Permian Resources — Q3 2026 Earnings Summary

Financial Performance:

• Reported net revenues of $1.958 billion for the quarter ended September 30, 2026, compared to $1.322 billion in the same period in 2025.
• Net income attributable to Class A Common Stock was $420.2 million for the quarter, compared to $59.2 million in Q3 2025.
• Adjusted free cash flow was $846 million for the quarter, compared to $469 million in Q3 2025.
• Cash provided by operating activities was $1,255 million for the quarter.
• Cash capital expenditures were $518 million for the quarter.
• Total controllable cash costs (LOE, GP&T, and cash G&A) were $7.05 per Boe, the lowest in company history, down from $7.93 per Boe in Q2 2026 (implied by $5.11 LOE + $1.21 GP&T + $0.73 G&A).
• Lease operating expenses (LOE) decreased 8% quarter-over-quarter to $5.11 per Boe.
• Cash general and administrative expenses decreased 16% quarter-over-quarter to $0.73 per Boe.
• Leverage (Net Debt-to-LQA EBITDAX) was approximately 0.5x as of September 30, 2026.
• Long-term debt, net was $2.653 billion as of September 30, 2026, down from $3.546 billion as of December 31, 2025.
• Redeemed $325 million in principal of legacy Earthstone 9.875% Senior Notes due 2031 during the quarter, reducing annual cash interest expense by approximately $75 million.

Guidance and Future Outlook:

• Raised mid-point of full-year 2026 oil production guidance to 202.5 MBbls/d, an increase of 13.5 MBbls/d from the initial February guidance.
• Updated full-year 2026 cash capital expenditures guidance to a range of $1.975 billion to $2.075 billion (mid-point $2.025 billion).
• Expects oil production to exceed 210 MBbls/d in the fourth quarter of 2026.
• Projects less than 0.5x leverage at year-end 2026.
• Anticipates generating an incremental $300 million of free cash flow for the full year 2026 compared to the original February plan, normalized for commodity prices.
• Updated full-year 2026 net average daily production guidance to 415,000–445,000 Boe/d.
• Updated full-year 2026 total controllable cash costs guidance to $7.15–$8.15 per Boe.

Business Segments and Product Lines:

• Average daily oil production increased 5% quarter-over-quarter to 208,029 Bbls/d.
• Average daily NGL production increased 37% quarter-over-quarter to 118,312 Bbls/d.
• Average daily natural gas production increased 42% quarter-over-quarter to 787,125 Mcf/d.
• Total production increased 22% quarter-over-quarter to 457,528 Boe/d.
• Realized oil price was $85.73 per barrel; NGL price was $24.22 per barrel; natural gas price was $0.74 per Mcf.
• Natural gas revenue increased $141 million quarter-over-quarter to $53 million.
• NGL revenue increased $81 million quarter-over-quarter to $264 million.
• Drilling team achieved a record average of over 2,700 feet per day.
• Deployed an AI-powered artificial lift monitoring system to optimize well performance.
• Testing surfactant and chemical deployment to improve recoveries.

Market and Competitive Landscape:

• Permian Resources is the second largest Permian Basin pure-play E&P with approximately 560,000 net acres.
• Executed approximately 175 acquisitions totaling ~24,000 net acres, ~9,000 NRAs, and ~200 net 10,000' locations in the core of the New Mexico Delaware Basin for ~$1.15 billion.
• Acquired Ridge Runner Resources II, LLC and its affiliated royalty company for an initial cash consideration of approximately $1.025 billion.
• Ridge Runner transaction included potential contingent cash payments of up to $125 million based on WTI prices in 2027 and 2028.
• Increased working interest in acquired assets to 80% 8/8ths net revenue interest.
• Placed high-GOR wells back online that were curtailed in Q2 due to negative regional natural gas prices.
• Enhanced natural gas pricing by increasing volumes priced at Gulf Coast and DFW markets through new firm transportation agreements.

Risks and Challenges:

• Commodity price volatility (oil, NGL, natural gas) and potential prolonged low price periods.
• Political and economic conditions in producing regions including the Middle East, Russia, and Eastern Europe.
• Uncertainty in estimating reserves and projecting future production rates.
• Midstream capacity constraints and potential interruptions in production.
• Environmental, health, and safety regulations and liabilities.
• Cybersecurity risks and data privacy breaches.
• Changes in tax laws and interpretations.
• Competition for assets, materials, people, and capital.

Management Commentary and Tone:

• Co-CEO Will Hickey described the quarter as "outstanding" with continued execution, noting record low total controllable cash costs per Boe.
• Co-CEO James Walter highlighted the team's ability to react quickly to higher commodity prices and grow production while maintaining cost discipline.
• Management emphasized a focus on "rapid payback initiatives" such as increasing working interest, accelerating workover activity, and reducing cycle times.
• Tone was confident regarding the ability to generate incremental free cash flow and the success of the acquisition strategy.

Other Key Points:

• Declared a quarterly base dividend of $0.16 per share for Q4 2026, payable December 31, 2026.
• The Ridge Runner bolt-on was producing approximately 6 MBbls/d of oil at closing on October 30, 2026, and is expected to contribute approximately 4 MBbls/d in Q4 2026.
• The Ridge Runner transaction was funded with cash on hand and the issuance of commercial paper.
• The company maintains a flat organizational structure to rapidly deploy improvements.
• Integrated proprietary technical and subsurface data with large language models to improve development strategy and drilling parameters.
• Net cash provided by operating activities for the nine months ended September 30, 2026, was $3.575 billion.
• Net cash used in investing activities for the nine months ended September 30, 2026, was $2.725 billion.
• Net cash used in financing activities for the nine months ended September 30, 2026, was $908.8 million.