Permian Resources: Increased Synergies From Earthstone Integration

Core Viewpoint - Permian Resources reported strong Q1 2024 results, achieving a total production of 319,514 BOEPD, including 151,794 barrels per day in oil production, and increased its full-year production guidance by 2% [2][10][11] Production and Financial Performance - Q1 2024 production results exceeded expectations due to excellent well performance and effective integration of Earthstone, with oil production up 11% compared to Q4 2023 [2][10] - Permian's capital expenditure budget is now approximately $2.05 billion, with projected free cash flow of $1.592 billion for 2024 [8][10] Synergies and Cost Savings - The integration of Earthstone was completed ahead of schedule, leading to an increase in annual synergy targets from $175 million to $225 million, with D&C costs reduced by approximately 15% [5][10][11] - Additional cost savings are expected from further reductions in operating costs, contributing to improved margins [5][13] Acquisitions and Growth Strategy - Permian recently liquidated Lynden Energy Corp. to simplify its corporate structure and reduce tax obligations, highlighting the rapid growth of Earthstone through acquisitions [4][11] - The company added 11,200 net leasehold acres and 4,500 net royalty acres for approximately $270 million, expected to contribute 3,500 BOEPD in 2H 2024 [15][16][17] Revenue and Valuation - Projected revenues for 2024 are estimated at $5.310 billion, based on current strip prices, with an increase in estimated value to $18 per share due to improved production guidance and synergies [8][10][11]