PNRG 2024 Earnings Soar Y/Y on Oil Output, Stock Falls 17% in a Month

Core Viewpoint - PrimeEnergy Resources Corporation experienced significant revenue and earnings growth in 2024, driven primarily by a substantial increase in oil and natural gas liquids production, despite challenges in natural gas pricing [2][3][8]. Financial Performance - Total revenues for 2024 reached $237.8 million, a 79% increase from $132.8 million in 2023 [2]. - Net income nearly doubled to $55.4 million from $28.1 million year-over-year [2]. - Basic earnings per share rose 107% to $31.43 from $15.19, while diluted earnings per share increased to $21.95 from $10.77 [2]. Production Growth - Oil production surged 123% year-over-year to 2.56 million barrels, and natural gas liquids (NGL) production increased 112% to 1.28 million barrels [3]. - Total oil and gas revenues increased 107% to $223 million, with oil contributing $193.7 million [3]. Operational Investments - Capital spending in 2024 totaled $113 million, with 48 horizontal wells drilled, primarily in Reagan County, Texas [4]. - Major investments included $66 million with Double Eagle and $46.7 million with Civitas [4]. Reserves and Efficiency - Proved reserves at year-end were 26.5 million barrels of oil equivalent, including 10.6 million barrels of oil and 8.3 million barrels of NGLs [5]. - Average production costs per barrel of oil equivalent decreased to $9.29 from $12.98 in 2023, indicating improved cost efficiency [10]. Strategic Focus - Management emphasized a commitment to financial discipline, aligning the 2025 capital budget with projected cash flows and considering asset sales or joint ventures to enhance liquidity [6]. - The company has invested over $430 million in horizontal drilling in the Midland Basin since 2012 and plans to continue this focus [7]. Future Outlook - Expected capital deployment for 2025 is $129 million across 43 horizontal wells, following a consistent increase in annual investments [11]. - PrimeEnergy anticipates further investment of $224 million in horizontal drilling in West Texas over the next few years [11]. Additional Developments - In 2024, PrimeEnergy divested non-core assets for $4.2 million and acquired undeveloped acreage worth $3.88 million in West Texas [12].