Workflow
Zacks Initiates Coverage of PrimeEnergy With Neutral Recommendation
PrimeEnergyPrimeEnergy(US:PNRG) ZACKSยท2024-06-19 12:46

Core Viewpoint - Zacks Investment Research has initiated coverage of PrimeEnergy Resources Corporation (PNRG) with a "Neutral" recommendation, highlighting its significant growth and operational efficiency in the oil and gas industry [1] Financial Performance - As of March 31, 2024, PNRG's total assets increased to $332.9 million from $288.6 million at the end of 2023, indicating a strengthened balance sheet [2] - The company reported an 88% year-over-year increase in revenues, reaching $42.99 million, driven by a doubling of production volumes [7] Production and Growth Strategy - PrimeEnergy plans to complete 54 horizontal wells in 2024 with an investment of $140 million, aiming for significant growth in production volumes [3] - The company operates 542 wells, primarily in Texas and Oklahoma, focusing on the Permian Basin and the SCOOP/STACK Play [8] Operational Challenges - Despite strong operational performance, PNRG faces liquidity challenges, with cash reserves dropping to $1.8 million and long-term debt increasing to $4 million as of March 31, 2024 [9] - The company's reliance on traditional extraction methods without significant investments in new technologies may put it at a disadvantage compared to competitors [4] Market Positioning - PrimeEnergy's shares have shown significant volatility, declining in the past six months but performing well over the past year, trading at lower valuation multiples compared to its peers [10]