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Permian Resources tops estimates on record free cash flow

The Midland, Texas producer reported Q2 revenue of $1.86 billion and adjusted EPS of 69 cents, and it boosted full-year oil production guidance while cutting debt and redeeming notes.

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Permian Resources delivered a blowout earnings report and beat Wall Street expectations, with results supported by higher oil prices, according to MarketBeat Ratings. For the three months, revenue rose to $1.86 billion versus a $1.66 billion estimate, while net income jumped to $792.5 million from $245 million a year earlier.

Adjusted earnings per share came in at 69 cents versus a consensus of 59 cents. Management said much of the improvement reflected an average oil sale price of $97.81 per barrel, up from $62.71 a year earlier, and production averaging 198,100 barrels per day, up 3% sequentially and about 12% year over year.

In its latest update, Permian raised the midpoint of its full-year oil production guidance to 199,000 barrels per day, with capital expenditures’ midpoint at $1.95 billion. The company also posted adjusted free cash flow of $751 million, about 50% higher than the prior quarter, and reported cash capital expenditures of $521 million.

Permian used cash to reduce leverage and interest costs, redeeming $550 million of legacy 8% notes and $325 million of 9.875% notes assumed in its 2023 Earthstone Energy merger. The company said the debt actions are expected to cut annual cash interest expense by about $75 million, bringing debt down roughly 35% since the end of 2024 to $2.7 billion from $4.2 billion, while also declaring a third-quarter dividend of 16 cents per share.

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