Note 16 - Subsequent Events

12 Months Ended

Dec. 31, 2023

Notes to Financial Statements

Subsequent Events [Text Block]

NOTE 16. Subsequent Events

Derivative Financial Instruments. In January 2024, the Company entered into fixed price basis swaps for the spread between the Cushing crude oil price and the Midland WTI crude oil price. The weighted average differential represents the amount of premium to the Cushing, Oklahoma crude oil price for the notional volumes covered by the basis swap contracts as shown below.

						Swaps
Settlement Month	Settlement Year	Type of Contract	Bbls Per Day		Index	Weighted Average Differential per Bbl
Crude Oil:
Jan - Mar	2024	Basis Swap		16,484	Argus WTI Midland	$	1.12
Apr - Jun	2024	Basis Swap		25,000	Argus WTI Midland	$	1.12
Jul - Sep	2024	Basis Swap		25,000	Argus WTI Midland	$	1.12
Oct - Dec	2024	Basis Swap		25,000	Argus WTI Midland	$	1.12

Share Repurchase Program. In February 2024, the Board approved a repurchase program of up to $75 million of the Company’s common stock. The approval grants HighPeak’s management the authority to repurchase shares opportunistically in the open market from time to time, through block trades, in privately negotiated transactions or by such other means which comply with applicable state and federal laws. This is the Company’s first authorization for a stock repurchase program since its founding.

The Company intends to fund the repurchases from available working capital, cash provided from operations and borrowings under its Senior Credit Facility Agreement. The timing, number and value of shares repurchased under the program will be at the discretion of management and the Board of Directors and will depend on a number of factors, including general market and economic conditions, business conditions, the trading price of the Company’s common stock, the nature of other investment opportunities available to the Company and compliance with the Company’s debt and other agreements. The stock repurchase program does not obligate HighPeak to acquire any particular dollar amount or number of shares of its common stock and the stock repurchase program may be suspended from time to time, modified, extended or discontinued by the Company’s Board of Directors. The stock repurchase program authority will expire December 31, 2024.

Dividends and dividend equivalents. In February 2024, the Board approved a quarterly dividend of $0.04 per share of common stock outstanding which resulted in a total of $5.1 million in dividends being paid on March 25, 2024. In addition, under the terms of the LTIP, the Company paid a dividend equivalent per share to all vested stock option holders of $536,000 in March 2024 and will accrue a dividend equivalent per share to all unvested stock option holders which is payable upon vesting, assuming no forfeitures. In addition, the Company will accrue an additional combined $86,000 in dividends on the restricted stock issued to directors, management directors and certain employees that will be payable upon vesting.