Permian Resources Corporation, a key player in the Permian Basin, delivered an impressive Q3 2024 update, showcasing their continued commitment to operational efficiency and innovation. The company’s strategic focus on improving drilling and completions, integrating sustainable practices like recycled water, and leveraging advanced techniques such as simul-frac has positioned them as a leader in cost management and productivity enhancement. In this blog, we delve into how these advancements are shaping the company’s future outlook.

1. Drilling and Completion Efficiencies: Driving Cost Savings

Permian Resources reported remarkable gains in drilling and completion (D&C) efficiency during Q3 2024, which have been central to their operational strategy.

Key Improvements:

Cycle Time Reduction: The company achieved a 16% reduction in average cycle times, with spud-to-rig release days dropping to just 13 days. This achievement marks a record for the company, driven by continuous refinement of drilling techniques and enhanced coordination between field and office teams.
Lower D&C Costs: Through the application of best practices and optimized processes, Permian Resources reduced D&C costs to approximately $800 per lateral foot, a significant 16% decrease from 2023 levels. This reduction equates to about $1 million in savings per well, underscoring the impact of their efficiency initiatives.

Strategic Impact:

The improved drilling efficiency has allowed Permian Resources to increase activity without exceeding their original capital budget. This disciplined approach highlights their commitment to maximizing returns while maintaining financial flexibility, setting a strong foundation for continued growth.

2. Embracing Sustainability with Recycled Water

Sustainability has become a core component of Permian Resources’ operational strategy, and their use of recycled water during completions is a prime example of this commitment.

Water Management Highlights:

50% Recycled Water Usage: In Q3 2024, the company reported that approximately half of the water used in completion operations came from recycled produced water. This initiative not only reduces the reliance on freshwater sources but also aligns with Permian Resources’ broader environmental, social, and governance (ESG) goals.
Cost and Environmental Benefits: Utilizing recycled water helps cut down on costs associated with sourcing and transporting freshwater, while also minimizing the environmental impact of their operations. The company’s focus on water recycling demonstrates a proactive approach to sustainable resource management, a critical factor in their long-term strategy.

3. The Power of Simul-Frac: Faster Completions and Cost Reductions

One of the standout operational techniques adopted by Permian Resources in 2024 has been the use of simul-frac. This advanced method involves fracturing multiple wells simultaneously, allowing for significant time and cost savings.

Simul-Frac Success:

Enhanced Efficiency: By employing simul-frac across multiple projects, Permian Resources has been able to accelerate the completion timeline and increase the number of wells brought online (turn-in-lines). This approach has played a key role in the company’s ability to maintain its capital budget while increasing production targets.
Cost Savings: The use of simul-frac has contributed to the overall reduction in well costs, complementing the company’s broader efforts to lower D&C expenses. The technique has been particularly effective in high-density drilling areas like the Windham Row project, where its application was expanded due to early positive results.

Strategic Adoption:

The success of simul-frac reflects Permian Resources’ commitment to innovative practices that enhance operational efficiency. The company’s ability to scale up the use of this technique demonstrates its flexibility and adaptability in optimizing well completions.

4. Outlook: Positioned for Sustainable Growth

Looking ahead, Permian Resources remains focused on building upon the operational efficiencies gained in 2024. The company’s outlook is underpinned by a strategy centered on disciplined capital management, continuous innovation, and a commitment to sustainability.

Key Outlook Points:

Increased Production Guidance: For the third consecutive quarter, the company raised its full-year production targets, now forecasting 158.5 MBbls/d of oil and 341 MBoe/d of total production. The upward revision is driven by strong well performance, operational efficiencies, and the successful integration of recent acquisitions.
Continued Efficiency Gains: Permian Resources plans to further refine its drilling and completion processes, with a focus on maintaining low per-foot well costs and improving cycle times. These efforts are expected to drive additional cost savings and support future growth.
Commitment to ESG Goals: The company’s use of recycled water and focus on reducing environmental impact will remain a key component of its operational strategy. By integrating sustainable practices, Permian Resources aims to enhance its ESG profile and meet the increasing demands for responsible resource development.

Conclusion

Permian Resources’ Q3 2024 update showcases a company at the forefront of operational efficiency and innovation in the Permian Basin. Their relentless pursuit of cost reductions, coupled with the adoption of sustainable practices like recycled water and advanced techniques such as simul-frac, has positioned them well for continued growth and value creation.

As the industry navigates an evolving landscape, Permian Resources’ strategy of disciplined execution and focus on efficiency will be critical drivers of its long-term success. Investors and stakeholders can expect the company to maintain its strong performance trajectory, delivering on its promises of enhanced production and sustainable shareholder returns.

Stay tuned for more updates as Permian Resources continues to set new benchmarks in the oil and gas industry. For detailed financial results and guidance, visit Permian Resources’ Investor Relations.

This blog captures the essence of Permian Resources’ operational advancements and outlook, highlighting their focus on efficiency, sustainability, and strategic growth in the Permian Basin.