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Sales Agreements and Volume Commitments - The company has long-term firm sales agreements with total NGL volume commitments of 10,674,000 Bbls through 2031, with daily commitments of 9,000 Bbls from 2025 to 2028[69] - Natural gas volume commitments total 98,540,000 Mcf, with daily commitments of 80,000 Mcf in 2025 and 2026, decreasing to 5,000 Mcf in 2029 and thereafter[69] - The company expects future production to meet all minimum volume commitments under its sales agreements, mitigating financial penalties for under-delivery[69] - The company has a firm crude oil sales agreement for 29,000 Bbls/d based on market prices, which ends on May 31, 2025, subject to financial penalties for non-compliance[69] Customer Concentration and Revenue Dependence - Major customers include Shell Trading (US) Company (31% of net revenues in 2024), Enterprise Crude Oil, LLC (19% in 2024), and BP America (11% in 2024), indicating a reliance on a small number of purchasers[72] - The company relies on a small number of significant purchasers for the majority of its oil, natural gas, and NGL production, with major purchasers accounting for over 10% of revenues in recent years[166] Regulatory Compliance and Environmental Impact - Regulatory compliance is crucial, with potential penalties for non-compliance that could affect profitability; the company believes it is in substantial compliance with current regulations[76][77] - The regulatory environment is subject to change, particularly regarding climate-related policies, which may impact production costs and demand for oil and natural gas[78] - The company is required to comply with anti-market manipulation laws enforced by FERC and CFTC, with significant penalties for violations[88] - The company is subject to stringent federal, state, and local laws regarding environmental and occupational safety, which may impose significant compliance costs[92] - The Resource Conservation and Recovery Act (RCRA) regulates hazardous waste management, and future reclassification of certain wastes could increase operational costs[95] - The Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) imposes joint liability for hazardous substance releases, which could lead to substantial cleanup costs[96] - The Clean Water Act (CWA) requires permits for pollutant discharges, and noncompliance can result in significant penalties[98] - The Oil Pollution Act of 1990 imposes strict liabilities on responsible parties for oil spills, which could adversely affect the company's operations[100] - Underground Injection Control (UIC) regulations govern the disposal of produced water, and changes in these regulations could increase operational costs[101] - The Clean Air Act (CAA) imposes restrictions on air emissions, and new regulations could raise compliance costs for the company[103] - The EPA finalized updates to NSPS regulations requiring the phase-out of routine flaring of natural gas from new oil wells and routine leak monitoring, with compliance deadlines for existing sources set for December 6, 2022[104] - The final rule establishes a "Super Emitter Response Program" for emissions events exceeding 200 pounds per hour, with states given two years to develop plans for reducing methane emissions from existing sources[104] - The EPA lowered the primary annual NAAQS for particulate matter 2.5 from 12.0 μg/m³ to 9.0 μg/m³, which could lead to increased regulatory burdens if areas are redesignated as nonattainment[105] - Compliance with air pollution control requirements may delay the development of natural gas, oil, and NGL projects, significantly increasing development and production costs[106] - The IRA imposed a federal fee on GHG emissions via a methane emissions charge, with regulations finalized by the EPA, but implementation remains uncertain due to ongoing litigation[108] - New Mexico's legislature is considering a bill to codify a 98% methane capture rule, requiring oil and gas operators to capture 98% of produced natural gas by December 31, 2026[111] - The BLM finalized a rule in April 2024 to limit venting and flaring from well sites on federal lands, requiring operators to submit a methane waste minimization plan[114] - Operations on federal lands are subject to NEPA evaluations, which may delay or increase costs for natural gas, oil, and NGL projects due to potential environmental assessments[115] - The identification of new endangered species could lead to increased costs and limitations on exploration and production activities, adversely impacting the ability to develop reserves[119] - Seasonal and permanent restrictions on drilling activities to protect wildlife may increase operational costs and limit production capabilities[209] - Increased scrutiny on environmental, social, and governance (ESG) matters could lead to higher compliance costs and reduced demand for the company's products[210] - Changes in federal leasing and permitting processes for oil and gas development could adversely impact operations, particularly with new regulations increasing fees and royalties[216] - The company is subject to ongoing litigation risks related to federal oil and gas leasing, which may affect operational results[218] - Environmental regulations may impose significant liabilities and operational restrictions, impacting growth and revenue[207] - The company may face significant environmental liabilities due to strict laws requiring remediation of contaminated sites, which could lead to material losses[208] Financial Performance and Risks - The company faces risks related to commodity price volatility, which can significantly impact revenue, cash flows, and overall financial condition[133] - The company may need to reduce capital spending or borrow funds if there is a sustained decline in commodity prices, affecting its ability to develop future reserves[135] - The company's cash flow from operations and access to capital are influenced by oil, natural gas, and NGL prices, which can limit its ability to sustain operations[149] - The company may face higher costs during periods of rising commodity prices, which could negatively impact profitability and cash flow[165] - The company is exposed to risks associated with the transportation of its production, as it relies on third-party facilities that it does not control[161] - The company is exposed to volatility in operating results due to multi-well pad drilling, which delays production commencement and can cause interruptions[168] - The company may incur financial losses from derivative transactions, which could reduce earnings and expose it to counterparty risks[177] - The company’s cash flow is heavily dependent on the ability of its operating subsidiaries to generate revenue and make distributions, which may fluctuate based on market conditions[221] - The company faces risks related to maintaining effective internal controls, which are essential for reliable financial reporting and preventing fraud[225] - The company's ability to service its debt obligations may be impacted by insufficient cash flows, potentially leading to asset sales or restructuring[184] - Restrictions in the company's debt agreements may limit its growth and ability to engage in certain business activities[186] - Liquidity concerns could lead to a downgrade in debt ratings, affecting access to financing and increasing borrowing costs[193] - Increases in interest rates may adversely affect operational costs and limit acquisition opportunities, impacting overall business performance[194] - Proposed changes to tax laws could significantly impact the company's financial condition and cash flow, including potential elimination of key deductions[219] Workforce and Talent Management - As of December 31, 2024, the company had 482 total employees, with a focus on attracting and retaining top-tier talent in the oil and gas sector[123] - The company conducts an equitable pay analysis annually to ensure fair compensation for all employees based on experience and performance[125] - The company is committed to a diverse workforce, recognizing the importance of different skill sets and experiences in driving superior results[126] - The loss of senior management or technical personnel could adversely affect the company's operations and financial condition[176] Capital Expenditures and Reserves - Capital expenditures for development and acquisition projects are substantial, and the company relies on cash flows, borrowings, and divestitures to fund these expenditures[148] - The estimated proved reserves as of December 31, 2024, were calculated using a twelve-month trailing average benchmark price of $71.96 per barrel of oil and $2.13 per MMBtu for natural gas[140] - 27% of the company's total estimated proved reserves were classified as proved undeveloped (PUD) as of December 31, 2024, which may require higher capital expenditures and longer development times than anticipated[143] - The company has a total estimated proved reserves concentrated in the Permian Basin, making it vulnerable to regional supply and demand fluctuations[160] - As of December 31, 2024, the company's aggregate long-term contractual obligation under multi-year agreements was $396.1 million, which includes minimum volume commitments[162] Internal Controls and Financial Reporting - The company maintained effective internal control over financial reporting as of December 31, 2024, according to the audit opinion[369] - The consolidated financial statements present fairly the financial position of the company as of December 31, 2024, in conformity with U.S. generally accepted accounting principles[357] - The company’s internal reserve engineers' estimates of proved reserves are compared to publicly available benchmark pricing data[365] - The company’s historical production forecasts are assessed against actual production volumes to evaluate forecasting accuracy[365] - The company’s internal controls related to estimating depletion expense were evaluated for design and operating effectiveness[365] - The company’s audit included procedures to assess risks of material misstatement in the consolidated financial statements[360] - The company’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting[373] Strategic Initiatives and Future Outlook - The company intends to pursue a strategy focused on reinvestment and future acquisitions to complement or expand its current business[169] - In 2024, the board of directors authorized a new stock repurchase program of $1 billion, replacing the previous $500 million program[227] - The company has historically used commodity derivative instruments to mitigate price risk associated with anticipated production[344] - The company’s Credit Agreement limits the ability to enter into commodity hedges covering greater than 85% of reasonably anticipated projected production from proved properties[344] - The company’s natural gas swaps for January 2025 - March 2025 have a weighted average gas price of $3.44 per MMBtu, with a total volume of 11,070,000 MMBtu[348] - The company’s crude oil swaps for January 2025 - March 2025 have a weighted average crude price of $75.21 per Bbl, with a total volume of 4,050,000 Bbls[346]

Financial Data and Key Metrics Changes - The company reported a record quarter in Q4 2024 with oil production of 171,000 barrels per day and total production of 368,000 barrels of oil equivalent per day [9] - Adjusted operating cash flow was $904 million and adjusted free cash flow was $400 million for Q4 2024 [11] - For the full year 2024, the company achieved nearly a 50% increase in performance compared to 2023 without increasing leverage [7][8] Business Line Data and Key Metrics Changes - The company drilled 275 wells in 2024, with CapEx remaining within the guidance range of $1.9 billion to $2.1 billion [10] - Q4 lease operating expenses (LOE) were $5.42 per BOE, cash G&A was $0.93 per BOE, and general production taxes (GPT) were $1.49 per BOE [10] Market Data and Key Metrics Changes - The company expects total production in 2025 to average between 300,000 and 380,000 BOE per day, with oil production averaging between 170,000 and 175,000 barrels per day [21] - The capital program for 2025 is approximately $2 billion, which is less than 2024 despite a higher production base [22] Company Strategy and Development Direction - The company plans to maximize shareholder value through a capital-efficient drilling program in the Delaware Basin [9] - The focus remains on maintaining a strong balance sheet and achieving investment-grade status [27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the sustainability of their operations, citing a strong inventory position and cost control measures [36][12] - The company aims to continue enhancing free cash flow per share, projecting it to nearly double from just over $1 in 2023 to over $2 in 2025 [30] Other Important Information - The company rolled out an enhanced capital return program prioritizing a leading base dividend for shareholders [13] - The company increased liquidity by approximately $1 billion during 2024, maintaining a strong financial position [13] Q&A Session Summary Question: Can you provide insight into target formations and co-development for 2025? - Management indicated that the target formations remain similar to previous years, with a high confidence in a fifteen-year inventory [36] Question: What is the view on larger scale M&A? - Management prefers smaller deals, finding them to offer higher quality inventory and better value, but remains open to larger deals if they align with strategic goals [40] Question: What drives operational efficiency? - The company attributes efficiency gains to a strong culture focused on continuous improvement rather than solely on M&A [45] Question: How do you see shareholder returns evolving? - The base dividend is a core part of the shareholder return strategy, with plans to increase it annually [51] Question: What is the expected CapEx for facilities? - Management expects facility spend to be around $400 million annually, with potential for further reductions in the future [58] Question: What are the drivers behind the reduction in D&C costs? - Approximately 55% of the reduction in D&C costs is attributed to efficiency gains, with the remainder due to cost deflation [71] Question: How does the Midland asset fit into the portfolio? - The Midland asset is not a primary focus but provides a nice cash flow stream and fits well within the overall portfolio [76] Question: What is the strategy for gas realizations? - The company is focused on optimizing gas netbacks, with significant improvements expected in 2026 and beyond [120] Question: How does the balance sheet strategy relate to stock performance? - Management emphasizes that balance sheet strength is about optimizing value creation rather than directly influencing stock trading [127]

Financial Data and Key Metrics Changes - The company reported a record quarter in Q4 2024 with oil production of 171,000 barrels per day and total production of 368,000 barrels of oil equivalent per day [9] - Adjusted operating cash flow reached $904 million and adjusted free cash flow was $400 million for the quarter [11] - For the full year 2024, the company achieved nearly a 50% increase in performance compared to 2023 without increasing leverage [7][8] Business Line Data and Key Metrics Changes - The company drilled 275 wells in 2024, with CapEx remaining within the guidance range of $1.9 billion to $2.1 billion [10] - Q4 lease operating expenses (LOE) were $5.42 per BOE, cash G&A was $0.93 per BOE, and general production taxes (GPT) were $1.49 per BOE [10] Market Data and Key Metrics Changes - The company expects total production in 2025 to average between 300,000 and 380,000 BOE per day, with oil production between 170,000 and 175,000 barrels per day, representing an 8% increase in annual oil production compared to 2024 [21][22] Company Strategy and Development Direction - The 2025 plan focuses on maximizing returns and free cash flow per share through consistent capital allocation and low-cost execution [20] - The company aims to maintain a fortress balance sheet and achieve investment-grade status, with expectations to exit 2025 at approximately 0.5 times leverage [26][27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the sustainability of their operations, citing a strong inventory position and a focus on low-cost leadership [14][19] - The company highlighted the importance of maintaining flexibility to capitalize on market dislocations and opportunities [27] Other Important Information - The company rolled out an enhanced capital return program prioritizing a leading base dividend, with a current yield over 4% [28] - The company executed approximately $1.2 billion in acquisitions for 50,000 net acres and 20,000 barrels of oil equivalent per day [16] Q&A Session Summary Question: Can you provide insight into target formations and co-development for 2025? - Management indicated that the target formations remain similar to previous years, with a high confidence in a fifteen-year inventory [36] Question: What is the view on larger scale M&A? - Management prefers smaller deals due to better quality inventory and values, but remains open to larger deals if they align with long-term business improvement [40][41] Question: What drives operational efficiency? - The company attributes efficiency gains to a strong culture focused on continuous improvement rather than solely on M&A [45][46] Question: How do you see shareholder returns evolving? - The base dividend is a core part of the shareholder return strategy, with plans to increase it annually while considering other capital allocation opportunities [51][52] Question: What is the outlook for capital expenditures? - Management expects facility spend to be around $400 million annually, with D&C costs currently at $7.50 per foot [58][60] Question: How do you plan to optimize gas realizations? - The company is focused on better marketing of hydrocarbons, with significant improvements expected in 2026 and beyond [120][122] Question: What is the strategy regarding royalty acreage? - The company is actively looking to acquire royalty interests, focusing on high-return development opportunities [130][132]

Investors might want to bet on Permian Resources (PR) , as it has been recently upgraded to a Zacks Rank #2 (Buy). This rating change essentially reflects an upward trend in earnings estimates -- one of the most powerful forces impacting stock prices.The Zacks rating relies solely on a company's changing earnings picture. It tracks EPS estimates for the current and following years from the sell-side analysts covering the stock through a consensus measure -- the Zacks Consensus Estimate.Individual investors ...

Fe b ru a ry 2 5 , 2 0 2 5 Q4'24 Earnings Presentation Important Information Forward-Looking Statements 1 Permian Resources – Company Overview |  | Largest pure-play Delaware Basin E&P company with | | | | --- | --- | --- | --- | | Premier Delaware | ~450,000 net acres, ~88,000 net royalty acres and | PR Key Statistics | | | | ~370 MBoe/d of FY'25E production | | | | Basin Pure-Play  | Scale and balance sheet strength provide flexibility to | | | | E&P Company | quickly respond to a range of market condit ...

Core Insights - Permian Resources reported $1.3 billion in revenue for Q4 2024, a year-over-year increase of 15.4% and an EPS of $0.36, slightly up from $0.35 a year ago [1] - The revenue was a -1.98% surprise compared to the Zacks Consensus Estimate of $1.32 billion, while the EPS exceeded the consensus estimate of $0.34 by +5.88% [1] Financial Performance - Average daily net production totaled 368,414 BOE/D, surpassing the seven-analyst average estimate of 358,924.8 BOE/D [4] - Natural gas production averaged 634,546 Mcf/D, exceeding the six-analyst average estimate of 628,850.1 Mcf/D [4] - NGL production averaged 91,382 BBL/D, above the six-analyst average estimate of 86,205.9 BBL/D [4] - Oil production averaged 171,274 BBL/D, compared to the six-analyst average estimate of 168,467.4 BBL/D [4] Pricing Metrics - Average sales price for gas, including derivative cash settlements, was $1.21, exceeding the $0.90 average estimate [4] - Average sales price for oil, including derivative cash settlements, was $70.75, slightly above the four-analyst average estimate of $70.39 [4] - Average sales price for oil was $69.66, compared to the three-analyst average estimate of $69.05 [4] - Average sales price for natural gas was $0.87, exceeding the three-analyst average estimate of $0.73 [4] - Average sales price for NGL was $24.05, above the two-analyst average estimate of $23.41 [4] Stock Performance - Shares of Permian Resources have returned -6.1% over the past month, while the Zacks S&P 500 composite changed by -1.8% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Core Viewpoint - Permian Resources reported quarterly earnings of $0.36 per share, exceeding the Zacks Consensus Estimate of $0.34 per share, and showing a slight increase from $0.35 per share a year ago, indicating a 5.88% earnings surprise [1][2] Financial Performance - The company achieved revenues of $1.3 billion for the quarter ended December 2024, which was 1.98% below the Zacks Consensus Estimate, but an increase from $1.12 billion year-over-year [2] - Over the last four quarters, Permian Resources has surpassed consensus EPS estimates four times and topped revenue estimates twice [2] Stock Performance - Permian Resources shares have declined approximately 2.2% since the beginning of the year, contrasting with the S&P 500's gain of 1.7% [3] - The current Zacks Rank for the stock is 3 (Hold), suggesting it is expected to perform in line with the market in the near future [6] Earnings Outlook - The consensus EPS estimate for the upcoming quarter is $0.40 on revenues of $1.36 billion, and for the current fiscal year, it is $1.63 on revenues of $5.51 billion [7] - The trend of estimate revisions for Permian Resources is mixed, which could change following the recent earnings report [6] Industry Context - The Oil and Gas - Exploration and Production - United States industry is currently ranked in the top 22% of over 250 Zacks industries, indicating a favorable outlook compared to lower-ranked industries [8]

Production and Reserves - Reported crude oil production of 171.3 MBbls/d and total average production of 368.4 MBoe/d for Q4 2024, representing a 63% and 77% increase year-over-year respectively[5] - 2025 production guidance set at 170 to 175 MBbls/d and 360 to 380 MBoe/d, indicating an 8% increase in annual production compared to 2024[11] - Total proved reserves increased to 1,027 MMBoe at year-end 2024, up from 925 MMBoe at the prior year-end[16] - Average daily net production for 2024 was 343,523 Boe/d, compared to 194,499 Boe/d in 2023, indicating a growth of about 76.7%[32] - Net average daily production guidance for 2025 is set at 360,000 to 380,000 Boe/d, with net average daily oil production expected to be between 170,000 and 175,000 Bbls/d[30] Financial Performance - Generated cash provided by operating activities of $872 million and adjusted free cash flow of $400 million in Q4 2024[10] - For the year ended December 31, 2024, oil sales reached $4.36 billion, a significant increase from $2.70 billion in 2023, representing a year-over-year growth of approximately 61.7%[32] - The company reported total oil and gas sales of $5.00 billion for the year ended December 31, 2024, compared to $3.12 billion in 2023, reflecting a year-over-year increase of approximately 60.3%[32] - Operating revenues for Q4 2024 reached $1,296,081, a 15.4% increase from $1,122,686 in Q4 2023[36] - Net income attributable to Class A Common Stock for the year ended December 31, 2024, was $984,701, compared to $476,306 in 2023, representing a 106.5% increase[36] Cash Flow and Expenditures - Total cash capital expenditures for Q4 2024 were $504 million, with drilling and completion costs reduced to approximately $775 per lateral foot, a 3% decrease from the previous quarter[8] - Estimated fiscal year 2025 cash capital expenditure budget of $1.9 to $2.1 billion, maintaining a similar capital budget year-over-year[11] - Total cash capital expenditure program for 2025 is projected to be between $1.9 billion and $2.1 billion[30] - Cash and cash equivalents surged to $479,343 by December 31, 2024, compared to $73,290 at the end of 2023, marking a 553.5% increase[38] - The company reported a net cash provided by operating activities of $3,411,968 for 2024, up from $2,213,499 in 2023, a 54.1% increase[40] Costs and Expenses - Lease operating expenses for the three months ended December 31, 2024, were $5.42 per Boe, up from $4.97 per Boe in the same period of 2023[34] - Total operating expenses for the year increased to $3,256,575, up 60.9% from $2,024,596 in 2023[36] - Anticipated total controllable cash costs of $7.25 to $8.25 per Boe in 2025, reflecting a $0.10 per Boe reduction compared to 2024[13] - Total controllable cash costs for 2025 are expected to range from $7.25 to $8.25 per Boe[30] Shareholder Returns - Declared a base dividend of $0.15 per share, yielding 4.3%[5] - Basic weighted average shares of Class A Common Stock outstanding increased to 702,968,000 in Q4 2024 from 459,593,000 in Q4 2023[49] - Adjusted diluted weighted average shares outstanding for Q4 2024 were 847,094,000, up from 744,958,000 in Q4 2023[49] Debt and Assets - Long-term debt increased to $4,184,233 in 2024, compared to $3,848,781 in 2023, indicating an 8.7% rise[38] - Total assets grew to $16,897,900 in 2024, up from $14,965,578 in 2023, reflecting a 12.9% increase[38] Derivative Gains and Swaps - The company reported a non-cash derivative gain of $73,579,000 in Q4 2024, compared to a loss of $180,179,000 in Q4 2023[55] - As of December 31, 2024, the company has crude oil swaps totaling approximately 4,050,000 Bbls for January to March 2025 at a weighted average price of $75.21 per Bbl[56] - The company has natural gas swaps of 11,070,000 MMBtu for January to March 2025 at a weighted average price of $3.44 per MMBtu[58] - The crude oil basis differential swaps for January to March 2025 total 3,932,000 Bbls with a weighted average differential of $1.11 per Bbl[56] - The company has planned to enter into additional contracts for crude oil swaps with volumes of 4,140,000 Bbls for July to September 2025 at a price of $72.64 per Bbl[56]