Permian Resources Raises 2026 Oil Target as Q3 Free Cash Flow Reaches $846 Million

Permian Resources Corp. (NYSE: PR) increased its 2026 oil-production target after third-quarter output rose and lower operating costs helped lift adjusted free cash flow to $845.6 million. The Delaware Basin producer now expects full-year oil production of 201,000 to 204,000 barrels per day, with a midpoint of 202,500 barrels per day, 7% above its initial February guidance.

The company reported average third-quarter production of 457,500 barrels of oil equivalent per day, including 208,000 barrels of oil, 118,300 barrels of natural gas liquids and 787.1 million cubic feet of natural gas. Oil production increased 5% from the second quarter, supported by new-well and base-production performance, higher working interests, increased workover activity and the Ward County bolt-on acquisition.

Total oil and gas revenue was $1.96 billion. GAAP net income attributable to Class A common stock was $420.2 million, or $0.49 per diluted share, while adjusted net income was $596.5 million, or $0.69 per adjusted diluted share. Adjusted EBITDAX totaled $1.43 billion.

Net cash provided by operating activities reached $1.25 billion. Adjusted operating cash flow was $1.36 billion, and cash capital expenditures were $518.3 million, resulting in adjusted free cash flow of $845.6 million, or $0.98 per diluted share. That compared with $751 million, or $0.88 per share, in the second quarter and $468.8 million a year earlier.

Production Gains Offset Lower Oil Pricing

Permian Resources’ higher production helped support cash generation even as its realized oil price declined to $85.73 per barrel from $97.81 in the second quarter. The realized NGL price increased to $24.22 per barrel from $23.28.

Natural gas production rose more than 40% sequentially after improved Waha pricing allowed the company to return all of its high gas-to-oil-ratio wells to production. Benchmark Waha pricing averaged $1.74 per Mcf in the third quarter, compared with negative $3.14 in the preceding period. The company also began moving more gas to Gulf Coast and Dallas-Fort Worth markets under new firm transportation agreements.

As a result, unhedged natural gas revenue exceeded $50 million, compared with a loss of about $90 million in the second quarter. The realized natural gas price was $0.74 per Mcf before hedging and $1.12 including hedges. Permian Resources said it will have more than 700 MMcf per day of firm transportation capacity to Gulf Coast and Dallas-Fort Worth markets beginning in 2027, allowing most of its gas to be priced at those hubs.

Cost control also contributed to the quarter’s cash-flow performance. Controllable cash costs fell to a company-record $7.05 per Boe. Lease operating expense declined to $5.11 per Boe from $5.55 in the second quarter, while cash general and administrative expense fell to $0.73 per Boe from $0.87. The company said drilling and completion efficiency gains largely offset inflation in diesel and steel costs.

Acquisitions Expand New Mexico Position

Permian Resources highlighted approximately 175 transactions involving about 24,000 net acres, 9,000 net royalty acres and 13,000 Boe per day of production in the New Mexico Delaware Basin. Combined cash consideration was about $1.15 billion.

The total included the $1.025 billion acquisition of Ridge Runner Resources II and an affiliated royalty company, which closed Oct. 30 and therefore contributed no production to the third quarter. Ridge Runner was producing about 13,000 Boe per day, approximately 45% oil, at closing. The acquired assets add roughly 200 net 10,000-foot drilling locations, according to the presentation.

The acquisition carries potential contingent payments of as much as $125 million based on quarterly WTI prices during 2027 and 2028. Permian Resources funded the acquisitions with cash on hand and commercial paper. Management expects year-end net debt-to-EBITDAX leverage to remain below 0.5 times, assuming strip pricing and no additional acquisitions or shareholder returns beyond the base dividend.

At Sept. 30, the company had $95 million of cash and cash equivalents, $3.09 billion of total debt and approximately $3.00 billion of net debt. Net debt-to-last-quarter annualized EBITDAX was 0.5 times.

2026 Production and Spending Outlook

Permian Resources expects full-year total production of 415,000 to 445,000 Boe per day and oil production of 201,000 to 204,000 barrels per day. The oil-production midpoint of 202,500 barrels per day is 13,500 barrels per day above the company’s initial February outlook and implies annual growth of about 11%.

The company updated its 2026 cash capital expenditure range to $1.975 billion to $2.075 billion, with a midpoint of $2.025 billion. The revised plan includes about $20 million associated with Ridge Runner, as well as spending tied to higher working interests and increased workover activity. Fourth-quarter oil production is expected to exceed 210,000 barrels per day, including about 4,000 barrels per day from Ridge Runner, while capital spending is expected to remain near the third-quarter level.

Management estimates that the current operating plan will generate about $300 million, or roughly $0.35 per share, of additional 2026 free cash flow compared with its original February plan when normalized for current commodity prices. Permian Resources also expects controllable cash costs to finish near the low end of its $7.15-to-$8.15-per-Boe guidance range.

The outlook remains exposed to commodity-price volatility, inflation, equipment and service availability, regulatory changes, operating and environmental risks, and uncertainty in production and reserve estimates. The company’s expected cash flow, leverage and acquisition economics also depend partly on future oil and natural gas prices, while the Ridge Runner transaction may require additional payments if WTI exceeds specified thresholds.