Permian Resources (US:PR)2021-05-05 20:27Financial Performance - Total net revenues for Q1 2021 were $192.4 million, a decrease of $0.4 million (0.2%) compared to Q1 2020[197]. - Oil sales decreased by 22% to $133.7 million in Q1 2021 from $170.5 million in Q1 2020[196]. - Natural gas sales increased by 324% to $35.5 million in Q1 2021 from $8.4 million in Q1 2020[196]. - Average realized oil price increased by 17% to $52.62 per barrel in Q1 2021, while average NYMEX price for oil rose by 25% to $57.84 per barrel[198]. - Average daily net production of oil decreased by 32% to 28,239 Bbls/d in Q1 2021 from 41,512 Bbls/d in Q1 2020[196]. - Natural gas average daily net production decreased by 12% to 103,806 Mcf/d in Q1 2021 from 117,751 Mcf/d in Q1 2020[196]. - NGL sales increased by 67% to $23.2 million in Q1 2021 from $13.9 million in Q1 2020[196]. - Net production volumes for oil, natural gas, and NGLs decreased by 33%, 13%, and 20% respectively, with only 20 wells placed on production since Q1 2020, adding 422 MBbls of net oil production compared to 1,864 MBbls from 86 wells in Q1 2020[199]. - Cash flows from operating activities generated $72.3 million in Q1 2021, a decrease of $28.5 million compared to Q1 2020[218]. Expenses and Costs - Lease operating expenses (LOE) decreased by $6.8 million (21%) to $25.9 million in Q1 2021, primarily due to a $4.6 million decrease in workover expenses and cost reduction initiatives[200]. - LOE per Boe increased by $0.31 (6%) to $5.30 in Q1 2021, driven by fixed and semi-variable costs that did not decrease at the same rate as production declines[201]. - Severance and ad valorem taxes decreased by $4.0 million (24%) to $12.6 million in Q1 2021, with severance taxes remaining consistent at 5.3% of total net revenues[202]. - Gathering, processing, and transportation expenses increased by $3.7 million (22%) to $20.6 million in Q1 2021, with per Boe costs rising from $2.59 to $4.23[203]. - Depreciation, depletion, and amortization (DD&A) expense decreased by $37.5 million to $63.8 million in Q1 2021, with DD&A per Boe dropping from $15.49 to $13.08[204]. - Impairment and abandonment expense was $9.2 million in Q1 2021, significantly lower than $611.3 million in Q1 2020[206]. - General and administrative expenses increased to $25.3 million in Q1 2021 from $18.9 million in Q1 2020, primarily due to $10.2 million in stock compensation expense related to liability awards[208]. - Interest expense rose by $1.1 million to $17.5 million in Q1 2021, driven by increased interest on Senior Secured Notes and credit facility borrowings[209]. Capital Expenditures and Financing - Total capital expenditures for Q1 2021 amounted to $72.9 million, with $70.6 million allocated to drilling, completion, and facilities[214]. - The company expects total capex for 2021 to be between $260 million and $310 million, primarily funded by cash flows from operations[214]. - The company issued $150 million of 3.25% senior convertible notes due 2028, resulting in net proceeds of $163.7 million after costs[193]. - The company issued 3.25% Convertible Senior Notes in March 2021, resulting in net proceeds of $163.7 million, used to repay borrowings and fund capped call spread transactions[217]. - As of March 31, 2021, the company had $160.0 million in borrowings outstanding under its credit facility and $503.9 million in available borrowing capacity[222]. - The borrowing base for CRP's credit facility was reaffirmed at $700 million during the spring 2021 semi-annual redetermination[194]. - The company was free cash flow positive in Q1 2021, allowing for partial repayment of borrowings under its credit agreement[214]. - The company was in compliance with all covenants and financial ratios as of March 31, 2021[225]. Derivative Instruments and Market Sensitivity - A 10% change in oil prices per barrel would result in a $13.4 million impact on oil and gas sales for Q1 2021[237]. - Crude oil swaps for April 2021 - June 2021 totaled 1,183,000 Bbls with a weighted average crude price of $43.18 per Bbl[240]. - Natural gas swaps for April 2021 - June 2021 amounted to 3,640,000 MMBtu with a weighted average gas price of $2.89 per MMBtu[241]. - The net fair value of oil and gas derivative contracts outstanding as of March 31, 2021 was $(46,522) thousand, reflecting a significant increase in liabilities from $(18,209) thousand as of December 31, 2020[242]. - A hypothetical 10% increase in the NYMEX forward curve for crude oil would result in a $21.9 million increase in fair value, while a 10% decrease would lead to a $22.2 million decrease[242]. - The company does not currently have or intend to enter into derivative hedge contracts to protect against fluctuations in interest rates applicable to its outstanding indebtedness[244]. - A 1.0% increase or decrease in the weighted average interest rate would impact interest expense by approximately $1.6 million per year[244]. Internal Controls and Compliance - No changes in the system of internal control over financial reporting occurred during the three months ended March 31, 2021, that materially affected internal controls[247]. - The company evaluated its disclosure controls and procedures as effective as of March 31, 2021, providing reasonable assurance for timely decision-making regarding required disclosures[246].