Summary of Permian Resources Q1 2026 Earnings Call

1Key Financial Results and Metrics

Free Cash Flow: Achieved a record free cash flow per share of $0.60, totaling over $500 million for the quarter.

Production: Oil production averaged 192,000 barrels per day, with total production at 413,000 barrels of oil equivalent per day, exceeding expectations.

Cost Metrics: Drilling and completion (D&C) costs reduced to approximately $685 per lateral foot, with record low controllable cash costs:

Lease Operating Expenses (LOE): $5.19 per BOE

General and Administrative (G&A): $0.77 per BOE

Debt Reduction: Reduced total debt by approximately $1.2 billion since the beginning of 2025, achieving investment-grade ratings from all three major agencies.

2Strategic Updates and Business Highlights

Operational Efficiency: Set records in drilling speed and lateral lengths, with 25% of wells exceeding 2.5 miles.

Microgrid Installation: Installed four microgrids, reducing electricity costs by 30% at associated well sites.

Natural Gas Portfolio: Improved natural gas pricing through firm transportation agreements, with realized prices at $1.33 per Mcf, a $2.44 premium to Waha pricing.

Production Strategy: Increased workover rig count, doubling from January to March, to accelerate production in a favorable oil price environment.

3Forward Guidance and Outlook

Production Growth: Anticipates modestly higher production and capital expenditures in Q2, with a focus on maximizing returns in a high-price environment.

Long-term Growth: Expects continued free cash flow growth in 2026, with flexibility to adjust activity levels based on market conditions.

Capital Allocation: Plans to prioritize dividends, debt repayment, and accretive acquisitions, maintaining a balanced approach to capital deployment.

4Bad News, Challenges, or Points of Concern

Natural Gas Pricing: Experienced material weakness in Waha gas pricing, impacting realized natural gas prices despite firm transportation agreements.

Market Volatility: Uncertainty regarding future oil prices and macroeconomic conditions could affect production and capital plans.

Inflation Risks: While current inflation has been minimal, particularly outside of diesel costs, there are concerns about potential future inflation impacting service costs.

5Notable Q&A Insights

Production Dynamics: Management confirmed that current production activity is not constrained by power supply, and they are focused on maximizing output in the current price environment.

M&A Activity: The company is well-positioned to pursue acquisitions, with an active market for deals in the Delaware Basin, although they will remain disciplined in their approach.

Gas Production Strategy: Management indicated that while they are shutting in gas wells due to negative pricing, they plan to return them to production when economically viable.

Operational Efficiency: Continued focus on reducing drilling and completion costs, with expectations for further improvements in the future. Overall, Permian Resources reported a strong quarter with record financial metrics, operational efficiencies, and a solid outlook, despite facing challenges related to gas pricing and market volatility.