PR

Permian Resources is a pure-play, low-cost Delaware Basin oil producer that has compounded impressively — revenue rose from $1.03B in FY2021 to $5.07B in FY2025, with the business now throwing off $3.61B of operating cash flow (up 5.7%). The balance sheet has strengthened markedly: long-term debt fell 15.3% to $3.55B, equity grew 12.5% to $10.3B, and liabilities-to-equity sits at a comfortable 0.62x. At $18.43 the stock trades at just 14.4x EPS of $1.28 and 1.0x sales, an undemanding multiple for an operator generating an 18.5% net margin and 28.9% operating margins.

The FY2025 results show the commodity cycle biting, however. Despite a 1.3% revenue uptick (helped by the $608M Apache bolt-on of ~13,000 net acres in core New Mexico), net income fell 5.0% to $935M, operating income dropped 16.2%, and EPS declined 11.7% — the direct result of WTI sliding from the high-$70s to $59.13/Bbl by Q4 2025 as OPEC supply pressured prices. Management is candid that lower prices could trigger property impairments and borrowing-base redeterminations. Permian (Waha) natural gas realizations were especially weak, at times negative, due to pipeline capacity constraints.