stockrowWhat it does
Permian Resources is an independent oil and natural gas producer. It acquires acreage, drills and completes wells, and sells the oil, natural gas liquids and natural gas those wells produce. Its assets are in the Permian Basin, concentrated in the Delaware Basin of West Texas and New Mexico. William M. Hickey III and James H. Walter are co-chief executive officers.
The company holds leasehold interests that give it working interests in wells, as well as royalty interests. A working interest represents a share of a well’s operations and production; a royalty interest gives its holder an interest in production without being the well operator. Permian Resources operates many of its wells and also owns interests in wells operated by others.
Its wells are primarily oil wells that also produce liquids-rich natural gas. The company markets most production from the properties it operates, both for itself and for other working-interest owners. It generally sells to a relatively small number of purchasers at prevailing market prices, sometimes adjusted for contractual differences.
Permian Resources also buys properties and additional interests near its existing operations. It uses horizontal drilling to develop multiple stacked shale formations beneath the same surface acreage. Developing reserves requires spending on drilling and completing wells, while the company’s production from existing wells normally declines over time.
How it makes money
Permian Resources earns revenue primarily by producing and selling oil, natural gas liquids, or NGLs, and natural gas. Revenue depends on the volumes sold and the prices the company realizes. Oil sales were $4.3 billion in FY2025 and represented 83.9% of revenue. NGL sales were $658.5 million, while natural gas sales were $131.7 million.
Total net production was 143,311 MBoe in 2025; total production averaged 458,000 BOE per day in Q3 2026. Oil and gas producers use barrels of oil equivalent, or BOE, to express oil, NGL and gas production in a common unit. Permian Resources converts natural gas to oil equivalent at a ratio of six Mcf of natural gas to one Boe.
The company generally sells its production at prevailing market prices, adjusted in some cases by contract. Most revenue contracts have terms longer than twelve months, but the amounts earned still vary with production and commodity prices. In 2025, oil production rose as wells were brought online or acquired, partly offset by normal declines from existing wells. Lower realized oil and NGL prices partly offset the effect of higher production on revenue.
The company has also changed where it delivers gas. In Q3 2026, it began delivering through Hugh Brinson, bringing the share of its gas volumes priced to Gulf Coast and DFW markets to approximately 80%. Its contracts preserve some flexibility to shift sales back to Waha if that market becomes more favorable.
| Product or service | Revenue, FY2025 | Share | Change on the year |
|---|---|---|---|
| Oil sales | $4.3 billion | 83.9% | −2.56% |
| NGL sales | $658.5 million | 13.0% | 3.29% |
| Natural gas sales | $131.7 million | 2.60% | 54,759.6% |
| Oil and Gas, Purchased | $23.8 million | 0.47% | — |
Customers and how it sells
Permian Resources sells production to a relatively small number of purchasers. Enterprise Crude Oil, LLC accounted for 34.0% of FY2025 revenue. The company says losing a major purchaser could materially affect revenue in the near term, although it believes the established markets and availability of other purchasers would prevent a material adverse effect on its financial condition or results of operations.
The company’s acreage is concentrated in the Delaware Basin in West Texas and New Mexico. As of December 31, 2025, it had approximately 480,000 net leasehold acres and over 105,000 net royalty acres. Approximately 67% of its net leasehold acreage was in Texas and the remaining 33% in New Mexico.
Most oil production is sold at the wellhead as it enters third-party gathering pipelines. The purchaser then transports it by pipeline or truck to a tank farm, another pipeline or a refinery. Natural gas moves through gathering lines to a central delivery point and processing facility, or is gathered by a third party directly from the wellhead.
Permian Resources markets most production from operated properties for itself and the other working-interest owners. Its gas contracts also allow some sales to move back to Waha if market conditions favor that location.
Suppliers and costs
Permian Resources relies on oilfield goods and services for drilling, completion and production, and on third-party gathering and transportation infrastructure to move its output. Its costs include lease operating expenses, severance and property taxes, gathering, processing and transportation, and drilling and development spending.
The company spent $1.97 billion on its developmental drilling and completion program in 2025, placing 190.7 net developmental wells on production. Lease operating expenses were $5.26 per Boe in 2025. Lower water disposal rates and wellhead chemical costs helped reduce that per-unit rate from the prior year, although total lease operating expenses rose with a higher well count.
Oilfield goods and service costs tend to move with commodity prices, and inflation can increase spending on goods, services and personnel. Permian Resources has identified diesel and casing as cost headwinds. It is also installing more microgrids in New Mexico to lower power costs where its operations are not connected to the grid.
Federal, state and local rules govern activities including well permits, water sourcing and disposal, and well abandonment. Compliance adds to the cost of doing business, while future compliance costs are uncertain.
- Revenue$5.1B
- Cost of revenue−$1.3B
- Research and development−$32.0M
- Selling, general and administrative−$186.5M
- Other operating costs−$2.0B
- Operating income$1.5B
Competitive position
Permian Resources competes with integrated oil companies and other independent producers in exploring for, developing and operating properties, as well as transporting and marketing production. It also faces indirect competition from alternative energy sources. No specific competitors are named.
The company’s ability to acquire prospects and develop reserves depends on evaluating properties and completing transactions in a competitive market. Competitors may respond differently to price changes, political conditions, weather and the proximity or capacity of transportation infrastructure. Permian Resources says larger transactions can involve competition, while many smaller transactions are negotiated directly with sellers.
The company’s assets include large, contiguous acreage blocks, and it uses horizontal drilling to reach multiple formations beneath the same surface acreage. It also operates a high percentage of its acreage, giving it control over the amount and timing of much of its capital spending.
Our reading: Contiguous acreage and operational control provide a meaningful local development advantage, but their durability depends on well results and the cost of replacing inventory. Our reading: Technical knowledge and relationships may help the company assess neighboring acquisitions, but competitive bidding and commodity prices limit how reliably those advantages translate into returns.
Growth opportunities
Permian Resources seeks to grow through drilling and completing wells, improving existing production and acquiring additional properties or working interests. In 2025, its development program placed 190.7 net developmental wells on production. It also acquired approximately 13,000 net leasehold acres from Apache Corporation, predominantly next to its existing New Mexico position, and completed other property acquisitions.
In Q3 2026, the company reported approximately 175 transactions adding 24,000 net acres, 9,000 net royalty acres and 13,000 BOE per day of production. Its announced acquisitions included Ridge Runner Resources for just over $1 billion, alongside smaller transactions. Ridge Runner closed on October 30, 2026. Permian Resources says the combined acquisitions will add over 200 net locations that can compete for capital within its portfolio.
The company is also working to improve production from existing wells through workovers and monitoring equipment. It is testing surfactant treatments, but says results have varied and it is still assessing whether they increase ultimate recoveries or accelerate production that would otherwise occur later.
For full-year 2026, Permian Resources increased its oil production guidance midpoint to 202,000 barrels per day and updated its cash capital expenditure midpoint to $2.025 billion. It expects Q4 oil production of more than 210,000 barrels per day, including approximately 4,000 barrels per day from Ridge Runner.
- $1.0BFY2021
- $2.1BFY2022
- $3.1BFY2023
- $5.0BFY2024
- $5.1BFY2025
Structural risks
- Commodity prices: Oil, NGL and natural gas prices are volatile. Sustained low prices could reduce cash flow, impair property values and make it harder to finance planned capital spending. Permian Basin gas prices have also been affected by pipeline constraints and maintenance.
- Capital and production: Development and acquisitions require substantial capital. Existing wells experience normal production declines, and the company’s access to cash and financing depends in part on commodity prices, production and reserves.
- Reserve estimates: Reserve estimates depend on assumptions that may prove inaccurate. Estimates for undeveloped locations are less precise than those for producing properties and can change as new information becomes available.
- Operations and infrastructure: Drilling and completion face equipment failures, accidents, shortages and geological difficulties. Gathering or transportation facilities may be unavailable or delayed. Firm delivery agreements can also result in under-delivery fees.
- Regulation and environment: The company must comply with rules covering drilling, water disposal, emissions and worker safety. Noncompliance can lead to penalties, corrective obligations or restrictions, and future compliance costs are uncertain.
- Customer concentration: Enterprise Crude Oil, LLC accounted for 34.0% of FY2025 revenue. The loss of a major purchaser could materially affect revenue in the near term.
Bottom line
Our reading
Permian Resources is an oil-led producer whose business rests on developing Delaware Basin acreage and replacing declining production through drilling and acquisitions. Its operated position gives it spending flexibility, but returns remain exposed to commodity prices, capital needs and the performance of new wells (item1; item7). More gas sold into downstream markets provides another outlet, while customer concentration and transportation constraints remain relevant exposures (item1; call_prepared).