Permian Resources (NYSE:PR) reported record fourth-quarter operational performance and outlined a 2026 plan that management said is designed to continue growing free cash flow per share through disciplined capital allocation and a low-cost Delaware Basin development program.
Record fourth-quarter execution caps 2025 results
Co-CEO Will Hickey said the company “set records across every key operational metric in Q4,” including highest oil production, lowest drilling and completion (D&C) cost per foot, and lowest controllable cash costs in company history.
- Oil production: 188.6 thousand barrels per day
- Total production: 401.5 thousand barrels of oil equivalent (BOE) per day
- D&C cost per foot: $700
- Cash CapEx: $481 million for the quarter; $1.97 billion for the year
- LOE: $5.26 per BOE
- Cash G&A: $0.80 per BOE
- GP&T: $1.18 per BOE
- Adjusted operating cash flow: $884 million
- Adjusted free cash flow: $403 million
Hickey also highlighted 2025 free cash flow per share of $1.94, up 18% year-over-year, alongside what he described as “meaningful debt reduction.” He said the company reduced debt by over $600 million during the year.
Dividend increase and “repeatable” operating model
Management announced an increase to the quarterly base dividend to $0.16 per share, a 7% increase. Hickey said that since inception in 2022, the company has grown its quarterly base dividend at a 40% CAGR.
In discussing 2025 execution, Hickey said the company delivered 5% higher oil production than its original 2025 guidance, including contributions from bolt-on acquisitions. He attributed improvements to both base business performance and structural cost reductions, citing year-over-year gains in drilling feet per day and completion efficiencies, as well as a 3% reduction in LOE per BOE linked to initiatives such as microgrid projects and runtime improvements.
Gas marketing: reducing Waha exposure
Hickey said the company has been working to improve gas realizations by reducing exposure to Waha pricing, building on midstream and marketing efforts initiated in 2024 and expanded in 2025. Based on agreements executed, Permian Resources expects to sell approximately 400 million cubic feet per day out of the basin in 2026, rising to roughly 700 million cubic feet per day in 2027 and beyond.
Management said these changes, combined with the hedge position, are expected to reduce Waha exposure to roughly 10% of total gas volumes in 2026 and improve unhedged gas realizations. Hickey said that while 2025 gas realizations were expected to be about a $0.40 discount versus Waha, the company now expects to realize a $0.50 premium to Waha “this year,” in reference to the updated outlook discussed on the call.
In the Q&A, management said it expects a potentially “bumpy road” for Waha over 2026, but indicated conditions could improve into 2027 as pipeline takeaway capacity expands, assuming no unexpected step-change in Permian gas growth. CFO Guy Oliphint later noted that in 2027 the company expects most exposure to be tied to non-Waha benchmarks such as HSC or DFW.
M&A strategy and inventory additions
Co-CEO James Walter highlighted continued acquisition activity, saying the company closed about 140 transactions totaling $240 million during the fourth quarter, adding 7,700 net acres, 1,300 net royalty acres, and roughly 70 net locations.
For full-year 2025, Walter said Permian Resources completed approximately $1.1 billion of acquisitions, adding about 250 locations and 13,000 BOE per day within existing operating areas. He described the program as including a large asset deal from Apache in New Mexico, several medium-sized bolt-ons, and a “ground game” of more than 675 smaller transactions. Walter also said the company added another 200 locations through organic inventory expansion.
In response to analyst questions about pricing and competition, Walter said many ground-game and bolt-on deals are “one-off negotiated deals” sourced through long-standing relationships, and that the company has generally focused on inventory-weighted deals rather than production-heavy, high-decline assets. Management also said federal lease sales can be highly competitive and, historically, often more expensive than the types of acquisitions the company prefers, though it has participated selectively when it has a perceived edge.
2026 guidance: higher production with lower CapEx
Walter laid out a 2026 plan that targets increased production with lower spending. For full-year 2026, the company expects:
- Total production: 415,000 BOE per day (average)
- Oil production: 189,000 barrels per day (average)
- CapEx: $1.85 billion, including about $400 million of non-D&C spend
Walter said the plan implies 2026 production about 5% higher than 2025 while reducing CapEx by $120 million. Activity is expected to remain concentrated in the Delaware Basin, with New Mexico representing about 65% of activity and Texas about 30%, with well mix and working interest expected to be similar to last year.
On costs, management said it expects 2026 D&C costs of $675 per foot, which Walter described as roughly 20% cheaper than 2024. During Q&A, management said further cost improvement opportunities are likely on the drilling side, pointing to faster drilling times observed in the Midland Basin as a benchmark. Walter also said the company’s 2026 well productivity is expected to be in line or “slightly better” than 2024 and 2025, emphasizing a consistent development approach across benches within the Delaware Basin.
On capital allocation, management said the base dividend is a priority, with additional free cash flow potentially directed to accretive acquisitions, balance sheet strength (including debt paydown and cash accumulation), and opportunistic share repurchases when dislocations arise.
Additional updates included management’s view that 2026 production should be “flat throughout the year,” with no expected first-quarter dip tied to storms, and that the company does not expect to become a full cash taxpayer until 2028 or beyond, based on current expectations discussed on the call.
About Permian Resources (NYSE:PR)
Permian Resources (NYSE: PR) is an independent exploration and production company focused on the acquisition, development and optimization of oil and natural gas assets in the Permian Basin. The company’s operations encompass all phases of upstream activity, including geological and geophysical analysis, drilling, completion and production. By employing horizontal drilling and hydraulic fracturing technologies, Permian Resources aims to efficiently unlock hydrocarbon reserves and deliver consistent production growth.
Headquartered in Oklahoma City, Permian Resources concentrates its asset portfolio in the Delaware and Midland sub-basins of West Texas and southeastern New Mexico.
