Permian Resources 2025 Q1 Earnings Strong Growth as Net Income Rises 70.1%

Permian Resources (PR) reported its fiscal 2025 Q1 earnings on May 7th, 2025. The company posted significant growth in both revenue and net income, with results surpassing previous year's figures. The total revenue increased by 10.7% to $1.38 billion, while net income reached $390.56 million, marking a 70.1% increase. The earnings per share (EPS) saw a substantial rise of 74.1%. The firm’s performance met market expectations, and the guidance for the rest of 2025 remains in line with previous forecasts.

Revenue

Permian Resources reported a total revenue increase to $1.38 billion for Q1 2025, up from $1.24 billion in Q1 2024. The revenue was driven by oil sales amounting to $1.11 billion, complemented by natural gas sales of $81.66 million and NGL sales of $185.02 million. Overall, the oil and gas sales collectively contributed to the total revenue growth.

Earnings/Net Income

Permian Resources experienced a notable rise in its earnings per share (EPS), which increased by 74.1% to $0.47 in Q1 2025 from $0.27 in Q1 2024. This growth is indicative of the company's strong earnings performance during the quarter. The net income also surged by 70.1%, reaching $390.56 million, the highest fiscal Q1 net income in a decade. The EPS growth indicates a strong financial performance.

Price Action

The stock price of Permian Resources experienced a minor decline of 0.34% during the latest trading day but showed resilience with a 0.76% increase over the past week. Month-to-date, the stock has witnessed a significant rise of 10.60%, reflecting market confidence in the company's recent performance.

Post-Earnings Price Action Review

The investment strategy of acquiring Permian Resources shares post-revenue release and holding them for 30 days has historically provided a 28.36% return over the past five years. Despite slightly underperforming the benchmark's 37.10% return, this strategy maintained a reasonable risk-adjusted return with a Sharpe ratio of 0.70. The maximum drawdown was -22.44%, with a volatility of 14.12%. These metrics suggest that while the strategy is sound, it carries moderate risk and variability. However, the consistency of returns indicates a stable investment opportunity, albeit with some market fluctuations.

CEO Commentary

Permian Resources delivered an outstanding quarter, characterized by strong operational performance and reduced costs, as noted by Will Hickey, Co-CEO. The company achieved a 4% reduction in controllable cash costs per Boe and decreased drilling and completion costs to $750 per foot, contributing to record adjusted free cash flow of $460 million. James Walter, Co-CEO, emphasized the strategic decision to lower the capital expenditure budget mid-point by $50 million while maintaining full-year production guidance, reflecting the high-quality nature of their asset base. Both CEOs expressed optimism about delivering robust free cash flow at lower oil prices, underpinned by high-return inventory and improved business fundamentals.

Guidance

Permian Resources expects to maintain similar free cash flow generation at $60 per barrel WTI for the remainder of 2025, comparable to 2024's performance at $75 per barrel. The company guides a full-year capital budget of $1.95 billion, reduced by $50 million, while sustaining its production guidance. Additionally, management anticipates maintaining a leverage ratio below 1x net debt-to-EBITDAX and over $3 billion in liquidity by year-end 2025, demonstrating a solid financial position.

Additional News

Permian Resources recently announced a strategic bolt-on acquisition in the Northern Delaware Basin, acquiring 13,320 net acres and 8,700 net royalty acres for $608 million. This acquisition aims to enhance the company's asset base with low decline production expected in the second half of 2025. The acquisition is positioned to provide significant returns with a high net revenue interest and low breakeven costs, further strengthening Permian Resources' portfolio. In addition, the company declared a quarterly cash dividend of $0.15 per share, reflecting a commitment to returning value to shareholders. The company also reported the repurchase of 4.1 million shares, signaling confidence in its ongoing strategic initiatives.