PRIMEENERGY RESOURCES CORP

PrimeEnergy Resources Corporation

What the company does

• Independent oil and natural gas company focused on acquiring, developing, and producing hydrocarbons.
• Operates and provides well-servicing support through Prime Operating Company and EOWS Midland Company.
• Engages in joint ventures with industry partners to acquire producing properties.
• Other interests include:
  • A 12.5% overriding royalty interest in over 30,000 acres in West Virginia (development not yet begun).
  • A wholly owned offshore subsidiary that owns an idle 60-mile offshore Texas pipeline.
• Geographic focus: United States, predominantly Texas and Oklahoma.

Business strategy and goals

• Target reservoirs with high initial production and strong cash flow, as well as lower initial production reservoirs with higher potential ROI.
• Emphasize horizontal drilling to improve economics and reduce surface footprint.
• Maintain a strong balance sheet and liquidity; use revolver borrowings to fund cash flow deficits if needed.
• Pursue disciplined growth through internal drilling, asset divestitures, and strategic joint ventures.
• Seek leasehold acquisitions and potential asset or stock acquisitions to broaden the asset base.

2025–2026 operational activity

• Horizontal development concentrated in West Texas/Midland Basin (Wolfcamp and Spraberry plays), with activity in Reagan and Upton counties, Martin County, and joint ventures with Double Eagle, Civitas, Civitas Resources, Apache, Ovintiv, Pioneer, ConocoPhillips, Vital Energy, Devon, and others.
• Drilling and completion activity:
  • 48 horizontals in 2024.
  • 21 horizontals spud in mid-2024, with production in 2025.
  • 48 horizontals in 2025 planned/participated in.
  • Additional activity in 2026 contemplated with several counterparties.
• 2025 development focus led to substantial capital deployment in Reagan, Upton, and Martin counties and selected Oklahoma projects (Canadian, Kingfisher, Grady, Garvin, etc.).
• Representative assets (2023–2025):
  • Reagan County: multiple 2.0–2.5-mile horizontals across tracts such as Brynn, Prime East, Studley AV, Studley CKO, Honey RF, Prime West, Kramer, O’Bannion, and Pink Floyd.
  • Upton County: 3-mile horizontals operated by Apache.
  • Oklahoma: participations with Ovintiv and Pioneer in 2-mile horizontals.
• 2025 capital expenditures for exploration and development: about $75 million.

Production, pricing, and reserves (as of 12/31/2025)

• Producing wells: 508 operated wells (30 Houston office, 323 Midland, 155 Oklahoma City).
• Net producing wells: 427 (gross 1,032 producing wells; net equals sum of fractional working interests).
• 2025 net production:
  • Oil: 2,286,000 barrels
  • NGLs: 1,650,000 barrels
  • Natural gas: 9,825,000 Mcf
• Average realized prices (2025):
  • Oil: $63.32/bbl
  • NGL: $15.32/bbl
  • Gas: $0.76/Mcf
• Production costs (net equivalent barrel of oil; 2025): $8.07 per net barrel (assumes 6 Mcf per barrel; costs exclude production taxes).
• Acreage (12/31/2025):
  • Leasehold: Gross 81,510 acres; Net 24,561 acres
  • Mineral fee: Gross 1,640 acres; Net 117 acres
  • Undeveloped total: Gross 100,767 acres; Net 25,095 acres
  • Total acreage: Gross 102,407 acres; Net 25,095 acres
• Proved reserves (12/31/2025): 28,388 MBOE; 82.3% proved developed, 17.7% proved undeveloped.
• Reserve evaluation performed by Ryder Scott Company, L.P.; internal oversight by the Engineering Data Manager and Engineering team.
• 2023–2025 exploration/development participation in 27 wells across West Texas and Oklahoma; net capitalized costs related to proved properties approximately $291 million.

Financial and capital markets context

• 2025 capital expenditures: approximately $75 million for acquisition, exploration, and development.
• Net capitalized costs related to proved properties: approximately $291 million as of 12/31/2025.
• 2025 proceeds from asset sales: approximately $2.2 million from sale of acreage and commercial property.
• Revolving credit facility:
  • Borrowing base currently $115 million; lender commitments up to $300 million.
  • Semi-annual redeterminations and potential interim redeterminations on acquisitions or sales.
• Estimated 2025 production revenue: approximately $177.5 million (Oil: ~$144.75M; NGL: ~$25.28M; Gas: ~$7.47M).
• Hedging: active program using put options and swaps to manage price risk; hedging can cap upside and may expose the company to counterparty and market risks.

Major customers (2025 sales share)

• Oil buyers (top shares): DE Central Operating, LLC (53%), Civitas Resources Inc (12%), APA Corporation (18%), among others.
• Gas & NGL buyers (top shares): DE Central Operating, LLC (40%), Civitas Resources Inc (26%), APA Corporation (15%), among others.
• No long-term fixed-price purchasing agreements; customers can be replaced by other purchasers if needed.

People, offices, and capacities

• Employees: 67 full-time employees as of December 31, 2025 (25 at principal offices and district operation centers; 42 in Midland/Oklahoma operations).
• Offices: principal office in Houston, Texas; district offices in Houston and Midland, Texas; Oklahoma City, Oklahoma; field offices in Midland, Texas and Garvin, Oklahoma.
• Operations model: operates the majority of its wells; many wells are operated under joint operating agreements with other working-interest owners; the company earns monthly operating fees and reimbursement of operating expenses.

Other points

• All oil and gas properties are located in the United States.
• The company highlights environmental, regulatory, and ESG-related risks, including compliance costs and regulatory exposure.
• The company emphasizes liquidity preservation and balance sheet strength, with flexibility to divest assets or enter joint ventures as needed.

Key takeaway

PrimeEnergy Resources Corporation is expanding horizontal development in the Midland Basin and parts of Oklahoma through partnerships. The company operates a substantial producing portfolio (508 operated wells, 427 net), reports proved reserves of 28,388 MBOE, and delivered a 2025 production mix of oil, NGLs, and natural gas. It maintains a disciplined liquidity strategy supported by a revolving credit facility and active hedging to manage commodity price exposure.