PrimeEnergy Posts Y/Y Earnings Growth in Q3 on Surging Oil Production

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$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$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]