Permian Resources Corporation (PR)

Permian Resources produces oil in one basin only, and only in its best part.

The concentration is a deliberate choice: all the acreage lies together, so infrastructure, crews and logistics are used intensively and the cost per barrel comes out below that of a company with scattered assets. The flip side is a complete absence of geographic diversification.

Growth comes from buying neighbouring acreage from small owners: added land is immediately served by existing infrastructure and is therefore worth more to the buyer than to the seller. A shale well loses flow quickly, so drilling is continuous. Risks: the oil price, the quality of the remaining inventory of locations and contractor costs. The payout has a base and a variable part.