PrimeEnergy Resources Corporation (PNRG) | Investment Case

1. Company Snapshot

1.a. Company Description

PrimeEnergy Resources Corporation, an independent oil and natural gas company, through its subsidiaries, engages in acquiring, developing, and producing oil and natural gas properties in the United States.It also acquires producing oil and gas properties through joint ventures with industry partners; and provides contract services to third parties, including well-servicing support operations, site-preparation, and construction services for oil and gas drilling and reworking operations.The company operates approximately 710 active wells and owns non-operating interests in approximately 822 additional wells primarily in Oklahoma and Texas.

The company was formerly known as PrimeEnergy Corporation and changed its name to PrimeEnergy Resources Corporation in December 2018.The company was incorporated in 1973 and is headquartered in Houston, Texas.

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1.b. Last Insights on PNRG

PrimeEnergy Resources Corporation's recent performance has been driven by several positive factors. The company's Q2 earnings release highlighted a decline in revenues and earnings due to lower oil prices, but was cushioned by higher gas and NGL volumes, cost cuts, and share buybacks. Additionally, PrimeEnergy boasts a strong balance sheet with minimal long-term debt, showcasing conservative accounting practices. The company has also been recognized nationally and locally for outstanding performance, including being ranked #1 in the Oil & Gas Operations category by Forbes.

1.c. Company Highlights

Last Price	190
Change Percentage	-1.46%
Open	192
Previous Close	192.81
Market Cap ( Millions)	313
Volume	27955
Year High	243.49
Year Low	126.4
M A 50	155.79
M A 200	169.73

FCF Yield	6.27%
Dividend Yield	0.00%
ROE	12.19%
Debt / Equity	1.07%
Net Debt / EBIDTA	-1.15%
Price To Book	1.47
Price Earnings Ratio	12.43
Price To FCF	15.95
Price To sales	1.59
EV / EBITDA	2.56

2. Transcript Summary

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3. NewsRoom

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

Nov -25

Source: zacks.com

PRIMEENERGY RESOURCES CORPORATION (PNRG) ANNOUNCES THIRD QUARTER RESULTS

Nov -19

Source: globenewswire.com

Pan American Closes LIFE Offering and Concurrent Private Placement Offering

Oct -14

Source: globenewswire.com

Pan American Closes LIFE Offering and Concurrent Private Placement Offering

Oct -14

Source: globenewswire.com

PrimeEnergy Resources Corporation Recognized Nationally and Locally for Outstanding Performance

Sep -10

Source: globenewswire.com

PrimeEnergy Resources Corporation Recognized Nationally and Locally for Outstanding Performance

Sep -09

Source: globenewswire.com

Is PrimeEnergy Stock a Smart Bet Amid Oil Slump & Gas Growth?

Sep -03

Source: zacks.com

PrimeEnergy Q2 Earnings Fall Y/Y on Lower Oil Prices, Stock Declines

Aug -26

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.52%)

6. Segments

Oil

Expected Growth: 4.5%

PrimeEnergy Resources Corporation's oil production is expected to grow driven by increasing demand for energy, advancements in drilling technologies, and strategic acquisitions in the Permian Basin.

Natural Gas Liquids

Expected Growth: 4.5%

Growing demand for petrochemicals, increasing use of NGLs as a cleaner fuel, and rising exploration activities are driving the Natural Gas Liquids market growth.

Natural Gas

Expected Growth: 4.8%

Increasing demand for clean energy, growing industrialization, and rising urbanization are driving the growth of the natural gas market. Additionally, government initiatives to reduce carbon emissions and increase energy efficiency are also contributing to the growth of this segment.

7. Detailed Products

Oil and Natural Gas

PrimeEnergy Resources Corporation is engaged in the acquisition, exploration, and production of oil and natural gas properties.

Crude Oil

The company produces crude oil from its operated properties in Oklahoma and Texas.

Natural Gas Liquids (NGLs)

PrimeEnergy Resources Corporation also produces NGLs, including ethane, propane, and butane.

Drilling and Exploration Services

The company provides drilling and exploration services to other oil and gas operators.

8. PrimeEnergy Resources Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for PrimeEnergy Resources Corporation is moderate due to the availability of alternative energy sources, but the company's focus on renewable energy and sustainable practices reduces the likelihood of customers switching to substitutes.

Bargaining Power Of Customers

The bargaining power of customers is low for PrimeEnergy Resources Corporation due to the company's strong brand reputation and the lack of alternative energy providers in the market.

Bargaining Power Of Suppliers

The bargaining power of suppliers is moderate for PrimeEnergy Resources Corporation due to the company's dependence on a few key suppliers for equipment and materials, but the company's strong relationships with suppliers mitigate this risk.

Threat Of New Entrants

The threat of new entrants is low for PrimeEnergy Resources Corporation due to the high barriers to entry in the energy industry, including regulatory hurdles and significant capital requirements.

Intensity Of Rivalry

The intensity of rivalry is high for PrimeEnergy Resources Corporation due to the competitive nature of the energy industry, with many established players competing for market share.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	0.18%
Debt Cost	6.59%
Equity Weight	99.82%
Equity Cost	6.59%
WACC	6.59%
Leverage	0.18%

11. Quality Control: PrimeEnergy Resources Corporation passed 7 out of 9 key points

Strong Liquidity

Low Debt

Strong Interest Coverage

Healthy Cash Flow

Operating Inefficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

SandRidge Energy

A-Score: 6.3/10

Value: 7.4

Growth: 3.3

Quality: 7.9

Yield: 9.0

Momentum: 4.0

Volatility: 6.0

1-Year Total Return ->

PHX Minerals

A-Score: 6.1/10

Value: 4.3

Growth: 2.0

Quality: 6.6

Yield: 7.0

Momentum: 9.0

Volatility: 7.7

1-Year Total Return ->

PrimeEnergy Resources

A-Score: 5.4/10

Value: 6.3

Growth: 8.9

Quality: 7.2

Yield: 0.0

Momentum: 7.0

Volatility: 2.7

1-Year Total Return ->

Berry

A-Score: 4.9/10

Value: 7.3

Growth: 4.6

Quality: 4.2

Yield: 9.0

Momentum: 1.5

Volatility: 3.0

1-Year Total Return ->

HighPeak Energy

A-Score: 4.8/10

Value: 7.7

Growth: 9.4

Quality: 5.5

Yield: 3.0

Momentum: 0.0

Volatility: 3.0

1-Year Total Return ->

Epsilon Energy

A-Score: 4.7/10

Value: 5.7

Growth: 2.7

Quality: 6.4

Yield: 7.0

Momentum: 1.0

Volatility: 5.7

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

8.74%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

6.59%

PrimeEnergy Resources Corporation - US74158E1047

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on PNRG

1.c. Company Highlights

Higher Growth

Better Quality

Lower Yield

Revenues Beats

Strong Momentum

Stable Momentum

2. Transcript Summary

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.52%)

6. Segments

Oil

Expected Growth: 4.5%

Natural Gas Liquids

Expected Growth: 4.5%

Natural Gas

Expected Growth: 4.8%

7. Detailed Products

Oil and Natural Gas

Crude Oil

Natural Gas Liquids (NGLs)

Drilling and Exploration Services

8. PrimeEnergy Resources Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: PrimeEnergy Resources Corporation passed 7 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

190.0$

Current Price

190$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA