HPKEW - HighPeak Energy Joins The Mainstream

2024-06-02 11:56:46 ET

Summary

• HighPeak Energy is adapting to market demands and is expected to revalue as it establishes a more traditional track record.
• The company went public in 2020 and rapidly built-up debt. This upset the debt market and the stock market.
• Management is focused on improving costs and increasing free cash flow, including reducing operating costs per BOE and decreasing the need for new wells.
• The focus on free cash flow and some debt reduction is also pleasing the market.
• The company should find its way back to lower interest rates and more traditional lenders or even the bond market.

HighPeak Energy ( HPK ) had a first quarter report where management admitted that the market was right, and they were joining the industry in adopting to some very common market demands. Going forward, the stock will likely revalue as a more traditional track record is established. This company has some of the best acreage in the industry as well as the low costs to go with it and a fantastic margin. Management is talented as well. Therefore, the conference call was an excellent start on getting the value this company deserves.

A previous article noted how a frustrated management mentioned "strategic alternatives". That did not appear to sit very well with the market. So now an attempt at conforming to the market appears to be well underway. Since the company has a lot of things going for it, like a great location, this should succeed....

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