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Permian Resources Corp (PR)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 was operationally strong: total production rose to 410.2 MBoe/d (+6% QoQ), oil volumes hit 186.9 MBbl/d, while controllable cash costs fell 6% QoQ to $7.36/Boe; D&C costs declined to ~$725/ft .
  • PR raised FY25 mid-point guidance for oil to 181.5 MBbl/d (+3.0 MBbl/d) and total to 394.0 MBoe/d (+9.0 MBoe/d); other guidance ranges were maintained .
  • Adjusted free cash flow reached $468.8MM; balance sheet strengthened via ~$460MM debt reduction (leverage ~0.8x; liquidity >$2.6B), and PR repurchased 2.3MM shares for $30MM in Q3 .
  • Versus Street: Q3 adjusted EPS beat; EBITDA beat; revenue was slightly below consensus. The beats were driven by higher volumes, disciplined costs, and improved realizations; GAAP EPS was muted by a $264.3MM debt extinguishment loss .

What Went Well and What Went Wrong

What Went Well

  • Production and efficiency: “Strong well performance and continued cost reductions drove another step-change in capital efficiency,” with controllable cash costs down 6% QoQ and D&C costs at ~$725/ft .
  • Technical execution: Haley development delivered a 45% oil outperformance vs offsets in first 90 days due to data-driven spacing/targeting and interval-specific completions; “the business is firing on all cylinders” .
  • Balance sheet and capital allocation: ~$460MM debt reduction (net debt/LQA EBITDAX ~0.8x), Fitch investment-grade rating, positive Moody’s outlook, and continued “all-of-the-above” capital allocation (dividends, acquisitions, buybacks) .

What Went Wrong

  • GAAP earnings diluted by financing actions: Q3 reported diluted EPS of $0.08 driven by a $264.3MM loss on extinguishment of debt; adjusted EPS was $0.37, highlighting non-GAAP normalization .
  • Revenue near-but-below consensus amid lower realized prices (oil $64.77/bbl, gas $0.52–$0.58/Mcf), tempering top-line despite volume outperformance .
  • Ongoing macro sensitivity: Management reiterated caution on 2026 activity pending macro clarity, balancing capital efficiency gains against commodity uncertainty .

Financial Results

Income Statement and EPS (GAAP and Adjusted)

MetricQ1 2025Q2 2025Q3 2025
Revenue ($USD Billions)$1.376 $1.198 $1.322
Net Income ($USD Millions)$329.3 $207.1 $59.2
Diluted EPS (GAAP) ($)$0.44 $0.28 $0.08
Adjusted EPS ($)$0.42 $0.27 $0.37
Adjusted EBITDAX ($USD Millions)$1,045.0 $893.9 $1,018.8

Key Operating KPIs and Costs

KPIQ1 2025Q2 2025Q3 2025
Total Production (Boe/d)373,209 385,118 410,225
Oil (Bbl/d)174,967 176,533 186,937
NGL (Bbl/d)86,010 97,804 105,822
Gas (Mcf/d)673,388 664,686 704,795
Realized Oil Price ($/Bbl)$70.48 $62.71 $64.77
LOE ($/Boe)$5.35 $5.36 $5.07
GP&T ($/Boe)$1.39 $1.59 $1.43
Cash G&A ($/Boe)$0.80 $0.87 $0.86
Cash Capex ($MM)$501 $505 $480
Adjusted Free Cash Flow ($MM)$459.8 $311.8 $468.8

Street vs. Actuals (S&P Global consensus; values marked * are from S&P Global)

MetricQ1 2025 Estimate*Q1 2025 Actual*Q2 2025 Estimate*Q2 2025 Actual*Q3 2025 Estimate*Q3 2025 Actual*
Primary EPS Consensus Mean ($)0.4150.4200.2730.2700.2940.370
Revenue Consensus Mean ($USD Billions)1.3841.3761.2271.1981.3261.322
EBITDA Consensus Mean ($USD Billions)1.0161.0420.8820.8770.9441.026

Values retrieved from S&P Global.

Guidance Changes

MetricPeriodPrevious Guidance (Q2 release)Current Guidance (Q3 release)Change
Net avg daily production (Boe/d)FY 2025380,000 — 390,000 390,000 — 398,000 Raised
Net avg daily oil production (Bbls/d)FY 2025177,500 — 179,500 181,000 — 182,000 Raised
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 ~$0.90 Maintained
Severance & ad valorem taxes (% of revenue)FY 20256.5% — 8.5% 6.5% — 8.5% Maintained
Total cash capex ($MM)FY 2025$1,920 — $2,020 $1,920 — $2,020 Maintained
Operated TILs (gross)FY 2025~275 ~275 Maintained
Avg working interestFY 2025~75% ~75% Maintained
Avg lateral length (feet)FY 2025~10,000 ~10,000 Maintained
Base dividendQ4 2025—$0.15/share declared Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2)Current Period (Q3)Trend
AI/technology in subsurfaceBuilding Midland-based technical edge; steady optimization across benches “Leveraging AI to expand play boundaries” and accelerate workflows; microseismic azimuth analysis to optimize completions Increasing adoption
Gas marketing/netbacksTeam expansion; moving downstream; expecting >$0.10/Mcf uplift; crude +$0.50/bbl uplift in 2026 ~330 MMcf/d out-of-basin in 2026 rising to ~700 MMcf/d in 2028; ~$1/Mcf uplift and >$100MM FCF in 2026; reduced Waha exposure to ~25% Improving realization
Cost structure (D&C/LOE)$750/ft achieved; LOE low via power/chemical optimization D&C ~$725/ft; controllable costs -6% QoQ; continued vendor/operational efficiency gains Better than prior
M&A/ground gameAPA NM bolt-on; active bolt-ons; downturn playbook execution ~250 transactions; +5,500 net acres; +2,400 net royalty acres for ~$180MM; pipeline “as full as ever” Robust pipeline
Regulatory/tax (OBBBA)Expect <$5MM current cash taxes in 2025; <$50MM cumulative in 2026–2027 No new change vs Q2; continued reference; commingling improvements previously highlighted Stable framework
Activity/macro toneQ2: cautious, flexible to ramp/slow Q3: wait for Feb 2026 guide; flexibility to pursue growth or low/no-growth depending on returns Cautious, flexible

Management Commentary

  • “Strong well performance and continued cost reductions drove another step-change in capital efficiency...we reduced D&C costs to approximately $725 per foot” — Will Hickey, Co-CEO .
  • “Capital allocation is the most important thing we do...our strong balance sheet allows an all-of-the-above approach” — James Walter, Co-CEO .
  • “We are convicted that...selling further downstream...is going to get you a higher netback on average over time” — James Walter, on gas FT/sales agreements .

Q&A Highlights

  • 2026 outlook: PR will wait until February; flexibility to run growth or capital-efficient flat program depending on macro and returns .
  • Haley pad: Outperformance reflects PR’s technical approach; other assets expected to perform in line; demonstrates repeatable process .
  • Gas marketing optionality: Ability to swing between DFW and Gulf Coast (HSC) ~50/50 with 10–15% flex; downstream sales reduce Waha exposure and volatility .
  • Cost trajectory: Further service cost reductions possible; efficiencies on drill-out for long laterals; LOE down via microgrids and treatments (e.g., chlorine dioxide) .
  • Capital returns: Base dividend sustainable around low break-even; opportunistic buybacks on dislocations; continued M&A/ground game .

Estimates Context

  • Q3 comparison: Primary EPS actual $0.370* vs $0.294* estimate — beat; Revenue actual $1.322B* vs $1.326B* estimate — slight miss; EBITDA actual $1.026B* vs $0.944B* estimate — beat. Beats were driven by higher volumes and lower controllable costs; the GAAP EPS was suppressed by the $264.3MM debt extinguishment loss .
  • Trend: Q1 beat on EPS and EBITDA; Q2 EPS roughly in line, revenue light, EBITDA near in-line; Q3 returned to EPS/EBITDA beats. Potential upward revisions on EBITDA/free cash flow trajectory as downstream gas/crude realizations improve and cost efficiencies persist .

Values retrieved from S&P Global.

Key Takeaways for Investors

  • Operations remain best-in-class: rising volumes and declining controllable costs demonstrate durable capital efficiency advantages; expect continued D&C and LOE gains .
  • Guidance raised on production without increasing capex ranges — positive signal on efficiency and inventory quality .
  • Strategic marketing shift materially improves 2026 gas and crude netbacks, with >$100MM FCF uplift tied to gas FT/sales; Waha exposure reduced to ~25% .
  • Balance sheet strength (leverage ~0.8x; liquidity >$2.6B) enables “all-of-the-above” capital allocation through cycles (dividends, M&A, buybacks) — a key multi-year thesis support .
  • Near term: Expect Street to reward EPS/EBITDA beats and guidance raise; be mindful that GAAP EPS can be noisy due to financing/hedge accounting — adjusted metrics better reflect core operations .
  • Medium term: February 2026 guide is a catalyst; improved realizations plus efficiency gains set up for “most capital-efficient year,” with optionality to choose growth vs. lower capex .
  • M&A/ground game continues to add accretive inventory at attractive valuations, reinforcing the free cash flow per share growth story .