HighPeak Energy (HPK) is sharpening its focus on debt reduction after slashing capital expenditures to well under $300 million in 2026, a dramatic fall from more than $1 billion in prior years. The company outlined its strategy during the Water Tower Research Virtual Insights Conference on Tuesday, Sept. 22, 2026.
Chief Executive Officer Mike Hollis, who took the role in September 2025, said the company maintained production around first-half levels while driving down costs. HighPeak’s average production in the first half of 2026 was 45,500 barrels of oil equivalent per day, above guidance, with oil making up 66% of total output.
"You fast-forward to where we are in 2026, we’ll be well under $300 million at about the same production level and maintaining that production going forward," Hollis said. "That had to happen so that HighPeak Energy would be positioned to be able to pay down that debt, get us in a position to where we have the flexibility and optionality for a different corporate finance structure, as well as any other opportunities that are out there in the future."
Capital spend was front-loaded, with 69% of the 2026 budget deployed in the first half of the year—above the guided 60%+ target—after the company brought forward a four-well pad. Management said the 2027 drilling and completion budget is expected to mirror 2026’s level.
Ryan Hightower, executive vice president, quantified the stakes of reducing the company’s interest burden. Every one percentage point cut in the interest coupon saves roughly $12 million annually. He added that the current debt load traps an estimated $8 to $9 per share in value that could shift to equity if leverage is reduced.
HighPeak operates contiguous acreage blocks at Flattop and Signal Peak in the Midland Basin of West Texas. The company had 440 producing wells online by end of 2025, most concentrated in the Wolfcamp A and Lower Spraberry formations. It estimates approximately 650 gross undeveloped locations in those primary targets, with total inventory across all stacked zones reaching about 2,600 locations. The Middle Spraberry zone has eight wells drilled and five online, with management expecting roughly 300 additional wells to eventually elevate that tier near 900–950 top locations.
Infrastructure work continues, with more than 40 central tank batteries installed and a new battery and pipeline system planned for the northern part of the Flattop block in 2026. Capital is split 70/30 between the northern and southern blocks, consistent with the acreage and inventory distribution.
Oil prices were trading above $100 a barrel at the time of the conference. HPK shares were reported around $7.86, down nearly 8% for the week but up 69% year-to-date.
