Permian Resources

None of the warning signs we check for were found.

We look for five warning signs: doubt it can keep going, weak checks on its own accounts, a notice that its past accounts can't be relied on, a change of auditor, and one customer bringing in a big share of sales. We don't check lawsuits, investigations or debt yet.

We checked the auditor's report, internal controls, restatement notices, auditor changes and big customers in the 10-K filed 26 Feb 2026, plus the 10-Q filed 6 Aug 2026 and 4 later 8-Ks.

Cheap for a reason is the question the numbers cannot answer.

Whether the price already reflects the risks is what the deep dive is for.

• Climate change laws and regulations restricting emissions of GHGs could increase our costs and reduce demand for the oil and natural gas we produce.

  Could happen

  In response to findings that emissions of carbon dioxide, methane and other GHGs present an endangerment to public health and the environment, the EPA has adopted regulations pursuant to the CAA that, among other things, require PSD preconstruction and Title V operating permits for GHG emissions from certain large stationary sources, mandate monitoring and annual reporting of GHG emissions, and impose new standards for reducing methane emissions from oil and gas operations by limiting venting and flaring and implementing leak detection and repair programs. Federal policy towards GHG emissions, and regulation thereunder, has varied significantly between the past several Presidential administrations. The current Trump administration has expressed a policy preference of limiting or rescinding regulations concerning GHG emissions and, in February 2026, promulgated a final rule repealing the EPA’s 2009 “Endangerment Finding” and its motor vehicle GHG emission performance standards. This rescission of the “Endangerment Finding” eliminates the basis for EPA’s authority under the CAA for most of its regulations concerning GHGs. However, whether or how such policies and the EPA’s recission of its “Endangerment Finding” will be implemented and if they will survive any potential legal challenges, or whether future administrations or Congress may pursue new GHG emissions regulation, cannot be predicted at this time.

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• We may be unable to compete effectively with larger companies, which may adversely affect our results of operations and financial condition.

  Could happen

  The oil and natural gas industry is intensely competitive, and we compete with other companies that have greater resources than us, particularly following recent consolidation within the industry. Many of our larger competitors not only drill for and produce oil and natural gas, but they also engage in refining operations and market petroleum and other products on a regional, national or worldwide basis. Our competitors may be able to pay more for oil and natural gas properties, and evaluate, bid for and purchase a greater number of properties than our financial or human resources permit. In addition, these companies may have a greater ability to continue drilling activities during periods of low oil and natural gas prices, to contract for drilling equipment, to secure trained personnel, and to absorb the burden of present and future federal, state, local and other laws and regulations. Competition has been strong in hiring experienced personnel, particularly in the engineering and technical, accounting and financial reporting, tax and land departments, and acquiring resources and other materials in markets experiencing shortages. In addition, competition is strong for attractive oil and natural gas properties, oil and natural gas companies, and drilling rights. Our inability to compete effectively with our competitors could have a material and adverse impact on our business activities, financial condition and results of operations.

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• Commodity prices are volatile, and a sustained period of low commodity prices for oil, NGLs and natural gas could adversely affect our business, financial condition and results of operations.

  Could happen

  • actions of U.S. and other governments to strategically release oil, NGLs and natural gas from strategic reserves, including any increased volumes of Venezuelan crude oil;

• Restrictions in OpCo’s existing and future debt agreements could limit our growth and ability to engage in certain activities.

  Could happen

  These restrictions may be suspended when our debt instruments are assigned an investment grade rating (Baa3 or better by Moody’s Investors Service, Inc. or BBB- or better by S&P Global Ratings or Fitch Ratings Inc., or two out of three, as applicable). However, there can be no assurance that we will be able to achieve such ratings.

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