Permian Resources (PR, Financial) reported first-quarter revenue of $1.38 billion, aligning perfectly with market expectations. The company demonstrated robust operational efficiency, marked by a notable reduction in costs. During this quarter, the firm effectively decreased controllable cash costs per barrel of oil equivalent (Boe) by 4% compared to the previous quarter. Additionally, drilling and completion costs were lowered to $750 per foot. These operational improvements were instrumental in achieving a record quarterly adjusted free cash flow of $460 million, underscoring PR's commitment to maintaining its position as a low-cost leader in the industry.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 20 analysts, the average target price for Permian Resources Corp (PR, Financial) is $17.85 with a high estimate of $23.00 and a low estimate of $14.00. The average target implies an upside of 50.13% from the current price of $11.89. More detailed estimate data can be found on the Permian Resources Corp (PR) Forecast page.
Based on the consensus recommendation from 22 brokerage firms, Permian Resources Corp's (PR, Financial) average brokerage recommendation is currently 1.8, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Permian Resources Corp (PR, Financial) in one year is $13.03, suggesting a upside of 9.59% from the current price of $11.89. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Permian Resources Corp (PR) Summary page.
PR Key Business Developments
Release Date: February 26, 2025
- Q4 Oil Production: 171,000 barrels of oil per day.
- Total Q4 Production: 368,000 barrels of oil equivalent per day.
- Q4 CapEx: $504 million.
- Adjusted Operating Cash Flow: $904 million in Q4.
- Adjusted Free Cash Flow: $400 million in Q4.
- Q4 LOE: $5.42 per BOE.
- Cash G&A: $0.93 per BOE in Q4.
- GP&T: $1.49 per BOE in Q4.
- 2024 Free Cash Flow Per Share Growth: Nearly 50% increase compared to 2023.
- 2024 Oil Production Increase: 8% higher than original guidance.
- 2024 Acquisitions: $1.2 billion for 50,000 net acres and 20,000 BOE per day.
- 2025 Expected Total Production: 360,000 to 380,000 BOE per day.
- 2025 Expected Oil Production: 170,000 to 175,000 barrels of oil per day.
- 2025 Capital Program: Approximately $2 billion.
- 2025 Controllable Cash Cost: Approximately $7.75 per BOE.
- 2024 Liquidity Increase: Approximately $1 billion.
- 2024 Leverage: Maintained at 1x.
- 2025 Expected Leverage: Approximately 0.5x.
- 2025 Base Dividend Yield: Over 4%.
- Post-Dividend Free Cash Flow Breakeven: Approximately $40.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Permian Resources Corp (PR, Financial) reported a record quarter in both production and free cash flow per share in Q4 2024.
- The company achieved a nearly 50% increase in free cash flow per share compared to 2023 without increasing leverage.
- PR's 2025 plan is expected to continue generating significant free cash flow per share growth.
- The company executed approximately $1.2 billion of acquisitions in 2024, effectively replacing drilled inventory with high-return assets.
- PR maintained a strong financial position with $3 billion in liquidity, including $500 million in cash, allowing for opportunistic actions in commodity price cycles.
Negative Points
- Despite strong performance, PR's stock trades at a two-turn discount compared to some peers.
- The company faces potential challenges in maintaining low D&C costs due to factors like tariffs and service cost fluctuations.
- PR's gas strategy improvements are expected to materialize more in 2026 and beyond, indicating a delay in optimizing gas netbacks.
- The company anticipates becoming a full cash taxpayer by 2026, which could impact future cash flows.
- PR's focus on smaller M&A deals may limit opportunities for larger scale acquisitions that could enhance scale and inventory duration.
