MIDLAND, Texas, May 7, 2024 (BUSINESS WIRE) --
Permian Resources Corporation ("Permian Resources" or the "Company") (NYSE: PR) today announced its first quarter 2024 financial and operational results and revised 2024 guidance.
Recent Financial and Operational Highlights
Delivered Permian Resources' best quarter to-date:
Production outperformance due to accelerated Earthstone efficiencies and continued strong well results
Robust free cash flow driven by operational execution and realization of cost synergies
Earthstone integration completed ahead of schedule
Earthstone annual synergy target increased by $50 million to $225 million
Executed ~$270 million of additional bolt-on acquisitions in core operating areas
Reported crude oil and total average production of 151.8 MBbls/d and 319.5 MBoe/d (~48% oil) during the quarter
Announced cash capital expenditures of $520 million, net cash provided by operating activities of $648 million and adjusted free cash flow(1) of $324 million ($0.42 per adjusted basic share)
Reported total return of capital of $185 million, or $0.24 per share, implying a total annualized return yield of ~5.7%(2):
Quarterly base dividend of $0.06 per share
Variable dividend of $0.14 per share
Repurchased 2.0 million shares for $31 million
Added ~11,200 net acres and ~110 locations in the Delaware Basin through recent transactions
Increased mid-point of full year oil and total production guidance by 2% to 150 MBbls/d and 320 MBoe/d
Management Commentary
"In our first full quarter post closing Earthstone, Permian Resources delivered strong operational and financial results, building upon our operational momentum from last year," said Will Hickey, Co-CEO of Permian Resources. "Outstanding well results and higher operational efficiencies across both legacy Permian Resources and Earthstone assets drove robust production during the quarter. This outperformance provided us with the confidence to increase standalone production guidance and represents a solid start to the year."
"This quarter's strong results allowed us to generate $324 million of adjusted free cash flow, or $0.42 per share," said James Walter, Co-CEO of Permian Resources. "Additionally, we continue to enhance our position through strategic leasehold and bolt-on acquisitions, adding high-quality inventory directly offset our most capital efficient asset that immediately competes for capital. We believe Permian Resources' leading cost structure, basin knowledge and balance sheet strength will continue to drive attractive opportunities to grow our already deep inventory position in an accretive manner."
Operational and Financial Results
Permian Resources continued the efficient development of its core Delaware Basin acreage position in the first quarter, delivering excellent well results while successfully integrating the Earthstone acquisition. During the quarter, average daily crude oil production was 151,794 barrels of oil per day ("Bbls/d"), an 11% increase compared to the prior quarter. First quarter total production averaged 319,514 barrels of oil equivalent per day ("Boe/d"). "Our strong first quarter production results were primarily driven by better than expected well performance, strong production runtimes and acceleration from continued operational efficiencies," said Will Hickey, Co-CEO.
The Company was able to accelerate activity due to strong drilling and completion ("D&C") synergy capture, driving increased D&C efficiencies program-wide. As of May 1, the Company is no longer utilizing any Earthstone drilling rigs or completion crews, and the Earthstone assets are fully integrated from a D&C perspective. Total cash capital expenditures ("capex") for the first quarter was $520 million.
Realized prices for the quarter were $76.13 per barrel of oil, $1.24 per Mcf of natural gas and $26.47 per barrel of natural gas liquids ("NGLs"), excluding the effects of hedges and GP&T costs. First quarter total controllable cash costs (LOE, GP&T and cash G&A) were $8.11 per Boe. LOE was $5.80 per Boe, GP&T was $1.34 per Boe and Cash G&A was $0.97 per Boe.
For the first quarter, Permian Resources generated net cash provided by operating activities of $648 million, adjusted operating cash flow(1) of $844 million ($1.09 per adjusted basic share) and adjusted free cash flow(1) of $324 million ($0.42 per adjusted basic share).
Permian Resources continues to maintain a strong financial position and low leverage profile. At March 31, 2024, the Company had $13 million in cash on hand and $60 million drawn under its revolving credit facility. Net debt-to-LQA EBITDAX(1) at March 31, 2024 was approximately 1x. Permian Resources recently completed its spring borrowing base redetermination process, whereby elected commitments increased to $2.5 billion from $2.0 billion, providing an additional $500 million of liquidity. The borrowing base remains unchanged at $4.0 billion. Also subsequent to quarter-end, the Company redeemed the $356 million aggregate principal amount of 6.875% Senior Notes due 2027.
Earthstone Integration Update
The integration of Earthstone is complete, and synergy capture is meaningfully ahead of schedule. Overall, the Company's success in both the acceleration and magnitude of synergies captured to-date has resulted in an increase of $50 million to the previously stated annual synergy target of $175 million, bringing the updated synergy target to $225 million per year.
As a result of the successful integration and synergy realization, during the quarter the Company reduced average spud-to-rig release days by 18% per well and average completion days by 50% per well on legacy Earthstone acreage compared to Earthstone's results from the first half of 2023. Additionally, Permian Resources has improved legacy Earthstone runtimes, benefiting overall production volumes, and realized approximately $1 per Boe of LOE and margin synergies through workover, compressor and midstream optimization initiatives.
"We are pleased to have achieved our original synergy target ahead of schedule and excited to increase our annual target to $225 million," said James Walter, Co-CEO. "I'm incredibly proud of both legacy companies' employees for ensuring such a smooth integration. Their hard work and dedication were key to such an efficient synergy capture."
Recent Acquisitions
Permian Resources continues to strengthen its acreage position in the core of the Delaware Basin, announcing two bolt-on acquisitions and additional properties acquired through its ongoing grassroots program.
The Company recently executed two separate bolt-on transactions located in Eddy County, New Mexico from undisclosed third-parties. The acquired properties consist of predominantly undeveloped acreage offset Permian Resources' highly capital efficient Parkway asset. Inventory on the acquired acreage comprises two-mile locations with high NRIs which immediately compete for capital. The Company closed upon the first transaction during the first quarter, and the second transaction is currently pending with closing expected to occur late in the second quarter.
"The acquired acreage is analogous to our high-quality Parkway position. This area represents one of the highest returning assets within our portfolio, with returns driven by reduced D&C costs and strong oil cuts. We are excited to begin development on the acquired acreage later this year," said Will Hickey, Co-CEO.
Additionally, Permian Resources continues to be highly successful executing upon its ground game, consisting of smaller grassroots acquisitions and leasehold transactions. During the first quarter of 2024, the Company completed approximately 150 grassroots leasing and working interest acquisitions. The majority of these acquisitions are slated for near-term development, making them highly accretive.
Combined, the Company added approximately 11,200 net leasehold acres and 4,500 net royalty acres for total consideration of approximately $270 million, reflecting an acquisition value of approximately $9,500 per net leasehold acre and approximately $5,000 per net royalty acre after adjusting for production value. Permian Resources has identified approximately 110 gross operated locations on the acquired properties. In total, these acquisitions contributed less than 100 Boe/d of total production in the first quarter.
(The transactions referenced in this press release are additive to the Company's Portfolio Optimization Transactions which were announced on January 30, 2024. For maps and further details summarizing Permian Resources' recent transactions, please see the presentation materials on its website under the Investor Relations tab.)
2024 Operational Plan and Target Update
Based on recent operational results, Permian Resources increased its 2024 standalone oil and total production targets by approximately 2% to 148-152 MBbls/d and 310-330 MBoe/d, respectively, based on the mid-point of guidance. There are no other changes to the Company's standalone guidance ranges.
The recent acquisitions noted above are expected to add approximately 3,500 Boe/d (~45% oil) of total production during the second half of 2024. The Company expects approximately $50 million of incremental capital expenditures associated with wells spud on the newly acquired acreage during the second half of 2024. Notably, the potential impact of the recently announced acquisitions is not included in the revised standalone guidance.
(For a detailed table summarizing Permian Resources' revised 2024 standalone operational and financial guidance, please see the Appendix of this press release.)
Shareholder Returns
Permian Resources announced today that its Board of Directors (the "Board") declared a quarterly base cash dividend of $0.06 per share of Class A common stock, or $0.24 per share on an annualized basis. This represents a 20% increase in the Company's base cash dividend compared to the prior quarter. Additionally, based upon first quarter financial results, the Board has declared a quarterly variable cash dividend of $0.14 per share of Class A common stock. Combined, the base and variable dividends represent a total cash return of $0.20 per share. The base and variable dividends are payable on May 29, 2024 to shareholders of record as of May 21, 2024. Permian Resources returned additional capital to shareholders in the first quarter by repurchasing 2.0 million shares of common stock for $31 million. The Company's first quarter total return of capital, inclusive of the base dividend, variable dividend and share repurchases, was $0.24 per share.
Quarterly Report on Form 10-Q
Permian Resources' financial statements and related footnotes will be available in its Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, which is expected to be filed with the Securities and Exchange Commission ("SEC") on May 8, 2024.
Conference Call and Webcast
Permian Resources will host an investor conference call on Wednesday, May 8, 2024 at 9:00 a.m. Central (10:00 a.m. Eastern) to discuss first quarter 2024 operating and financial results. Interested parties may join the call by visiting Permian Resources' website at www.permianres.com and clicking on the webcast link or by dialing (800) 225-9448 (Conference ID: PRCQ124) at least 15 minutes prior to the start of the call. A replay of the call will be available on the Company's website or by phone at (800) 938-2488 (Passcode: 24995) for a 14-day period following the call.
About Permian Resources
Headquartered in Midland, Texas, Permian Resources is an independent oil and natural gas company focused on the responsible acquisition, optimization and development of high-return oil and natural gas properties. The Company's assets and operations are concentrated in the core of the Delaware Basin, making it the second largest Permian Basin pure-play E&P. For more information, please visit www.permianres.com.
Cautionary Note Regarding Forward-Looking Statements
The information in this press release includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical fact included in this press release, regarding our strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects, plans and objectives of management are forward-looking statements. When used in this press release, the words "could," "may," "believe," "anticipate," "intend," "estimate," "expect," "project," "goal," "plan," "target" and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. These forward-looking statements are based on management's current expectations and assumptions about future events and are based on currently available information as to the outcome and timing of future events.
Forward-looking statements may include statements about:
volatility of oil, natural gas and NGL prices or a prolonged period of low oil, natural gas or NGL prices and the effects of actions by, or disputes among or between, members of the Organization of Petroleum Exporting Countries ("OPEC"), such as Saudi Arabia, and other oil and natural gas producing countries, such as Russia, with respect to production levels or other matters related to the price of oil, natural gas and NGLs;
political and economic conditions and events in or affecting other producing regions or countries, including the Middle East, Russia, Eastern Europe, Africa and South America;
our business strategy and future drilling plans;
our reserves and our ability to replace the reserves we produce through drilling and property acquisitions;
our drilling prospects, inventories, projects and programs;
our financial strategy, return of capital program, leverage, liquidity and capital required for our development program;
the timing and amount of our future production of oil, natural gas and NGLs;
our ability to identify, complete and effectively integrate acquisitions of properties, assets or businesses;
our ability to realize the anticipated benefits and synergies from the Earthstone merger and effectively integrate the assets acquired in such transaction;
our hedging strategy and results;
our competition;
our ability to obtain permits and governmental approvals;
our compliance with government regulations, including those related to climate change as well as environmental, health and safety regulations and liabilities thereunder;
our pending legal matters;
the marketing and transportation of our oil, natural gas and NGLs;
our leasehold or business acquisitions;
cost of developing or operating our properties;
our anticipated rate of return;
general economic conditions;
weather conditions in the areas where we operate;
credit markets;
our ability to make dividends, distributions and share repurchases;
uncertainty regarding our future operating results;
our plans, objectives, expectations and intentions contained in this press release that are not historical; and
the other factors described in our most recent Annual Report on Form 10-K, and any updates to those factors set forth in our subsequent Quarterly Reports on Form 10-Q or Current Reports on Form 8-K.
We caution you that these forward-looking statements are subject to all of the risks and uncertainties, most of which are difficult to predict and many of which are beyond our control, incident to the exploration for and development, production, gathering and sale of oil, natural gas and NGLs. Factors which could cause our actual results to differ materially from the results contemplated by forward-looking statements include, but are not limited to, commodity price volatility (including regional basis differentials), uncertainty inherent in estimating oil, natural gas and NGL reserves and in projecting future rates of production, geographic concentration of our operations, lack of availability of drilling and production equipment and services, lack of transportation and storage capacity as a result of oversupply, government regulations or other factors, risks relating to the Earthstone Merger, competition in the oil and natural gas industry for assets, materials, qualified personnel and capital, drilling and other operating risks, environmental and climate related risks, regulatory changes, restrictions on the use of water, availability to cash flow and access to capital, inflation, changes in our credit ratings or adverse changes in interest rates, changes in the financial strength of counterparties to our credit agreement and hedging contracts, the timing of development expenditures, political and economic conditions and events in foreign oil and natural gas producing countries, changes in local, regional, national, and international economic conditions, security threats and the other risks described in our filings with the SEC.
Reserve engineering is a process of estimating underground accumulations of oil and natural gas that cannot be measured in an exact way. The accuracy of any reserve estimate depends on the quality of available data, the interpretation of such data, and price and cost assumptions made by reserve engineers. In addition, the results of drilling, testing and production activities may justify revisions of estimates that were made previously. If significant, such revisions would change the schedule of any further production and development drilling. Accordingly, reserve estimates may differ significantly from the quantities of oil and natural gas that are ultimately recovered.
Should one or more of the risks or uncertainties described in this press release occur, or should any underlying assumptions prove incorrect, our actual results and plans could differ materially from those expressed in any forward-looking statements. All forward-looking statements, expressed or implied, included in this press release are expressly qualified in their entirety by this cautionary statement. This cautionary statement should also be considered in connection with any subsequent written or oral forward-looking statements that we or persons acting on our behalf may issue.
Except as otherwise required by applicable law, we disclaim any duty to update any forward-looking statements, all of which are expressly qualified by the statements in this section, to reflect events or circumstances after the date of this press release.
1) Adjusted Operating Cash Flow, Adjusted Free Cash Flow and Net Debt-to-LQA EBITDAX are non-GAAP financial measures. See "Non-GAAP Financial Measures" included within the Appendix of this press release for related disclosures and reconciliations to the most directly comparable financial measures calculated and presented in accordance with GAAP.
2) Based on closing share price as of May 3, 2024.
Details of our revised 2024 operational and financial guidance are presented below:
2024 FY Guidance (Updated)
------------------------------------------------------------
Net average daily production (Boe/d) 310,000 -- 330,000
Net average daily oil production (Bbls/d) 148,000 -- 152,000
Production costs
Lease operating expenses ($/Boe) $5.50 -- $6.00
Gathering, processing and transportation expenses ($/Boe) $1.00 -- $1.50
Cash general and administrative ($/Boe)(1) $0.90 -- $1.10
Severance and ad valorem taxes (% of revenue) 6.5% -- 8.5%
Total cash capital expenditure program ($MM) $1,900 -- $2,100
Operated drilling program
TILs (gross) 250
Average working interest 75%
(1)
Excludes stock-based compensation.
Permian Resources Corporation
Operating Highlights
Three Months Ended March 31,
--------------------------------------------------------------------------------------------------------------------
2024 2023
-------------------- --------- -------------------- -------------------- ------- --------------------
Net revenues (in thousands):
$ 1,051,642 $ 524,386
Oil sales
38,767 32,122
Natural gas sales(1)
152,590 59,760
NGL sales(2)
-------------------- --------- -------------------- -------------------- ------- --------------------
$ 1,242,999 $ 616,268
Oil and gas sales
==================== ========= ==================== ==================== ======= ====================
Average sales prices:
$ 76.13 $ 74.38
Oil (per Bbl)
(0.12 ) 3.65
Effect of derivative settlements on average price (per Bbl)
-------------------- --------- -------------------- -------------------- ------- --------------------
$ 76.01 $ 78.03
Oil including the effects of hedging (per Bbl)
==================== ========= ==================== ==================== ======= ====================
$ 76.96 $ 76.13
Average NYMEX WTI price for oil (per Bbl)
(0.83 ) (1.75 )
Oil differential from NYMEX
$ 1.24 $ 1.81
Natural gas price excluding the effects of GP&T (per Mcf)(1)
0.17 0.58
Effect of derivative settlements on average price (per Mcf)
-------------------- --------- -------------------- -------------------- ------- --------------------
$ 1.41 $ 2.39
Natural gas including the effects of hedging (per Mcf)
==================== ========= ==================== ==================== ======= ====================
$ 2.41 $ 2.67
Average NYMEX Henry Hub price for natural gas (per MMBtu)
(1.17 ) (0.86 )
Natural gas differential from NYMEX
$ 26.47 $ 27.12
NGL price excluding the effects of GP&T (per Bbl)(2)
Net production:
13,813 7,050
Oil (MBbls)
51,802 23,974
Natural gas (MMcf)
6,629 2,798
NGL (MBbls)
-------------------- --------- -------------------- -------------------- ------- --------------------
29,076 13,844
Total (MBoe)(3)
==================== ========= ==================== ==================== ======= ====================
Average daily net production:
151,794 78,332
Oil (Bbls/d)
569,249 266,374
Natural gas (Mcf/d)
72,846 31,094
NGL (Bbls/d)
-------------------- --------- -------------------- -------------------- ------- --------------------
_______________________________________
(1)
Natural gas sales for the three months ended March 31, 2024 include $25.3 million of gathering, processing and transportation costs ("GP&T") that are reflected as a reduction to natural gas sales and $11.3 million for the three months ended March 31, 2023. Natural gas average sales prices, however, exclude $0.49 per Mcf of such GP&T charges for the three months ended March 31, 2024 and $0.47 per Mcf for the three months ended March 31, 2023.
(2)
NGL sales for the three months ended March 31, 2024 include $22.9 million of GP&T that are reflected as a reduction to NGL sales and $16.1 million for the three months ended March 31, 2023. NGL average sales prices, however, exclude $3.45 per Bbl of such GP&T charges for the three months ended March 31, 2024 and $5.77 per Bbl for the three months ended March 31, 2023.
Permian Resources Corporation
Operating Expenses
Three Months Ended March 31,
-----------------------------------------------------------------------------------------------------------------
2024 2023
-------------------- ------- -------------------- -------------------- ------ --------------------
Operating costs (in thousands):
$ 168,671 $ 74,532
Lease operating expenses
96,166 48,509
Severance and ad valorem taxes
39,055 15,482
Gathering, processing and transportation expenses
Operating cost metrics:
$ 5.80 $ 5.38
Lease operating expenses (per Boe)
7.7 % 7.9 %
Severance and ad valorem taxes (% of revenue)
Permian Resources Corporation
Consolidated Statements of Operations (unaudited)
(in thousands, except per share data)
Three Months Ended March 31,
---------------------------------------------------------------------------------------------------------------------
2024 2023
-------------------- --------- -------------------- -------------------- -------- --------------------
Operating revenues
$ 1,242,999 $ 616,268
Oil and gas sales
Operating expenses
168,671 74,532
Lease operating expenses
96,166 48,509
Severance and ad valorem taxes
39,055 15,482
Gathering, processing and transportation expenses
410,179 188,219
Depreciation, depletion and amortization
37,373 35,474
General and administrative expenses
11,123 13,299
Merger and integration expense
20 245
Impairment and abandonment expense
11,488 4,374
Exploration and other expenses
-------------------- --------- -------------------- -------------------- -------- --------------------
774,075 380,134
Total operating expenses
Net gain (loss) on sale of long-lived assets 112 66
-------------------- --------- -------------------- -------------------- -------- --------------------
Income from operations 469,036 236,200
Other income (expense)
(72,587 ) (36,777 )
Interest expense
(121,129 ) 54,512
Net gain (loss) on derivative instruments
3,232 120
Other income (expense)
-------------------- --------- -------------------- -------------------- -------- --------------------
(190,484 ) 17,855
Total other income (expense)
-------------------- --------- -------------------- -------------------- -------- --------------------
Income before income taxes 278,552 254,055
Income tax expense (48,957 ) (34,254 )
-------------------- --------- -------------------- -------------------- -------- --------------------
Net income 229,595 219,801
(83,020 ) (117,681 )
Less: Net income attributable to noncontrolling interest
-------------------- --------- -------------------- -------------------- -------- --------------------
Net income attributable to Class A Common Stock $ 146,575 $ 102,120
==================== ========= ==================== ==================== ======== ====================
Income per share of Class A Common Stock:
$ 0.27 $ 0.35
Basic
==================== ========= ==================== ==================== ======== ====================
$ 0.25 $ 0.31
Diluted
==================== ========= ==================== ==================== ======== ====================
Weighted average Class A Common Stock outstanding:
552,472 295,913
Basic
Permian Resources Corporation
Consolidated Balance Sheets (unaudited)
(in thousands, except share and per share amounts)
March 31, 2024 December 31, 2023
-------------------------------------------------- --------------------------------------------------
ASSETS
Current assets
$ 12,692 $ 73,290
Cash and cash equivalents
557,243 481,060
Accounts receivable, net
5,000 70,591
Derivative instruments
32,442 25,451
Prepaid and other current assets
-------------------- ---------- -------------------- -------------------- ---------- --------------------
607,377 650,392
Total current assets
Property and Equipment
Oil and natural gas properties, successful efforts method
2,476,541 2,401,317
Unproved properties
15,492,619 15,036,687
Proved properties
(3,808,590 ) (3,401,895 )
Accumulated depreciation, depletion and amortization
-------------------- ---------- -------------------- -------------------- ---------- --------------------
14,160,570 14,036,109
Total oil and natural gas properties, net
45,007 43,647
Other property and equipment, net
-------------------- ---------- -------------------- -------------------- ---------- --------------------
14,205,577 14,079,756
Total property and equipment, net
Noncurrent assets
123,147 59,359
Operating lease right-of-use assets
145,208 176,071
Other noncurrent assets
-------------------- ---------- -------------------- -------------------- ---------- --------------------
$ 15,081,309 $ 14,965,578
TOTAL ASSETS
==================== ========== ==================== ==================== ========== ====================
LIABILITIES AND EQUITY
Current liabilities
$ 977,114 $ 1,167,525
Accounts payable and accrued expenses
53,172 33,006
Operating lease liabilities
33,687 2,725
Derivative instruments
48,059 38,297
Other current liabilities
-------------------- ---------- -------------------- -------------------- ---------- --------------------
1,112,032 1,241,553
Total current liabilities
Noncurrent liabilities
3,909,418 3,848,781
Long-term debt, net
128,160 121,417
Asset retirement obligations
441,839 422,627
Deferred income taxes
71,898 28,302
Operating lease liabilities
69,766 73,150
Other noncurrent liabilities
-------------------- ---------- -------------------- -------------------- ---------- --------------------
5,733,113 5,735,830
Total liabilities
Commitments and contingencies (Note 12)
Shareholders' equity
Common stock, $0.0001 par value, 1,500,000,000 shares authorized:
59 54
Class A: 587,622,487 shares issued and 582,262,542 shares outstanding at March 31, 2024 and 544,610,984 shares issued and 540,789,758 shares outstanding at December 31, 2023
19 23
Class C: 187,607,059 shares issued and outstanding at March 31, 2024 and 230,962,833 shares issued and outstanding at December 31, 2023
6,331,073 5,766,881
Additional paid-in capital
626,930 569,139
Retained earnings (accumulated deficit)
-------------------- ---------- -------------------- -------------------- ---------- --------------------
6,958,081 6,336,097
Total shareholders' equity
2,390,115 2,893,651
Noncontrolling interest
-------------------- ---------- -------------------- -------------------- ---------- --------------------
9,348,196 9,229,748
Total equity
-------------------- ---------- -------------------- -------------------- ---------- --------------------
Permian Resources Corporation
Consolidated Statements of Cash Flows (unaudited)
(in thousands)
Three Months Ended March 31,
--------------------------------------------------------------------------------------------------------------------------------
2024 2023
-------------------- -------------- -------------------- -------------------- -------------- --------------------
Cash flows from operating activities:
$ 229,595 $ 219,801
Net income
Adjustments to reconcile net income to net cash provided by operating activities:
410,179 188,219
Depreciation, depletion and amortization
9,631 17,871
Stock-based compensation expense
20 245
Impairment and abandonment expense
46,979 33,454
Deferred tax expense
(112 ) (66 )
Net (gain) loss on sale of long-lived assets
128,474 (14,777 )
Non-cash portion of derivative (gain) loss
1,531 2,796
Amortization of debt issuance costs, discount and premium
Changes in operating assets and liabilities:
(85,138 ) (1,503 )
(Increase) decrease in accounts receivable
5,350 (1,016 )
(Increase) decrease in prepaid and other assets
(98,911 ) (6,811 )
Increase (decrease) in accounts payable and other liabilities
-------------------- -------------- -------------------- -------------------- -------------- --------------------
647,598 438,213
Net cash provided by operating activities
-------------------- -------------- -------------------- -------------------- -------------- --------------------
Cash flows from investing activities:
(97,019 ) (100,755 )
Acquisition of oil and natural gas properties, net
(519,623 ) (315,285 )
Drilling and development capital expenditures
(2,772 ) (1,204 )
Purchases of other property and equipment
-- 60,000
Contingent considerations received related to divestiture
66 65,116
Proceeds from sales of oil and natural gas properties
-------------------- -------------- -------------------- -------------------- -------------- --------------------
(619,348 ) (292,128 )
Net cash used in investing activities
-------------------- -------------- -------------------- -------------------- -------------- --------------------
Cash flows from financing activities:
220,000 160,000
Proceeds from borrowings under revolving credit facility
(160,000 ) (260,000 )
Repayment of borrowings under revolving credit facility
(1,880 ) --
Debt issuance costs
58 231
Proceeds from exercise of stock options
(31,492 ) (61,578 )
Share repurchases
(87,194 ) (15,192 )
Dividends paid
(28,327 ) (13,324 )
Distributions paid to noncontrolling interest owners
-------------------- -------------- -------------------- -------------------- -------------- --------------------
(88,835 ) (189,863 )
Net cash provided by (used in) financing activities
-------------------- -------------- -------------------- -------------------- -------------- --------------------
(60,585 ) (43,778 )
Net increase (decrease) in cash, cash equivalents and restricted cash
73,864 69,932
Cash, cash equivalents and restricted cash, beginning of period
-------------------- -------------- -------------------- -------------------- -------------- --------------------
$ 13,279 $ 26,154
Cash, cash equivalents and restricted cash, end of period
==================== ============== ==================== ==================== ============== ====================
Reconciliation of cash, cash equivalents and restricted cash presented on the Consolidated Statements of Cash Flows for the periods presented:
Three Months Ended March 31,
--------------------------------------------------------------------------------------------------------------------------------------------
2024 2023
------------------------------------------------------------ ------------------------------------------------------------
Cash and cash equivalents $ 12,692 $ 25,593
Restricted cash 587 561
-------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Total cash, cash equivalents and restricted cash $ 13,279 $ 26,154
==================== ==================== ==================== ==================== ==================== ====================
Non-GAAP Financial Measures
In addition to disclosing financial results calculated in accordance with U.S. generally accepted accounting principles ("GAAP"), our earnings release contains non-GAAP financial measures as described below.
Adjusted EBITDAX
Adjusted EBITDAX is a supplemental non-GAAP financial measure that is used by management and external users of our consolidated financial statements, such as industry analysts, investors, lenders and rating agencies. We define Adjusted EBITDAX as net income attributable to Class A Common Stock before net income attributable to noncontrolling interest, interest expense, income taxes, depreciation, depletion and amortization, impairment and abandonment expense, non-cash gains or losses on derivatives, stock-based compensation (not cash-settled), exploration and other expenses, merger and integration expense, gain/loss from the sale of long-lived assets and other non-recurring items. Adjusted EBITDAX is not a measure of net income as determined by GAAP.
Our management believes Adjusted EBITDAX is useful as it allows them to more effectively evaluate our operating performance and compare the results of our operations from period to period and against our peers, without regard to our financing methods or capital structure. We exclude the items listed above from net income in arriving at Adjusted EBITDAX because these amounts can vary substantially from company to company within our industry depending upon accounting methods and book values of assets, capital structures and the method by which the assets were acquired. Adjusted EBITDAX should not be considered as an alternative to, or more meaningful than, net income as determined in accordance with GAAP or as an indicator of our operating performance or liquidity. Certain items excluded from Adjusted EBITDAX are significant components in understanding and assessing a company's financial performance, such as a company's cost of capital and tax structure, as well as the historic costs of depreciable assets, none of which are components of Adjusted EBITDAX. Our presentation of Adjusted EBITDAX should not be construed as an inference that our results will be unaffected by unusual or nonrecurring items. Our computations of Adjusted EBITDAX may not be comparable to other similarly titled measures of other companies.
The following table presents a reconciliation of Adjusted EBITDAX to net income, which is the most directly com
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