Permian Resources Q4 2024 Earnings Report

Permian Resources EPS Results

• Actual EPS: N/A
• Consensus EPS: $0.36
• Beat/Miss: N/A
• One Year Ago EPS: N/A

Permian Resources Revenue Results

• Actual Revenue: N/A
• Expected Revenue: $1.30 billion
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Permian Resources Announcement Details

• Quarter: Q4 2024
• Date: 2/25/2025
• Time: After Market Closes
• Conference Call Date: Wednesday, February 26, 2025
• Conference Call Time: 10:00AM ET

Permian Resources (NYSE:PR), an independent oil and natural gas company, focuses on the development of crude oil and related liquids-rich natural gas reserves in the United States. The company's assets primarily focus on the Delaware Basin, a sub-basin of the Permian Basin. Its properties consist of acreage blocks in West Texas, Eddy County, Lea County, and New Mexico. The company was formerly known as Centennial Resource Development, Inc. and changed its name to Permian Resources Corporation in September 2022. Permian Resources Corporation was incorporated in 2015 and is headquartered in Midland, Texas.

Permian Resources Q4 2024 Earnings Call Transcript

Key Takeaways

• In Q4, Permian Resources delivered record production of 171,000 barrels of oil per day and achieved its highest-ever free cash flow per share thanks to strong field execution and cost control.
• For full year 2024, free cash flow per share rose by nearly 50% over 2023, liquidity increased by about $1 billion, and leverage remained flat, underscoring financial resilience.
• The 2025 plan targets 8% higher oil production (345,000 BOPD), a reduced capital program of ~$2 billion, and aims to exit the year at approximately 0.5x leverage to maximize shareholder value.
• The company continues its cost leadership with drilling & completion costs at roughly $750 per lateral foot and expected controllable cash costs near $7.75 per BOE in 2025.
• In 2024, ~$1.2 billion of accretive M&A added 50,000 net acres and 20,000 BOE/d, with immediate synergies driving down acquired-asset costs by about $3 per BOE.

Presentation

[Operator]

Good morning, and welcome to Permian Resources Conference Call to discuss its fourth quarter and full year twenty twenty four earnings. Today's call is being recorded. A replay of the call will be accessible until 03/06/2025 by dialing (888) 660-6264 and entering the replay access code 7 5 0 7 75050 or by visiting the company's website at www.permianres.com. At this time, I will turn the call over to Hayes Mebry, Permian Resources' Vice President of Investor Relations for some opening remarks. Please go ahead.

[Hays Mabry, Director of Investor Relations at Permian Resources]

Thanks, Ina, and thank you all for joining us. On the call today are Will Hickey and James Walter, our Chief Executive Officers and Guy Ollifant, our Chief Financial Officer. I would like to note that many of the comments during this call are forward looking statements that involve risks and uncertainties that could affect our actual results or plans. Many of these risks are beyond our control and are discussed in more detail in the Risk Factors and the Forward Looking Statements sections of our filings with the SEC. Although we believe the expectations expressed are based on reasonable assumptions, they are not guarantees of future performance and actual results may differ materially.

[Hays Mabry, Director of Investor Relations at Permian Resources]

We may also refer to non GAAP financial measures. For any non GAAP measure we use, a reconciliation to the nearest corresponding GAAP measure can be found in our earnings release or presentation. With that, I will turn the call over to Will Hickey, Co CEO.

[William Hickey, Director & Co-CEO at Permian Resources]

Thanks, Hayes. We're excited to discuss our fourth quarter results as well as layout our 2025 plan this morning. We reported a record quarter in both production and free cash flow per share in Q4, demonstrating that the business continues to perform extremely well, led by outstanding execution in the field. Additionally, we saw a relentless focus on cost control manifest into lower DMC cost and controllable cash cost when compared to Q3. Over the full year of 2024, our team delivered outstanding results, resulting in a nearly 50% increase in free cash flow per share compared to 2023.

[William Hickey, Director & Co-CEO at Permian Resources]

Even more impressive, we achieved this without increasing leverage, reflecting the strength and consistency of our core operations. As a result, we believe 2024 represents a highly repeatable year, positioning us for sustained performance and growth. As we look to 2025, we expect to continue maximizing shareholder value by executing on our highly capital efficient Delaware Basin drilling program. We're proud to lay out a 2025 plan that's expected to continue to generate significant free cash flow per share growth. Moving into quarterly results.

[William Hickey, Director & Co-CEO at Permian Resources]

Q4 production exceeded expectations with oil production of 171,000 barrels of oil per day and total production of 368,000 barrels of oil equivalent per day. Our D and C team also continues to execute at an extremely high level, which led to two seventy five wells tilled in 2024. Importantly, we executed on this plan with CapEx remaining well within our original guidance range of $1,900,000,000 to $2,100,000,000 In addition, we delivered leading cash costs supporting strong margins with Q4 LOE of $5.42 per BOE, cash G and A of $0.93 per BOE and GP and T of $1.49 per BOE. Strong production results paired with low cash costs and CapEx of $5.00 $4,000,000 in the quarter resulted in adjusted operating cash flow of $9.00 $4,000,000 and adjusted free cash flow of $400,000,000 dollars Turning to Slide four, we wanted to provide a quick review of how strong a year 2024 was for PR. We were able to beat and or raise production guidance every quarter on just the base outperformance.

[William Hickey, Director & Co-CEO at Permian Resources]

When including the bolt on acquisitions we closed throughout the year, we delivered 8% higher oil production when compared to our original 2024 guidance. Our cost controls also performed extremely well as most recent oil costs were almost 20% lower compared to 2023. Most importantly, a little over half of this reduction was a direct result of structural efficiency improvements gained throughout the year with the balance a result of service cost deflation. We also rolled out an enhanced capital return program during 2024 that prioritizes a leading base dividend for our shareholders. This change was underpinned by the material improvements in free cash flow per share generation of our business, which we will touch on more in just a little bit.

[William Hickey, Director & Co-CEO at Permian Resources]

Lastly, during 2024, we were able to increase our liquidity by approximately $1,000,000,000 showcasing our ability to maintain a very strong financial position with no change in leverage. While executing on $1,200,000,000 of accretive M and A, we have and will continue to prioritize maintaining a fortress balance sheet as we believe this allows us to maintain flexibility and be opportunistic through the commodity price cycles. Slide five illustrates our expertise and cost leadership in the Delaware Basin. Our relentless focus on low cost leadership allows us to drive both D and C and controllable cash cost to peer leading levels. Our 2025 plan, which James will outline here in a minute, benefits greatly from the reduction in all in costs we've seen over the past year.

[William Hickey, Director & Co-CEO at Permian Resources]

Given the marginal nature of free cash flow, running a low cost business is critical in supporting strong free cash flow per share. Turning to Slide six, we want to highlight the success of our 2024 M and A program. We executed on approximately $1,200,000,000 of acquisitions for 50,000 net acres and about 20,000 barrels of oil equivalent per day across our acreage position. The mix of acquisitions consisted of a large asset deal in Bria Draw, several smaller bolt on acquisitions and finally a substantial ground game that consisted of over 500 transactions for 4,000 net acres. We believe that expertise in executing each of these type of transaction provides PR the means to continue to replace our drilled locations with higher rate of return inventory that immediately competes for capital.

[William Hickey, Director & Co-CEO at Permian Resources]

As you can see, these acquisitions more than replaced the inventory that we drilled throughout 2024 with similar or better rates of return to our 2024 development. We plan on continuing our strong track record of pursuing accretive M and A that adds near term, mid term and long term value to shareholders. Now looking at Slide seven, we want to highlight a big reason for why we've been so successful at M and A that creates value for shareholders. One of our sustainable competitive advantages is our ability to buy acreage in areas where we can apply PR's leading cost structure to the acquired assets immediately. Specifically, when we compared the last several months of LOE on assets prior to acquisition, we've already driven a $3 per BOE reduction on that asset base.

[William Hickey, Director & Co-CEO at Permian Resources]

This was largely achieved through our lean field organization, technical expertise in artificial lift, optimized chemical programs and a leading field compression team that maximizes production while reducing downtime. Similarly, on the D and C side, we've reduced cost by over $300 per lateral foot when compared to the prior operator's most recent wells. Our leading cycle times, completion optimization and sourcing of key materials to scale support these improvements. We're confident that our ability to execute this level will allow us to continue to find Delaware Basin opportunities at attractive rates of return. With that, I will turn it over to James to go over our '25 plan.

[James Walter, Director & Co-CEO at Permian Resources]

Thanks, Will. Turning to Slide eight, we're excited to discuss our 2025 business plan, which is focused on maximizing returns and free cash flow per share through consistent, thoughtful capital allocation and low cost execution. Our plan is a result of a tremendous amount of effort from every department of Permian Resources. We want to thank our entire team for the hard work that went in to pulling this all together. For the full year 2025, we expect total production to average between 740,000 BOE per day and oil production to average between 345,000 barrels of oil per day.

[James Walter, Director & Co-CEO at Permian Resources]

This plan delivers 8% higher annual oil production compared to full year 2024. Our capital program consists of approximately $2,000,000,000 which is less than 2024 despite the higher production base, showing materially improved capital efficiency year over year. 80 of the capital program is allocated to drilling and completion operations, where we expect to term line approximately two eighty five wells this year with roughly the same DUC inventory as we carried in 2024. The remaining 20% is primarily investments in infrastructure that position PR continue to drive value in 2025 and beyond. Our development program in Wellness will be largely the same as last year and will continue to be focused on our high returning Delaware Basin asset with New Mexico accounting for about 65% of our activity, the Texas Delaware accounting for about 30% and the Midland Basin getting the balance.

[James Walter, Director & Co-CEO at Permian Resources]

We expect our average working interest to be approximately 75%, which is in line with 2024 and our average lateral length to increase to approximately 10,000 feet. We expect our controllable cash cost to be approximately $7.75 per BOE, which as we mentioned earlier, we believe to be the lowest cost in the Permian. Additionally, we continue to optimize our tax planning strategies and expect approximately $25,000,000 current taxes for 2025 at strip prices. The combination of the same or better well productivity with lower cost across the board drive meaningfully improved capital efficiency and lower breakevens in 2025. Turning to Slide nine.

[James Walter, Director & Co-CEO at Permian Resources]

Our balance sheet reflects the same philosophy around low leverage and high liquidity we have shown since the founding of our predecessor company. We maintained leverage right at 1x through the course of 2024, while doing $1,200,000,000 in acquisitions. And we expect to exit 2025 at approximately 0.5x levered assuming current strip prices. As mentioned earlier, we exited the year with $3,000,000,000 in liquidity, including approximately $500,000,000 of cash. This positions us to be opportunistic in any environment as we believe market dislocations represent some of the greatest value creation opportunities in this sector.

[James Walter, Director & Co-CEO at Permian Resources]

We've also protected our downside through hedging with approximately 25 of our crude oil heads at $73 and strong oil and gas hedges for the next few years. The next strategic priority for our balance sheet is the achievement of investment grade status, which we think come before the end of the year given our consistent conservative financial policies and lower leverage than many of our investment grade peers. We paid our first zero point one five dollars per share base dividend in November, and our current base dividend yield is over 4%, highlighting the relative value that Permian Resources stock represents today. Importantly, the improvement in business fundamentals we have highlighted throughout the deck have driven our post dividend free cash flow breakeven down to approximately $40 which highlights the sustainability of our plan. Turning to Slide 10, we want to go back to 2023 to highlight some of the performance metrics that have helped drive the outsized investor returns we'll highlight on the following slide.

[James Walter, Director & Co-CEO at Permian Resources]

As most of you know, our sole focus is creating value on a per share basis, and our team has positioned us to deliver substantial peer leading growth on key per share metrics like production per share and free cash flow per share. From 2023 to 2025, we will grow production per debt adjusted share by approximately 50% or reducing our cost structure in a material way during that same time period. And the end result is our free cash flow per share almost doubles from just over $1 per share in 2023 to over $2 per share in 2025. Slide 11 shows the public results of the improvements to our business we hired on Slide 10. Our team's tireless focus on value creation and free cash flow per share growth has led to best in class total shareholder returns every year since the Colgate Centennial merger in 2022.

[James Walter, Director & Co-CEO at Permian Resources]

As you can see turning to Slide 12, the majority of this shareholder value has come from improvements in the quality of our business rather than a rerating of our multiple. Even with our industry leading TSR the past few years, we believe that Permian Resources is well positioned to continue to create outside value for investors. Our go forward value creation potential is underpinned by an industry leading cost structure, low breakevens and long dated high return inventory, which together have driven leading returns for investors. Thank you for tuning in today. And now we will turn it back to the operator for Q and A. Thank

[Operator]

you. Your first question comes from the line of Scott Hanold from RBC Capital Markets. Please go ahead.

[Scott Hanold, Managing Director - Energy Research at RBC Capital Markets]

Yes, thanks. Good morning.

[William Hickey, Director & Co-CEO at Permian Resources]

Good morning.

[Scott Hanold, Managing Director - Energy Research at RBC Capital Markets]

You discussed a little bit about your plan into 2025 and a lot of regional similarities. Can you give a little color around the target formations and co development to that provide you confidence in sustainability of the economics as you move forward?

[Scott Hanold, Managing Director - Energy Research at RBC Capital Markets]

And what's your visibility on that right now in terms of like duration?

[William Hickey, Director & Co-CEO at Permian Resources]

Yes. I mean, it's shockingly similar both to kind of allocation across states, basins and zones. I think you'll see average pad size may creep up a little bit just some of the blocks we're drilling set up for larger scale development, but really it's the same zones. It will be a lot of the same zones in New Mexico, Texas and Midland Basin that we've done for previous years. And really, I'd say our inventory position has not changed.

[William Hickey, Director & Co-CEO at Permian Resources]

If we follow kind of the M and A slides in there, we've been able to basically replace everything we've drilled for two years in a row now. So we still sit with high confidence fifteen year inventory with kind of the first half of that showing very little degradation from what we've done today.

[Scott Hanold, Managing Director - Energy Research at RBC Capital Markets]

Yes. And that's great. And that kind of leads into my next kind of question in terms of the M and A strategy going forward. And as you replace this inventory, you replace it as very similar quality stuff. And what is your view on larger scale M and A?

[Scott Hanold, Managing Director - Energy Research at RBC Capital Markets]

It seems like sort of the trend in the sector is getting bigger deals to enhance your scale, enhance the duration of the inventory and lower cost. Like when you look at larger scale deals in the Delaware, how much do you all see is left that could be targeted?

[James Walter, Director & Co-CEO at Permian Resources]

I think the M and A landscape overall, I think we see a pretty interesting and attractive kind of market backdrop as we head into 2025. I think it looks pretty similar to the last couple of years and the years before COVID, which have been kind of fruitful if people can find and do the right deals. I think in terms of scale, we've been more focused on the kind of smaller deals. I think the biggest deal we've done on the cash side was the Oxybria Jaw deal we announced in Q3. And I think we find those deals tend to have higher quality inventory and represent better values.

[James Walter, Director & Co-CEO at Permian Resources]

I think the bigger deals we've seen, especially on the private side in the Delaware, tended to be very production heavy and probably not as long lived on the inventory side of things. And so I think our focus has been more on the smaller deals, kind of the hundreds of millions of dollars and smaller. That's it. I mean, we'd be happy to look at bigger deals. We've looked at quite a few of them.

[James Walter, Director & Co-CEO at Permian Resources]

And if we found the one that was the right fit, the right quality and we believe truly made our business better over the long term, I think we'd be excited to do something bigger. But we see more value on the smaller end and probably the same going forward. But you never know what the market's going to bring and you can assume we're looking at everything.

[Scott Hanold, Managing Director - Energy Research at RBC Capital Markets]

Appreciate that. Thank you.

[Operator]

Thank you. And your next question comes from the line of Neal Dingmann from Tuohy Securities. Please go ahead.

[Neal Dingmann, Managing Director - Energy Research at Truist Securities]

Good morning guys. Thanks for the time. Will, maybe my first question for you is just around the operational efficiencies. You continue to just sort of quarter on quarter out. I'm wondering, is part of this driven by the continued integration of new assets?

[Neal Dingmann, Managing Director - Energy Research at Truist Securities]

I mean, does that help? Or really what continues to be the driver just when you guys are able to do this throughout the quarter?

[William Hickey, Director & Co-CEO at Permian Resources]

I'd say really that's just the culture that we've built around here. We've got a team of highly motivated, highly skilled people that are really working every day to try to better what they did the quarter before. That's the culture that's ingrained in PR. That's what we've been doing for a long time. And M and A, I'd say, M and A allows us to showcase that.

[William Hickey, Director & Co-CEO at Permian Resources]

M and A allows us to leverage our cost structure to buy deals at high rate of return and kind of immediately apply that cost structure where you can see kind of the synergies as quick as the first month after acquisition. But I wouldn't say M and A makes us better. I think on the margin it probably gives us some scale and some purchasing power, but really kind of the day to day grinding out hours, days, minutes on the drilling side and finding ways to optimize completions to lower cost is really just a cultural thing ingrained in PR. And I think we benefit a lot from being in Midland and really being focused on one basin. There is a lot of value in being kind of hyper focused on one basin in Midland, and I think kind of the culmination of the culture with that is what drives the performance.

[Neal Dingmann, Managing Director - Energy Research at Truist Securities]

Great point. Thanks, Will. And then James, maybe just a second one for you on shareholder return. I'm just wondering, I for one want to say, you all just haven't gone crazy thinking you have to pay out 100% or you have to have a 15% yield dividend. Just wondering when you sort of see that free cash flow shaping up as it is, how do you think what do you think is the appropriate shareholder return value this year by going next year? How do you sort of see that strategy?

[James Walter, Director & Co-CEO at Permian Resources]

Yes. I mean, I think as we said a lot to base dividend is the core of our shareholder returns program and we paid our we all got our first zero point one five dollars per share base dividend in November. So I think we're all really excited about that. I think we like the strong dividend yield. I think it reflects the kind of value proposition of PR stock today.

[James Walter, Director & Co-CEO at Permian Resources]

And it feels really sustainable. Like I said on the call, I think that's sustainable at a cash flow bake even. Post dividend down to 40% I think feels really, really good. I think going forward, look, I think our number one goal is to continue to increase the base dividend on an annual basis. We all think that's the kind of a key criteria to have a healthy high quality growing business as a sustainably growing base dividend.

[James Walter, Director & Co-CEO at Permian Resources]

So I think that's our first priority. And then beyond that, I think that kind of capital allocation post base dividend is going to depend on the opportunity set in front of us. I think that could be what it's been in the last couple of months is putting cash on the balance sheet and paying down some debt. I think over time, there could be interesting opportunities on the share buyback side or on the strategic acquisition side. And we're looking at all that and I think we're kind of making the decision every day, every week, every month what we think is going to drive the highest return for shareholders and that's where the kind of rest of the cash is going to go.

[Neal Dingmann, Managing Director - Energy Research at Truist Securities]

Love the answer. Well done guys. Thank you.

[James Walter, Director & Co-CEO at Permian Resources]

Thanks Neil.

[William Hickey, Director & Co-CEO at Permian Resources]

Thanks Neil.

[Operator]

Thank you. And your next question comes from the line of Gabe Tabood from the Keayigawa. Please go ahead.

[Gabe Daoud, Managing Director, Energy Equity Research at TD Cowen]

Thanks. Hey, guys. Good morning. Thanks for taking my questions.

[Gabe Daoud, Managing Director, Energy Equity Research at TD Cowen]

I was hoping first we could start with CapEx. A couple items, wanted to ask about. I guess, first is just the level of facility spend of I guess, it's about $400,000,000 on an absolute basis. Just curious if that's a good number to use annually on a go forward basis. And then your D and C per foot numbers targeting $750 a foot. Are you there now or is that a level that you expect to get to at some point this year?

[William Hickey, Director & Co-CEO at Permian Resources]

Cool. Great questions. Facilities, yes, I think kind of right around $400,000,000 maybe slightly above that is kind of where we think we'll be this year. That's $100,000,000 off of where we were last year. If you remember, there was a kind of a lot of one time spend associated with the Earthstone integration.

[William Hickey, Director & Co-CEO at Permian Resources]

So I think $400,000,000 is probably the right, call it, short to midterm run rate. Obviously, acquisitions can move that around. I do think that if we didn't do any acquisitions and just continue to prosecute developing our own inventory that once you get, call it, three plus four years out, you could see that drop further to kind of call it maybe as low as $300,000,000 a year. But that's probably the right kind of base case no acquisition run rate. And I think based on our history there's likely to be some acquisitions that happen between now and then.

[William Hickey, Director & Co-CEO at Permian Resources]

And then, yes, D and C side, $7.50 a foot is cutting edge real time cost today. So we are there. We were as we were looking at kind of what to put in the budget and the guide. I'd say we've got confidence based on what we're seeing real time in the field today that $7.50 is achievable and we are there today.

[Gabe Daoud, Managing Director, Energy Equity Research at TD Cowen]

Awesome. Okay. So I think it'd be fair to say you could probably move that lower as we move throughout the year?

[William Hickey, Director & Co-CEO at Permian Resources]

Yes. You said that, not me. I think that I trust my team will continue to find ways to get better. But at the same time, I kind of it feels like we've squeezed probably a lot of we can out of the deflation side of the equation. People are talking about tariffs.

[William Hickey, Director & Co-CEO at Permian Resources]

There's kind of a lot of other factors at play. So I think $7.50 is the right guide based on where I stand today. And hopefully, we can go find ways to cut costs from here, but it's not quite as clear as it maybe was three or four months ago.

[Gabe Daoud, Managing Director, Energy Equity Research at TD Cowen]

Okay. Okay. No, that's fair. Understood. Thanks for that.

[Gabe Daoud, Managing Director, Energy Equity Research at TD Cowen]

And then just a quick follow-up. Is it fair to assume just given pretty static level of equipment and activity relative to where you just were? So maybe no real lumpiness in the program this year. Is that a fair statement?

[William Hickey, Director & Co-CEO at Permian Resources]

I think there's a little bit of lumpiness. I would say CapEx is probably slightly front half weighted and production is slightly back half weighted, something like that. Production is probably on the low end of the guide for the first half of the year and then high end of the guide for the back half of the year and CapEx you probably could move a couple percent to the first half and drop the back half by a couple percent something like that.

[Gabe Daoud, Managing Director, Energy Equity Research at TD Cowen]

Got you.

[Gabe Daoud, Managing Director, Energy Equity Research at TD Cowen]

Got you. Okay. Nothing too meaningful though. Okay, great. Thanks guys.

[Operator]

Thank you. And your next question comes from the line of Zack Farham from JPMorgan. Please go ahead.

[Zach Parham, Executive Director, Equity Research at JP Morgan]

Good morning, guys. Just a follow-up on some of the other questions on D and C costs. You're at $7.50 a foot now. That's down over 100 a foot from where you were kind of coming into '24. Can you just detail what the drivers in those reductions in D and C costs have been over the last year? How much of that's efficiency gains versus on the cost side?

[William Hickey, Director & Co-CEO at Permian Resources]

Yes, happy to do it. I'd say just real high level, I'd say probably slightly over 50%, maybe 55% is going to come from the efficiency side with the balance being more kind of real per unit cost deflation. On the efficiency side, it's drilling weighted. You can see it kind of however you want to pull our drilling times. Just we've continued to cut days and days and days on both the Delaware Basin and Midland Basin side of the equation.

[William Hickey, Director & Co-CEO at Permian Resources]

And we've talked about this a lot, but on the drilling side days directly affect dollars. Spread rate call it $90,000 to $100,000 a day every time you cut it you save about that much on a gross basis per well. On the material side, it's really just kind of tangible stuff like sands come down, casings come down and then a little bit of call it like deflation on true services. Simofracts helped a little bit and you kind of add all that together and you just get to the numbers you're quoting.

[Zach Parham, Executive Director, Equity Research at JP Morgan]

Got it. Thanks for that. And then maybe just an update on the Midland asset and kind of how that fits into the portfolio. It seems like it's about 5% of turn in lines this year, but how do you think about that asset fitting into the portfolio over the longer term?

[James Walter, Director & Co-CEO at Permian Resources]

Kevin, I think we're obviously very focused on the Delaware Basin. That's kind of our backyard. That's where we've spent the majority of our time and majority managing majority of our capital. But that's turned out to be a good little asset. I think our team's done a really good job bringing kind of costs in line with the leading operators in the Midland Basin.

[James Walter, Director & Co-CEO at Permian Resources]

Frankly, when we acquired that asset a couple of years ago, it was in a fine position. But I think our team's really taken that and made it a lot better, kind of applied the PR secret sauce, if you will. I think it's not an area of focus for us, but I think it fits well in the portfolio today. It's a little bit of our capital activity. It provides a nice little cash flow stream.

[James Walter, Director & Co-CEO at Permian Resources]

And I think over the longer, longer term, if there's something to do to optimize the position that included that, I think we'd obviously be open to it. But I think we like having the portfolio. I think it's got really good gas price optionality. Obviously, kind of Permian gas prices haven't been anything to be that excited about, but that business has a real amount of leverage to kind of end base in gas pricing that I think most kind of makes it more attractive to hold and probably requires a different environment to do something with. But tell you the truth, our team has done such good work.

[James Walter, Director & Co-CEO at Permian Resources]

I think we're pretty happy with it sitting where it is. And if there's a way to do something to make it or make our business better, obviously, that's what we do every day, we'd be open to it. But happy with it in the portfolio as it stands today.

[Zach Parham, Executive Director, Equity Research at JP Morgan]

Got it. Thanks guys.

[Operator]

Thank you. And your next question comes from the line of Kevin McCarthy from Pickering Energy Partners. Please go ahead.

[Kevin MacCurdy, Managing Director at Pickering Energy Partners]

Hi, guys. It looks like you're taking your efficiency gains in shorter cycle times from 2024 and using it to increase turning lines year over year. This is slightly different than some of your peers who I think are banking those efficiency gains and keeping production flattish. And I wonder if you could just share your thought process gains and keeping production flattish. And I wonder if you could just share your thought process on activity levels and how you reached the decision you did?

[William Hickey, Director & Co-CEO at Permian Resources]

Well, at the beginning of it, I'd say kind of what first of all, we look at as we're making capital allocation decisions, especially with respect to the drilling program is just kind of the all in return of the program. And we've talked about this in the past, but also kind of the payback of it. When you add an incremental rig, how fast that rig pays for itself to where you're in a net better cash position because of it. And I think what you've seen over the last nine months or twelve months is commodity prices have moved against us, but at the same time our cost structure has more than offset it. We have we're earning better returns at the pad level today than we were a year ago, just given the overall return profile of the business really with the cost structure being the biggest tailwind.

[William Hickey, Director & Co-CEO at Permian Resources]

I think as we look at the plan for 2025, I wouldn't I'd call this more of a tweener program. Like we are from year over year, it's 8% growth, but there's a lot of acquisitions in it. Kind of from Q4 levels, it's less than that. And we could easily dial it up to show meaningful growth much more than this to kind of high end 10% as we've talked about or dial it back a little bit. But it feels like kind of the return profile of the business justifies a little bit of growth and that's where we landed.

[James Walter, Director & Co-CEO at Permian Resources]

And really the way we're thinking about it and the way we focus on everything is per share growth. And I think we've got the debt adjusted per share growth in the deck of 11% year over year, which I think feels really healthy. So I think kind of our focus like we talked about a lot is on the per share metric. It feels like that kind of fits with the position of our business today and the macro environment.

[Kevin MacCurdy, Managing Director at Pickering Energy Partners]

Thanks. I appreciate that answer. And yes, I think the growth certainly separates you from your peers. For a follow-up, I wanted to touch on the minimal cash taxes in 2025 because I think that's a meaningful piece of the free cash flow. How are you guys able to mitigate taxes again this year?

[Kevin MacCurdy, Managing Director at Pickering Energy Partners]

And do you have any thoughts on how long you can kind of continue to defer the majority of your cash taxes?

[James Walter, Director & Co-CEO at Permian Resources]

Yes. This is Guy.

[James Walter, Director & Co-CEO at Permian Resources]

So for 2024, we really just kind of continue to optimize our tax planning. And we learned a lot with Earthstone that ultimately resulted in nominal cash taxes paid in 2024 and 2025 is just a carryover of that, what I call improved planning and probably optimization of Earthstone. As we go forward, cash taxes will be more meaningful in 2026 and by 2027, closer to a full cash taxpayer. So we're going through all that now. So that will change, but 2025 was a meaningful improvement relative to what we thought six or nine months ago.

[Kevin MacCurdy, Managing Director at Pickering Energy Partners]

Appreciate that. Thank you, guys.

[James Walter, Director & Co-CEO at Permian Resources]

Thanks,

[Operator]

Evan. Thank you. Your next question comes from the line of Derek Whitfield from Texas Capital. Please go ahead.

[Derrick Whitfield, Managing Director at Texas Capital]

Good morning all and thanks for taking my questions. Over the last two quarters, you guys have added 2,500 net acres via grassroots leasing with the majority of that coming in 4Q. Kind of looking forward across your expanded position, is it reasonable to think that you could continue to add 5,000 to 10,000 acres per year via grassroots leasing really negating the need for larger bolt homes?

[James Walter, Director & Co-CEO at Permian Resources]

High end of that sounds pretty high. I think we're confident like we've been doing this a long time and it's lumpy. I think we could have replicate what we did in Q4 a couple of quarters in a full year period. But I think probably the kind of 4,000, five thousand, six thousand in that acre is probably the better base case. I'd say 10,000 an acre would be a really good year 10,000 acres would be a really good year.

[James Walter, Director & Co-CEO at Permian Resources]

I think just kind of the way that these deals come through and the kind of opportunity set being largely tied to the drill bit in our drill schedule, like you do have some outsized quarters like we saw in Q4. But I think we're certainly confident we can continue doing it at the scale we've done in the last couple of years, which I think is probably close to that 5,000 acres plus or minus 5,000 acres plus or minus run rate. But who knows? I mean, our team, we've got an incredible team out here in the Midland on the ground every day looking for opportunities. So I think a really good year could look like that, but probably not every year.

[Derrick Whitfield, Managing Director at Texas Capital]

Makes sense. And for my follow-up, I wanted to ask a capital efficiency question. One of your peers recently introduced a new measure where they evaluated the price in 2025 that would allow for similar free cash flow per share as achieved in 2024. I guess with respect to that capital efficiency measure, if you've seen it, I'd love your take on it. And secondly, if you have a view on what crude price would deliver a similar level of free cash flow per share for you in 2025 if you have it?

[James Walter, Director & Co-CEO at Permian Resources]

Yes. I mean, I think for us, we actually like looking at this. I think one thing that's really important as we talk about running our business every day is that our business is getting better year over year and kind of the ultimate arbiter of quality as we see it is free cash flow per share. I think that metric that we talked about is generally in the context of absolute free cash flow. But I think from our perspective, if we were trying to generate the same, call it, dollars 1,400,000,000.0, we generated in free cash flow on an absolute basis last year, which is, call it, a $75 crude price.

[James Walter, Director & Co-CEO at Permian Resources]

We think we could do that this year in the kind of low to mid-60s, call that $63 plus or minus. And build back that shows the quality of the business, the kind of step change that we've seen in operational efficiencies and capital efficiency across the board.

[Derrick Whitfield, Managing Director at Texas Capital]

Great update. Thanks for your time.

[James Walter, Director & Co-CEO at Permian Resources]

Thanks, Eric.

[Operator]

Thank you. And your next question comes from the line of Neil Mehta from Goldman Sachs. Please go ahead.

[Neil Mehta, Head of Americas Natural Resources Equity Research at Goldman Sachs]

Yes. Good morning, Will and James and team. Thanks for the time here. Yes, I guess big big picture question. You show in the deck, despite multi year outperformance, the stock does still trade at a two turn discount to a lot of the peer set, including your big brother in the Midland.

[Neil Mehta, Head of Americas Natural Resources Equity Research at Goldman Sachs]

And I guess the question is, what do you think the market is needs to better understand to start thinking about Permian resources differently and more in the context of other pure play Permian stories?

[James Walter, Director & Co-CEO at Permian Resources]

I think to be frank, I think we don't spend a ton of time guessing what the market is thinking. You're probably closer to that and better answering that question than we are. I'd say where we spend all of our time focused on is how we can make our business better. I think if I had to had to speculate, I'm probably not the best person to do this. I think it's a combination of one, Permian Resources is still a relatively new story.

[James Walter, Director & Co-CEO at Permian Resources]

Like I think if you want to talk about the guys across the street, they've been doing this for well over a decade, probably closer to two than to one and doing it tremendously well year in, year out, quarter in, year in, quarter out. So I think like that multiple is deserved by the kind of both the quality of the business they run and the duration they run it for. We're still a relatively new story. I think it's the two point five year mark or so for Permian Resources and we're still new to a lot of investors. So hopefully we've built a lot of trust.

[James Walter, Director & Co-CEO at Permian Resources]

We've obviously we've been creating a lot of value for shareholders. And I think over time, the kind of multiple uplift will come as people see I think people see the quality of our business today, but continue to see quarter in, quarter out and year end, year out execution. So I think the only other thing we get occasionally from investors is the outperformance to date, which is shown on Slide 11, has been so strong three years running that I think people have a hard time reconciling that with Slide 12, which is still a relatively low multiple compared to the peer set. So I think it will work itself out over time. And I'd say for us, we're really focused on how we grow free cash flow per share and think everything else will take care of itself.

[Neil Mehta, Head of Americas Natural Resources Equity Research at Goldman Sachs]

Yes. Great answer. And then just a follow-up on lateral lengths. You're moving from 9,300 feet to 10,000. Just talk about what how do you continue to drive this higher?

[Neil Mehta, Head of Americas Natural Resources Equity Research at Goldman Sachs]

And what's your approach to continuing to extend those laterals?

[William Hickey, Director & Co-CEO at Permian Resources]

Yes. I think this is just the way the acreage position is set up this year. I think we've always Delaware Basin, at least in kind of the deeper Wolfcamp type benches targeted two mile laterals is just kind of the optimal Delaware Basin laterally. I think some of the step up from 9,300 to 10,000 is just we're drilling very, very few sub 10,000 foot laterals as well or this year as well as there's a few three mile laterals that in some of the shallower benches actually does drive incremental economics and when so that's what we'll do. I think the verdict is still a little bit out on the Delaware Basin.

[William Hickey, Director & Co-CEO at Permian Resources]

If you'll see the big shift change from targeting 10,000 feet to chart targeting closer to 12,500 feet that you've seen in the Midland Basin. I'd say most Midland Basin operational synergies or efficiencies do end up translating to to Delaware a couple of years later. So I probably wouldn't bet against it. But we Delaware Basin productivity makes a lot more fluid per foot than Midland. And so at some point, if you really, really start to push lateral lengths, your fluid deliverability is constrained and it kind of hurts the economics.

[William Hickey, Director & Co-CEO at Permian Resources]

So I'd say that's the stuff we're looking at every day. But I do have the confidence that our drilling team could easily go drill 2.5, three miles if needed. It's more of just that makes sense of the acreage position and the economics.

[Neil Mehta, Head of Americas Natural Resources Equity Research at Goldman Sachs]

Yes. Okay. Thanks, Will.

[Operator]

Thank you. And your next question comes from the line of Oliver Wang from TPH. Please go ahead.

[Oliver Huang, Director at TPH&Co]

Good morning, James, Will and team, and thanks for taking the questions. Just wanted to kind of look back at the 2025 budget and the non D and C portion that 20%. It sounds like most of that is facilities infrastructure related, but just any sort of color you all can provide with respect to the magnitude of the non op CapEx within that budget?

[James Walter, Director & Co-CEO at Permian Resources]

Yes, non op is pretty small. We've done an awesome job over the years, I think, kind of coring up and focusing on our operated business. I'd say it's the announcement is less than $50,000,000 a year.

[Oliver Huang, Director at TPH&Co]

Okay. That makes sense. And for a follow-up, maybe just on gas realizations. Last quarter, you all put out a slide speaking towards focusing on optimizing the gas netbacks. Just kind of wondering if there's been any progress updates to kind of offer up on that front that you're able to speak to?

[James Walter, Director & Co-CEO at Permian Resources]

No. I mean, I'd say it's definitely still a priority. I think kind of better marketing of all of our hydrocarbons across the board is a priority. I'd say on the gas side that just takes time. I think you saw us on the crude side kind of guide up our oil realizations by 1% at the midpoint from our guidance last year.

[James Walter, Director & Co-CEO at Permian Resources]

And I think we've made some real progress there, 0.1 dollars zero point two zero dollars zero point five zero dollars a barrel in different places really moves the needle on free cash flow at the end of the day. On the gas side, I think, to be frank, I think our the way we're going to sell our gas this year probably looks a lot like it did last year. I think the kind of real step change that we think we'll see is probably in 2026 and beyond as we're looking at some longer term, longer haul deals, ways to access. Got a couple of different things on the plate that could allow us to access different markets than Waha, but that just takes time. So I think our gas strategy is very in focus for us.

[James Walter, Director & Co-CEO at Permian Resources]

I think kind of optimizing our realizations over the next decade is at the very top of the strategic priorities list, but I think you'll see that more in 2026 and 2027 than you will in 2025.

[Oliver Huang, Director at TPH&Co]

Perfect. Thanks for the time.

[Operator]

Thank you. And your next question comes from the line of Josh Silverstein from UBS. Please go ahead.

[Josh Silverstein, Managing Director at UBS Group]

Yes, thanks. Good morning, guys. You mentioned potentially getting the balance sheet to half a turn of leverage by the end of this year. Do you see benefit in getting to this level from a rerating in the stock? Or does it make sense to stay closer to one times and use that cash for buyback and acquisitions?

[James Walter, Director & Co-CEO at Permian Resources]

We're definitely not kind of solving for balance sheet issues because I think of implications for how the stock trades. I'd say as we think about balance sheet, it's positioning our business to optimize value creation in all environments. And I think having a stronger balance sheet, I think everyone would agree, positions you well to be able to be opportunistic and aggressive if there's a downturn. And also, you have dry powder as well if the right opportunity comes along, be that a buyback, be that an acquisition and a kind of normal market as well. So I don't think it's a stock positioning.

[James Walter, Director & Co-CEO at Permian Resources]

I said we're very comfortable at one times. We've been at one times the majority of our business life cycle the last nine or ten years. And we're in a fortunate position where the business is generating so much cash. It's going to delever more quickly this year absent any extra acquisitions or buybacks. But there's certainly no strong view that we're going to trade better at 0.5x than 1x.

[Josh Silverstein, Managing Director at UBS Group]

Got it. And then on the royalty side, you guys have a pretty chunky position now, almost 90,000 net royalty acres. A couple of questions here. Just as you're thinking about M and A, are you thinking about potentially targeting more royalty acreage? And then for the drilling program this year, how much drilling is on that royalty acreage to enhance returns?

[James Walter, Director & Co-CEO at Permian Resources]

Yes. I think look, we look at all acquisitions under the lens of what's the all in total return we think we can achieve. And I'd say the majority of the acquisition dollars we spent have been on working interest. I think we look at a lot of royalties deals. That's a pretty competitive landscape and competitive market where there's often perceived lower cost of capital.

[James Walter, Director & Co-CEO at Permian Resources]

But I think we're definitely active buying royalties under the Permian Resources where we can. I think where you've had the most success is buying working interest packages that come with royalties alongside it. I think that's been you saw that in the BereaDRAW deal and we announced last year and kind of I think probably more likely to be the base case. And then when it comes to activity, I'd say the activity goes towards the highest rate of return developments that we have and more often than not those tend to be on the high NRI package that we have with the kind of royalties advantage. You'll see on 2015 our kind of 2025 guidance has us at about a 79% eight-eight-ten RI.

[James Walter, Director & Co-CEO at Permian Resources]

So we're definitely allocating more capital to those higher return high NRI packages.

[Josh Silverstein, Managing Director at UBS Group]

Got it. Thanks guys.

[Operator]

Thank you. And your next question comes from the line of Jan Abbott from Wolfe Research. Please go ahead.

[John Abbott, E&P Research Vice President at Wolfe Research, LLC]

Hey, good morning and thank you for taking our questions. Will, I want to go back to the cost per lateral foot. Ignoring tariffs, which you mentioned at risk there, at $750 per lateral foot, to achieve further efficiencies from here, do we really need to see more of a technological change at this point in time? Or are there other things that you could potentially do to see a major change in costs?

[William Hickey, Director & Co-CEO at Permian Resources]

Yes. Look, I mean, if I was to make the bull case for cutting costs from here, I'd say there's small changes in continued kind of reduced flat time on the drilling side. There's small changes on water sourcing. Recycled water is a meaningful savings and water has become a really, really big part of our capital budget. On the completion side, and then yes, there's always the breakthroughs.

[William Hickey, Director & Co-CEO at Permian Resources]

Like if you follow drilling costs for PR or the predecessor company that we ran over time, it's kind of a flat to very marginal improvements quarter over quarter and then you have big step changes kind of once every year or two. We saw one of those going from Q1 to Q2 last year. So, actually those are more of the technological change. So you discover a new BHA or you find a swap out of fluids or something like that that has like a meaningful change. So those are all the ways you could win.

[William Hickey, Director & Co-CEO at Permian Resources]

Obviously, there's ways you can lose too and so hence the $750,000,000 being kind of where we landed for the year.

[John Abbott, E&P Research Vice President at Wolfe Research, LLC]

Okay. And then I want to go back to CapEx with production. I mean production is 8% year over year. So, we got a backdated oil curve, but there are benefits to maintaining efficiencies of operations. I mean, we've seen that in your cost per lateral foot. So, when you think about sort of possibly managing production or like when you think about like a production number, does it make more sense to let efficiencies continue versus managing to a production number?

[James Walter, Director & Co-CEO at Permian Resources]

I think it just really depends on the market and kind of I'd say both it's a combination as we think about kind of capital allocation and reinvestment rate, which ultimately drives kind of the production number that you referenced. It's a function as we think about it of what is what are the returns that we're getting and what is the kind of macro backdrop go forward. I think the returns we're getting even at a back weighted strip are phenomenal in this environment. I think we talked about our returns at a corporate level are materially better than they were last year at even a lower oil price. But I do think kind of there is a backdrop of kind of potentially an oversupplied market as you kind of move through the year.

[James Walter, Director & Co-CEO at Permian Resources]

I think maybe some of the storm clouds are subsiding a little bit. But I think with that backdrop, we kind of got to what we viewed as a middle ground on kind of organic growth, call it kind of low to mid single digits on organic basis and 8% overall. What we're really focused on is the per share growth. And I think we can't talk about that enough. That kind of per debt adjusted share, our 11% overproduction growth feels really good for the business in this market.

[James Walter, Director & Co-CEO at Permian Resources]

And I think you'll see us talk a lot more about that metric going forward.

[John Abbott, E&P Research Vice President at Wolfe Research, LLC]

Appreciate it. Thank you for taking our questions. Thank you.

[Operator]

Thank you. And your next question comes from the line of Leo Mariani from ROTH Capital Partners. Please go ahead.

[Leo Mariani, Managing Director, Senior Research Analyst at Roth Capital Partners, LLC]

Yes. Hi. Obviously, you spoke a bit in your prepared comments about, clearly the multiple being lower than peers and hopefully that takes care of itself over time. But at the same time, you guys are generating a lot of free cash flow, which seems to put the balance sheet in a lot better shape at the end of the year and I know M and A is unpredictable. But just given the fact that your leverage profile is in great shape and the multiples low. Why doesn't it make sense to maybe feather in a little bit more buyback instead of kind of waiting for things to totally blow up here?

[James Walter, Director & Co-CEO at Permian Resources]

Yes. I mean, I think for us, we've always talked about our buyback strategy is going to be very call it, rifle shot. And we think you want to get a better bang for your buck on buyback dollars when you see real dislocations or a real downturn. And although I think we're undervalued, it appears it doesn't feel like a truly dislocated market kind of more broadly today. So I think we think our dollars are better spent putting them on the balance sheet and rating for a call it a riper opportunity than one that's just good enough.

[James Walter, Director & Co-CEO at Permian Resources]

We think that kind of prudent approach to share buybacks to ultimately drive more shareholder value over the long term and we're kind of prepared to be patient and wait for the right opportunity to be that a juicier buyback in the future that I think we do in mass or an acquisition opportunity or something else.

[Leo Mariani, Managing Director, Senior Research Analyst at Roth Capital Partners, LLC]

Okay. And then just turning to your controllable cash costs, as you pointed out, they kicked down a little bit here in the fourth quarter. You're looking at 2025 guidance, I guess you guys are expecting them to come down again on your controllable cash costs. Maybe just kind of talk to some of the success you had in 4Q and what the drivers are to kind of reduce the cost more in 2025? Is it just simply a matter of scale?

[Leo Mariani, Managing Director, Senior Research Analyst at Roth Capital Partners, LLC]

Or are there some kind of tangible cost reduction efforts that you guys are working on?

[William Hickey, Director & Co-CEO at Permian Resources]

Yes. So I'd say one big win that which we highlighted some of is the cost we were able to cut so quickly out of the acquisitions we made. That free address that we bought was north of $10 per BOE asset. And just a few months after getting our hands on it, we've got it down into the $8 s and I think there's room to continue to lower it from there. So you have some of those tailwinds as you compare Q4 to kind of forward looking 2025%.

[William Hickey, Director & Co-CEO at Permian Resources]

We also have just kind of the way our development program sets up relative to some of our midstream contracts. I think you'll expect we expect to lower GP and T year over year. That's more just a function of where we're drilling than any material change to the business. But look, I'd say overall, we think controllable cash cost is important to protecting our margin, to protecting our ability to generate free cash flow and free cash flow per share. So we'll keep chipping away at it.

[William Hickey, Director & Co-CEO at Permian Resources]

Industry leading G and A kind of keep pushing on that LOE side, etcetera, etcetera will lead to a better business and ultimately more free cash flow.

[Leo Mariani, Managing Director, Senior Research Analyst at Roth Capital Partners, LLC]

Thank you.

[Operator]

Thank you. And your next question comes from the line of Paul Diamond from Citi. Please go ahead.

[Paul Diamond, Analyst at Citigroup]

Good morning. Thanks for taking my call. Just a quick one. You mentioned on M and A opportunities, kind of thinking that couple of hundred million dollars range. Should we think about the go forward kind of opportunity set similar to Berea Draw or on the high side or the low side of that?

[James Walter, Director & Co-CEO at Permian Resources]

I think we're doing acquisitions today that are $50,000 on the small end and we're doing those by the dozen or by the hundreds. And I think we've done a lot of the kind of Berea Draw size, high $100,000,000 acquisitions. Last year, we did the kind of $800,000,000 Berea Draw deal. We did a kind of $200 something million deal in Eddy County and then couple of deals a little smaller than that. So I think that's probably the right range of kind of potential outcomes.

[James Walter, Director & Co-CEO at Permian Resources]

I think it's kind of big as $1,000,000,000 on the kind of cash transaction side and as small as $10,000

[Paul Diamond, Analyst at Citigroup]

Understood. Appreciate the clarity. And then just talking a bit about the ground gains. Compared to two point five years ago, the CDEV, Colgate merger, how have you seen that evolve? You've seen similar bid ask spreads, similar kind of negotiation times or just any evolution in that net marketer activity?

[James Walter, Director & Co-CEO at Permian Resources]

The ground game has been pretty similar to efforts that we've had underway since we started the predecessor company, Colgate, back in 2015. And I think a big part of that is the relationships and being boots on the ground out here in Midland in the heart of the Permian that kind of opens up a lot of opportunities for us. But I'd say the only big change we saw was from the Colgate Centennial merger in 2022 was just the scale of the business. We go from running four, five, six rigs to running 12 rigs and that kind of doubles the opportunity set and probably doubled our success rate at acquiring deals. So I think the kind of negotiate times, rate of return, cost breakers have been pretty steady for a long time.

[Paul Diamond, Analyst at Citigroup]

Understood. Thanks for clarity. I'll leave it there.

[Operator]

Thank you. And your next question comes from the line of Noah Hengness from Bank of America. Please go ahead.

[Noah Hungness, Associate at Bank of America Merrill Lynch]

Good morning, guys, and congrats on a great quarter. For my first question, I just wanted to ask on the base dividend. You guys have continued to have your capital costs your capital program become more efficient, your cash costs go lower and your production is higher than what we were expecting. And it seems like your free cash flow capacity is also increasing. So what was your reasoning behind keeping your base dividend flat when you announced results?

[James Walter, Director & Co-CEO at Permian Resources]

Yes. The reason is we paid our we all got our first zero point one five dollars base dividend in November. So it just kind of felt like the kind of that was the right status quo. And I think we probably messaged this indirectly when we rolled it out that kind of we do plan to revisit it annually, but we kind of did our annual revisit with the first November dividend that we paid. I think the business could certainly support a larger dividend and we're excited to kind of revisit it this time next year and should have a nice increase.

[James Walter, Director & Co-CEO at Permian Resources]

But I'd say it just felt like we had just done this and frankly the dividend yield is higher than it was when we rolled it out and it had only been one quarter. So pretty simple thinking that it just kind of didn't seem like it made sense to make a change just one quarter in.

[Noah Hungness, Associate at Bank of America Merrill Lynch]

Yes. That makes sense. And then I just would like to know your thoughts on potentially implementing creative drilling solutions like u laterals. We've seen some of your peers in the basin do so to levels of success and if you guys had any thoughts on that.

[William Hickey, Director & Co-CEO at Permian Resources]

Yes. So I'd say for the most part, we're very fortunate that our kind of land team and our land position does not require it. Like if you go look at our acreage on a map, just a simple scan, you can see how well it sets up for kind of two or longer than two straight well developments. Having said that, I think we've drilled three or four U-turn wells or kind of curved candy cane wells, if that's what you want to call it, to date. And anytime it does make sense, it's part of the program.

[William Hickey, Director & Co-CEO at Permian Resources]

I'd say our billing team has proven over the three or four times we've done it that there's very, very little incremental cost like that curve. Sometimes you don't even see it on a DVD plot. And so we have the confidence that when it makes sense, we'll do it. And I think that it'll be something kind of like Simulfrack. It's part of the program, but I don't think it'll be something that we are necessarily highlighting as a huge step change in capital efficiency, primarily driven that we just don't have that many inefficient places where we need to do it.

[Noah Hungness, Associate at Bank of America Merrill Lynch]

Got you. Thank you so much for answering our questions.

[William Hickey, Director & Co-CEO at Permian Resources]

You bet. Thanks Noah.

[Operator]

Thank you. There are no further questions at this time. I will now hand the call back to Mr. James Walter for any closing remarks.

[James Walter, Director & Co-CEO at Permian Resources]

Thank you, and thanks to everyone for dialing in today. Having gotten off to a great start for 2025, our primary goal remains the same, to maximize shareholder value over the long term. To do that, we plan to continue to build on our track record of delivering consistent results with the lowest cost structure in the Delaware Basin. Thanks again, Deborah, for joining the call today and for following the Permian Resources story.

[Operator]

This concludes today's call. Thank you for participating. You may all disconnect.

Participants

Executives

• Hays Mabry, Director of Investor Relations
• William Hickey, Director & Co-CEO
• James Walter, Director & Co-CEO

Analysts

• Scott Hanold, Managing Director - Energy Research at RBC Capital Markets
• Neal Dingmann, Managing Director - Energy Research at Truist Securities
• Gabe Daoud, Managing Director, Energy Equity Research at TD Cowen
• Zach Parham, Executive Director, Equity Research at JP Morgan
• Kevin MacCurdy, Managing Director at Pickering Energy Partners
• Derrick Whitfield, Managing Director at Texas Capital
• Neil Mehta, Head of Americas Natural Resources Equity Research at Goldman Sachs
• Oliver Huang, Director at TPH&Co
• Josh Silverstein, Managing Director at UBS Group
• John Abbott, E&P Research Vice President at Wolfe Research, LLC
• Leo Mariani, Managing Director, Senior Research Analyst at Roth Capital Partners, LLC
• Paul Diamond, Analyst at Citigroup
• Noah Hungness, Associate at Bank of America Merrill Lynch