Permian Resources (US:PR)2025-11-06 21:10Financial Performance - Total net revenues for Q3 2025 were $1,321.8 million, a 9% increase from $1,215.6 million in Q3 2024[176]. - Pre-tax net income for the three months ended September 30, 2025, was $168.9 million, down from $563.0 million in 2024, with an income tax expense of $87.4 million[192]. - For the nine months ended September 30, 2025, the company generated pre-tax net income of $967.3 million, a decrease from $1.2 billion in the same period of 2024[210]. - Total net revenues for the nine months ended September 30, 2025, were $191.2 million, or 5%, higher than the same period in 2024, driven by oil, NGL, and natural gas sales[195]. Production and Sales - Oil production increased by 16% to 17,198 MBbls in Q3 2025, driven by new wells and acquisitions[177]. - NGL production rose by 23% to 9,736 MBbls, while natural gas production increased by 17% to 64,841 MMcf in Q3 2025[177]. - Net production volumes for oil, NGLs, and natural gas increased by 15%, 19%, and 14%, respectively, due to additional production from new wells[196]. - Average realized sales price for natural gas surged by 178% to $1.08 per Mcf in Q3 2025 compared to Q3 2024[178]. - Average realized sales prices for natural gas increased by 700% in the first nine months of 2025 compared to the same period in 2024, attributed to higher regional and national average index gas prices[197]. - Average realized sales prices for oil and NGLs decreased by 14% and 6%, respectively, due to lower NYMEX crude prices and lower Mont Belvieu spot prices[198]. Expenses and Costs - Lease operating expenses increased by $18.1 million to $191.3 million for the three months ended September 30, 2025, a 10% increase compared to the same period in 2024[180]. - Total operating expenses increased by $57.3 million, with lease operating expenses rising by 11% to $558.9 million[199]. - Severance and ad valorem taxes rose by $9.9 million to $101.5 million, with severance taxes increasing by $10.6 million due to higher NGL and natural gas revenues[181]. - Depreciation, depletion, and amortization (DD&A) expense increased by $73.3 million to $526.9 million, driven by higher production volumes[184]. - General and administrative expenses rose to $50.0 million from $43.8 million, with cash G&A per Boe decreasing by 9% to $0.86[186]. - Severance and ad valorem taxes increased by $23.6 million, with severance taxes rising primarily due to higher NGL and natural gas revenues[200]. - Depreciation, depletion, and amortization (DD&A) expense amounted to $1.5 billion, an increase of $217.3 million over the same period in 2024, driven by higher production volumes[202]. Shareholder Returns - During the nine months ended September 30, 2025, the company declared and paid dividends totaling $366.8 million[170]. - The company repurchased 4.4 million shares of Class A Common Stock and 2.0 million shares of Class C Common Stock for a total of $73.7 million[171]. - The company declared and paid quarterly base dividends totaling $0.45 per share of Class A Common Stock and distributions totaling $0.45 per share of Class C Common Stock, amounting to $366.8 million in total dividends and distributions for the nine months ended September 30, 2025[214]. Debt and Financing - The company redeemed all outstanding 3.25% senior unsecured convertible notes due 2028, resulting in the issuance of 30.6 million shares of Class A Common Stock[172]. - A loss on extinguishment of debt of $264.3 million was recorded, mainly related to the redemption of Convertible Senior Notes[188]. - The company has a total debt balance of $3.5 billion, consisting of senior notes with fixed interest rates, unaffected by interest rate movements[237]. - The company redeemed an aggregate principal amount of $175 million of its 2031 Senior Notes at a price equal to 109.875% of the principal amount during the nine months ended September 30, 2025[216]. Cash Flow and Investments - Cash flows from operating activities for the nine months ended September 30, 2025, were $2.7 billion, an increase of $162.8 million from the same period in 2024[218]. - Cash used in investing activities for the nine months ended September 30, 2025, was $2.1 billion, a decrease from $2.6 billion in the same period of 2024[218]. - Total development capital expenditures for the nine months ended September 30, 2025, were $1.5 billion, with expectations for total capital expenditures in 2025 to be between $1.92 billion and $2.02 billion[212]. Market Risks and Derivatives - The company’s primary market risk exposure is in the pricing for oil, NGL, and natural gas production, with potential revenue fluctuations of $323.1 million for each 10% change in oil prices per Bbl[230]. - The company utilized derivative instruments to mitigate price risk associated with anticipated production, allowing for increased certainty of cash flows for its drilling program[231]. - As of September 30, 2025, the net fair value of oil and gas derivative contracts outstanding increased to $200.342 million from $111.356 million as of December 31, 2024[235]. - A hypothetical 10% upward or downward shift in the NYMEX forward curve for crude oil would result in a $99.8 million change in fair value position[235]. - The company has no borrowings outstanding under its Credit Agreement as of September 30, 2025, and does not intend to enter into derivative hedge contracts for interest rate fluctuations[236]. Future Expectations - For the period October 2025 - December 2025, crude oil swaps volume is 5,244,000 Bbls at an average price of $70.99 per Bbl[234]. - Natural gas swaps for the same period show a volume of 15,180,000 MMBtu at an average price of $4.02 per MMBtu[235]. - The weighted average differential for crude oil basis differential swaps for October 2025 - December 2025 is $1.10 per Bbl[233]. - The company expects to maintain a consistent volume of natural gas swaps, with a projected volume of 12,880,000 MMBtu for October 2027 - December 2027[235]. - The weighted average price for natural gas swaps at the Waha Hub for October 2026 - December 2026 is $2.68 per MMBtu[235].