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Stock incentive plan
 12 Months Ended
Dec. 31, 2023
Share-Based Payment Arrangement [Abstract]  
Stock incentive plan Stock Incentive Plan
In connection with the closing of the Transactions, the Company’s Board of Directors adopted the Granite Ridge Resources, Inc. 2022 Omnibus Incentive Plan (the “Plan”), which provides the Company the ability to grant, among other award types, stock options, restricted stock awards, and PSUs to directors, officers, employees and consultants or advisors employed by or providing service to the Company. The maximum number of shares of common stock that may be issued under the Plan is 6.5 million shares. The Company recognizes forfeitures on stock-based compensation awards as they occur.
During the first quarter of 2023, the Company granted restricted stock awards, fully vested stock awards, stock options, and PSUs. As of December 31, 2023, the Company had 5.7 million shares of common stock remaining available for future awards under the Plan. Shares issued as a result of awards granted under the Plan are generally new common shares.
The stock-based compensation expense and associated tax benefit were as follows:
Year Ended
(in thousands)December 31, 2023
Stock-based compensation expense
Restricted Stock Awards$1,081 
Performance Stock Units47 
Stock Options234 
Other Awards800 
Total stock-based compensation expense$2,162 
Tax benefit recognized on compensation expense$311 
Restricted Stock Awards - The Company has granted restricted stock awards to certain of its employees and consultants under the Plan. Restricted stock awards are valued at the closing price of the Company's common stock on the date of grant. All restricted shares are legally issued and outstanding. If an employee terminates employment prior to the restriction lapse date, the awarded shares are forfeited and canceled and are no longer considered issued and outstanding. The holders of unvested restricted stock awards have voting rights and the right to receive dividends. The restricted stock awards generally vest ratably over a period of three years. The Company recognizes compensation expense utilizing graded vesting whereby compensation expense is recognized over the service period for each separately vesting tranche. A summary of the Company's restricted stock award activity for the year ended December 31, 2023 is presented below.
Restricted Stock Awards Weighted
Average
Grant Date
Fair Value
Per Share
Outstanding at December 31, 2022— $— 
Awards granted308,938 $5.72 
Awards canceled/forfeited(12,948)$5.01 
Outstanding at December 31, 2023295,990 $5.75 
PSUs - The Company has granted PSUs to certain of its officers under the Plan. The PSUs cliff vest at the end of a three-year performance period, generally subject to continued employment through the performance period. The total number of shares eligible to be earned may range from zero to 200% of the target number of PSUs granted, determined based upon achievement of certain “financial performance” and “market performance” criteria for the Company and individual performance criteria for the officers awarded PSUs. Financial performance is based on the Company’s financial performance at the end of the applicable performance period, while market performance is based on the relative standing of total shareholder return achieved by the Company compared to a predetermined group of peer companies at the end of the applicable performance period. Individual performance criteria is based on the officers’ performance relative to individual performance goals at the end of the performance period. The Company utilizes the Monte Carlo simulation method to
determine the fair value of the PSUs. A summary of the Company's PSU activity for the year ended December 31, 2023 is presented below.
Performance Stock Units Weighted
Average
Grant Date
Fair Value
Per Share
Outstanding at December 31, 2022— $— 
Awards granted26,574 $6.01 
Outstanding at December 31, 202326,574 $6.01 
Stock Options - The Company has granted stock options to certain of its officers under the Plan. The Company’s outstanding stock options expire in 10 years following the date of grant. Pursuant to the stock options granted under the Plan, 33% of the options vested immediately with an additional 33% to vest on each of the next two anniversaries of the date of the grant, generally subject to continued employment through each such vesting date. Of the stock options granted during 2023, 72,108 of such stock options have an exercise price per share of $5.02, and 320,000 of the stock options have an exercise price per share of $9.22. A summary of the Company's stock option activity for the year ended December 31, 2023 is presented below.
Stock Options Weighted
Average
Exercise Price
Per Share		Aggregate intrinsic value
(in thousands)
Outstanding at December 31, 2022— $— 
Options granted392,108 $8.45 
Options canceled/forfeited— $— 
Options exercised— $— 
Outstanding at December 31, 2023392,108 $8.45 $72 
Options exercisable at December 31, 2023130,702 $8.45 $24 
The fair value of each stock option award was estimated on the date of grant. For stock options granted at-the-money (those with an exercise price of $5.02), grant date fair value was estimated using the Black-Scholes pricing model. As these options represent plain vanilla options and the Company did not have historical exercise detail, the expected term for these options was estimated using the simplified method allowed under Staff Accounting Bulletin Topic 14.D.2, which is the average of the weighted average vesting term and time to expiration as of the grant date. For stock options granted with an exercise price of $9.22, grant date fair value was estimated using a lattice-based option valuation model that incorporated a range of assumptions. Expected volatilities were based on historical volatilities of the Company's stock and other factors. The expected term was derived from the output of the option valuation model and represents the period of time that options granted are expected to be outstanding. The weighted average fair value of stock options on the date of the grant during the year ended December 31, 2023 was $0.82 per share. The weighted average remaining terms on the outstanding options and the exercisable options was 9.3 years. The Company used the following assumptions to estimate the fair value of stock options granted during the year ended December 31, 2023:
Year Ended
December 31, 2023
Risk-free interest rate
3.5% - 3.7%
Volatility
56.0% - 59.0%
Expected term
5.5 years - 7.8 years
Dividend yield8.8%
Stock Awards - During the first quarter of 2023, the Company issued 94,007 fully vested stock awards as other awards to certain of its employees and consultants under the Plan. Weighted average grant date fair value of other awards was $8.51.
Future stock-based compensation expense - The following table reflects the future stock-based compensation expense to be recorded for all the stock-based compensation awards that were outstanding at December 31, 2023:
(in thousands)Restricted Stock AwardsPerformance Stock UnitsStock Options
2024$419 $62 $78 
2025174 62 12 
202629 — — 
Total$622 $124 $90