Permian Resources Announces Strong Third Quarter 2024 Results and Increased Full Year Guidance

MIDLAND, Texas–(BUSINESS WIRE)–Permian Resources Corporation (“Permian Resources” or the “Company”) (NYSE: PR) today announced its third quarter 2024 financial and operational results and revised 2024 guidance.

Recent Financial and Operational Highlights

• Reported crude oil and total average production of 160.8 MBbls/d and 347.1 MBoe/d during the quarter
• Announced cash capital expenditures of $520 million, cash provided by operating activities of $954 million and adjusted free cash flow¹ of $303 million
• Continue to drive operational efficiencies, resulting in reduced cycle times and lower well costs
  • Reduced D&C costs to ~$800 per lateral foot, which represents a 16% decrease from 2023
• Announced quarterly base dividend of $0.15 per share, a 150% increase compared to the prior quarter
  • Represents initial base dividend under the Company’s updated return of capital strategy
• Maintained strong balance sheet with leverage of ~1x and ~$2.8 billion of total liquidity
  • Ended quarter with undrawn revolver and $272 million of cash
• Received upgraded credit ratings by Moody’s, S&P and Fitch
  • Targeting investment grade credit ratings in 2025
• Closed previously announced Barilla Draw transaction, adding ~29,500 net acres and ~9,900 net royalty acres directly offset existing operations
• Increased mid-point of full year oil and total production guidance by over 4% to 158.5 MBbls/d and 341.0 MBoe/d
  • Third consecutive increase of guidance primarily driven by strong performance of base business

Management Commentary

“Our team continues to do a tremendous job executing in the field and has improved upon the operational efficiencies gained earlier in the year. Most importantly, reduced cycle times have driven a significant reduction in well costs,” said Will Hickey, Co-CEO of Permian Resources. “We are now drilling and completing wells for approximately $1 million cheaper than 2023. This improvement is driven by our operations team’s relentless pursuit of efficiencies and cost savings.”

“We are proud to increase full year production guidance for the third consecutive quarter, while maintaining our original capital budget. We have now increased oil guidance 11 MBbls/d above our initial outlook, with approximately 8 MBbls/d of this increase driven by our existing business and the remainder from accretive acquisitions,” said James Walter, Co-CEO of Permian Resources. “We are also excited for the first quarter under our significantly enhanced base dividend. The revised return of capital policy will provide better visibility for our shareholders to current and future dividends, while positioning Permian Resources to continue delivering strong dividend growth and leading total shareholder returns.”

Operational and Financial Results

Permian Resources continued the efficient development of its core Delaware Basin acreage position in the third quarter, delivering higher operational efficiencies and continued strong well results. During the quarter, average daily crude oil production was 160,801 Bbls/d, a 5% increase compared to the prior quarter. Reported natural gas and NGL volumes were 603,217 Mcf/d and 85,754 Bbls/d, respectively. Third quarter total production was 347,091 Boe/d.

Total cash capital expenditures (“capex”) for the third quarter were $520 million. The Company continues to drive operational efficiencies, further reducing well costs on a per lateral foot basis. For the third quarter, drilling and completion costs per lateral foot were approximately $800, or a $150 per lateral foot reduction from 2023.

“During the quarter, we reduced our drilling cycle times by 16% compared to last year, while also increasing our completion crew pump hours per day by 19%,” said Will Hickey, Co-CEO. “As a result, these operational efficiencies have lowered drilling and completion costs, and we will continue to focus on further cost reductions as we head into next year.”

Realized prices for the quarter were $74.31 per barrel of oil, $(0.20) per Mcf of natural gas and $22.35 per barrel of NGL. Regional natural gas prices during the quarter continued to be negatively impacted by pipeline capacity constraints, which are expected to be alleviated through additional capacity in the near-term. The Company has continued to make progress towards its goal of pricing more natural gas out of basin, increasing its non-Waha sales to approximately 30% in 2024 compared to 20% in 2023.

Third quarter total controllable cash costs (LOE, GP&T and cash G&A) were $7.95 per Boe. LOE was $5.43 per Boe, GP&T was $1.57 per Boe and cash G&A was $0.95 per Boe.

For the third quarter, Permian Resources generated net cash provided by operating activities of $954 million, adjusted operating cash flow¹ of $823 million and adjusted free cash flow¹ of $303 million. Adjusted basic weighted average shares¹ outstanding were 794.4 million for the three months ended September 30, 2024.

Permian Resources continues to maintain a strong financial position and low leverage profile upon closing the previously announced Barilla Draw bolt-on acquisition during the quarter. At September 30, 2024, the Company had $272 million in cash on hand and no amounts drawn under its revolving credit facility. Total liquidity was approximately $2.8 billion. Net debt-to-LQA EBITDAX¹ at September 30, 2024 was approximately 1x.

2024 Operational Plan and Target Update

Permian Resources increased its 2024 oil production target by 6.5 MBbls/d to 158.5 MBbls/d and raised its total production target by 16.0 MBoe/d to 341.0 MBoe/d, based on the mid-point of guidance. The majority of the increase in full year production guidance is driven by continued strong well performance and operational efficiencies, with the balance coming from the recently closed Barilla Draw acquisition. The Company is also adjusting the expected number of turn-in-lines (“TILs”) for 2024 to approximately 270 gross wells, as a result of faster cycle times. There are no other changes to the Company’s guidance ranges.

“This represents our third consecutive increase to full year production targets, while maintaining our original capital expenditure guidance,” said James Walter, Co-CEO. “Most importantly, the vast majority of our increase year-to-date has been driven by outperformance of our base business, highlighting the quality of our asset base.”

(For a detailed table summarizing Permian Resources’ revised 2024 operational and financial guidance, please see the Appendix of this press release.)

Shareholder Returns

Permian Resources announced today that its Board of Directors (the “Board”) declared a quarterly base dividend of $0.15 per share of Class A common stock, or $0.60 per share on an annualized basis. This represents the first quarterly base dividend under the Company’s new return of capital policy, which represents a 150% increase compared to its prior base dividend and provides a leading base dividend yield amongst U.S. independent E&Ps. The base dividend is payable on November 22, 2024 to shareholders of record as of November 14, 2024. The Company’s base dividend represents an annualized yield of 4.4%, as of November 4, 2024.

Recent Acquisitions

On September 17, 2024, Permian Resources closed the previously announced Barilla Draw bolt-on acquisition of approximately 29,500 net acres, 9,900 net royalty acres and substantial midstream infrastructure located in the core of the Delaware Basin. The Company assumed operations on November 1, 2024 and has begun development on the acquired properties. During the third quarter, the Barilla Draw assets contributed approximately 2 MBoe/d, or 1 MBbls/d of oil.

Additionally, Permian Resources continues to be successful executing upon its ground game, consisting of smaller grassroots acquisitions and leasehold transactions. During the third quarter, the Company added approximately 460 net acres through over 100 grassroots leasing and working interest acquisitions. There were no incremental production volumes associated with these acquisitions during the quarter.

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 September 30, 2024, which is expected to be filed with the Securities and Exchange Commission (“SEC”) on November 7, 2024.

Conference Call and Webcast

Permian Resources will host an investor conference call on Thursday, November 7, 2024 at 9:00 a.m. Central (10:00 a.m. Eastern) to discuss third quarter 2024 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) 225-9448 (Conference ID: PRCQ324) 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 (800) 839-5495 (Passcode: 26601) 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 the responsible acquisition, optimization and development of high-return oil and natural gas properties. The Company’s assets and operations are concentrated in the core of the Delaware Basin, making it the second largest Permian Basin pure-play E&P. For more information, please visit www.permianres.com.

Cautionary Note Regarding Forward-Looking Statements

The information in this press release includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical fact included in this press release, regarding our strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects, plans and objectives of management are forward-looking statements. When used in this press release, the words “could,” “may,” “believe,” “anticipate,” “intend,” “estimate,” “expect,” “project,” “goal,” “plan,” “target” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. These forward-looking statements are based on management’s current expectations and assumptions about future events and are based on currently available information as to the outcome and timing of future events.

Forward-looking statements may include statements about:

• volatility of oil, natural gas and NGL prices or a prolonged period of low oil, natural gas or NGL prices and the effects of actions by, or disputes among or between, members of the Organization of Petroleum Exporting Countries (“OPEC”), such as Saudi Arabia, and other oil and natural gas producing countries, such as Russia, with respect to production levels or other matters related to the price of oil, natural gas and NGLs;
• political and economic conditions and events in or affecting other producing regions or countries, including the Middle East, Russia, Eastern Europe, Africa and South America;
• our business strategy and future drilling plans;
• our reserves and our ability to replace the reserves we produce through drilling and property acquisitions;
• our drilling prospects, inventories, projects and programs;
• our financial strategy, return of capital program, leverage, liquidity and capital required for our development program;
• the timing and amount of our future production of oil, natural gas and NGLs;
• our ability to identify, complete and effectively integrate acquisitions of properties, assets or businesses, including our recent acquisitions and related transactions;
• our hedging strategy and results;
• our competition;
• our ability to obtain permits and governmental approvals;
• our compliance with government regulations, including those related to climate change as well as environmental, health and safety regulations and liabilities thereunder;
• our pending legal matters;
• the marketing and transportation of our oil, natural gas and NGLs;
• our leasehold or business acquisitions;
• cost of developing or operating our properties;
• our anticipated rate of return;
• general economic conditions;
• weather conditions in the areas where we operate;
• credit markets;
• our ability to make dividends, distributions and share repurchases;
• uncertainty regarding our future operating results;
• our plans, objectives, expectations and intentions contained in this press release that are not historical; and
• the other factors described in our most recent Annual Report on Form 10-K, and any updates to those factors set forth in our subsequent Quarterly Reports on Form 10-Q or Current Reports on Form 8-K.

We caution you that these forward-looking statements are subject to all of the risks and uncertainties, most of which are difficult to predict and many of which are beyond our control, incident to the exploration for and development, production, gathering and sale of oil, natural gas and NGLs. Factors which could cause our actual results to differ materially from the results contemplated by forward-looking statements include, but are not limited to:

• commodity price volatility (including regional basis differentials);
• uncertainty inherent in estimating oil, natural gas and NGL reserves, including the impact of commodity price declines on the economic producibility of such reserves, and in projecting future rates of production;
• geographic concentration of our operations;
• lack of availability of drilling and production equipment and services;
• lack of transportation and storage capacity as a result of oversupply, government regulations or other factors;
• risks related to our recent acquisitions, including the risk that we may fail to integrate such acquisitions on the terms and timing currently contemplated, or at all, and/or to realize our strategy and plans to achieve the expected benefits of such acquisitions;
• competition in the oil and natural gas industry for assets, materials, qualified personnel and capital;
• drilling and other operating risks;
• environmental and climate related risks, including seasonal weather conditions;
• regulatory changes, including those that may result from the U.S. Supreme Court’s decision overturning the Chevron deference doctrine and that may impact environmental, energy, and natural resources regulation;
• the possibility that the industry in which we operate may be subject to new or volatile local, state, and federal or legislative actions (including additional taxes and changes in environmental, health, and safety regulation and regulations related to climate change) as a result of developing national and/or global efforts to address climate change;
• restrictions on the use of water, including limits on the use of produced water and potential restrictions on the availability to water disposal facilities;
• availability to cash flow and access to capital;
• inflation;
• changes in our credit ratings or adverse changes in interest rates;
• changes in the financial strength of counterparties to our credit agreement and hedging contracts;
• the timing of development expenditures;
• political and economic conditions and events in foreign oil and natural gas producing countries, including embargoes, continued hostilities in the Middle East and other sustained military campaigns, including the conflict in Israel and its surrounding areas, the war in Ukraine and associated economic sanctions on Russia, conditions in South America, Central America, China and Russia, and acts of terrorism or sabotage;
• changes in local, regional, national, and international economic conditions;
• security threats, including evolving cybersecurity risks such as those involving unauthorized access, denial-of-service attacks, third-party service provider failures, malicious software, data privacy breaches by employees, insiders or other with authorized access, cyber or phishing-attacks, ransomware, social engineering, physical breaches or other actions; and
• other risks described in our filings with the SEC.

Reserve engineering is a process of estimating underground accumulations of oil and natural gas that cannot be measured in an exact way. The accuracy of any reserve estimate depends on the quality of available data, the interpretation of such data, and price and cost assumptions made by reserve engineers. In addition, the results of drilling, testing and production activities may justify revisions of estimates that were made previously. If significant, such revisions would change the schedule of any further production and development drilling. Accordingly, reserve estimates may differ significantly from the quantities of oil and natural gas that are ultimately recovered.

Should one or more of the risks or uncertainties described in this press release occur, or should any underlying assumptions prove incorrect, our actual results and plans could differ materially from those expressed in any forward-looking statements. All forward-looking statements, expressed or implied, included in this press release are expressly qualified in their entirety by this cautionary statement. This cautionary statement should also be considered in connection with any subsequent written or oral forward-looking statements that we or persons acting on our behalf may issue.

Except as otherwise required by applicable law, we disclaim any duty to update any forward-looking statements, all of which are expressly qualified by the statements in this section, to reflect events or circumstances after the date of this press release.

1) Adjusted Operating Cash Flow, Adjusted Free Cash Flow, Adjusted Basic Weighted Average Shares and Net Debt-to-LQA EBITDAX are non-GAAP financial measures. See “Non-GAAP Financial Measures” included within the Appendix of this press release for related disclosures and reconciliations to the most directly comparable financial measures calculated and presented in accordance with GAAP.

Details of our revised 2024 operational and financial guidance are presented below:

	2024 FY Guidance (Updated)
Net average daily production (Boe/d)	340,000	—	342,000
Net average daily oil production (Bbls/d)	158,000	—	159,000
Production costs
Lease operating expenses ($/Boe)	$5.50	—	$6.00
Gathering, processing and transportation expenses ($/Boe)	$1.00	—	$1.50
Cash general and administrative ($/Boe)(1)	$0.90	—	$1.10
Severance and ad valorem taxes (% of revenue)	6.5%	—	8.5%
Total cash capital expenditure program ($MM)	$1,900	—	$2,100
Operated drilling program
TILs (gross)	~270
Average working interest	~75%
Average lateral length (feet)	~9,300

(1)

Excludes stock-based compensation.

Permian Resources Corporation
Operating Highlights
	Three Months Ended September 30,								Nine Months Ended September 30,
		2024				2023				2024				2023
Net revenues (in thousands):
Oil sales	$	1,099,318			$	660,445			$	3,265,303			$	1,734,057
Natural gas sales(1)		(37,087	)			38,354				(21,351	)			94,123
NGL sales(2)		153,340				59,742				460,701				170,027
Oil and gas sales	$	1,215,571			$	758,541			$	3,704,653			$	1,998,207
Average sales prices:
Oil (per Bbl)	$	74.31			$	79.92			$	76.80			$	75.42
Effect of derivative settlements on average price (per Bbl)		0.09				0.69				(0.37	)			2.51
Oil including the effects of hedging (per Bbl)	$	74.40			$	80.61			$	76.43			$	77.93
Average NYMEX WTI price for oil (per Bbl)	$	75.16			$	82.26			$	77.54			$	77.39
Oil differential from NYMEX		(0.85	)			(2.34	)			(0.74	)			(1.97	)
Natural gas price excluding the effects of GP&T (per Mcf)(1)	$	(0.20	)		$	1.93			$	0.33			$	1.66
Effect of derivative settlements on average price (per Mcf)		0.43				0.16				0.34				0.41
Natural gas including the effects of hedging (per Mcf)	$	0.23			$	2.09			$	0.67			$	2.07
Average NYMEX Henry Hub price for natural gas (per MMBtu)	$	2.08			$	2.58			$	2.18			$	2.46
Natural gas differential from NYMEX		(2.28	)			(0.65	)			(1.85	)			(0.80	)
NGL price excluding the effects of GP&T (per Bbl)(2)	$	22.35			$	23.67			$	23.63			$	23.69
Net production:
Oil (MBbls)		14,794				8,264				42,519				22,994
Natural gas (MMcf)		55,496				26,068				162,522				75,134
NGL (MBbls)		7,889				3,212				22,229				9,241
Total (MBoe)(3)		31,932				15,821				91,835				44,758
Average daily net production:
Oil (Bbls/d)		160,801				89,824				155,180				84,225
Natural gas (Mcf/d)		603,217				283,351				593,144				275,215
NGL (Bbls/d)		85,754				34,917				81,129				33,852
Total (Boe/d)(3)		347,091				171,966				335,166				163,946

(1)			Natural gas sales for the three and nine months ended September 30, 2024 include $26.2 million and $75.1 million, respectively, of gathering, processing and transportation costs (“GP&T”) that are reflected as a reduction to natural gas sales and $12.0 million and $30.7 million for the three and nine months ended September 30, 2023, respectively. Natural gas average sales prices, however, exclude $0.47 and $0.46 per Mcf of such GP&T charges for the three and nine months ended September 30, 2024, respectively, and $0.46 and $0.41 per Mcf for the three and nine months ended September 30, 2023, respectively.
(2)			NGL sales for the three and nine months ended September 30, 2024 include $23.0 million and $64.7 million, respectively, of GP&T that are reflected as a reduction to NGL sales and $16.3 million and $48.9 million for the three and nine months ended September 30, 2023, respectively. NGL average sales prices, however, exclude $2.91 and $2.90 per Bbl of such GP&T charges for the three and nine months ended September 30, 2024, respectively, and $5.07 and $5.29 per Bbl for the three and nine months ended September 30, 2023, respectively.
(3)			Calculated by converting natural gas to oil equivalent barrels at a ratio of six Mcf of natural gas to one Boe.

Permian Resources Corporation
Operating Expenses
	Three Months Ended September 30,								Nine Months Ended September 30,
		2024				2023				2024				2023
Operating costs (in thousands):
Lease operating expenses	$	173,255			$	85,810			$	501,597			$	243,333
Severance and ad valorem taxes		91,548				58,942				280,784				156,378
Gathering, processing and transportation expenses		50,220				20,731				133,020				57,966
Operating cost metrics:
Lease operating expenses (per Boe)	$	5.43			$	5.42			$	5.46			$	5.44
Severance and ad valorem taxes (% of revenue)		7.5	%			7.8	%			7.6	%			7.8	%
Gathering, processing and transportation expenses (per Boe)	$	1.57			$	1.31			$	1.45			$	1.30

Permian Resources Corporation
Consolidated Statements of Operations (unaudited)
(in thousands, except per share data)
	Three Months Ended September 30,								Nine Months Ended September 30,
		2024				2023				2024				2023
Operating revenues
Oil and gas sales	$	1,215,571			$	758,541			$	3,704,653			$	1,998,207
Operating expenses
Lease operating expenses		173,255				85,810				501,597				243,333
Severance and ad valorem taxes		91,548				58,942				280,784				156,378
Gathering, processing and transportation expenses		50,220				20,731				133,020				57,966
Depreciation, depletion and amortization		453,603				236,204				1,290,210				640,149
General and administrative expenses		43,783				34,519				129,885				122,729
Merger and integration expense		—				10,422				18,064				28,071
Impairment and abandonment expense		1,380				245				7,784				734
Exploration and other expenses		6,962				5,031				24,428				14,668
Total operating expenses		820,751				451,904				2,385,772				1,264,028
Net gain on sale of long-lived assets		329				63				441				129
Income from operations		395,149				306,700				1,319,322				734,308
Other income (expense)
Interest expense		(79,934	)			(40,582	)			(227,973	)			(114,185	)
Net gain (loss) on derivative instruments		238,533				(151,781	)			131,702				(76,668	)
Other income (expense)		9,247				246				9,676				685
Total other income (expense)		167,846				(192,117	)			(86,595	)			(190,168	)
Income before income taxes		562,995				114,583				1,232,727				544,140
Income tax expense		(106,468	)			(16,254	)			(237,697	)			(77,056	)
Net income		456,527				98,329				995,030				467,084
Less: Net income attributable to noncontrolling interest		(70,151	)			(52,896	)			(226,979	)			(246,132	)
Net income attributable to Class A Common Stock	$	386,376			$	45,433				768,051			$	220,952
Income per share of Class A Common Stock:
Basic	$	0.56			$	0.14			$	1.24			$	0.71
Diluted	$	0.53			$	0.13			$	1.16			$	0.64
Weighted average Class A Common Stock outstanding:
Basic		693,692				324,650				619,741				312,015
Diluted		736,239				366,174				663,315				351,417

Contacts

Hays Mabry – Vice President, Investor Relations

(432) 315-0114

ir@permianres.com

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