Permian Resources eyes 8% annual production growth on flat capex
Permian Resources Corp., Midland, plans to boost average production in 2025 to 360,000-380,000 boe/d, 8% higher than its 2024 average but only marginally above the company’s fourth-quarter output.
Co-chief executive officers Will Hickey and James Walter are forecasting teams will this year turn in line about 285 wells, up from 275 last year, and Hickey said the company’s development plans will be “shockingly similar” in terms of geography and zones as teams build on the acquisitions Permian completed last year in its core Delaware basin area of operations.
Permian Resources’s leaders expect the average lateral lengths of new wells to be about 10,000 ft versus 9,300 in 2024. But, driven by continued efficiency gains, capital spending will be in line with last year’s roughly $2 billion (OGJ Online, Nov. 7, 2024). Four-fifths of that figure will go to drilling and completion work, the remainder to facilities, infrastructure, and other projects.
Well costs for fourth-quarter 2024 totaled $775 per lateral foot, down from $800 in the previous 3 months and $950 at end-2023. Executives are forecasting that number to fall to $750 this year but, on a Feb. 26 conference call with analysts, Hickey said further improvements will become tougher to realize. Given the prospect of tariffs on steel and aluminum products as well as some other costs pressures, he said the prospect of more gains is “not quite as clear as it was 3 months ago.”
In terms of 2025 activity, the oeprator's New Mexico assets will receive about 65% of capital while those on the Texas side of the Delaware basin will get 30%. The remaining 5% will go to the company’s Midland basin operations.
Permian Resources generated a net profit of nearly $217 million in the fourth-quarter 2024, down from $255 million in the same period a year earlier. Revenues rose 15% to $1.3 billion and operating income climbed to $425 million from $362 million but higher interest expense and a net loss on derivatives (versus a $190 million gain in late 2023) cut into the bottom line.
Shares of Permian Resources (Ticker: PR) were changing hands up more than 3% to $14.12 in midday trading Feb. 26. Over the past 6 months, they have slipped about 3%, leaving the company’s market capitalization at about $11.3 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.
