Summary of Permian Resources Q2 2026 Earnings Call

1Key Financial Results and Metrics

Record Free Cash Flow: $751 million, up nearly 50% quarter-over-quarter.

Free Cash Flow per Share: $0.88.

Oil Production: Approximately 198,000 barrels per day, a 3% increase from Q1.

Capital Expenditures: $521 million for the quarter.

Leverage Ratio: Approximately 0.5x, with expectations to maintain this level through year-end.

2Strategic Updates and Business Highlights

Operational Efficiency: Increased workover rig count by 50% to boost production in response to rising oil prices; working interest in completed wells rose to 82%.

Natural Gas Strategy: Proactively curtailed production in response to negative WAHA prices, resulting in a realized price of $0.38 per Mcf and generating an additional $75 million in revenue.

Acquisition Strategy: Closed on a $520 million acquisition of 2,000 net acres and 5,000 Boe/day in Ward County, enhancing operational control and increasing operating net locations from 50 to 120 through a subsequent acreage trade.

Innovative Practices: Continued focus on capital efficiency through water recycling, surfactant trials, and optimized wellbore designs.

3Forward Guidance and Outlook

Production Guidance: Updated to 199,000 barrels of oil per day for full-year 2026, a 10% increase from 2025.

Capital Expenditure Guidance: Midpoint set at $1.95 billion, approximately 1% lower than the previous year.

Free Cash Flow Projection: Expected to nearly double compared to 2024, with continued focus on increasing free cash flow per share.

4Bad News, Challenges, or Points of Concern

Natural Gas Market Volatility: WAHA prices averaged negative $3.14 per Mcf during Q2, leading to significant curtailments and highlighting ongoing market risks.

Inflationary Pressures: Rising costs associated with diesel and materials could impact future capital expenditures and operational costs.

Production Growth Risks: Future production growth will depend on market conditions, including oil prices and service costs, which could lead to a shift back to maintenance mode if conditions deteriorate.

5Notable Q&A Insights

M&A Landscape: The company remains focused on smaller, high-quality acquisitions rather than larger, competitive packages, maintaining discipline in purchase prices to ensure targeted returns.

Operational Adjustments: The introduction of water-based mud is aimed at cost savings rather than reducing drill times; slim-hole designs are expected to enhance efficiency.

Future Capital Allocation: The company plans to continue prioritizing dividends while maintaining a strong balance sheet and pursuing accretive acquisitions.

Emerging Bench Development: Positive results from new drilling in the Avalon and deeper Wolfcamp zones, though the company remains cautious about new benches like Woodford and Brushy. Overall, Permian Resources reported strong financial performance and operational efficiency in Q2 2026, with a clear strategy to enhance shareholder value through disciplined capital allocation and strategic acquisitions, while navigating challenges in the volatile natural gas market.