Permian Resources (US:PR)2025-05-08 20:17Part I—FINANCIAL INFORMATION Financial Statements (Unaudited) For the first quarter of 2025, Permian Resources reported a significant increase in net income to $390.6 million, up from $229.6 million in the prior-year period, driven by higher production volumes and stronger natural gas and NGL prices Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Current Assets | $1,356,833 | $1,121,594 | | Total Property and Equipment, net | $15,358,996 | $15,473,478 | | TOTAL ASSETS | $17,076,443 | $16,897,900 | | Total Current Liabilities | $1,585,272 | $1,327,337 | | Total Long-term Debt, net | $3,710,381 | $4,184,233 | | TOTAL LIABILITIES | $6,272,643 | $6,379,381 | | Total Equity | $10,803,800 | $10,518,519 | Consolidated Statement of Operations Highlights (in thousands) | Account | Three Months Ended Mar 31, 2025 | Three Months Ended Mar 31, 2024 | | :--- | :--- | :--- | | Oil and gas sales | $1,376,451 | $1,242,999 | | Total operating expenses | $871,988 | $774,075 | | Income from operations | $504,463 | $469,036 | | Net income | $390,563 | $229,595 | | Net income attributable to Class A Common Stock | $329,298 | $146,575 | | Diluted EPS | $0.44 | $0.25 | Consolidated Statement of Cash Flows Highlights (in thousands) | Account | Three Months Ended Mar 31, 2025 | Three Months Ended Mar 31, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $898,032 | $647,598 | | Net cash used in investing activities | ($361,816) | ($619,348) | | Net cash used in financing activities | ($313,323) | ($88,835) | | Net increase (decrease) in cash | $222,893 | ($60,585) | Note 2—Acquisitions The company completed a bolt-on acquisition from Occidental Petroleum in September 2024, adding approximately 29,500 net leasehold acres - Completed the acquisition of oil and gas properties from Occidental Petroleum affiliates on September 17, 2024, which included approximately 29,500 net leasehold acres and 9,900 net royalty acres63 - In May 2025, the company agreed to acquire oil and gas properties from Apache Corporation for approximately $608 million, adding 13,320 net leasehold acres and 8,700 net royalty acres in its New Mexico operating area157 Note 4—Long-Term Debt As of March 31, 2025, total net debt was approximately $4.0 billion, a decrease from $4.2 billion at year-end 2024 Long-Term Debt Composition (in thousands) | Debt Instrument | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Credit Facility | $0 | $0 | | Senior Notes, net | $3,998,984 | $4,184,233 | | Total debt, net | $3,998,984 | $4,184,233 | - As of March 31, 2025, the company had a borrowing base of $4.0 billion with elected commitments of $2.5 billion under its credit facility, with no borrowings outstanding and $2.5 billion in available capacity69 - In January 2025, the company redeemed $175 million of its 9.875% Senior Notes due 2031, paying $192.3 million and recognizing a $5.8 million loss on debt extinguishment89 Note 6—Stock-Based Compensation Stock-based compensation expense increased to $16.9 million in Q1 2025 from $9.6 million in Q1 2024 Stock-Based Compensation Expense (in thousands) | Award Type | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Restricted stock | $6,214 | $4,586 | | Performance stock units | $10,715 | $5,045 | | Total | $16,929 | $9,631 | Note 7—Derivative Instruments The company uses derivative instruments to manage commodity price risk, reporting a net gain of $57.7 million in Q1 2025, a reversal from a $121.1 million loss in Q1 2024 Net Gain (Loss) on Derivative Instruments (in thousands) | Type | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Realized cash settlement gains (losses) | $21,308 | $7,345 | | Non-cash mark-to-market derivative gain (loss) | $36,423 | ($128,474) | | Total | $57,731 | ($121,129) | - As of March 31, 2025, the company has crude oil swaps for 45,000 Bbls/d for the remainder of 2025 and 17,500 Bbls/d for 2026, along with significant natural gas swaps extending into 2027107109 Note 9—Shareholders' Equity and Noncontrolling Interest In Q1 2025, the company declared and paid a total dividend of $0.15 per share, amounting to $121.0 million, with no share repurchases in the quarter Dividends and Distributions Declared and Paid | Period | Base Dividend/Distribution | Variable Dividend/Distribution | Total per Share | Total Paid (in thousands) | | :--- | :--- | :--- | :--- | :--- | | Q1 2025 | $0.15 | $0.00 | $0.15 | $121,010 | | Q1 2024 | $0.05 | $0.10 | $0.15 | $115,521 | - The Board authorized a stock repurchase program of up to $1 billion, with no shares repurchased in Q1 2025, but 2.0 million Common Units for $31.5 million in Q1 2024136137 Note 10—Earnings Per Share Basic EPS for Class A Common Stock increased to $0.47 in Q1 2025 from $0.27 in Q1 2024, reflecting significant net income growth Earnings Per Share (EPS) Calculation | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Basic EPS | $0.47 | $0.27 | | Diluted EPS | $0.44 | $0.25 | Note 13—Subsequent Events Subsequent to quarter-end, the company repurchased shares, reaffirmed its credit facility, declared a dividend, and agreed to a $608 million acquisition - In April 2025, 4.1 million shares of Class A Common Stock for $43.3 million were repurchased154 - On April 30, 2025, the company's credit agreement borrowing base was reaffirmed at $4.0 billion with elected commitments of $2.5 billion155 - In May 2025, an agreement was entered to acquire oil and gas properties from Apache Corporation for $608 million, expected to close in Q2 2025157 Management's Discussion and Analysis of Financial Condition and Results of Operations Management attributes the 11% year-over-year revenue growth in Q1 2025 to a 16% increase in total production volumes, offsetting a 7% decline in realized oil prices - The company expects total drilling, completion, and facilities capital expenditures for 2025 to be between $1.9 billion and $2.0 billion, funded entirely from cash flows from operations186 - The company plans to return capital to shareholders through a base dividend and opportunistic share repurchases, paying a quarterly base dividend of $0.15 per share in Q1 2025, totaling $121.0 million188 Production and Revenue Comparison (Q1 2025 vs Q1 2024) | Metric | Q1 2025 | Q1 2024 | % Change | | :--- | :--- | :--- | :--- | | Total Production (MBoe) | 33,589 | 29,076 | 16% | | Average Daily Production (Boe/d) | 373,209 | 319,514 | 17% | | Oil Sales Revenue (in thousands) | $1,109,771 | $1,051,642 | 6% | | Average Oil Price ($/Bbl) | $70.48 | $76.13 | (7)% | | Natural Gas Sales Revenue (in thousands) | $81,658 | $38,767 | 111% | | Average Gas Price ($/Mcf) | $1.35 | $0.75 | 80% | Operating Cost Metrics (per Boe) | Metric | Q1 2025 | Q1 2024 | % Change | | :--- | :--- | :--- | :--- | | Lease operating expenses (per Boe) | $5.35 | $5.80 | (8)% | | Gathering, processing & transportation (per Boe) | $1.39 | $1.34 | 4% | | Cash G&A (per Boe) | $0.80 | $0.97 | (18)% | Quantitative and Qualitative Disclosures About Market Risk The company's primary market risk is commodity price volatility, mitigated by derivative contracts, with minimal interest rate risk due to fixed-rate debt - A 10% change in commodity prices would impact quarterly sales by $111.0 million for oil, $8.2 million for natural gas, and $18.5 million for NGLs205 - As of March 31, 2025, a hypothetical 10% shift in the NYMEX forward curve would change the fair value of crude oil hedges by $129.9 million and natural gas hedges by $31.8 million206213 - Interest rate risk is minimal as the $4.0 billion in senior notes are fixed-rate, and there were no borrowings under the variable-rate credit facility as of March 31, 2025214215 Controls and Procedures Management concluded that the company's disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting during the quarter - The principal executive officers and principal financial officer concluded that the company's disclosure controls and procedures were effective as of March 31, 2025217 - No changes in the system of internal control over financial reporting occurred during Q1 2025 that have materially affected, or are reasonably likely to materially affect, the company's internal control218 Part II—OTHER INFORMATION Legal Proceedings The company is subject to ordinary course legal proceedings, including a potential environmental liability from the Earthstone Merger, not expected to have a material adverse effect - The company assumed a liability from the Earthstone Merger related to potential environmental defects from a prior Novo acquisition, with potential penalties exceeding $1 million, but no material adverse effect is expected222 Risk Factors There have been no material changes in the company's risk factors from those described in its 2024 Annual Report on Form 10-K and other SEC filings - There have been no material changes in risk factors from those described in the 2024 Annual Report224 Unregistered Sales of Equity Securities and Use of Proceeds During the first quarter of 2025, the company did not purchase any of its Common Stock in the open market under its stock repurchase program - No purchases of the company's equity securities were made by the issuer during the three months ended March 31, 2025225 Other Information During the quarter ended March 31, 2025, no directors or officers adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement - No directors or officers adopted or terminated a Rule 10b5-1 trading arrangement during the quarter226 Exhibits This section lists the exhibits filed with the Form 10-Q, including certifications by the CEO and CFO, and XBRL data files