Permian Resources (PR) - 2025 Q2 - Quarterly Results

Second Quarter 2025 Performance and Outlook Financial and Operational Highlights 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] - 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][8] - 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][14] Management Commentary 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] - Management executed its 'downturn playbook' by deploying approximately $600 million in acquisitions and buying back shares at prices considered below mid-cycle values[3] - 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] Financial and Operational Results 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] Strategic Execution 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] - Closed the acquisition of APA Corporation's New Mexico assets, adding low breakeven inventory and low decline production in core operating areas[11] - Continued its 'ground game' by adding ~1,300 net acres and 80 net royalty acres through ~130 grassroots transactions[11] - Projects year-end 2025 net debt-to-EBITDAX to be approximately 0.8x, assuming $60/bbl WTI for the rest of the year[12] Updated 2025 Guidance and Outlook 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][16] - These new marketing arrangements are projected to generate an incremental $50 million of free cash flow in 2026 compared to 2024[17] - The full-year 2025 current income tax estimate was lowered to less than $5 million due to the One Big Beautiful Bill Act[14] Shareholder Returns and Hedging 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] - In Q2, the company repurchased 4.1 million shares for $43 million at an average price of $10.52 per share[20] - 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] - 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] Financial Statements (Unaudited) Operating Highlights and Expenses 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 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 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 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 Reconciliation of Non-GAAP Measures 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 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 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 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 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 |