, electrification, field-level optimization, and a culture that's constantly looking for ways to do things better. Most importantly, these cost savings are proving to be durable and sustainable. Our development program also continued to perform exactly as planned. During the first half, again, we drilled 17 operated wells, completed 24, and turned 20 wells into sales.

[Michael Hollis, President and CEO at HighPeak Energy]

As we discussed earlier, we made the decision to accelerate a portion of the completion activity into the second quarter to capture favorable service costs. That decision allowed us to get more work done sooner, improve capital efficiency, and position the company for significantly lower capital spending during the second half of the year. From a capital standpoint, we invested $185.9 million during the first six months of 2026.

[Michael Hollis, President and CEO at HighPeak Energy]

Even with the accelerated completion program, we remained fully aligned with our full-year development budget. We didn't spend more money. We simply chose to spend a portion of it earlier to capture efficiencies and create additional value. The combination of strong production, lower operating costs, and disciplined capital execution generated approximately $281 million of EBITDAX during the first half.

[Michael Hollis, President and CEO at HighPeak Energy]

Those results highlight the quality of our asset base, the strength of our operating model, and the cash-generating capability of the business. At the end of the day, this is exactly the kind of performance we strive for. We delivered production above expectations, kept costs under control, executed the development plan, and maintained capital discipline. More importantly, we've positioned the company to generate stronger free cash flow during the second half of the year as capital spending comes down while production remains strong.

[Michael Hollis, President and CEO at HighPeak Energy]

That's the formula we're focused on: consistent execution, efficient operations, disciplined capital allocation, and creating long-term value. As we wrap up today's prepared remarks, I leave you with a few final thoughts. HighPeak is exactly where we want to be. We built this year's plan with the understanding that commodity prices would remain volatile. We manage the business accordingly.

[Michael Hollis, President and CEO at HighPeak Energy]

The results we're delivering today reflect the strategy that was designed to generate strong returns and free cash flow across a range of market conditions, not just in the perfect environment. Our maintenance mode development program is doing exactly what it was intended to do. We're maintaining strong production, spending substantially less capital than we have in prior years, and generating increasing amounts of free cash flow. Just as important, we preserve flexibility.

[Michael Hollis, President and CEO at HighPeak Energy]

If the market conditions change, we have the ability to adapt while continuing to focus on long-term value creation. We can't control commodity prices, interest rates, or geopolitical events, but we can control how we operate the business, and that's where our focus remains. We will continue allocating capital with discipline, protecting the balance sheet, driving operational efficiencies, and generating substantial free cash flow.

[Michael Hollis, President and CEO at HighPeak Energy]

We've always believed that successful companies are built by making sound decisions quarter after quarter and year after year, and that's exactly what we're doing at HighPeak today. We have a high-quality asset base and a proven team and a development inventory that gives us confidence in the future of this company. Most importantly, we're committed to creating long-term value for the people who have invested alongside us.

[Michael Hollis, President and CEO at HighPeak Energy]

Our strategy is straightforward: operate efficiently, spend capital wisely, and generate strong returns and let the results speak for themselves. Before we close, I want to thank the employees. The results we've discussed today are a direct reflection of their hard work, commitment, and focus on operating safely and efficiently every day. I'd also like to thank our shareholders for their continued support and confidence in HighPeak. We don't take that trust lightly, and we are committed to earning it every day. With that, operator, we're ready to open the call for questions.

[Operator]

Thank you. As a reminder, if you would like to ask a question, please press star one on your telephone. You'll hear that automated message advising your hand is raised. If you would like to remove yourself from a queue, press star one again. We also ask that you wait for your name and company to be announced before proceeding with your question. One moment while we compile the Q&A roster. Our first question is coming from the line of Jeff Robertson of Water Tower Research. Please go ahead.

[Jeff Robertson, Analyst at Water Tower Research]

Thank you. Good morning. Mike, can you talk a little bit about the impact on second quarter production from accelerating some of the completions into the quarter and what you would anticipate for the rest of the year just based on your schedule of additional wells to turn in line?

[Michael Hollis, President and CEO at HighPeak Energy]

Absolutely, Jeff. No, great question. Obviously, with a smaller production base and as we move activity around, more specifically on the completion side of the business, you do affect existing production by stimulating wells at a certain area. We kind of refer to that as water out or frac impacted oil volumes. As you can imagine, second quarter was going to be a more active completion, intense quarter by design, and then we pulled four additional completions into that quarter.

[Michael Hollis, President and CEO at HighPeak Energy]

So to your point, we watered out or frac impacted even more oil than we had initially anticipated. So when you look at our kind of maintenance mode program, you will have some lumpiness as we move that frac crew around and have breaks in the schedule. You will see if you were looking at daily volumes, you will see some movement.

[Michael Hollis, President and CEO at HighPeak Energy]

But again, we guide on a yearly guide, and when you look at the first six months of the year, we are above that guided range pretty significantly. There is a lot of pieces that go into that. The actual well performance that we are seeing from our development program, and we talked a little earlier about the workover program. But the read-through there is that the budget is set.

[Michael Hollis, President and CEO at HighPeak Energy]

We just pulled forward some of that opportunity because we had a condition where we had a good frac crew at a good price in a good market, and they were very efficient and effective. So we went ahead and let them do a little more work. But for the whole year, what the read-through is, obviously less capital will be spent in the second half of the year. The drilling rig toggle was a little tougher, right?

[Michael Hollis, President and CEO at HighPeak Energy]

Because it is one rig, it is either an on or an off. So the plan is to continue to drill with that one rig throughout the entire year. Again, you can kind of see in the first 6 months, we drilled one additional well above what we had planned for the year just because of the drilling efficiencies throughout the year. So we would expect something similar for the second half of the year, maybe one additional well drilled. But the drilling portion of capital spend is fairly small. I think somewhere in the 30% range of a wells AFE.

[Michael Hollis, President and CEO at HighPeak Energy]

On the completion side, the read through there is we will do the budgeted amount of completions throughout the year. We just performed 69% of that work in the first half of the year. So think less water out volumes as you go throughout the rest of the year, not like what we've had in the first half, as well as some impact from the workover program that we have. We think volumes will stay strong throughout the last, I can't speak, last half of the year. And hopefully commodity prices are supportive as well. But at any reasonable oil price, we will generate significant free cash flow throughout the remainder of 2026.

[Jeff Robertson, Analyst at Water Tower Research]

Mike, I know it's way too early to talk about, or it's too early to talk about 2027 guidance, but can you just talk about the cadence in the second half of 2026 and maybe in the stress spilling over into the first part of 2027? And will the setup for next year from a production standpoint be somewhat similar to what you all were thinking when you came into 2026?

[Michael Hollis, President and CEO at HighPeak Energy]

Absolutely, Jeff. The original plan was to have somewhere in the 10+ DUCs move into 2027 out of this year's program. Being able to drill two additional wells throughout the year just because the rig is that much more efficient, just means two additional DUCs move into 2027. The fact that we are only going to do the set number of completions we had in the budget, again, 2027 is set up to look a lot like 2026 as far as capital requirements as well as production volumes.

[Jeff Robertson, Analyst at Water Tower Research]

Just turning to the balance sheet, Mike, you had $146 million of cash at the end of the quarter and scheduled amortization of the term loan at $30 million per quarter starts at the end of the third quarter. Can you talk a little bit about how you're thinking of liquidity on the balance sheet and paying down or amortizing the term loan and the free cash flow build? And would it be reasonable to expect that you amortize the term loan to the extent you can faster than the $30 million per quarter?

[Michael Hollis, President and CEO at HighPeak Energy]

Jeff, great question. We will amortize that $30 million a quarter. In order to do more than that, what we have to manage in the future is we need enough cash that, obviously at today's oil prices, we are going to generate much more than that $30 million a quarter to be able to meet the amortization and have a cash build. However, we need to be a little careful with pre-paying too much because you can't get that money back. It's not like a revolver where you can reborrow it. So you'll see us be a little more cautious to paying down above the $30 million for the next quarter or so.

[Michael Hollis, President and CEO at HighPeak Energy]

But again, it all depends on what that free cash flow generation per quarter, which again, mainly driven by what the oil prices are for the quarter, which we can't guess right now. No, we will definitely do the $30 million a quarter, and we will have enough cash on hand to be able to weather any kind of variability over the next year or so, think 2027 and beyond.

[Jeff Robertson, Analyst at Water Tower Research]

Thank you, Mike.

[Michael Hollis, President and CEO at HighPeak Energy]

Yes, sir. Thank you, Jeff.

[Operator]

Thank you. One moment for the next question. Our next question is coming from the line of Nicholas Pope of Roth Capital. Please go ahead.

[Nicholas Pope, Analyst at Roth Capital]

Morning, guys.

[Michael Hollis, President and CEO at HighPeak Energy]

Hey, Nick.

[Nicholas Pope, Analyst at Roth Capital]

Quick questions here. Looking at the workover load that you all had in 2Q. Saw a bit of an uptick. You highlighted it that there's a lot of work to do there. Curious how to think about inventory or what the running room is on those workovers and how those manifest themselves, either in production or costs, where that necessarily shows up in the income statement, kind of where you all expect to see the benefit, and how much sight you have on the potential for more of those workovers.

[Michael Hollis, President and CEO at HighPeak Energy]

Sure. Nick, I would love to tell you that wells never fail and operations are really easy. Our job is to always make them look very stable, easy, and nothing to see here. But in the operations world, you always have things happen. Typically, when we choose to do a workover, we won't take a well that's producing just fine and go take that production offline to go do this workover. Eventually, something will happen on that well to where you have to do an intervention. When you talk about the pace going forward, through the first half of this year, we've called up most of what we had kind of banked as wells that we could go quickly pull forward. On the go-forward basis from more or less from now into memorial, wells will need to be worked on.

[Michael Hollis, President and CEO at HighPeak Energy]

When we have to be there to do the work, that's when we'll do the additional workover expense of the little mini stimulations, the acid surfactants, all of those things as well as lowering pumps, doing things to optimize the reservoir's capability of delivering into that well bore. Again, we can't really forecast with exact precision when a well's going to fail because we're always working on the other side of that equation to keep that well producing and keep our LOE costs down. We're kind of on both sides of that equation, but I want you to hear the read-through is there will always be opportunity for these workovers from now until the future.

[Michael Hollis, President and CEO at HighPeak Energy]

The big answer for us, and where it shows up on cost, it shows up in the LOE side because a lot of that work was something you were going to have to do. You had rods fail, and you had to go pull rods and replace things. That's all on the LOE side. On the capital side, we capture if we're doing any kind of mini simulation that we think would increase reserves from that wellbore. Hopefully that answered. Thank you.

[Nicholas Pope, Analyst at Roth Capital]

Yes, sir. Further on some of the questions that Jeff had, looking at the quarter, the gas weighting, obviously had a lot more gas volumes, had the negative gas prices during the quarter. Curious what you all are seeing here in the second half of the year, both with pricing and being able to move that gas and how much of that weighting, somewhat transient with some of the work that got brought forward with that high gas volumes and your ability to manage that in the second half of the year.

[Michael Hollis, President and CEO at HighPeak Energy]

Great setup for me there, Nick. I really appreciate that because I'm actually going to step back a little bit to tell you why the oil percentage went down to 64%, from our guided range of 67%-68%. Couple reasons, and you kind of saw this in Q4 of 2025, where we did a lot of stimulations in that quarter in high production areas. Think water out, frac impacted. We did the same thing in the second quarter. A lot of your high oil content wells, say, a well making couple of 3, 400 bbl a day, is going to be at a slightly higher oil cut than wells that are producing, say, 100. That's important here in a second when I tell you some of the other things we did. We watered down a lot of high oil cut production.

[Michael Hollis, President and CEO at HighPeak Energy]

That brings down your oil percent for the quarter. Offsetting that as well, we also worked over several, call it kind of 80 bbl-100 bbl a day older wells that have a higher gas cut. Not only did we get them back online, but we did the mini stimulations that increased their production. That was some of the offset that we had in second quarter and why our production remained flat in spite of those additional watered-out volumes. That will come at a slightly higher gas ratio than new wells that come on very oil rich. That's why it was 64. What's the read-through for the rest of the year? Again, we feel comfortable with our 67%-68% oil cut.

[Michael Hollis, President and CEO at HighPeak Energy]

Now that we're halfway through the year, I would probably lean a little closer to the 67% of the range is what I would expect to happen through the rest of the year. You had a couple other questions about the cost that we received. The entire industry got some pretty horrendous costs of gas in the second quarter, very high negative Waha differentials. If you look at HighPeak compared to most of our peers, I think our negative $1.50 that we turned in for the second quarter is very respectable compared to all of our other public peers and will be at kind of that top-tier portion of being negative, I guess. That's a bad way to say it. Looking forward, what do things look like now?

[Michael Hollis, President and CEO at HighPeak Energy]

With Gulf Coast Express expansion happening or online, Hugh Brinson, you've seen that Waha differential now closer to the -$1 from what was -$3 to -$5 an Mcf. What does that mean going forward? The negative number that goes into your realized price is a lot smaller for the rest of this year. We will see much better realizations from our gas going forward. We've taken some steps to help hedge some of that volatility because one thing the Permian operators are extremely good at is filling pipes, and pipes are always late.

[Michael Hollis, President and CEO at HighPeak Energy]

We will see tightness in the future in the late 2027 into 2028. We need to prepare for that. As we sit right now for the next 12 months, gas takeaway is not an issue. We have not had one Mcf that we wasn't able to put into a pipe. We just weren't getting paid for it. We had to pay for them to take it. Going forward, that will be much better in 2026 and at least through the first half of 2027.

[Nicholas Pope, Analyst at Roth Capital]

Got it. I appreciate the time. I'll let you move on. Thank you.

[Michael Hollis, President and CEO at HighPeak Energy]

Thank you, Nick.

[Operator]

Thank you. There are no more questions in the queue. That does conclude today's program. Thank you all for joining, and you may now disconnect.

Participants

Executives

• Steven Tholen, CFO
• Michael Hollis, President and CEO

Analysts

• Jeff Robertson, Analyst at Water Tower Research
• Nicholas Pope, Analyst at Roth Capital