Group 1 - The analyst has a diverse professional background across multiple industries, including logistics, construction, and retail, which provides a unique perspective on investing [1] - The investment strategy focuses on cyclical industries, aiming for significant returns during economic recovery and growth, while also maintaining a diversified portfolio that includes bonds, commodities, and forex [1] - The importance of balancing risk is acknowledged, leading to the incorporation of fixed-income investments, both long and short [1]

Core Insights - Permian Resources Corporation (PR) reported second-quarter 2025 adjusted net income per share of 27 cents, matching the Zacks Consensus Estimate, but down from 39 cents in the prior year due to increased operating expenses and lower commodity prices [1][8] - Oil and gas sales totaled $1.2 billion, a decline of 3.8% year-over-year, missing the Zacks Consensus Estimate by 2.4% [1][8] Production & Price Realizations - Average daily production increased by 13.7% year-over-year to 385,118 barrels of oil equivalent (Boe), surpassing the Zacks Consensus Estimate of 376,103 Boe [3] - Oil volume for the quarter was 176,533 barrels per day (Bbls/d), up 15.5% year-over-year, exceeding the consensus mark of 175,688 Bbls/d [3] - Average sales price for oil was $62.71 per barrel, down 21.7% from $80.10 in the prior year [4] - Average realized natural gas price was 50 cents per Mcf, compared to negative 42 cents in the year-ago period, slightly missing the consensus estimate of 51 cents [4] - Average realized NGL price was $17.75 per barrel, down from $20.07 in the second quarter of 2024 [5] Costs & Expenses - Total operating expenses rose to $900.1 million from $791 million in the prior year, driven by a 17.7% increase in lease operating costs to $188 million and a 27.5% rise in gathering, processing, and transportation expenses [6] - Depreciation, depletion, and amortization expenses totaled $506.4 million, reflecting an 18.8% year-over-year increase [6] Financial Position - Adjusted cash flow from operations decreased by 3.8% to $816.8 million, while capital expenditure totaled $505 million, resulting in adjusted free cash flow of $311.8 million [7] - The company repurchased 4.1 million shares at a weighted average price of $10.52 per share [7] - As of June 30, 2025, cash and cash equivalents stood at $451 million, with long-term debt of $3.7 billion, leading to a debt-to-capitalization ratio of 25.4% [7] Guidance for 2025 - PR raised its 2025 oil production target by 6 MBbls/d to 178.5 MBbls/d and total production target by 15 MBoe/d to 385 MBoe/d, based on strong well performance and the recent APA acquisition [9] - The company adjusted its 2025 cash capital expenditure range to $1,920-$2,020 million, including an additional $20 million related to the APA acquisition [9] Tax Forecast - Following the passage of the One Big Beautiful Bill Act, PR lowered its 2025 current income tax forecast to under $5 million, down from under $10 million [10]

[Glossary of Units of Measurements and Industry Terms](index=3&type=section&id=Glossary%20of%20Units%20of%20Measurements%20and%20Industry%20Terms) This section defines key units of measurement and industry-specific terms used throughout the report [Cautionary Statement Concerning Forward-Looking Statements](index=6&type=section&id=Cautionary%20Statement%20Concerning%20Forward-Looking%20Statements) This statement highlights inherent uncertainties and risks associated with forward-looking information in the report [Part I—FINANCIAL INFORMATION](index=9&type=section&id=Part%20I%E2%80%94FINANCIAL%20INFORMATION) This part presents comprehensive financial data, including statements, notes, and management's analysis of performance [Item 1. Financial Statements (Unaudited)](index=9&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents unaudited consolidated financial statements, including balance sheets, operations, cash flows, and equity, with notes [Consolidated Balance Sheets](index=9&type=section&id=Consolidated%20Balance%20Sheets) Total assets increased to **$17.49 billion** as of June 30, 2025, driven by proved properties and derivative instruments | (in thousands) | June 30, 2025 | December 31, 2024 | Change | % Change | | :----------------------------------- | :------------ | :---------------- | :----- | :------- | | **ASSETS** | | | | | | Cash and cash equivalents | $451,002 | $479,343 | $(28,341) | -5.9% | | Accounts receivable, net | $513,121 | $530,452 | $(17,331) | -3.3% | | Derivative instruments (current) | $151,203 | $85,509 | $65,694 | 76.8% | | Total current assets | $1,149,071 | $1,121,594 | $27,477 | 2.4% | | Proved properties, net | $15,974,614 | $15,423,097 | $551,517 | 3.6% | | Total assets | $17,494,406 | $16,897,900 | $596,506 | 3.5% | | **LIABILITIES AND EQUITY** | | | | | | Accounts payable and accrued expenses | $1,397,708 | $1,198,418 | $199,290 | 16.6% | | Current portion of long-term debt | $286,126 | $— | $286,126 | N/A | | Total current liabilities | $1,828,947 | $1,327,337 | $501,610 | 37.8% | | Long-term debt, net | $3,711,355 | $4,184,233 | $(472,878) | -11.3% | | Total liabilities | $6,589,888 | $6,379,381 | $210,507 | 3.3% | | Total equity | $10,904,518 | $10,518,519 | $386,000 | 3.7% | [Consolidated Statements of Operations](index=11&type=section&id=Consolidated%20Statements%20of%20Operations) Net income for Q2 2025 decreased by **12%** to **$207.1 million**, while H1 2025 increased by **40.5%** to **$536.4 million**, influenced by prices and derivatives Consolidated Statements of Operations Highlights | (in thousands, except per share data) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | % Change (3M) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | % Change (6M) | | :----------------------------------- | :------------------------------- | :------------------------------- | :------------ | :------------------------------ | :------------------------------ | :------------ | | Oil and gas sales | $1,197,596 | $1,246,083 | -3.9% | $2,574,047 | $2,489,082 | 3.4% | | Total operating expenses | $900,111 | $790,946 | 13.8% | $1,772,099 | $1,565,021 | 13.2% | | Income from operations | $297,485 | $455,137 | -34.6% | $801,948 | $924,173 | -13.1% | | Net gain (loss) on derivative instruments | $73,019 | $14,298 | 410.7% | $130,750 | $(106,831) | N/A | | Net income attributable to Class A Common Stock | $207,137 | $235,100 | -11.9% | $536,435 | $381,675 | 40.5% | | Basic EPS | $0.30 | $0.38 | -21.1% | $0.76 | $0.66 | 15.2% | | Diluted EPS | $0.28 | $0.36 | -22.2% | $0.72 | $0.61 | 18.0% | [Consolidated Statements of Cash Flows](index=12&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operating activities increased by **$350.7 million** to **$1.94 billion** for H1 2025, driven by higher production and derivative gains Consolidated Statements of Cash Flows Highlights | (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change | | :----------------------------------- | :------------------------------- | :------------------------------- | :----- | | Net cash provided by operating activities | $1,936,728 | $1,586,032 | $350,696 | | Net cash used in investing activities | $(1,485,129) | $(1,294,950) | $(190,179) | | Net cash used in financing activities | $(479,940) | $(316,497) | $(163,443) | | Net increase (decrease) in cash | $(28,341) | $(25,415) | $(2,926) | | Cash, cash equivalents and restricted cash, end of period | $451,002 | $48,449 | $402,553 | - Cash paid for interest increased to **$148.6 million** in 2025 from **$136.6 million** in 2024 for the six months ended June 30[43](index=43&type=chunk) [Consolidated Statements of Shareholders' Equity](index=14&type=section&id=Consolidated%20Statements%20of%20Shareholders'%20Equity) Total equity increased to **$10.90 billion** as of June 30, 2025, driven by net income and stock-based compensation, offset by dividends and share repurchases - Net income contributed **$329.3 million** and **$207.1 million** to equity for the three months ended March 31, 2025 and June 30, 2025, respectively[45](index=45&type=chunk) - Dividends paid totaled **$107.5 million** and **$107.1 million** for the three months ended March 31, 2025 and June 30, 2025, respectively[45](index=45&type=chunk) - Share repurchases of Class A Common Stock amounted to **$43.3 million** for the three months ended June 30, 2025[45](index=45&type=chunk) [Notes to Consolidated Financial Statements](index=16&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes provide detailed explanations of the company's accounting policies, significant transactions, and financial instrument details [Note 1—Basis of Presentation and Summary of Significant Accounting Policies](index=16&type=section&id=Note%201%E2%80%94Basis%20of%20Presentation%20and%20Summary%20of%20Significant%20Accounting%20Policies) Permian Resources Corporation is an independent oil and natural gas company focused on the Permian Basin, with financial statements prepared under GAAP and SEC rules - Permian Resources Corporation is an independent oil and natural gas company primarily focused on the Permian Basin[48](index=48&type=chunk) - During the six months ended June 30, 2025, the Company entered into a three-year drilling rig contract, resulting in **$10.3 million** of current and **$18.9 million** of noncurrent operating lease liabilities[53](index=53&type=chunk) - The FASB issued ASU No 2023-09 (Improvements to Income Tax Disclosures) and ASU No 2024-03 (Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures), which will require additional disclosures in future financial statements[60](index=60&type=chunk)[61](index=61&type=chunk) [Note 2—Acquisitions](index=18&type=section&id=Note%202%E2%80%94Acquisitions) In June 2025, the Company acquired approximately **13,000 net leasehold acres** from Apache Corporation for **$608 million**, plus smaller acquisitions totaling **$4

Core Insights - Permian Resources reported record operational execution in Q2 2025, leading to increased full-year production guidance and reduced capital expenditure outlook [4][10] - The company completed a $600 million acquisition of Apache assets, integrating them rapidly and generating immediate cost savings [4][9] - New gas and crude contracts are expected to improve netbacks significantly, contributing to a projected $50 million increase in free cash flow for 2026 compared to 2024 [4][17] Production and Financial Performance - Oil production reached 176,500 barrels per day in Q2 2025, with total production at 385,000 barrels of oil equivalent per day [3][10] - Adjusted operating cash flow was $817 million, while adjusted free cash flow stood at $312 million, with cash capital expenditures of $505 million [3][11] - The company maintained approximately one times leverage and $3 billion in liquidity after investments and buybacks [3][13] Strategic Acquisitions and Integration - The Apache acquisition added significant asset overlap and inventory, with integration completed within a week [3][4] - The company added 1,300 net acres through grassroots deals in Q2 2025, enhancing future drilling inventory [3][11] - Management emphasized a focus on high-return drilling and completion rather than large-scale midstream infrastructure ownership [7][9] Marketing and Midstream Agreements - New gas and crude contracts are expected to provide 75 million cubic feet per day of firm gas transportation by year-end 2025, increasing to 450 million by year-end 2028 [6][17] - The agreements are projected to improve gas netbacks by over $0.10 per Mcf and crude oil netbacks by over $0.50 per barrel [6][17] - The company is evolving its marketing strategy to optimize pricing and reduce reliance on Waha hub sales [15][46] Tax and Regulatory Environment - Tax reform is expected to result in cash taxes below $5 million for 2025 and under $50 million cumulatively for 2026 and 2027 [4][19] - Legal changes allowing federal and state commingling in New Mexico are anticipated to reduce capital requirements and operational complexity [7][70] Operational Efficiencies - The company achieved five of its top 10 fastest drills in Q2 2025, with expectations for further efficiency improvements in the second half of the year [6][40] - Microgrid power installations have reduced field power costs by 30% at two locations, supporting lower lease operating expenses [6][64] - Management noted that well costs per foot are expected to decline as drilling efficiencies are implemented [6][67]

Financial Data and Key Metrics Changes - The company reported oil production of 176,500 barrels per day, exceeding expectations, with total production at 385,000 barrels of oil equivalent per day [8][10] - Adjusted operating cash flow reached $817 million, while adjusted free cash flow was $312 million, with cash capital expenditures at $5 million [8][10] - The company maintained leverage at approximately one times and liquidity of about $3 billion [11][12] Business Line Data and Key Metrics Changes - The company executed a buyback program, repurchasing $43 million of shares at an average price of $10.52 per share [6] - The acquisition of Apache for approximately $600 million was completed, contributing about 900 barrels of oil per day to production [6][8] - The company added 1,300 net acres across 130 grassroots acquisitions in Q2, enhancing its development opportunities [9] Market Data and Key Metrics Changes - The company has entered into multiple new transportation and marketing agreements to optimize pricing for hydrocarbons, expecting to improve gas netbacks by over $0.10 per Mcf and crude netbacks by over $0.50 per barrel [13][14] - The company anticipates an incremental 75 million cubic feet per day of firm transport by year-end 2025, ramping to 450 million cubic feet per day by year-end 2028 [13][14] Company Strategy and Development Direction - The company aims to achieve investment grade status, recently receiving its first investment grade rating from Fitch, which is expected to enhance its financial flexibility [10][11] - The marketing strategy is evolving to focus on optimizing pricing and reducing costs, with a goal to sell a larger percentage of gas outside the basin [12][59] - The company is committed to countercyclical investments to deliver shareholder returns throughout market cycles [7][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate downturns due to its strong balance sheet and asset quality, emphasizing the importance of maintaining operational efficiency [39][40] - The company is cautious about future growth, indicating a preference for flattish to low single-digit growth in production due to market uncertainties [98] Other Important Information - The company highlighted the benefits of the One Big Beautiful Bill Act, which is expected to reduce taxes and regulatory burdens, enhancing investment incentives in domestic shale production [15][16] - The company is focused on maintaining a cash balance of $500 million to $1 billion to ensure liquidity during downturns [110] Q&A Session Summary Question: Can you provide insight into recent production performance? - Management noted strong well results and favorable weather conditions contributed to robust production performance [20][21] Question: How do you view the current landscape and future production guidance? - Management indicated a cautious approach, suggesting that production guidance will be adjusted based on macroeconomic conditions and commodity prices [24][25] Question: What impact do the new marketing agreements have on unit costs? - Management confirmed that there would be no immediate change to GP and T based on the new agreements, but they expect improved netbacks [29][30] Question: Is the company considering expanding its midstream presence? - Management stated that while they have evaluated options, they believe their upstream business offers better returns than midstream investments [33][34] Question: Can you elaborate on the downturn playbook? - Management emphasized the importance of a strong balance sheet and asset quality, stating that downturns can present investment opportunities [39][40] Question: What is the company's perspective on M&A activity? - Management views the company as a potential consolidator in the Delaware Basin, with a robust pipeline of acquisition opportunities [43][44] Question: How do you see the impact of federal land regulations? - Management noted that new regulations allow for more efficient operations in New Mexico, leading to capital savings [104][105] Question: What is the expected cash balance moving forward? - Management indicated a target cash balance of $500 million to $1 billion to maintain liquidity [110] Question: What are the expectations for ground game activity? - Management expects to continue strong ground game activity, particularly following the recent acquisition [112][113]

Financial Data and Key Metrics Changes - The company reported oil production of 176,500 barrels per day, exceeding expectations, with total production at 385,000 barrels of oil equivalent per day [6][10] - Adjusted operating cash flow reached $817 million, and adjusted free cash flow was $312 million, with cash capital expenditures of $5 million [6][10] - The company maintained leverage at approximately one times and liquidity of about $3 billion [10] Business Line Data and Key Metrics Changes - The company executed a buyback program, repurchasing $43 million of shares at an average price of $10.52 per share [5] - The acquisition of Apache for approximately $600 million was completed, contributing about 900 barrels of oil per day to production [5][6] Market Data and Key Metrics Changes - The company has entered into multiple new transportation and marketing agreements to optimize pricing, expecting to improve gas netbacks by over $0.10 per Mcf and crude netbacks by over $0.50 per barrel [12][13] - The agreements are projected to provide an incremental 75 million cubic feet per day of firm transport by year-end 2025, ramping to 450 million cubic feet per day by year-end 2028 [12] Company Strategy and Development Direction - The company aims to achieve investment grade status, recently receiving its first investment grade rating from Fitch, which is expected to enhance capital access and reduce costs [9][10] - The company is focused on countercyclical investments to deliver shareholder returns throughout market cycles [5][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate market volatility and emphasized a cautious approach to production growth amid economic uncertainty [24][95] - The company anticipates current cash taxes to be less than $5 million in 2025 and less than $50 million cumulatively in 2026 and 2027 due to favorable tax provisions [15] Other Important Information - The company added 1,300 net acres across 130 grassroots acquisitions in Q2, which are considered high-return investments [7] - The company is exploring various markets for gas sales, aiming to reduce reliance on Waha pricing over time [57] Q&A Session Summary Question: Can you provide insight into recent production performance? - Management noted strong well results and favorable weather conditions contributed to production exceeding expectations [20][21] Question: How do you view the current landscape and future production guidance? - Management indicated a cautious outlook, suggesting production growth may be flattish to low single digits due to market uncertainties [24][95] Question: What is the impact of recent marketing agreements on unit costs? - Management confirmed no immediate change to GP and T costs based on the new agreements, with expected improvements in netbacks [28][29] Question: Will the company consider expanding its midstream presence? - Management stated that while they evaluate options, the focus remains on upstream operations due to better returns [31][32] Question: Can you elaborate on the downturn playbook? - Management emphasized the importance of a strong balance sheet and asset quality, allowing for opportunistic investments during market downturns [38][39] Question: What is the expected impact of federal land regulations? - Management clarified that new regulations allow for more efficient operations in New Mexico but do not open up previously stranded acreage [98][100] Question: What is the right cash balance to maintain? - Management indicated a target cash balance of $500 million to $1 billion to ensure liquidity during downturns [105] Question: What is the outlook for ground game acquisitions? - Management expressed optimism about future ground game opportunities, particularly following the recent Apache acquisition [107]

Financial Performance - Q2'25 adjusted EBITDAX was $894 million[17] - Adjusted operating cash flow for Q2'25 reached $817 million[17] - Adjusted free cash flow for Q2'25 was $312 million[17] - Net debt stood at $3581 million with a net debt-to-LQA EBITDAX ratio of 10x[17] Production and Operations - Total average production for Q2'25 was 3851 MBoe/d, including 1765 MBbls/d of oil, 978 MBbls/d of NGLs, and 6647 MMcf/d of natural gas[17,18] - The company increased the mid-point of full year oil and total production guidance to 1785 MBbls/d and 3850 MBoe/d respectively[18] - Cash capital expenditures for Q2'25 amounted to $505 million[18] Strategic Initiatives - The company closed the APA New Mexico bolt-on acquisition, adding approximately 13000 net acres[18] - Approximately 130 grassroots transactions added ~1,300 net acres and ~80 net royalty acres for ~$10 million[18] - The company expects recent marketing agreements to drive an incremental ~$50 million uplift to 2026E FCF versus 2024[18,39] Shareholder Returns and Balance Sheet - A base dividend of $015 per share was declared, representing a 44% dividend yield[18] - $43 million of PR stock was repurchased at an average of $1052 per share in April[18,20] - The company maintained a strong balance sheet with leverage of 10x and total liquidity of ~$3 billion[18,20]

Core Insights - Permian Resources reported quarterly earnings of $0.27 per share, matching the Zacks Consensus Estimate, but down from $0.39 per share a year ago [1] - The company posted revenues of $1.2 billion for the quarter ended June 2025, missing the Zacks Consensus Estimate by 2.41% and down from $1.25 billion year-over-year [2] - The stock has underperformed, losing about 4.7% since the beginning of the year compared to the S&P 500's gain of 7.1% [3] Earnings Performance - The company has surpassed consensus EPS estimates two times over the last four quarters [1] - The earnings surprise for the last quarter was -4.55%, with actual earnings of $0.42 per share against an expected $0.44 [1] Future Outlook - Current consensus EPS estimate for the upcoming quarter is $0.34 on revenues of $1.33 billion, and for the current fiscal year, it is $1.41 on revenues of $5.28 billion [7] - The estimate revisions trend for Permian Resources was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] Industry Context - The Oil and Gas - Exploration and Production - United States industry is currently in the bottom 27% of Zacks industries, which may impact stock performance [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, suggesting that investors should monitor these revisions closely [5]

[Second Quarter 2025 Performance and Outlook](index=1&type=section&id=Second%20Quarter%202025%20Performance%20and%20Outlook) [Financial and Operational Highlights](index=1&type=section&id=Financial%20and%20Operational%20Highlights) Permian Resources reported strong Q2 2025 results, with total production of 385.1 MBoe/d and adjusted free cash flow of $312 million, increasing full-year production guidance, closing a significant acquisition, repurchasing stock, and receiving an investment-grade credit rating Q2 2025 Key Metrics | Metric | Value | | :--- | :--- | | Total Average Production | 385.1 MBoe/d | | Oil Production | 176.5 MBbls/d | | Cash Capital Expenditures | $505 million | | Cash from Operating Activities | $1.0 billion | | Adjusted Free Cash Flow | $312 million | | Base Dividend per Share | $0.15 | | Share Repurchases | $43 million | | Balance Sheet Leverage | 1.0x | - The company increased its full-year 2025 production guidance, with the **midpoint for oil now at 178.5 MBbls/d** and **total production at 385.0 MBoe/d**[4](index=4&type=chunk) - Strategic activities included closing the APA New Mexico bolt-on (~**13,000 net acres**), grassroots acquisitions (~**1,300 net acres**), and receiving an inaugural investment-grade credit rating (**BBB-**) from Fitch[4](index=4&type=chunk)[8](index=8&type=chunk) - As a result of the One Big Beautiful Bill Act, the company **lowered its 2025 current income tax estimate to less than $5 million**[4](index=4&type=chunk)[14](index=14&type=chunk) [Management Commentary](index=1&type=section&id=Management%20Commentary) Co-CEOs Will Hickey and James Walter highlighted the company's strong operational execution, citing record efficiency in drilling and completions, and emphasizing the successful execution of their 'downturn playbook' through strategic acquisitions and share repurchases - The company achieved record operational efficiencies in Q2, including the fastest well drilled, most feet drilled per day, and lowest completions cost per foot[3](index=3&type=chunk) - Management executed its 'downturn playbook' by deploying **approximately $600 million in acquisitions** and buying back shares at prices considered below mid-cycle values[3](index=3&type=chunk) - The company maintains a strong balance sheet and **total liquidity of approximately $3 billion**, positioning it to 'play offense' during future market volatility or macroeconomic uncertainty[3](index=3&type=chunk) [Financial and Operational Results](index=3&type=section&id=Financial%20and%20Operational%20Results) In Q2 2025, Permian Resources produced an average of 385,118 Boe/d, driven by strong well performance and the APA bolt-on acquisition, generating $1.0 billion in cash from operations and $312 million in adjusted free cash flow, while maintaining low leverage at 1.0x Net Debt-to-LQA EBITDAX Q2 2025 Production and Financial Summary | Metric | Value | | :--- | :--- | | Avg. Daily Oil Production | 176,533 Bbls/d | | Avg. Daily Total Production | 385,118 Boe/d | | Cash Capital Expenditures | $505 million | | Net Cash from Operations | $1.0 billion | | Adjusted Free Cash Flow | $312 million | | Total Controllable Cash Costs | $7.82 per Boe | Q2 2025 Realized Prices | Commodity | Realized Price | | :--- | :--- | | Oil | $62.71 / Bbl | | NGL | $17.75 / Bbl | | Natural Gas | $0.53 / Mcf | - The company maintained a strong financial position with **$451 million in cash**, an undrawn revolving credit facility, and **total liquidity of approximately $3 billion**. **Net debt-to-LQA EBITDAX was 1.0x**[8](index=8&type=chunk) [Strategic Execution](index=3&type=section&id=Strategic%20Execution) During Q2, Permian Resources executed its 'downturn playbook' by repurchasing 4.1 million shares for $43 million at a significant discount and closing the APA Corporation's New Mexico assets acquisition, maintaining a strong balance sheet with projected year-end 2025 leverage of approximately 0.8x - **Repurchased 4.1 million shares at a weighted average price of $10.52 per share, a 23% discount** to the share price as of August 5, 2025[10](index=10&type=chunk) - Closed the acquisition of APA Corporation's New Mexico assets, adding low breakeven inventory and low decline production in core operating areas[11](index=11&type=chunk) - Continued its 'ground game' by adding ~**1,300 net acres** and **80 net royalty acres** through ~**130 grassroots transactions**[11](index=11&type=chunk) - **Projects year-end 2025 net debt-to-EBITDAX to be approximately 0.8x**, assuming $60/bbl WTI for the rest of the year[12](index=12&type=chunk) [Updated 2025 Guidance and Outlook](index=4&type=section&id=Updated%202025%20Guidance%20and%20Outlook) The company increased its full-year 2025 production guidance, raising the midpoint for oil to 178.5 MBbls/d and total production to 385.0 MBoe/d, while adjusting cash capital expenditures and anticipating improved netbacks from new marketing agreements Updated Full Year 2025 Guidance | Metric | Midpoint/Range | | :--- | :--- | | Oil Production | 178.5 MBbls/d | | Total Production | 385.0 MBoe/d | | Cash Capital Expenditures | $1,920 – $2,020 million | - New transportation and marketing agreements are expected to **increase natural gas realizations by over $0.10/Mcf** and **crude oil realizations by over $0.50/Bbl** in 2026 compared to 2024[15](index=15&type=chunk)[16](index=16&type=chunk) - These new marketing arrangements are projected to generate an **incremental $50 million of free cash flow** in 2026 compared to 2024[17](index=17&type=chunk) - The full-year 2025 current income tax estimate was **lowered to less than $5 million** due to the One Big Beautiful Bill Act[14](index=14&type=chunk) [Shareholder Returns and Hedging](index=4&type=section&id=Shareholder%20Returns%20and%20Hedging) Permian Resources declared a Q3 2025 base dividend of $0.15 per share and repurchased $43 million of its stock in Q2, while adding incremental oil hedges for 2H 2025 and full year 2026 to manage price risk - The Board of Directors declared a **Q3 2025 base dividend of $0.15 per share ($0.60 annualized)**, payable on September 30, 2025[19](index=19&type=chunk) - In Q2, the company **repurchased 4.1 million shares for $43 million at an average price of $10.52 per share**[20](index=20&type=chunk) - **Added 12,000 Bbls/d of incremental oil swaps for 2H 2025 at an average price of $70.18/Bbl**. **Approximately 32% of expected oil production is now hedged** for the remainder of 2025[18](index=18&type=chunk) - **Added 12,000 Bbls/d of oil hedges for the full year 2026 at an average price of $66.12/Bbl, bringing total 2026 oil hedges to 29.5 MBbls/d**[18](index=18&type=chunk) [Financial Statements (Unaudited)](index=9&type=section&id=Financial%20Statements%20(Unaudited)) [Operating Highlights and Expenses](index=9&type=section&id=Operating%20Highlights%20and%20Expenses) For Q2 2025, total oil and gas sales decreased to $1.198 billion due to lower realized oil prices, despite higher production volumes, with lease operating expenses slightly increasing to $5.36 per Boe Q2 Production Volumes (YoY) | Production | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Oil (Bbls/d) | 176,533 | 152,883 | +15.5% | | NGL (Bbls/d) | 97,804 | 84,736 | +15.4% | | Natural Gas (Mcf/d) | 664,686 | 606,856 | +9.5% | | **Total (Boe/d)** | **385,118** | **338,761** | **+13.7%** | Q2 Operating Expenses per Boe (YoY) | Expense per Boe | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Lease Operating Expenses | $5.36 | $5.18 | | Gathering, Processing & Transport | $1.59 | $1.42 | [Consolidated Statement of Operations](index=11&type=section&id=Consolidated%20Statement%20of%20Operations) For Q2 2025, Permian Resources reported net income attributable to Class A Common Stock of $207.1 million, or $0.28 per diluted share, a decrease from the prior year due to lower operating revenues and higher operating expenses, despite a net gain on derivative instruments Q2 Statement of Operations Summary (in thousands) | Account | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Oil and gas sales | $1,197,596 | $1,246,083 | | Total operating expenses | $900,111 | $790,946 | | Income from operations | $297,485 | $455,137 | | Net income | $245,021 | $308,908 | | **Net income attributable to Class A Common Stock** | **$207,137** | **$235,100** | Earnings Per Share (Diluted) | Period | EPS (Diluted) | | :--- | :--- | | Q2 2025 | $0.28 | | Q2 2024 | $0.36 | [Consolidated Balance Sheet](index=12&type=section&id=Consolidated%20Balance%20Sheet) As of June 30, 2025, Permian Resources' total assets increased to $17.5 billion, with $451 million in cash and total liabilities at $6.6 billion, resulting in total equity of $10.9 billion Balance Sheet Summary (in thousands) | Account | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $451,002 | $479,343 | | Total current assets | $1,149,071 | $1,121,594 | | Total property and equipment, net | $16,026,776 | $15,473,478 | | **Total Assets** | **$17,494,406** | **$16,897,900** | | Total current liabilities | $1,828,947 | $1,327,337 | | Long-term debt, net | $3,711,355 | $4,184,233 | | **Total Liabilities** | **$6,589,888** | **$6,379,381** | | **Total Equity** | **$10,904,518** | **$10,518,519** | [Consolidated Statement of Cash Flows](index=13&type=section&id=Consolidated%20Statement%20of%20Cash%20Flows) For the six months ended June 30, 2025, net cash provided by operating activities was $1.94 billion, with net cash used in investing activities of $1.49 billion and financing activities of $480 million, ending the period with a cash balance of $451 million Six Months Ended June 30, 2025 Cash Flow Summary (in thousands) | Cash Flow Activity | Amount | | :--- | :--- | | Net cash provided by operating activities | $1,936,728 | | Net cash used in investing activities | ($1,485,129) | | Net cash used in financing activities | ($479,940) | | **Net decrease in cash** | **($28,341)** | | **Cash at end of period** | **$451,002** | [Appendix: Non-GAAP Financial Measures and Hedging](index=14&type=section&id=Appendix%3A%20Non-GAAP%20Financial%20Measures%20and%20Hedging) [Reconciliation of Non-GAAP Measures](index=14&type=section&id=Reconciliation%20of%20Non-GAAP%20Measures) The company provides non-GAAP measures for investor evaluation, reporting Q2 2025 Adjusted EBITDAX of $893.9 million, leverage of 1.0x, adjusted free cash flow of $311.8 million, and adjusted net income per diluted share of $0.27 [Adjusted EBITDAX and Net Debt](index=14&type=section&id=Adjusted%20EBITDAX%20and%20Net%20Debt) Adjusted EBITDAX for Q2 2025 was $893.9 million, a decrease from the prior quarter, with net debt at $3.58 billion as of June 30, 2025, resulting in a Net Debt-to-LQA EBITDAX ratio of 1.0x Adjusted EBITDAX Trend (in thousands) | Quarter | Adjusted EBITDAX | | :--- | :--- | | Q2 2025 | $893,930 | | Q1 2025 | $1,045,000 | | Q4 2024 | $976,655 | | Q2 2024 | $928,092 | Net Debt Calculation (as of June 30, 2025) | Metric | Value (in thousands) | | :--- | :--- | | Total debt, net | $3,997,481 | | Less: cash and cash equivalents | ($451,002) | | **Net debt (Non-GAAP)** | **$3,580,720** | | **Net debt-to-LQA EBITDAX** | **1.0x** | [Adjusted Operating Cash Flow and Free Cash Flow](index=18&type=section&id=Adjusted%20Operating%20Cash%20Flow%20and%20Free%20Cash%20Flow) For Q2 2025, adjusted operating cash flow was $816.8 million, and after subtracting $505.0 million in total cash capital expenditures, the company generated $311.8 million in adjusted free cash flow Q2 Adjusted Free Cash Flow Reconciliation (in thousands) | Account | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $1,038,696 | $938,434 | | Adjustments for working capital, etc. | ($221,871) | ($89,762) | | **Adjusted operating cash flow** | **$816,825** | **$848,672** | | Less: total cash capital expenditures | ($504,996) | ($516,412) | | **Adjusted free cash flow** | **$311,829** | **$332,260** | [Adjusted Net Income and Adjusted Shares](index=17&type=section&id=Adjusted%20Net%20Income%20and%20Adjusted%20Shares) In Q2 2025, adjusted net income was $223.2 million, or $0.27 per adjusted diluted share, compared to $297.4 million, or $0.37 per adjusted diluted share, in Q2 2024, with adjusted diluted weighted average shares outstanding at 845.1 million Q2 Adjusted Net Income (in thousands) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Adjusted net income | $223,237 | $297,409 | | Adjusted diluted shares outstanding | 845,075 | 815,724 | | **Adjusted net income per diluted share** | **$0.27** | **$0.37** | [Derivative Contracts Summary](index=20&type=section&id=Derivative%20Contracts%20Summary) As of July 31, 2025, the company held significant hedging positions for crude oil and natural gas through 2027, including 57,000 Bbls/d of crude oil swaps for the remainder of 2025 at over $70/Bbl and 165,000 MMBtu/d of natural gas swaps Crude Oil Swaps (NYMEX WTI) as of July 31, 2025 | Period | Volume (Bbls/d) | Wtd. Avg. Price ($/Bbl) | | :--- | :--- | :--- | | Jul - Dec 2025 | 57,000 | ~$71.71 | | Full Year 2026 | 29,500 | ~$68.57 | Natural Gas Swaps (NYMEX Henry Hub) as of July 31, 2025 | Period | Volume (MMBtu/d) | Wtd. Avg. Price ($/MMBtu) | | :--- | :--- | :--- | | Jul - Dec 2025 | 165,000 | ~$3.80 | | Full Year 2026 | 91,000 | ~$3.79 | | Full Year 2027 | 140,000 | ~$3.77 |

Core Viewpoint - Analysts project that Permian Resources will report a quarterly earnings per share (EPS) of $0.27, reflecting a year-over-year decline of 30.8%, with revenues expected to reach $1.23 billion, down 1.5% from the same quarter last year [1]. Earnings Projections - The consensus EPS estimate has been revised 15.2% higher in the last 30 days, indicating a collective reevaluation by analysts [2]. - Changes in earnings projections are crucial for predicting investor reactions, as empirical studies show a strong correlation between earnings estimate trends and short-term stock price movements [3]. Key Metrics - Analysts estimate the 'Average daily net production - Total' to be 376,103 barrels of oil equivalent per day, up from 338,761 barrels in the same quarter last year [5]. - The 'Average daily net production - Natural gas' is projected to reach 673,266 thousand cubic feet per day, compared to 606,856 thousand cubic feet per day a year ago [5]. - The 'Average daily net production - NGL' is estimated at 88,131 barrels of oil per day, an increase from 84,736 barrels in the same quarter last year [6]. - The 'Average daily net production - Oil' is forecasted to be 175,688 barrels of oil per day, up from 152,883 barrels in the same quarter last year [6]. Sales Prices - The 'Average sales prices - Oil - Including Derivative Cash Settlements' is projected to be $65.74, down from $78.99 a year ago [7]. - The 'Average sales prices - Oil - Excluding the effects of hedging' is expected to be $63.12, compared to $80.10 in the previous year [7]. - The 'Average sales prices - NGL - Excluding the effects of GP&T' is estimated at $17.79, down from $22.51 in the same quarter last year [8]. Stock Performance - Shares of Permian Resources have changed by -0.6% in the past month, contrasting with a +1% move in the Zacks S&P 500 composite [8].