PrimeEnergy Q3 Earnings Slide Y/Y as Oil Volumes & Prices Fall

Shares of PrimeEnergy Resources Corporation PNRG have gained 1.4% since the company reported its earnings for the third quarter of 2025. This compares favorably with the S&P 500 Index’s 0.1% increase over the same time. In the past month, the stock has risen 0.5% against the S&P 500’s 3.4% decline.

Earnings & Revenue Performance of PNRG

PrimeEnergy posted third-quarter 2025 revenues of $46 million, down from $69.5 million a year earlier. Net income for the quarter was $10.6 million compared with $22.1 million in the year-ago period. Basic earnings per share were $6.41, roughly half of the $12.63 recorded in the third quarter of 2024, while diluted EPS fell to $4.38 from $8.80. The year-over-year declines reflected weaker oil and natural gas liquids (NGL) realizations and lower oil volumes, partially offset by stronger natural-gas volumes and pricing.

PrimeEnergy Corporation Price, Consensus and EPS Surprise

PrimeEnergy Corporation price-consensus-eps-surprise-chart | PrimeEnergy Corporation Quote

PNRG: Other Key Business Metrics

Oil, gas and NGL sales continued to make up the bulk of PrimeEnergy’s quarter. Oil revenues fell 38.1% to $34.8 million on a 33.3% drop in barrels sold and a 7.2% decline in the average realized oil price. NGL revenues slipped 21.7% to $5.6 million, driven by a lower realized NGL price despite relatively stable volumes. Offsetting part of that weakness, natural-gas revenues more than tripled to $2 million as gas sold rose 6.6%, and the average realized gas price increased sharply from 30 cents per Mcf to 86 cents per Mcf. Together, total oil-and-gas revenues declined 33.8% to $42.4 million for the quarter.

Cost performance was mixed. Lease operating expense decreased 18.9% to $10.4 million, and production and ad valorem taxes declined 9.1% to $2.4 million, tracking the lower oil-heavy revenue base. Depreciation, depletion and amortization (DD&A) also fell 22.7% year over year to $14.1 million, reflecting the natural decline of mature wells even as newer horizontals added reserves. General and administrative expenses improved 22.9% to $3 million, mainly from lower compensation and corporate costs. Interest expense was modestly higher at $0.48 million, consistent with higher borrowing costs earlier in the year.

On the balance sheet side, PrimeEnergy ended Sept. 30, 2025 with $3.7 million in cash and no outstanding bank debt, leaving the full $115 million borrowing base undrawn at quarter-end. The company also continued to shrink its share count, repurchasing 13,000 shares in the third quarter and 73,470 shares year to date under its long-running buyback program.

PNRG: Management Commentary

Management emphasized capital discipline alongside shareholder returns. Chairman and CEO Charles E. Drimal, Jr. said that the company is “balancing disciplined investment with opportunities to return capital to shareholders,” pointing to a strong balance sheet and high insider ownership as signs of long-term alignment. The press release also highlighted that insiders control a meaningful stake, with Drimal holding voting control of about 56.5% of fully diluted shares and other insiders, and a major shareholder holding another 20%.

Drivers of PNRG’s Headline Numbers

The main drag on year-over-year results was oil. PrimeEnergy’s oil volumes declined as mature properties naturally depleted, and realized oil prices trended lower versus last year. NGL pricing pressure added to the revenue contraction. By contrast, natural-gas performance was a bright spot, with higher gas volumes and significantly better pricing, boosting gas revenues from a small base.

Operationally, the company continued its horizontal development program, especially in the Midland Basin of West Texas. During the third quarter of 2025, PrimeEnergy participated in 15 Double Eagle-operated “Full House” wells in Reagan County, TX, investing about $30.1 million, and in eight “Horseshoe” wells in Midland County, TX, with Vital Energy, investing about $5.4 million. These wells were brought online by quarter-end or shortly thereafter, supporting longer-term production.

PNRG’s Outlook

PrimeEnergy reiterated expectations for steady horizontal activity. Management expects to invest about $98 million in 44 horizontal wells during 2025, following $96 million spent on 35 horizontals in 2023 and $113 million on 48 horizontals in 2024. Looking beyond 2025, the company outlined a multi-year Permian drilling opportunity, estimating more than 100 potential horizontal locations on its acreage and projecting roughly $224 million of horizontal investment over the next several years if proposals proceed. Liquidity is expected to remain supported by operating cash flow and the revolving credit facility.

Other Developments at PNRG

The only disposition noted in 2025 was a $0.6 million gain on the sale of a fully depreciated workover rig in the first quarter. Comparability of field-service income and expense continues to be affected by the sale of the South Texas service company in the third quarter of 2024, which reduced both revenues and costs in 2025.

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