MIDLAND, Texas--(
BUSINESS WIRE)--Permian Resources Corporation (“Permian Resources” or the “Company”) (NYSE: PR) today announced its first quarter 2025 financial and operational results, revised full year 2025 guidance and a strategic Northern Delaware Basin bolt-on acquisition.
Recent Financial and Operational HighlightsReported crude oil and total average production of 175.0 MBbls/d and 373.2 MBoe/d
Announced cash capital expenditures of $501 million, net cash provided by operating activities of $898 million and adjusted free cash flow1 of $460 million, representing the highest adjusted free cash flow in Company history
Closed previously announced non-core divestiture of the Barilla Draw gathering systems for $180 million
Maintained strong balance sheet with leverage1 of ~0.8x, cash of $702 million and total liquidity of $3.2 billion
Declared base dividend of $0.15 per share, representing a 5.0% yield
Recently repurchased 4.1 million shares at a weighted average price of $10.52 per share
Reduced the mid-point of full year capital budget by $50 million to $1.95 billion, while maintaining oil and total production guidance ranges
Bolt-On Transaction HighlightsAcquired 13,320 net acres and 8,700 net royalty acres directly offset Permian Resources’ core New Mexico operating areas for $608 million~12 MBoe/d (~45% oil) of low decline production expected during second half of 2025
High NRI (average 83% 8/8ths) enhances returns and bolsters PR’s existing royalty position
Adds >100 new gross operated, two-mile locations with advantaged NRIs, which immediately compete for capitalInventory scheduled for development in the near-term achieves an average breakeven of ~$30 per barrel WTI
Significant industrial logic with clear path to outsized value creationMajority of inventory located within PR's existing Parkway asset in Eddy County, one of the Company's most capital efficient assets
High-quality non-operated position provides PR the opportunity to add incremental value via its ground game
Purchased at an attractive valuation, reflecting current market conditions$12,500 per net acre, $6,000 per net royalty acre and $2 million per net location
Accretive to all key per share metrics
Maintain strong balance sheet pro forma for transaction with <1x net debt-to-EBITDAX and >$3 billion of liquidity at year-end 2025, assuming $60 per barrel WTI for remainder of year
Management Commentary
“Permian Resources delivered another outstanding quarter, highlighted by strong operational performance and lower costs. Through our team’s relentless pursuit of enhancing our low cost leadership, during the quarter we reduced controllable cash costs per Boe by 4% quarter-over-quarter and lowered D&C costs to $750 per foot, which helped generate record quarterly adjusted free cash flow of $460 million,” said Will Hickey, Co-CEO of Permian Resources.
“As a result of the current environment, we are lowering the mid-point of our capital expenditure budget by $50 million while maintaining our full year production guidance, demonstrating the high-quality nature of our asset base,” said James Walter, Co-CEO of Permian Resources. “Underpinned by high-return inventory and improved business fundamentals, we expect to deliver similar free cash flow at $60 per barrel WTI for the remainder of 2025 as we did in 2024 at $75 per barrel.”
PR’s Fortress Balance Sheet Allows It To Be Opportunistic During Downturns
Since the Company’s inception, Permian Resources has been focused on improving its already strong balance sheet in order to position itself to create outsized value in the event of a downturn. Since year-end 2023, Permian Resources has increased its liquidity by over $1 billion to $3.2 billion, while steadily decreasing leverage despite more than doubling the size of the Company over this time. Permian Resources’ current leverage ratio of 0.8x represents a reduction of over 25% since 2023 and is in-line or better than many of its large-cap E&P peers. Permian Resources’ consistent hedging philosophy is designed to protect the balance sheet, cash flow and shareholder returns. With approximately 25% of its oil production hedged this year at attractive prices, the Company’s peer-leading hedge position ensures it has the flexibility to be opportunistic during downcycles.
Importantly, Permian Resources’ low-cost leadership and high-quality asset base have resulted in improved business fundamentals, capable of delivering strong free cash flow generation even at lower oil prices. Combined, these attributes ensure that Permian Resources is well-positioned to act in order to maximize shareholder returns in any commodity price environment.
Permian Resources’ downturn strategy is focused on three main pillars: maintaining a rock-solid balance sheet, leveraging its cost leadership and investing opportunistically. Given its current position of strength, the Company was able to immediately begin to execute on its downturn playbook during the second quarter, deploying capital in a countercyclical nature to take advantage of lower commodity prices. In April, the Company began to execute on its share repurchase program during heightened market volatility, buying back 4.1 million shares at a weighted average price of $10.52 per share. More recently, the Company entered into an agreement to acquire APA Corporation’s Northern Delaware Basin assets, which consist of low breakeven inventory and low decline production within its core New Mexico operating areas. Permian Resources believes that these investments during periods of lower commodity prices will generate significant returns for its shareholders over the long-term.
Notably, the Company's balance sheet remains strong pro forma for the transaction, making it well positioned to continue executing upon this playbook, with expected net debt-to-EBITDAX of less than 1x and over $3 billion of liquidity at year-end, after giving effect to this transaction and assuming $60 per barrel WTI for remainder of year.
Financial and Operational Results
Permian Resources continued the efficient development of its core Delaware Basin acreage position in the first quarter. During the quarter, average daily crude oil production was 174,967 Bbls/d, a 2% increase compared to the prior quarter. Reported natural gas and NGL volumes were 673,388 Mcf/d and 86,010 Bbls/d, respectively. Oil outperformance was driven by continued strong execution, in particular from production optimization and well performance on assets acquired in 2024. The additional outperformance in natural gas production was primarily a result of higher ethane rejection during the quarter.
Total cash capital expenditures (“capex”) for the first quarter were $501 million. The Company continues to reduce well costs on a per lateral foot basis. For the first quarter, drilling and completion costs were approximately $750 per lateral foot, or an 8% reduction compared to 2024.
Realized prices for the quarter were $70.48 per barrel of oil, $1.35 per Mcf of natural gas and $23.90 per barrel of NGL. The Company demonstrated strong cost control in the first quarter, with total controllable cash costs (LOE, GP&T and cash G&A) decreasing $0.30 per Boe quarter-over-quarter to $7.54 per Boe. First quarter LOE was $5.35 per Boe, GP&T was $1.39 per Boe and cash G&A was $0.80 per Boe.
For the first quarter, Permian Resources generated net cash provided by operating activities of $898 million, adjusted operating cash flow1 of $961 million and adjusted free cash flow1 of $460 million. Adjusted diluted shares1 outstanding were 847.8 million for the three months ended March 31, 2025.
As previously discussed, Permian Resources continues to maintain a strong financial position and low leverage profile. During the quarter, the Company further strengthened its balance sheet by increasing cash on hand by $223 million quarter-over-quarter to $702 million. Total debt was reduced by 4% quarter-over-quarter to $4.0 billion, as the Company redeemed $175 million in principal of legacy Earthstone 9.875% Senior Notes during January. At quarter-end, Permian Resources’ revolving credit facility remained undrawn, and total liquidity was $3.2 billion. Net debt-to-LQA EBITDAX1 at March 31, 2025 was 0.8x.
Acquisition Overview
Permian Resources announced that it has entered into a definitive agreement with APA Corporation (Nasdaq: APA) to purchase approximately 13,320 net acres, 8,700 net royalty acres and 12,000 Boe/d directly offset Permian Resources’ core New Mexico operating areas for $608 million, subject to customary purchase price adjustments. The acquired acreage is over 65% operated and has an average 8/8ths net revenue interest of approximately 83%. The acquisition is expected to be accretive to all key per share metrics. The transaction is expected to close by the end of the second quarter of 2025.
The bolt-on acquisition meets and exceeds Permian Resources’ acquisition criteria for growing its high-return and low breakeven inventory. Permian Resources has identified over 100 gross operated, two-mile locations with high NRIs which immediately compete for capital. The acquired inventory scheduled for development over the near-term achieves an average breakeven of $30 per barrel WTI. The asset’s shallow base decline and high-return inventory drive a low reinvestment rate of approximately 35%, which supports the long-term accretion of the acquisition.
Permian Resources has identified significant upside potential associated with the acquired assets. In addition to new operated inventory, the acquisition increases working interest in over 100 existing Permian Resources operated locations, given the sizable acreage overlap. Additionally, the acquired properties include high-quality non-operated acreage adjacent to and surrounding Permian Resources’ current position. Utilizing its highly effective ground game, the Company plans to leverage this acreage to trade for incremental interests in existing operated units or establish new operating units.
“This acquisition is a natural fit for us and has material upside that Permian Resources is uniquely positioned to realize. We continue to grow our high return inventory, our net royalty acre portfolio and our acreage footprint in a cost-efficient manner that reflects the current environment. Our overarching goal is to drive long-term value for our investors, and we believe the addition of high-quality assets adjacent to our core position, acquired during a lower commodity price environment will further enhance short and long-term returns for investors,” said James Walter, Co-CEO.
2025 Operational Plan and Target Update
Permian Resources is maintaining its full year 2025 standalone oil and total production guidance ranges, while reducing its cash capex range by 3% at the mid-point to $1.9 – $2.0 billion from $1.9 – $2.1 billion, previously. As a result of the reduced activity, the Company now expects to turn-in-line approximately 275 gross wells. There are no other changes to the Company’s standalone guidance ranges.
The recent acquisition noted above is expected to add approximately 12,000 Boe/d (~45% oil) of total production to the second half of 2025. The Company expects approximately $20 million of incremental capital expenditures associated with additional activity on the newly acquired acreage during the second half of 2025. Notably, the potential impact of the recently announced acquisition is not included in the revised standalone guidance.
(For a detailed table summarizing Permian Resources’ revised 2025 operational and financial guidance, please see the Appendix of this press release.)
Shareholder Returns
Permian Resources announced today that its Board of Directors declared the Company’s second quarter 2025 base dividend of $0.15 per share of Class A common stock, or $0.60 per share on an annualized basis. The base dividend is payable on June 30, 2025 to shareholders of record as of June 16, 2025. The Company’s base dividend represents an annualized yield of 5.0% as of May 6, 2025.
Subsequent to quarter-end, Permian Resources took advantage of heightened market volatility to opportunistically repurchase its shares in the open market. During April, the Company repurchased 4.1 million shares for $43 million at a weighted average price of $10.52 per share. The Company currently has a $1 billion share repurchase authorization in place.
Quarterly Report on Form 10-Q
Permian Resources’ financial statements and related footnotes will be available in its Quarterly Report on Form 10-Q for the quarter ended March 31, 2025, which is expected to be filed with the Securities and Exchange Commission (“SEC”) on May 8, 2025.
Conference Call and Webcast
Permian Resources will host an investor conference call on Thursday, May 8, 2025 at 9:00 a.m. Central (10:00 a.m. Eastern) to discuss first quarter 2025 operating and financial results. Interested parties may join the call by visiting Permian Resources’ website at
www.permianres.com and clicking on the webcast link or by dialing (800) 549-8228 (Conference ID: 27785) at least 15 minutes prior to the start of the call. A replay of the call will be available on the Company’s website or by phone at (888) 660-6264 (Passcode: 27785) for a 14-day period following the call.
About Permian Resources
Headquartered in Midland, Texas, Permian Resources is an independent oil and natural gas company focused on driving peer-leading returns through the acquisition, optimization and development of high-return oil and natural gas properties. The Company's assets are located in the Permian Basin, with a concentration in the core of the Delaware Basin. Through its approximately 450,000 net acres in West Texas and Southeast New Mexico, Permian Resources is the second largest Permian Basin pure-play E&P. For more information, please visit
www.permianres.com.
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