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PrimeEnergy (PNRG) Earnings & Revenues Increase Y/Y in Q2
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PrimeEnergy Resources Corporation (PLPC - Free Report) delivered strong financial results in the second quarter of 2024, highlighted by significant year-over-year increases in earnings and revenues on robust oil production and favorable pricing. The company's strategic focus on expanding its drilling activities, particularly in the West Texas region, resulted in substantial production growth, which more than doubled from the prior-year period.
However, the quarter also saw a decline in natural gas revenues and a rise in costs, underscoring the challenges of managing capital expenditure and sustaining profitability in a volatile market. Investors should closely examine PrimeEnergy's operational strategies and financial health as the company continues to navigate the complexities of the energy sector.
PrimeEnergy Corporation Price, Consensus and EPS Surprise
PrimeEnergy reported second-quarter 2024 earnings per share of $7.77, significantly increasing from $3.82 in the year-ago quarter.
Total quarterly revenues were $64.8 million for the quarter, a sharp increase from $35.7 million in the prior-year period.
The strong quarterly earnings were largely driven by a significant rise in oil sales, reflecting higher production volumes and improved pricing.
Production
Oil: Production for the quarter reached 695,000 barrels (Bbls), a 133.99% increase from 297,022 Bbls in the last-year period. The rise in production was driven by new wells coming online, particularly in the West Texas region, where the company has been aggressively expanding its drilling activities.
Natural Gas: Production saw an increase, with output rising 95.49% to 1,729,000 million cubic feet (Mcf) from 884,456 Mcf in second-quarter 2023.
NGLs: Production increased 88.11% to 274,000 Bbls in the second quarter from 145,659 Bbls in the prior-year quarter.
Prices
The average price per barrel of oil for the quarter was $80.91 compared with $70.59 in second-quarter 2023, reflecting a 14.62% year-over-year increase.
Natural gas prices faced a 96.4% year-over-year decline to around 5 cents per Mcf in second-quarter 2024 from $1.39 per Mcf in the prior-year quarter.
The average price for NGLs during the quarter was $19.61 per barrel compared with $19.09 per barrel in second-quarter 2023, representing a 2.72% year-over-year increase.
Revenues by Segments
PrimeEnergy reported a significant rise in oil revenues to $56.2 million from $21 million in second-quarter 2023, reflecting higher production volumes and improved pricing. Similarly, NGL revenues increased to $5.4 million from $2.8 million.
Revenues from natural gas, however, saw a sharp decline to $82,000 from $1.2 million a year earlier as the company’s focus shifted more toward oil production, which currently offers better returns.
Profitability
Net income for the quarter stood at $19.7 million, nearly doubling from $10.1 million in the prior-year quarter. This growth in profitability is a testament to the company's successful focus on high-margin oil production despite the increased cost base.
Costs
Despite these challenges, the company's total costs and expenses increased in tandem with revenues, reaching $40.2 million from $22.6 million in second-quarter 2023. The most notable increase was in depreciation, depletion and amortization (DD&A) expenses, which more than doubled year over year to $17.3 million from $7.5 million. This rise reflects the extensive capital investments in new drilling and production operations, particularly in the West Texas region.
Cash & Debt
As of Jun 30, 2024, PrimeEnergy’s cash and cash equivalents stood at $2 million, a significant decrease from $11.1 million at the end of 2023. This decline in cash was primarily due to increased capital expenditure, which was funded through operating cash flows and additional debt.
During the quarter, the company utilized its credit facility to manage liquidity, with the borrowing base increasing to $115 million as of Jul 29, 2024. PrimeEnergy had $10 million in outstanding borrowings under this facility, leaving $105 million available for future needs.
Management Guidance
Given the substantial capital expenditure and ongoing projects, particularly in West Texas, investors can anticipate continued high levels of investment in the near term. The company’s ability to manage this expenditure while maintaining profitability will be crucial for sustaining shareholder value.
Other Developments
During second-quarter 2024, PrimeEnergy completed several asset transactions and continued its strategic focus on drilling and development in its key operating regions. The company sold 12 net acres in Lea County, NM, for $150,600, following the sale of 48 net acres in the same area earlier in the year. Additionally, the company farmed out acreage in East Texas for $55,000. These transactions align with PrimeEnergy's ongoing strategy of optimizing its portfolio and focusing resources on high-potential assets.
The company is also actively participating in the completion of 12 horizontal wells in Reagan County, TX, with significant interest. This ongoing development underscores PrimeEnergy’s commitment to expanding its production base in the Permian Basin, which remains a key growth area for the company.
PNRG’s financial and operational strategies, coupled with its disciplined capital deployment, position the company well for continued growth. Investors should monitor PrimeEnergy’s ability to maintain production momentum while managing costs effectively, particularly in the face of fluctuating commodity prices.
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PrimeEnergy (PNRG) Earnings & Revenues Increase Y/Y in Q2
PrimeEnergy Resources Corporation (PLPC - Free Report) delivered strong financial results in the second quarter of 2024, highlighted by significant year-over-year increases in earnings and revenues on robust oil production and favorable pricing. The company's strategic focus on expanding its drilling activities, particularly in the West Texas region, resulted in substantial production growth, which more than doubled from the prior-year period.
However, the quarter also saw a decline in natural gas revenues and a rise in costs, underscoring the challenges of managing capital expenditure and sustaining profitability in a volatile market. Investors should closely examine PrimeEnergy's operational strategies and financial health as the company continues to navigate the complexities of the energy sector.
PrimeEnergy Corporation Price, Consensus and EPS Surprise
PrimeEnergy Corporation price-consensus-eps-surprise-chart | PrimeEnergy Corporation Quote
Q2 Results
PrimeEnergy reported second-quarter 2024 earnings per share of $7.77, significantly increasing from $3.82 in the year-ago quarter.
Total quarterly revenues were $64.8 million for the quarter, a sharp increase from $35.7 million in the prior-year period.
The strong quarterly earnings were largely driven by a significant rise in oil sales, reflecting higher production volumes and improved pricing.
Production
Oil: Production for the quarter reached 695,000 barrels (Bbls), a 133.99% increase from 297,022 Bbls in the last-year period. The rise in production was driven by new wells coming online, particularly in the West Texas region, where the company has been aggressively expanding its drilling activities.
Natural Gas: Production saw an increase, with output rising 95.49% to 1,729,000 million cubic feet (Mcf) from 884,456 Mcf in second-quarter 2023.
NGLs: Production increased 88.11% to 274,000 Bbls in the second quarter from 145,659 Bbls in the prior-year quarter.
Prices
The average price per barrel of oil for the quarter was $80.91 compared with $70.59 in second-quarter 2023, reflecting a 14.62% year-over-year increase.
Natural gas prices faced a 96.4% year-over-year decline to around 5 cents per Mcf in second-quarter 2024 from $1.39 per Mcf in the prior-year quarter.
The average price for NGLs during the quarter was $19.61 per barrel compared with $19.09 per barrel in second-quarter 2023, representing a 2.72% year-over-year increase.
Revenues by Segments
PrimeEnergy reported a significant rise in oil revenues to $56.2 million from $21 million in second-quarter 2023, reflecting higher production volumes and improved pricing. Similarly, NGL revenues increased to $5.4 million from $2.8 million.
Revenues from natural gas, however, saw a sharp decline to $82,000 from $1.2 million a year earlier as the company’s focus shifted more toward oil production, which currently offers better returns.
Profitability
Net income for the quarter stood at $19.7 million, nearly doubling from $10.1 million in the prior-year quarter. This growth in profitability is a testament to the company's successful focus on high-margin oil production despite the increased cost base.
Costs
Despite these challenges, the company's total costs and expenses increased in tandem with revenues, reaching $40.2 million from $22.6 million in second-quarter 2023. The most notable increase was in depreciation, depletion and amortization (DD&A) expenses, which more than doubled year over year to $17.3 million from $7.5 million. This rise reflects the extensive capital investments in new drilling and production operations, particularly in the West Texas region.
Cash & Debt
As of Jun 30, 2024, PrimeEnergy’s cash and cash equivalents stood at $2 million, a significant decrease from $11.1 million at the end of 2023. This decline in cash was primarily due to increased capital expenditure, which was funded through operating cash flows and additional debt.
During the quarter, the company utilized its credit facility to manage liquidity, with the borrowing base increasing to $115 million as of Jul 29, 2024. PrimeEnergy had $10 million in outstanding borrowings under this facility, leaving $105 million available for future needs.
Management Guidance
Given the substantial capital expenditure and ongoing projects, particularly in West Texas, investors can anticipate continued high levels of investment in the near term. The company’s ability to manage this expenditure while maintaining profitability will be crucial for sustaining shareholder value.
Other Developments
During second-quarter 2024, PrimeEnergy completed several asset transactions and continued its strategic focus on drilling and development in its key operating regions. The company sold 12 net acres in Lea County, NM, for $150,600, following the sale of 48 net acres in the same area earlier in the year. Additionally, the company farmed out acreage in East Texas for $55,000. These transactions align with PrimeEnergy's ongoing strategy of optimizing its portfolio and focusing resources on high-potential assets.
The company is also actively participating in the completion of 12 horizontal wells in Reagan County, TX, with significant interest. This ongoing development underscores PrimeEnergy’s commitment to expanding its production base in the Permian Basin, which remains a key growth area for the company.
PNRG’s financial and operational strategies, coupled with its disciplined capital deployment, position the company well for continued growth. Investors should monitor PrimeEnergy’s ability to maintain production momentum while managing costs effectively, particularly in the face of fluctuating commodity prices.