Permian Resources Corporation Class A

Thank you. Thank you. Good morning and welcome to Permian Resources conference call to discuss its first quarter 2025 earnings. Today's call is being recorded. A replay of the call will be accessible until May 22nd, 2025 by dialing 888-660-6264 and answering the replay access code 27785 or by visiting the company's website at www.permian.com. PermianRest.com. At this time, I will turn the call over to Hayes Mabry, Permian Resources Vice President of Investor Relations, for some opening remarks. Please go ahead, sir.

Thanks, Angeline, and thank you all for joining us. On the call today are Will Hickey and James Walter, our Chief Executive Officers, and Guy Oliphant, our Chief Financial Officer. I would like to note that many of the comments during this call are forward-looking statements that involve risk 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 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. 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.

Thanks, Hayes. There is a lot we're excited to talk about today. We delivered another strong quarter, outperforming expectations and achieving the highest free cash flow per share in PR history of $0.54 per share, driven by lower per unit cost and solid production performance. We did all this while strengthening the balance sheet with the highest liquidity, most cash, and lowest leverage in PR history. All the work we've done to date has put us in an incredibly strong position, not just to navigate the current market, but to capitalize on it. And we've used this strength to start executing our downturn playbook already, with our first opportunistic share buyback and the announcement of a New Mexico bolt-on, both with which James will hit in more detail. Moving to Q1 performance, production exceeded expectations with oil production of 175,000 barrels of oil per day and total production of 373,000 barrels of oil equivalent per day. Our strong production performance is mainly attributable to outperformance from our 2024 acquisitions, driven by artificial lift optimization and stronger than expected well performance. In addition to wins on the production side, our operations team continued to drive down costs. Compared to Q4, We reduced controllable cash costs by 4% and DNC costs by 3%, landing at $750 per foot for the quarter. Strong production performance and further extending our Delaware Basin cost leadership resulted in adjusted operating cash flow of $900 million and adjusted free cash flow of $460 million, with $500 million of cash capex. Our outstanding operating performance and conservative financial strategy further enhanced our fortress balance sheets. During the quarter, robust free cash flow generation drove an increase in cash on the balance sheet from $479 million at year end to approximately $700 million on March 31st. We also redeemed $175 million in principal with the 9 and 7 8's high interest legacy Earthstone notes, which will save us approximately $17 million per year in reduced interest expenses. These actions reduced leverage from one times at year end to 0.8 times at the end of Q1. We also highlight our updated credit ratings from BA1 from Moody's and Double B Plus from S&P. With Fitch already at Double B Plus, we are one notch away from our investment grade goal at all three rating agencies. And you'll see in this presentation our credit metrics compare favorably to our investment grade peers. Turning to slide five, when we started the predecessor company Colgate back in the 2015-16 downturn, we built the company on a strategy of being prepared to play offense in any market. That mindset has benefited us tremendously in previous downturns and remains a core part of PR's DNA today. While we've been executing on an accretive consolidation strategy, we've also been pulling every lever to make sure we are ready for the next downturn. Since year end 23, we have decreased leverage to 0.8 times and increased liquidity to 3.2 billion, all while more than doubling the size of the business. Looking at our current hedge book, we have approximately 25% of 2025 oil production hedged at a price just above $73 per barrel. This hedging strategy allows PR to be more opportunistic during a downturn, when investments can earn the highest return. In addition, our high returning asset base and our ability to drive costs out of the business allows us to maximize cash return from every dollar invested. That's not just a talking point, it's material. At our current cost structure and consistent well performance, we can generate the same free cash flow this year if oil remains at 60 that we did last year at 75. Thanks to our strategy, our people, and our relentless execution, PR is in the strongest position in company history operate effectively and create value through a down market. With that, I'll turn it over to James to walk through our downturn strategy in more detail.