Permian Resources Corporation ((PR)) has held its Q4 earnings call. Read on for the main highlights of the call.
Permian Resources Corporation’s recent earnings call painted a picture of robust performance and strategic growth. The company reported record production and free cash flow in 2024, alongside significant cost reductions and successful mergers and acquisitions (M&A) activities. Despite these achievements, challenges such as future cash tax obligations and gas realizations remain on the horizon, which the company plans to tackle in the coming years.
Record Production and Free Cash Flow in Q4 2024
Permian Resources achieved record production levels in the fourth quarter of 2024, with oil production reaching 171,000 barrels per day and total production hitting 368,000 barrels of oil equivalent per day. This performance translated into an adjusted free cash flow of $400 million for the quarter, underscoring the company’s operational efficiency and financial strength.
Significant Cost Reductions Achieved
The company reported a remarkable nearly 50% increase in performance compared to 2023, without increasing leverage. Well costs were reduced by almost 20% from the previous year, with more than half of this reduction attributed to structural efficiency improvements, demonstrating Permian Resources’ commitment to cost management.
Strong 2024 M&A Performance
Permian Resources executed approximately $1.2 billion in acquisitions, securing 50,000 net acres. This strategic move replaced the inventory drilled in 2024 with high-return inventory, positioning the company for continued growth and profitability.
2025 Growth Plan
Looking ahead, Permian Resources has laid out an ambitious growth plan for 2025, expecting an 8% increase in annual oil production compared to 2024. The capital program is set at approximately $2 billion, reflecting improved capital efficiency year over year.
Increased Liquidity and Strong Financial Position
In 2024, the company increased its liquidity by approximately $1 billion, maintaining a strong financial position with no change in leverage. This financial stability was achieved while executing $1.2 billion of accretive M&A activities.
Minimal Cash Taxes in 2025
Permian Resources anticipates minimal cash taxes in 2025, with more significant cash tax obligations expected in 2026. The company is preparing to become a full cash taxpayer by 2027, aligning its financial strategies accordingly.
Gas Realization Challenges
The company is currently focusing on optimizing gas netbacks, although significant improvements are not expected until 2026 and beyond. The strategy remains largely unchanged from 2024, indicating a steady approach to addressing these challenges.
Forward-Looking Guidance
Permian Resources provided guidance for 2025, maintaining production between 300,000 and 380,000 BOE per day, with oil production averaging 170,000 to 175,000 barrels per day. The capital program is set at approximately $2 billion, with 80% allocated to drilling and completion operations. The company expects an 8% increase in annual oil production compared to 2024, supported by continued cost efficiencies and strategic M&A activities.
In conclusion, Permian Resources Corporation’s earnings call highlighted a strong performance in 2024, with record production and strategic growth initiatives. The company is well-positioned for future success, despite challenges related to cash taxes and gas realizations. Investors can look forward to continued growth and operational efficiency as Permian Resources executes its 2025 growth plan.