Balance sheet analysis
Permian Resources’ total assets were $15 billion and $8.5 billion in 2023 and 2021, respectively.
The total assets in 2023 were up 76.5% year-on-year, because the amount of total liabilities surged in 2023.
The increase in total liabilities was $2.9 billion or 102% to $5.74 billion in 2023, compared with 2.84 billion in 2022.
Total property and equipment, net were $14.1 billion and $7.9 billion in 2023 and 2022, respectively.
Total property and equipment, net in 2023 were up 78.5% year-on-year.
The amount of total property and equipment, net in 2023 accounted for 94% of total assets. The 94% is very extreme.
The increase in total liabilities was used to acquiring fixed assets in 2023.
Total current assets were $650 million as of December 31, 2023.
Total current liabilities were $1.24 billion as of December 31, 2023.
The current ratio was 0.52 times for 2023.
The debt ratio was 38.3% for 2023.
Permian Resources‘ asset structure is very extreme, and fixed assets reached 94% of total assets.
The debt need cash flow to remain, so cash flow is very important.
Profitability analysis
Permian Resources‘ oil and gas sales were $3.12 billion, $2.13 billion and $1.03 billion in 2023, 2022 and 2021, respectively.
Oil and gas sales in 2023 were up 46.5% year-on-year.
Oil and gas sales in 2022 were up 106.8% year-on-year.
Operating income was $1.1 billion, $1 billion and $370.6 million in 2023, 2022 and 2021, respectively.
The operating profit margin was 35.3%, 47% and 36% in 2023, 2022 and 2021, respectively.
Net income was $880 million, $750 million and $138.2 million in 2023, 2022 and 2021, respectively.
The net profit margin was 28.2%, 35.2% and 13.4% in 2023, 2022 and 2021, respectively.
Net income attributable to Class A Common Stock was $476.3 million, $515 million and $138.2 million in 2023, 2022 and 2021, respectively.
Permian Resources’ total shareholders’ equity was $6.3 billion as of December 31, 2023.
The return on shareholders’ equity was 7.6% in 2023.
Although the net profit margin was very high, the return on shareholders equity was very low.
In addition, fixed asset turnover rate was very bad.
The fixed assets turnover was 28.4% for 2023.
Cash flow analysis
Net cash provided by operating activities was $2.2 billion, $1.4 billion and $525.6 million in 2023, 2022 and 2021, respectively.
Capital expenditure was $1.52 billion, $772 million and $320 million in 2023, 2022 and 2021, respectively.
Cash free flow was $0.68 billion, $0.63 billion and $205.6 million in 2023, 2022 and 2021, respectively.
Except for capital expenditure, the account of acquisition of oil and natural gas properties is a cash outflow account.
Acquisition of oil and natural gas properties, net was $234 million, $8.9 million and $6.5 million in 2023, 2022 and 2021, respectively.
Share repurchase were $162 million, $19 million and $14.5 million in 2023, 2022 and 2021, respectively.
Dividends paid were $142 million and $14.4 million in 2023 and 2021, respectively.
Cash returned to shareholders was $304 million, $33.4 million and $ 14.5 million in 2023, 2022 and 2021, respectively.
Conclusion
We think that Permian Resources’ return on shareholders’ equity was very low.
We need to notice difference between net income and net income attributable Permian Resources’ shareholders .
Permian Resources’ stock price is $17.18 per share, which is equivalent to $13.28 billion in market capitalization.
We reckon that the reasonable valuation is about $3 billion.
We could see that the company’s PE is about 30 times, which is apparently overvalued.
Disclaimer: The content is for reference only and does not constitute investment advice.
Introduction
Permian Resources Corporation is an independent oil and natural gas company focused on driving sustainable returns through the responsible acquisition, optimization and development of high-return crude oil and associated liquids-rich natural gas reserves.
