An independent oil and gas producer headquartered in Midland, Texas, Permian Resources drills for crude oil and natural gas in the Delaware Basin of West Texas and New Mexico. The company was born in 2022 when Centennial Resource Development merged with Colgate Energy, then grew again by buying Earthstone Energy. Its name honors the Permian Basin, the region where it works — which itself borrows its name from the Permian geologic period, named after the Russian city of Perm.
Operating income nearly tripled to $928M as oil prices rose 56%, but natural gas sales turned sharply negative at -$121M on Waha hub pricing.
nearly tripled, but the quarter was defined by two opposing forces. rose 55% to $1.86 billion and widened 25.1 points to 50% as realized oil prices climbed 56% to $97.81 per barrel, while natural gas sales fell to -$120.7 million as Waha hub prices averaged -$3.14 per Mcf. The company is generating cash at a record pace, but its gas is a growing liability.
Key takeaways
rose 212% to $928.2 million, and widened 25.1 points to 50.0%, as a 56% increase in realized oil prices to $97.81 per barrel and a 12% rise in oil volumes drove oil sharply higher.
Natural gas sales fell to -$120.7 million from a $30.1 million gain a year earlier, as Waha hub pricing averaged -$3.14 per Mcf — the most negative quarter for gas in the company's reported history.
rose 283% to $792.5 million, or $0.93 per diluted share, a result that included a $167.1 million net derivative asset at quarter-end after $200.8 million in losses during the first half of 2026.
Section summaries
Management's Discussion and Analysis
Oil revenue surged 75% YoY on higher WTI prices and volumes, while negative natural gas prices and hedging losses pressured margins.
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Total oil and gas sales rose 55% to $1.86B in Q2 2026, driven by a 56% increase in realized oil prices to $97.81/Bbl and a 12% rise in oil production volumes.
Natural gas sales turned sharply negative at -$120.7M due to Waha Hub prices averaging -$3.14/Mcf, partially offset by $33.3M in purchased gas sales net proceeds.
rose 45% to $1.51 billion, fully funding $987.7 million in and $135 million in dividends, with no borrowings outstanding under the new $3.0 billion unsecured .
fell 19% to $2.99 billion after the redemption of high-coupon senior notes including the 8.00% notes due 2027, and declined $13.1 million to $59.6 million.
per Boe rose 4% to $5.55, while gathering, processing and transportation costs fell 34% due to lower NGL and gas volumes and contract changes.
What changed
The Waha hub natural gas price recovery flagged in Q1 2025 and Q2 2025 has fully reversed: after turning negative again in Q1 2026 at -$18.5 million, gas sales deteriorated further to -$120.7 million in Q2 2026 as Waha pricing averaged -$3.14 per Mcf — the worst quarter on record.
The $279.8 million net derivative asset at year-end 2025 fell to $167.1 million by June 30, 2026, as $200.8 million in losses flowed through earnings, reversing the that had boosted in prior periods.
The investment-grade ratings achieved in Q1 2026 enabled the company to enter a new $3.0 billion unsecured , replacing the prior secured facility and removing the cap on commodity hedging — a structural shift in financial flexibility flagged as a watch item in the prior quarter.
The $5.19 per Boe achieved in Q1 2026 — the lowest in at least two years — rose to $5.55 in Q2 2026, a 7% sequential increase, as the efficiency gains from the bolt-on integration were offset by higher costs on the expanded well count.
What to watch
Whether Waha hub natural gas pricing remains deeply negative in Q3 2026 as new Permian Basin takeaway capacity comes online, or whether the -$3.14 per Mcf average proves to be the trough.
The trajectory of the $167.1 million net derivative asset and its impact on reported as those contracts settle, given that a 10% shift in forward crude curves would now change the derivative fair value by $114.0 million.
Whether the company activates the remaining authorization now that investment-grade ratings are secured and has fallen below $3.0 billion, or continues to prioritize debt reduction.
The sustainability of the 50.0% if oil prices retreat from $97.81 per barrel, given that natural gas sales are now a material drag on rather than a contributor.
per Boe increased 4% to $5.55, while gathering, processing and transportation costs fell 34% due to lower NGL and gas volumes and contract changes.
declined $13.1M to $59.6M following the redemption of high-coupon senior notes, including the 8.00% notes due 2027.
The company achieved investment-grade ratings from all three major agencies, entered a new $3.0B unsecured , and funded $987.7M in entirely from .
Quantitative and Qualitative Disclosures About Market Risk
Primary market risk is commodity price volatility; the company uses swaps and basis swaps to hedge oil, NGL, and natural gas production.
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A 10% change in oil prices would impact first-half 2026 oil and gas sales by $299.0 million, NGLs by $33.7 million, and natural gas by $13.9 million.
The company hedges with crude oil swaps (NYMEX WTI), basis differential swaps (Mid-Cush), and roll differential swaps, with volumes heavily concentrated in the near term.
Natural gas hedging includes NYMEX Henry Hub swaps, Waha swaps, HSC swaps, and basis differential swaps tied to Waha and HSC indices.
The net of commodity derivatives fell from $279.8 million at year-end 2025 to $167.1 million at June 30, 2026, driven by $200.8 million in losses.
A hypothetical 10% shift in forward crude curves would change the derivative by $114.0 million; a 10% shift in natural gas curves would change it by $19.6 million.
Interest rate risk is minimal: no borrowings were outstanding under the Credit Agreement, and the $3.0 billion in senior notes carry fixed rates.
The company has no material legal proceedings except an assumed environmental penalty from the Earthstone merger expected to exceed $1 million.
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The company assumed a liability for potential environmental defects from Earthstone's prior acquisition of Novo.
A Tolling Agreement has been received for Novo's alleged violations, but no Notice of Violation has been issued yet.
The expected penalty or settlement costs could exceed $1 million, though the ultimate outcome is uncertain.
The company does not believe this matter will have a material adverse effect on its business, financial position, results of operations, or cash flows.
No other material environmental claims exceeding the $1 million disclosure threshold are known as of June 30, 2026.
In addition to the other information set forth in this Quarterly Report, you should carefully consider the risk factors and other cautionary statements described under the heading “Item 1A. Risk Factors” included in our 2025 Annual Report and the risk factors and other cautionar…
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In addition to the other information set forth in this Quarterly Report, you should carefully consider the risk factors and other cautionary statements described under the heading “Item 1A. Risk Factors” included in our 2025 Annual Report and the risk factors and other cautionary statements contained in our other SEC filings. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition or future results. There have been no material changes in our risk factors from those described in our 2025 Annual Report or our SEC filings.
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