Permian Resources Announces Partial Redemption of 9.875% Senior Notes Due 2031

Rhea-AI Summary

Permian Resources (NYSE: PR) announced that its subsidiary, Permian Resources Operating, will partially redeem its 9.875% Senior Notes due 2031. The company will redeem $175 million of the Notes on January 24, 2025, at a redemption price of 109.875% of the principal amount, plus accrued and unpaid interest. After this redemption, $325 million of Notes will remain outstanding.

Positive

• Reduction of high-interest debt ($175M of 9.875% Senior Notes)
• Demonstrates financial flexibility and ability to manage debt obligations

Negative

• Premium payment of 109.875% on principal amount increases redemption cost
• $325M of high-interest Notes still remaining outstanding

Insights

Financial Analyst

The partial redemption of $175 million of high-yield notes carrying a 9.875% interest rate demonstrates strong financial management and improving balance sheet health. At a redemption price of 109.875%, this will cost approximately $192.3 million plus accrued interest, but will generate significant annual interest savings of about $17.3 million.

This strategic move reflects robust cash flow generation and a commitment to deleveraging. By reducing the outstanding notes from $500 million to $325 million, Permian Resources is effectively lowering its interest expense burden during a period of elevated rates. The willingness to pay the redemption premium indicates confidence in the company's liquidity position and future cash flow generation capabilities.

For investors, this debt reduction strengthens the company's financial flexibility and could potentially lead to improved credit ratings, lower borrowing costs on future debt issuances and enhanced shareholder returns through the realized interest savings. The timing of this redemption, amid volatile energy markets, signals management's prudent approach to capital allocation and balance sheet optimization.

Credit Risk Analyst

The early redemption of these high-cost notes marks a notable improvement in Permian Resources' credit profile. With a market cap of $10.8 billion, this debt reduction represents a meaningful step in optimizing the capital structure. The willingness to incur a 9.875% prepayment penalty suggests strong cash positions and indicates management's confidence in sustained operational performance.

The reduction in leverage should positively impact key credit metrics, including the debt-to-EBITDA ratio and interest coverage ratios. By proactively addressing this high-cost debt, the company is positioning itself more favorably for future market conditions and potential credit rating improvements. The remaining $325 million in notes provides a more balanced debt profile while maintaining operational flexibility.

MIDLAND, Texas--(BUSINESS WIRE)-- Permian Resources Corporation (“Permian Resources” or the “Company”) (NYSE: PR) announced today that Permian Resources Operating, LLC (the “Issuer”), a subsidiary of Permian Resources, has issued a notice of partial redemption (the “Notice”) with respect to its 9.875% Senior Notes due 2031 (the “Notes”). On January 24, 2025 (the “Redemption Date”), the Issuer will redeem an aggregate principal amount of $175 million of Notes in accordance with the terms set forth in the indenture governing the Notes.

The Notes will be redeemed at a redemption price of 109.875% of the principal amount thereof, plus accrued and unpaid interest, if any, to, but excluding, the Redemption Date (the “Redemption”). Following the Redemption, there will be an aggregate principal amount of $325 million of Notes outstanding. Additional information concerning the terms of the Redemption is contained in the Notice.

About Permian Resources

Headquartered in Midland, Texas, Permian Resources is an independent oil and natural gas company focused on the responsible acquisition, optimization and development of high-return oil and natural gas properties. The Company’s assets and operations are concentrated in the core of the Delaware Basin, making it 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 the Redemption, our strategy, financial position, and 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,” “resulting” 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:

• volatility of oil, natural gas and NGL prices or a prolonged period of low oil, natural gas or NGL prices and the effects of actions by, or disputes among or between, members of the Organization of Petroleum Exporting Countries, such as Saudi Arabia, and other oil and natural gas producing countries, such as Russia, with respect to production levels or other matters related to the price of oil, natural gas and NGLs;
• political and economic conditions and events in or affecting other producing regions or countries, including the Middle East, Russia, Eastern Europe, Africa and South America;
• our business strategy and future drilling plans;
• our reserves and our ability to replace the reserves we produce through drilling and property acquisitions;
• our drilling prospects, inventories, projects and programs;
• our financial strategy, return of capital program, leverage, liquidity and capital required for our development program;
• the timing and amount of our future production of oil, natural gas and NGLs;
• our ability to identify, complete and effectively integrate acquisitions of properties, assets or businesses, including our recent acquisitions and related transactions;
• our hedging strategy and results;
• our competition;
• our ability to obtain permits and governmental approvals;
• our compliance with government regulations, including those related to climate change as well as environmental, health and safety regulations and liabilities thereunder;
• our pending legal matters;
• the marketing and transportation of our oil, natural gas and NGLs;
• our leasehold or business acquisitions;
• cost of developing or operating our properties;
• our anticipated rate of return;
• general economic conditions;
• weather conditions in the areas where we operate;
• credit markets;
• our ability to make dividends, distributions and share repurchases;
• uncertainty regarding our future operating results;
• our plans, objectives, expectations and intentions contained in this press release that are not historical; and
• the other factors described in our most recent Annual Report on Form 10-K, and any updates to those factors set forth in our subsequent Quarterly Reports on Form 10-Q or Current Reports on Form 8-K.

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, natural gas and NGLs. Factors which could cause our actual results to differ materially from the results contemplated by forward-looking statements include, but are not limited to:

• commodity price volatility (including regional basis differentials);
• uncertainty inherent in estimating oil, natural gas and NGL reserves, including the impact of commodity price declines on the economic producibility of such reserves, and in projecting future rates of production;
• geographic concentration of our operations;
• lack of availability of drilling and production equipment and services;
• lack of transportation and storage capacity as a result of oversupply, government regulations or other factors;
• risks related to our recent acquisitions, including the risk that we may fail to integrate such acquisitions on the terms and timing currently contemplated, or at all, and/or to realize our strategy and plans to achieve the expected benefits of such acquisitions;
• competition in the oil and natural gas industry for assets, materials, qualified personnel and capital;
• drilling and other operating risks;
• environmental and climate related risks, including seasonal weather conditions;
• regulatory changes, including those that may result from the U.S. Supreme Court’s decision overturning the Chevron deference doctrine and that may impact environmental, energy, and natural resources regulation;
• the possibility that the industry in which we operate may be subject to new or volatile local, state, and federal or legislative actions (including additional taxes and changes in environmental, health, and safety regulation and regulations related to climate change) as a result of developing national and/or global efforts to address climate change;
• restrictions on the use of water, including limits on the use of produced water and potential restrictions on the availability of water disposal facilities;
• availability of cash flow and access to capital;
• inflation;
• changes in our credit ratings or adverse changes in interest rates;
• changes in the financial strength of counterparties to our credit agreement and hedging contracts;
• the timing of development expenditures;
• political and economic conditions and events in foreign oil and natural gas producing countries, including embargoes, continued hostilities in the Middle East and other sustained military campaigns, including the conflict in Israel and its surrounding areas, the war in Ukraine and associated economic sanctions on Russia, conditions in South America, Central America, China and Russia, and acts of terrorism or sabotage;
• changes in local, regional, national, and international economic conditions;
• security threats, including evolving cybersecurity risks such as those involving unauthorized access, denial-of-service attacks, third-party service provider failures, malicious software, data privacy breaches by employees, insiders or other with authorized access, cyber or phishing-attacks, ransomware, social engineering, physical breaches or other actions; and
• other risks described in our filings with the U.S. Securities and Exchange Commission.

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 any 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.

This press release does not constitute a notice of redemption with respect to the Notes.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250114549614/en/

Hays Mabry – Vice President, Investor Relations

(432) 315-0114

ir@permianres.com

Source: Permian Resources Corporation

FAQ

How much of Permian Resources' (PR) 9.875% Senior Notes is being redeemed?

Permian Resources is redeeming $175 million of its 9.875% Senior Notes due 2031.

What is the redemption price for Permian Resources' (PR) Senior Notes?

The Notes will be redeemed at 109.875% of the principal amount, plus accrued and unpaid interest.

When will Permian Resources (PR) redeem the Senior Notes?

The redemption will occur on January 24, 2025.

How much of Permian Resources' (PR) Senior Notes will remain outstanding after the redemption?

After the redemption, $325 million of Notes will remain outstanding.