Permian Resources Announces Strong Fourth Quarter 2025 Results and Provides Full Year 2026 Plan with Improved Capital Efficiency and Increased Base Dividend

MIDLAND, Texas--( BUSINESS WIRE)--Permian Resources Corporation (“Permian Resources” or the “Company”) (NYSE: PR) today announced its fourth quarter and full year 2025 financial and operational results and 2026 financial and operational plans.

Fourth Quarter 2025 Financial and Operational Highlights

Full Year 2025 Financial and Operational Highlights

2026 Financial and Operational Plan

Management Commentary

“2025 marked our third consecutive year of operational execution as a public company, and I could not be more proud of our team’s achievements,” said Will Hickey, Co-CEO of Permian Resources. “As we head into 2026, I am confident that our team will continue to leverage their technical skills and continuous learnings to improve upon our cost leadership position in the Delaware Basin.”

“Permian Resources’ focus has always been on delivering peer-leading free cash flow per share growth and peer-leading total shareholder returns,” said James Walter, Co-CEO of Permian Resources. “Going forward, we are well-positioned to continue delivering outsized value creation for shareholders. We have a high-quality inventory base in the top U.S. oil shale basin, a tremendous team with a track-record of low-cost execution, a strong pipeline of attractive acquisition opportunities and a balance sheet that allows us to continue to pursue an “all of the above” capital allocation strategy.”

Financial and Operational Results

During the fourth quarter, average daily crude oil production was 188,633 barrels of oil per day (“Bbls/d”), a 1% increase compared to the prior quarter. Reported NGL and natural gas volumes were 102,131 Bbls/d and 664,265 Mcf/d, respectively. Total production was 401,475 barrels of oil equivalent per day (“Boe/d”).

The Company continues to increase operational efficiencies, driving down drilling and completions costs per foot. For the fourth quarter, drilling and completion costs per lateral foot were approximately $700, a 14% reduction from 2024. Total cash capital expenditures (“capex”) for the quarter were $481 million. “During the fourth quarter, we continued to set new company records in the field, including the highest average feet drilled per day and the lowest completions cost per foot,” said Will Hickey, Co-CEO.

Realized prices for the quarter were $58.78 per barrel of oil, $15.44 per barrel of NGLs and $0.07 per Mcf of natural gas. The Company demonstrated strong cost control in the fourth quarter, with total controllable cash costs (LOE, GP&T and cash G&A) decreasing $0.12 per Boe quarter-over-quarter to $7.24 per Boe. Fourth quarter LOE was $5.26 per Boe, GP&T was $1.18 per Boe and cash G&A was $0.80 per Boe.

For the fourth quarter, Permian Resources generated net cash provided by operating activities of $904 million, adjusted operating cash flow 1 of $884 million and adjusted free cash flow 1 of $403 million. Adjusted diluted shares 1 outstanding were 845.7 million for the three months ended December 31, 2025.

Acquisitions Update

During the fourth quarter, Permian Resources continued to build upon its ground game success, executing approximately 140 bolt-on and grassroots transactions. Combined, the Company added 7,700 net leasehold acres and 1,300 net royalty acres for total consideration of $240 million, reflecting an acquisition value of $26,000 per net leasehold acre and $15,000 per net royalty acre. Essentially all of the acquisition capital during the fourth quarter was invested in New Mexico, further strengthening the Company’s core Northern Delaware position.

“2025 was another great year for our acquisition effort, with the combination of ground game and larger acquisitions equating to over $1 billion for the second year in a row,” said James Walter, Co-CEO. “Our Delaware Basin cost structure and local relationships with sellers provide us with a durable competitive advantage for continuing to execute accretive acquisitions.”

2026 Operational Plan and Targets

Permian Resources’ 2026 operational plan is focused on maximizing free cash flow per share for its investors and delivering improved year-over-year capital efficiency through the combination of consistent well productivity and lower costs. Assuming planned activity levels and current commodity prices, the Company expects its full year oil and total production to average approximately 186 to 192 MBbls/d and 400 to 430 MBoe/d, respectively. The estimated 2026 cash capex budget is approximately $1.75 billion to $1.95 billion, of which approximately $400 million is allocated to facilities, infrastructure, capital workover and non-operated capex. Notably, this represents annual oil production growth of approximately 4%, while delivering a 6% lower capital budget year-over-year.

“Through consistent well productivity and lower costs, we continue to drive materially higher capital efficiency. As a result, we expect to deliver approximately 20% higher annual oil production compared to 2024 with 10% lower capital expenditures, clearly demonstrating this improvement,” said Will Hickey, Co-CEO.

Permian Resources expects to turn-in-line (“TIL”) approximately 250 gross wells, with an average working interest of 75% to 80% and 8/8ths net revenue interest of approximately 79%. The Company also expects its average lateral length during 2026 to be approximately 11,000 feet, an increase of 500 feet from the previous year. Through realized efficiency gains, the Company’s capital budget is further supported by an approximately 8% reduction in D&C costs per foot compared to 2025. Similar to the previous year, Permian Resources anticipates that approximately 65% of its 2026 operating activity will be directed towards New Mexico and approximately 30% towards the Texas Delaware Basin, with the remaining portion to be allocated to its Midland Basin position.

Through its continued focus on remaining the Delaware Basin’s low-cost leader, Permian Resources anticipates total controllable cash costs of $7.15 to $8.15 per Boe in 2026. Specifically, controllable cash costs consist of approximately $5.45 per Boe for LOE, $1.40 per Boe for GP&T expense and $0.80 per Boe for cash G&A. The Company expects its oil realizations to average 97% to 100% of WTI during 2026. Permian Resources estimates its average realized revenue from natural gas to be approximately $0.25 to $0.75 per Mcf premium versus Waha Hub pricing and its NGLs to be approximately 23% to 25% of WTI.

(For a detailed table summarizing Permian Resources’ 2026 operational and financial guidance, please see the Appendix of this press release.)

Shareholder Returns

Permian Resources announced today that its Board of Directors (the “Board”) declared the Company’s first quarter 2026 base dividend of $0.16 per share of Class A common stock, a 7% increase from $0.15 per share previously. Since its inception in 2022, Permian Resources has grown its inaugural quarterly base dividend of $0.05 per share at a compound annual growth rate of over 40%, reflecting the Company's commitment to delivering a sustainable and growing base dividend. The Company's first quarter base dividend is payable on March 31, 2026 to shareholders of record as of March 17, 2026. The Company’s base dividend represents an annualized yield of 3.6% as of February 24, 2026.

Year-End 2025 Proved Reserves

Permian Resources reported year-end 2025 total proved reserves of 1,116 MMBoe compared to 1,027 MMBoe at prior year-end. At year-end 2025, proved reserves consisted of 43% oil, 26% natural gas liquids and 31% natural gas. Proved developed reserves were 794 MMBoe (71% of total proved reserves) at December 31, 2025. Netherland Sewell & Associates, Inc., an independent reserve engineering firm, prepared Permian Resources’ year-end reserves estimate for the year ended December 31, 2025.

Annual Report on Form 10-K

Permian Resources’ financial statements and related footnotes will be available in its Annual Report on Form 10-K for the year ended December 31, 2025, which is expected to be filed with the Securities and Exchange Commission (“SEC”) on February 26, 2026.

Conference Call and Webcast

Permian Resources will host an investor conference call on Thursday, February 26, 2026 at 9:00 a.m. Central (10:00 a.m. Eastern) to discuss fourth quarter and full year 2025 operating and financial results. Interested parties may join the call by visiting Permian Resources’ website at www.permianres.com and clicking on the webcast link or by dialing (800) 549-8228 (Conference ID: 23999) at least 15 minutes prior to the start of the call. A replay of the call will be available on the Company’s website or by phone at (888) 660-6264 (Passcode: 23999) for a 14-day period following the call.

About Permian Resources

Headquartered in Midland, Texas, Permian Resources is an independent oil and natural gas company focused on driving peer-leading returns through the acquisition, optimization and development of high-return oil and natural gas properties. The Company’s assets are located in the Permian Basin, with a concentration in the core of the Delaware Basin. Through its position of approximately 480,000 net acres in West Texas and Southeast New Mexico, Permian Resources is the second largest Permian Basin pure-play E&P. For more information, please visit www.permianres.com.

Cautionary Note Regarding Forward-Looking Statements

The information in this press release includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical fact included in this press release, regarding our strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects, plans and objectives of management are forward-looking statements. When used in this press release, the words “could,” “may,” “believe,” “anticipate,” “intend,” “estimate,” “expect,” “project,” “goal,” “plan,” “target” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. These forward-looking statements are based on management’s current expectations and assumptions about future events and are based on currently available information as to the outcome and timing of future events.

Forward-looking statements may include statements about:

We caution you that these forward-looking statements are subject to all of the risks and uncertainties, most of which are difficult to predict and many of which are beyond our control, incident to the exploration for and development, production, gathering and sale of oil, NGLs and natural gas. Factors which could cause our actual results to differ materially from the results contemplated by forward-looking statements include, but are not limited to:

Reserve engineering is a process of estimating underground accumulations of oil and natural gas that cannot be measured in an exact way. The accuracy of any reserve estimate depends on the quality of available data, the interpretation of such data, and price and cost assumptions made by reserve engineers. In addition, the results of drilling, testing and production activities may justify revisions of estimates that were made previously. If significant, such revisions would change the schedule of any further production and development drilling. Accordingly, reserve estimates may differ significantly from the quantities of oil and natural gas that are ultimately recovered.

Should one or more of the risks or uncertainties described in this press release occur, or should underlying assumptions prove incorrect, our actual results and plans could differ materially from those expressed in any forward-looking statements. All forward-looking statements, expressed or implied, included in this press release are expressly qualified in their entirety by this cautionary statement. This cautionary statement should also be considered in connection with any subsequent written or oral forward-looking statements that we or persons acting on our behalf may issue.

Except as otherwise required by applicable law, we disclaim any duty to update any forward-looking statements, all of which are expressly qualified by the statements in this section, to reflect events or circumstances after the date of this press release.

1) Adjusted Operating Cash Flow, Adjusted Free Cash Flow, Adjusted Diluted Shares and Net Debt-to-LQA EBITDAX are non-GAAP financial measures. See “Non-GAAP Financial Measures” included within the Appendix of this press release for related disclosures and reconciliations to the most directly comparable financial measures calculated and presented in accordance with GAAP.

Details of our 2026 operational and financial guidance are presented below:

2026 FY Guidance

Net average daily production (Boe/d)

400,000

—

430,000

Net average daily oil production (Bbls/d)

186,000

—

192,000

Production costs

Total controllable cash costs

$7.15

—

$8.15

Lease operating expenses ($/Boe)

~$5.45

Gathering, processing and transportation expenses ($/Boe)

~$1.40

Cash general and administrative ($/Boe) (1)

~$0.80

Severance and ad valorem taxes (% of revenue)

6.5%

—

8.5%

Total cash capital expenditure program ($MM)

$1,750

—

$1,950

Operated drilling program

TILs (gross)

~250

Average working interest

75% - 80%

Average lateral length (feet)

~11,000

(1) Excludes stock-based compensation.

Permian Resources Corporation

Operating Highlights

Three Months Ended December 31,

Year Ended December 31,

2025

2024

2025

2024

Net revenues (in thousands):

Oil sales

1,020,125

1,097,662

4,251,193

4,362,965

NGL sales

145,089

176,828

658,515

637,529

Natural gas sales

(14,023

)

21,591

131,663

240

Purchased gas sales, net

18,177

—

23,840

—

Oil and gas sales

1,169,368

1,296,081

5,065,211

5,000,734

Net production:

Oil (MBbls)

17,355

15,757

66,364

58,276

NGL (MBbls)

9,396

8,407

35,773

30,636

Natural gas (MMcf)

61,113

58,378

247,045

220,900

Total (MBoe) (1)

36,935

33,895

143,311

125,730

Average daily net production:

Oil (Bbls/d)

188,633

171,274

181,819

159,225

NGL (Bbls/d)

102,131

91,382

98,008

83,706

Natural gas (Mcf/d)

664,265

634,546

676,835

603,551

Total (Boe/d) (1)

401,475

368,414

392,633

343,523

Average sales prices:

Oil (per Bbl)

58.78

69.66

64.06

74.87

Effect of derivative settlements on average price (per Bbl)

3.70

1.09

2.40

0.03

Oil including the effects of hedging (per Bbl)

62.48

70.75

66.46

74.90

NGL (per Bbl)

15.44

21.03

18.41

20.81

Natural gas (per Mcf)

(0.23

)

0.37

0.53

—

Effect of derivative settlements on average price (per Mcf)

1.07

0.34

0.48

0.34

Effect of purchased gas sales on average price (per Mcf)

0.30

—

0.10

—

Natural gas including the effects of hedging (per Mcf)

1.14

0.71

1.11

0.34

(1) Calculated by converting natural gas to oil equivalent barrels at a ratio of six Mcf of natural gas to one Boe.

Permian Resources Corporation

Operating Expenses

Three Months Ended December 31,

Year Ended December 31,

2025

2024

2025

2024

Operating costs (in thousands):

Lease operating expenses

194,182

183,575

753,119

685,172

Severance and ad valorem taxes

85,851

96,947

390,255

377,731

Gathering, processing, and transportation expense

43,728

50,582

200,103

183,602

Operating cost metrics:

Lease operating expenses (per Boe)

5.26

5.42

5.26

5.45

Severance and ad valorem taxes (% of revenue)

7.3

7.5

7.7

7.6

Gathering, processing, and transportation expense (per Boe)

1.18

1.49

1.40

1.46

Permian Resources Corporation

Consolidated Statements of Operations

(in thousands, except per share data)

Three Months Ended December 31,

Year Ended December 31,

2025

2024

2025

2024

Operating revenues

Oil and gas sales

1,169,368

1,296,081

5,065,211

5,000,734

Operating expenses

Lease operating expenses

194,182

183,575

753,119

685,172

Severance and ad valorem taxes

85,851

96,947

390,255

377,731

Gathering, processing and transportation expenses

43,728

50,582

200,103

183,602

Depreciation, depletion and amortization

524,979

486,463

2,032,507

1,776,673

General and administrative expenses

43,613

44,745

186,471

174,630

Merger and integration expense

—

18,064

Impairment and abandonment expense

379

2,128

7,985

9,912

Exploration and other expenses

6,799

6,363

32,042

30,791

Total operating expenses

899,531

870,803

3,602,482

3,256,575

Net gain (loss) on sale of long-lived assets

—

(66

)

—

375

Income from operations

269,837

425,212

1,462,729

1,744,534

Other income (expense)

Interest expense

(67,067

)

(76,783

)

(283,062

)

(296,171

)

Loss on extinguishment of debt

—

(270,120

)

(8,585

)

Net gain (loss) on derivative instruments

209,260

(36,716

)

445,724

94,986

Other income (expense)

3,826

6,411

27,844

16,087

Total other income (expense)

146,019

(107,088

)

(79,614

)

(193,683

)

Income before income taxes

415,856

318,124

1,383,115

1,550,851

Income tax expense

(33,965

)

(62,645

)

(284,179

)

(300,342

)

Net income

381,891

255,479

1,098,936

1,250,509

Less: Net income attributable to noncontrolling interest

(42,386

)

(38,829

)

(163,762

)

(265,808

)

Net income attributable to Class A Common Stock

339,505

216,650

935,174

984,701

Income per share of Class A Common Stock:

Basic

0.46

0.31

1.31

1.54

Diluted

0.45

0.29

1.28

1.45

Weighted average Class A Common Stock outstanding:

Basic

745,004

702,968

715,772

640,662

Diluted

761,364

746,693

730,975

684,492

Permian Resources Corporation

Consolidated Balance Sheets

(in thousands, except share and per share amounts)

December 31, 2025

December 31, 2024

ASSETS

Current assets

Cash and cash equivalents

153,690

479,343

Accounts receivable, net

840,653

530,452

Derivative instruments

279,725

85,509

Prepaid and other current assets

38,075

26,290

Total current assets

1,312,143

1,121,594

Property and equipment

Oil and natural gas properties, successful efforts method

Unproved properties

1,933,409

1,990,441

Proved properties

21,484,903

18,595,780

Accumulated depreciation, depletion and amortization

(7,168,925

)

(5,163,124

)

Total oil and natural gas properties, net

16,249,387

15,423,097

Other property and equipment, net

57,051

50,381

Total property and equipment, net

16,306,438

15,473,478

Noncurrent assets

Operating lease right-of-use assets

132,764

119,703

Other noncurrent assets

160,840

183,125

TOTAL ASSETS

17,912,185

16,897,900

LIABILITIES AND EQUITY

Current liabilities

Accounts payable and accrued expenses

1,453,610

1,198,418

Operating lease liabilities

79,496

57,216

Other current liabilities

144,726

71,703

Total current liabilities

1,677,832

1,327,337

Noncurrent liabilities

Long-term debt, net

3,545,598

4,184,233

Asset retirement obligations

166,847

148,443

Deferred income taxes

893,463

602,379

Operating lease liabilities

55,102

64,288

Other noncurrent liabilities

39,460

52,701

Total liabilities

6,378,302

6,379,381

Shareholders’ equity

Common stock, $0.0001 par value, 1,500,000,000 shares authorized:

Class A: 757,854,120 shares issued and 751,746,410 shares outstanding at December 31, 2025 and 707,388,380 shares issued and 703,774,082 shares outstanding at December 31, 2024

Class C: 84,378,125 shares issued and outstanding at December 31, 2025 and 99,599,640 shares issued and outstanding at December 31, 2024

Additional paid-in capital

8,710,698

8,056,552

Retained earnings (accumulated deficit)

1,567,500

1,081,895

Total shareholders’ equity

10,278,282

9,138,528

Noncontrolling interest

1,255,601

1,379,991

Total equity

11,533,883

10,518,519

TOTAL LIABILITIES AND EQUITY

17,912,185

16,897,900

Permian Resources Corporation

Consolidated Statements of Cash Flows

(in thousands)

Year Ended December 31,

2025

2024

Cash flows from operating activities:

Net income

1,098,936

1,250,509

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation, depletion and amortization

2,032,507

1,776,673

Stock-based compensation expense

70,371

60,399

Impairment and abandonment expense

7,985

9,912

Deferred tax expense

285,400

299,019

Net (gain) loss on sale of long-lived assets

—

(375

)

Non-cash portion of derivative (gain) loss

(168,479

)

(17,783

)

Amortization of debt issuance costs, discount and premium

8,023

6,563

Loss on extinguishment of debt

270,120

8,585

Changes in operating assets and liabilities:

(Increase) decrease in accounts receivable

(321,456

)

(51,396

)

(Increase) decrease in prepaid and other assets

(23,288

)

(8,491

)

Increase (decrease) in accounts payable and other liabilities

347,422

78,353

Net cash provided by operating activities

3,607,541

3,411,968

Cash flows from investing activities:

Acquisition of oil and natural gas properties, net

(1,070,547

)

(1,047,128

)

Drilling and development capital expenditures

(1,965,926

)

(2,060,667

)

Purchases of other property and equipment

(13,682

)

(12,845

)

Proceeds from sales of oil and natural gas properties

176,701

16,445

Net cash used in investing activities

(2,873,454

)

(3,104,195

)

Cash flows from financing activities:

Proceeds from equity offering, net

—

402,211

Proceeds from borrowings under revolving credit facility

—

1,965,000

Repayment of borrowings under revolving credit facility

—

(1,965,000

)

Proceeds from issuance of senior notes

—

1,000,000

Debt issuance and redemption costs

(18,767

)

(26,498

)

Redemption of senior notes

(464,548

)

(656,351

)

Proceeds from exercise of stock options

219

257

Share repurchases

(73,700

)

(61,048

)

Dividends paid

(447,714

)

(466,915

)

Distributions paid to noncontrolling interest owners

(55,230

)

(93,950

)

Net cash (used in) provided by financing activities

(1,059,740

)

97,706

Net increase (decrease) in cash, cash equivalents and restricted cash

(325,653

)

405,479

Cash, cash equivalents and restricted cash, beginning of period

479,343

73,864

Cash, cash equivalents and restricted cash, end of period

153,690

479,343

Non-GAAP Financial Measures

In addition to disclosing financial results calculated in accordance with U.S. generally accepted accounting principles (“GAAP”), our earnings release contains non-GAAP financial measures as described below.

Adjusted EBITDAX

Adjusted EBITDAX is a supplemental non-GAAP financial measure that is used by management and external users of our consolidated financial statements, such as industry analysts, investors, lenders and rating agencies. We define Adjusted EBITDAX as net income attributable to Class A Common Stock before net income attributable to noncontrolling interest, interest expense, income taxes, depreciation, depletion and amortization, impairment and abandonment expense, loss on extinguishment of debt, non-cash gains or losses on derivatives, stock-based compensation, exploration and other expenses, gain/loss from the sale of long-lived assets and other non-recurring items. Adjusted EBITDAX is not a measure of net income as determined by GAAP.

Our management believes Adjusted EBITDAX is useful as it allows them to more effectively evaluate our operating performance and compare the results of our operations from period to period and against our peers, without regard to our financing methods or capital structure. We exclude the items listed above from net income in arriving at Adjusted EBITDAX because these amounts can vary substantially from company to company within our industry depending upon accounting methods and book values of assets, capital structures and the method by which the assets were acquired. Adjusted EBITDAX should not be considered as an alternative to, or more meaningful than, net income as determined in accordance with GAAP or as an indicator of our operating performance or liquidity. Certain items excluded from Adjusted EBITDAX are significant components in understanding and assessing a company’s financial performance, such as a company’s cost of capital and tax structure, as well as the historic costs of depreciable assets, none of which are components of Adjusted EBITDAX. Our presentation of Adjusted EBITDAX should not be construed as an inference that our results will be unaffected by unusual or nonrecurring items. Our computations of Adjusted EBITDAX may not be comparable to other similarly titled measures of other companies.

The following table presents a reconciliation of Adjusted EBITDAX to net income, which is the most directly comparable financial measure calculated and presented in accordance with GAAP:

Three Months Ended

(in thousands)

12/31/2025

9/30/2025

6/30/2025

3/31/2025

12/31/2024

Adjusted EBITDAX reconciliation to net income:

Net income attributable to Class A Common Stock

339,505

59,234

207,137

329,298

216,650

Net income attributable to noncontrolling interest

42,386

22,227

37,884

61,265

38,829

Interest expense

67,067

69,386

72,770

73,839

76,783

Income tax expense

33,965

87,394

62,486

100,334

62,645

Depreciation, depletion and amortization

524,979

526,915

506,410

474,203

486,463

Impairment and abandonment expense

379

2,251

146

5,209

2,128

Loss on extinguishment of debt

—

264,294

—

5,826

—

Non-cash derivative (gain) loss

(79,493

)

(35,307

)

(17,256

)

(36,423

)

73,579

Stock-based compensation expense (1)

14,031

17,435

19,293

16,199

13,149

Exploration and other expenses

6,799

4,933

5,060

15,250

6,363

(Gain) loss on sale of long-lived assets

—

Adjusted EBITDAX

949,618

1,018,762

893,930

1,045,000

976,655

(1)

Includes stock-based compensation expense for equity awards related to general and administrative employees only. Stock-based compensation amounts for geographical and geophysical personnel are included within the Exploration and other expenses line item.

Net Debt-to-LQA EBITDAX

Net debt-to-LQA EBITDAX, also referred to as leverage, is a non-GAAP financial measure. We define net debt as total debt, net, plus unamortized debt discount, premium and issuance costs on our senior notes minus cash and cash equivalents.

We define net debt-to-LQA EBITDAX as net debt (defined above) divided by Adjusted EBITDAX (defined and reconciled in the section above) for the three months ended December 31, 2025, on an annualized basis. We refer to this metric to show trends that investors may find useful in understanding our ability to service our debt. This metric is widely used by professional research analysts, including credit analysts, in the valuation and comparison of companies in the oil and gas exploration and production industry. The following table presents a reconciliation of net debt to total debt, net and the calculation of net debt-to-LQA EBITDAX for the period presented:

(in thousands)

December 31, 2025

Total debt, net

3,545,598

Unamortized debt discount, premium and issuance costs on senior notes

29,402

Total debt

3,575,000

Less: cash and cash equivalents

(153,690

)

Net debt (Non-GAAP)

3,421,310

LQA EBITDAX (1)

3,798,472

Net debt-to-LQA EBITDAX

0.9

(1) Represents adjusted EBITDAX (defined and reconciled in the section above) for the three months ended December 31, 2025, on an annualized basis.

Adjusted Shares

Adjusted basic and diluted weighted average shares outstanding (“Adjusted Basic and Diluted Shares”) are non-GAAP financial measures defined as basic and diluted weighted average shares outstanding adjusted to reflect the weighted average shares of our Class C Common Stock outstanding and the effect of the conversion of our Convertible Senior Notes during the period.

Our Adjusted Basic and Diluted Shares provide a comparable per share measurement when presenting results such as adjusted free cash flow and adjusted net income that include the interests of both net income attributable to Class A Common Stock and the net income attributable to our noncontrolling interest. Adjusted Basic and Diluted Shares are used in calculating several metrics that we use as supplemental financial measurements in the evaluation of our business.

The following table presents a reconciliation of Adjusted Basic and Diluted Shares to basic and diluted weighted average shares outstanding, which are the most directly comparable financial measures calculated and presented in accordance with GAAP:

Three Months Ended December 31,

Year Ended December 31,

(in thousands)

2025

2024

2025

2024

Basic weighted average shares of Class A Common Stock outstanding

745,004

702,968

715,772

640,662

Weighted average shares of Class C Common Stock

84,378

100,401

94,632

144,566

Adjusted basic weighted average shares outstanding

829,382

803,369

810,404

785,228

Basic weighted average shares of Class A Common Stock outstanding

745,004

702,968

715,772

640,662

Add: Dilutive effects of Convertible Senior Notes

—

29,408

—

29,408

Add: Dilutive effects of equity awards

16,360

14,317

15,203

14,422

Diluted weighted average shares of Class A Common Stock outstanding

761,364

746,693

730,975

684,492

Weighted average shares of Class C Common Stock

84,378

100,401

94,632

144,566

Effect of conversion of Convertible Senior Notes on weighted average shares

—

20,922

—

Adjusted diluted weighted average shares outstanding

845,742

847,094

846,529

829,058

Adjusted Operating Cash Flow and Adjusted Free Cash Flow

Adjusted operating cash flow and adjusted free cash flow are supplemental non-GAAP financial measures used by management and external users of our consolidated financial statements, such as industry analysts, investors, lenders and rating agencies. We define adjusted operating cash flow as net cash provided by operating activities adjusted to remove changes in working capital, merger and integration and other non-recurring charges, and estimated tax distributions to our non-controlling interest owners. Adjusted operating cash flows is reduced by total cash capital expenditures to arrive at adjusted free cash flows.

Our management believes adjusted operating cash flow and adjusted free cash flow are useful indicators of the Company’s ability to internally fund its future exploration and development activities, to service its existing level of indebtedness or incur additional debt, without regard to the timing of settlement of either operating assets and liabilities, its merger and integration and other non-recurring costs or estimated tax distributions to noncontrolling interest owners after funding its capital expenditures paid for the period. The Company believes that these measures, as so adjusted, present meaningful indicators of the Company’s actual sources and uses of capital associated with its operations conducted during the applicable period. Our computation of adjusted operating cash flow and adjusted free cash flow may not be comparable to other similarly titled measures of other companies. Adjusted operating cash flow and adjusted free cash flow should not be considered as alternatives to, or more meaningful than, net cash provided by operating activities as determined in accordance with GAAP or as indicators of our operating performance or liquidity.

Adjusted operating cash flow and adjusted free cash flow are not financial measures that are determined in accordance with GAAP. Accordingly, the following table presents a reconciliation of adjusted operating cash flow and adjusted free cash flow to net cash provided by operating activities, which is the most directly comparable financial measure calculated and presented in accordance with GAAP:

Three Months Ended December 31,

Year Ended December 31,

(in thousands)

2025

2024

2025

2024

Net cash provided by operating activities

904,327

871,578

3,607,541

3,411,968

Changes in working capital:

Accounts receivable

281,226

103,963

321,456

51,396

Prepaid and other assets

20,313

1,663

23,288

8,491

Accounts payable and other liabilities

(322,321

)

(73,735

)

(347,422

)

(78,353

)

Merger and integration expense & other

—

4,749

25,659

Estimated tax distribution to noncontrolling interest owners (1)

582

(125

)

—

Adjusted operating cash flow

883,608

904,051

3,609,487

3,419,161

Less: total cash capital expenditures

(480,518

)

(504,459

)

(1,965,926

)

(2,060,667

)

Adjusted free cash flow

403,090

399,592

1,643,561

1,358,494

Adjusted diluted weighted average shares outstanding

845,742

847,094

846,529

829,058

______________________

(1) Reflects estimated future distributions to noncontrolling interest owners based upon current federal and state income tax expense recognized during the period and expected to be paid by the partnership. Such estimates are based upon the noncontrolling interest ownership percentage as of December 31, 2025.

Adjusted Net Income

Adjusted net income is a supplemental non-GAAP financial measure that is used by management and external users of our consolidated financial statements, such as industry analysts, investors, lenders and rating agencies. We define adjusted net income as net income attributable to Class A Common Stock plus net income attributable to noncontrolling interest adjusted for loss on extinguishment of debt, non-cash gains or losses on derivatives, merger and integration expense, other nonrecurring charges, impairment and abandonment expense, gain/loss from the sale of long-lived assets and the related income tax adjustments for these items. Adjusted net income is not a measure of net income as determined by GAAP.

Our management believes adjusted net income is useful as it allows them to more effectively evaluate our operating performance and compare the results of our operations from period to period and against our peers by excluding certain non-cash items that can vary significantly. Adjusted net income should not be considered as an alternative to, or more meaningful than, net income as determined in accordance with GAAP or as an indicator of our operating performance or liquidity. Our presentation of adjusted net income should not be construed as an inference that our results will be unaffected by unusual or nonrecurring items. Our computations of adjusted net income may not be comparable to other similarly titled measures of other companies.

Adjusted net income is not a financial measure that is determined in accordance with GAAP. Accordingly, the following table presents a reconciliation of adjusted net income to net income, which is the most directly comparable financial measure calculated and presented in accordance with GAAP:

Three Months Ended

December 31,

Year Ended December 31,

(in thousands, except per share data)

2025

2024

2025

2024

Net income attributable to Class A Common Stock

339,505

216,650

935,174

984,701

Net income attributable to noncontrolling interest

42,386

38,829

163,762

265,808

Loss on extinguishment of debt (1)

—

270,120

8,585

Non-cash derivative (gain) loss

(79,493

)

73,579

(168,479

)

(17,783

)

Merger and integration expense & other

—

4,749

25,659

Impairment and abandonment expense

379

2,128

7,985

9,912

(Gain) loss on sale of long-lived assets

—

(375

)

Adjusted net income excluding above items

302,777

331,252

1,213,311

1,276,507

Income tax (expense) benefit attributable to the above items (2)

8,264

(25,785

)

(1,804

)

(65,656

)

Adjusted Net Income

311,041

305,467

1,211,507

1,210,851

Interest on Convertible Senior Notes, net of tax

—

1,294

2,570

5,182

Adjusted Net Income - Diluted

311,041

306,761

1,214,077

1,216,033

Adjusted diluted weighted average shares outstanding (Non-GAAP) (3)

845,742

847,094

846,529

829,058

Adjusted net income per adjusted diluted share

0.37

0.36

1.43

1.47

(1)

There is no tax benefit calculated for the loss on extinguishment of debt associated with the Convertible Senior Notes incurred during the year ended December 31, 2025.

(2)

Income tax (expense) benefit for adjustments made to adjusted net income is calculated using PR's federal and state-apportioned statutory tax rate that was approximately 22.5%.

(3)

Adjusted diluted weighted average shares outstanding is a Non-GAAP measure that has been computed and reconciled to the nearest GAAP metric in the preceding table above.

The following table summarizes the approximate volumes and average contract prices of the hedge contracts the Company had in place as of December 31, 2025 and additional contracts entered into through February 20, 2026:

Period

Volume

(Bbls)

Volume

(Bbls/d)

Wtd. Avg. Crude

Price

($/Bbl)

Crude oil swaps - NYMEX WTI

January 2026 - March 2026

5,355,000

59,500

$64.62

April 2026 - June 2026

6,324,500

69,500

63.70

July 2026 - September 2026

4,554,000

49,500

65.79

October 2026 - December 2026

4,554,000

49,500

65.16

Period

Volume

(Bbls)

Volume

(Bbls/d)

Wtd. Avg.

Differential

($/Bbl)

Crude oil basis differential swaps (1)

January 2026 - March 2026

4,485,000

49,833

$0.94

April 2026 - June 2026

6,324,500

69,500

0.91

July 2026 - September 2026

3,634,000

39,500

1.02

October 2026 - December 2026

3,634,000

39,500

1.02

Period

Volume

(Bbls)

Volume

(Bbls/d)

Wtd. Avg.

Differential

($/Bbl)

Crude oil roll differential swaps - NYMEX WTI

January 2026 - March 2026

3,405,000

37,833

$0.26

April 2026 - June 2026

5,232,500

57,500

0.31

July 2026 - September 2026

2,530,000

27,500

0.33

October 2026 - December 2026

2,530,000

27,500

0.33

______________________

(1)

These crude oil basis swap transactions are settled utilizing the ARGUS MIDLAND WTI and ARGUS WTI CUSHING indices.

Period

Volume

(MMBtu)

Volume

(MMBtu/d)

Wtd. Avg. Gas

Price

($/MMBtu)

Natural gas swaps - NYMEX Henry Hub

January 2026 - March 2026

12,330,000

137,000

$4.23

April 2026 - June 2026

12,467,000

137,000

3.57

July 2026 - September 2026

12,604,000

137,000

3.83

October 2026 - December 2026

12,604,000

137,000

4.16

January 2027 - March 2027

12,600,000

140,000

4.24

April 2027 - June 2027

12,740,000

140,000

3.32

July 2027 - September 2027

12,880,000

140,000

3.58

October 2027 - December 2027

12,880,000

140,000

3.94

Period

Volume

(MMBtu)

Volume

(MMBtu/d)

Wtd. Avg. Gas

Price

($/MMBtu)

Natural gas swaps - Waha

January 2026 - March 2026

8,550,000

95,000

$2.66

April 2026 - June 2026

8,645,000

95,000

0.43

July 2026 - September 2026

8,740,000

95,000

1.80

October 2026 - December 2026

15,145,000

164,620

2.73

January 2027 - March 2027

7,650,000

85,000

3.57

Period

Volume

(MMBtu)

Volume

(MMBtu/d)

Wtd. Avg. Gas

Price

($/MMBtu)

Natural gas swaps - HSC

January 2026 - March 2026

9,000,000

100,000

$4.40

April 2026 - June 2026

9,100,000

100,000

3.63

July 2026 - September 2026

9,200,000

100,000

3.95

October 2026 - December 2026

9,200,000

100,000

4.24

Period

Volume

(MMBtu)

Volume

(MMBtu/d)

Wtd. Avg.

Differential

($/MMBtu)

Natural gas basis differential swaps (1)

January 2026 - March 2026

12,330,000

137,000

$(1.34)

April 2026 - June 2026

12,467,000

137,000

(2.31)

July 2026 - September 2026

12,604,000

137,000

(1.42)

October 2026 - December 2026

12,604,000

137,000

(1.21)

January 2027 - March 2027

14,490,000

161,000

(0.47)

April 2027 - June 2027

14,651,000

161,000

(1.11)

July 2027 - September 2027

14,812,000

161,000

(0.65)

October 2027 - December 2027

14,812,000

161,000

(0.91)

______________________

(1)

These natural gas basis swap contracts are settled utilizing the Inside FERC’s West Texas Waha price and the NYMEX Henry Hub price of natural gas.