Permian Resources: Cash-Generative Delaware Basin Execution and a Material Accounting Discrepancy

Q4/FY2024: Big cash flow, big questions#

Permian Resources ([PR]) closed FY2024 with $5.00B of revenue and $3.41B of operating cash flow, producing free cash flow of $291.3M even while spending $3.12B on property, plant and equipment. Those numbers paint a company generating substantial cash from Delaware Basin operations at scale. At the same time, the company’s own filings in the dataset show a notable internal inconsistency: the FY2024 income statement records net income of $984.7M, while the statement of cash flows in the same filing shows net income of $1.25B — a difference of about $262M that must be reconciled by investors and analysts before relying on headline earnings metrics.

This combination — strong operating cash generation, heavy reinvestment, a sustainable quarterly dividend and active bolt-on M&A — is the dominant storyline for Permian Resources. But the unexplained variance between income-statement and cash-flow net income is the single most important development for investors right now because it affects margin interpretation, EPS reconciliation and the quality-of-earnings assessment.

The numbers that define FY2024 (and our calculations)#

Below I summarize the consolidated financials and compute key ratios independently from the raw annualized numbers in the filings. Where the dataset contains divergent figures, I call that out and explain how I prioritized cash-based metrics for quality assessment.

Income statement and margin trends (2021–2024)#

*Note: the FY2024 statement of cash flows in the dataset lists net income $1.25B, creating a material +$262M discrepancy vs the income statement number above. I flag that difference below and prioritize cash-flow measures when assessing earnings quality. Primary source: FY2024 filings and investor materials SEC Filings - Permian Resources Corporation.

The headline growth: revenue rose +60.2% YoY (from $3.12B to $5.00B) and reported EBITDA expanded to $3.63B in 2024, producing an EBITDA margin of ~72.6% (3.63/5.00). Those margins are extreme relative to most industrials and reflect the liquids-weighted production mix and industry accounting dynamics; they are, however, consistent with a high-liquids, low-cost Delaware Basin operator.

Balance sheet and cash flow snapshot (2021–2024)#

*Net debt = total debt - cash and cash equivalents; calculated independently from the figures in the balance sheet entries.

From these figures I compute a handful of key balance-sheet and valuation ratios using FY2024 raw data:

• Net debt / EBITDA = $3.83B / $3.63B = ~1.06x (my calculation). The dataset's TTM figure (0.95x) differs slightly; timing and trailing vs. year-end EBITDA cause the variance.
• Debt / Equity = $4.31B / $9.14B = ~0.47x (47%). The dataset shows debt-to-equity TTM ~0.44x — close, again due to different denominators or mid-period adjustments.
• Market capitalization (snapshot in dataset) = $9.92B; adding net debt gives an enterprise value of ~$13.75B. EV / EBITDA (using FY2024 EBITDA) = $13.75B / $3.63B = ~3.79x (my calculation) versus the dataset’s 3.5x.

These metrics show a company with modest leverage relative to its cash-generation capacity and an EV/EBITDA multiple that reflects commodity cyclicality rather than secular premium multiples.

Quality of earnings: why cash matters here (and the discrepancy)#

Permian Resources’ FY2024 operating cash flow of $3.41B is the single best measure of current earnings quality because it directly captures realized commodity receipts, cash working-capital movements and non-cash addbacks such as depreciation. The company reported heavy non-cash D&A of $1.78B in 2024, which inflates accounting EBITDA relative to cash profits but is expected given large PP&E balances in the oil & gas sector.

The unexplained difference between the income statement net income ($984.7M) and the cash-flow net income ($1.25B) is material relative to FY net income and must be reconciled through the company’s detailed 10-K/10-Q schedules. Potential causes include rounding differences, classification of noncontrolling interest, retrospective adjustments, or presentation of certain non-operating items between statements. Until the company officially reconciles that variance in a filing or investor communication, investors should prioritize cashflow-based measures (OCF, FCF, net-debt/EBITDA) for assessing operational performance and capital returns.

Practical implication: the company’s cash-generation capability funds dividends, buybacks and bolt-on M&A irrespective of line-item net income — and that cash generation is strong. For FY2024, operating cash flow of $3.41B funded $466.9M of dividends and $61.05M of share repurchases while still supporting heavy capex and acquisitions (acquisitions net of $16.45M in 2024) SEC Filings - Permian Resources Corporation.

Capital allocation: dividend, buybacks and bolt-on M&A#

Permian Resources runs a capital-allocation mix built around a base dividend and opportunistic buybacks while selectively deploying capital to accretive bolt-ons. The company declared a quarterly dividend of $0.15 per share (annualized $0.60), representing a TTM dividend per share of $0.45 in the dataset and a yield of ~3.18% at the prevailing price. Dividend coverage is supported by the combination of strong operating cash flow and moderate capex, but free cash flow in 2024 was compressed to $291.3M because of an elevated capex program.

Management has simultaneously pursued strategic acreage purchases that expand contiguous inventory and improve net revenue interests. Two transactions cited in public materials illustrate the approach: a $608M APA Corp. bolt-on adding ~13,320 net acres and a previously announced ~$817.5M acquisition from Occidental that added roughly 29,500 net acres and immediate production. Management frames these as accretive to cash flow per share and free cash flow per share because the transactions densify operations and unlock higher-margin locations; the company also sold non-core midstream assets to Kinetik for $180M to streamline focus and re-deploy capital Permian Resources - APA acquisition / Permian Resources - Occidental acquisition / Divestiture to Kinetik.

From a capital-allocation efficiency angle, compute a simple coverage check: FY2024 operating cash flow ($3.41B) less capex ($3.12B) leaves the headline FCF ($291.3M), which funded dividends (~$467M declared, including 2024/2025 payouts in dataset) and some repurchases. In short, the company’s declared dividend in 2024 was broader than standalone FCF, implying a reliance on balance-sheet flexibility, asset sales, or quarter-to-quarter cash timing to fully fund distributions. That pattern is visible in the dataset: dividends paid in cash flow totaled $466.92M in 2024 while free cash flow was $291.33M.

Operational execution: drilling costs, unit economics and production mix#

Operationally, the company emphasizes the classic Delaware Basin playbook: contiguous acreage, liquids-weighted production and relentless focus on drilling & completion efficiency. Recent public commentary and quarterly materials point to drilling-and-completion costs in the range of ~$750–$775 per lateral foot in recent quarters, record drilling times and improved controllable cash costs per Boe in the high single digits. Those operational gains are the principal driver of robust EBITDA margins and high operating cash flow despite commodity-price variability.

Q2 2025 operational disclosure (company press materials) cited average daily crude production and overall production metrics that underpin the revenue base: average total production of roughly 385.1 MBoe/d (including sizable liquids) and Q2 revenue around $1.20B despite softer realized prices, showing that scale and mix can blunt near-term price pressure Permian Resources - Q2 2025 Results.

Operational execution also shows up in controllable cash cost metrics. The company reported controllable cash costs near $7.82–$7.84 per Boe in recent quarters, an incremental improvement quarter-over-quarter that meaningfully enhances per-barrel margins when liquids prices are volatile. Combined with high liquids intensity, the result is resilient free cash flow at mid-cycle oil prices.

Competitive positioning and risks#

Permian Resources’ competitive advantage is primarily geographic concentration: contiguous, high-quality acreage in the Delaware Basin with scale advantages that permit shared infrastructure and lower per-well costs. The company’s bolt-on approach — buying acreage that immediately competes for capital — is intended to convert scale into lower unit costs and higher net revenue interest. That strategy is defensible in the near term given the company’s demonstrated cash-generation ability and the ability to re-deploy proceeds from non-core midstream sales.

Key risks to that thesis include commodity-price volatility, execution risk on large organic drilling programs, the integration risk of recent acquisitions, and the accounting discrepancy noted earlier which raises questions about the transparency of some line-item measures. Additionally, the company’s dividend and buyback activity have, in some periods, exceeded standalone free cash flow, implying potential reliance on asset sales or short-term balance-sheet flexibility if commodity prices or production levels deteriorate.

Forward-looking signals and analyst estimates#

Analysts in the dataset show a gradual moderation of growth beyond 2025: consensus estimates indicate FY2025 revenue around $5.23B and FY2026 at $5.34B, with EPS and EBITDA roughly stable through 2029 per the formatted estimates. Forward EV/EBITDA multiples in the dataset range from ~6.6x in 2025 falling to the mid-5x range by 2027–2029, reflecting expected normalization and capital spending cycles. Those estimates assume continued operational performance, modest volume growth and the company continuing to convert Delaware scale into cash flow.

What this means for investors#

Permian Resources is a cash-generative, liquids-weighted Delaware Basin operator that has converted scale and drilling productivity into substantial operating cash flow. The company’s FY2024 operating cash flow of $3.41B and EBITDA of $3.63B are the core strengths supporting dividends, buybacks and selective M&A. Investors should, however, weigh two proximate caveats: first, the unexplained ~$262M discrepancy between income-statement net income and cash-flow net income in the FY2024 filings; and second, the fact that free cash flow after heavy capex was modest in 2024 ($291.3M), while dividend and repurchase activity exceeded that level in cash terms.

In short: the cash engine is real and large, but the accounting reconciliation and capital-allocation sequencing matter. If the company consistently converts the reported operating cash flow into sustainable free cash flow growth (through either modest capex normalization, continued efficiency gains or thoughtful asset sales), the capital-return story will be credible. If not, dividend coverage and buyback pace could be constrained.

Key takeaways#

Permian Resources posted FY2024 revenue of $5.00B and operating cash flow of $3.41B, demonstrating strong cash generation from Delaware Basin operations. The company’s capital program is large but targeted — capex of $3.12B funded both growth and a $0.15 quarterly dividend.

There is a material internal discrepancy between the income statement’s net income ($984.7M) and the cash-flow statement’s net income ($1.25B); investors should seek clarification in subsequent filings or the company’s investor Q&A. Until reconciled, prioritize cash-based metrics (OCF, FCF, net-debt/EBITDA) for valuation and coverage assessments.

Operational improvements (lower $/lateral foot, faster drilling, lower controllable cash costs) and accretive bolt-on M&A underpin the company’s strategy to increase free-cash-flow per share and protect dividend sustainability; however, near-term free cash flow was modest after elevated capex in 2024.

Conclusion#

Permian Resources is executing a recognizable Delaware Basin playbook: consolidate contiguous, liquids-rich acreage, drive drilling-and-completion efficiencies, monetize non-core assets, and return capital to shareholders. The company’s cash generation is the real story and supports that approach. That said, the filing-level accounting inconsistency and the tight gap between free cash flow and shareholder distributions in 2024 add an essential layer of caution. For investors evaluating Permian Resources, the priority is twofold: (1) monitor management’s reconciliation of FY2024 net-income line items in official filings and (2) watch near-term free cash flow conversion as capex normalizes and acquired acreage contributions ramp.

Sources: Permian Resources public press releases and investor materials (Q2 2025 results and transaction announcements), and FY2024 filings Permian Resources - Investor Relations Press Releases (Q2 2025 Results), Permian Resources - APA acquisition, Permian Resources - Occidental acquisition, Divestiture to Kinetik, and SEC filings SEC Filings - Permian Resources Corporation (EDGAR).