[PR] Permian Resources Thesis 2026: Delaware Basin Production Cycle Drives Capital Return Acceleration

Key Takeaways

• Permian Resources Corp. (NYSE: PR) FY2025 revenue ~$5.6-6.0B (+15-25% YoY) with adj. EPS ~$1.85-2.20 reflecting continued post-2024 370-400 MBoe/d aggregate production (+15-20% YoY) plus selected continued post-2024 ~600K+ aggregate net acres in Delaware Basin (Texas + New Mexico) plus selected post-September 2024 ~$818M aggregate Occidental Petroleum (NYSE: OXY) Delaware Basin asset acquisition completion under continued Co-CEOs Will Hickey + James Walter since post-September 2022 (~3-year tenure as Co-CEO post-Centennial + Colgate Energy Partners III merger; selected Centennial Resource Development origin co-founder roles + ~15-year industry careers; succeeded post-2022 Centennial Resource Development + Colgate Energy Partners III ~$3.4B aggregate merger creating Permian Resources).
• Delaware Basin production cycle: 370-400 MBoe/d aggregate production FY2025 (+15-20% YoY); selected primary ~600K+ aggregate net acres in Delaware Basin (Texas + New Mexico); selected continued post-2024 ~50%+ oil mix (~190-205 MBbl/d aggregate oil production); selected ~$5-6 per Boe aggregate FY2025 lease operating expenses (LOE); selected continued post-2024 ~$2.0-2.4B aggregate FY2025 capital expenditures (capex; selected various drilling + completion capex); selected continued post-2024 ~12-18 month aggregate Delaware Basin payback period.
• Occidental Delaware Basin acquisition: post-September 2024 ~$818M aggregate Occidental Petroleum Delaware Basin asset acquisition completion (selected acquired ~29.5K aggregate net acres + ~15 MBoe/d aggregate production from Occidental Petroleum); selected continued post-2024 selected various Centennial + Colgate Energy Partners III + selected various Delaware Basin asset consolidation; selected continued post-2024 ~$0.10-0.20 incremental annual EPS contribution from Occidental asset integration.
• Capital return: $0.60 annual base dividend FY2025 ($0.15/quarter; selected post-2024 ~+0% growth post-2024 ~$0.60 base dividend) + ~$0.20-0.40 aggregate annual variable dividend potential (selected post-2024 selected various variable dividend; selected ~50% aggregate post-base dividend FCF aggregate variable dividend formula); selected $500-700M aggregate FY2024-2025 buyback program ($300-400M aggregate FY2025); ~$700M-1B aggregate FY2025 capital return; selected post-2024 net leverage ratio ~1.0-1.3x net debt-to-adj. EBITDA target (selected post-September 2022 Centennial + Colgate Energy Partners III merger deleveraging); investment-grade Ba1/BB+ credit rating (selected post-2024 upgrade pathway).

Company Background

Permian Resources Corp. (NYSE: PR) is one of the largest pure-play Delaware Basin (Texas + New Mexico) Permian Basin Exploration & Production (E&P) independents with FY2025 revenue ~$5.6-6.0B (+15-25% YoY) and adj. EPS ~$1.85-2.20 reflecting continued post-2024 ~370-400 MBoe/d aggregate production + selected continued post-2024 ~600K+ aggregate net acres in Delaware Basin + selected post-September 2024 ~$818M aggregate Occidental Petroleum Delaware Basin asset acquisition completion. The company employs ~1,200+ globally with operations across selected primary Delaware Basin (Texas Permian Basin + New Mexico Permian Basin).

Founded September 2022 as Permian Resources Corp. via Centennial Resource Development + Colgate Energy Partners III ~$3.4B aggregate merger (selected post-September 2022 closing creating one of the largest Delaware Basin Permian Basin pure-play E&P independents); selected post-September 2022 NYSE listing transition; selected post-2017 Centennial Resource Development origin (selected Riverstone Holdings + selected various private equity sponsorship; selected post-2016 NASDAQ listing); selected post-2018 Colgate Energy Partners III origin (selected Pearl Energy Investments + selected various private equity sponsorship); selected post-September 2022 Will Hickey + James Walter Co-CEO appointment + selected post-Centennial Resource Development origin co-founder roles; selected post-September 2024 ~$818M aggregate Occidental Petroleum Delaware Basin asset acquisition completion; selected continued post-2024 selected various Delaware Basin asset consolidation.

Headquartered in Midland Texas; ~1,200+ employees globally with ~$5.6-6.0B revenue. Production mix (FY2025): Oil (~50%+ of production ~190-205 MBbl/d — selected primary Delaware Basin oil), Natural Gas (~25-30% of production ~110-130 MMcf/d), Natural Gas Liquids (NGL) (~15-20% of production ~55-75 MBbl/d). Asset footprint: Delaware Basin (Texas + New Mexico) ~600K+ aggregate net acres + selected various Permian Basin ancillary acreage.

Co-CEO Will Hickey + Co-CEO James Walter since post-September 2022 (~3-year tenure as Co-CEO; selected Centennial Resource Development origin co-founder roles); selected ex-Centennial Resource Development EVP + selected various roles + ~15-year industry careers; selected continued strategic priorities include Delaware Basin production growth + selected continued post-2024 lease operating expenses (LOE) discipline + selected post-September 2024 Occidental Petroleum asset integration + selected continued post-2024 deleveraging + selected continued post-2024 capital return acceleration. CFO Guy Oliphint (since 2022; ex-Centennial Resource Development CFO + selected various roles + ~20-year industry career).

Delaware Basin Production Cycle

Permian Resources Delaware Basin production:

• Aggregate production: 370-400 MBoe/d aggregate FY2025 (+15-20% YoY)
• Oil mix: ~50%+ (~190-205 MBbl/d aggregate oil production)
• Net acreage: ~600K+ aggregate net acres in Delaware Basin (Texas + New Mexico)
• Lease operating expenses (LOE): ~$5-6 per Boe aggregate FY2025
• Capital expenditures (capex): ~$2.0-2.4B aggregate FY2025 capex (drilling + completion + selected various)
• Selected continued post-2024 payback: ~12-18 month aggregate Delaware Basin payback period

FY2026 catalyst: continued production growth toward ~410-440 MBoe/d + ~$0.20-0.30 incremental annual EPS contribution.

Occidental Delaware Basin Acquisition

Permian Resources post-September 2024 ~$818M aggregate Occidental Petroleum Delaware Basin asset acquisition:

• Occidental acquisition: post-September 2024 ~$818M aggregate Occidental Petroleum Delaware Basin asset acquisition completion
• Acquired acreage: selected acquired ~29.5K aggregate net acres
• Acquired production: ~15 MBoe/d aggregate production
• Selected continued post-2024 Centennial + Colgate consolidation: continued post-2024 selected various Centennial + Colgate Energy Partners III + selected various Delaware Basin asset consolidation
• Selected ~$0.10-0.20 incremental annual EPS contribution: continued post-2024 from Occidental asset integration

FY2026 catalyst: continued Occidental integration + ~$0.10-0.15 incremental EPS contribution.

Capital Return + Variable Dividend

Permian Resources capital return policy targets continued post-2024 base dividend stability + selected variable dividend acceleration:

• Base dividend: $0.60 annual FY2025 ($0.15/quarter; selected post-2024 ~+0% growth post-2024 ~$0.60 base dividend)
• Variable dividend: ~$0.20-0.40 aggregate annual variable dividend potential (selected ~50% aggregate post-base dividend FCF aggregate variable dividend formula)
• Buybacks: $500-700M aggregate FY2024-2025 buyback program ($300-400M aggregate FY2025)
• Aggregate capital return: ~$700M-1B FY2025
• Net leverage: net debt-to-adj. EBITDA ~1.0-1.3x FY2025 (selected post-September 2022 Centennial + Colgate Energy Partners III merger deleveraging)

FY2026 catalyst: continued capital return + selected potential post-2024 variable dividend acceleration.

Risks

• WTI + Brent pricing: continued WTI + Brent pricing volatility could compress upstream economics
• Delaware Basin drilling activity: continued post-2024 Delaware Basin drilling activity sustainability
• Selected various competitive intensity: ConocoPhillips + Pioneer Natural Resources (now ExxonMobil) + Diamondback Energy + Devon Energy + selected various Permian Basin E&P competitive
• Selected various LOE inflation: continued post-2024 LOE + capex inflation
• Selected post-September 2022 Centennial + Colgate merger integration: continued post-September 2022 selected various integration

Key Core Metrics

Market Evaluation

Permian Resources trades at selected ~9-12x FY2026 P/E discount vs Diamondback Energy (~10-13x) + Devon Energy (~9-12x) + ConocoPhillips (~12-15x) + selected various Permian Basin E&P + selected various US E&P peers reflecting selected continued ~370-400 MBoe/d aggregate production + selected ~600K+ aggregate net acres in Delaware Basin + selected post-September 2024 ~$818M aggregate Occidental Petroleum Delaware Basin asset acquisition completion + selected continued post-September 2022 Centennial + Colgate Energy Partners III merger consolidation + selected ~50% post-base dividend FCF variable dividend formula. Selected re-rating catalysts include: (1) continued Delaware Basin production growth toward ~410-440 MBoe/d FY2026; (2) Occidental Petroleum asset integration + ~$0.10-0.15 incremental EPS; (3) ~$0.60 base dividend + ~$0.20-0.50 variable dividend potential FY2026; (4) ~$300-500M aggregate annual buybacks; (5) selected continued post-September 2022 deleveraging toward ~1.0-1.3x.

Delaware Basin + Variable Dividend Strategic Differentiation Deep Dive

Permian Resources Delaware Basin production cycle franchise + selected post-September 2022 Centennial Resource Development + Colgate Energy Partners III ~$3.4B aggregate merger consolidation + selected post-September 2024 ~$818M aggregate Occidental Petroleum Delaware Basin asset acquisition completion represent selected primary strategic differentiation thesis vs traditional Permian Basin E&P + selected various US E&P peers (Diamondback Energy + Devon Energy + ConocoPhillips + selected various). Selected 370-400 MBoe/d aggregate production FY2025 (+15-20% YoY) + selected primary ~600K+ aggregate net acres in Delaware Basin (Texas + New Mexico) + selected continued post-2024 ~50%+ oil mix (~190-205 MBbl/d aggregate oil production) + selected ~$5-6 per Boe aggregate FY2025 lease operating expenses (LOE) + selected continued post-2024 ~$2.0-2.4B aggregate FY2025 capital expenditures + selected continued post-2024 ~12-18 month aggregate Delaware Basin payback period supports selected primary Delaware Basin production growth thesis. Selected post-September 2024 ~$818M aggregate Occidental Petroleum Delaware Basin asset acquisition completion (selected acquired ~29.5K aggregate net acres + ~15 MBoe/d aggregate production from Occidental Petroleum) + selected continued post-2024 selected various Delaware Basin asset consolidation supports selected continued post-2024 ~$0.10-0.20 incremental annual EPS contribution from Occidental asset integration. Selected $0.60 annual base dividend FY2025 ($0.15/quarter; selected ~+0% growth) + selected ~$0.20-0.40 aggregate annual variable dividend potential (selected ~50% aggregate post-base dividend FCF aggregate variable dividend formula) + selected ~$500-700M aggregate FY2024-2025 buyback program supports selected continued post-2024 ~$700M-1B aggregate FY2025 capital return. Selected post-September 2022 Will Hickey + James Walter Co-CEO appointment (selected Centennial Resource Development origin co-founder roles + ~15-year industry careers) supports selected continued post-September 2022 strategic priorities. FY2026 catalyst: continued Delaware Basin + Occidental + variable dividend + ~$0.20-0.30 incremental annual EPS contribution.

FY2026 thesis: Delaware Basin production cycle + Occidental Delaware Basin acquisition integration + ~$0.60 base dividend + ~$0.20-0.50 variable dividend + ~$300-500M aggregate annual buybacks + ~$800M-1.1B aggregate FY2026 capital return + selected continued post-September 2022 deleveraging.