HighPeak Energy Stock Jumps As Company Shifts Into 'Free Cash Flow Mode': What's Going On?

HighPeak Energy Inc HPK shares are trading higher in Monday's after-hours session after the company initiated a strategic alternatives process, which includes a potential sale.

What To Know: HighPeak said its board has voted to initiate a process to evaluate certain strategic alternatives to maximize shareholder value, including a potential sale of the company.

"The Board and I believe now is an opportune time to capture the value we do not consider is presently reflected in our share price. We have worked diligently over the last few years to secure this position and are poised to capitalize on the favorable energy market outlook," said Jack Hightower, chairman and CEO of HighPeak.

HighPeak also said it plans to reduce drilling operations from six to four drilling rigs during the first half of 2023 in order to "align its 2023 and 2024 plans with the evolving economic environment."

As a result, the company anticipates having self-sustaining operations and becoming cash flow positive in the second half of the year and then transitioning into consistent free cash flow generation thereafter.

"We believe we are currently trading at a substantial discount to our intrinsic value and our investors will benefit materially as we transition into a free cash flow mode," Hightower added.

HighPeak is an independent oil and natural gas company focused on the acquisition, development, exploration and exploitation of unconventional oil and natural gas reserves in the Midland Basin in West Texas. 

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HPK Price Action: HighPeak has a 52-week high of $38.21 and a 52-week low of $16.04.

The stock was up 7.91% at $29.05 in after hours after being halted on the announcement, according to Benzinga Pro.

Photo: John R Perry from Pixabay.