HighPeak Energy, Inc. Announces Quarterly Dividend Increase and $75 Million Share Repurchase Authorization
- 60% increase in quarterly dividend
- $75 million share repurchase authorization
- Funding from available working capital, cash provided from operations, and borrowings under its super priority revolving credit facility
- The program does not obligate the company to acquire any particular dollar amount or number of shares of its common stock
- The program may be suspended, modified, extended, or discontinued by the Board of Directors
- The program will expire on December 31, 2024
- None.
Insights
The announcement by HighPeak Energy of a 60 percent increase in its quarterly dividend and a $75 million share repurchase authorization is a significant financial development. The dividend increase signals confidence in the company's profitability and cash flow stability. It can be interpreted as a positive signal to investors, suggesting that the company's management believes the underlying business is strong enough to sustain higher cash distributions to shareholders. This could potentially attract income-focused investors and support the stock price.
Moreover, the share repurchase program reflects a strategic use of capital. By reducing the number of outstanding shares, earnings per share (EPS) could increase, all else being equal. This may lead to a higher stock valuation. However, it's essential to consider whether the repurchases are being made above intrinsic value, which could destroy shareholder value. Investors should also be cautious about the company's decision to potentially fund repurchases with debt, as this could increase leverage and financial risk.
HighPeak Energy's initiation of a stock repurchase program, a first since its founding, indicates a shift in capital allocation strategy that warrants attention. Market conditions, including the trading price of HighPeak's common stock, will play a crucial role in the timing and volume of repurchases. Share buybacks often signal to the market that the company's leadership believes the stock is undervalued. It is also a tool that can be used to manage earnings metrics and shareholder returns.
However, it is important to analyze the industry context. In the energy sector, where capital expenditure is critical for growth, the decision to allocate substantial funds for share repurchases over investment in exploration and production could be viewed with skepticism. Investors should assess how this strategy aligns with the company's long-term growth prospects and whether it is a prudent use of capital given the cyclical nature of the energy market.
From an economic perspective, HighPeak Energy's decision to increase dividends and authorize a stock repurchase program can be seen as a response to macroeconomic factors and the company's financial health. A robust economic environment or favorable conditions in the energy sector could support such shareholder-friendly initiatives. However, the broader economic outlook, including interest rates, inflation and energy demand forecasts, could affect the company's ability to sustain these programs.
Investors should consider the opportunity cost of these initiatives, as funds used for dividends and buybacks could alternatively be invested in growth opportunities or used to pay down debt. The company's approach to balancing these priorities will impact its financial flexibility and ability to navigate economic cycles.
FORT WORTH, Texas, Feb. 05, 2024 (GLOBE NEWSWIRE) -- HighPeak Energy, Inc. (“HighPeak” or the “Company”) (NASDAQ: HPK) today announced a 60 percent increase to its quarterly dividend to
Quarterly Dividend
The Company’s Board of Directors declared a quarterly dividend of
Stock Repurchase Program
HighPeak’s Board of Directors approved a repurchase program of up to
The Company intends to fund the repurchases from available working capital, cash provided from operations and borrowings under its super priority revolving credit facility. 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.
About HighPeak Energy, Inc.
HighPeak Energy, Inc. is a publicly traded independent crude oil and natural gas company, headquartered in Fort Worth, Texas, focused on the acquisition, development, exploration and exploitation of unconventional crude oil and natural gas reserves in the Midland Basin in West Texas. For more information, please visit our website at www.highpeakenergy.com.
Cautionary Note Regarding Forward-Looking Statements
The information in this press release contains forward-looking statements that involve risks and uncertainties. When used in this document, the words “believes,” “plans,” “expects,” “anticipates,” “forecasts,” “intends,” “continue,” “may,” “will,” “could,” “should,” “future,” “potential,” “estimate” or the negative of such terms and similar expressions as they relate to HighPeak Energy, Inc. (“HighPeak Energy,” the “Company” or the “Successor”) are intended to identify forward-looking statements, which are generally not historical in nature. The forward-looking statements are based on the Company's current expectations, assumptions, estimates and projections about the Company and the industry in which the Company operates. Although the Company believes that the expectations and assumptions reflected in the forward-looking statements are reasonable as and when made, they involve risks and uncertainties that are difficult to predict and, in many cases, beyond the Company's control. These and other risks are described in the Company's Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K and other filings with the SEC. The Company undertakes no duty to publicly update these statements except as required by law.
Investor Contact:
Ryan Hightower
Vice President, Business Development
817.850.9204
rhightower@highpeakenergy.com
Source: HighPeak Energy, Inc.
FAQ
What is the new quarterly dividend announced by HighPeak Energy, Inc.?
When will the quarterly dividend be paid?
What is the amount approved for the stock repurchase program?
How will the stock repurchase program be funded?
Can the stock repurchase program be suspended or modified?
When will the stock repurchase program authority expire?
