Permian Resources Corp. Upgraded To 'BBB-' On Increased Scale And Strong Credit Metrics

Midland, Texas-based oil, gas, and natural gas liquids (NGLs) exploration and production (E&P) company Permian Resources Corp. continues to expand its scale and improve its operational performance while maintaining strong financial measures.

• Therefore, S&P Global Ratings raised its issuer credit rating on the company to 'BBB-' from ‘BB+’ and the issue-level rating on its unsecured debt to ‘BBB-‘ from ‘BB+’.

• The stable outlook on Permian Resources reflects our expectation that its financial measures will continue improving as the company reduces debt, grows production in line with higher-rated peers, and maintains conservative financial policies. We expect funds from operations (FFO) to debt well above 60% over the next 24 months.

NEW YORK (S&P Global Ratings) March 17, 2026—S&P Global Ratings today took the rating actions listed above.

The upgrade reflects Permian Resources' increased scale and improved operating efficiency in the Permian basin. Over the past few years, the company has expanded its footprint in the Permian basin through numerous acquisitions, including the Earthstone acquisition in 2023, its purchase of Barilla Draw assets from Occidental Petroleum in 2024, and its purchase of APA Corp.’s assets in 2025. Incorporating its numerous bolt-on acquisitions this year, it increased its net acreage position to about 480,000 and increased its net royalty acreage to 105,000 acres, compared with approximately 176,380 net leasehold acres and 40,000 net royalty acres as of year-end 2022. The company’s ground game continues to increase its acreage position at favorable costs, and we expect this trend to continue at least over the next 12 months. Permian Resources added about 30,000 net acres through about 700 transactions in 2025.

We anticipate 2026 average production of 400,000-430,000 barrels of oil equivalent per day (boe/d). In 2026, Permian Resources expects to bring 250 wells online,with an average lateral length of 11,000 feet, while continuing to reduce controllable costs. Additionally, we expect the company will increase its organic production by 5%-10% in 2027.

Permian Resources also continues to increase its reserve base through both the drill bit and acquisitions. Its reserves totaled 1.1 billion boe as of year-end 2025, which represented a 9% year-over-year increase. It has had a reserve replacement ratio of more than 100% over the last three years. About 71% of the company’s reserves are classified as proved developed producing (PDP), with about 43% oil and 26% NGLs. In our view, Permian Resources’ production and reserve scale now compare favorably with 'BBB-' category peers. However, it is geographically less diverse than some higher-rated peers given the concentration of its assets in the Delaware sub-basin of the Permian basin.

Permian Resources’ new natural gas marketing agreements should result in incremental free cash flow in 2026. The new natural gas firm transportation and sales agreements, as outlined in its third-quarter call, cover almost half of the company’s 2026 expected gas production and, including hedges, reduces its exposure to Waha hub pricing to 10%. We believe this should improve overall price realizations and somewhat reduce price volatility for natural gas while increasing free cash flow. Additionally, the company has a strong track record of continually reducing operating costs, which we expect to continue in 2026.

Permian Resources maintains strong credit metrics and has a net debt target of 0.5x-1.0x. The company financed its previous acquisitions in a credit-friendly manner by using mostly equity and cash on hand, as it did for its most recent acquisition from APA Corp. Additionally, Permian Resources continues to reduce total debt levels, with a decrease of $635 million in 2025, including redeeming its $287 million of 2026 notes and $170 million of convertible notes in the third quarter.

We would expect the company to call at par its 8% notes when they become callable in April 2026, therefore reducing debt by another $550 million and decreasing interest expense. Under our base-case forecast, we assume the company's FFO to debt will be well above 60% while its debt to EBITDA will be 0.5x-1.0x over the next two years. Even at our midcycle prices of $2.75 per million British thermal units (/mmBtu) Henry Hub and $50 per barrel (/bbl) West Texas Intermediate (WTI), FFO to debt remains well above 60%.

The company has adequate liquidity, supported by the full availability under its $2.5 billion reserve-based lending (RBL) credit facility and almost $154 million of cash as of year-end. We expect it will generate significant discretionary cash over the next two years and anticipate it will return less than 50% to its shareholders via dividends and share repurchases, while retaining the remaining amount for general corporate purposes, which could include debt reduction and additional acquisitions. However, we do not assume Permian Resources will undertake any additional acquisitions under our base case due to the uncertainty around their timing and scale. Overall, based on continued debt reduction and capital allocation flexibility, we believe the company’s current financial policy supports an investment-grade rating.

The stable outlook on Permian Resources reflects our expectation that its financial measures will continue to improve as the company reduces debt, modestly grows production, and maintains conservative financial policies. We expect FFO to debt to be well above 60% over the next three years, and would expect this ratio to remain above 60% even under our mid-cycle price assumptions.

We could lower our rating on Permian Resources if, contrary to our expectations, it adopts a more aggressive financial policy such that we expect FFO to debt to approach 45% for a sustained period, including under our midcycle oil and natural gas price assumptions of $50/bbl WTI and $2.75/mmBtu Henry Hub. This would most likely occur if it:

• Increases its shareholder returns concurrent with a sustained weakening in crude oil and natural gas prices; or

• Completes a debt-funded acquisition that doesn’t add to near-term cash flow, resulting in significantly higher leverage.

We could raise our rating on Permian Resources if it increases its production and reserves to levels commensurate with those of its higher-rated peers while maintaining FFO to debt of more than 60%, including under our midcycle price deck assumptions.