Granite Ridge Resources, Conduit Power, and Diamondback Energy have announced a joint financing of a 200‑megawatt distributed generation project in the Electric Reliability Council of Texas (ERCOT) Load Zone West. Conduit Power will build, own, and operate the natural‑gas‑fired plants, while Granite Ridge and Diamondback will receive a fixed capacity payment and a preferred share of the power proceeds. The project is slated to reach commercial operation in 2026.
The partnership gives Granite Ridge a new, low‑risk revenue stream that complements its core oil and gas portfolio. Conduit Power, backed by Grey Rock Investment Partners, brings proven experience in dispatchable natural‑gas generation and battery storage, positioning the project to address ERCOT’s supply‑demand imbalances caused by intermittent renewable generation and growing load in the western Texas region.
Granite Ridge’s Q3 2025 financial results show the deal’s strategic fit: revenue rose to $112.7 million, up 20 % year‑over‑year, and net income climbed to $14.5 million, a 59 % increase from the same period in 2024. The company’s debt‑to‑equity ratio stands at 46.6 %, with debt well covered by operating cash flow and EBIT, underscoring the financial prudence that underpins the new power‑generation investment.
Management highlighted the opportunity created by Permian Basin gas‑takeaway constraints. CEO Tyler Farquharson said the partnership would enhance well‑level economics through power sales, while Conduit’s CEO Matthew Herpich emphasized the ability to deliver reliable power and create durable value in Texas markets.
The deal positions Granite Ridge to tap into the growing demand for dispatchable power in Texas, diversifying its income sources and leveraging its financial expertise. By adding a steady, long‑term capacity payment and power‑proceeds share, the company strengthens its risk‑mitigation strategy and aligns with its broader goal of generating stable cash flow from non‑operated assets.
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