Sign in
PR

Permian Resources Corp (PR)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 delivered record volumes and strong cash generation: oil 171.3 MBbl/d, total 368.4 MBoe/d, adjusted operating cash flow $904M and adjusted free cash flow $400M, underpinned by total cash capex of $504M and controllable cash costs of $7.84/Boe .
  • Costs continued to trend lower with D&C at ~$775/ft in Q4, and management said the cutting-edge run-rate is ~$750/ft as of the call, reflecting efficiency gains more than service deflation .
  • 2025 plan targets ~8% YoY oil and total production growth (170–175 MBbl/d; 360–380 MBoe/d) on flat capex ($1.9–$2.1B) and lower controllable cash costs ($7.25–$8.25/Boe midpoint ↓ ~$0.10/Boe vs 2024), implying improved capital efficiency and higher free cash flow vs 2024 at strip .
  • Balance sheet/liquidity remained robust (liquidity ~$3.0B, net debt/LQA EBITDAX 0.95x at YE; partial $175M redemption of 9.875% 2031 notes in Q1’25), and Board declared a $0.15/sh base dividend for Q1’25 (~4.3% yield) .
  • Consensus estimates: We attempted to pull S&P Global consensus for Q4 and the prior quarters, but the service returned a daily request limit error; as a result, comparisons vs Street are not shown (S&P Global consensus unavailable via tool).

What Went Well and What Went Wrong

What Went Well

  • Cost leadership and execution: controllable cash costs fell to $7.84/Boe; LOE $5.42/Boe and GP&T $1.49/Boe; D&C ~$775/ft in Q4 with management citing ~$750/ft real-time, driven ~55% by efficiency gains (drilling days, simul-frac, material sourcing) .
  • Free cash flow strength: adjusted operating cash flow $904M and adjusted FCF $400M in Q4 on $504M capex; 2025 plan aims to generate more FCF than 2024 on flat capex and higher volumes .
  • Strategic portfolio moves and balance sheet: closed divestiture of Reeves County gathering for $180M (Q1’25) and redeemed $175M of 9.875% 2031s with cash; YE liquidity ~$3.0B and net debt/LQA EBITDAX 0.95x .

What Went Wrong

  • Headwind from weak Permian gas: realized gas price was just $0.87/Mcf in Q4 (Q3 was -$0.20/Mcf), reflecting ongoing Waha dislocations; management expects larger gas marketing uplift in 2026+ as new routes/contracts ramp .
  • EPS down sequentially: diluted EPS fell to $0.29 from $0.53 in Q3, with higher DD&A and derivative losses QoQ (non-cash) impacting GAAP earnings .
  • 2025 cadence: management flagged some program lumpiness (front-half weighted capex; back-half weighted production), and tariff/cost inputs could limit further near-term D&C cost declines from ~$750/ft .

Financial Results

Headline P&L, Cash Flow and Cost Metrics (USD, costs per Boe)

MetricQ4 2023Q3 2024Q4 2024
Oil & gas sales ($USD Millions)$1,122.7 $1,215.6 $1,296.1
Diluted EPS ($)$0.51 $0.53 $0.29
Net income attrib. to Class A ($MM)$255.4 $386.4 $216.7
Adjusted EBITDAX ($MM)$858.1 $905.0 $976.7
Net cash from operating activities ($MM)$846.0 $954.4 $871.6
Total cash capex ($MM)$458.2 $520.2 $504.5
Adjusted free cash flow ($MM)$332.0 $302.7 $399.6
LOE ($/Boe)$4.97 $5.43 $5.42
GP&T ($/Boe)$1.19 $1.57 $1.49
Cash G&A ($/Boe)–$0.95 $0.93

Production and Realized Prices

KPIQ4 2023Q3 2024Q4 2024
Oil (MBbl/d)136.6 160.8 171.3
Total (MBoe/d)285.2 347.1 368.4
Realized oil ($/Bbl)$76.61 $74.31 $69.66
Realized gas ($/Mcf, excl. GP&T)$1.50 -$0.20 $0.87
Realized NGL ($/Bbl, excl. GP&T)$21.57 $22.35 $24.05
D&C cost per foot–~$800 ~$775

Notes: “Adjusted” figures per company definitions; reconciliations in the release .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net avg daily oil (MBbl/d)FY 2025n/a (first issuance)170–175 New
Net avg daily total (MBoe/d)FY 2025n/a (first issuance)360–380 New
Total cash capex ($B)FY 2025n/a (first issuance)$1.9–$2.1 New
Controllable cash costs ($/Boe)FY 2025n/a (first issuance)$7.25–$8.25 (mid ↓ ~$0.10 vs 2024) New
LOE / GP&T / Cash G&A ($/Boe)FY 2025n/a (first issuance)~$5.55 / ~$1.30 / ~$0.90 New
Oil realizations (% of WTI)FY 2025n/a98–100% New
Gas basis vs Waha ($/Mcf)FY 2025n/a-$0.30 to -$0.50 New
NGL realizations (% of WTI)FY 2025n/a27–30% New
Severance & ad valorem (% rev)FY 2025n/a6.5–8.5% New
TILs (gross)FY 2025n/a~285; avg WI ~75% New
Avg lateral length (ft)FY 2025n/a~10,000 (↑ ~700 vs 2024) New
Current taxesFY 2025n/a~ $25M at strip (planning) New
Base dividendQ1 2025$0.15/sh initiated Q4 2024$0.15/sh declared (Q1’25) Maintained

Context on FY 2024 updates for trend: In Q3 2024, PR raised FY24 oil/total production to 158.5 MBbl/d and 341.0 MBoe/d, with TILs ~270, while keeping $1.9–$2.1B capex unchanged .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2/Q3 2024)Current Period (Q4 2024)Trend
Cost efficiency (D&C/LOE)Q2: D&C ~$830/ft; LOE $5.18/Boe; efficiencies drove record drilling cycle times . Q3: D&C ~$800/ft; LOE $5.43; simul-fracs and drilling days down .Q4: D&C ~$775/ft; real-time ~$750/ft; ~55% of cuts from efficiency; LOE $5.42/Boe .Improving
Gas pricing/marketingQ3: Material uplift possible via Gulf Coast access; 30% non-Waha sales; multi-year plan .2025 largely similar to 2024; larger uplift expected 2026+ as long-haul options mature .Gradual progress; bigger gains post-2025
Capital plan cadenceQ3: Steady 12 rigs; capex down QoQ on mix .2025 capex slightly front-half weighted; production back-half weighted .Manageable lumpiness
Shareholder returnsQ3: Lifted base dividend to $0.15/sh; opportunistic buybacks .Base dividend maintained; buybacks held for dislocations; delever path to ~0.5x by YE’25 .Stable policy; balance sheet strengthening
M&A strategyQ3: Focus on bolt-ons/ground game; OXY/Barilla Draw closed .Prefer smaller, higher-return deals; ground game 2–6k acres/yr base case .Consistent
Lateral length/techQ3: Water recycling targeting 2/3–3/4; drilling/frac efficiency .Avg lateral moves to ~10,000 ft; 3-mile laterals selectively; $750/ft likely near-term floor barring tech step-changes .Incremental gains; selective longer laterals
TaxesQ3: 2024 current taxes cut to $10–$15M .2025 current taxes ~ $25M; full cash taxpayer more likely by 2026–27 .Low near-term; rising mid-term

Management Commentary

  • “We reported a record quarter in both production and free cash flow per share in Q4... Strong production results paired with low cash costs and CapEx of $504 million... resulted in an adjusted operating cash flow of $904 million and adjusted free cash flow of $400 million.” — Co-CEO Will Hickey .
  • “For the full year 2025, we expect total production to average between 360–380 Mboe/d and oil 170–175 Mbbl/d… capital program ~ $2 billion, less than 2024 despite the higher production base, showing materially improved capital efficiency.” — Co-CEO James Walter .
  • “We maintained leverage right at 1x through 2024… expect to exit 2025 at approximately 0.5x leverage… next strategic priority for our balance sheet is investment-grade status.” — Co-CEO James Walter .
  • “Probably slightly over 50%, maybe 55% is going to come from the efficiency side with the balance being real per-unit cost deflation” (drivers of D&C cost cuts). — Co-CEO Will Hickey .

Q&A Highlights

  • D&C cost drivers and sustainability: ~55% of cost reductions are structural efficiency (drilling days, completion optimization), with the rest from service/material deflation; ~$750/ft is current “cutting-edge,” with further declines dependent on tech and input costs (tariffs) .
  • 2025 cadence: Expect slightly front-half-weighted capex and back-half-weighted volumes; program remains broadly similar to 2024 by region/zone mix .
  • Facilities/infrastructure spend: ~ $400M is a reasonable near-term run-rate for facilities; could drift lower to ~$300M longer term absent acquisitions .
  • Gas realizations strategy: 2025 sales mix similar to 2024; meaningful uplift targeted in 2026–2027 as long-haul access and market diversification advance .
  • Capital returns posture: Prioritize a sustainably growing base dividend; buybacks remain opportunistic and reserved for dislocations; deleveraging continues alongside optionality for M&A .

Estimates Context

  • We attempted to retrieve S&P Global (Capital IQ) consensus for Q4 2024 and the prior two quarters, but the service returned a daily request limit error; therefore, comparisons to Street estimates are unavailable in this recap. We will update beat/miss analysis upon successful retrieval of S&P Global consensus.

Key Takeaways for Investors

  • Execution remains best-in-class: PR is translating structural cost leadership into sustained FCF generation even with weak in-basin gas pricing; Q4 adjusted FCF of ~$400M on ~$504M capex evidences capital discipline .
  • 2025 plan upgrades quality: ~8% volume growth on flat capex and lower controllable cash costs improves per-share FCF potential; management explicitly targets higher FCF vs 2024 at strip .
  • Balance sheet optionality rising: YE liquidity ~$3.0B, net debt/LQA EBITDAX 0.95x (YE) and a path to ~0.5x by YE’25 give ample room for opportunistic buybacks or bolt-on M&A without sacrificing dividend sustainability .
  • Gas uplift is a 2026+ story: expect incremental progress in 2025 but more material netback improvement post-2025 as long-haul and market access initiatives mature .
  • Near-term watch items: sequential EPS softness tied to DD&A/derivative marks; monitor service costs/tariffs that could limit further D&C cost declines from ~$750/ft, and the front-half capex/back-half production cadence through 2025 .
  • Dividend durability: Base dividend of $0.15/sh (4%+ yield) looks well-covered given PR’s low breakeven (~$40 post-dividend per management) and efficiency gains; annual increases remain the stated priority .

Appendix: Additional Q4 2024 Data Points

  • Proved reserves at YE 2024: 1,027 MMBoe (45% oil); PD 746 MMBoe (73% of total) .
  • Liquidity and leverage: cash $479M at YE; undrawn revolver; total liquidity $3.0B; net debt/LQA EBITDAX 0.95x .
  • Hedge book (select crude swaps): 45 kbbl/d hedged in 2025 at weighted avg ~$72–$75/bbl; 17.5 kbbl/d in 2026 at ~$69–$71 .

Search notes: We read the full Q4 2024 8-K (earnings press release), the full Q4 2024 earnings call, and reviewed prior-quarter (Q3 and Q2 2024) press releases/transcripts for context. No additional PR-labeled “press-release” documents appeared in our catalog for Q4 2024 beyond the 8-K exhibit press release .