PR

Core Business Model & Value Creation Priority

• Management is focused on long-term growth of free cash flow per share and total shareholder return, rather than pursuing scale for scale's sake, and adheres to strict full-cycle return underwriting standards for all investments.
• The company maintains a differentiated off-market "ground game" acquisition strategy focused on small, accretive bolt-on deals that leverage existing operational and commercial advantages to generate high returns.
• The company ended Q2 2026 with a strong balance sheet, with leverage of just 0.5x, which management expects to remain at 0.5x by year end 2026.

2026 Year-to-Date Acquisition Activity

• Year-to-date 2026, Permian has acquired ~55,000 net acres in the core Delaware Basin across ~190 separate small transactions, for total consideration of $1.05 billion, adding 330 high-confidence, high-net-revenue-interest locations.
• Closed a $520 million acquisition of ~2,000 net acres and 5,000 BOE per day of production in Ward County, followed by a mutually beneficial acreage trade with an offset operator that increased operated net locations from 50 to 120 and boosted average lotto earnings by 20%; the trade is expected to close in Q3 2026.
• Assembled a 15,000 net contiguous acreage position in the Parkway bolt-on project in Eddy County, with 2-mile lateral lengths and 82.5% NRI, sourced through off-market industry relationships.

Operational Efficiency Initiatives

• Continued to increase water recycling rates, reaching the highest level in company history in Q2 2026, reducing the largest lease operating expense (water disposal) and holding LOE flat.
• Deployed water-based mud in drilling areas with typical mud losses, generating $5-$7 per foot of drilling cost savings, and transitioned to a slimmer wellbore design that reduces steel, cement, and drilling time costs to offset inflationary pressures from rising diesel and casing prices.
• Early trials of surfactant treatments for existing producing wells have delivered an average sub-1-year payback, with some wells seeing production uplifts of over 100 barrels per day; additional testing is ongoing to refine deployment strategy.
• Gradually increased average lateral lengths over time, reaching ~11,000 feet (just under 2 miles) currently, with a successful first 4-mile lateral drilled in Q2 2026; longer laterals reduce drilling and completion cost per foot, improving capital efficiency.

• Full year 2026 crude oil production guidance was raised to 199,000 barrels per day, representing 10% production growth compared to 2025. The capital expenditure midpoint guidance was updated to $1.95 billion, which is approximately 1% lower than 2025 full-year capital spending, reflecting material improvements in capital efficiency.
• Of the 6,500 barrels per day increase in full-year 2026 production guidance compared to prior guidance, only ~1,000 barrels per day comes from acquired production; the majority of the increase comes from higher working interest in 2026 operated projects, with a small contribution from accelerated workover activity. Of the $100 million increase in 2026 capex guidance, $25 million is for incremental Ward County acquisition takeover costs, with the remainder driven by higher working interest in 2026 projects.
• Management expects full year 2026 full-year free cash flow to be nearly double the full-year 2024 free cash flow, and expects natural gas pricing and transportation arrangements in 2027 to deliver significantly better free cash flow performance compared to 2026, after the 2026 headwind of severely depressed Waha prices.
• 2027 capital spending and production growth will be returns-driven: if oil prices are high and service costs are low, the company will likely be in growth mode; if prices are lower and costs are higher, it will shift to maintenance mode. At the 2026 capex level of ~$1.95-$2.0 billion, the company would continue to grow production, while maintenance capex is below that range.

Permian Resources is an independent oil and gas producer operating in the Permian Basin, split between two core product segments: crude oil and natural gas. For Q2 2026: 1. Crude Oil: Production reached 198,000 barrels per day, a 3% (6,000 barrels per day) increase quarter over quarter. This growth was driven by increased workover activity and higher working interest in completed wells, which reached 82% for the quarter, up from the original 75% target. The segment contributed the majority of total quarterly revenue and drove the quarter's record free cash flow. 2. Natural Gas: The segment faced severe market dislocation, with Waha natural gas prices averaging negative $3.14 per MCF for the quarter. Management proactively curtailed 20% of natural gas production quarter over quarter to avoid selling at negative prices. After curtailments, firm transportation, and hedging, the company realized an average natural gas price of 38 cents per MCF, capturing a $75 million revenue uplift compared to unmitigated market pricing. All curtailed production was returned to full operation by the end of June without operational issues when Waha prices improved. Total Q2 2026 free cash flow for the company was a record $751 million, a nearly 50% increase quarter over quarter, with record free cash flow per share of $0.88. Cash capital expenditures for the quarter totaled $521 million.

• The company faces ongoing commodity price volatility, particularly for natural gas in the Waha market, which saw extreme negative pricing during Q2 2026 that required production curtailments.
• Inflationary pressures from rising diesel fuel and steel casing prices create upward pressure on drilling costs, requiring continuous operational efficiency improvements to offset.
• Off-market and bolt-on acquisitions are dependent on access to proprietary deal flow and can vary quarter to quarter, with no guarantee that the 2026 year-to-date pace of acquisition activity will continue.
• While new exploration zones and enhanced oil recovery techniques (such as surfactants) show early promise, results are still being evaluated and may not deliver expected productivity improvements.
• Potential future oil takeaway capacity constraints in the Permian Basin could impact production growth over the medium term, though management is confident midstream partners will expand capacity ahead of demand.

Q: What is the outlook for the company's ground game M&A strategy, and how do you approach larger competitive marketed deals or federal lease sales? / A: Management expects the consistent long-term pace of ground game M&A to continue, and sees the opportunity set as strong as it has ever been. The company evaluates all high-quality larger marketed packages in the Delaware Basin, but will only pursue deals that meet its strict full-cycle return targets. Many recent competitive transactions have had purchase prices too high to meet the company's return thresholds, so management will remain patient and disciplined.

Q: How do you see Permian takeaway capacity for oil and gas developing, and do you expect a surge in production or capacity constraints? / A: Management is confident that sufficient oil takeaway capacity exists for the next several years, and expects midstream partners will continue to add capacity ahead of future demand growth. New natural gas pipeline capacity coming online in Q3 2026 is sufficient to handle the restored curtailed production and incremental near-term growth, and management expects the Waha price dislocation to end with the new capacity. No meaningful surge in overall operator activity has been seen to date following the new pipeline announcements.

Q: What is the company's approach to capital allocation going forward, now that leverage is at 0.5x at the lower end of the target range? Will you increase the dividend or shift to buybacks? / A: Growing the base dividend consistently over time remains a priority for the company. Otherwise, management does not plan to change the existing capital allocation framework, which has worked well: the current strategy allows the company to continue pursuing accretive acquisitions, maintain a strong balance sheet, and grow free cash flow per share. Management will hold the current course for the foreseeable future.

Q: What is the status of surfactant trials, and what are early results and deployment plans? / A: Two surfactant completion trials are currently underway, with only one online so far, and the program will pause for the rest of 2026 to evaluate results. For production side surfactant treatments on late-life wells, early aggregate results are encouraging, with an average sub-one-year payback even after including wells that delivered no uplift; some wells have delivered production uplifts over 100 barrels per day. The team is currently working to identify which wells will deliver the highest uplift before wider deployment.