PrimeEnergy Q3 Earnings Slide Y/Y as Oil Volumes & Prices Fall

Core Viewpoint - PrimeEnergy Resources Corporation (PNRG) reported a decline in revenues and net income for the third quarter of 2025, primarily due to weaker oil and natural gas liquids (NGL) realizations, although natural gas performance showed improvement [2][7]. Earnings & Revenue Performance - Third-quarter 2025 revenues were $46 million, down from $69.5 million a year earlier - Net income for the quarter was $10.6 million compared to $22.1 million in the same period last year - Basic earnings per share were $6.41, down from $12.63, while diluted EPS fell to $4.38 from $8.80 [2]. Key Business Metrics - Oil revenues decreased by 38.1% to $34.8 million, driven by a 33.3% drop in barrels sold and a 7.2% decline in average realized oil price - NGL revenues fell 21.7% to $5.6 million due to lower realized prices, despite stable volumes - Natural gas revenues more than tripled to $2 million, with gas sold increasing by 6.6% and average realized gas price rising from $0.30 per Mcf to $0.86 per Mcf - Total oil-and-gas revenues declined 33.8% to $42.4 million for the quarter [3]. Cost Performance - Lease operating expenses decreased by 18.9% to $10.4 million, and production and ad valorem taxes fell by 9.1% to $2.4 million - Depreciation, depletion, and amortization (DD&A) dropped 22.7% year over year to $14.1 million - General and administrative expenses improved by 22.9% to $3 million, while interest expense increased slightly to $0.48 million [4]. Balance Sheet Overview - As of September 30, 2025, the company had $3.7 million in cash and no outstanding bank debt, with a $115 million borrowing base undrawn - The company repurchased 13,000 shares in the third quarter and 73,470 shares year to date under its buyback program [5]. Management Commentary - Management emphasized capital discipline and shareholder returns, highlighting a strong balance sheet and high insider ownership - Chairman and CEO Charles E. Drimal, Jr. noted the balance between disciplined investment and capital returns to shareholders, with insiders controlling a significant stake [6]. Operational Developments - The company continued its horizontal development program, participating in 15 Double Eagle-operated wells and investing about $30.1 million, along with $5.4 million in eight "Horseshoe" wells - These wells were brought online by quarter-end or shortly thereafter, supporting longer-term production [8]. Future Outlook - Management expects to invest about $98 million in 44 horizontal wells during 2025, following previous investments of $96 million in 2023 and $113 million in 2024 - The company sees a multi-year Permian drilling opportunity with over 100 potential horizontal locations and projects roughly $224 million of investment over the next several years [10]. Other Developments - The only noted disposition in 2025 was a $0.6 million gain from the sale of a fully depreciated workover rig in the first quarter - Comparability of field-service income and expense continues to be affected by the sale of a South Texas service company in the third quarter of 2024 [11].