1Q2 Results: Starting to Scale High-Margin Growth

  • Total 1Q21 production averaged 5,290 BOE/d (~90% oil), a 59% increase from 4Q20.
  • During the first half of May, production averaged approximately 8,300 BOE/d, 57% above 1Q output.
  • Full-year average production outlook remains 10,500 – 12,000 BOE/d with an estimated 2021 exit rate of 12,000 – 14,000 BOE/d. First quarter results provide an early indication of HighPeak’s growth potential.
  • Growth outlook is underpinned by HighPeak’s Lower Spraberry and Wolfcamp A development in its Flat Top area, a contiguous ~33,000-acre position in northeast Howard County.
  • HighPeak’s first two wells targeting the Wolfcamp D and Wolfcamp C zones on the contiguous ~18,000-acre Signal Peak acreage block are flowing back. The Wolfcamp D well has begun to cut oil faster than any other well the company has drilled.
  • During 1Q21, HighPeak completed five Wolfcamp A wells and one Lower Spraberry well in Flat Top. Currently four wells are being completed and two are drilling in Flat Top.
  • 1Q21 cash margin was $42.14/BOE, an 85% improvement from 4Q20. Higher realized prices and lower cash costs combined to drive the gain.
  • 1Q21 EBITDAX was $20.1 million, up 187% from 4Q20.
  • Gains in production, cash margin, and EBITDAX reflect the early benefits of HighPeak scaling its Midland Basin development program.
  • The balance sheet remains strong. HighPeak ended the quarter with $0 outstanding on its RBL that currently has a $50 million borrowing base and commitment level. The cash balance was $9.6 million on March 31.
  • Based on HighPeak’s full-year production outlook and NYMEX oil and natural gas reference prices of $60/bbl and $2.75, respectively, we estimate the company could generate approximately $165 - $197 million of EBITDAX for 2021.

Source: YCharts, *As of May 19, 2021


HighPeak Energy (HPK) is a Midland Basin-focused independent oil and gas exploration and production company that owns approximately 51,000 net acres in the eastern portion of Howard County, Texas. Year-end 2020 proved reserves were 22.5 MMBOE (84% oil/46% proved developed). The company commenced trading on the NASDAQ in August 2020 following the business combination of Pure Acquisition Corp., a special purpose acquisition vehicle, with HighPeak Energy, Inc. and certain affiliates of HighPeak Energy Partners, L.P. Management has a long history building Permian Basin focused exploration and production companies and currently controls about 90% of the voting shares.

Total 1Q21 production averaged 5,290 BOE/d (~90% oil), a 59% increase from 4Q20.


Water Tower Research (“WTR”) is a professional publisher of investment research reports on public companies and, to a lesser extent, private firms (“the Companies”). WTR provides investor-focused content and digital distribution strategies designed to help companies communicate with investors.

WTR is not a registered investment adviser or a broker/dealer nor does WTR provide investment banking services. WTR operates as an exempt investment adviser under the so called “publishers’ exemption” from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940. WTR does not provide investment ratings / recommendations or price targets on the companies it reports on. Readers are advised that the research reports are published and provided solely for informational purposes and should not be construed as an offer to sell or the solicitation of an offer to buy securities or the rendering of investment advice. The information p...