Permian Resources CorpPR
Permian Resources Corp Commitments Disclosure
Note 13—Commitments and Contingencies
Contractual Obligations
The following table is a schedule of the Company’s future minimum payments required under contractual commitments that have initial or remaining non-cancelable terms in excess of one year as of December 31, 2025:
| (in thousands) | 2026 | 2027 | 2028 | 2029 | 2030 | Thereafter | Total | ||||||||||||||||||||||||||||||||||
| Purchase obligations | $ | 50,507 | $ | 15,251 | $ | 13,233 | $ | 724 | $ | — | $ | — | $ | 79,715 | |||||||||||||||||||||||||||
Firm Transportation | 28,885 | 78,282 | 107,169 | 118,033 | 118,032 | 769,179 | 1,219,580 | ||||||||||||||||||||||||||||||||||
Total | $ | 79,392 | $ | 93,533 | $ | 120,402 | $ | 118,757 | $ | 118,032 | $ | 769,179 | $ | 1,299,295 | |||||||||||||||||||||||||||
Purchase Obligations
The Company has multi-year energy purchase agreements in place to buy electricity utilized in its operations. Under the contracts, the Company is obligated to purchase a minimum amount of electricity at a fixed price. If the Company does not utilize the minimum amounts of electricity on a monthly basis, the Company is then liable to pay the difference between the fixed price per the agreement and the price at which the supplier is able to sell the unutilized quantity. The total remaining obligation is $41.0 million, which represents the gross minimum financial commitments pursuant to these agreements as of December 31, 2025. The Company paid electricity costs of $32.9 million, $10.2 million and $7.5 million for the years ended December 31, 2025, 2024 and 2023, respectively, to these suppliers.
The Company has an agreement in place to buy frac sand used in its well fracture stimulation process that has a contract term through December 31, 2026. Under the terms of this take-or-pay agreement, the Company is obligated to purchase a minimum volume of frac sand at a fixed price. The remaining obligation under this contract is $38.7 million, which represents the minimum financial commitment pursuant to the terms of the contract from December 31, 2025 through December 31, 2026. Actual expenditures under these contracts may exceed the minimum commitments. The Company paid $132.2 million, $147.2 million and $102.5 million for the years ended December 31, 2025, 2024 and 2023, respectively, under the original contract, which was capitalized as incurred during the periods.
Firm Transportation
During the year ended December 31, 2025, the Company entered into a series of firm commitment transportation agreements that guarantee volumetric capacity on pipelines for gas transportation with varying terms over ten years. The agreements are effective beginning in 2025 and will provide the Company natural gas capacity on the pipelines ranging from 25,000 to 300,000 MMBtu per day. The Company is not required to deliver natural gas volumes specifically produced from any of the Company’s properties under these agreements. The agreements include demand fees that are applied to the total volumetric capacity per the agreements regardless if utilized. As a result, the aggregate minimum financial commitment amount over the term of these agreements is approximately $1.2 billion based upon the volumetric commitments per the agreements as of December 31, 2025. The Company has paid $5.8 million related to these commitments during the year ended December 31, 2025, which are included in the Purchased gas sales, net line item described in Note 14—Revenues.
Delivery Commitments
In 2024, the Company assumed NGL and natural gas delivery commitments in connection with acquisitions completed during the year. The NGL agreement includes a commitment to deliver a minimum of 9,000 Bbls per day of NGL volumes to the purchaser over the next 2.3 years or be subject to under-delivery fees equal to a specified rate under the contractual required minimum volumes, subject to inflation factors. The natural gas delivery commitments include a commitment to deliver certain minimum daily volumes of natural gas over the next 6 years or be subject to under-delivery fees equal to a specified rate, subject to inflation factors. The aggregate minimum financial commitment amounts over the remaining term for the NGL and natural gas agreements are $24.8 million and $61.5 million, respectively.
The amount discussed above represent the total gross volumes the Company is required to deliver per these agreements, which gross volumes are not comparable to the Company’s net production presented in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operation, as amounts therein are reflected net of all royalties, overriding royalties and production due to others. During the year ended December 31, 2025, the Company incurred $12.2 million of under-delivery charges related to these agreements. The Company may incur additional under-delivery penalties related to these agreements during the remaining 2.3 and 6 year terms, however, based upon current projections of expected production, the Company does not believe future charges would be material to the Company’s financial position, results of operations or cash flows.
Lease Commitments
Refer to Note 15—Leases for details on the Company’s operating and finance lease agreements.
Contingencies
The Company may at times be subject to various commercial or regulatory claims, prior period adjustments from service providers, litigation or other legal proceedings that arise in the ordinary course of business. While the outcome of these lawsuits and claims cannot be predicted with certainty, management believes it is remote that the impact of such matters that are reasonably possible to occur will have a material adverse effect on the Company’s financial position, results of operations or cash flows. Management is unaware of any pending litigation brought against the Company requiring a contingent liability to be recognized as of the date of these consolidated financial statements.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 26, 2026 | Showing above |
| 2024 | Feb 26, 2025 | |
| 2021 | Feb 24, 2022 | |
| 2020 | Feb 24, 2021 | |
| 2019 | Feb 24, 2020 | |
| 2018 | Feb 25, 2019 | |
| 2017 | Feb 26, 2018 | |
| 2016 | Mar 23, 2017 | |
About Commitments Disclosures
Commitments and contingencies disclosures catalog a company's off-balance-sheet obligations and legal exposures — purchase commitments, guarantee arrangements, pending litigation, and regulatory proceedings. These items represent potential future cash outflows that may not appear as liabilities on the balance sheet until they become probable and estimable.
Key signals: litigation reserves and disclosed loss ranges quantify management's estimate of legal exposure, but unquantified "reasonably possible" losses often represent the larger risk. Watch for changes in language around pending cases — shifts from "remote" to "reasonably possible" or increases in estimated loss ranges signal deteriorating outcomes. Unconditional purchase obligations and take-or-pay contracts create fixed cost structures that reduce operational flexibility. Guarantee arrangements for subsidiaries or joint ventures can create cascading obligations. Compare the total commitment schedule against projected free cash flow to assess whether the company can meet its obligations without additional financing.