Permian Resources (NYSE:PR) reported record second-quarter free cash flow of $751 million, or $0.88 per share, as higher oil production, increased working interests in completed wells and a rapid response to commodity-price movements supported results.
Co-Chief Executive Officer Will Hickey said free cash flow increased nearly 50% from the prior quarter and exceeded the company’s total free cash flow generated during 2023. He said the company expects full-year 2026 free cash flow to be nearly double its 2024 result.
Those factors, along with well performance, drove approximately 6,000 barrels per day of quarter-over-quarter oil growth for cash capital expenditures of $521 million, according to Hickey.
Gas curtailments limited Waha exposure
Permian Resources curtailed natural-gas production from high gas-oil-ratio wells exposed to Waha pricing during the quarter, when Waha natural gas averaged negative $3.14 per Mcf and traded as low as negative $9.52 per Mcf.
The curtailments reduced the company’s natural-gas production by about 20% from the prior quarter. Hickey said firm transportation agreements, hedging and the production curtailments enabled Permian Resources to realize $0.38 per Mcf for its gas during the period, providing more than $75 million of revenue uplift on natural-gas sales.
The company returned all previously curtailed wells to production in late June as Waha pricing improved, Chief Financial Officer Guy Oliphint said. He added that third- and fourth-quarter gas volumes should look more normal and that the company has transportation capacity expected to cover roughly all of its net gas volumes in 2027.
James Walter, co-CEO, said the company has not seen a meaningful change in basin activity due to improved gas egress. However, he said new pipelines coming online appear able to handle restored volumes and incremental growth, while the company feels more confident about crude and natural-gas takeaway capacity over the next several years.
Acquisition program expands Delaware Basin inventory
Permian Resources said it has acquired about 55,000 net acres in the core Delaware Basin year to date through roughly 190 separate transactions, for total consideration of approximately $1.05 billion. The transactions added about 330 high-confidence, high-net-revenue-interest drilling locations, the company said.
The company closed a $520 million acquisition in Ward County covering approximately 2,000 net acres and 5,000 barrels of oil equivalent per day. The acreage is adjacent to its existing position and is fully held by production, Walter said.
Following that acquisition, Permian Resources entered an acreage trade agreement with an offset operator that is expected to close in the third quarter. The trade is designed to address the acquired property’s non-operated, low-working-interest and scattered-acreage characteristics. Walter said it is expected to increase operated net locations from 50 to 120 and extend average lateral lengths by 20%.
The company also assembled an approximately 15,000-net-acre contiguous position in Eddy County, New Mexico, called the Parkway bolt-on project. The acreage has two-mile lateral lengths and an 82.5% net revenue interest, Walter said.
Management characterized the acquisition strategy as focused on off-market and smaller transactions where the company believes it has commercial, technical or operational advantages. Walter said Permian Resources evaluates larger marketed packages as well, but remains disciplined on purchase prices and full-cycle return targets.
Guidance increased as working interests rise
Permian Resources raised its full-year 2026 oil-production guidance to 199,000 barrels per day, representing 10% growth from 2025. Its capital-expenditure midpoint is now $1.95 billion, about 1% below 2025 spending, according to management.
Oliphint said the revised production outlook increased from 192,500 barrels per day after the first quarter. Of the 6,500-barrel-per-day increase, about 1,000 barrels per day reflects the annualized contribution from the Ward County acquisition. Most of the remaining increase comes from higher working interests in 2026 projects, supplemented by accelerated workovers.
Capital guidance increased by $100 million. Oliphint said approximately $25 million relates to Ward County takeover costs, including bringing equipment to the company’s operating standards, while the remainder reflects higher working interests in wells turned in line. He said the increase should not be doubled to estimate an annualized 2027 impact because most of the spending occurred in the second quarter.
At its current $1.95 billion to $2 billion spending range, Oliphint said the company would continue to grow production, while maintenance capital would be below that level. Management said future growth versus maintenance decisions will depend on commodity prices and service costs.
Efficiency work targets costs and recovery
Hickey said Permian Resources is working to offset inflationary pressure from diesel and casing costs through longer laterals, water recycling, water-based mud in areas prone to drilling-fluid losses, slimmer wellbore designs and completion improvements.
The company’s average lateral length has increased to roughly 11,000 feet, and it drilled its first four-mile lateral during the second quarter. Hickey said the company expects lateral lengths to continue rising gradually, rather than through a sharp year-over-year change.
Permian Resources also began surfactant trials in completion and production operations. Hickey said two completion trials have been conducted, with one pad online and another yet to begin production. In late-life production applications, the company has seen results ranging from negligible impact to more than 100 barrels per day of uplift, though management said it is too early to determine the ultimate scale of the program.
The company ended the quarter with leverage of approximately 0.5 times and expects to remain at about that level at year-end. Hickey said the company intends to continue increasing its base dividend over time, while maintaining its existing overall capital-allocation approach.
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.
