Permian Resources (PR) Delivers Exceptional Q1 2024 Results, Raises Guidance and Synergy Targets

Published on September 24, 2024 | Ticker: PR

Permian Resources Corporation (PR) has reported its first quarter 2024 results, showcasing exceptional operational and financial performance that has exceeded expectations. The company's unwavering focus on low-cost execution and accretive transactions has solidified its position as a leading Permian pure-play operator.

Financials

In the first quarter of 2024, Permian Resources delivered total production of 319,514 Boe/d, including oil production of 151,794 Bbls/d. This represents a 108% increase in total production and a 94% increase in oil production compared to the same period in 2023. The strong production results were driven by the successful integration of the Earthstone Energy acquisition, which closed in November 2023, as well as the company's ability to accelerate drilling and completion activities across its asset base.

Financially, Permian Resources reported quarterly revenue of $1.24 billion, a 102% increase from the first quarter of 2023. This robust revenue growth was supported by higher production volumes and improved realized commodity prices, with the company's average realized oil price increasing 2% year-over-year to $76.13 per barrel. Net income for the quarter was $229.6 million, while annual net income for 2023 was $476.3 million. Operating cash flow for the quarter was $647.6 million, and annual operating cash flow for 2023 was $2.21 billion. Free cash flow for the quarter was $324.0 million, and annual free cash flow for 2023 was $419.8 million.

Synergy Target Increase

The company's strong operational execution has enabled it to increase its annual synergy target from the Earthstone acquisition by $50 million, to a total of $225 million. This is a testament to the integration team's ability to quickly identify and capture value-enhancing opportunities across the combined asset base. Specifically, the company has achieved an 18% reduction in Earthstone drilling days per well and a 50% reduction in completion days per well, surpassing its initial expectations.

Shareholder Returns

Permian Resources' focus on capital discipline and shareholder returns remains a key priority. During the first quarter, the company declared and paid a quarterly dividend of $0.06 per share of Class A Common Stock and a quarterly distribution of $0.06 per Common Unit of its subsidiary, Permian Resources Operating, LLC. Additionally, the company paid a variable dividend and distribution of $0.14 per share and per Common Unit, respectively, bringing the total quarterly return of capital to $0.24 per share. The company also repurchased 2 million shares of its Class C Common Stock during the quarter for $31.4 million.

Outlook

Looking ahead, Permian Resources has increased its full-year 2024 production guidance to 150,000 Bbls/d of oil and 320,000 Boe/d, representing a 2% increase compared to its original guidance. This revised outlook is a result of the company's successful execution and the integration of the Earthstone assets. The company expects a relatively flat production profile in the second quarter, followed by a modest decline in the second half of the year due to normal working interest fluctuations.

Acquisitions

In addition to its strong organic performance, Permian Resources continues to actively pursue accretive acquisition opportunities. During the first quarter, the company completed multiple bolt-on acquisitions in Eddy County, New Mexico for a total adjusted purchase price of $92 million. These transactions added over 11,000 net leasehold acres and approximately 110 gross operated locations, further enhancing the company's high-quality inventory.

Liquidity

Permian Resources' financial position remains robust, with $1.9 billion in available borrowing capacity under its $4.0 billion borrowing base as of March 31, 2024. The company's leverage ratio stood at approximately 1.0x at the end of the quarter, providing ample financial flexibility to execute its strategic initiatives.

Conclusion

The company's success in the first quarter of 2024 is a testament to its unwavering commitment to operational excellence, disciplined capital allocation, and strategic acquisitions. Permian Resources' ability to consistently deliver strong results, while also returning capital to shareholders, makes it a compelling investment opportunity in the large-cap oil and gas space.

You may be interested in...

Diamondback Energy (FANG): Powering Through Challenges with Operational Excellence

Diamondback Energy, Inc. (FANG) is a leading independent oil and natural gas exploration and production company, primarily focused on the acquisition, development, exploration, and exploitation of unconventional, onshore oil and natural gas reserves in the Permian Basin in West Texas. Throughout its storied history, Diamondback has navigated industry headwinds with unwavering operational discipline, cementing its position as a premier player in the energy sector.

Permian Resources Corporation (PR): Driving Growth Through Disciplined Execution

Permian Resources Corporation (PR) has firmly established itself as a leading independent oil and natural gas company, with a relentless focus on responsible acquisition, optimization, and development of high-return assets in the prolific Permian Basin. The company's unwavering commitment to operational excellence, financial discipline, and strategic growth has propelled it to the forefront of the industry.

PEDEVCO Corp. (PED): Unlocking Value Through Strategic Acquisition and Operational Excellence

PEDEVCO Corp. (PED) is an energy company focused on the acquisition and development of strategic, high-growth oil and gas projects in the United States. With a strong track record of successful operations and a commitment to technological innovation, PEDEVCO is poised to capitalize on the dynamic energy landscape and deliver long-term value for its shareholders.

Mexco Energy Corporation (MXC): Delivering Sustainable Growth in the Permian Basin

Mexco Energy Corporation (MXC) is a Colorado-based independent oil and gas exploration and production company that has been actively involved in the energy industry for over four decades. The company's focus is on the acquisition, exploration, development, and production of crude oil, natural gas, and natural gas liquids, with a primary emphasis on the prolific Permian Basin region of West Texas and Southeastern New Mexico.

Riley Exploration Permian, Inc. (REPX): Delivering Consistent Returns Amidst Industry Volatility

Riley Exploration Permian, Inc. (REPX) is a growth-oriented, independent oil and natural gas company focused on the acquisition, exploration, development, and production of oil, natural gas, and natural gas liquids (NGLs) primarily in the Permian Basin in West Texas and Southeastern New Mexico. The company has built a strong track record of operational excellence and financial discipline, enabling it to navigate the inherent volatility of the energy industry and consistently deliver value for its shareholders.