Permian Resources (PR) Update - Jan 18

Post Reply
dan_s
Posts: 34465
Joined: Fri Apr 23, 2010 8:22 am

Permian Resources (PR) Update - Jan 18

Post by dan_s »

If PR's Q4 results and guidance for 2023 confirm my forecast model assumptions, my valuation of this stock will be going higher.
Q4 production was ~145,000 Boepd.
------------------------------------------
MIDLAND, Texas, January 17, 2023--(BUSINESS WIRE)--Permian Resources Corporation ("Permian Resources" or the "Company") (NYSE: PR) today announced that it has entered into a series of portfolio management transactions, comprising of a bolt-on acquisition, a divestiture of non-operated production and acreage and a divestiture of a portion of its water infrastructure assets in Reeves County, Texas.

"At Permian Resources, we believe our focus on portfolio management will continue to drive value for our shareholders. The combined transactions high-grade our portfolio, adding 45 top-quartile locations, 4,000 net acres with significant development potential and 3,100 net royalty acres while generating approximately $100 million in net cash proceeds," said James Walter, Co-CEO of Permian Resources.

Acquisition Summary

Permian Resources has entered into a definitive agreement to acquire 4,000 net leasehold acres, 3,300 net royalty acres and 1,100 barrels of oil equivalent per day ("Boe/d") (73% oil) of net production, located predominantly in Lea County, New Mexico from an undisclosed third-party for a total purchase price of $98 million.

This purchase price reflects an acquisition value of approximately $8,000 per net leasehold acre and approximately $7,000 per net royalty acre. The properties’ operated position consists of largely undeveloped acreage and is contiguous to one of the Company’s existing core blocks in Lea County. Permian Resources has identified approximately 45 gross operated two-mile locations from the properties being acquired that immediately compete for capital within the existing portfolio. The acquired properties also include non-operated acreage largely adjacent to and surrounding Permian Resources’ position, which the Company plans to utilize for future acreage trades and other portfolio management transactions.

Non-Operated Divestitures Summary

Permian Resources also announced the divestiture of producing, non-operated properties in Reeves County consisting of approximately 1,800 Boe/d (44% oil) and 3,500 net leasehold acres to an undisclosed third-party for $60 million, reflecting a valuation multiple of greater than 5x 2023 estimated EBITDA. The divested acreage represents the substantial majority of the Company’s non-operated position in Texas and included minimal remaining inventory.

The Company also sold a non-operated position consisting of 300 net leasehold acres in Eddy County, New Mexico for $35,000 per net acre, resulting in approximately $10 million of net proceeds.

Midstream Infrastructure Transactions Summary

The Company signed definitive agreements with an undisclosed third-party that result in Permian Resources divesting a portion of its saltwater disposal wells and associated produced water infrastructure in Reeves County for total consideration of $125 million. The full consideration will be received at closing with $60 million subject to repayment if certain thresholds tied to Permian Resources’ future drilling activity in the service area over the next several years are not met. The Company expects to retain the full consideration based on its current development plan. The counterparty has a strong record of operating midstream assets, and the divested infrastructure has ample additional capacity to service the Company’s future produced water disposal needs. The transaction is expected to close during the first quarter of 2023, subject to regulatory approval.

2023 Preliminary Outlook

The Company is not adjusting its previously announced fourth quarter 2022 and full year 2023 preliminary outlook as a result of these transactions and plans to issue full year 2023 guidance concurrent with its fourth quarter and full year 2022 earnings results. < 2023 production guidance is 150,000 to 165,000 Boepd with production mix of approximately 52% oil, 29% natural gas and 19% NGLs.

About Permian Resources

Headquartered in Midland, Texas, Permian Resources is an independent oil and natural gas company focused on the responsible acquisition, optimization and development of high-return oil and natural gas properties. The Company’s assets and operations are located in the core of the Delaware Basin. For more information, please visit www.permianres.com.
---------------------------------------
This company is large enough to draw a lot of "LOVE" from the Wall Street Gang this year. It reminds me a lot of the early days of Diamondback Energy (FANG).
Dan Steffens
Energy Prospectus Group
Post Reply