Group 1 - The article discusses the analysis of oil and gas companies, specifically focusing on identifying undervalued companies in the sector [1] - The author emphasizes the importance of understanding the balance sheet, competitive position, and development prospects of these companies [1] - The oil and gas industry is characterized as a boom-bust, cyclical industry, requiring patience and experience for successful investment [2] Group 2 - The article mentions that the author has no current stock or derivative positions in the companies discussed but may initiate a long position in the future [3] - It is noted that the article reflects the author's personal opinions and is not influenced by compensation from any company mentioned [3] - The article does not provide investment advice and encourages investors to conduct their own research [4]

Core Insights - PrimeEnergy Resources Corporation reported a decline in revenue and earnings for Q2 and the first half of 2025 due to lower oil prices, but maintained solid cash flow and continued capital returns to shareholders [1][6] Financial Performance - Q2 2025 Revenue: $42.0 million, down from $64.8 million in Q2 2024 - Q2 Net Income: $3.2 million, compared to $19.7 million in the previous year - Q2 Diluted EPS: $1.33, a decrease from $7.77 - First Half 2025 Revenue: $92.0 million, down from $107.8 million in 2024 - First Half Net Income: $12.4 million, compared to $31.1 million in 2024 - First Half Discretionary Cash Flow: $56.9 million, down from $64.1 million in 2024 [6] Shareholder Alignment - In Q2 2025, Chairman Charles E. Drimal, Jr. entered into voting rights agreements covering 155,926 shares, resulting in affiliated shareholders controlling over 80% of the Company's voting power on a fully diluted basis, indicating strong confidence in the Company's long-term strategy [3] Production and Strategy - Despite a modest decline in oil volumes year-over-year, the Company experienced strong growth in natural gas and NGL production, highlighting the strength of its diversified production base [4] - The Company remains committed to executing its development program and creating long-term value, supported by a disciplined capital program [4] Capital Management - Share Repurchases: 53,000 shares in 2025, totaling $12.1 million; $113.5 million since the program's inception, with plans to continue repurchases throughout the year [6] - Liquidity: $2.4 million cash at quarter-end; $115 million fully available under credit facility [6]

[FORM 10-Q Header](index=1&type=section&id=FORM%2010-Q%20Header) [Filing Information](index=1&type=section&id=Filing%20Information) This document is a Quarterly Report on Form 10-Q for PrimeEnergy Resources Corporation, covering the period ended June 30, 2025 - The report is a Quarterly Report on Form 10-Q for the period ended June 30, 2025[2](index=2&type=chunk) - PrimeEnergy Resources Corporation's common stock is traded on NASDAQ under the symbol **PNRG**[4](index=4&type=chunk) Common Stock Outstanding as of August 13, 2025 | Class of Stock | Shares Outstanding | | :--------------- | :----------------- | | Common Stock, $0.10 par value | 1,649,000 | [Index to Form 10-Q](index=3&type=section&id=Index%20to%20Form%2010-Q) [Report Structure](index=3&type=section&id=Report%20Structure) The index outlines the Form 10-Q structure, dividing it into Part I (Financial Information) and Part II (Other Information) - The report is structured into two main parts: Part I—Financial Information and Part II—Other Information[7](index=7&type=chunk) - Part I includes Consolidated Balance Sheets, Statements of Income, Equity, Cash Flows, Notes to Financial Statements, Management's Discussion and Analysis, Quantitative and Qualitative Disclosures About Market Risk, and Controls and Procedures[7](index=7&type=chunk) - Part II covers Legal Proceedings, Risk Factors, Unregistered Sales of Equity Securities and Use of Proceeds, Defaults Upon Senior Securities, Other Information, and Exhibits[7](index=7&type=chunk) [Definitions of Certain Terms and Conventions Used Herein](index=4&type=section&id=Definitions%20of%20Certain%20Terms%20and%20Conventions%20Used%20Herein) [Key Industry and Financial Terminology](index=4&type=section&id=Key%20Industry%20and%20Financial%20Terminology) This section defines key terms and conventions used in the report, primarily related to oil and gas measurements, industry benchmarks, and financial/regulatory terms - Key measurements defined include **Bbl** (barrel), **BOE** (barrel of oil equivalent), **Mcf** (thousand cubic feet), and **MMBtu** (million British thermal units)[11](index=11&type=chunk) - Industry benchmarks such as **Brent**, **WAHA**, and **WTI** are defined for oil and gas pricing[11](index=11&type=chunk) - Financial and regulatory terms like **Borrowing Base**, **DD&A** (depletion, depreciation and amortization), **GAAP**, **PV-10** (Present Value at 10%), and **Standardized Measure** are explained[11](index=11&type=chunk)[12](index=12&type=chunk) - Detailed definitions are provided for 'Proved reserves,' 'Proved developed reserves,' and 'Proved undeveloped reserves,' including criteria for estimation and economic conditions[11](index=11&type=chunk)[12](index=12&type=chunk) [CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS](index=8&type=section&id=CAUTIONARY%20STATEMENT%20CONCERNING%20FORWARD-LOOKING%20STATEMENTS) [Forward-Looking Statements and Associated Risks](index=8&type=section&id=Forward-Looking%20Statements%20and%20Associated%20Risks) This section warns that the report contains forward-looking statements subject to significant risks and uncertainties beyond the Company's control - The report contains forward-looking statements identified by words like 'believes,' 'plans,' 'expects,' and 'anticipates,' which are not historical in nature[14](index=14&type=chunk) - These statements are based on current expectations and assumptions but involve significant risks and uncertainties that are difficult to predict and often beyond the Company's control[14](index=14&type=chunk) - Key risks include volatility of commodity prices, impact of armed conflicts (Ukraine, Middle East), competition, permitting delays, regulatory changes (tax, environmental), litigation, inflation, supply chain disruptions, availability of resources, transportation access, ability to replace reserves, ESG goals, access to capital, financial strength of counterparties, uncertainties in reserve estimates, and cybersecurity risks[15](index=15&type=chunk) - Readers are cautioned not to place undue reliance on forward-looking statements, and the Company undertakes no duty to update them except as required by law[16](index=16&type=chunk) [PART I—FINANCIAL INFORMATION](index=9&type=section&id=PART%20I%E2%80%94FINANCIAL%20INFORMATION) [Item 1. FINANCIAL STATEMENTS](index=9&type=section&id=Item%201.%20FINANCIAL%20STATEMENTS) This section presents the unaudited condensed consolidated financial statements for the periods ended June 30, 2025, and December 31, 2024, along with detailed explanatory notes [Consolidated Balance Sheets](index=9&type=section&id=Consolidated%20Balance%20Sheets) The Consolidated Balance Sheets show total assets increased by approximately **$18.4 million**, driven by oil and gas properties, while liabilities also rose due to higher accrued property costs and long-term bank debt Consolidated Balance Sheet Highlights (Thousands of dollars) | Item | June 30, 2025 (Unaudited) | December 31, 2024 | | :--------------------------------- | :------------------------ | :------------------ | | **ASSETS** | | | | Total Current Assets | $33,242 | $28,270 | | Total Property and Equipment, Net | $308,628 | $295,837 | | Total Assets | $343,026 | $324,622 | | **LIABILITIES AND EQUITY** | | | | Total Current Liabilities | $55,310 | $49,655 | | Long-Term Bank Debt | $12,000 | $4,000 | | Total Liabilities and Contingencies| $137,777 | $121,697 | | Total Equity | $205,249 | $202,925 | - Total Assets increased by **$18.4 million (5.67%)** from $324.6 million at December 31, 2024, to $343.0 million at June 30, 2025[19](index=19&type=chunk) - Long-Term Bank Debt increased from **$4.0 million** at December 31, 2024, to **$12.0 million** at June 30, 2025, a **200% increase**[19](index=19&type=chunk) [Consolidated Statements of Income](index=10&type=section&id=Consolidated%20Statements%20of%20Income) The Consolidated Statements of Income show a significant decrease in net income for both the three and six months ended June 30, 2025, primarily due to lower oil revenues and higher DD&A expenses Consolidated Statements of Income Highlights (Thousands of dollars, except per share amounts) | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total revenues | $41,983 | $64,825 | $92,039 | $107,815 | | Total costs and expenses | $37,803 | $40,150 | $76,486 | $68,797 | | Net income | $3,228 | $19,732 | $12,362 | $31,051 | | Basic Net income per share | $1.94 | $11.08 | $7.37 | $17.31 | | Diluted Net income per share | $1.33 | $7.77 | $5.07 | $12.16 | - Net income for the three months ended June 30, 2025, decreased by **83.66%** to **$3.2 million** from $19.7 million in the prior year[21](index=21&type=chunk) - Net income for the six months ended June 30, 2025, decreased by **60.20%** to **$12.4 million** from $31.1 million in the prior year[21](index=21&type=chunk) - Oil revenues decreased significantly, by **39.22%** for the three months and **25.34%** for the six months, while natural gas revenues increased by **321.67%** for the six months ended June 30, 2025[21](index=21&type=chunk) [Consolidated Statements of Equity](index=11&type=section&id=Consolidated%20Statements%20of%20Equity) The Consolidated Statements of Equity show an increase in total equity from **$202.9 million** at December 31, 2024, to **$205.2 million** at June 30, 2025, driven by net income partially offset by treasury stock repurchases Consolidated Statements of Equity Highlights (Thousands of dollars) | Item | Balance at Dec 31, 2024 | Balance at June 30, 2025 | | :------------------- | :---------------------- | :----------------------- | | Total Equity | $202,925 | $205,249 | | Net Income (6 months)| N/A | $12,362 | | Treasury Stock Purchases (6 months) | N/A | $(10,038) | - Total Equity increased by **$2.3 million** from December 31, 2024, to June 30, 2025[23](index=23&type=chunk) - The Company purchased **53,570 shares** of treasury stock for a total cost of **$10.038 million** during the six months ended June 30, 2025[23](index=23&type=chunk)[25](index=25&type=chunk) [Consolidated Statements of Cash Flows](index=12&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) The Consolidated Statements of Cash Flows indicate a decrease in net cash provided by operating activities for the six months ended June 30, 2025, leading to a net decrease in cash and cash equivalents Consolidated Statements of Cash Flows Highlights (Thousands of dollars) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :------------------------------- | | Net Cash Provided by Operating Activities | $29,863 | $41,252 | | Net Cash Used in Investing Activities | $(28,010) | $(44,592) | | Net Cash Used in Financing Activities | $(2,038) | $(5,706) | | Net Decrease in Cash and Cash Equivalents | $(185) | $(9,046) | | Cash and Cash Equivalents at End of Period| $2,364 | $2,015 | - Net cash provided by operating activities decreased by **$11.4 million (27.6%)** from $41.3 million in 2024 to $29.9 million in 2025[25](index=25&type=chunk) - Property expenditures decreased from **$45.2 million** in 2024 to **$28.6 million** in 2025, leading to a lower net cash outflow from investing activities[25](index=25&type=chunk) - Financing activities included **$52.5 million** in proceeds from long-term bank debt and **$44.5 million** in repayments, alongside **$10.0 million** in treasury stock purchases for the six months ended June 30, 2025[25](index=25&type=chunk) [Notes to Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes provide essential details supporting the consolidated financial statements, covering accounting policies, balance sheet components, debt, obligations, contingencies, stock options, related party transactions, segment information, EPS, and a subsequent event [(1) Basis of Presentation](index=13&type=section&id=(1)%20Basis%20of%20Presentation) The interim financial statements are unaudited and prepared in accordance with SEC rules, consistent with the Company's annual Form 10-K, with management evaluating new FASB ASUs - Interim financial statements are unaudited and prepared in accordance with SEC rules, consistent with the annual Form 10-K[26](index=26&type=chunk) - The Company is evaluating **ASU 2024-03** (Disaggregation of Income Statement Expenses, effective after Dec 15, 2026) and **ASU 2023-09** (Improvements to Income Tax Disclosures, effective after Dec 15, 2024) for potential impacts[28](index=28&type=chunk)[29](index=29&type=chunk) [(2) Acquisitions and Dispositions](index=13&type=section&id=(2)%20Acquisitions%20and%20Dispositions) In Q1 2025, the Company recognized a **$619,000** gain from the disposition of a fully depreciated workover rig, following 2024 sales of acreage in New Mexico and East Texas - In Q1 2025, a gain of **$619,000** was recognized on the disposition of a fully depreciated workover rig[31](index=31&type=chunk) - In 2024, the Company sold **60 net acres** in Lea County, New Mexico, for **$526,200** and farmed out East Texas acreage for **$54,800**[32](index=32&type=chunk) [(3) Additional Balance Sheet Information](index=13&type=section&id=(3)%20Additional%20Balance%20Sheet%20Information) This note details Accounts Receivable, Accounts Payable, and Accrued Liabilities, showing oil and gas sales as the largest portion of receivables and significant reductions in trade payables and accrued compensation/taxes Accounts Receivable Breakdown (Thousands of dollars) | Category | June 30, 2025 | December 31, 2024 | | :--------------- | :------------ | :---------------- | | Oil and gas sales| $26,653 | $21,211 | | Total Accounts Receivable, net | $28,919 | $24,338 | Accounts Payable Breakdown (Thousands of dollars) | Category | June 30, 2025 | December 31, 2024 | | :--------------- | :------------ | :---------------- | | Trade | $3,636 | $12,038 | | Royalty and other owners | $3,841 | $3,607 | | Total Accounts Payable | $7,797 | $16,329 | Accrued Liabilities Breakdown (Thousands of dollars) | Category | June 30, 2025 | December 31, 2024 | | :--------------- | :------------ | :---------------- | | Compensation and related expenses | $4,605 | $10,668 | | Taxes | $3,070 | $9,524 | | Total Accrued Liabilities | $12,686 | $25,514 | [(4) Long-Term Debt](index=15&type=section&id=(4)%20Long-Term%20Debt) The Company operates under a Fourth Amended and Restated Credit Agreement with a **$300 million** revolving line of credit, with the borrowing base reaffirmed at **$115 million** and no outstanding borrowings as of August 14, 2025 - The Company has a revolving line of credit up to **$300 million** under the 2022 Credit Agreement, with a maturity date extended to 2028[35](index=35&type=chunk)[37](index=37&type=chunk) - The Borrowing Base was increased from **$65 million** to **$85 million** in February 2024, and further to **$115 million** in July 2024, reaffirmed at **$115 million** in December 2024[36](index=36&type=chunk)[37](index=37&type=chunk) Long-Term Debt Status (Thousands of dollars) | Date | Outstanding Borrowings | Available Credit | Effective Rate | | :---------------- | :--------------------- | :--------------- | :------------- | | Dec 31, 2024 | $4,000 | $111,000 | 9.75% | | June 30, 2025 | $12,000 | $103,000 | 9.75% | | Aug 14, 2025 | $0 | $115,000 | N/A | [(5) Other Long-Term Obligations and Commitments](index=15&type=section&id=(5)%20Other%20Long-Term%20Obligations%20and%20Commitments) The Company has operating lease obligations totaling **$857,000** through 2028 and an Asset Retirement Obligation (ARO) liability of **$13.8 million** at June 30, 2025 - Operating lease costs for the six months ended June 30, 2025, were **$386,000**[40](index=40&type=chunk) Operating Lease Payment Schedule (Thousands of dollars) | Year | Undiscounted Lease Payments | | :--- | :-------------------------- | | 2025 (remainder) | $412 | | 2026 | $291 | | 2027 | $127 | | 2028 | $27 | | Total | $857 | Asset Retirement Obligation (Thousands of dollars) | Item | June 30, 2025 | | :-------------------------------- | :------------ | | Asset retirement obligation at Dec 31, 2024 | $13,867 | | Net wells placed on production | $67 | | Liabilities settled | $(503) | | Accretion of discount | $335 | | Asset retirement obligation at June 30, 2025 | $13,766 | [(6) Contingent Liabilities](index=16&type=section&id=(6)%20Contingent%20Liabilities) Management believes that future environmental expenses and legal actions will not materially adversely affect the Company's financial condition or results of operations - Management does not expect environmental expenses or legal actions to materially affect the Company's financial condition or results of operations[44](index=44&type=chunk)[45](index=45&type=chunk) [(7) Stock Options and Other Compensation](index=16&type=section&id=(7)%20Stock%20Options%20and%20Other%20Compensation) As of June 30, 2025, two key executive officers held outstanding and exercisable non-statutory stock options for **767,500 shares** with exercise prices ranging from **$1.00 to $1.25** and no expiration date - **767,500 shares** under non-statutory stock options were outstanding and exercisable by two key executive officers as of June 30, 2025[46](index=46&type=chunk) - Exercise prices for these options range from **$1.00 to $1.25**, and they have no expiration date[46](index=46&type=chunk) [(8) Related Party Transactions](index=16&type=section&id=(8)%20Related%20Party%20Transactions) Related party transactions primarily involve the Company acting as an agent for joint venture partners, potentially including Board members, in collecting or paying oil and gas property-related receipts or expenses - Related party transactions mainly involve the Company acting as an agent for joint venture partners (potentially including Board members) in collecting or paying oil and gas property-related receipts or expenses[47](index=47&type=chunk) [(9) Segment Information](index=17&type=section&id=(9)%20Segment%20Information) The Company operates as a single segment focused on oil and gas exploration, development, operation, and servicing, with net income (loss) before income taxes as the primary performance measure - The Company operates in one industry segment: oil and gas exploration, development, operation, and servicing[48](index=48&type=chunk) - Net income (loss) before income taxes is the key performance measure reported to the Chief Executive Officer (CODM)[48](index=48&type=chunk) [(10) Earnings Per Share](index=17&type=section&id=(10)%20Earnings%20Per%20Share) Basic earnings per share are calculated by dividing net income by weighted average common shares outstanding, while diluted EPS accounts for dilutive securities, both significantly lower than the prior year Earnings Per Share (Six Months Ended June 30) | EPS Type | 2025 (Thousands of dollars, except per share) | 2024 (Thousands of dollars, except per share) | | :------- | :-------------------------------------------- | :-------------------------------------------- | | Net Income | $12,362 | $31,051 | | Basic EPS | $7.37 | $17.31 | | Diluted EPS | $5.07 | $12.16 | | Basic Weighted Average Shares Outstanding | 1,677,096 | 1,793,640 | | Dilutive Options | 763,209 | 759,507 | Earnings Per Share (Three Months Ended June 30) | EPS Type | 2025 (Thousands of dollars, except per share) | 2024 (Thousands of dollars, except per share) | | :------- | :-------------------------------------------- | :-------------------------------------------- | | Net Income | $3,228 | $19,732 | | Basic EPS | $1.94 | $11.08 | | Diluted EPS | $1.33 | $7.77 | | Basic Weighted Average Shares Outstanding | 1,661,916 | 1,780,593 | | Dilutive Options | 762,807 | 759,729 | [(11) Subsequent Event](index=17&type=section&id=(11)%20Subsequent%20Event) The One Big Beautiful Bill Act (OBBBA) was signed into law on July 4, 2025, extending 100% first-year depreciation and modifying business interest expense limitations, expected to benefit cash flows - The One Big Beautiful Bill Act (OBBBA) was signed into law on July 4, 2025, extending **100% first-year depreciation** and modifying business interest expense limitations[50](index=50&type=chunk) - The Company expects the OBBBA to provide a benefit to cash flows from operating activities, though not a material impact on results of operations[50](index=50&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Conditions and Results of Operation](index=18&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Conditions%20and%20Results%20of%20Operation) This section provides management's perspective on the Company's financial condition and operational results, detailing its business, reserves, development activities, revenue/expense changes, and liquidity [Company Overview and Business Strategy](index=18&type=section&id=Company%20Overview%20and%20Business%20Strategy) PrimeEnergy is an independent oil and natural gas company focused on acquiring, developing, and producing oil and gas, primarily in Texas and Oklahoma, with revenue highly susceptible to commodity price volatility - PrimeEnergy is an independent oil and natural gas company with properties primarily in Texas and Oklahoma[52](index=52&type=chunk) - The Company's strategy involves acquiring producing properties, seeking operator positions, and evaluating leasehold for exploration and development to build stockholder value[53](index=53&type=chunk) - Revenue and cash flow are principally derived from the sale of oil, natural gas, and NGLs, making them highly susceptible to commodity price volatility[54](index=54&type=chunk) - The Company currently has no derivative contracts and does not intend to enter into future ones unless required or significantly beneficial for near-term price stability[55](index=55&type=chunk) [Oil & Gas Properties and Reserves](index=18&type=section&id=Oil%20%26%20Gas%20Properties%20and%20Reserves) The Company is actively developing reserves in Texas (Permian Basin) and Oklahoma (Scoop/Stack Play), with total proved reserves at **26,512 MBOE** as of December 31, 2024, and a PV-10 value of **$345.6 million** - The Company maintains approximately **17,138 gross (9,622 net) acres** in the Permian Basin of West Texas, with potential for **100 additional horizontal wells**[56](index=56&type=chunk) - In Oklahoma, the Company holds approximately **4,021 net leasehold acres** in the Scoop/Stack Play[57](index=57&type=chunk) Oil and Gas Reserves (MBOE) | Reserve Category | Dec 31, 2022 | Dec 31, 2023 | Dec 31, 2024 | | :----------------- | :----------- | :----------- | :----------- | | Proved Developed | 10,353 | 13,558 | 20,288 | | Proved Undeveloped | 6,366 | 15,488 | 6,224 | | Total Proved | 16,719 | 29,046 | 26,512 | PV-10 and Standardized Measure (Thousands of dollars) | As of December 31, | PV-10 Value | Standardized Measure | | :----------------- | :---------- | :------------------- | | 2022 | $310,769 | $244,536 | | 2023 | $351,960 | $278,048 | | 2024 | $345,626 | $273,045 | - Average WTI oil prices used for reserve estimates decreased from **$93.67/barrel** in 2022 to **$75.48/barrel** in 2024, and Henry Hub gas prices decreased from **$6.36/MMBtu** in 2022 to **$2.13/MMBtu** in 2024[63](index=63&type=chunk) [District Information and Recent Activity](index=20&type=section&id=District%20Information%20and%20Recent%20Activity) West Texas remains the primary focus, holding **88.3%** of total proved reserves and experiencing significant horizontal drilling investment, with substantial capital expenditures planned for future development Proved Reserves and Production by Region (as of Dec 31, 2024) | Region | Proved Reserves (MBoe) | % of Total Proved Reserves | Average Net Daily Production (Boe per day) | | :--------------- | :--------------------- | :------------------------- | :----------------------------------------- | | Gulf Coast | 452 | 1.7% | 143 | | Mid-Continent | 2,643 | 10% | 806 | | West Texas | 23,383 | 88.3% | 13,749 | | Total | 26,512 | 100% | 14,707 | - In the Gulf Coast, the Company completed the Wing 16 well in May 2025 for **$400,000**, producing **240 Mcfd**, **3 Bcpd**, and **50 Bwpd**[69](index=69&type=chunk) - Mid-Continent activities include participation in two 2-mile horizontal wells with Ovintiv Mid-Continent (spud March 2025, completed May 2025) with a **$402,000** investment, and planned participation in two 2-mile horizontal wells with Devon in August 2025 with a **$1.414 million** investment[71](index=71&type=chunk) - In West Texas, the Company invested **$113 million** in **48 horizontal wells** in 2024, with an additional **$64 million** invested in **21 horizontal wells** by Q2 2025[74](index=74&type=chunk)[75](index=75&type=chunk) - Anticipated future investment in West Texas horizontal drilling over the next several years is approximately **$224 million**, including **$48 million** in 2025, **$100 million** for Wolfcamp 'D' development, and **$76 million** for 25 other near-term wells[77](index=77&type=chunk) [Results of Operations](index=23&type=section&id=Results%20of%20Operations) Net income significantly decreased for both the three and six months ended June 30, 2025, compared to 2024, primarily due to lower oil prices and higher DD&A expenses, despite increased gas and NGL production Net Income and EPS (Thousands of dollars, except per share) | Period | Net Income | Basic EPS | | :--------------------------------- | :--------- | :-------- | | Three months ended June 30, 2025 | $3,228 | $1.94 | | Three months ended June 30, 2024 | $19,732 | $11.08 | | Six months ended June 30, 2025 | $12,362 | $7.37 | | Six months ended June 30, 2024 | $31,051 | $17.31 | Oil, Gas, and NGL Sales Performance (Six Months Ended June 30) | Item | 2025 | 2024 | Change (YoY) | % Change (YoY) | | :--------------------------------- | :--------- | :--------- | :----------- | :------------- | | Barrels of Oil Produced | 1,057,000 | 1,126,000 | (69,000) | (6.13)% | | Average Oil Price Received | $63.24 | $79.51 | $(16.27) | (20.46)% | | Oil Revenue (In 000's) | $66,844 | $89,533 | $(22,689) | (25.34)% | | Mcf of Gas Sold | 4,815,000 | 2,886,000 | 1,929,000 | 66.84% | | Average Gas Price Received | $1.26 | $0.50 | $0.76 | 152.00% | | Gas Revenue (In 000's) | $6,072 | $1,440 | $4,632 | 321.67% | | Barrels of NGLs Sold | 835,000 | 480,000 | 355,000 | 73.96% | | Average NGL Price Received | $16.94 | $20.29 | $(3.35) | (16.50)% | | NGL Revenue (In 000's) | $14,146 | $9,739 | $4,407 | 45.25% | | Total Oil & Gas Revenue (In 000's) | $87,062 | $100,712 | $(13,650) | (13.55)% | - Depreciation, depletion and amortization expense increased by **$13.5 million (48.9%)** for the six months ended June 30, 2025, due to increased production from new wells and revisions to depletion rates[86](index=86&type=chunk) - Interest expense increased by **$0.8 million (160%)** for the six months ended June 30, 2025, reflecting higher borrowings under the revolving credit agreement[88](index=88&type=chunk) [Liquidity and Capital Resources](index=25&type=section&id=Liquidity%20and%20Capital%20Resources) The Company's strategy focuses on developing oil and gas reserves through horizontal drilling, with a **$98 million** capital budget for 2025, funded by cash flow and its **$115 million** revolving credit facility, which currently has no outstanding borrowings - The Company's capital budget for 2025 is **$98 million** for **44 horizontal wells**, primarily in the Midland Basin of West Texas[93](index=93&type=chunk) - From January 2023 through 2025, the Company will have invested approximately **$307 million** in horizontal development[93](index=93&type=chunk) - The Company's primary sources of liquidity are cash generated from operations and its **$300 million** reserves-based revolving credit facility, which has a current borrowing base of **$115 million**[97](index=97&type=chunk) - As of August 14, 2025, there were no outstanding borrowings under the credit facility, and the Company is in compliance with all financial and operational covenants[97](index=97&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=26&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, PrimeEnergy Resources Corporation is not required to provide disclosures under this item - The Company is a smaller reporting company and is not required to provide disclosures about market risk[99](index=99&type=chunk) [Item 4. Controls and Procedures](index=26&type=section&id=Item%204.%20Controls%20and%20Procedures) The Company's management, including the CEO and CFO, evaluated the effectiveness of its disclosure controls and procedures as of June 30, 2025, and concluded they are effective with no material changes - The Company's disclosure controls and procedures were evaluated and deemed effective as of June 30, 2025[100](index=100&type=chunk) - No material changes in internal control over financial reporting occurred since the last quarter of 2025[101](index=101&type=chunk) [PART II—OTHER INFORMATION](index=27&type=section&id=PART%20II%E2%80%94OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=27&type=section&id=Item%201.%20Legal%20Proceedings) The Company is not currently party to any material legal proceedings - There are no legal proceedings to report[104](index=104&type=chunk) [Item 1A. Risk Factors](index=27&type=section&id=Item%201A.%20Risk%20Factors) As a smaller reporting company, PrimeEnergy Resources Corporation is not required to provide disclosures under this item - The Company is a smaller reporting company and is not required to provide disclosures about risk factors[105](index=105&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=27&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) There were no unregistered sales of equity securities during the period, but the Company continued its stock repurchase program, buying **16,970 shares** for an average price of **$173.43 per share** during Q2 2025 - No unregistered sales of equity securities occurred during the reporting period[106](index=106&type=chunk) Stock Repurchase Activity (Q2 2025) | Month | Number of Shares | Average Price Paid per Share | | :---- | :--------------- | :--------------------------- | | April | 11,970 | $173.20 | | May | 2,000 | $192.17 | | June | 3,000 | $161.85 | | Total/Average | 16,970 | $173.43 | - A total of **3,890,956 shares** have been repurchased under the program for **$113.45 million** at an average price of **$29.16 per share** through June 30, 2025[108](index=108&type=chunk) - As of June 30, 2025, **109,044 shares** remain authorized for purchase under the stock repurchase program[108](index=108&type=chunk) [Item 3. Defaults Upon Senior Securities](index=27&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The Company has not defaulted on any senior securities - There are no defaults upon senior securities to report[107](index=107&type=chunk) [Item 4. Reserved](index=27&type=section&id=Item%204.%20Reserved) This item is reserved and contains no information - This item is reserved[107](index=107&type=chunk) [Item 5. Other Information](index=27&type=section&id=Item%205.%20Other%20Information) There is no other information to report under this item - There is no other information to report[107](index=107&type=chunk) [Item 6. Exhibits](index=28&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of the Form 10-Q, including financial statements, corporate governance documents, descriptions of securities, credit agreements, and certifications - Exhibits include financial statements, corporate governance documents (Certificate of Incorporation, Bylaws), and descriptions of securities[109](index=109&type=chunk) - Key agreements such as the Fourth Amended and Restated Credit Agreement and its subsequent amendments (First, Second, Third, and Fourth) are filed as exhibits[109](index=109&type=chunk) - Certifications from the Chief Executive Officer and Chief Financial Officer (pursuant to Rules 13a-14(a)/15d-14(a) and 18 U.S.C. Section 1350) are included[110](index=110&type=chunk) - The report also includes Inline XBRL (eXtensible Business Reporting Language) documents for data tagging[110](index=110&type=chunk) [Signatures](index=30&type=section&id=Signatures) [Report Signatures](index=30&type=section&id=Report%20Signatures) The Form 10-Q was duly signed on August 19, 2025, by Charles E. Drimal, Jr., President and Principal Executive Officer, and Beverly A. Cummings, Executive Vice President and Principal Financial Officer - The report was signed on August 19, 2025[112](index=112&type=chunk) - Signatories include Charles E. Drimal, Jr., President and Principal Executive Officer, and Beverly A. Cummings, Executive Vice President and Principal Financial Officer[112](index=112&type=chunk)

Group 1 - PrimeEnergy Resources Corporation has appointed Withum Smith+Brown, PC as its independent registered public accounting firm effective June 27, 2025 [1] - The decision to change auditors was recommended and approved by the Company's Audit Committee and the Board of Directors [1] Group 2 - PrimeEnergy Resources is an independent oil and natural gas company focused on the acquisition, development, and production of hydrocarbons, primarily in Texas [2] - The Company's common stock trades on NASDAQ under the symbol PNRG [2]

Core Insights - Pan American Energy Corp. has appointed Mr. Tasheel Jeerh as a new Board Member, while Paul Gorman steps down as a Director [1][2][3] - The company is focused on the acquisition, exploration, and development of mineral properties, particularly in battery and critical metals in North America [3] Company Developments - Mr. Jeerh brings extensive experience in the energy and minerals sectors, emphasizing strategic growth and resource development [2] - CEO Adrian Lamoureux expressed enthusiasm about Mr. Jeerh's appointment, highlighting the importance of his background for the company's growth plans [3] Project Acquisitions - Pan American has executed an option agreement to acquire a 75% interest in the Big Mack Lithium Project, located 80 km north of Kenora, Ontario, with the potential to earn an additional 15% [4] - The company has also entered into an option agreement with Northern Critical Minerals Corp. to acquire up to a 100% interest in the Tharsis REE Project in the Northwest Territories, which is prospective for rare earth and high field strength elements [4]

Company Overview - Pan American Energy Corp. is an exploration stage company focused on the acquisition, exploration, and development of mineral properties containing battery metals in North America [3]. Debt Settlement Transactions - The company has issued 205,841 common shares at a deemed value of $0.20 per share, totaling $441,168.50 in settlement of accrued and outstanding debt to certain creditors [1]. - All securities issued are subject to a statutory hold period expiring on October 7, 2025, in accordance with Canadian securities legislation [2]. Project Acquisition - The company has executed an option agreement with Magabra Resources to acquire a 75% interest in the Big Mack Lithium Project, located 80 km north of Kenora, Ontario, with the potential to earn an additional 15% interest for a total of 90% [4].

Core Insights - PrimeEnergy Resources Corporation (PNRG) reported a 1.6% increase in shares since Q1 2025 results, outperforming the S&P 500's 1.8% decline during the same period [1] - The company achieved Q1 revenues of $50.1 million, a 16.4% increase from $42.99 million in the prior year, driven by higher natural gas and NGL volumes despite a decline in oil revenues [2] - Net income decreased by 19.3% to $9.1 million, with diluted EPS falling 15.7% to $3.72 due to increased depreciation and interest expenses [2] Production and Revenue Growth - Oil production rose 6% year over year to 457,000 barrels, while natural gas output increased by 106.6% to 2.39 billion cubic feet, and NGL production surged 120.4% to 454,000 barrels [3] - Oil sales decreased by 1.9% to $32.7 million, but natural gas revenues more than quadrupled to $6 million, and NGL revenues increased by 95.4% to $8.5 million, leading to a total oil and gas revenue improvement of 21% year over year [4] Operating Expenses and Margins - Production costs rose 4.3% to $9.5 million, while depreciation, depletion, and amortization expenses nearly doubled to $20.4 million due to expanded asset base [5] - Interest expenses increased by 174.4% to $590,000, reflecting higher debt balances and interest rates [5] Management Commentary - The CFO described the quarter as showing "strong operational momentum," highlighting growth in gas and NGL volumes and ongoing capital returns through share repurchases [6] - Management emphasized the portfolio's resilience to commodity price volatility, supported by a mix of mature reserves and active development areas in Texas [6] Strategic Factors - Performance was influenced by robust development in West Texas, with participation in numerous new horizontal wells leading to production gains, particularly in natural gas and NGLs [7] - Weaker oil and NGL pricing partially offset revenue gains, while increased depreciation and interest costs impacted profitability [7] Guidance and Outlook - The company plans to invest $118 million in 38 horizontal wells in 2025, continuing aggressive capital deployment in the Midland Basin [8] - Management intends to fund capital needs primarily through operating cash flows and a $300 million credit facility, with $108.5 million remaining available [8] Shareholder Returns - In the quarter, PrimeEnergy repurchased 47,970 shares for $9.17 million, continuing its share repurchase program, with a total of $112.6 million returned to shareholders through buybacks [10] - A gain of $619,000 was recorded from the sale of a workover rig, reflecting ongoing portfolio optimization [10] Overall Assessment - Despite a decline in earnings due to increased investment and rising costs, underlying growth in production and revenues, along with continued capital returns, indicate confidence in the company's long-term strategy [11]

Core Insights - PrimeEnergy Resources Corporation reported a 16.4% year-over-year increase in revenue for Q1 2025, driven by growth in oil and gas production [1][6] - Despite a decline in earnings per share compared to Q1 2024, the company emphasized significant shareholder returns and operational momentum [1][4] Financial Performance - Revenue reached $50.1 million, up 16.4% from the previous year [6] - Oil production increased to 457,000 barrels, a rise of 6.0% [6] - Natural gas production surged to 2.39 billion cubic feet (Bcf), marking a 106.6% increase [6] - NGL (Natural Gas Liquids) production rose to 454,000 barrels, up 120.4% [6] - Net income was reported at $9.1 million, a decrease of 19.3% [6] - Diluted earnings per share (EPS) fell to $3.72, down 15.7% [6] Shareholder Returns - The company has returned a total of $112.6 million to shareholders through stock repurchases since initiating its buyback program [3] - In 2025, 47,970 shares were repurchased at a cost of $9.17 million [6] - As of May 19, 2025, the outstanding share count was 2,428,000, including vested options [3] Operational Highlights - The CFO highlighted strong operational momentum with significant growth in natural gas and NGL volumes [4] - Total assets increased to $339.3 million at the end of the quarter, up from $324.6 million as of December 31, 2024 [3]

Reserves and Production - The company reported proved developed reserves of 5,757 MBbls of oil, 3,676 MBbls of NGLs, and 24,749 MMcf of gas for 2023, with total reserves increasing to 13,558 MBoe[52]. - The Gulf Coast region had 452 MBoe of proved reserves, representing 1.7% of total proved reserves as of December 31, 2024[60]. - As of December 31, 2024, the company had 359 producing wells in the Mid-Continent region, with an average net daily production of 806 Boe[63]. - In West Texas, the company had 543 wells, with an average net daily production of 13,749 Boe, representing 88.3% of total proved reserves[65]. - Average net daily production reached 14,707 Boe per day as of December 31, 2024, with 13,749 Boe per day coming from Texas[59]. Financial Performance - The company reported a net income of $9.1 million, or $5.40 per share, for the three months ended March 2025, compared to $11.3 million, or $6.27 per share, for the same period in 2024[71]. - Oil, gas, and NGLs sales increased by 21.02% to $47.2 million for the three months ended March 2025, up from $39.0 million in the same period of 2024[72]. - Production and ad valorem taxes increased by 10.77% to $3.3 million for the first quarter of 2025, reflecting higher gas and natural gas liquid revenues[74]. - Depreciation, depletion, and amortization increased by 97.3% to $20.4 million for the first quarter of 2025, due to increased production from new wells[76]. Capital Expenditures and Investments - The company invested $113 million in 48 horizontal wells in West Texas in 2024, with plans to invest $118 million in 38 horizontal wells in 2025[82]. - The company anticipates investing over $100 million in future drilling activities targeting the Wolfcamp "D" pay zone in Reagan County[70]. - The company has identified 25 horizontal locations across its acreage in Upton and Martin counties that could be drilled in the near term, requiring an investment of approximately $76 million[70]. - The Company aims to maintain a strong balance sheet and ample liquidity, with a capital budget reflective of commodity prices and expected cash flows for 2025[81]. Debt and Credit Facilities - The Company has a reserves-based line of credit totaling $300 million, with a current borrowing base of $115 million[86]. - As of May 14, 2025, the Company's outstanding borrowings under this line are $24.0 million[86]. - The next borrowing base review is scheduled for June 2025, and the bank reviews the borrowing base semi-annually[86]. - The Company is currently in compliance with financial and operational covenants and expects to remain compliant over the next twelve months[86]. - The Company’s oil and gas properties are pledged as collateral for the line of credit[86]. Market Conditions and Future Outlook - Natural gas prices averaged $2.13 per MMBtu in 2024, down from $2.64 per MMBtu in 2023 and $6.36 per MMBtu in 2022[57]. - Oil prices averaged $75.48 per barrel in 2024, compared to $78.22 per barrel in 2023 and $93.67 per barrel in 2022[57]. - Future development plans are contingent on cash flow expectations and the availability of funds from the revolving credit facility[51]. - The ability to borrow under the revolving credit facility may be limited if there is a decrease in the borrowing base due to commodity price declines[86]. - Future drilling and development plans will be based on expected cash flows from operations and availability of funds[85]. - The Company may face a decrease in its borrowing base due to lower natural gas or oil prices, operational difficulties, or declines in reserves[86]. Strategic Initiatives - The company is actively pursuing acquisitions of producing properties to enhance its asset base and stockholder value[46]. - The company has no current derivative contracts and does not plan to enter into new contracts unless necessary for credit stability[48]. - The majority of the Company's capital spending is discretionary and will depend on the assessment of the oil and gas business environment[87]. - The Company is not required to enter into any hedge agreements as the borrowing base utilization percentage is less than 15%[85].

Core Viewpoint - PrimeEnergy Resources Corporation experienced significant revenue and earnings growth in 2024, driven primarily by a substantial increase in oil and natural gas liquids production, despite challenges in natural gas pricing [2][3][8]. Financial Performance - Total revenues for 2024 reached $237.8 million, a 79% increase from $132.8 million in 2023 [2]. - Net income nearly doubled to $55.4 million from $28.1 million year-over-year [2]. - Basic earnings per share rose 107% to $31.43 from $15.19, while diluted earnings per share increased to $21.95 from $10.77 [2]. Production Growth - Oil production surged 123% year-over-year to 2.56 million barrels, and natural gas liquids (NGL) production increased 112% to 1.28 million barrels [3]. - Total oil and gas revenues increased 107% to $223 million, with oil contributing $193.7 million [3]. Operational Investments - Capital spending in 2024 totaled $113 million, with 48 horizontal wells drilled, primarily in Reagan County, Texas [4]. - Major investments included $66 million with Double Eagle and $46.7 million with Civitas [4]. Reserves and Efficiency - Proved reserves at year-end were 26.5 million barrels of oil equivalent, including 10.6 million barrels of oil and 8.3 million barrels of NGLs [5]. - Average production costs per barrel of oil equivalent decreased to $9.29 from $12.98 in 2023, indicating improved cost efficiency [10]. Strategic Focus - Management emphasized a commitment to financial discipline, aligning the 2025 capital budget with projected cash flows and considering asset sales or joint ventures to enhance liquidity [6]. - The company has invested over $430 million in horizontal drilling in the Midland Basin since 2012 and plans to continue this focus [7]. Future Outlook - Expected capital deployment for 2025 is $129 million across 43 horizontal wells, following a consistent increase in annual investments [11]. - PrimeEnergy anticipates further investment of $224 million in horizontal drilling in West Texas over the next few years [11]. Additional Developments - In 2024, PrimeEnergy divested non-core assets for $4.2 million and acquired undeveloped acreage worth $3.88 million in West Texas [12].