Field efficiencies drive Permian Resources guidance increase
Permian Resources Corp., Midland, has nudged up its production guidance as recent acquisitions and greater well efficiencies boosted third-quarter output.
The Permian Resources team averaged a little more than 347,000 boe/d of total production and oil production was 160,801 b/d during the third quarter. Those numbers were up about 2% and 5%, respectively, from the second quarter and were helped a little bit by the $818 million acquisition in September of some Delaware basin assets from Occidental Petroleum Corp. (OGJ Online, July 29, 2024). The company now controls roughly 450,000 net acres in New Mexico and West Texas.
Refinements in the field are playing a bigger part in those steady production increases: Co-chief executive officers Will Hickey and James Walter say the company’s drilling and completion costs fell to about $800 per lateral foot in the third quarter, down from $30 in the second quarter and an average of $950 for all of 2023. Similarly, the average window from the time a well is spudded to when it comes online has fallen to 13 days from roughly 16 last year.
For the full year, Hickey and Walter now expect Permian Resources to average about 341,000 boe/d (158,500 b/d oil) with capital spending steady at $1.9-2.1 billion. The expected number of wells turned in line is now 270, up from the previous forecast of 265.
In addition to the recent Occidental deal, Permian Resources last year acquired Earthstone Energy Inc. in a deal worth about $4.5 billion (OGJ Online, Aug. 21, 2023). But future deals are likely to be smaller and focused on filling out the company’s Delaware footprint with the aim of making Permian Resources’ core operations better.
“With the quality of the business that we’ve got today, I’d say that raises the bar really, really high,” Walter said. “A lot of the deals that are out there and all the deals we’ve looked at lately just don’t achieve our return hurdles and don’t make our business better.”
During the third quarter, Permian Resources produced a net profit of more than $456 million, an increase from roughly $98 million in the same period in 2023. Operating income rose to $395 million from $307 million. A large change from last year’s results came in the form of a gain on derivatives. Revenues rose to nearly $1.22 billion from $759 million in the prior-year quarter.
Shares of Permian Resources (Ticker: PR) were up 3% to about $15 in midday trading Nov. 7. They are, however, still down about 6% from 6 months ago, a move that has trimmed the company’s market capitalization to about $12.1 billion.
Geert De Lombaerde | Senior Editor
A native of Belgium, Geert De Lombaerde has more than two decades of business journalism experience and writes about markets and economic trends for Endeavor Business Media publications Healthcare Innovation, IndustryWeek, FleetOwner, Oil & Gas Journal and T&D World. With a degree in journalism from the University of Missouri, he began his reporting career at the Business Courier in Cincinnati and later was managing editor and editor of the Nashville Business Journal. Most recently, he oversaw the online and print products of the Nashville Post and reported primarily on Middle Tennessee’s finance sector as well as many of its publicly traded companies.