Permian Resources Corporation (ticker: PR) reported robust financial and operational results for the second quarter of 2024, with a notable increase in oil production and a raised full-year production guidance. The company’s production reached 153,000 barrels of oil per day and a total of 339,000 barrels of oil equivalent per day.
Permian Resources also announced the strategic acquisition of Barilla Draw assets from OXY, which is expected to add high-return inventory in the Texas Delaware region and support future growth. The company discussed its operational efficiencies, improved cost controls, and strong cash flow, alongside maintaining a solid balance sheet with low leverage and sufficient liquidity.
The earnings call also touched upon the company’s future outlook, with plans to maintain current rig and frac counts and a focus on capital efficiency. Permian Resources is targeting an investment-grade credit rating by 2025.
Key Takeaways
- Permian Resources increased oil production to 153,000 barrels per day and total production to 339,000 barrels of oil equivalent per day.
- Raised full-year production guidance after the acquisition of Barilla Draw assets from OXY.
- Improved operational efficiencies and cost controls, with well costs decreasing to $830 per foot.
- Maintained a strong balance sheet, executing a $400 million equity offering and issuing $1 billion of bonds for acquisition financing.
- Plans to maintain current rig and frac counts, with a focus on capital efficiency and drilling efficiency.
- Aims for an investment-grade credit rating by 2025.
Company Outlook
- Permian Resources plans to drill a pad on Barilla Draw in the latter half of the year.
- The company will decide on 2025 activity based on market conditions and remains focused on driving long-term shareholder value.
Bearish Highlights
- The company notes potential recessions in service costs and expects gas and NGL volumes to revert to more normal trends as gas prices recover.
Bullish Highlights
- Acquisition of Barilla Draw assets and 2,000 acres in Eddy County strengthen the company’s position.
- Efficiency gains in drilling, averaging 1,500 feet per day, are now considered the new norm.
- The company’s low cost structure allows it to capitalize on small market opportunities.
Misses
- No immediate plans to monetize the position in royalty acres.
- The company is cautious about 2025 activity levels, indicating it is too early to set firm plans.
Q&A Highlights
- Permian Resources has hedged for 2025 and may add more hedges…
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