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Permian Resources Corp (PR)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 delivered operational outperformance (oil 176.5 Mbbl/d; total 385.1 Mboe/d), an increased FY25 production outlook (midpoints raised to 178.5 Mbbl/d oil and 385.0 Mboe/d total), and maintained low controllable cash costs ($7.82/boe actual in Q2; FY guide $7.25–$8.25/boe) .
  • Versus estimates: EPS of $0.28 modestly beat the $0.273* consensus; revenue of $1.198B missed $1.228B*; EBITDA of ~$877.1M missed ~$882.1M*; Q1 EPS beat and Q4 EPS missed, showing variability across recent quarters (see Estimates Context) *.
  • Guidance raised and marketing agreements signed to improve netbacks (gas +$0.10/Mcf; crude +$0.50/bbl), adding ~$50M incremental FCF in 2026; PR also received a Fitch investment grade rating (BBB-)—key positive catalysts .
  • “Downturn playbook” execution: closed APA New Mexico bolt-on (~$600M), repurchased $43M of stock at $10.52/share, and added ~1,300 net acres via ground game; liquidity ~$3B and leverage ~1.0x retained .

What Went Well and What Went Wrong

What Went Well

  • Record field execution: “fastest well drilled,” “most feet drilled per day,” and “lowest completions cost per foot” in company history; management emphasized low-cost leadership positioning across commodity cycles .
  • Strategic marketing uplift: new gas/crude transport and purchase agreements to sell more hydrocarbons at demand hubs, expected to improve realizations and add ~$50M FCF in 2026 .
  • Credit upgrade: Fitch initiated investment grade rating at BBB- with stable outlook; management expects S&P and Moody’s to follow .

What Went Wrong

  • Pricing headwinds: average realized oil price fell to $62.71/bbl (from $70.48 in Q1), with gas at $0.50/Mcf and NGL at $17.75/bbl, pressuring revenue QoQ ($1.198B vs $1.377B in Q1) .
  • Minor estimate misses: Q2 revenue and EBITDA modestly below consensus despite operational strength; EBITDA “actual” vs consensus reflects standardized S&P methodology vs company’s Adjusted EBITDAX * *.
  • Tariff cost friction: casing costs up due to tariffs; while efficiencies and vendor changes help, they partially offset targeted well cost improvements in 2H25 .

Financial Results

MetricQ4 2024Q1 2025Q2 2025
Revenue (Oil & gas sales, $USD Millions)$1,296.1 $1,376.5 $1,197.6
Diluted EPS ($USD)$0.29 $0.44 $0.28
Net Income attributable to Class A ($USD Millions)$216.7 $329.3 $207.1
Adjusted EBITDAX ($USD Millions)$976.7 $1,045.0 $893.9
Adjusted Free Cash Flow ($USD Millions)$399.6 $459.8 $311.8
Cash Capital Expenditures ($USD Millions)$504.5 $500.7 $505.0

Revenue breakdown (Q2 2025):

MetricQ2 2025
Oil Sales ($USD Millions)$1,007.5
NGL Sales ($USD Millions)$158.0
Natural Gas Sales ($USD Millions)$30.2
Purchased Gas Sales, net ($USD Millions)$2.0
Total Oil & Gas Sales ($USD Millions)$1,197.6
Oil Volumes (MBbls)16,064
NGL Volumes (MBbls)8,900
Gas Volumes (MMcf)60,486

Operating KPIs

KPIQ4 2024Q1 2025Q2 2025
Total Production (Boe/d)368,414 373,209 385,118
Oil (Bbl/d)171,274 174,967 176,533
NGL (Bbl/d)91,382 86,010 97,804
Natural Gas (Mcf/d)634,546 673,388 664,686
LOE ($/boe)$5.42 $5.35 $5.36
GP&T ($/boe)$1.49 $1.39 $1.59
Cash G&A ($/boe)$0.93 $0.80 $0.87
Avg Oil Price ($/bbl)$69.66 $70.48 $62.71
Avg Gas Price ($/Mcf)$0.87 $1.35 $0.50
Avg NGL Price ($/bbl)$24.05 $23.90 $17.75
Cash on Hand ($USD Millions)$479.3 $702.2 $451.0
Liquidity ($USD Billions)~$3.0 $3.2 ~$3.0
Net Debt / LQA EBITDAX (x)0.95x 0.8x 1.0x
Adjusted Diluted Shares (Millions)847.1 847.8 845.1

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net avg daily production (Boe/d)FY 2025360,000–380,000 380,000–390,000 Raised
Net avg daily oil (Bbl/d)FY 2025170,000–175,000 177,500–179,500 Raised
Total cash capex ($MM)FY 2025$1,900–$2,000 $1,920–$2,020 Raised (bolt-on WIP wells +$20MM)
Total controllable cash costs ($/boe)FY 2025$7.25–$8.25 $7.25–$8.25 Maintained
LOE ($/boe)FY 2025~$5.55 ~$5.55 Maintained
GP&T ($/boe)FY 2025~$1.30 ~$1.30 Maintained
Cash G&A ($/boe)FY 2025~$0.90 ~$0.90 Maintained
Severance & ad valorem (% of revenue)FY 20256.5%–8.5% 6.5%–8.5% Maintained
Current income tax estimate ($MM)FY 2025< $10 < $5 Lowered
Dividend (base, $/share)Q3 2025$0.15 $0.15 Maintained

Earnings Call Themes & Trends

TopicQ4 2024 (Q-2)Q1 2025 (Q-1)Q2 2025 (Current)Trend
Marketing & netbacksFocus on capital efficiency; no major downstream updates No major marketing changes disclosed New gas/crude agreements to sell at key hubs; +$0.10/Mcf gas and +$0.50/bbl crude realizations; $50M FCF uplift in 2026 Improving
Downturn playbookBalance sheet strength, liquidity ~$3B Executed repurchases and announced APA bolt-on; reduced capex midpoint Closed APA bolt-on; repurchased $43M; emphasized buying assets/buybacks in dislocations Reinforced
Cost structure & well efficiencyD&C ~$775/ft D&C ~$750/ft; controllable cash costs down QoQ Record drilling times and lowest completions cost/ft; LOE optimization (chemical/power) Improving
Hedging strategyOil/gas swaps across 2025–2027 ~25% oil hedged; consistent philosophy Added incremental 2025/2026 oil swaps; ~32% 2025 oil hedged at ~$71.71/bbl Increased hedge coverage
Regulatory/taxNo major tax updates; 2025 plan provided None notedOne Big Beautiful Bill Act lowers cash taxes (<$5M in 2025; < $50M cumulatively 2026–2027); commingling on federal/state in NM improves efficiency Favorable
Credit profileLeverage ~0.95x Leverage ~0.8x Fitch IG (BBB-); leverage ~1.0x post bolt-on Strengthening

Management Commentary

  • “Our business continues to operate at a very high level... we set new Company records for the fastest well drilled, the most feet drilled per day and the lowest completions cost per foot” — Will Hickey, Co‑CEO .
  • “We executed on approximately $600 million in acquisitions and bought back shares at... below mid-cycle prices... our rock-solid balance sheet and maximum liquidity will allow us to continue to play offense” — James Walter, Co‑CEO .
  • “We are extremely proud to receive our inaugural investment grade credit rating... intend to achieve investment grade ratings from S&P and Moody’s in the near-term” — Guy Oliphint, CFO .

Q&A Highlights

  • Production/capex cadence: Outperformance driven by strong base wells and recent POPs; capex reduced vs original plan; activity adjustments will be driven by commodity returns, with operational flexibility to add/drop rigs as needed .
  • GP&T impact: Netback improvements are net of implied costs; no immediate change to GP&T unit costs from agreements .
  • Downturn strategy: Strong balance sheet, low breakevens, opportunistic M&A and buybacks during dislocation; PR positioned as a logical consolidator in the Delaware Basin while keeping standalone potential high .
  • Drilling efficiency: Five of top‑10 fastest wells ever in Q2; meaningful runway to migrate “best‑well” performance to average wells; tariffs raised casing costs but net cost/ft expected down in 2H25 via efficiencies and vendor optimization .
  • Power and LOE optimization: Micro‑grid pilots reduced power costs ~30%; scaling depends on asset concentration and line capital tradeoffs .
  • Gas marketing: Aim to reduce Waha exposure over time to ~20–25% of gas sales; exploring multiple markets including Gulf Coast, Central/East Texas, and potentially Rockies/West Coast .
  • Hedging stance: Target ~30%/20%/10% hedged one/two/three years out; added hedges opportunistically in June dislocation .

Estimates Context

MetricQ4 2024Q1 2025Q2 2025
Revenue Actual ($USD Millions)$1,296.1 $1,376.5 $1,197.6
Revenue Consensus ($USD Millions)*$1,297.9*$1,383.9*$1,227.3*
EPS Actual (Diluted, $USD)$0.29 $0.44 $0.28
EPS Consensus ($USD)*$0.341*$0.415*$0.273*
EBITDA Actual ($USD Millions)*$877.2*$1,041.6*$877.1*
EBITDA Consensus ($USD Millions)*$938.6*$1,015.9*$882.1*

Interpretation (numbers rounded):

  • Q2 2025: EPS beat by ~0.007; revenue missed by ~$30.7M; EBITDA missed by ~$5.0M* *.
  • Q1 2025: EPS beat by ~0.025; revenue slight miss by ~$7.4M; EBITDA beat by ~$25.7M* *.
  • Q4 2024: EPS miss by ~0.051; revenue inline; EBITDA miss by ~$61.4M* *.

Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Raised FY25 oil/total production guidance with maintained cost guidance signals operating momentum despite lower commodity prices; marketing agreements should further lift 2026 realizations and FCF (+$50M) .
  • Estimate mix: Q2 delivered an EPS beat but revenue/EBITDA slight misses; trajectory shows operational resilience yet sensitivity to prices—watch strip/realizations and marketing ramp timing *.
  • Balance sheet and rating upgrade (BBB-) increase flexibility for opportunistic M&A/buybacks while retaining low leverage (~1.0x) and ~$3B liquidity—supports multi-pronged capital allocation .
  • Efficiency agenda remains a core lever: record drilling, lower completions cost/ft, LOE optimization (micro‑grids); management expects cost/ft to decline in 2H25 even with tariff headwinds .
  • Hedging provides cash flow stability (2025 ~32% oil hedged at ~$71.71/bbl; added 12 kb/d swaps at $70.18/bbl), allowing patience and opportunism in a volatile macro .
  • Tax/regulatory tailwinds (OBBBA): cash taxes reduced (<$5M FY25; < $50M cumulatively FY26–27) and commingling on federal/state production improves capital efficiency in NM .
  • Near-term trading: focus on realization uplift milestones, APA integration proof points, and any follow‑through from S&P/Moody’s ratings; medium term, FCF per share growth and disciplined M&A should drive relative outperformance .