HPK 10-Q

HighPeak Energy, Inc. (HPK)

10-Q 2023-05-10 For: 2023-03-31

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Added on April 11, 2026

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Delaware	84-3533602
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

421 W. 3rd St., Suite 1000	76102
Fort Worth, Texas	(Zip Code)
(Address of principal executive offices and zip code)

Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☒

		Page
Definitions of Certain Terms and Conventions Used Herein		1
Cautionary Statement Concerning Forward-Looking Statements		4
PART I. FINANCIAL INFORMATION
Item 1.	Condensed Consolidated Financial Statements (Unaudited)	5
	Condensed Consolidated Balance Sheets	5
	Condensed Consolidated Statements of Operations	6
	Condensed Consolidated Statements of Changes in Stockholders’ Equity	7
	Condensed Consolidated Statements of Cash Flows	8
	Notes to Condensed Consolidated Financial Statements	9
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	26
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	36
Item 4.	Controls and Procedures	37
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	36
Item 1A.	Risk Factors	36
Item 6.	Exhibits	37
Signatures		38

	•	*“10.000% Senior Notes*” means the $225.0 million aggregate principal amount of our 10.000% Senior Notes due 2024, which were issued pursuant to an indenture in February 2022.
	•	*“10.625% Senior Notes*” means the $250.0 million aggregate principal amount of our 10.625% Senior Notes due 2024, $225.0 million of which were issued pursuant to an indenture in November 2022 and $25.0 million of which were issued pursuant to an indenture in December 2022.
	•	*“3-D seismic*” means three-dimensional seismic data which is geophysical data that depicts the subsurface strata in three dimensions. 3-D seismic data typically provides a more detailed and accurate interpretation of the subsurface strata than two-dimensional data.
	•	*“Alamo Acquisitions*” means the acquisitions of certain crude oil and natural gas properties in Borden County, Texas, collectively, from (i) Alamo Borden County II, LLC (“Alamo II”), Alamo Borden County III, LLC (“Alamo III”) and Alamo Borden County IV, LLC (“Alamo IV”) pursuant to that certain Purchase and Sale Agreement dated February 15, 2022 by and among HighPeak Energy, HighPeak Energy Assets, LLC (together with HighPeak Energy, the “HighPeak Parties”), Alamo II, Alamo III, and Alamo IV and (ii) Alamo Borden County 1, LLC (“Alamo I”) pursuant to that certain Purchase and Sale Agreement dated June 3, 2022 by and among the HighPeak Parties and Alamo I.
	•	*“ASC*” means Accounting Standards Codification.
	•	*“ASU*” means Accounting Standards Update.
	•	*“Basin*” means a large natural depression on the earth’s surface in which sediments generally brought by water accumulate.
	•	*“Bbl*” means a standard barrel containing 42 United States gallons.
	•	*“Bcf*” means one billion cubic feet.
	•	*“Boe*” means a barrel of crude oil equivalent and is a standard convention used to express crude oil and natural gas volumes on a comparable crude oil equivalent basis. Natural gas equivalents are determined under the relative energy content method by using the ratio of six thousand cubic feet of natural gas to one Bbl of crude oil or NGL.
	•	*“Boepd*” means Boe per day.
	•	*“Bopd*” means one barrel of crude oil per day.
	•	*“Btu*” means British thermal unit, which is a measure of the amount of energy required to raise the temperature of one pound of water one degree Fahrenheit.
	•	*“common stock” or “HighPeak Energy common stock*” means the Company’s common stock, par value $0.0001 per share.
	•	*“Completion*” The process of treating a drilled well followed by the installation of permanent equipment for the production of crude oil and natural gas, or in the case of a dry hole, the reporting of abandonment to the appropriate agency.
	•	*“Credit Agreement*” means the Company’s Credit Agreement, dated as of December 17, 2020, as amended from time to time, among HighPeak Energy, Inc., as Borrower, Wells Fargo Bank, National Association, as administrative agent, and the Lenders party thereto.
	•	*“DD&A*” means depletion, depreciation and amortization.
	•	*“Development costs*” Costs incurred to obtain access to proved reserves and to provide facilities for extracting, treating, gathering and storing the crude oil and natural gas. For a complete definition of development costs, refer to the SEC’s Regulation S-X, Rule 4-10(a)(7).
	•	*“Development project*” A development project is the means by which petroleum resources are brought to the status of economically producible. As examples, the development of a single reservoir or field, an incremental development in a producing field or the integrated development of a group of several fields and associated facilities with a common ownership may constitute a development project.
	•	*“Development well*” A well drilled within the proved area of a crude oil or natural gas reservoir to the depth of a stratigraphic horizon known to be productive.
	•	*“Differential*” An adjustment to the price of crude oil, NGL or natural gas from an established spot market price to reflect differences in the quality and/or location of crude oil, NGL or natural gas.
	•	*“Dry hole” or “dry well*” A well found to be incapable of producing hydrocarbons in sufficient quantities such that proceeds from the sale of such production exceed production expenses and taxes.
	•	*“Economically producible*” The term economically producible, as it relates to a resource, means a resource which generates revenue that exceeds, or is reasonably expected to exceed, the costs of the operation.
	•	*“Eighth Amendment*” means the Eighth Amendment to Credit Agreement, dated as of March 14, 2023, by and among HighPeak Energy, Inc., as Borrower, Wells Fargo Bank, National Association, as administrative agent, the guarantors party thereto and the lenders party thereto.
	•	*“EUR” or “Estimated ultimate recovery*” The sum of reserves remaining as of a given date and cumulative production as of that date.
	•	*“Exploratory well*” An exploratory well is a well drilled to find a new field, to find a new reservoir in a field previously found to be productive of crude oil or natural gas in another reservoir. Generally, an exploratory well is any well that is not a development well, an extension well, a service well or a stratigraphic test well as those items are defined by the SEC.
	•	*“Extension well*” An extension well is a well drilled to extend the limits of a known reservoir.
	•	*“FASB*” Financial Accounting Standards Board.
	•	*“Field*” An area consisting of a single reservoir or multiple reservoirs all grouped on, or related to, the same individual geological structural feature or stratigraphic condition. The field name refers to the surface area, although it may refer to both the surface and the underground productive formations.
	•	*“Fifth Amendment*” means the Fifth Amendment to Credit Agreement, dated as of October 14, 2022, by and among HighPeak Energy, Inc., as Borrower, Fifth Third Bank, National Association, as the existing administrative agent, Wells Fargo Bank, National Association, as the new administrative agent, the guarantors party thereto and the lenders party thereto.
	•	*“First Amendment*” means the First Amendment to Credit Agreement, dated as of June 23, 2021, among HighPeak Energy, Inc., as Borrower, Fifth Third Bank, National Association, as administrative agent, and the guarantors party thereto and lenders party thereto.
	•	*“Formation*” A layer of rock which has distinct characteristics that differs from nearby rocks.
	•	*“Fourth Amendment*” means the Fourth Amendment to Credit Agreement, dated as of June 27, 2022, among HighPeak Energy, Inc., as Borrower, Fifth Third Bank, National Association, as administrative agent, and the guarantors party thereto and lenders party thereto.
	•	*“GAAP*” means accounting principles generally accepted in the United States of America.
	•	*“Gross wells*” means the total wells in which a working interest is owned.

	•	*“Hannathon Acquisition*” means the acquisition of various crude oil and natural gas properties largely contiguous to the Company’s Signal Peak operating area in Howard County, Texas pursuant to that certain Purchase and Sale Agreement dated as of April 26, 2022, with Hannathon Petroleum, LLC and certain other third-party private sellers set forth therein.
	•	*“Held by production*” Acreage covered by a mineral lease that perpetuates a company’s right to operate a property as long as the property produces a minimum paying quantity of crude oil or natural gas.
	•	*“HH*” means Henry Hub, a distribution hub in Louisiana that serves as the delivery location for natural gas futures contracts on the NYMEX.
	•	*“HighPeak Energy” or the “Company*” means HighPeak Energy, Inc. and its subsidiaries.
	•	*“Horizontal drilling*” A drilling technique used in certain formations where a well is drilled vertically to a certain depth and then drilled at a right angle within a specified interval.
	•	*“Hydraulic fracturing*” is the technique of stimulating the production of hydrocarbons from tight formations. The Company routinely utilizes hydraulic fracturing techniques in its drilling and completion programs. The process involves the injection of water, sand, and chemicals under pressure into the formation to fracture the surrounding rock and stimulate production.
	•	*“Lease operating expenses*” The expenses of lifting crude oil or natural gas from a producing formation to the surface, constituting part of the current operating expenses of a working interest including labor, superintendence, supplies, repairs, short-lived assets, maintenance, allocated overhead costs, workover, marketing and transportation costs, insurance and other expenses incidental to production, but excluding lease acquisition or drilling or completion expenses.
	•	*“MBbl*” means one thousand Bbls.
	•	*“MBoe*” means one thousand Boes.
	•	*“Mcf*” means one thousand cubic feet and is a measure of natural gas volume.
	•	*“MMBbl*” means one million Bbls.
	•	*“MMBtu*” means one million Btus.
	•	*“MMcf*” means one million cubic feet and is a measure of natural gas volume.
	•	*“Net acres*” The percentage of total acres an owner has out of a particular number of gross acres or a specified tract. As an example. an owner who has 50% interest in 100 gross acres owns 50 net acres.
	•	*“Net production*” Production that is owned by us, less royalties and production due others.
	•	*“NGL*” means natural gas liquids, which are the heavier hydrocarbon liquids that are separated from the natural gas stream; such liquids include ethane, propane, isobutane, normal butane and gasoline.
	•	*“NYMEX*” means the New York Mercantile Exchange.
	•	*“OPEC*” means the Organization of Petroleum Exporting Countries.
	•	*“Operator*” The individual or company responsible for the exploration and/or production of a crude oil or natural gas well or lease.
	•	*“Plugging*” A downhole tool that is set inside the casing to isolate the lower part of the wellbore.
	•	*“Pooling*” The bringing together of small tracts or fractional mineral interests in one or more tracts to form a drilling and production unit for a well under applicable spacing rules.
	•	*“Predecessor*” refers to HPK LP for the period from January 1, 2020 to August 20, 2020.
	•	*“Production costs*” Costs incurred to operate and maintain wells and related equipment and facilities, including depreciation and applicable operating costs of support equipment and facilities and other costs of operating and maintaining those wells and related equipment and facilities. For a complete definition of production costs, refer to the SEC’s Regulation S-X, Rule 4-10(a)(20).
	•	*“Productive well*” A well that is found to be capable of producing hydrocarbons in sufficient quantities such that proceeds from the sale of the production exceed production expenses and taxes.
	•	*“Proration unit*” A unit that can be effectively and efficiently drained by one well, as allocated by a governmental agency having regulatory jurisdiction.
	•	*“Prospect*” A specific geographic area which, based on supporting geological, geophysical or other data and also preliminary economic analysis using reasonably anticipated prices and costs, is deemed to have potential for the discovery of commercial hydrocarbons.
	•	*“Proved developed nonproducing reserves” or “PDNP*” means proved reserves that are developed nonproducing reserves.
	•	*“Proved developed producing reserves” or “PDP*” means proved reserves that are developed producing reserves.
	•	*“Proved developed reserves*” means proved reserves that can be expected to be recovered through existing wells with existing equipment and operating methods and can be expected to be recovered through extraction technology installed and operational at the time of the reserve estimate and can be subdivided into PDP and PDNP reserves.
	•	*“Proved reserves*” Those quantities of crude oil and natural gas, which, by analysis of geosciences and engineering data, can be estimated with reasonable certainty to be economically producible – from a given date forward, from known reservoirs, and under existing economic conditions, operating methods, and government regulations – prior to the time at which contracts providing the right to operate expire, unless evidence indicates that renewal is reasonably certain, regardless of whether deterministic or probabilistic methods are used for the estimation. The project to extract the hydrocarbons must have commenced or the operator must be reasonably certain that it will commence the project within a reasonable time.

	(i) The area of the reservoir considered as proved includes: (A) the area identified by drilling and limited by fluid contacts, if any, and (B) adjacent undrilled portions of the reservoir that can, with reasonable certainty, be judged to be continuous with it and to contain economically producible crude oil or natural gas on the basis of available geoscience and engineering data.
	(ii) In the absence of data on fluid contacts, proved quantities in a reservoir are limited by the lowest known hydrocarbons as seen in a well penetration unless geoscience, engineering or performance data and reliable technology establishes a lower contact with reasonable certainty.
	(iii) Where direct observation from well penetrations has defined a highest known crude oil elevation and the potential exists for an associated natural gas cap, proved crude oil reserves may be assigned in the structurally higher portions of the reservoir only if geoscience, engineering or performance data and reliable technology establish the higher contact with reasonable certainty.
	(iv) Reserves which can be produced economically through application of improved recovery techniques (including, but not limited to, fluid injection) are included in the proved classification when: (A) successful testing by a pilot project in an area of the reservoir with properties no more favorable than in the reservoir as a whole, the operation of an installed program in the reservoir or an analogous reservoir, or other evidence using reliable technology establishes the reasonable certainty of the engineering analysis on which the project or program was based; and (B) the project has been approved for development by all necessary parties and entities, including governmental entities.
	(v) Existing economic conditions include prices and costs at which economic producibility from a reservoir is to be determined. The price shall be the average during the 12-month period prior to the ending date of the period covered by the report, determined as an unweighted arithmetic average of the first-day-of-the-month price for each month within such period, unless prices are defined by contractual arrangements, excluding escalations based upon future conditions.

	•	*“Proved undeveloped reserves” or “PUD*” means proved reserves that are expected to be recovered from new wells on undrilled acreage or from existing wells where a relatively major expenditure is required for completion. Undrilled locations can be classified as PUDs only if a development plan has been adopted indicating that such locations are scheduled to be drilled within five (5) years, unless specific circumstances justify a longer time.
	•	*“PV-10*” When used with respect to crude oil and natural gas reserves, PV-10 means the estimated future gross revenue to be generated from the production of proved reserves, net of estimated production and future development and abandonment costs, using prices and costs in effect at the determination date, before income taxes, and without giving effect to non-property related expenses, discounted to a present value using an annual discount rate of 10%. PV-10 is not a financial measure calculated in accordance with GAAP and generally differs from standardized measure, the most directly comparable GAAP financial measure, because it does not include the effects of income taxes on future net revenues. Neither PV-10 nor standardized measure represents an estimate of the fair market value of our crude oil and natural gas properties. We and others in the industry use PV-10 as a measure to compare the relative size and value of proved reserves held by companies without regard to the specific tax characteristics of such entities.
	•	*“Realized price*” The cash market price less all expected quality, transportation and demand adjustments.
	•	*“Recompletion*” The process of re-entering an existing wellbore that is either producing or not producing and completing new reservoirs or enhancing existing reservoirs in an attempt to establish or increase existing production.
	•	*“Reserves*” Reserves are estimated remaining quantities of crude oil and natural gas and related substances anticipated to be economically producible, as of a given date, by application of development projects to known accumulations. In addition, there must exist, or there must be a reasonable expectation that there will exist, the legal right to produce or a revenue interest in the production, installed means of delivering crude oil and natural gas or related substances to market, and all permits and financing required to implement the project.
	•	*“Reservoir*” A porous and permeable underground formation containing a natural accumulation of producible crude oil and/or natural gas that is confined by impermeable rock or water barriers and is separate from other reservoirs.
	•	*“Resources*” Quantities of crude oil and natural gas estimated to exist in naturally occurring accumulations. A portion of the resources may be estimated to be recoverable, and another portion may be considered unrecoverable. Resources include both discovered and undiscovered accumulations.
	•	*“royalty*” An interest in a crude oil and natural gas lease that gives the owner the right to receive a portion of the production from the leased acreage (or of the proceeds from the sale thereof) but does not require the owner to pay any portion of the production or development costs on the leased acreage. Royalties may be either landowner’s royalties, which are reserved by the owner of the leased acreage at the time the lease is granted, or overriding royalties, which are usually reserved by an owner of the leasehold in connection with a transfer to a subsequent owner.
	•	*“SEC*” means the United States Securities and Exchange Commission.
	•	*“Second Amendment*” means the Second Amendment to Credit Agreement, dated as of October 1, 2021, among HighPeak Energy, Inc., as Borrower, Fifth Third Bank, National Association, as administrative agent, and the guarantors party thereto and lenders party thereto.
	•	*“Service well*” A well drilled or completed for the purpose of supporting production in an existing field. Specific purposes of service wells include natural gas injection, water injection, steam injection, air injection, salt-water disposal, water supply for injection, observation, or injection for in-situ combustion.
	•	*“Seventh Amendment*” means the Seventh Amendment to Credit Agreement, dated as of December 9, 2022, by and among HighPeak Energy, Inc., as Borrower, Wells Fargo Bank, National Association, as administrative agent, the guarantors party thereto and the lenders party thereto.
	•	*“Sixth Amendment*” means the Sixth Amendment to Credit Agreement, dated as of October 31, 2022, by and among HighPeak Energy, Inc., as Borrower, Wells Fargo Bank, National Association, as administrative agent, the guarantors party thereto and the lenders party thereto.
	•	*“Spacing*” The distance between wells producing from the same reservoir. Spacing is often expressed in terms of acres, e.g., 100-acre spacing, the distance between horizontal wellbores, e.g., 880-foot spacing or the number of wells per section, e.g., 6-well spacing. It is often established by regulatory agencies and/or the operator to optimize recovery of hydrocarbons.
	•	*“Spot market price*” The cash market price without reduction for expected quality, transportation and demand adjustments.
	•	*“Standardized measure*” The present value (discounted at an annual rate of 10 percent) of estimated future net revenues to be generated from the production of proved reserves net of estimated income taxes associated with such net revenues, as determined in accordance with FASB guidelines as well as the rules and regulations of the SEC, without giving effect to non-property related expenses such as indirect general and administrative expenses, and debt service or to DD&A. Standardized measure does not give effect to derivative transactions.
	•	*“Stratigraphic test well*” A drilling effort, geologically directed, to obtain information pertaining to a specific geologic condition. Such wells customarily are drilled without the intent of being completed for hydrocarbon production. The classification also includes tests identified as core tests and all types of expendable holes related to hydrocarbon exploration. Stratigraphic tests are classified as “exploratory type” if not drilled in a known area or “development type” if drilled in a known area.
	•	*“Third Amendment*” means the Third Amendment to Credit Agreement, dated as of February 9, 2022, among HighPeak Energy, Inc., as Borrower, Fifth Third Bank, National Association, as administrative agent, and the lenders party thereto.
	•	*“Undeveloped acreage*” Lease acreage on which wells have not been drilled or completed to a point that would permit the production of commercial quantities of crude oil and natural gas regardless of whether such acreage contains proved reserves.
	•	*“Unit*” The joining of all or substantially all interests in a reservoir or field, rather than a single tract, to provide for development and operation without regard to separate property interests. Also, the area covered by a unitization agreement.
	•	*“U.S.*” means the United States.
	•	*“warrants*” means warrants to purchase one share of HighPeak Energy common stock at a price of $11.50 per share.
	•	*“Wellbore*” The hole drilled by the bit that is equipped for crude oil and natural gas production on a completed well. Also called well or borehole.
	•	*“Working interes*t” The right granted to the lessee of a property to explore for and to produce and own crude oil, natural gas or other minerals. The working interest owners bear the exploration, development and operating costs on either a cash, penalty or carried basis.
	•	*“Workover*” Operations on a producing well to restore or increase production.
	•	*“WTI*” means West Texas Intermediate, a light sweet blend of crude oil produced from fields in western Texas and is a grade of crude oil used as a benchmark in crude oil pricing.
	•	With respect to information on the working interest in wells and acreage, “*net” wells and acres are determined by multiplying “gross*” wells and acres by the Company’s working interest in such wells or acres. Unless otherwise specified, wells and acreage statistics quoted herein represent gross wells or acres.
	•	All currency amounts are expressed in U.S. dollars.

	●	the supply and demand for and the market prices of crude oil, NGL, natural gas and other products or services, and the associated impact of our hedging practices relating thereto;
	●	the results of our ongoing strategic alternatives review process;
	●	our ability to pay, when due, the principal of, interest on or other amounts due in respect of our indebtedness, including our 10.000% Senior Notes due February 2024, Credit Agreement due June 2024 and 10.625% Senior Notes due November 2024;
	●	political instability or armed conflict in crude oil or natural gas producing regions, such as the ongoing war between Russia and Ukraine;
	●	the integration of acquisitions;
	●	the availability of capital resources;
	●	production and reserve levels;
	●	drilling and completion risks;
	●	inflation rates and the impacts of associated monetary policy responses, including increased interest rates and resulting pressures on economic growth;
	●	economic and competitive conditions;
	●	capital expenditures and other contractual obligations;
	●	weather conditions;
	●	the length, scope and severity of the ongoing coronavirus disease (“COVID-19”) pandemic, including the effects of related public health concerns and the impact of continued actions taken by governmental authorities and other third parties in response to the pandemic and its impact on commodity prices, supply and demand considerations, and storage capacity;
	●	the availability of goods and services and supply chain issues;
	●	legislative, regulatory or policy changes;
	●	regulatory and related policy actions intended by federal, state and/or local governments to reduce fossil fuel use and associated carbon emissions, to drive the substitution of renewable forms of energy for crude oil and natural gas, which may over time reduce demand for crude oil, NGL and natural gas, including as a result of the Inflation Reduction Act of 2022 (“IRA 2022”) or otherwise;
	●	cyber-attacks;
	●	occurrence of property acquisitions or divestitures;
	●	the securities or capital markets and our ability to access such markets on attractive terms or at all, and related risks such as general credit, liquidity, market and interest-rate risks; and
	●	other factors disclosed under “Part I, Items 1 and 2. Business and Properties,” “Part I, Item 1A. Risk Factors,” “Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Part II, Item 7A. Quantitative and Qualitative Disclosures about Market Risk,” included in the Company’s Annual Report on Form 10-K filed with the SEC on March 6, 2023 (“Annual Report”) and this Quarterly Report under “Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Part I, Item 3. Quantitative and Qualitative Disclosures about Market Risk,” and elsewhere in this Quarterly Report.

	March 31, 2023 (Unaudited)			December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents	$	47,536		$	30,504
Accounts receivable		80,980			96,596
Inventory		15,759			13,275
Prepaid expenses		1,004			4,133
Derivatives		—			17
Total current assets		145,279			144,525
Crude oil and natural gas properties, using the successful efforts method of accounting:
Proved properties		2,669,752			2,270,236
Unproved properties		97,910			114,665
Accumulated depletion, depreciation and amortization		(341,045	)		(259,962	)
Total crude oil and natural gas properties, net		2,426,617			2,124,939
Other property and equipment, net		3,556			3,587
Other noncurrent assets		7,067			6,431
Total assets	$	2,582,519		$	2,279,482
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt, net	$	215,295		$	—
Accounts payable – trade		133,246			105,565
Accrued capital expenditures		132,071			91,842
Revenues and royalties payable		29,500			15,623
Accrued interest		15,087			13,152
Other accrued liabilities		14,021			15,600
Derivatives		11,265			16,702
Advances from joint interest owners		10,217			7,302
Operating leases		726			343
Total current liabilities		561,428			266,129
Noncurrent liabilities:
Long-term debt, net		645,469			704,349
Deferred income taxes		145,671			131,164
Asset retirement obligations		7,763			7,502
Derivatives		797			691
Operating leases		400			—
Commitments and contingencies (Note 10)
Stockholders’ equity:
Preferred stock, $0.0001 par value, 10,000,000 shares authorized, none issued and outstanding at December 31, 2022 and 2021		—			—
Common stock, $0.0001 par value, 600,000,000 shares authorized, 113,177,011 and 113,165,027 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively		11			11
Additional paid-in capital		1,013,100			1,008,896
Retained earnings		207,880			160,740
Total stockholders’ equity		1,220,991			1,169,647
Total liabilities and stockholders’ equity	$	2,582,519		$	2,279,482

	Three Months Ended March 31,
	2023			2022
Operating revenues:
Crude oil sales	$	215,696		$	86,938
NGL and natural gas sales		8,098			5,291
Total operating revenues		223,794			92,229
Operating costs and expenses:
Crude oil and natural gas production		32,942			9,446
Production and ad valorem taxes		12,297			5,006
Exploration and abandonments		2,164			209
Depletion, depreciation and amortization		81,131			17,024
Accretion of discount		118			54
General and administrative		2,502			1,940
Stock-based compensation		4,054			3,976
Total operating costs and expenses		135,208			37,655
Income from operations		88,586			54,574
Interest and other income		30			250
Interest expense		(26,972	)		(5,252	)
Derivative gain (loss), net		3,120			(66,394	)
Income (loss) before income taxes		64,764			(16,822	)
Income tax expense (benefit)		14,507			(312	)
Net income (loss)	$	50,257		$	(16,510	)
Earnings (loss) per share:
Basic net income (loss)	$	0.41		$	(0.17	)
Diluted net income (loss)	$	0.39		$	(0.17	)

Weighted average shares outstanding:
Basic		111,055			95,841
Diluted		117,765			95,841

Dividends declared per share	$	0.025		$	0.025

Three Months Ended March 31, 2023
	Shares Outstanding		Common Stock		Additional Paid-in- Capital		Retained Earnings			Total Stockholders' Equity
Balance, December 31, 2022		113,165	$	11	$	1,008,896	$	160,740		$	1,169,647
Dividends declared ($0.025 per share)		—		—		—		(2,829	)		(2,829	)
Dividend equivalents declared on outstanding stock options ($0.025 per share)		—		—		—		(288	)		(288	)
Exercise of warrants		—		—		2		—			2
Stock-based compensation costs:
Shares issued upon options being exercised		12		—		148		—			148
Compensation costs included in net income		—		—		4,054		—			4,054
Net income		—		—		—		50,257			50,257
Balance, March 31, 2023		113,177	$	11	$	1,013,100	$	207,880		$	1,220,991

Three Months Ended March 31, 2022
	Shares Outstanding		Common Stock		Additional Paid-in- Capital			Retained Earnings (Accumulated Deficit)			Total Stockholders' Equity
Balance, December 31, 2021		96,774	$	10	$	617,489		$	(64,436	)	$	553,063
Dividends declared ($0.025 per share)		—		—		—			(2,434	)		(2,434	)
Dividend equivalents declared on outstanding stock options ($0.025 per share)		—		—		—			(250	)		(250	)
Stock issued for acquisition		6,960		—		156,599			—			156,599
Stock issuance costs		—		—		(55	)		—			(55	)
Exercise of warrants		69		—		779			—			779
Stock-based compensation costs:
Shares issued upon options being exercised		8		—		75			—			75
Compensation costs included in net loss		—		—		2,614			—			2,614
Net loss		—		—		—			(16,510	)		(16,510	)
Balance, March 31, 2022		103,811	$	10	$	777,501		$	(83,630	)	$	693,881

	March 31, 2023		December 31, 2022
Land	$	2,139	$	2,139
Transportation equipment		649		691
Buildings		540		544
Leasehold improvements		221		206
Field equipment		6		6
Furniture and fixtures		1		1
Total other property and equipment, net	$	3,556	$	3,587

	●	Level 1 – quoted prices for identical assets or liabilities in active markets.
	●	Level 2 – quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates) and inputs derived principally from or corroborated by observable market data by correlation or other means.
	●	Level 3 – unobservable inputs for the asset or liability, typically reflecting management’s estimate of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore, determined using model-based techniques, including discounted cash flow models.

	As of March 31, 2023
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)		Total
Liabilities:
Commodity price derivatives – current		—		11,265			—		11,265
Commodity price derivatives – noncurrent		—		797			—		797
Total liabilities		—		12,062			—		12,062
Total recurring fair value measurements	$	—	$	(12,062	)	$	—	$	(12,062	)

	As of March 31, 2023				As of December 31, 2022
	Carrying				Carrying
	Value		Fair Value		Value		Fair Value
Liabilities:
Current portion of long-term debt:
10.000% Senior Notes (a)	$	225,000	$	225,000	$	225,000	$	225,000
Long-term debt:
10.625% Senior Notes (a)	$	250,000	$	250,000	$	250,000	$	250,000

	Remainder of 2023
	Second Quarter		Third Quarter		Fourth Quarter		Total
Crude Oil Price Swaps – WTI:
Volume (MBbls)		546.0		276.0		—		822.0
Price per Bbl	$	67.81	$	72.30	$	—	$	69.32
Deferred Premium Put Options – WTI:
Volume (MBbls)		364.0		644.0		920.0		1,928.0
Price per Bbl (Put Price)	$	61.05	$	60.46	$	55.97	$	58.43
Price per Bbl (Net of Premium)	$	56.05	$	55.46	$	50.97	$	53.43

	2024
	First Quarter		Second Quarter		Third Quarter		Fourth Quarter		Total
Deferred Premium Put Options – WTI:
Volume (MBbls)		455.0		455.0		460.0		—		1,370.0
Price per Bbl (Put Price)	$	51.50	$	51.50	$	51.50	$	—	$	51.50
Price per Bbl (Net of Premium)	$	46.50	$	46.50	$	46.50	$	—	$	46.50

	Stock Options			Average Exercise Price		Remaining Term in Years		Intrinsic Value (in thousands)
Outstanding at December 31, 2021		9,983,727		$	10.19		8.7	$	44,395
Awards granted		1,564,500			25.09
Exercised		(12,000	)	$	10.00
Forfeitures		(18,999	)	$	18.66
Outstanding at December 31, 2021		11,517,228		$	12.20		7.9	$	128,429
Exercised		(11,834	)	$	12.52
Forfeitures		(1,667	)	$	29.67
Outstanding at December 31, 2022		11,503,727		$	12.20		7.7	$	88,546

Vested at December 31, 2022		11,304,747		$	12.02		7.9	$	127,591
Exercisable at December 31, 2022		11,304,747		$	12.02		7.9	$	127,591

Vested at March 31, 2023		11,291,246		$	12.02		7.7	$	86,644
Exercisable at March 31, 2023		11,291,246		$	12.02		7.7	$	86,644

	Three Months Ended March 31,
	2023			2022

Noncash derivative gain (loss), net	$	5,314		$	(41,633	)
Cash payments on settled derivatives, net		(2,194	)		(24,761	)
Derivative gain (loss), net	$	3,120		$	(66,394	)

	As of March 31, 2023
Fifth Third Bank, National Association	$	(4,272	)
Bank of America, National Association		(4,359	)
Citizens Bank, National Association		(3,431	)
	$	(12,062	)

	Three Months Ended March 31, 2023
Beginning capitalized exploratory/extension well costs	$	186,427
Additions to exploratory/extension well costs		193,183
Reclassification to proved properties		(325,724	)
Exploratory/extension well costs charged to exploration and abandonment expense		—
Ending capitalized exploratory/extension well costs	$	53,886

	March 31, 2023			December 31, 2022
Credit Agreement due 2024	$	420,000		$	270,000
10.625% Senior Notes, due 2024		250,000			250,000
10.000% Senior Notes, due 2024		225,000			225,000
Discounts, net (a)		(22,796	)		(27,086	)
Debt issuance costs, net (b)		(11,440	)		(13,565	)
Total debt		860,764			704,349
Less current portion of long-term debt, net		(215,295	)		—
Long-term debt, net	$	645,469		$	704,349

	Three Months Ended March 31, 2023
Beginning asset retirement obligations	$	7,502
Liabilities incurred from new wells		143
Accretion of discount		118
Ending asset retirement obligations	$	7,763

	March 31, 2023			December 31, 2022
Approved and authorized shares		14,341,882			14,340,324
Shares subject to awards issued under plan		(13,755,690	)		(13,769,191	)
Shares available for future grant		586,192			571,133

	March 31, 2023
Remainder of 2023	$	785
2024		414
Total lease payments		1,199
Less present value discount		(74	)
Present value of lease liabilities	$	1,125

	March 31, 2023			December 31, 2022
Deferred tax assets:
Interest expense limitations	$	16,281		$	10,623
Net operating loss carryforwards		6,291			5,496
Stock-based compensation		4,565			4,102
Unrecognized derivative losses		2,604			3,756
Other		11			32
Less: Valuation allowance		—			—
Deferred tax assets		29,752			24,009
Deferred tax liabilities:
Crude oil and natural gas properties, principally due to differences in basis and depreciation and the deduction of intangible drilling costs for tax purposes		(175,423	)		(155,169	)
Unrecognized derivative gains		—			(4	)
Deferred tax liabilities		(175,423	)		(155,173	)
Net deferred tax liabilities	$	(145,671	)	$	(131,164	)

	•	a $7.3 million increase in production and ad valorem taxes, primarily attributable to the 209% increase in daily sales volumes as a result of the Company’s successful horizontal drilling program partially offset by 23% higher production taxes on a dollar per Boe basis due to lower overall realized prices of 21%, excluding the effects of derivatives; and

	•	a $2.0 million increase in exploration and abandonments expense primarily due to an increase in leasehold abandonments; and

	Three Months Ended March 31, 2023
Crude Oil (Bbls)		31,507
NGL (Bbls)		3,280
Natural Gas (Mcf)		14,611
Total (Boe)		37,222

	Three Months Ended March 31, 2023
Unproved property acquisition costs	$	5,463
Proved acquisition costs		—
Total acquisitions		5,463
Development costs		185,864
Exploration costs		193,239
Total finding and development costs		384,566
Asset retirement obligations		143
Total costs incurred	$	384,709

	Drilled				Completed
	Gross		Net		Gross		Net
Flat Top area		18		17.7		21		15.0
Signal Peak area		7		7.0		11		10.8
Total		25		24.7		32		25.8

Exhibit
Number	Description

3.1	Amended and Restated Certificate of Incorporation of HighPeak Energy, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K (File No. 001-39464) filed with the SEC on August 27, 2020).

3.2	Amended and Restated Bylaws of HighPeak Energy, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K (File No. 001-39464) filed with the SEC on November 9, 2020).

4.1	Registration Rights Agreement, dated as of August 21, 2020, by and among HighPeak Energy, Inc., HighPeak Pure Acquisition, LLC, HighPeak Energy, LP, HighPeak Energy II, LP, HighPeak Energy III, LP and certain other security holders named therein (incorporated by reference to Exhibit 4.4 to the Company’s Current Report on Form 8-K (File No. 001-39464) filed with the SEC on August 27, 2020).

4.2	Stockholders’ Agreement, dated as of August 21, 2020, by and among HighPeak Energy, Inc., HighPeak Pure Acquisition, LLC, HighPeak Energy, LP, HighPeak Energy II, LP, HighPeak Energy III, LP, Jack Hightower and certain directors of Pure Acquisition Corp. (incorporated by reference to Exhibit 4.3 to the Company’s Current Report on Form 8-K (File No. 001-39464) filed with the SEC on August 27, 2020).

4.3	Amendment and Assignment to Warrant Agreement, dated as of August 21, 2020, by and among Pure Acquisition Corp., Continental Stock Transfer & Trust Company and HighPeak Energy, Inc. (incorporated by reference to Exhibit 4.2 to the Company’s Registration Statement on Form S-4 and Form S-1 (File No. 333-235313) filed with the SEC on August 5, 2020).

4.4	Indenture, dated as of February 16, 2022, by and among HighPeak Energy, Inc., as issuer, the guarantors party thereto and UMB Bank, National Association, as trustee (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K (File No. 001-39464) filed with the SEC on February 22, 2022).

4.5	Supplement No. 1 to Indenture, dated as of November 9, 2022, by and among HighPeak Energy, Inc., as issuer, the guarantors party thereto and UMB Bank, National Association, as trustee (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K (File No. 001-39464) filed with the SEC on November 10, 2022).

4.6	Indenture, dated as of November 8, 2022, by and among HighPeak Energy, Inc., as issuer, the guarantors party thereto and UMB Bank, National Association, as trustee (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K (File No. 001-39464) filed with the SEC on November 10, 2022).

4.7	Indenture, dated as of December 12, 2022, by and among HighPeak Energy, Inc., as issuer, the guarantors party thereto and UMB Bank, National Association, as trustee (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K (File No. 001-39464) filed with the SEC on December 12, 2022).

10.1	Eighth Amendment to Credit Agreement, dated as of March 14, 2023, among HighPeak Energy, Inc., as Borrower, Wells Fargo Bank, National Association, as the administrative agent, the guarantors party thereto and the lenders party thereto (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No. 001-39464) filed with the SEC on March 15, 2023).

31.1*	Certification of the Company’s Chief Executive Officer Pursuant to Section 302 of the Sarbanes Oxley Act of 2002 (18 U.S.C. Section 7241).

31.2*	Certification of the Company’s Chief Financial Officer Pursuant to Section 302 of the Sarbanes Oxley Act of 2002 (18 U.S.C. Section 7241).

32.1**	Certification of the Company’s Chief Executive Officer Pursuant to Section 906 of the Sarbanes Oxley Act of 2002 (18 U.S.C. Section 1350).

32.2**	Certification of the Company’s Chief Financial Officer Pursuant to Section 906 of the Sarbanes Oxley Act of 2002 (18 U.S.C. Section 1350).

101.INS**	Inline XBRL Instance Document

101.SCH**	Inline XBRL Taxonomy Extension Schema Document

101.CAL**	Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF**	Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB**	Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE**	Inline XBRL Taxonomy Extension Presentation Linkbase Document

104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

*	Filed herewith.
**	Furnished herewith.
+	Certain schedules, annexes or exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K but will be furnished supplementally to the SEC upon request.

	HIGHPEAK ENERGY, INC.

May 10, 2023	By:	/s/ Steven Tholen
		Steven Tholen
		Chief Financial Officer

May 10, 2023	By:	/s/ Keith Forbes
		Keith Forbes
		Vice President and Chief Accounting Officer