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PrimeEnergy Q2 Earnings Fall Y/Y on Lower Oil Prices, Stock Declines
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Shares of PrimeEnergy Resources Corporation (PNRG - Free Report) have declined 1.7% since reporting results for the second quarter of 2025. This compares with the S&P 500 index’s 0.9% rise over the same time frame. Over the past month, the stock has declined 17.2% against the S&P 500’s 1.5% growth.
Earnings & Revenue Performance
PrimeEnergy posted revenues of $42 million for the second quarter of 2025, down 35% from $64.8 million in the same quarter last year. Net income dropped to $3.2 million from $19.7 million a year ago, while diluted earnings per share fell to $1.33 from $7.77.
For the first half of 2025, revenues totaled $92 million compared with $107.8 million in the prior year, while net income was $12.4 million, down from $31.1 million. The steep declines were driven by lower oil prices, though higher natural gas and NGL volumes created headwinds.
PrimeEnergy Corporation Price, Consensus and EPS Surprise
Oil sales dropped sharply in the quarter to $34.2 million from $56.2 million a year earlier, reflecting a 14% decline in production volumes and a 30% drop in realized oil prices.
Conversely, natural gas revenues plunged 48% to just $43,000 due to weaker realized prices despite higher volumes. Natural gas liquids sales, however, rose 5% to $5.6 million, as a 39% increase in volumes offset lower prices. Field service income also fell 32% to $2 million as the company scaled back its service operations.
Expenses offered a mixed picture. Oil and gas production costs declined 19% year over year to $10.1 million, while production and ad valorem taxes fell more than 50%, in line with weaker revenue streams. General and administrative expenses declined 23% to $3 million, but depreciation, depletion and amortization jumped 20% to $20.8 million due to new wells brought online. Interest expenses more than tripled to $0.7 million, reflecting higher borrowings under the company’s credit facility.
Management Commentary
Chairman Charles E. Drimal, Jr. emphasized the resilience of the company’s diversified production base, noting that while oil volumes were modestly lower, natural gas and NGL production delivered strong growth. He highlighted the importance of maintaining a balanced production mix and reiterated the company’s commitment to disciplined capital allocation and shareholder returns.
Management also underscored its confidence in long-term value creation through continued execution of its development program, particularly in the Permian Basin. Drimal pointed to the company’s ability to generate solid cash flow despite softer commodity prices, noting discretionary cash flow of $56.9 million for the first half of 2025 versus $64.1 million a year ago.
Factors Influencing the Headline Numbers
The headline earnings declines were primarily a function of oil price volatility. Average realized oil prices for the quarter came in at $56.96 per barrel, down nearly 30% year over year, while gas prices tumbled more than 60%. The drop in commodity pricing eroded revenues despite higher natural gas and NGL volumes.
Operating costs were positively impacted by the plugging of older wells, which reduced expenses, while lower ad valorem taxes reflected the revenue decline. Still, the addition of producing wells significantly increased depletion and depreciation charges, contributing to the overall earnings decline.
Outlook
PrimeEnergy indicated plans to continue share repurchases through the remainder of 2025, building on $12.1 million already deployed in the first half of the year and $113.5 million cumulatively since program inception. Management reiterated its commitment to disciplined capital spending and highlighted ongoing development activity in West Texas and Oklahoma. In total, the company expects to invest $98 million in 44 horizontal wells this year.
Other Developments
During the quarter, PrimeEnergy consolidated shareholder control as chairman Drimal entered into voting rights agreements with outside investors covering 155,926 shares. This brought affiliated shareholders’ control to more than 80% of the company’s voting power, bolstering stability in corporate governance.
The company also reported continued investment in the Permian Basin, with multiple joint ventures and horizontal drilling projects advancing in Reagan, Upton, Martin and Midland counties. Additionally, PrimeEnergy repurchased 16,970 shares in the second quarter at an average price of $173.43, reflecting its ongoing capital return strategy.
PrimeEnergy’s second-quarter results highlight the challenging commodity backdrop, with revenues and earnings sharply falling on weaker oil pricing.
Nonetheless, higher gas and NGL volumes, disciplined expense management, and continued capital return initiatives underscore management’s confidence in navigating volatile markets. The company remains heavily invested in its Permian Basin development program, while shareholder alignment measures signal a focus on long-term strategic stability.
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PrimeEnergy Q2 Earnings Fall Y/Y on Lower Oil Prices, Stock Declines
Shares of PrimeEnergy Resources Corporation (PNRG - Free Report) have declined 1.7% since reporting results for the second quarter of 2025. This compares with the S&P 500 index’s 0.9% rise over the same time frame. Over the past month, the stock has declined 17.2% against the S&P 500’s 1.5% growth.
Earnings & Revenue Performance
PrimeEnergy posted revenues of $42 million for the second quarter of 2025, down 35% from $64.8 million in the same quarter last year. Net income dropped to $3.2 million from $19.7 million a year ago, while diluted earnings per share fell to $1.33 from $7.77.
For the first half of 2025, revenues totaled $92 million compared with $107.8 million in the prior year, while net income was $12.4 million, down from $31.1 million. The steep declines were driven by lower oil prices, though higher natural gas and NGL volumes created headwinds.
PrimeEnergy Corporation Price, Consensus and EPS Surprise
PrimeEnergy Corporation price-consensus-eps-surprise-chart | PrimeEnergy Corporation Quote
Other Key Business Metrics
Oil sales dropped sharply in the quarter to $34.2 million from $56.2 million a year earlier, reflecting a 14% decline in production volumes and a 30% drop in realized oil prices.
Conversely, natural gas revenues plunged 48% to just $43,000 due to weaker realized prices despite higher volumes. Natural gas liquids sales, however, rose 5% to $5.6 million, as a 39% increase in volumes offset lower prices. Field service income also fell 32% to $2 million as the company scaled back its service operations.
Expenses offered a mixed picture. Oil and gas production costs declined 19% year over year to $10.1 million, while production and ad valorem taxes fell more than 50%, in line with weaker revenue streams. General and administrative expenses declined 23% to $3 million, but depreciation, depletion and amortization jumped 20% to $20.8 million due to new wells brought online. Interest expenses more than tripled to $0.7 million, reflecting higher borrowings under the company’s credit facility.
Management Commentary
Chairman Charles E. Drimal, Jr. emphasized the resilience of the company’s diversified production base, noting that while oil volumes were modestly lower, natural gas and NGL production delivered strong growth. He highlighted the importance of maintaining a balanced production mix and reiterated the company’s commitment to disciplined capital allocation and shareholder returns.
Management also underscored its confidence in long-term value creation through continued execution of its development program, particularly in the Permian Basin. Drimal pointed to the company’s ability to generate solid cash flow despite softer commodity prices, noting discretionary cash flow of $56.9 million for the first half of 2025 versus $64.1 million a year ago.
Factors Influencing the Headline Numbers
The headline earnings declines were primarily a function of oil price volatility. Average realized oil prices for the quarter came in at $56.96 per barrel, down nearly 30% year over year, while gas prices tumbled more than 60%. The drop in commodity pricing eroded revenues despite higher natural gas and NGL volumes.
Operating costs were positively impacted by the plugging of older wells, which reduced expenses, while lower ad valorem taxes reflected the revenue decline. Still, the addition of producing wells significantly increased depletion and depreciation charges, contributing to the overall earnings decline.
Outlook
PrimeEnergy indicated plans to continue share repurchases through the remainder of 2025, building on $12.1 million already deployed in the first half of the year and $113.5 million cumulatively since program inception. Management reiterated its commitment to disciplined capital spending and highlighted ongoing development activity in West Texas and Oklahoma. In total, the company expects to invest $98 million in 44 horizontal wells this year.
Other Developments
During the quarter, PrimeEnergy consolidated shareholder control as chairman Drimal entered into voting rights agreements with outside investors covering 155,926 shares. This brought affiliated shareholders’ control to more than 80% of the company’s voting power, bolstering stability in corporate governance.
The company also reported continued investment in the Permian Basin, with multiple joint ventures and horizontal drilling projects advancing in Reagan, Upton, Martin and Midland counties. Additionally, PrimeEnergy repurchased 16,970 shares in the second quarter at an average price of $173.43, reflecting its ongoing capital return strategy.
PrimeEnergy’s second-quarter results highlight the challenging commodity backdrop, with revenues and earnings sharply falling on weaker oil pricing.
Nonetheless, higher gas and NGL volumes, disciplined expense management, and continued capital return initiatives underscore management’s confidence in navigating volatile markets. The company remains heavily invested in its Permian Basin development program, while shareholder alignment measures signal a focus on long-term strategic stability.