Permian Resources (PR) Update - Dec 19

[dan_s]

Note that this is NOT AN INCREASE IN PR's OUTSTANDING COMMON STOCK.

MIDLAND, Texas, December 19, 2023--(BUSINESS WIRE)--Permian Resources Corporation ("Permian Resources" or the "Company") (NYSE: PR) today announced the pricing of an underwritten public offering of an aggregate 39,414,415 shares of its Class A Common Stock, par value $0.0001 per share ("Class A common stock"), by certain affiliates of NGP Energy Capital Management L.L.C., Riverstone Investment Group LLC and EnCap Investments L.P. (the "Selling Stockholders"), resulting in total gross proceeds of approximately $512.4 million. Permian Resources will not sell any shares of Class A common stock in the offering and will not receive any proceeds therefrom.

Concurrently with the closing of the offering, the Company has agreed to purchase (the "Concurrent OpCo Unit Purchase") from certain of the Selling Stockholders an aggregate 2,252,252 common units representing limited liability company interests ("OpCo Units") in Permian Resources Operating, LLC, a Delaware limited liability company and a subsidiary of Permian Resources ("OpCo"), at a price per OpCo Unit equal to the price per share at which the underwriter purchases shares of Class A common stock in the offering and to cancel a corresponding number of shares of the Company’s Class C Common Stock, par value $0.0001 per share, held by such Selling Stockholders. The offering of Class A common stock is not conditioned upon the completion of the Concurrent OpCo Unit Purchase, but the Concurrent OpCo Unit Purchase is conditioned upon the completion of the offering.
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PR closed the highly accretive merger with Earthstone Energy (ESTE) on 11-1-2023, which is the primary reason it has been the top performing stock in our Sweet 16 Growth Portfolio (up 41.7% YTD). PR's current production is approximately 315,000 Boepd and I expect their aggressive 2024 drilling program to push full-year 2024 production up to 325,000 Boepd (~48% crude oil). Most of their 2024 completed wells will be in the Delaware Basin, which is more oil prone. My current valuation of PR is $19.00 per share. It opened this morning at $12.99.

[KGardiner]

Dan, I'm not familiar with this kind of transaction, so I am wondering:

Is PR buying back some of these shares from these private investors?

Thanks
Kevin

[dan_s]

Public companies are required to report "material" stock sales by their shareholders that have been negotiated outside of the public market.

In this case Permian Resources has agreed to purchase from certain of the Selling Stockholders an aggregate 2,252,252 common units representing limited liability company interests ("OpCo Units") in Permian Resources Operating, LLC, a Delaware limited liability company and a subsidiary of Permian Resources. < Basically, PR is buying out the Selling Stockholder's interest in one of PR subsidiaries, which will increase PR's equity in that LLC.

PR is not buying back any of their common stock from the Selling Stockholders.

These transactions have no impact on the outstanding shares.

9 out of 10 times these press releases are "misunderstood" and create buying opportunities. PR is still very under-valued IMO.

[Fraser921]

Didn't PR issue shares to the selling shareholders for the land/business they recently bought, ergo they are cashing out on stock that they already issued. So none issued today, but stock issued in the past.

Anyway, they picked a good day to do it. looks ike it priced at 13 and the price more or less held rising thru the day.

As i mentioned the other day, the missles drones from the Houtis are causing the ships to reroute and it will support crude prices which are up a few bucks 2.35 from Friday

[dan_s]

The merger with Earthstone that closed on 11-1-2023 was a stock for stock deal that added 140,701,000 shares.

The merger pushed PR's production up to over 310,000 Boepd in November from 171,966 Boepd in Q3. December production exit rate should be ~315,000 Boepd and my forecast for 2024 is 325,000 Boepd.