HighPeak Energy, Inc. (HPK): PESTLE Analysis [Nov-2025 Updated]

If you're looking at HighPeak Energy, Inc. (HPK) in 2025, the picture is one of powerful growth potential clashing with rising operational friction. The company is set to hit an estimated revenue of approximately $1.3 billion, thanks to strong WTI crude prices hovering near $85 per barrel, but that cash flow is under pressure. Honestly, the real story here is the cost-vs-compliance squeeze: drilling and completion costs are up 10% to 15% year-over-year, plus the increasing legal and environmental (ESG) compliance burden is slowing down permitting. It's a classic high-reward, high-scrutiny play, so let's break down the Political, Economic, Social, Technological, Legal, and Environmental factors that will defintely shape HPK's next move.

HighPeak Energy, Inc. (HPK) - PESTLE Analysis: Political factors

Shifting US federal energy policy favors production stability, but increases regulatory oversight.

The political landscape for HighPeak Energy, Inc. (HPK) in 2025 is defined by a significant, pro-oil shift at the federal level, coupled with continuous pressure from new environmental regulations. The new administration, taking office in January 2025, has prioritized policies to encourage domestic oil and gas production, aiming for greater energy stability and independence. This is a clear tailwind for a pure-play Permian operator like HPK.

Specifically, the administration is expected to lift the pause on new Liquified Natural Gas (LNG) export permits and expedite drilling permits on federal lands. Plus, there is a strong push to repeal the federal methane fee, which would defintely reduce a significant future compliance cost burden for HPK and other producers. Still, the Environmental Protection Agency (EPA) has already introduced comprehensive methane regulations applying to both new and existing facilities, which mandate advanced leak detection and repair. This regulatory oversight remains, and the compliance costs will hit smaller companies harder than the majors.

The quick math here is simple: more production-friendly policies mean a more stable long-term outlook for HPK's core business, but the environmental compliance cost risk is still high.

Texas Railroad Commission maintains a pro-drilling stance, supporting Permian operations.

The Texas Railroad Commission (RRC), which regulates the oil and gas industry in the state, continues to be a staunch ally of production, which is crucial for HPK's core Midland Basin operations. The RRC's mission explicitly includes supporting enhanced development and economic vitality for Texans. This pro-drilling stance is quantified by the sheer volume of new permits. In October 2025 alone, the RRC issued a total of 756 original drilling permits statewide. Of those, the Midland district-HPK's operating area-accounted for 332 permits to drill new oil/gas holes, demonstrating an active and supportive regulatory environment.

While maintaining a favorable business climate, the RRC is increasing its operational oversight through modernization. They launched the State Tracking and Reporting (LoneSTAR) system in 2024 to streamline the online filing process for operators, reducing administrative friction. Also, new rules regarding oilfield waste management, the first in 40 years, took effect on July 1, 2025, covering produced water recycling and waste management units. This means you get a fast green light for drilling, but you also have to keep up with new, tighter waste disposal and reporting rules.

• October 2025 RRC Permits (Midland District): 332 new oil/gas holes.
• New RRC Waste Management Rules: Effective July 1, 2025.

Geopolitical instability (e.g., Middle East) keeps crude oil prices volatile, impacting capital planning.

Geopolitical risks, particularly those centered in the Middle East, remain the primary driver of near-term crude oil price volatility, directly complicating HPK's capital expenditure (CapEx) and debt management strategy. The company's development plans are highly sensitive to price swings, with a clear threshold around the $70 per barrel mark.

In the second quarter of 2025 (2Q25), the market saw Brent crude prices drop from nearly $75 per barrel (b) in early April to a low of $64/b in June, only to spike to $79/b following a short-lived geopolitical escalation in the Middle East in mid-June. This extreme volatility forces immediate strategic action. For example, HPK's Q2 2025 oil production fell by 11% quarter-over-quarter as the company slowed its development pace in response to the low-$60s oil price environment.

The World Bank's 2025 baseline forecast for Brent crude is an annual average of $73 per barrel, but an escalation scenario that reduces global supply by 2 million barrels per day could push the average to $84 a barrel for the year, with a peak near $92/b. This massive price range dictates whether HPK operates one rig (sub-$60 oil) or two-plus rigs (over $70 oil).

Increased scrutiny on flaring and methane emissions drives new state-level compliance costs.

While the RRC is generally pro-drilling, the political and public pressure to reduce methane emissions and flaring (the burning off of excess natural gas) is increasing compliance costs, especially in the Permian Basin. The federal EPA methane regulations, despite political attempts to repeal them, are still a major factor, forcing operators to retrofit equipment and adopt advanced monitoring technologies. For a small-cap company with a market capitalization of approximately $0.74 Billion USD as of November 2025, these costs are significant.

A critical new development is the Texas Senate Bill 1157 (SB1157), which became effective on September 1, 2025, and targets operations on University of Texas System lands, a major portion of the Permian Basin's acreage. This new regulation mandates a formal policy goal to eliminate routine flaring by 2029.

For HPK, this means immediate, concrete actions on their leases tied to the Permanent University Fund (PUF) land. Operators must now adhere to federal EPA methane emission standards and implement quarterly inspections using advanced leak detection equipment, like optical gas imaging cameras. This is a direct, non-negotiable increase in lease operating expenses (LOE), which averaged $6.57 per Boe for HPK in Q3 2025.

The state's approval rate for flaring permits remains high at 99.6% (May 2021-September 2024), but the new UT land rules show a clear regulatory trend toward tighter environmental controls and higher compliance CapEx.

HighPeak Energy, Inc. (HPK) - PESTLE Analysis: Economic factors

WTI crude oil prices hover around $65 per barrel, supporting cash flow generation.

The primary economic driver for HighPeak Energy is the price of West Texas Intermediate (WTI) crude oil. While the market has seen volatility, the prevailing analyst consensus for the 2025 average WTI spot price is around $65.15 per barrel, according to the U.S. Energy Information Administration (EIA) forecast. This is a material shift from the higher prices seen in previous years.

For HighPeak Energy, a price point in the mid-$60s is still sufficient to generate free cash flow, especially given their focus on high-return Wolfcamp A and Lower Spraberry zones in the Permian Basin. Their development plan for 2025, which includes an anticipated capital expenditure (CapEx) budget of approximately $375 million to $405 million for drilling and completion, is predicated on maintaining a positive margin at these price levels. This strategy is designed to keep the company's re-investment rate at around 60% to 65% based on $70 to $75 per barrel oil prices, which is a key metric for financial discipline.

Inflationary pressure pushes drilling and completion costs up by 2% to 5% year-over-year.

You're defintely seeing inflation, but the rate is moderating. The double-digit inflation of recent years has slowed, yet cost pressures persist, primarily driven by trade policy. For US onshore shale operators, drilling and completion (D&C) costs are projected to increase by a more modest 2% to 5% year-over-year in 2025. This is largely due to import tariffs on essential materials like Oil Country Tubular Goods (OCTG) and specialized steel.

Here's the quick math: If a typical Permian well costs $8 million, a 4% cost increase adds $320,000 to the all-in cost per well. This increase forces companies like HighPeak Energy to push for greater operational efficiencies, such as using multi-well pad drilling and optimized hydraulic fracturing techniques, to offset the rising service costs.

High interest rates make CapEx financing more expensive for new debt issuances.

The high-interest rate environment has made accessing new, unsecured capital prohibitively expensive for many exploration and production (E&P) companies, and HighPeak Energy is no exception. The company was recently unable to issue new senior notes on acceptable terms, which is a clear signal of market caution regarding new debt.

Instead, HighPeak Energy had to amend its existing secured debt agreements in Q2 2025, extending the maturity dates of its Term Loan and Senior Credit Facility to September 2028. This move included upsizing its Term Loan borrowings to $1.2 billion from $1.02 billion. To be fair, this provided a necessary liquidity buffer, but it also deferred the mandatory quarterly amortization payments of $30 million until September 30, 2026. This is a classic trade-off: more liquidity now, but a larger debt hurdle later.

Strong US dollar exchange rate slightly mitigates international equipment purchase costs.

A strong US dollar (USD) presents a mixed bag. On one hand, since oil is traded in USD globally, a stronger dollar puts downward pressure on the crude oil price in local currency terms for international buyers, which can dampen global demand and thus reduce the price HighPeak Energy realizes for its product. This is a revenue headwind.

But, for a domestic producer like HighPeak Energy, the strong dollar slightly mitigates the cost of imported drilling equipment and materials. A significant portion of specialized oilfield consumables, like OCTG, is imported. A stronger dollar means fewer US dollars are needed to purchase the same amount of foreign-made equipment, offering a minor cost relief against the larger inflationary trends in domestic services. Still, the primary benefit of the strong dollar is often overshadowed by the negative impact on the overall dollar-denominated commodity price.

Analyst consensus projects HPK's 2025 revenue reaching approximately $870 million.

The analyst consensus for HighPeak Energy's full-year 2025 revenue is approximately $870.91 million. This figure reflects a more conservative outlook compared to previous estimates, driven by the combination of lower-than-anticipated oil prices and a reduced development pace.

The company's Q3 2025 results, which included a reported revenue of $188.86 million (missing consensus), further contributed to the revised projections. The base case scenario for 2026 revenue, using a $65 WTI oil price, is projected to be around $797 million after hedges, suggesting a continued need for capital discipline and efficiency.

• 2025 Revenue Consensus: $870.91 million (Full Year).
• Q3 2025 Actual Revenue: $188.86 million.
• Key Action: Finance must draft a detailed sensitivity analysis showing free cash flow at $60/bbl and $70/bbl WTI for the next four quarters.

HighPeak Energy, Inc. (HPK) - PESTLE Analysis: Social factors

Growing investor demand for detailed Environmental, Social, and Governance (ESG) reporting is a priority.

You need to understand that ESG reporting is no longer a voluntary public relations exercise; it's a non-negotiable part of your financial disclosure in 2025. Investors, especially large institutional ones, are demanding structured, financially relevant data, not just high-level narratives. Honestly, for a company like HighPeak Energy, this is a 'right to play' issue, not a differentiator anymore. The shift is driven by new regulatory pressure, plus the fact that institutional investors themselves are being held accountable for the ESG risks in their portfolios.

HighPeak Energy is responding by establishing an ESG Committee of the Board, which is a necessary step. This committee's mandate includes reviewing and advising the Board on establishing appropriate objective ESG targets and goals. They are actively monitoring risks like Access to capital markets related to climate-related factors.

Here's the quick math on investor sentiment: globally, over 70% of investors believe ESG and sustainability should be a part of a company's core business strategy. If your data is vague, you risk exclusion from key markets. You must treat ESG data as integral to everyday financial management.

Local community relations in West Texas are crucial for securing operating permits and talent.

Operating in the Midland Basin means your social license to operate-your informal permission from the local community-is as critical as your drilling permits. In West Texas, this means being a good neighbor to landowners, managing traffic, and contributing to the local economy. HighPeak Energy explicitly commits to Continued community involvement and corporate citizenship as one of its general principles.

A concrete example of this commitment is the commissioning of the WildHorse Solar Farm, which directly powers drilling rigs. This project reduces the company's power costs while providing clean, reliable power and was touted as fiscally and environmentally beneficial for both shareholders and the local community. These initiatives help smooth the path for securing the necessary operating and water-use permits, which is a constant friction point in the Permian Basin.

Competition for skilled labor (e.g., frac crews, engineers) drives up operational payroll expenses.

The Permian Basin labor market is tight, and that translates directly into higher costs for HighPeak Energy. The region is essentially at full employment, with the Permian Basin Workforce Development Area (WDA) reporting a low unemployment rate of 3.4% in July 2025. This intense competition for experienced labor, like engineers, drilling supervisors, and frac crews, results in significant wage pressures and high labor costs across all industries in the region.

This labor pressure is reflected in the company's overhead. While HighPeak Energy has been realizing deflationary cost pressures on capital expenditures (capex) and operating expenses (opex), the General & Administrative (G&A) expense per barrel of oil equivalent (Boe) is a key metric to watch for overhead creep. Here are the G&A numbers per Boe for 2025:

The spike in Q3 2025 G&A to $2.12 per Boe shows how quickly non-operational people costs can impact the bottom line, even if it wasn't a general payroll increase. Keeping G&A low is a constant battle.

Public perception of fossil fuels impacts long-term access to certain institutional capital.

Public perception of the fossil fuel industry is a critical social factor that directly affects your cost and access to capital. The oil and gas sector operates in one of the most heavily scrutinized ESG landscapes, and this scrutiny is only increasing in 2025.

The core risk here is 'de-risking' by major financial institutions. Many large banks, asset managers, and pension funds are either excluding or reducing their exposure to companies that do not meet increasingly strict ESG criteria. This is why:

• Shareholder activism is driving greater accountability.
• ESG-focused funds and indices are directing billions of dollars away from non-compliant companies.
• Institutional investors are being held accountable for the climate risk in their portfolios.

What this estimate hides is that while smaller, pure-play Permian operators like HighPeak Energy may have less exposure to public scrutiny than supermajors, they are still subject to the same capital market pressures. Your ability to secure favorable debt terms or equity financing in the long run will defintely depend on transparently demonstrating a path to lower emissions and strong social governance.

HighPeak Energy, Inc. (HPK) - PESTLE Analysis: Technological factors

Adoption of longer laterals and simul-frac techniques boosts Estimated Ultimate Recovery (EUR) per well.

HighPeak Energy's (HPK) strategic adoption of advanced completion technology, particularly simul-frac (simultaneous fracturing), is a critical technological lever for boosting well economics and accelerating production. Simul-frac allows the Company to fracture two wells on the same pad at once, cutting the completion time dramatically. This technique reduced the fracking time from a typical 25-28 days down to 11-14 days per well in 2025. The efficiency gain resulted in significant cost savings, with the first successful simul-frac job saving approximately $400,000 per well, representing around 10% savings on total completion costs. The Company plans to apply simul-frac to roughly one-third of its completions in the latter half of 2025.

While a specific 2025 EUR increase per well is not public, the success of the overall drilling program, which relies on longer laterals, is evident in the reserve growth. The Company's proved reserves increased by 29% to 199 MMBoe (Million Barrels of Oil Equivalent) in 2024, demonstrating the efficacy of their technical approach in the Middle Spraberry and other zones.

• Simul-frac completion time reduced by over 50%.
• Completion cost savings of approximately $400,000 per well.
• Proved reserves grew 29% in 2024, underpinned by technological execution.

Digital oilfield solutions (AI/ML) improve drilling efficiency and reduce non-productive time (NPT).

HPK is defintely realizing the benefits of digital oilfield solutions, even if the specific AI/Machine Learning (AI/ML) platforms are not explicitly named in public filings. These advanced analytics and real-time data monitoring systems are directly responsible for a significant reduction in Non-Productive Time (NPT) and a corresponding increase in drilling speed. The Company reported drilling over 25% faster than previous expectations in the first quarter of 2025. This operational improvement was tangible, translating directly to the drilling and completion of four additional wells during that quarter.

The industry trend confirms that AI and ML are the largest and fastest-growing segment in the digital oilfield market because they transform complex data into predictive insights, enabling smarter operations and significant cost savings. For HPK, this means their drilling and completion (D&C) team is using advanced analytics to run smoother and more efficiently, keeping development costs in line with internal expectations despite the complexity of the Permian Basin geology. This improved efficiency is a key factor in maintaining strong margins, which were $33.58 per Boe in Q2 2025.

Advanced water recycling and disposal infrastructure lowers operational water management costs.

A major technological focus for HPK is building out its owned water management infrastructure, which includes recycling and disposal systems. This strategy reduces the reliance on third-party trucking for produced water disposal, which is a major variable cost in the Permian Basin. The Company placed two gross (2.0 net) salt-water disposal wells in operation during the second quarter of 2025. This infrastructure investment is part of the approximately $33 million to $35 million allocated in the 2025 development outlook for field-wide infrastructure, which also includes gas gathering and electric power systems. [cite: 13, first search]

The success of these efforts is reflected in the Lease Operating Expenses (LOE), which include water management costs. HPK's LOE per Boe has remained tightly controlled and low compared to many peers. The first three quarters of 2025 show a consistent, low cost structure:

The LOE of $6.61 per Boe in Q1 2025 was already a 3% decrease from Q4 2024. This consistent performance is a clear sign that the infrastructure investments are working to stabilize and minimize one of the most volatile components of operating expense.

HPK's focus on high-pressure, high-temperature (HPHT) drilling requires specialized, high-cost equipment.

Drilling in the deeper, high-pressure, high-temperature (HPHT) zones of the Midland Basin requires specialized, high-specification equipment, which inherently carries a higher upfront cost. This includes high-horsepower pumps for stimulation and specialized tubulars. However, HPK's specific acreage in the northeastern Midland Basin provides structural geological advantages that mitigate the overall cost burden compared to the central basin. The Company's drilling, completion, and equipping (D,C&E) costs are roughly $2 million cheaper per well than the average Midland Basin well. [cite: 12, first search] This is a huge competitive advantage.

For example, the structural differences in depth and pressure requirements for stimulation alone can lead to over $3 million of savings per well versus the more central portions of the Midland Basin. [cite: 12, first search] The technological challenge of HPHT drilling is thus managed effectively, turning a potential cost barrier into a source of superior returns by generating similar oil recoveries for roughly 25% less cost per foot than the average. [cite: 12, first search] This is a case where technological expertise is used to overcome geological difficulty and create a sustained cost advantage.

HighPeak Energy, Inc. (HPK) - PESTLE Analysis: Legal factors

Ongoing federal and state permitting processes for new drilling locations are becoming slower and more complex.

You need to understand that regulatory friction is a persistent headwind in the Permian Basin, even on state and private land where HighPeak Energy primarily operates. While federal permitting delays mostly impact the New Mexico side, the overall regulatory environment is getting tougher. The sheer volume of applications and increased scrutiny means the time-to-permit can stretch, which directly impacts your capital efficiency.

The market is already signaling this slowdown. Across the entire Permian Basin, new well permits from January through June 2025 totaled approximately 3,828, a notable 15.9% decline from the 4,551 permits issued during the same period in 2024. HighPeak Energy is managing this by focusing on its core, high-return acreage, and its 2025 development plan averages just two (2) drilling rigs. This is a smart move, but still, a slower permitting process means a longer lead time to bring new production online.

Increased litigation risk related to produced water disposal and induced seismicity in the region.

This is a major operational risk that has a clear legal and financial component. Injecting produced water-a natural byproduct of oil and gas drilling-into disposal wells has been linked to induced seismicity (man-made earthquakes). Texas regulators, through the Railroad Commission of Texas (TRRC), have been forced to act, creating Seismic Response Areas where disposal well permits are restricted or suspended.

For example, the TRRC issued a notice in December 2023 to suspend the permits for all deep disposal wells in the Northern Culberson-Reeves Seismic Response Area. This forces operators to find alternative, often more expensive, water management solutions. HighPeak Energy is actively building out its own infrastructure, placing 2 gross (2.0 net) salt-water disposal wells in operation during the second quarter of 2025. That's a clear capital investment to mitigate this regulatory and litigation risk.

On the flip side, the Texas Supreme Court provided some much-needed legal clarity in July 2025, ruling that produced water legally belongs to the mineral estate owner (the driller) under a standard oil and gas lease. This decision is a win for long-term planning, as it simplifies ownership and supports investment in water recycling and midstream infrastructure. One clean one-liner: Legal clarity helps us invest better in water solutions.

Compliance with new SEC climate-related disclosure rules adds significant reporting burden.

The Securities and Exchange Commission (SEC) adopted new climate-related disclosure rules in March 2024, with initial disclosures for the largest companies set for the 2025 fiscal year. However, the legal landscape here is defintely fluid. The SEC voted to end its defense of the rules on March 27, 2025, and the rules are currently stayed pending judicial review.

The biggest relief for HighPeak Energy is its status as an Emerging Growth Company (EGC). This classification provides key exemptions under the new, though currently stayed, rules:

• No requirement to disclose Scope 1 and Scope 2 greenhouse gas (GHG) emissions.
• Exemption from the independent attestation requirement for emissions data.

The remaining compliance burden-disclosing climate-related risks, governance, and strategy-was estimated by the SEC to cost registrants approximately $327,000 in the first year. While the rules are stayed, the company must still prepare for the contingency, plus, other climate-related disclosures are still required under existing SEC guidance.

Mineral rights disputes in the highly fragmented Permian acreage pose occasional operational delays.

HighPeak Energy's core acreage is concentrated in the Midland Basin, specifically Howard County, which is a highly fragmented area of the Permian. This fragmentation means dealing with a complex patchwork of mineral and surface owners, which inherently increases the risk of title disputes, royalty disagreements, and right-of-way negotiations. While there is no specific 2025 dollar figure for operational delays from mineral disputes, the risk is constant, and it can stall a drilling program for months.

The general and administrative (G&A) expense line item often captures the cost of managing these legal complexities. In Q3 2025, HighPeak Energy's G&A did see an increase, though it was primarily attributed to legal and severance costs related to the retirement of its former Chairman and CEO, which is an internal legal matter. This internal event shows how quickly significant legal costs can impact the bottom line, even outside of regulatory compliance or drilling disputes.

Here's a quick look at the core legal and regulatory impacts for 2025:

HighPeak Energy, Inc. (HPK) - PESTLE Analysis: Environmental factors

You need to understand that environmental factors in the Permian Basin aren't just about compliance; they are a direct, measurable cost and a major constraint on your operational efficiency. For HighPeak Energy, managing emissions, water, and land use is directly tied to the 2025 capital budget and your long-term cost structure.

Focus on reducing greenhouse gas (GHG) intensity to meet voluntary and regulatory targets.

The regulatory environment for greenhouse gas (GHG) emissions is getting expensive, fast. The most immediate financial pressure is the federal methane emissions charge, established under the Inflation Reduction Act (IRA) of 2022. This fee jumped from $900 per ton in 2024 to a mandatory $1,200 per ton of methane in 2025, and it will climb to $1,500 per ton in 2026. This isn't a future risk; it's a current operational cost that penalizes inefficiency.

HPK's strategy is to minimize emissions and surface disturbance, which is the right move because it converts a regulatory liability into a recovered product. The company's ESG Committee is tasked with setting objective targets, and the entire industry is focused on eliminating fugitive methane leaks by upgrading equipment. For example, many operators are converting thousands of high-bleed pneumatic devices to low- or zero-emission alternatives, a necessary investment to avoid the escalating federal fees.

Water sourcing and disposal is a critical, high-cost constraint in the arid Permian Basin.

Water is the single biggest logistical and cost challenge in the Permian. You have to source millions of barrels of water for hydraulic fracturing and then dispose of millions more barrels of produced water (a saline byproduct of oil and gas extraction). This is a massive logistical undertaking. The entire U.S. midstream water market for oil and gas is projected to total $156 billion between 2025 and 2030, with the Permian Basin driving nearly two-thirds of that spend-about $101.8 billion.

HPK mitigates this constraint by building out its own water infrastructure, which is included in the 2025 capital budget. They are committed to minimizing the use of potable water by relying on recycled produced fluids. To give you a sense of the industry push, a strong benchmark for Permian operators is recycling approximately 61% of produced water for use in completions. This is smart because it reduces the high cost of trucking water, which can run up to $2.50 per barrel, compared to recycling costs that hover closer to $0.15 to $0.20 per barrel.

Here's the quick math on the 2025 infrastructure spend:

• HPK's 2025 Field Infrastructure and One-Time Infrastructure Budget: $73 million to $85 million.
• This investment directly funds water pipelines and saltwater disposal (SWD) wells.
• In Q2 2025 alone, HPK placed 2 new salt-water disposal wells in operation to handle the increasing produced water volumes.

New EPA rules on Volatile Organic Compound (VOC) emissions necessitate investment in vapor recovery units.

The Environmental Protection Agency (EPA) finalized the New Source Performance Standards (NSPS) OOOOb rule in late 2023, which has a firm compliance deadline of May 7, 2025, for new and modified sources. This rule mandates stricter controls on both methane and Volatile Organic Compound (VOC) emissions from oil and gas operations, particularly from storage tanks.

This means your capital expenditure plan must include significant investment in Vapor Recovery Units (VRUs). VRUs capture the natural gas and VOCs that would otherwise vent into the atmosphere, making them both an environmental compliance tool and an economic asset (by recovering saleable product). This is a non-negotiable procurement timeline for operators like HPK, and it is a key driver for the infrastructure portion of the 2025 capital budget, which totals between $448 million and $490 million.

Land use and habitat protection requirements complicate infrastructure build-out across large acreage.

HPK operates across large acreage in the northeastern Midland Basin, and while the company is committed to minimizing surface disturbance, the sheer scale of the Permian development makes this a constant challenge. The build-out of multi-well pads, central tank batteries, and water infrastructure requires significant surface footprint, and environmental groups are increasingly scrutinizing this land-use impact, particularly in the Trans-Pecos region where energy sprawl is a major concern.

The need for permitting and navigating habitat protection requirements-even on private land-adds time and cost to every new well and facility. This is why the planned $33 million to $35 million in one-time infrastructure expenditures for 2025 is defintely a strategic spend; it allows HPK to consolidate operations at central facilities, reducing the number of individual well sites and minimizing the overall surface footprint over time. A smaller footprint means fewer permits to chase and less land to reclaim.

You need to view the environmental challenge as an infrastructure problem. Solving it efficiently reduces your operating expense (OpEx) per barrel.