Permian Resources Corp
For the period ended Mar 31, 2025. Filed May 8, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 8, 2025
PR$21.52-1.1%Stored close · as of Nov 9, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-07.
0001658566-24-000109
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-08.
0001658566-25-000041
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 128 previous paragraphs and 73 current paragraphs.
40 unchanged; 29 reworded; 3 added; 45 removed; 14 previous and 1 current paragraphs rearranged.
Tables are not compared: 18 previous and 9 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (3)
Current report
Concerns of global economic growth, inflation, increases in global oil and natural gas supply levels and the potential for a global trade war resulted in oil price deterioration throughout 2024 and 2025. Oil prices have continued to be influenced by geopolitical tensions and trade policies as well as global economic slowdowns resulting in more downward pressure of prices at the end of the first quarter and beginning of the second quarter of 2025.
Current report
LOE per Boe for the first quarter of 2025 was $5.35, which represents a decrease of $0.45 per Boe (or 8%) from the first quarter of 2024. This decrease was primarily driven by lower semi-variable well costs, such as lower wellhead equipment rental rates, water disposal rates, and wellhead chemicals that resulted from operational efficiencies.
Current report
Refer to Note 1—Basis of Presentation and Summary of Significant Accounting Policies under Part I, Item 1. of this Quarterly Report for a discussion of recently adopted accounting standards and the potential effects of new accounting pronouncements.
Removed paragraphs (45)
Previous report
On November 1, 2023, we completed the Earthstone merger (the “Earthstone Merger”) with Earthstone Energy, Inc. (“Earthstone”). Earthstone’s results of operations were included in our financial statements and results of operations beginning on November 1, 2023.
Previous report
2024 Asset Acquisitions
Previous report
On September 17, 2024, we completed the acquisition of oil and gas properties with certain affiliates of Occidental Petroleum Corporation for total cash consideration of $743.5 million, subject to customary post-closing purchase price adjustments (the “Bolt-On Acquisition”). The Bolt-On Acquisition included approximately 29,500 net leasehold acres and approximately 9,900 net royalty acres that are predominately located directly offsetting our existing assets in Reeves County, Texas, as well as Eddy County, New Mexico. Additionally, the acquired assets in Reeves County include a fully integrated midstream system, consisting of over 100 miles of operated oil and gas gathering systems, approximately 10,000 surface acres, and water infrastructure including saltwater disposal wells, a recycling facility, frac ponds and water wells. The revenues and associated operating expenses from the Bolt-On Acquisition are included in our consolidation financial data as of September 30, 2024, but had a minimal impact to our third quarter results of operations due to the end of quarter acquisition close date.
Previous report
During the nine months ended September 30, 2024, we completed multiple acquisitions of oil and natural gas properties for a cumulative adjusted purchase price of approximately $363 million. These acquisitions are part of our ongoing bolt-on and grassroots acquisition programs.
Previous report
During the third quarter of 2024, we announced an update to our return of capital strategy including an increase to our quarterly base dividend to $0.15 per share ($0.60 per share annually), representing a 150% increase to our prior base dividend. Additionally, our Board of Directors authorized a new share repurchase program of $1 billion, replacing our existing $500 million program. These strategic return changes reinforce our commitment to maximizing shareholder value and continued focus on delivering leading shareholder returns.
Previous report
During the nine months ended September 30, 2024, we paid $61.0 million to repurchase 3.8 million Common Units resulting in an equal number of the underlying shares of Class C Common Stock simultaneously being canceled under our stock repurchase program.
Previous report
On August 5, 2024 we issued $1.0 billion of 6.25% senior notes due 2033 (the “2033 Senior Notes”) in a 144A private placement at par. We used the net proceeds from the 2033 Senior Notes to (i) fund the tender offer and remaining redemption of our $300 million 7.75% senior notes due 2026; (ii) fund a portion of the purchase price of the Bolt-On Acquisition; and (iii) repay a portion of borrowings outstanding under our credit facility.
Previous report
On July 30, 2024, we completed an underwritten public offering of 26.5 million shares of our Class A Common Stock resulting in net cash proceeds of $402.2 million after underwriting discounts and commissions. The net proceeds from this equity offering were used to fund a portion of the aggregate purchase price of the Bolt-On Acquisition.
Previous report
In connection with the spring borrowing base redetermination in April 2024, we entered into the seventh amendment to the Credit Agreement (the “Seventh Amendment”). The Seventh Amendment, among other things, increased the elected commitments under the Credit Agreement to $2.5 billion from $2.0 billion and reaffirmed the borrowing base at $4.0 billion.
Previous report
(1) Natural gas sales for the three months ended September 30, 2024 include $26.2 million of gathering, processing and transportation costs (“GP&T”) that are reflected as a reduction to natural gas sales and $12.0 million for the three months ended September 30, 2023. Natural gas average sales price, however, excludes $0.47 per Mcf of such GP&T charges for the three months ended September 30, 2024 and $0.46 per Mcf for the three months ended September 30, 2023.
Previous report
(2) NGL sales for the three months ended September 30, 2024 include $23.0 million of GP&T that are reflected as a reduction to NGL sales and $16.3 million for the three months ended September 30, 2023. NGL average sales price, however, excludes $2.91 per Bbl of such GP&T charges for the three months ended September 30, 2024 and $5.07 per Bbl for the three months ended September 30, 2023.
Previous report
Exploration and Other Expenses. The following table summarizes our exploration and other expenses for the periods indicated:
Previous report
Exploration and other expenses were $7.0 million for the three months ended September 30, 2024 compared to $5.0 million for the three months ended September 30, 2023. Exploration and other expenses mainly consist of topographical studies, geographical and geophysical (“G&G”) projects, salaries and expenses of G&G personnel and include other operating costs. The period over period increase was primarily related to (i) higher G&G personnel costs in the third quarter of 2024 associated with increased headcount due to the Earthstone Merger; and (ii) higher costs incurred on G&G projects and seismic studies in the third quarter of 2024 compared to the same period in 2023.
Previous report
Nine Months Ended September 30, 2024 Compared to Nine Months Ended September 30, 2023
Previous report
(1) Natural gas sales for the nine months ended September 30, 2024 include $75.1 million of GP&T that are reflected as a reduction to natural gas sales and $30.7 million for the nine months ended September 30, 2023. Natural gas average sales price, however, excludes $0.46 per Mcf of such GP&T charges for the nine months ended September 30, 2024 and $0.41 for the nine months ended September 30, 2023.
Previous report
(2) NGL sales for the nine months ended September 30, 2024 include $64.7 million of GP&T that are reflected as a reduction to NGL sales and $48.9 million for the nine months ended September 30, 2023. NGL average sales price, however, excludes $2.90 per Bbl of such GP&T charges for the nine months ended September 30, 2024 and $5.29 for the nine months ended September 30, 2023.
Previous report
Net production volumes for oil, natural gas, and NGLs increased 85%, 116%, and 141%, respectively, between periods. The increase in oil production resulted from additional production added from wells acquired in the Earthstone Merger and from placing additional wells online since the third quarter of 2023. These oil volume increases were partially offset by normal production declines across our existing wells. Natural gas and NGLs are produced concurrently with our crude oil volumes, which typically result in a high correlation between fluctuations in oil quantities sold and natural gas and NGL quantities sold driving the 116% and 141%, respective increases in gas and NGL volumes between periods. The higher increase in gas and NGL volumes between periods as compared to the 85% increase in oil volumes was due to the producing wells acquired in the Earthstone Merger, which have a higher gas-to-oil ratio than our existing production base, and this has resulted in more volumes of gas and NGLs being added to our total production stream since the closing of the Earthstone Merger on November 1, 2023. NGL volumes were further positively impacted by processors of our raw gas operating in higher ethane-recovery during the first nine months of 2024 as compared to the same 2023 period, which resulted in a higher percentage of NGLs being recovered from our wet gas stream between periods.
Previous report
These increases were partially offset by decreases in the average realized sales prices for natural gas which decreased 80% in the first nine months of 2024 compared to the same 2023 period. This decrease was mainly due to wider gas differentials realized on our gas sales, which are primarily sold at Waha where the market price averaged negative $0.15 per MMBtu during the first nine months of 2024 compared to $1.56 for the first nine months of 2023 due to location specific market constraints as discussed under the “Market Conditions” section above.
Previous report
Operating Expenses. The following table summarizes our operating expenses for the periods indicated:
Previous report
Lease Operating Expenses. LOE per Boe was $5.46 for the nine months ended September 30, 2024, which was consistent with our per Boe rate of $5.44 for the nine months ended September 30, 2023. On a nominal basis, LOE for the nine months ended September 30, 2024 increased $258.3 million compared to the nine months ended September 30, 2023 and was related to our significantly higher well count between periods primarily due to (i) wells acquired in the Earthstone Merger on November 1, 2023; and (ii) additional wells placed on production since September 30, 2023.
Previous report
Gathering, Processing and Transportation Expenses. GP&T for the nine months ended September 30, 2024 increased $75.1 million compared to the nine months ended September 30, 2023. This increase in expense was mainly attributable to higher natural gas and NGL volumes sold between periods, which in turn resulted in a higher amount of plant processing fees and gathering costs being incurred. Additionally, GP&T increased on a per Boe basis from $1.30 for the first nine months of 2023 to $1.45 for the first nine months of 2024. This increase in rate was mainly attributable to a higher portion of our GP&T costs being recognized as expense as compared to a reduction to our gas and NGL revenues between periods primarily related to processing contracts assumed as part of the Earthstone Merger.
Previous report
G&A expenses for the nine months ended September 30, 2024 were $129.9 million compared to $122.7 million for the nine months ended September 30, 2023. Higher G&A for the first nine months of 2024 was the result of an increase of $29.4 million in cash G&A between periods primarily associated with our overall corporate growth between periods and associated higher G&A headcount, which increased from 179 as of September 30, 2023 to 260 as of September 30, 2024 stemming primarily from the Earthstone Merger. This increase was partially offset by a $22.3 million decrease in total stock-based compensation expense between periods related to less expenses associated with accelerated vestings of equity awards primarily for employees terminated in connection with the Colgate Merger on September 1, 2022. Refer to Note 6—Stock-Based Compensationfor additional information regarding these award accelerations and modifications.
Previous report
While cash G&A increased between periods, on a per Boe basis our Cash G&A rate decreased 26% from $1.24 per Boe during the nine months ended September 30, 2023 to $0.92 per Boe during the nine months ended of 2024 as a result of improved operational execution and realization of cost synergies following the Earthstone Merger.
Previous report
Merger and integration expense. Merger and integration expense for the nine months ended September 30, 2024 was $18.1 million. These charges incurred during the 2024 period mainly related to the Earthstone Merger that closed on November 1, 2023 and consisted of (i) $13.2 million in severance and related benefits incurred for employees that were terminated in connection with our corporate mergers; and (ii) $4.9 million in charges associated with software integration, consultancy and other professional fees.
Previous report
Merger and integration expense incurred during the nine months ended September 30, 2023 was $28.1 million. These charges related to the Colgate Merger that closed on September 1, 2022 and consisted of (i) $14.5 million in severance and related benefits associated with employees that were terminated in connection with the Colgate Merger; and (ii) $13.6 million of costs associated with consultancy, legal and accounting fees.
Previous report
Exploration and Other Expenses. The following table summarizes our exploration and other expenses for the periods indicated:
Previous report
Exploration and other expenses were $24.4 million for the nine months ended September 30, 2024 compared to $14.7 million for the same prior year period. Exploration and other expenses mainly consist of topographical studies, G&G projects, salaries and expenses of G&G personnel and includes other operating costs. The period over period increase was primarily related to (i) an estimated net contingency loss of $7.6 million recorded during 2024 associated with charges that have been in legal dispute and stemmed from a severe winter storm impacting the Permian Basin in February 2021 (refer to Note 12—Commitments and Contingenciesfor additional information regarding the contingency loss); and (ii) higher G&G personnel costs associated with increased headcount.
Previous report
Other Income and Expenses.
Previous report
Interest expense was $113.8 million higher for the nine months ended September 30, 2024 compared to the same 2023 period mainly due to (i) $70.0 million in additional interest costs on the senior notes we assumed in the Earthstone Merger; (ii) $50.7 million in higher interest incurred on our 2032 Senior Notes that were issued in September 2023 and December 2023; and (iii) $9.7 million in interest incurred on our 2033 Senior Notes that were issued in July 2024. These increases were partially offset by (i) $9.6 million less interest expense incurred on our credit facility due to lower weighted average borrowings outstanding, which were $136.4 million versus $380.5 million for the first nine months of 2024 and 2023, respectively; and (ii) the redemption of our 2027 6.875% Senior Notes in April 2024 and the redemption of our 2026 7.75% Senior Notes in August 2024 that resulted in $6.8 million less interest incurred period over period, inclusive of the loss on extinguishment associated with their redemptions (refer to Note 4—Long-Term Debtfor additional information regarding the senior note redemptions).
Previous report
During the third quarter of 2024, we completed an underwritten public offering of 26.5 million shares of our Class A Common Stock resulting in net cash proceeds of $402.2 million after underwriting discounts and commissions. Additionally, we issued $1.0 billion of 6.25% senior notes due 2033 in a 144A private placement at par. We used the net proceeds from these offerings to (i) fund the tender offer and remaining redemption of our $300 million 7.75% senior notes due 2026; (ii) fund the $743.5 million purchase price of the Bolt-On Acquisition; and (iii) repay borrowings outstanding under our credit facility.
Previous report
In connection with the 2024 spring borrowing base redetermination, we entered into the Seventh Amendment to the Credit Agreement, which, among other things, increased the elected commitments under the Credit Agreement to $2.5 billion from $2.0 billion and reaffirmed the borrowing base at $4.0 billion. The elected commitments and borrowing base were reaffirmed during the fall 2024 borrowing base redetermination that also resulted in us entering into the eighth amendment to our Credit Agreement (the “Eighth Amendment”). The Eighth Amendment, among other things, also extended the maturity date from February 2027 to February 2028 and adjusted the applicable margin calculation to a pricing grid based upon borrowing base utilization.
Previous report
Quarterly Report. For further information on the Credit Agreement, refer to Note 4—Long-Term Debt under Part I, Item I of this Quarterly Report.
Previous report
Convertible Senior Notes
Previous report
On March 19, 2021, OpCo issued $150.0 million of 3.25% senior unsecured convertible notes due 2028 (the “Convertible Senior Notes”). On March 26, 2021, OpCo issued an additional $20.0 million of Convertible Senior Notes pursuant to the exercise of the underwriters’ over-allotment option to purchase additional notes. These issuances resulted in aggregate net proceeds to OpCo of $163.6 million, which were used to repay borrowings outstanding under the Credit Agreement and to fund the cost of entering into capped call spread transactions of $14.7 million. Subsequently in April 2021, we redeemed at par all of our 8% second lien senior secured notes, which was the intended use of proceeds from the Convertible Senior Notes offering.
Previous report
The Convertible Senior Notes are fully and unconditionally guaranteed on a senior unsecured basis by the Company and each of OpCo’s current subsidiaries that guarantee OpCo’s outstanding Senior Unsecured Notes as defined below.
Previous report
The Convertible Senior Notes bear interest at an annual rate of 3.25% and are due on April 1, 2028 unless earlier repurchased, redeemed or converted. The Convertible Senior Notes may become convertible prior to April 1, 2028, upon the occurrence of certain events or conditions being met as disclosed in Note 4—Long-Term Debt under Part I, Item I of this Quarterly Report. As of September 30, 2024, certain conditions have been met, and as a result, noteholders have the right to convert their Convertible Senior Notes. OpCo can settle the Convertible Senior Notes by paying or delivering cash, shares of the Class A Common Stock, or a combination of cash and Class A Common Stock, at OpCo’s election.
Previous report
In connection with the Convertible Senior Notes issuance, OpCo entered into privately negotiated capped call spread transactions (the “Capped Call Transactions”), that are expected to reduce potential dilution to our Class A Common Stock upon a conversion and/or offset any cash payments OpCo is required to make in excess of the principal amount of the Convertible Senior Notes, subject to a cap. The Capped Call Transactions have an initial strike price of $6.28 per share of Class A Common Stock and an initial capped price of $8.4525 per share of Class A Common Stock (each subject to certain customary adjustments).
Previous report
On August 5, 2024, OpCo issued at par $1.0 billion of 6.25% senior notes due 2033 (the “2033 Senior Notes”) in a 144A private placement that resulted in net proceeds of $986.4 million, after deducting $13.6 million debt issuance costs.
Previous report
On November 1, 2023, in connection with the Earthstone Merger, OpCo entered into supplemental indentures whereby all of Earthstone’s outstanding senior notes were assumed and became the senior unsecured debt obligations of OpCo. The senior notes assumed by OpCo included $550 million of 8.00% senior notes due 2027 (the “2027 8.00% Senior Notes”) and $500 million of 9.875% senior notes due 2031 (the “2031 Senior Notes”). We recorded the acquired senior notes at their fair values as of the Earthstone Merger closing date, which were equal to 102.86% of par (a $15.7 million premium) for the 2027 8.00% Senior Notes and 107.37% of par (a $36.8 million premium) for the 2031 Senior Notes.
Previous report
On September 12, 2023, OpCo issued $500 million of 7.00% senior notes due 2032 (the “Original 2032 Notes”) in a 144A private placement. On December 13, 2023, OpCo issued additional notes under the indenture dated September 12, 2023 that totaled an additional $500 million of 7.00% senior notes (together with the Original 2032 Notes, the “2032 Senior Notes”), which resulted in aggregate net proceeds of $982.5 million, after deducting the issuance discount of $2.5 million and debt issuance costs of $15.0 million. The 2032 Senior Notes are treated as a single series of securities and vote together as a single class, and have substantially identical terms, other than the issue date and issue price.
Showing the first 40 of 45 passages. Open the source sections for the rest.
Reworded paragraphs (29)
Previous wording
The Organization of Petroleum Exporting Countries and other oil producing countries (“OPEC+”) undertook a series of actions in an effort to support commodity prices throughout 2023 in response to global recession concerns, a high interest rate environment, lower than expected demand from China and a regional banking crisis in the U.S., among other events. In addition, both Saudi Arabia and Russia announced unilateral production curtailments at separate times during 2023. These actions, coupled with relatively strong global demand and rising tensions in the Middle East, caused crude oil prices to increase during 2023, with NYMEX WTI spot prices reaching a high of $93.68 per barrel on September 27, 2023. However, further concerns of global economic growth, inflation and increases in oil and natural gas supply levels resulted in additional price deterioration at the end of 2023 and into the beginning of 2024. More recently, oil demand concerns around China and the rest of the world have caused the NYMEX WTI spot price to drop to an average of $69.37 in September 2024. Natural gas prices have remained low throughout the first nine months of 2024 driven by an over-supply due to mild winter weather, liquefied natural gas (LNG) project delays and higher than expected natural gas production. Market prices in the Permian Basin were further impacted by low demand as a result of current pipeline capacity constraints out of the basin and additional pipeline maintenance, which led to negative regional gas prices being realized at the Waha Hub in West Texas (“Waha”) throughout the first nine months of 2024. Specifically, the Waha price of natural gas averaged negative $1.00 per MMBtu during the third quarter of 2024 leading to negative gas realizations.
Current wording
Natural gas prices remained low for the majority of 2024 driven by an over-supply due to mild winter weather, liquefied natural gas project delays and higher than expected natural gas production. Market prices in the Permian Basin were further impacted by low demand as a result of current pipeline capacity constraints out of the basin and additional pipeline maintenance, which led to negative regional gas prices being realized at the Waha Hub in West Texas (“Waha”) during the second and third quarters of 2024. Increased demand from colder temperatures, production constraints and additional long-haul pipeline takeaway resulted in positive realized prices at Waha for the fourth quarter of 2024 and first quarter of 2025. However, high production growth, pipeline maintenance and constrained takeaway negatively impacted Waha prices at the end of the first quarter and into the second quarter of 2025.
Previous wording
Lower commodity prices and lower futures curves for oil and gas prices can result in impairments of our proved oil and natural gas properties or undeveloped acreage and may materially and adversely affect our operating cash flows, liquidity, financial condition, results of operations, future business and operations, and/or our ability to finance planned capital expenditures, which could in turn impact our ability to comply with covenants under our five-year secured revolving credit facility (the “Credit Agreement”) and senior notes. Lower realized prices may also reduce the borrowing base under our Credit Agreement, which is determined at the discretion of the lenders and is based on the collateral value of our proved reserves that have been mortgaged to the lenders. Upon a redetermination, if any borrowings in excess of the revised borrowing capacity were outstanding, we could be forced to immediately repay a portion of the debt outstanding under the Credit Agreement.
Current wording
Lower commodity prices and lower futures curves for oil and gas prices can result in impairments of our proved oil and natural gas properties or undeveloped acreage and may materially and adversely affect our operating cash flows, liquidity, financial condition, results of operations, future business and operations, and/or our ability to finance planned capital expenditures, which could in turn impact our ability to comply with covenants under our secured revolving credit facility (the “Credit Agreement”) and senior notes. Lower realized prices may also reduce the borrowing base under our Credit Agreement, which is determined at the discretion of the lenders and is based on the collateral value of our proved reserves that have been mortgaged to the lenders. Upon a redetermination, if any borrowings in excess of the revised borrowing capacity were outstanding, we could be forced to immediately repay a portion of the debt outstanding under the Credit Agreement.
Previous wording
Due to the cyclical nature of the oil and gas industry, fluctuating demand for oilfield goods and services can put pressure on the pricing structure within our industry. As commodity prices rise, costs of oilfield goods and services generally also increase; however, during periods of commodity price declines, oilfield costs typically lag and do not adjust downward as fast as oil prices do. In addition, the U.S. has seen higher than normal inflation during 2023 and 2024. Inflationary pressures such as these may also result in increases to the costs of our oilfield goods, services and personnel, which can in turn cause our capital expenditures and operating costs to rise.
Current wording
Due to the cyclical nature of the oil and gas industry, fluctuating demand for oilfield goods and services can put pressure on the pricing structure within our industry. As commodity prices rise, costs of oilfield goods and services generally also increase; however, during periods of commodity price declines, oilfield costs typically lag and do not adjust downward as fast as oil prices do. In addition, the U.S. saw higher levels of inflation during 2024 and the beginning of 2025, which is expected to remain heightened throughout 2025 due to concerns over global trade wars and changes in tariff policies. Inflationary pressures such as these may also result in increases to the costs of our oilfield goods, services and personnel, which can in turn cause our capital expenditures and operating costs to rise.
Previous wording
During the nine months ended September 30, 2024, we declared and paid quarterly base dividends totaling $0.17 per share of Class A Common Stock and distributions totaling $0.17 per share of Class C Common Stock (each of which has an underlying common unit of OpCo (“Common Units”)). In addition, during the first nine months of 2024, we declared and paid variable dividends totaling $0.39 per share of Class A Common Stock and distributions totaling $0.39 per share of Class C Common Stock. The cash dividends and distributions paid to common unitholders totaled $440.3 million for the nine months ended September 30, 2024.
Current wording
During the three months ended March 31, 2025, we declared and paid quarterly base dividends totaling $0.15 per share of Class A Common Stock and distributions totaling $0.15 per share of Class C Common Stock (each of which has an underlying common unit of OpCo (“Common Units”)). The cash dividends and distributions paid to common unitholders totaled $121.0 million for the three months ended March 31, 2025.
Previous wording
On April 5, 2024, we redeemed all of OpCo’s outstanding 2027 6.875% Senior Notes at a redemption price equal to 100% of the aggregate principal amount outstanding of $356.4 million plus accrued and unpaid interest up to, but excluding, the redemption date.
Current wording
During January 2025, we redeemed $175 million of our senior notes due 2031 (the “2031 Senior Notes”) at a redemption price equal to 109.875% of the aggregate principal amount redeemed plus accrued and unpaid interest up to, but excluding, the redemption date. Following the redemption, the remaining aggregate principal amount of the 2031 Senior Notes outstanding was $325 million.
Previous wording
Oil, Natural Gas and NGL Sales Revenues. Total net revenues for the three months ended September 30, 2024 were $457.0 million (or 60%) higher than total net revenues for the three months ended September 30, 2023. Revenues are a function of oil, natural gas and NGL volumes sold and average commodity prices realized.
Current wording
Oil, Natural Gas and NGL Sales Revenues. Total net revenues for the three months ended March 31, 2025 were $133.5 million (or 11%) higher than total net revenues for the three months ended March 31, 2024. Revenues are a function of oil, natural gas and NGL volumes sold and average commodity prices realized.
Previous wording
Net production volumes for oil, natural gas and NGLs increased 79%, 113% and 146%, respectively, between periods. The increase in oil production resulted from additional production added from wells acquired in the Earthstone Merger and from placing additional wells online since the third quarter of 2023. These oil volume increases were partially offset by normal production declines across our existing wells. Natural gas and NGLs are produced concurrently with our crude oil volumes, which typically result in a high correlation between fluctuations in oil quantities sold and natural gas and NGL quantities sold driving the 113% and 146% respective increases in gas and NGL volumes between periods. The higher increase in gas and NGL volumes between periods as compared to the 79% increase in oil volumes was due to the producing wells acquired in the Earthstone Merger, which have a higher gas-to-oil ratio than our existing production base, and this has resulted in more volumes of gas and NGLs being added to our total production stream since the closing of the Earthstone Merger on November 1, 2023. NGL volumes were further positively impacted by processors of our raw gas operating in higher ethane-recovery during the third quarter of 2024 as compared to the same 2023 period, which resulted in a higher percentage of NGLs being recovered from our wet gas stream between periods.
Current wording
Net production volumes for oil, natural gas and NGLs increased 14%, 17% and 17%, respectively, between periods. The increase in oil production resulted from additional production added from additional wells placed online or acquired since the first quarter of 2024. These oil volume increases were partially offset by normal production declines across our existing wells. Natural gas and NGLs are produced concurrently with our crude oil volumes, which typically result in a high correlation between fluctuations in oil quantities sold and natural gas and NGL quantities sold driving the respective 17% increases in gas and NGL volumes between periods.
Previous wording
Total net revenues increases were also driven by higher average realized sales prices of oil, which increased 2% in the first nine months of 2024 compared to the same 2023 period. The 2% increase in the average realized oil price was mainly the result of improved oil differentials between periods.
Current wording
Total net revenues increases were also driven by higher average realized sales prices of natural gas and NGLs, which increased 80% and 4%, respectively, in the first quarter of 2025 compared to the same 2024 period. The 80% increase in the average realized natural gas price was mainly the result of significantly higher local and national average index gas prices between periods. The 4% increase in the average realized NGL prices between periods was primarily attributable to improved differentials between periods based on the mix and prices of NGL components produced between periods.
Previous wording
The average realized sales prices for oil and natural gas decreased 7% and 110%, respectively, in the third quarter of 2024 compared to the same 2023 period. The 7% decrease in the average realized oil price was mainly the result of lower NYMEX crude prices partially offset by improved oil differentials realized between periods. The 110% decrease was mainly due to wider gas differentials realized on our gas sales, which are primarily sold at Waha where the market price averaged negative $1.00 per MMBtu during the third quarter of 2024 due to location specific market constraints as discussed under the“Market Conditions” section above.
Current wording
These increases were partially offset by a decrease in the average realized sales price for oil which decreased 7% in the first quarter of 2025 compared to the same 2024 period. The 7% decrease in the average realized oil price was mainly the result of lower NYMEX crude prices due to economic and political concerns during the 2025 period as discussed under the “Market Conditions” section above.
Previous wording
Lease Operating Expenses. Lease operating expenses (“LOE”) per Boe for the third quarter of 2024 was $5.43 and consistent with our per Boe rate of $5.42 from the third quarter of 2023. On a nominal basis, LOE for the three months ended September 30, 2024 increased $87.4 million compared to the three months ended September 30, 2023 and was the direct result of our significantly higher well count between periods primarily due to (i) wells acquired in the Earthstone Merger on November 1, 2023; and (ii) additional wells placed on production since September 30, 2023.
Current wording
Lease Operating Expenses. Lease operating expenses (“LOE”) for the three months ended March 31, 2025 increased $11.0 million compared to the three months ended March 31, 2024 and was the direct result of our higher well count between periods primarily due to additional wells placed on production or acquired since March 31, 2024.
Previous wording
Severance and Ad Valorem Taxes. Severance and ad valorem taxes for the three months ended September 30, 2024 increased $32.6 million compared to the three months ended September 30, 2023. Severance taxes are based on the market value of our oil and gas production at the wellhead, while ad valorem taxes are generally based on the assessed taxable value of proved developed oil and gas properties and vary across the different counties in which we operate. Severance taxes for the third quarter of 2024 increased $29.4 million compared to the same 2023 period primarily due to higher total operating revenues between periods. Ad valorem taxes between periods also increased by $3.2 million, mainly due to additional expense incurred on the proved developed properties acquired in the Earthstone Merger.
Current wording
Severance and Ad Valorem Taxes. Severance and ad valorem taxes for the three months ended March 31, 2025 increased $11.8 million compared to the three months ended March 31, 2024. Severance taxes are based on the market value of our oil and gas production at the wellhead, while ad valorem taxes are generally based on the assessed taxable value of proved developed oil and gas properties and vary across the different counties in which we operate. Severance taxes for the first quarter of 2025 increased $12.0 million compared to the same 2024 period primarily due to higher total operating revenues between periods. As a percentage of revenues, our severance and ad valorem taxes were consistent between periods at 7.8% and 7.7% for the three months ended March 31, 2025 and 2024, respectively.
Previous wording
Gathering, Processing and Transportation Expenses. Gathering, processing and transportation costs (“GP&T”) for the three months ended September 30, 2024 increased $29.5 million as compared to the three months ended September 30, 2023. This increase in expense was mainly attributable to higher natural gas and NGL volumes sold between periods, which in turn resulted in a higher amount of plant processing fees and gathering costs being incurred. Additionally, GP&T increased 20% on a per Boe basis from $1.31 for the third quarter of 2023 to $1.57 for the third quarter of 2024. This increase in rate was mainly attributable to a higher portion of our GP&T costs being recognized as expense as compared to a reduction to our gas and NGL revenues between periods primarily related to processing contracts assumed as part of the Earthstone Merger.
Current wording
Gathering, Processing and Transportation Expenses. Gathering, processing and transportation costs (“GP&T”) for the three months ended March 31, 2025 increased $7.6 million as compared to the three months ended March 31, 2024. This increase in expense was mainly attributable to higher natural gas and NGL volumes sold between periods, which in turn resulted in a higher amount of plant processing fees and gathering costs being incurred.
Previous wording
For the three months ended September 30, 2024, DD&A expense amounted to $453.6 million, an increase of $217.4 million over the same 2023 period. The primary factor contributing to higher DD&A expense in 2024 was the increase in our overall production volumes between periods, which increased DD&A expense by $240.5 million, while our lower DD&A rate of $14.21 per BOE decreased DD&A expense by $23.1 million between periods.
Current wording
For the three months ended March 31, 2025, DD&A expense amounted to $474.2 million, an increase of $64.0 million over the same 2024 period. The primary factor contributing to higher DD&A expense in 2025 was the increase in our overall production volumes between periods, which increased DD&A expense by $63.7 million, while our slightly higher DD&A rate of $14.12 per BOE increased DD&A expense by $0.3 million between periods.
Previous wording
DD&A per BOE was $14.21 for the third quarter of 2024 as compared to $14.93 for the same period in 2023, a 5% decline between periods. Our DD&A rate can fluctuate as a result of finding and development costs incurred, acquisitions, impairments, as well as changes in proved developed and proved undeveloped reserves.
Current wording
DD&A per BOE was $14.12 for the first quarter of 2025 as compared to $14.11 for the same period in 2024. Our DD&A rate can fluctuate as a result of finding and development costs incurred, acquisitions, impairments, as well as changes in proved developed and proved undeveloped reserves.
Previous wording
G&A expenses for the three months ended September 30, 2024 were $43.8 million compared to $34.5 million for the three months ended September 30, 2023. Higher G&A in the third quarter of 2024 was the result of an increase of $11.4 million in cash G&A between periods primarily associated with our overall corporate growth between periods and associated higher G&A headcount, which increased from 179 as of September 30, 2023 to 260 as of September 30, 2024 stemming from the Earthstone Merger. This increase was partially offset by a $2.1 million decrease in stock-based compensation between periods related to less expenses associated with accelerated vestings of equity awards associated with employees terminated in connection with the merger with Colgate Energy Partners III, LLC (the “Colgate Merger”) on September 1, 2022. Refer to Note 6—Stock-Based Compensationfor additional information regarding these award accelerations and modifications.
Current wording
G&A expenses for the three months ended March 31, 2025 were $43.1 million compared to $37.4 million for the three months ended March 31, 2024. Higher G&A in the first quarter of 2025 was the result of an increase of $7.1 million in stock-based compensation between periods primarily related to (i) additional grants of performance stock units (“PSUs”) and restricted stock since the first quarter of 2024; and (ii) the modification of the Co-CEO’s PSUs that resulted in accelerated expense period over period. This increase was partially offset by a $1.4 million decrease in cash G&A between periods.
Previous wording
While cash G&A increased between periods, on a per Boe basis, our Cash G&A rate decreased 20% from $1.19 per Boe during the three months ended September 30, 2023 to $0.95 per Boe during the three months ended September 30, 2024 as a result of improved operational execution and realization of cost synergies following the Earthstone Merger.
Current wording
Cash G&A on a per Boe basis decreased 18% between periods from $0.97 per Boe during the three months ended March 31, 2024 to $0.80 per Boe during the three months ended March 31, 2025 as a result of improved operational execution and realization of cost synergies following various transactions.
Previous wording
Merger and integration expense. There was no merger and integration expense incurred during the three months ended September 30, 2024 as integration of the Earthstone Merger was complete. Merger and integration expense incurred during the three months ended September 30, 2023 was $10.4 million. These charges related to the Colgate Merger that closed on September 1, 2022 and consisted of (i) $0.7 million in severance and related benefits associated with employees that were terminated in connection with the Colgate Merger; and (ii) $9.7 million of costs associated with consultancy, legal and accounting fees.
Current wording
Merger and integration expense. There was no merger and integration expense incurred during the three months ended March 31, 2025. Merger and integration expense incurred during the three months ended March 31, 2024 was $11.1 million. These charges incurred during the 2024 period related to the merger with Earthstone Energy, Inc. (“Earthstone Merger”) that closed on November 1, 2023 and consisted of (i) $8.1 million in severance and related benefits associated with employees that were terminated in connection with the Earthstone Merger; and (ii) $3.0 million from software integration, consultancy and other professional fees.
Previous wording
Interest expense increased $39.4 million for the three months ended September 30, 2024 as compared to the three months ended September 30, 2023 primarily due to (i) $23.3 million in additional interest costs on the senior notes we assumed in the Earthstone Merger; (ii) $15.7 million in higher interest incurred on our 2032 Senior Notes that were issued in September 2023 and December 2023; and (iii) $9.7 million in interest incurred on our 2033 Senior Notes that were issued in July 2024. These increases were partially offset by (i) the redemption of our 2027 6.875% Senior Notes in April 2024 and the redemption of our 2026 7.75% Senior Notes in August 2024 that resulted in $4.4 million less interest incurred period over period, inclusive of the loss on extinguishment associated with their extinguishment (refer to Note 4—Long-Term Debtfor additional information regarding the senior note redemptions); and (ii) $3.2 million less interest expense incurred on our credit facility due to lower weighted average borrowings outstanding, which were $92.0 million versus $317.3 million for the three months of 2024 and 2023, respectively.
Current wording
Interest expense increased $7.1 million for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024 primarily due to (i) $15.6 million in interest incurred on our senior notes due 2033 that were issued in July 2024; and (ii) $5.8 million in additional interest expense related to the loss on extinguishment related to the partial redemption of our 2031 Senior Notes in January 2025. These increases were partially offset by the redemptions of our 6.875% senior notes due 2027 in April 2024 and 7.75% senior notes due 2026 in August 2024, as well as the partial redemption of our 2031 Senior Notes in January 2025 resulting in a total of $15.2 million less interest expense incurred between periods.
Previous wording
For the three months ended September 30, 2024, we generated pre-tax net income of $563.0 million and recorded income tax expense of $106.5 million. During the three months ended September 30, 2023, we generated pre-tax net income of $114.6 million and recorded income tax expense of $16.3 million. The primary factor decreasing our income tax expense below the U.S. statutory rate for both periods was the portion of pre-tax income that was attributable to our non-controlling interest partners and not taxable to the Company.
Current wording
For the three months ended March 31, 2025, we generated pre-tax net income of $490.9 million and recorded income tax expense of $100.3 million. During the three months ended March 31, 2024, we generated pre-tax net income of $278.6 million and recorded income tax expense of $49.0 million. The primary factor decreasing our income tax expense below the U.S. statutory rate for both periods was the portion of pre-tax income that was attributable to our non-controlling interest partners and not taxable to the Company.
Previous wording
We continually evaluate our capital needs and compare them to our capital resources. Our total cash capital expenditures incurred for development during the nine months ended September 30, 2024 were $1.6 billion. We expect our total drilling, completion and facilities cash capital expenditures budget for 2024 to be between $1.9 billion to $2.1 billion. We funded our capital expenditures for the nine months ended September 30, 2024 entirely from cash flows from operations, and we expect to fund the remainder of our 2024 capital expenditures budget entirely from cash flows from operations given our anticipated level of oil and gas production, current commodity prices and our commodity hedge positions in place.
Current wording
We continually evaluate our capital needs and compare them to our capital resources. During the three months ended March 31, 2025 our total development capital expenditures were $500.7 million. We expect our total drilling, completion and facilities capital expenditures for 2025 to be between $1.9 billion to $2.0 billion. We funded our capital expenditures for the three months ended March 31, 2025 entirely from cash flows from operations, and we expect to fund the remainder of our 2025 capital expenditures budget entirely from cash flows from operations given our anticipated level of oil and gas production, current commodity prices and our commodity hedge positions in place.
Previous wording
We plan to return capital to shareholders through a combination of a quarterly base dividend plus a variable return program, including variable dividends, share repurchases or a combination of both. During the nine months ended September 30, 2024, we declared and paid quarterly base dividends totaling $0.17 per share of Class A Common Stock and distributions totaling $0.17 per share of Class C Common Stock (each of which has an underlying Common Unit of OpCo). In addition, during the first three quarters of 2024, we declared and paid variable dividends totaling $0.39 per share of Class A Common Stock and distributions totaling $0.39 per share of Class C Common Stock. The cash dividends and distributions paid to common unitholders totaled $440.3 million for the nine months ended September 30, 2024. Additionally, we repurchased 3.8 million shares of Class C Common Stock for $61.0 million under our stock repurchase program during the nine months ended September 30, 2024.
Current wording
We plan to return capital to shareholders primarily through our base dividend, in addition to opportunistic share repurchases. During the three months ended March 31, 2025, we declared and paid a quarterly base dividend of $0.15 per share of Class A Common Stock and a distribution of $0.15 per share of Class C Common Stock (each of which has an underlying Common Unit of OpCo). The cash dividends and distributions paid to common unitholders totaled $121.0 million for the three months ended March 31, 2025.
Previous wording
On September 3, 2024, our Board of Directors approved a new stock repurchase program to allow for share repurchases of up to $1 billion on an indefinite basis, replacing our existing $500 million stock repurchase program. The stock repurchase program can be used to reduce our shares of common stock outstanding. Such repurchases would be made at terms and prices determined by us based upon prevailing market conditions, applicable legal requirements, available liquidity, compliance with our debt agreements and other factors. In addition, we may, from time to time, seek to retire or purchase our outstanding senior notes through cash purchases and/or exchanges for debt in open-market purchases, privately negotiated transactions or otherwise.
Current wording
Our stock repurchase program can be used to reduce our shares of common stock outstanding. Such repurchases would be made at terms and prices determined by us based upon prevailing market conditions, applicable legal requirements, available liquidity, compliance with our debt agreements and other factors.
Previous wording
For the nine months ended September 30, 2024, we generated $2.5 billion of cash from operating activities, an increase of $1.2 billion from the same period in 2023. Cash provided by operating activities increased primarily due to higher production volumes and higher realized price of oil as well as the timing of our collections on our receivables for the nine months ended September 30, 2024 as compared to the same 2023 period. These increasing factors were partially offset by higher lease operating expenses, severance and ad valorem taxes, GP&T and cash G&A and lower realized prices for gas during the nine months ended September 30, 2024 as compared to the same 2023 period. Refer to “Results of Operations” for more information on the impact of volumes and prices on revenues and on fluctuations in our operating costs between periods.
Current wording
For the three months ended March 31, 2025, we generated $898.0 million of cash from operating activities, an increase of $250.4 million from the same period in 2024. Cash provided by operating activities increased primarily due to higher production volumes and higher realized prices of gas and NGLs as well as the timing of collections on our receivables and payments to our suppliers during the three months ended March 31, 2025 as compared to the same 2024 period. These increasing factors were partially offset by lower realized prices for oil, higher severance and ad valorem taxes, lease operating expenses, GP&T and interest expense during the three months ended March 31, 2025 as compared to the same 2024 period. Refer to “Results of Operations” for more information on the impact of volumes and prices on revenues and on fluctuations in our operating costs between periods.
Previous wording
During the nine months ended September 30, 2024, cash flows from operating activities, proceeds from the issuance of our 2033 Senior Notes and proceeds from an underwritten public offering of 26.5 million Class A shares were used to (i) fund $1.6 billion of drilling and development cash capital expenditures; (ii) fund acquisitions of oil and gas properties of $1.0 billion; (iii) redeem $656.4 million of our senior notes; (iv) pay $440.3 million in dividends and cash distributions to our shareholders and holders of our Common Units; and (v) repurchase $61.0 million of our common stock.
Current wording
During the three months ended March 31, 2025, cash flows from operating activities and proceeds of $176.0 million from the sale of natural gas and oil gathering systems that were acquired during a prior year acquisition were used to (i) fund $500.7 million of drilling and development cash capital expenditures; (ii) redeem $175.0 million of our senior notes; (iii) pay $121.0 million in dividends and cash distributions to our shareholders and holders of our Common Units; and (iv) fund acquisitions of oil and gas properties of $35.4 million.
Previous wording
During the nine months ended September 30, 2023, cash flows from operating activities, cash on hand, proceeds from the issuance of our 2032 Senior Notes and sales proceeds from divestitures together with contingent consideration of $119.2 million from the sale of oil and natural gas properties were used to (i) fund $1.1 billion of drilling and development cash expenditures; (ii) repay net borrowings of $385 million under our Credit Agreement; (iii) pay $143.1 million in dividends and cash distributions to our shareholders and holders of our Common Units; (iv) fund acquisitions of oil and gas properties of $116.9 million; (v) repurchase $57.3 million of our common stock; and (vi) purchase an office building in Midland, Texas for $27.5 million.
Current wording
During the three months ended March 31, 2024, cash flows from operating activities, cash on hand and net borrowings under our revolving credit facility were used to (i) fund $519.6 million of drilling and development cash expenditures; (ii) pay $115.5 million in dividends and cash distributions to our shareholders and holders of our Common Units; (iii) fund acquisitions of oil and gas properties of $97.0 million; and (iv) repurchase $31.5 million of our common stock.
Previous wording
OpCo, our consolidated subsidiary, has a five-year secured revolving Credit Agreement with a syndicate of banks maturing in February 2027 that, as of September 30, 2024, had a borrowing base of $4.0 billion and elected commitments of $2.5 billion. As of September 30, 2024, we had $0.0 million in borrowings outstanding and $2.5 billion in available borrowing capacity, which was net of $2.5 million in letters of credit outstanding.
Current wording
OpCo, our consolidated subsidiary, has a secured revolving Credit Agreement with a syndicate of banks maturing in February 2028 that, as of March 31, 2025, had a borrowing base of $4.0 billion and elected commitments of $2.5 billion. As of March 31, 2025, we had no borrowings outstanding and $2.5 billion in available borrowing capacity, which was net of $2.5 million in letters of credit outstanding. The elected commitments and borrowing base were reaffirmed during the spring 2025 borrowing base redetermination.
Previous wording
The Credit Agreement includes fall away covenants, lower interest rates and reduced collateral requirements that OpCo may elect if OpCo is assigned an Investment Grade Rating (as defined within the Credit Agreement). OpCo was in compliance with the covenants and the applicable financial ratios described above as of September 30, 2024 and through the filing of this
Current wording
The Credit Agreement includes fall away covenants, lower interest rates and reduced collateral requirements that OpCo may elect if OpCo is assigned an Investment Grade Rating (as defined within the Credit Agreement). OpCo was in compliance with the covenants and the applicable financial ratios described above as of March 31, 2025 and through the filing of this Quarterly Report.
Previous wording
For further information on our Convertible Senior Notes and Senior Unsecured Notes, refer to Note 4—Long-Term Debt under Part I, Item I of this Quarterly Report.
Current wording
OpCo has $4.0 billion in debt outstanding as of March 31, 2025, consisting of senior unsecured convertible notes due 2028 and senior unsecured notes with maturity dates ranging from 2026 to 2033. For further information on our debt instruments, refer to Note 4—Long-Term Debt under Part I, Item I of this Quarterly Report.
Previous wording
Our contractual obligations include operating and transportation agreements, drilling rig contracts, office and equipment leases, asset retirement obligations, long-term debt obligations and cash interest expense on long-term debt obligations, which we routinely enter into, modify or extend. Since December 31, 2023, there have not been any significant, non-routine changes in our contractual obligations other than (i) the NGL delivery commitment assumed and multi-year energy purchase agreement entered into as discussed in Note 12—Commitments and Contingencies under Part I, Item I of this Quarterly Report; and (ii) the drilling rig contracts entered into as discussed in Note 1—Basis of Presentation and Summary of Significant Accounting Policies under Part I, Item I of this Quarterly Report.
Current wording
Our contractual obligations include operating and transportation agreements, drilling rig contracts, office and equipment leases, asset retirement obligations, long-term debt obligations and cash interest expense on long-term debt obligations, which we routinely enter into, modify or extend. Since December 31, 2024, there have not been any significant, non-routine changes in our contractual obligations other than (i) a drilling rig contract entered into as discussed in Note 1—Basis of Presentation and Summary of Significant Accounting Policies under Part I, Item I of this Quarterly Report.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
In addition, we may, from time to time, seek to retire or purchase our outstanding senior notes through cash purchases and/or exchanges for debt in open-market purchases, privately negotiated transactions or otherwise. During the first quarter of 2025, we redeemed $175 million of our 2031 Senior Notes at a redemption price equal to 109.875% of the aggregate principal amount redeemed plus accrued and unpaid interest up to, but excluding, the redemption date. Following the redemption, the remaining aggregate principal amount of the 2031 Senior Notes outstanding was $325 million.
Rearranged previous paragraphs (14)
Previous report — wording carried elsewhere
The following table provides the components of our net revenues and net production (net of all royalties, overriding royalties and production due to others) for the periods indicated, as well as each period’s average prices and average daily production volumes:
Previous report — wording carried elsewhere
(3) Calculated by converting natural gas to oil equivalent barrels at a ratio of six Mcf of natural gas to one Boe.
Previous report — wording carried elsewhere
Oil, Natural Gas and NGL Sales Revenues. Total net revenues for the nine months ended September 30, 2024 were $1.7 billion, or 85%, higher than total net revenues for the nine months ended September 30, 2023. Revenues are a function of oil, natural gas and NGL volumes sold and average commodity prices realized.
Previous report — wording carried elsewhere
Severance and Ad Valorem Taxes. Severance and ad valorem taxes for the nine months ended September 30, 2024 increased $124.4 million compared to the nine months ended September 30, 2023. Severance taxes are based on the market value of our production at the wellhead, while ad valorem taxes are generally based on the assessed taxable value of our proved developed oil and gas properties and vary across the different counties in which we operate. Severance taxes for the first nine months of 2024 increased $109.3 million compared to the same 2023 period primarily due to higher total operating revenues between periods. Ad valorem taxes between periods also increased by $15.1 million, mainly due to additional expense incurred on the proved developed properties acquired in the Earthstone Merger.
Previous report — wording carried elsewhere
Depreciation, Depletion and Amortization. The following table summarizes our DD&A for the periods indicated:
Previous report — wording carried elsewhere
For the nine months ended September 30, 2024, DD&A expense amounted to $1.3 billion, an increase of $650.1 million over the same 2023 period. The primary factor contributing to higher DD&A expense in 2024 was the increase in our overall production volumes between periods, which increased DD&A expense by $673.3 million during the first nine months of 2024, while slightly lower DD&A rates between periods decreased DD&A expense by $23.2 million for the nine months ended September 30, 2024.
Previous report — wording carried elsewhere
DD&A per BOE was $14.05 for the nine months ended September 30, 2024 as compared to $14.30 for the same period in 2023, a 2% decline between periods. Our DD&A rate can fluctuate as a result of finding and development costs incurred, acquisitions, impairments, as well as changes in proved developed and proved undeveloped reserves.
Previous report — wording carried elsewhere
General and Administrative Expenses. The following table summarizes our G&A expenses for the periods indicated:
Previous report — wording carried elsewhere
Interest Expense. The following table summarizes our interest expense for the periods indicated:
Previous report — wording carried elsewhere
Net Gain (Loss) on Derivative Instruments. Net gains and losses are a function of (i) changes in derivative fair values associated with fluctuations in the forward price curves for the commodities underlying each of our hedge contracts outstanding and (ii) monthly cash settlements on any closed out hedge positions during the period.
Previous report — wording carried elsewhere
The following table presents gains and losses on our derivative instruments for the periods indicated:
Previous report — wording carried elsewhere
Income Tax Expense. The following table summarizes our pre-tax income and income tax expense for the periods indicated:
Previous report — wording carried elsewhere
Our provisions for income taxes for the first nine months of 2024 and 2023 differs from the amounts that would be provided by applying the U.S. federal statutory rate of 21% to pre-tax book income primarily due to (i) the portion of pre-tax net income that is attributable to our non-controlling interest and which is therefore not taxable to the Company; (ii) other permanent differences; and (iii) state income taxes.
Previous report — wording carried elsewhere
For the nine months ended September 30, 2024 we generated pre-tax net income of $1.2 billion and recorded income tax expense of $237.7 million. During the nine months ended September 30, 2023, we generated pre-tax net income of $544.1 million and recorded income tax expense of $77.1 million. The primary factor decreasing our income tax expense below the U.S. statutory rate for both periods was the portion of pre-tax income that was attributable to our non-controlling interest partners and not taxable to the Company.