Core Insights - PrimeEnergy Resources Corporation reported a 16.4% year-over-year increase in revenue for Q1 2025, driven by growth in oil and gas production [1][6] - Despite a decline in earnings per share compared to Q1 2024, the company emphasized significant shareholder returns and operational momentum [1][4] Financial Performance - Revenue reached $50.1 million, up 16.4% from the previous year [6] - Oil production increased to 457,000 barrels, a rise of 6.0% [6] - Natural gas production surged to 2.39 billion cubic feet (Bcf), marking a 106.6% increase [6] - NGL (Natural Gas Liquids) production rose to 454,000 barrels, up 120.4% [6] - Net income was reported at $9.1 million, a decrease of 19.3% [6] - Diluted earnings per share (EPS) fell to $3.72, down 15.7% [6] Shareholder Returns - The company has returned a total of $112.6 million to shareholders through stock repurchases since initiating its buyback program [3] - In 2025, 47,970 shares were repurchased at a cost of $9.17 million [6] - As of May 19, 2025, the outstanding share count was 2,428,000, including vested options [3] Operational Highlights - The CFO highlighted strong operational momentum with significant growth in natural gas and NGL volumes [4] - Total assets increased to $339.3 million at the end of the quarter, up from $324.6 million as of December 31, 2024 [3]

Reserves and Production - The company reported proved developed reserves of 5,757 MBbls of oil, 3,676 MBbls of NGLs, and 24,749 MMcf of gas for 2023, with total reserves increasing to 13,558 MBoe[52]. - The Gulf Coast region had 452 MBoe of proved reserves, representing 1.7% of total proved reserves as of December 31, 2024[60]. - As of December 31, 2024, the company had 359 producing wells in the Mid-Continent region, with an average net daily production of 806 Boe[63]. - In West Texas, the company had 543 wells, with an average net daily production of 13,749 Boe, representing 88.3% of total proved reserves[65]. - Average net daily production reached 14,707 Boe per day as of December 31, 2024, with 13,749 Boe per day coming from Texas[59]. Financial Performance - The company reported a net income of $9.1 million, or $5.40 per share, for the three months ended March 2025, compared to $11.3 million, or $6.27 per share, for the same period in 2024[71]. - Oil, gas, and NGLs sales increased by 21.02% to $47.2 million for the three months ended March 2025, up from $39.0 million in the same period of 2024[72]. - Production and ad valorem taxes increased by 10.77% to $3.3 million for the first quarter of 2025, reflecting higher gas and natural gas liquid revenues[74]. - Depreciation, depletion, and amortization increased by 97.3% to $20.4 million for the first quarter of 2025, due to increased production from new wells[76]. Capital Expenditures and Investments - The company invested $113 million in 48 horizontal wells in West Texas in 2024, with plans to invest $118 million in 38 horizontal wells in 2025[82]. - The company anticipates investing over $100 million in future drilling activities targeting the Wolfcamp "D" pay zone in Reagan County[70]. - The company has identified 25 horizontal locations across its acreage in Upton and Martin counties that could be drilled in the near term, requiring an investment of approximately $76 million[70]. - The Company aims to maintain a strong balance sheet and ample liquidity, with a capital budget reflective of commodity prices and expected cash flows for 2025[81]. Debt and Credit Facilities - The Company has a reserves-based line of credit totaling $300 million, with a current borrowing base of $115 million[86]. - As of May 14, 2025, the Company's outstanding borrowings under this line are $24.0 million[86]. - The next borrowing base review is scheduled for June 2025, and the bank reviews the borrowing base semi-annually[86]. - The Company is currently in compliance with financial and operational covenants and expects to remain compliant over the next twelve months[86]. - The Company’s oil and gas properties are pledged as collateral for the line of credit[86]. Market Conditions and Future Outlook - Natural gas prices averaged $2.13 per MMBtu in 2024, down from $2.64 per MMBtu in 2023 and $6.36 per MMBtu in 2022[57]. - Oil prices averaged $75.48 per barrel in 2024, compared to $78.22 per barrel in 2023 and $93.67 per barrel in 2022[57]. - Future development plans are contingent on cash flow expectations and the availability of funds from the revolving credit facility[51]. - The ability to borrow under the revolving credit facility may be limited if there is a decrease in the borrowing base due to commodity price declines[86]. - Future drilling and development plans will be based on expected cash flows from operations and availability of funds[85]. - The Company may face a decrease in its borrowing base due to lower natural gas or oil prices, operational difficulties, or declines in reserves[86]. Strategic Initiatives - The company is actively pursuing acquisitions of producing properties to enhance its asset base and stockholder value[46]. - The company has no current derivative contracts and does not plan to enter into new contracts unless necessary for credit stability[48]. - The majority of the Company's capital spending is discretionary and will depend on the assessment of the oil and gas business environment[87]. - The Company is not required to enter into any hedge agreements as the borrowing base utilization percentage is less than 15%[85].

Core Viewpoint - PrimeEnergy Resources Corporation experienced significant revenue and earnings growth in 2024, driven primarily by a substantial increase in oil and natural gas liquids production, despite challenges in natural gas pricing [2][3][8]. Financial Performance - Total revenues for 2024 reached $237.8 million, a 79% increase from $132.8 million in 2023 [2]. - Net income nearly doubled to $55.4 million from $28.1 million year-over-year [2]. - Basic earnings per share rose 107% to $31.43 from $15.19, while diluted earnings per share increased to $21.95 from $10.77 [2]. Production Growth - Oil production surged 123% year-over-year to 2.56 million barrels, and natural gas liquids (NGL) production increased 112% to 1.28 million barrels [3]. - Total oil and gas revenues increased 107% to $223 million, with oil contributing $193.7 million [3]. Operational Investments - Capital spending in 2024 totaled $113 million, with 48 horizontal wells drilled, primarily in Reagan County, Texas [4]. - Major investments included $66 million with Double Eagle and $46.7 million with Civitas [4]. Reserves and Efficiency - Proved reserves at year-end were 26.5 million barrels of oil equivalent, including 10.6 million barrels of oil and 8.3 million barrels of NGLs [5]. - Average production costs per barrel of oil equivalent decreased to $9.29 from $12.98 in 2023, indicating improved cost efficiency [10]. Strategic Focus - Management emphasized a commitment to financial discipline, aligning the 2025 capital budget with projected cash flows and considering asset sales or joint ventures to enhance liquidity [6]. - The company has invested over $430 million in horizontal drilling in the Midland Basin since 2012 and plans to continue this focus [7]. Future Outlook - Expected capital deployment for 2025 is $129 million across 43 horizontal wells, following a consistent increase in annual investments [11]. - PrimeEnergy anticipates further investment of $224 million in horizontal drilling in West Texas over the next few years [11]. Additional Developments - In 2024, PrimeEnergy divested non-core assets for $4.2 million and acquired undeveloped acreage worth $3.88 million in West Texas [12].

Production and Revenue Summary - The company produced 2,556,000 barrels of oil in 2024, a significant increase from 1,144,000 barrels in 2023, representing a 123.43% increase [2] - Oil revenue reached $193,737,000 in 2024, up from $87,906,000 in 2023, marking a 120.39% increase [2] - Gas sold increased to 7,766,000 Mcf in 2024 from 4,127,000 Mcf in 2023, an increase of 88.18% [2] - Total oil and gas revenue for 2024 was $223,042,000, compared to $107,742,000 in 2023, reflecting a 107.01% increase [2] Financial Performance - Total revenues for the year ended December 31, 2024, were $237,796,000, up from $132,810,000 in 2023, an increase of $104,986,000 [3] - Net income for 2024 was $55,404,000, compared to $28,103,000 in 2023, showing an increase of $27,301,000 [3] - Basic earnings per share (EPS) rose to $31.43 in 2024 from $15.19 in 2023, an increase of $16.24 [3] - Diluted EPS increased to $21.95 in 2024 from $10.77 in 2023, an increase of $11.18 [3] Company Overview - The company, PrimeEnergy, is an independent oil and natural gas entity engaged in acquiring, developing, and producing oil and natural gas, primarily in Texas [4]

Financial Performance - The company reported a net income of $55.4 million for 2024, or $31.43 per share, compared to $28.1 million, or $15.19 per share for 2023, reflecting production increases offset by commodity price decreases [238]. - Oil, NGL, and gas sales increased by $115 million, or 107.01%, to $223.1 million for the year ended December 31, 2024, from $107.7 million for the year ended December 31, 2023 [239]. - Total oil and gas revenue increased by $115.3 million, or 107.01%, to $223.042 million for the year ended December 31, 2024, from $107.742 million for the year ended December 31, 2023 [242]. - Crude oil production increased by 1,412,000 barrels, or 123.43%, to 2,556,000 barrels for the year ended December 31, 2024, from 1,144,000 barrels for the year ended December 31, 2023 [240]. - Natural gas production increased by 3,639 MMcf, or 88.18%, to 7,766 MMcf for the year ended December 31, 2024, from 4,127 MMcf for the year ended December 31, 2023 [240]. - Average price received for crude oil decreased by $1.04 per barrel, or 1.35%, to $75.80 for the year ended December 31, 2024, from $76.84 for the year ended December 31, 2023 [242]. - Average price received for natural gas decreased by $1.49 per Mcf, or 77.6%, to $0.43 for the year ended December 31, 2024, from $1.92 for the year ended December 31, 2023 [242]. - Depreciation, depletion, and amortization increased by $45.5 million, or 147.0%, to $76.5 million for the year ended December 31, 2024, from $31.0 million for the year ended December 31, 2023 [246]. - Interest expense increased by $1.0 million, or 189.0%, to $1.5 million for the year ended December 31, 2024, from $0.5 million for the year ended December 31, 2023 [249]. - Tax expense increased to $15.8 million for the year ended December 31, 2024, from $6.1 million for the year ended December 31, 2023 [250]. - Field service income decreased by $4.5 million, or 29.5%, to $10.9 million for the year ended December 31, 2024, from $15.4 million for the year ended December 31, 2023 [244]. Cash Flow and Investments - Net cash provided by operating activities for the year ended December 31, 2024, was $115.9 million, an increase from $109.0 million in the prior year [224]. - The company invested $113 million in 48 horizontal wells in West Texas during 2024, with significant participation in drilling and completing new wells [232]. - The company expects to invest approximately $60 million in 22 new horizontal wells in the Midland Basin of West Texas in 2025 [234]. - The company has a stock repurchase program, spending $13.4 million in 2024 and $7.5 million in 2023, with expectations for continued spending in 2025 [237]. - The company’s capital budget for 2025 is reflective of commodity prices and is based on expected cash flows, with any deficiencies expected to be funded by borrowings [228]. Liquidity and Debt - The company has a credit facility totaling $300 million, with a borrowing base of $115 million, and as of April 8, 2025, had $17.5 million in outstanding borrowings [229]. - The company’s liquidity is primarily sourced from cash generated from operations and available capacity under its revolving credit facility [223]. Strategic Goals - The company’s strategy includes acquiring income-producing assets to build stockholder value through consistent growth in its oil and gas reserve base [216]. - The company sold 120 net mineral acres and 10 surface acres for gross proceeds of $1,386,000 in 2024, and divested 37 producing and two saltwater injection wells, reducing future plugging liability [235].

Industry Overview - The oil and gas industry is characterized as a boom-bust, cyclical sector, requiring patience and experience to navigate effectively [2] Company Analysis - PrimeEnergy Resources Corporation and related companies are analyzed for undervalued opportunities in the oil and gas space [1] - Analysis includes a detailed breakdown of balance sheets, competitive positioning, and development prospects [1] Research Service - Oil & Gas Value Research provides exclusive analysis to members, including insights not published on the free site [1] - A free two-week trial is available for those interested in accessing the full range of research and analysis [1]

Core Insights - PrimeEnergy Resources Corporation (PNRG) stock increased by 81.8% over the last six months, significantly outperforming the industry growth of 14.1% [1] - The company has shown strong operational performance with substantial production growth in oil and natural gas [13] - PNRG's strategic focus on horizontal drilling and asset optimization positions it well for future growth [10][9] Company Overview - Established in 1973 and headquartered in Houston, TX, PNRG is an independent oil and natural gas producer with a diversified portfolio [3] - The company emphasizes financial flexibility, partnerships with leading operators, and a variety of drilling projects [3] - PNRG owns a 60-mile offshore pipeline in Texas and has interests in a retail shopping center in Alabama, enhancing its portfolio diversification [3] Operational Strategy - PNRG holds significant assets in the Permian Basin, focusing on horizontal drilling to enhance production while minimizing surface disruption [4] - In 2023, the company drilled 35 horizontal wells and completed 56 by the end of Q3 2024, indicating a commitment to increasing production [5] - PNRG has identified 28 potential drilling sites in West Texas for 2026-2027, with an estimated investment of $67 million [8] Financial Performance - For the nine months ending Sept. 30, 2024, PNRG's oil production increased by 131% year over year to 1.88 million barrels, while natural gas production rose by 82% to 5.03 million Mcf [13] - The company is currently trading at a trailing 12-month EV/EBITDA ratio of 2.86X, significantly lower than the industry average of 7.52X, indicating potential undervaluation [14] Growth Catalysts - PNRG's investments in horizontal drilling are expected to yield higher production rates and faster returns compared to traditional methods [10] - The U.S. Energy Information Administration projects record crude oil production levels of 13.5 million barrels per day by 2025, benefiting PNRG's operations in the Permian Basin [11] - Natural gas prices are forecasted to rise, supporting higher revenue potential for PNRG's natural gas operations [12] Strategic Transactions - PNRG is optimizing its asset portfolio through acquisitions and divestitures, recently acquiring 100 net acres in Reagan County for $1.11 million and selling non-core assets for $2.8 million [9] - The company allocated $140 million for new horizontal well projects in 2024 and plans to invest an additional $95 million in 2025 [7]

Core Insights - PrimeEnergy Resources Corporation (PNRG) shares increased by 3.6% following the third quarter 2024 earnings report, outperforming the S&P 500 index which declined by 1.1% during the same period [1] - Over the past month, PNRG shares rose by 30.7%, significantly exceeding the S&P 500's growth of 1.6% [1] Financial Performance Highlights - For Q3 2024, PNRG reported revenues of $69.46 million, an 84.7% increase from $37.58 million in the same quarter last year [2] - The diluted earnings per share for Q3 2024 were $8.80, more than double the $4.13 reported in the prior year, with net income rising 105.9% year-over-year to $22.08 million from $10.72 million [2][6] Production Metrics - Oil production volumes for Q3 2024 reached 757,000 barrels, a 134.4% increase year-over-year [4] - Natural gas production rose 98.4% year-over-year to 2.14 million Mcf, while natural gas liquids (NGLs) production surged 144.7% year-over-year to 394,000 barrels [4] - For the nine-month period, oil production more than doubled to 1.88 million barrels, gas production increased by 81.9% to 5.03 million Mcf, and NGLs production rose 112.1% to 874,000 barrels [5] Pricing Trends - Average realized prices for oil in Q3 2024 were $74.23 per barrel, down 9.2% from the prior year [5] - Gas prices averaged 30 cents per Mcf, reflecting a significant year-over-year decline of 86.9% [5] - NGLs fetched $18.21 per barrel, down 6.9% year-over-year [5] Management Commentary - The company attributed its strong performance to aggressive horizontal drilling activities in the Permian Basin and Oklahoma, completing 56 horizontal wells in the first nine months of 2024 with an investment of approximately $141 million [7] Operational Factors - Year-over-year revenue growth was driven by increased production across all categories, although declines in natural gas and NGL prices partially impacted oil revenues [8] - Operating expenses rose in line with increased activity levels, with depreciation, depletion, and amortization expenses more than doubling in Q3 due to higher production volumes and recent capital investments [8] Future Guidance - PNRG reiterated its commitment to maintaining a strong balance sheet and robust liquidity, with $92.9 million available under its credit facility to fund capital expenditures primarily through cash flow and available credit [9] - The company plans to continue its aggressive horizontal drilling strategy in the Permian Basin, allocating $84 million for 2025 projects [10] Asset Management - In Q3 2024, PNRG divested non-core assets, generating proceeds of $737,760, and exited the well-servicing business by selling Eastern Oil Well Service Company for $2.8 million, recording a gain of $1.92 million [12] - The company repurchased 93,130 shares for $10.2 million in the first nine months of 2024, demonstrating its commitment to shareholder returns [13]

Financial Performance - PrimeEnergy Resources Corporation reported a net income of $22,076,000 for the quarter and $53,127,000 for the nine months ended September 30, 2024, translating to earnings of $8.80 and $20.93 per share on a fully diluted basis [1] - Revenues for the three months ended September 30, 2024, were $69,455,000, compared to $37,575,000 in the same period of 2023, marking a significant increase [4] - Total assets as of September 30, 2024, were $345,588,000, up from $288,568,000 at the end of 2023 [4] Production Volumes - Oil production for the three months ended September 30, 2024, was 757,000 barrels, a 134.37% increase from 323,000 barrels in 2023 [2] - Natural gas production for the same period was 2,144,000 Mcf, representing a 98.41% increase from 1,081,000 Mcf in 2023 [2] - For the nine months ended September 30, 2024, oil production totaled 1,883,000 barrels, up 131.33% from 814,000 barrels in 2023 [3] Company Overview - PrimeEnergy Resources Corporation is an independent oil and natural gas company engaged in acquiring, developing, and producing oil and natural gas, primarily in Texas [5]

Reserves and Production - As of December 31, 2023, total proved reserves amounted to 29,046 MBoe, with 13,558 MBoe developed and 15,488 MBoe undeveloped[66] - Average net daily production was 7,181 Boe, with West Texas contributing 6,172 Boe, Mid-Continent 831 Boe, and Gulf Coast 173 Boe[66] - In the Mid-Continent region, the company has 2,210 MBoe of proved reserves, representing 8% of total proved reserves[68] - The Gulf Coast region has 563 MBoe of proved reserves, accounting for 2% of total proved reserves[67] - At year-end 2023, the Company had 15,488 MBOE of proved undeveloped reserves attributable to 52 undeveloped wells, with 28 in the process of being drilled or completed[79] Investment and Development - The company completed 56 new horizontal wells in 2024, investing approximately $141 million, and plans to invest about $84 million in another 30 horizontal wells for 2025[70] - The company is currently participating in the completion of 6 horizontal wells in Upton County, Texas, with an average 47.52% interest, expecting to spend approximately $35 million[70] - The Company invested approximately $30 million in nine horizontal wells in West Texas, with an average interest of 47.8%[73] - The Company has plans for additional Wolfcamp D drilling, potentially setting up the development of as many as 36 horizontals on its acreage in Reagan County[94] - The company anticipates investing over $300 million in horizontal development in West Texas from January 2024 through December 2027[95] - The Company has invested a total of $141 million in 56 wells completed by early September 2024, with an additional planned investment of $48.4 million in 24 new horizontal wells in West Texas for 2025[121] Financial Performance - The company reported a net income of $53.13 million, or $29.88 per share, for the nine months ended September 30, 2024, compared to $22.22 million, or $11.95 per share, for the same period in 2023, reflecting increased production and oil prices[98] - Oil, gas, and NGL sales increased by $31.99 million, or 99.88%, to $64.01 million for the three months ended September 30, 2024, compared to $32.02 million for the same period in 2023[99] - The company produced 1,883,000 barrels of oil for the nine months ended September 30, 2024, an increase of 1,069,000 barrels, or 131.33%, from 814,000 barrels in the same period in 2023[101] - Average oil price received was $77.39 per barrel for the nine months ended September 30, 2024, compared to $75.42 per barrel in 2023, reflecting a 2.61% increase[104] Expenses and Taxes - Production and ad valorem taxes increased by $1.2 million, or 83.39%, to $2.6 million for the three months ended September 30, 2024, compared to $1.4 million for the same period in 2023[105] - Depreciation, depletion, and amortization expense increased by $22.9 million, or 100.57%, to $45.8 million for the nine months ended September 30, 2024, from $22.8 million in 2023[108] - General and administrative expenses rose by $2.8 million, or 34.34%, to $10.8 million for the nine months ended September 30, 2024, compared to $8.1 million in 2023[109] Asset Management and Acquisitions - The company is actively pursuing acquisitions of producing properties to diversify and broaden its asset base[58] - The company maintains a balanced portfolio of assets, with primary sources of liquidity being cash generated from operations and a credit facility[57] - The Company sold 368 net mineral acres and 7.8 surface acres in Midland County, Texas in 2023, receiving gross proceeds of $436,050 and recognizing a gain of $47,000[122] - In the second quarter of 2024, the Company sold 12 net acres in Lea County, New Mexico for proceeds of $150,600, and an additional 2.29 surface acres in Odessa, Texas for $68,000[126] - The Company sold its south Texas well-servicing business for $2,800,000 in the third quarter of 2024[128] Credit and Compliance - The Company has a credit agreement with a reserves-based line of credit totaling $300 million, with a current borrowing base of $115 million and outstanding borrowings of $22.1 million as of November 14, 2024[115][129] - The next borrowing base review for the credit agreement is scheduled for December 2024, which may affect the borrowing capacity based on commodity prices and operational performance[115] - The Company is in compliance with financial and operational covenants of its credit agreement and expects to maintain compliance over the next twelve months[115] Historical Performance - In 2023, the Company participated in the drilling and completion of 35 horizontal wells, with an investment of approximately $91 million, 99% of which was for wells in West Texas[89] - In 2022, the Company participated in eight horizontal wells with an investment of approximately $4 million, all brought into production in August 2022[75] - At year-end 2022, the Company had 6,366 MBOE of proved undeveloped reserves attributable to 25 horizontal wells[77]