Street View: Permian Resources sees solid FCF for 2023

Permian Basin Royalty Trust

02/09/2022 12:33

** Centennial Resource Development Inc  CDEV.O  and Colgate
Energy Partners III LLC on Thursday completed their merger to
form Permian Resources Corp  PR.O , which will begin trading on
Nasdaq on Friday
    ** PR expects 2023 total production of 150,000-165,000
barrels of oil equivalent per day (boepd), capex of $1.15
bln-$1.35 bln, and FCF of ~$1.1 bln-$1.3 bln assuming current
strip prices
    ** Declared qtrly base dividend of 5 cents/shr; plans to
distribute at least 50% of its FCF after base dividend, through
variable dividend, buybacks, or both
    
    CAPEX, FCF, AND ROC TIMING IN FOCUS
    ** RBC Capital Markets ("outperform", PT: $11) says PR's
2023 plans set it up for one of highest FCF yields/growth
combinations in its coverage for next year
    ** Says PR's capex forecast was slightly higher than
consensus, but brokerage believes this is due to some
conservatism given industry inflation trends
    ** Siebert Williams Shank ("buy", PT: $12) says 2023 FCF
guidance is in line with brokerage's estimate
    ** Believes Thursday's news will be viewed as neutral with
only a slight downward revision to brokerage's estimates for
co's EBITDA and FCF
    ** Cowen ("market perform", PT: $10.50) says PR's ROC yield
is competitive, despite higher-than-expected capex, but
investors may nitpick about buybacks and variable dividends only
beginning in Q2 2023
    ** Notes stock has recovered from some of its initial
underperformance on deal and has been one of the
better-performing small-and-mid-caps in Q3

 (Reporting by Ruhi Soni in Bengaluru)
 ((Ruhi.Soni@thomsonreuters.com
Twitter: https://twitter.com/ruhithere))