PrimeEnergy Resources Corporation (PNRG) 2026年第一季度10-Q摘要

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UNITED STATES 

SECURITIES AND EXCHANGE COMMISSION 

Washington, D.C. 20549 

 

 

FORM 10-Q 

 

 

 
 
 ☒ 

 
 
 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 

 
 

 

For the Quarterly Period Ended March 31, 2026

 

Or 

 
 
 ☐ 

 
 
 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 

 
 

 

For the Transition Period From                      to                     

 

Commission File Number 0-7406 

 

 

 

PrimeEnergy Resources Corporation 

(Exact name of registrant as specified in its charter) 

 

 

 

 
 
 Delaware

 
 
 84-0637348

 
 

 
 
 (State or other jurisdiction of

 incorporation or organization)

 
 
 (I.R.S. employer

 Identification No.)

 
 

 

9821 Katy Freeway, Houston, Texas 77024

(Address of principal executive offices)

 

(713) 735-0000

(Registrant’s telephone number, including area code) 

 

(Former name, former address and former fiscal year, if changed since last report)

 

 

 

Securities registered pursuant to Section 12(b) of the Act:

 

 
 
 Title of each class

 
  
 
 Trading

 Symbol(s)

 
  
 
 Name of each exchange

 on which registered

 
 

 
 
 Common Stock, $0.10 par value

 
  
 
 PNRG

 
  
 
 NASDAQ

 
 

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filings required for the past 90 days.    Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 
 
 Large Accelerated Filer

 
 
 ☐

 
 
 Accelerated Filer

 
 
 ☐

 
 

 
  
  
  
  
 

 
 
 Non-Accelerated Filer

 
 
 ☒

 
 
 Smaller Reporting Company

 
 
 ☒

 
 

 
  
  
  
  
 

 
  
  
 
 Emerging growth company

 
 
 ☐

 
 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☒

The number of shares outstanding of each class of the Registrant’s Common Stock as of May 11, 2026 was: Common Stock, $0.10 par value 1,618,000 shares.

 

 

 

 

  

 

PrimeEnergy Resources Corporation 

Index to Form 10-Q

March 31, 2026

 

 
  
 
 Page 

 
 

 
  
  
 

 
 
 Definitions of Certain Terms and Conventions Used Herein

 
  
 

 
 
 Cautionary Statement Concerning Forward-Looking Statements

 
  
 

 
 
 Part I—Financial Information

 
  
 

 
 
 Item 1. Financial Statements

 
  
 

 
 
 Condensed Consolidated Balance Sheets – March 31, 2026 (unaudited) and December 31, 2025

 
 
 1

 
 

 
 
 Condensed Consolidated Statements of Income – For the three months ended March 31, 2026 and 2025 (unaudited)

 
 
 2

 
 

 
 
 Condensed Consolidated Statements of Equity – For the three months ended March 31, 2026 and 2025 (unaudited)

 
 
 3

 
 

 
 
 Condensed Consolidated Statements of Cash Flows – For the three months ended March 31, 2026 and 2025 (unaudited)

 
 
 4

 
 

 
 
 Notes to Condensed Consolidated Financial Statements – March 31, 2026 (unaudited)

 
 
 5-9

 
 

 
 
 Item 2. Management’s Discussion and Analysis of Financial Conditions and Results of Operation

 
 
 10-17

 
 

 
 
 Item 3. Quantitative and Qualitative Disclosures About Market Risk

 
 
 17

 
 

 
 
 Item 4. Controls and Procedures

 
 
 17

 
 

 
 
 Part II - Other Information

 
  
 

 
 
 Item 1. Legal Proceedings

 
 
 18

 
 

 
 
 Item 1A. Risk Factors

 
 
 18

 
 

 
 
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

 
 
 18

 
 

 
 
 Item 3. Defaults Upon Senior Securities

 
 
 18

 
 

 
 
 Item 4. Reserved

 
 
 18

 
 

 
 
 Item 5. Other Information

 
 
 18

 
 

 
 
 Item 6. Exhibits

 
 
 19

 
 

 
 
 Signatures

 
 
 21

 
 

 

 

 

  

 

Definitions of Certain Terms and Conventions Used Herein 

 

Within this Report, the following terms and conventions have specific meanings:

 

Measurements.  

 
  
 
 ●

 
 
 “Bbl” means a standard barrel containing 42 United States gallons.

 
 

 

 
  
 
 ●

 
 
 “BOE” means a barrel of oil equivalent and is a standard convention used to express oil and gas volumes on a comparable oil equivalent basis. Gas equivalents are determined under the relative energy content method by using the ratio of six thousand cubic feet of gas to one Bbl of oil or natural gas liquid.

 
 

 

 
  
 
 ●

 
 
 “BOEPD” means BOE per day.

 
 

 

 
  
 
 ●

 
 
 “Btu” means British thermal unit, which is a measure of the amount of energy required to raise the temperature of one pound of water one degree Fahrenheit.

 
 

 

 
  
 
 ●

 
 
 “MBbl” means one thousand Bbls.

 
 

 

 
  
 
 ●

 
 
 “MBOE” means one thousand BOEs.

 
 

 

 
  
 
 ●

 
 
 “Mcf” means one thousand cubic feet and is a measure of gas volume.

 
 

 

 
  
 
 ●

 
 
 “MMcf” means one million cubic feet.

 
 

 

Indices.  

 
  
 
 ●

 
 
 “Brent” means Brent oil price, a major trading classification of light sweet oil that serves as a benchmark price for oil worldwide.

 
 

 

 
  
 
 ●

 
 
 “WAHA” is a benchmark pricing hub for West Texas gas.

 
 

 

 
  
 
 ●

 
 
 “WTI” means West Texas Intermediate, a light sweet blend of oil produced from fields in western Texas and is a grade of oil used as a benchmark in oil pricing. General terms and conventions.

 
 

 

 
  
 
 ●

 
 
 “DD&A” means depletion, depreciation and amortization.

 
 

 

 
  
 
 ●

 
 
 “ESG” means environmental, social and governance.

 
 

 

 
  
 
 ●

 
 
 “GAAP” means accounting principles generally accepted in the United States of America.

 
 

 

 
  
 
 ●

 
 
 “GHG” means greenhouse gases.

 
 

 

 
  
 
 ●

 
 
 “LNG” means liquefied natural gas.

 
 

 

 
  
 
 ●

 
 
 “NGLs” means natural gas liquids, which are the heavier hydrocarbon liquids that are separated from the gas stream; such liquids include ethane, propane, isobutane, normal butane and natural gasoline.

 
 

 

 
  
 
 ●

 
 
 “NYMEX” means the New York Mercantile Exchange.

 
 

 

 
  
 
 ●

 
 
 “OPEC” means the Organization of Petroleum Exporting Countries.

 
 

 

 
  
 
 ●

 
 
 “PrimeEnergy” or the “Company” means PrimeEnergy Resources Corporation and its subsidiaries.

 
 

 

 

 

 

 
  
 
 ●

 
 
 “Proved developed reserves” means reserves that can be expected to be recovered through existing wells with existing equipment and operating methods or in which the cost of the required equipment is relatively minor compared to the cost of a new well.

 
 

 

 
  
 
 ●

 
 
 “Proved reserves” means those quantities of oil and gas, which, by analysis of geosciences and engineering data, can be estimated with reasonable certainty to be economically producible – from a given date forward, from known reservoirs, and under existing economic conditions, operating methods, and government regulations – prior to the time at which contracts providing the right to operate expire, unless evidence indicates that renewal is reasonably certain, regardless of whether deterministic or probabilistic methods are used for the estimation. The project to extract the hydrocarbons must have commenced or the operator must be reasonably certain that it will commence the project within a reasonable time.

 
 

 

 
  
 
 (i)

 
 
 The area of the reservoir considered as proved includes: (A) The area identified by drilling and limited by fluid contacts, if any, and (B) Adjacent undrilled portions of the reservoir that can, with reasonable certainty, be judged to be continuous with it and to contain economically producible oil or gas on the basis of available geoscience and engineering data.

 
 

 

 
  
 
 (ii)

 
 
 In the absence of data on fluid contacts, proved quantities in a reservoir are limited by the lowest known hydrocarbons as seen in a well penetration unless geoscience, engineering or performance data and reliable technology establishes a lower contact with reasonable certainty.

 
 

 

 
  
 
 (iii)

 
 
 Where direct observation from well penetrations has defined a highest known oil elevation and the potential exists for an associated gas cap, proved oil reserves may be assigned in the structurally higher portions of the reservoir only if geoscience, engineering or performance data and reliable technology establish the higher contact with reasonable certainty.

 
 

 

 
  
 
 (iv)

 
 
 Reserves which can be produced economically through application of improved recovery techniques (including, but not limited to, fluid injection) are included in the proved classification when: (A) Successful testing by a pilot project in an area of the reservoir with properties no more favorable than in the reservoir as a whole, the operation of an installed program in the reservoir or an analogous reservoir, or other evidence using reliable technology establishes the reasonable certainty of the engineering analysis on which the project or program was based; and (B) The project has been approved for development by all necessary parties and entities, including governmental entities.

 
 

 

 
  
 
 (v)

 
 
 Existing economic conditions include prices and costs at which economic producibility from a reservoir is to be determined. The price shall be the average during the 12-month period prior to the ending date of the period covered by the report, determined as an unweighted arithmetic average of the first-day-of-the-month price for each month within such period, unless prices are defined by contractual arrangements, excluding escalations based upon future conditions.

 
 

 

 
  
 
 ●

 
 
 “Proved undeveloped reserves” means reserves that are expected to be recovered from new wells on undrilled acreage, or from existing wells where a relatively major expenditure is required for recompletion.

 
 

 

 
  
 
 (i)

 
 
 Reserves on undrilled acreage shall be limited to those directly offsetting development spacing areas that are reasonably certain of production when drilled, unless evidence using reliable technology exists that establishes reasonable certainty of economic producibility at greater distances.

 
 

 

 
  
 
 (ii)

 
 
 Undrilled locations can be classified as having proved undeveloped reserves only if a development plan has been adopted indicating that they are scheduled to be drilled within five years, unless the specific circumstances, justify a longer time.

 
 

 

 
  
 
 (iii)

 
 
 Under no circumstances shall estimates for proved undeveloped reserves be attributable to any acreage for which an application of fluid injection or other improved recovery technique is contemplated, unless such techniques have been proved effective by actual projects in the same reservoir or an analogous reservoir, or by other evidence using reliable technology establishing reasonable certainty.

 
 

 

 

 

 

 
  
 
 ●

 
 
 “SEC” means the United States Securities and Exchange Commission.

 
 

 

 
  
 
 ●

 
 
 “Standardized Measure” means the after-tax present value of estimated future net cash flows of proved reserves, determined in accordance with the rules and regulations of the SEC, using prices and costs employed in the determination of proved reserves and a 10 percent discount rate.

 
 

 

 
  
 
 ●

 
 
 “U.S.” means United States.

 
 

 

 
  
 
 ●

 
 
 With respect to information on the working interest in wells, drilling locations and acreage, “net” wells, drilling locations and acres are determined by multiplying “gross” wells, drilling locations and acres by the Company’s working interest in such wells, drilling locations or acres. Unless otherwise specified, wells, drilling locations and acreage statistics quoted herein represent gross wells, drilling locations or acres.

 
 

 

 
  
 
 ●

 
 
 “WASP” means weighted average sales price.

 
 

 

 
  
 
 ●

 
 
 All currency amounts are expressed in U.S. dollars.

 
 

 

 

 

 

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS 

 

This information in this Quarterly Report on Form 10-Q (this “Report”) contains forward-looking statements that involve risks and uncertainties. When used in this document, the words “believes,” “plans,” “expects,” “anticipates,” “forecasts,” “models,” “intends,” “continue,” “may,” “will,” “could,” “should,” “future,” “potential,” “estimate,” or the negative of such terms and similar expressions as they relate to the Company are intended to identify forward-looking statements, which are generally not historical in nature. The forward-looking statements are based on PrimeEnergy Resources Corporation “The Company” current expectations, assumptions, estimates and projections about the Company and the industry in which the Company operates. Although the Company believes that the expectations and assumptions reflected in the forward-looking statements are reasonable as and when made, they involve risks and uncertainties that are difficult to predict and, in many cases, beyond the Company’s control. In addition, the Company may be subject to currently unforeseen risks that may have a material adverse effect on it. 

 

These risks and uncertainties include, among other things, volatility of commodity prices; product supply and demand; the impact of armed conflict (including the conflicts in Ukraine and the Middle East) or political instability on economic activity and oil and gas supply and demand; competition; the ability to obtain drilling, environmental and other permits and the timing thereof; the effect of future regulatory or legislative actions on The Company or the industry in which it operates, including potential changes to tax rates or laws, new restrictions on development activities or potential changes in regulations limiting produced water disposal; the ability to obtain approvals from third parties and negotiate agreements with third parties on mutually acceptable terms; potential liability resulting from pending or future litigation; the costs, including the potential impact of cost increases due to inflation and supply chain disruptions, and results of development and operating activities; the impact of a widespread outbreak of an illness on global and U.S. economic activity, oil and gas demand, and global and U.S. supply chains; availability of equipment, services, resources and personnel required to perform the Company’s development and operating activities; access to and availability of transportation, processing, fractionation, refining, storage and export facilities; The Company’s ability to replace reserves, implement its business plans or complete its development activities as scheduled; the Company’s ability to achieve its emissions reductions, flaring and other ESG goals; access to and cost of capital; the financial strength of (i) counterparties to The Company’s credit facility and derivative contracts, (ii) issuers of The Company’s investment securities and (iii) purchasers of The Company’s oil, NGL and gas production and downstream sales of purchased commodities; uncertainties about estimates of reserves, identification of drilling locations and the ability to add proved reserves in the future; the assumptions underlying forecasts, including forecasts of production, operating cash flow, well costs, capital expenditures, rates of return, expenses, and cash flow from downstream purchases and sales of oil and gas, net of firm transportation commitments; quality of technical data; environmental and weather risks, including the possible impacts of climate change on the Company’s operations and demand for its products; cybersecurity risks; the risks associated with the ownership and operation of the Company’s well services business and acts of war or terrorism. In addition, the Company may be subject to currently unforeseen risks that may have a materially adverse effect on it. 

 

Accordingly, no assurances can be given that the actual events and results will not be materially different than the anticipated results described in the forward-looking statements. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date hereof. The Company undertakes no duty to publicly update these statements except as required by law. 

 

 

 

 

 

PART I—FINANCIAL INFORMATION 

 

 

Item 1.         FINANCIAL STATEMENTS 

 

PRIMEENERGY RESOURCES CORPORATION 

CONDENSED CONSOLIDATED BALANCE SHEETS

(Thousands of dollars, except share data)

 

 
  
  
 
 March 31,

 2026

 
  
  
 
 December 31,

 2025

 
  
 

 
  
  
 (Unaudited)
  
  
  
  
 

 
 
 ASSETS

 
  
  
  
  
  
  
  
  
 

 
 
 Current Assets

 
  
  
  
  
  
  
  
  
 

 
 
 Cash and cash equivalents

 
  
 $
 19,373
  
  
 $
 7,425
  
 

 
 
 Accounts receivable, net of an allowance for credit losses of $558

 
  
  
 20,584
  
  
  
 19,412
  
 

 
 
 Prepaid obligations

 
  
  
 928
  
  
  
 865
  
 

 
 
 Other current assets

 
  
  
 5
  
  
  
 5
  
 

 
 
 Total Current Assets

 
  
  
 40,890
  
  
  
 27,707
  
 

 
 
 Property and Equipment

 
  
  
  
  
  
  
  
  
 

 
 
 Oil and gas properties, at cost

 
  
  
 847,837
  
  
  
 846,559
  
 

 
 
 Less: Accumulated depletion and depreciation

 
  
  
 (569,379
 
 )

 
  
  
 (552,756
 
 )

 
 

 
  
  
  
 278,458
  
  
  
 293,803
  
 

 
 
 Field and office equipment, at cost

 
  
  
 13,207
  
  
  
 13,073
  
 

 
 
 Less: Accumulated depreciation

 
  
  
 (11,426
 
 )

 
  
  
 (11,433
 
 )

 
 

 
  
  
  
 1,781
  
  
  
 1,640
  
 

 
 
 Total Property and Equipment, Net

 
  
  
 280,239
  
  
  
 295,443
  
 

 
 
 Other Assets

 
  
  
 1,166
  
  
  
 745
  
 

 
 
 Total Assets

 
  
 $
 322,295
  
  
 $
 323,895
  
 

 
  
  
  
  
  
  
  
  
  
 

 
 
 LIABILITIES AND EQUITY

 
  
  
  
  
  
  
  
  
 

 
 
 Current Liabilities

 
  
  
  
  
  
  
  
  
 

 
 
 Accounts payable

 
  
 $
 7,557
  
  
 $
 10,979
  
 

 
 
 Accrued liabilities

 
  
  
 26,737
  
  
  
 26,169
  
 

 
 
 Due to related parties

 
  
  
 22
  
  
  
 17
  
 

 
 
 Current portion of other long-term obligations

 
  
  
 721
  
  
  
 260
  
 

 
 
 Asset retirement obligations

 
  
  
 1,681
  
  
  
 —
  
 

 
 
 Derivative liability 

 
  
  
 1,936
  
  
  
 —
  
 

 
 
 Total Current Liabilities

 
  
  
 38,654
  
  
  
 37,425
  
 

 
  
  
  
  
  
  
  
  
  
 

 
 
 Asset Retirement Obligations, net of current portion

 
  
  
 12,921
  
  
  
 14,337
  
 

 
 
 Deferred Income Taxes

 
  
  
 52,372
  
  
  
 55,468
  
 

 
 
 Other Long-Term Obligations, net of current portion

 
  
  
 946
  
  
  
 980
  
 

 
 
 Total Liabilities

 
  
  
 104,893
  
  
  
 108,210
  
 

 
 
 Commitments and Contingencies

 
  
  
 
 
 
  
  
  
 
 
 
  
 

 
 
 Equity

 
  
  
  
  
  
  
  
  
 

 
 
 Common stock, $.10 par value; 2026 and 2025: Authorized and issued: 2,810,000 shares, outstanding 2026: 1,618,000; outstanding 2025: 1,632,500 shares

 
  
  
 281
  
  
  
 281
  
 

 
 
 Paid-in capital

 
  
  
 7,555
  
  
  
 7,555
  
 

 
 
 Retained earnings

 
  
  
 291,724
  
  
  
 287,385
  
 

 
 
 Treasury stock, at cost; 2026: 1,192,000 shares; 2025: 1,177,500

 
  
  
 (82,158
 
 )

 
  
  
 (79,536
 
 )

 
 

 
 
 Total Equity

 
  
  
 217,402
  
  
  
 215,685
  
 

 
 
 Total Liabilities and Equity

 
  
 $
 322,295
  
  
 $
 323,895
  
 

 

The accompanying Notes are an integral part of these Consolidated Financial Statements

 

1

 

 

 

PRIMEENERGY RESOURCES CORPORATION 

CONDENSED CONSOLIDATED STATEMENTS OF INCOME – Unaudited 

Three Months Ended March 31, 2026 and 2025

(Thousands of dollars, except per share amounts)

 

 
  
  
 
 2026

 
  
  
 
 2025

 
  
 

 
 
 Revenues and other income:

 
  
  
  
  
  
  
  
  
 

 
 
 Oil

 
  
 $
 35,371
  
  
 $
 32,666
  
 

 
 
 Natural gas

 
  
  
 (1,022
 )
  
  
 6,029
  
 

 
 
 Natural gas liquids

 
  
  
 5,178
  
  
  
 8,529
  
 

 
 
 Field service

 
  
  
 1,786
  
  
  
 2,145
  
 

 
 
 Interest and other income, net

 
  
  
 11
  
  
  
 68
  
 

 
 
 Unrealized (loss) on derivative instruments

 
  
  
 (1,936
 )
  
  
 —
  
 

 
 
 Gain on disposition of assets, net

 
  
  
 16
  
  
  
 619
  
 

 
  
  
  
 39,404
  
  
  
 50,056
  
 

 
 
 Costs and expenses:

 
  
  
  
  
  
  
  
  
 

 
 
 Oil and gas production

 
  
  
 9,714
  
  
  
 9,519
  
 

 
 
 Production and advalorem taxes

 
  
  
 3,195
  
  
  
 3,271
  
 

 
 
 Field service

 
  
  
 1,181
  
  
  
 1,859
  
 

 
 
 Depreciation, depletion and amortization

 
  
  
 16,709
  
  
  
 20,358
  
 

 
 
 Accretion of discount on asset retirement obligations

 
  
  
 265
  
  
  
 183
  
 

 
 
 General and administrative

 
  
  
 2,839
  
  
  
 2,903
  
 

 
 
 Interest

 
  
  
 270
  
  
  
 590
  
 

 
  
  
  
 34,173
  
  
  
 38,683
  
 

 
 
 Income before income taxes

 
  
  
 5,231
  
  
  
 11,373
  
 

 
 
 Income tax provision

 
  
  
 892
  
  
  
 2,239
  
 

 
 
 Net income attributable to common stockholders

 
  
 $
 4,339
  
  
 $
 9,134
  
 

 
 
 Net Income per share attributable to Common Stockholders:

 
  
  
  
  
  
  
  
  
 

 
 
 Basic

 
  
 $
 2.67
  
  
 $
 5.40
  
 

 
 
 Diluted

 
  
 $
 1.82
  
  
 $
 3.72
  
 

 
 
 Weighted average shares Outstanding:

 
  
  
  
  
  
  
  
  
 

 
 
 Basic

 
  
  
 1,624,650
  
  
  
 1,692,445
  
 

 
 
 Diluted

 
  
  
 2,387,911
  
  
  
 2,456,003
  
 

 

The accompanying Notes are an integral part of these Consolidated Financial Statements

 

2

 

 

 

PRIMEENERGY RESOURCES CORPORATION 

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY – Unaudited 

Three Months Ended March 31, 2026 and 2025

(Thousands of dollars, except share amounts)

 

 
  
  
 
 Shares

 Outstanding 

 
  
  
 
 Common

 Stock 

 
  
  
 
 Additional

 Paid-In

 Capital 

 
  
  
 
 Retained

 Earnings 

 
  
  
 
 Treasury

 Stock 

 
  
  
 
 Total

 Equity 

 
  
 

 
 
 Balance at December 31, 2024

 
  
  
 1,708,470
  
  
 $
 281
  
  
 $
 7,555
  
  
 $
 261,073
  
  
 $
 (65,984
 
 )

 
  
 $
 202,925
  
 

 
 
 Purchase of treasury stock

 
  
  
 (36,000
 
 )

 
  
  
 —
  
  
  
 —
  
  
  
 —
  
  
  
 (7,095
 
 )

 
  
  
 (7,095
 
 )

 
 

 
 
 Net Income

 
  
  
 —
  
  
  
 —
  
  
  
 —
  
  
  
 9,134
  
  
  
 —
  
  
  
 9,134
  
 

 
 
 Balance at March 31, 2025

 
  
  
 1,672,470
  
  
 $
 281
  
  
 $
 7,555
  
  
 $
 270,207
  
  
 $
 (73,079
 )
  
 $
 204,964
  
 

 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
 

 
 
 Balance at December 31, 2025

 
  
  
 1,708,470
  
  
 $
 281
  
  
 $
 7,555
  
  
 $
 287,385
  
  
 $
 (79,536
 )
  
 $
 215,685
  
 

 
 
 Purchase of treasury stock

 
  
  
 (14,500
 )
  
  
 —
  
  
  
 —
  
  
  
 —
  
  
  
 (2,622
 )
  
  
 (2,622
 )
 

 
 
 Net Income

 
  
  
 —
  
  
  
 —
  
  
  
 —
  
  
  
 4,339
  
  
  
 —
  
  
  
 4,339
  
 

 
 
 Balance at March 31, 2026

 
  
  
 1,693,970
  
  
 $
 281
  
  
 $
 7,555
  
  
 $
 291,724
  
  
 $
 (82,158
 
 )

 
  
 $
 217,402
  
 

 

The accompanying Notes are an integral part of these Consolidated Financial Statements

 

3

 

 

 

PRIMEENERGY RESOURCES CORPORATION 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS – Unaudited 

Three Months Ended March 31, 2026 and 2025

(Thousands of dollars)

 

 
  
  
 
 2026 

 
  
  
 
 2025 

 
  
 

 
 
 Cash Flows from Operating Activities:

 
  
  
  
  
  
  
  
  
 

 
 
 Net Income

 
  
 $
 4,339
  
  
 $
 9,134
  
 

 
 
 Adjustments to reconcile net income to net cash provided by operating activities:

 
  
  
  
  
  
  
  
  
 

 
 
 Depreciation, depletion, amortization

 
  
  
 16,709
  
  
  
 20,358
  
 

 
 
 Accretion of discount on asset retirement obligations

 
  
  
 265
  
  
  
 183
  
 

 
 
 Gain on sale and exchange of assets

 
  
  
 (16
 
 )

 
  
  
 (619
 
 )

 
 

 
 
 Unrealized loss on derivative instruments

 
  
  
 1,936
  
  
  
 —
  
 

 
 
 Provision for deferred income taxes

 
  
  
 (3,096
 )
  
  
 1,999
  
 

 
 
 Changes in assets and liabilities:

 
  
  
  
  
  
  
  
  
 

 
 
 Accounts receivable

 
  
  
 (1,172
 )
  
  
 (93
 )
 

 
 Prepaids assets
  
  
 (63
 )
  
  
 (40
 )
 

 
 
 Other current assets

 
  
  
 —
  
  
  
 (3
 )
 

 
 
 Other assets

 
  
  
 (422
 )
  
  
 (842
 )
 

 
 
 Accounts payable

 
  
  
 (3,422
 )
  
  
 (1,943
 )
 

 
 
 Accrued liabilities

 
  
  
 568
  
  
  
 9,170
  
 

 
 
 Due to related parties

 
  
  
 5
  
  
  
 35
  
 

 
 
 Other liabilities

 
  
  
 426
  
  
  
 847
  
 

 
 
 Net Cash Provided by Operating Activities

 
  
  
 16,057
  
  
  
 38,186
  
 

 
 
 Cash Flows from Investing Activities:

 
  
  
  
  
  
  
  
  
 

 
 
 Property expenditures

 
  
  
 (1,503
 
 )

 
  
  
 (34,660
 
 )

 
 

 
 
 Proceeds from sale of properties and equipment

 
  
  
 16
  
  
  
 619
  
 

 
 
 Net Cash Used in Investing Activities

 
  
  
 (1,487
 )
  
  
 (34,041
 )
 

 
 
 Cash Flows from Financing Activities:

 
  
  
  
  
  
  
  
  
 

 
 
 Purchase of stock for treasury

 
  
  
 (2,622
 
 )

 
  
  
 (7,095
 
 )

 
 

 
 
 Proceeds from long-term bank debt

 
  
  
 —
  
  
  
 24,000
  
 

 
 
 Repayment of long-term bank debt and other long-term obligations

 
  
  
 —
  
  
  
 (21,500
 )
 

 
 
 Net Cash Used in Provided by Financing Activities

 
  
  
 (2,622
 
 )

 
  
  
 (4,595
 
 )

 
 

 
 
 Net increase (decrease) in Cash and Cash Equivalents

 
  
  
 11,948
  
  
  
 (450
 )
 

 
 
 Cash and Cash Equivalents at the Beginning of the Period

 
  
  
 7,425
  
  
  
 2,549
  
 

 
 
 Cash and Cash Equivalents at the End of the Period

 
  
 $
 19,373
  
  
 $
 2,099
  
 

 
 
 Supplemental Disclosures:

 
  
  
  
  
  
  
  
  
 

 
 
 Income taxes paid during the period

 
  
 $
 —
  
  
 $
 —
  
 

 
 
 Interest paid

 
  
 $
 359
  
  
 $
 768
  
 

 
  
  
  
  
  
  
  
  
  
 

 
 
 Non-Cash Investing Transactions

 
  
  
  
  
  
  
  
  
 

 
 
 Increase (Decrease) in accrued capital expenditures for oil and natural gas properties

 
  
 $
 (327
 )
  
 $
 5
  
 

 

The accompanying Notes are an integral part of these Consolidated Financial Statements

 

4

 

 

PRIMEENERGY RESOURCES CORPORATION 

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 

March 31, 2026

 

 

 

(1) Basis of Presentation: 

 

The accompanying condensed consolidated financial statements of PrimeEnergy Resources Corporation (“PrimeEnergy” or the “Company”) have not been audited by independent public accountants. Pursuant to applicable Securities and Exchange Commission (“SEC”) rules and regulations, the accompanying interim financial statements do not include all disclosures presented in annual financial statements and the reader should refer to the Company’s Form 10-K for the year ended December 31, 2025. In the opinion of management, the accompanying interim consolidated financial statements contain all material adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the Company’s consolidated balance sheets as of March 31, 2026, and December 31, 2025, the consolidated results of operations, cash flows and equity for the three months ended March 31, 2026, and 2025.

 

As of March 31, 2026, PrimeEnergy’s significant accounting policies are consistent with those discussed in Note 1—Description of Operations and Significant Accounting Policies of its consolidated financial statements contained in PrimeEnergy’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025. The results for interim periods are not necessarily indicative of annual results. For purposes of disclosure in the consolidated financial statements, subsequent events have been evaluated through the date the statements were issued.

 

 

(2) Acquisitions and Dispositions 

 

In the first quarter of 2025, the Company recognized a gain of $619,000 on the disposition of a workover rig related to our service company.

 

In the first quarter of 2026, the Company had no significant acquisitions or dispositions.

 

 

(3) Additional Balance Sheet Information: 

 

Certain balance sheet amounts are comprised of the following:  

 

 
 
 (Thousands of dollars)

 
  
 
 March 31,

 2026 

 
  
  
 
 December 31,

 2025 

 
  
 

 
 
 Accounts Receivable:

 
  
  
  
  
  
  
  
  
 

 
 
 Joint interest billing

 
  
 $
 1,353
  
  
 $
 1,576
  
 

 
 
 Trade receivables

 
  
  
 908
  
  
  
 693
  
 

 
 
 Oil and gas sales

 
  
  
 18,854
  
  
  
 17,595
  
 

 
 
 Other

 
  
  
 27
  
  
  
 106
  
 

 
 
 Less: Allowance for credit losses

 
  
  
 (558
 )
  
  
 (558
 )
 

 
 
 Total

 
  
 $
 20,584
  
  
 $
 19,412
  
 

 
 
 Accounts Payable:

 
  
  
  
  
  
  
  
  
 

 
 
 Trade

 
  
 $
 3,115
  
  
 $
 6,531
  
 

 
 
 Royalty and other owners

 
  
  
 4,099
  
  
  
 4,113
  
 

 
 
 Partner advances

 
  
  
 311
  
  
  
 311
  
 

 
 
 Other

 
  
  
 32
  
  
  
 24
  
 

 
 
 Total

 
  
 $
 7,557
  
  
 $
 10,979
  
 

 
 
 Accrued Liabilities:

 
  
  
  
  
  
  
  
  
 

 
 
 Compensation and related expenses

 
  
 $
 4,826
  
  
 $
 10,708
  
 

 
 
 Property costs

 
  
  
 6,525
  
  
  
 6,852
  
 

 
 
 Taxes

 
  
  
 9,792
  
  
  
 4,564
  
 

 
 
 Lease operating costs

 
  
  
 5,112
  
  
  
 3,492
  
 

 
 
 Other

 
  
  
 482
  
  
  
 553
  
 

 
 
 Total

 
  
 $
 26,737
  
  
 $
 26,169
  
 

 

5

 

  

 

(4) Long-Term Debt: 

 

Bank Debt: 

 

On July 5, 2022, the Company and its lenders entered into a Fourth Amended and Restated Credit Agreement (the “2022 Credit Agreement”) with a maturity date of June 1, 2026. Under the 2022 Credit Agreement, the Company has a revolving line of credit and letter of credit facility of up to $300 million subject to a borrowing base that is determined semi-annually by lenders based upon the Company’s consolidated financial statements and the estimated value of the Company’s oil and gas properties, in accordance with the Lenders’ customary practices for oil and gas loans. The initial borrowing base of the agreement is $75 million. The credit facility is secured by substantially all of the Company’s oil and gas properties. The 2022 Credit Agreement includes terms and covenants that require the Company to maintain a minimum current ratio and total indebtedness to EBITDAX (earnings before depreciation, depletion, amortization, taxes, interest expense and exploration costs) ratio, as defined, and restrictions are placed on the payment of dividends, the amount of treasury stock the Company may purchase, and commodity hedge agreements. 

 

Through a series of amendments since origination the borrowing base determination was adjusted to be $115 million during June 2025. The prime rate in effect for December 2025, was 6.75%.  Any borrowings the Company entered into would be subject to effective rates that are equal to the current prime rate plus a utilization percentage as required by the 2022 Credit Agreement. As of December 31, 2025, the Company had no outstanding borrowings and $115 million in availability under the credit facility.

 

Effective February 24, 2026, the Company and its lenders entered into a Fifth Amendment to the 2022 Credit Agreement. All parties agreed to the reaffirmation of the borrowing base of $115 million and the agreed amount will remain in effect until the next schedule redetermination or the date the borrowing base is next adjusted in accordance with the credit agreement. The agreement also lowers the borrowing base utilization percentages and any term adjustment rates applied to SOFR or ABR loans as applicable. 

 

The prime rate in effect through March 2026, remained at 6.75%. Any borrowings the Company entered into would be subject to effective rates that are equal to the current prime rate plus a utilization percentage as required by the 2022 Credit Agreement and subsequent amendments. As of March 31, 2026, the Company had no outstanding borrowings and $115 million in availability under the credit facility. Currently, through the date of this reported filing, the Company has no outstanding borrowings and no changes in the amount available for the Company’s under the credit facility.

 

 

(5) Other Long-Term Obligations and Commitments: 

 

Operating Leases: 

 

The Company leases office facilities under operating leases and recognizes lease expense on a straight-line basis over the lease term. Lease assets and liabilities are initially recorded at commencement date based on the present value of lease payments over the lease term. As most of the Company’s lease contracts do not provide an implicit discount rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The weighted average discount rate used was 9.17%. Certain leases may contain variable costs above the minimum required payments and are not included in the right-of-use assets or liabilities. Leases may include renewal, purchase or termination options that can extend or shorten the term of the lease. The exercise of those options is at the Company’s sole discretion and is evaluated at inception and throughout the contract to determine if a modification of the lease term is required. Leases with an initial term of 12 months or less are not recorded on the balance sheet.

 

6

 

 

On February 10, 2026, the Company entered into a twelve-month lease extension agreement, effective March 1, 2026, with the landlord of the Company’s Houston office.

 

The payment schedule for the Company’s operating lease obligations as of March 31, 2026 is as follows:

 

 
 
 (Thousands of dollars)

 
  
 
 Operating

 Leases

 
  
 

 
 
 2026 (remaining)

 
  
 $
 622
  
 

 
 
 2027

 
  
  
 235
  
 

 
 
 2028

 
  
  
 27
  
 

 
 
 Total undiscounted lease payments

 
  
  
 884
  
 

 
 
 Less: Amount associated with discounting

 
  
  
 (78
 )
 

 
 
 Total net operating lease liabilities

 
  
  
 806
  
 

 
 
 Less: Current portion of other long-term obligations

 
  
  
 721
  
 

 
 
 Non-current portion included in Other long-term obligations

 
  
 $
 85
  
 

 

Asset Retirement Obligation: 

 

A reconciliation of the liability for plugging and abandonment costs for the three months ended March 31, 2026 is as follows:

 

 
 
 (Thousands of dollars)

 
  
 
 March 31,

 2026

 
  
 

 
 
 Asset retirement obligations at December 31, 2025

 
  
 $
 14,337
  
 

 
 
 Net wells placed in production

 
  
  
 -
  
 

 
 
 Liabilities settled

 
  
  
 -
  
 

 
 
 Accretion of discount

 
  
  
 265
  
 

 
 
 Asset retirement obligations at March 31, 2026

 
  
 $
 14,602
  
 

 
 
 Less current portion of asset retirement obligations

 
  
  
 1,681
  
 

 
 
 Asset retirement obligations, long-term

 
  
 $
 12,921
  
 

 

The Company’s liability is determined using significant assumptions, including current estimates of plugging and abandonment costs, annual inflation of these costs, the productive life of wells and a risk-adjusted interest rate. Changes in any of these assumptions can result in significant revisions to the estimated asset retirement obligation. Revisions to the asset retirement obligation are recorded with an offsetting change to producing properties, resulting in prospective changes to depreciation, depletion and amortization expense and accretion of discount. Because of the subjectivity of assumptions and the relatively long life of most of the Company’s wells, the costs to ultimately retire the wells may vary significantly from previous estimates.

 

 

(6) Contingent Liabilities: 

 

The Company is subject to environmental laws and regulations. Management believes that future expenses, before recoveries from third parties, if any, will not have a material effect on the Company’s financial condition. This opinion is based on expenses incurred to date for remediation and compliance with laws and regulations, which have not been material to the Company’s results of operations.

 

From time to time, the Company is party to certain legal actions arising in the ordinary course of business. While the outcome of these events cannot be predicted with certainty, management does not expect these matters to have a materially adverse effect on the financial position or results of operations of the Company.

 

 

(7) Stock Options and Other Compensation: 

 

In May 1989, non-statutory stock options were granted by the Company to four key executive officers for the purchase of shares of common stock. At March 31, 2026 and 2025, remaining options held by two key executive officers on 767,500 shares were outstanding and exercisable at prices ranging from $1.00 to $1.25. According to their terms, the options have no expiration date. 

 

7

 

  

 

(8) Related Party Transactions: 

 

Amounts due to or from related parties primarily represent receipts or expenses, related to oil and gas properties, collected or paid by the Company as agent for the joint venture partners, which may include members of the Company’s Board of Directors. Amounts due to related parties were $22 thousand and $17 thousand at March 31, 2026 and December 31, 2025, respectively.

 

 

(9) Fair Value Disclosures:

 

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The Company separates the fair value of its financial instruments using a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy assigns the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). Level 2 measurements are inputs that are observable for assets or liabilities, either directly or indirectly, other than quoted prices included within Level 1. The Company utilizes market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable. The Company classifies fair value balances based on the observability of those inputs.

 

A financial instrument’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of fair value assets and liabilities and their placements within the fair value hierarchy levels. There were no derivative contracts at December 31, 2025. The following table provides fair value measurement information for the commodity derivatives measured at fair value on a recurring basis as of March 31, 2026 (in thousands):

 

 
  
  
 
 March 31, 2026

 
  
 

 
  
  
 
 Level 1

 
  
  
 
 Level 2

 
  
  
 
 Level 3

 
  
  
 
 Total

 
  
 

 
 
 Assets

 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
 

 
 
 Assets from derivative contracts

 
  
 $
 -
  
  
 $
 -
  
  
 $
 -
  
  
 $
 -
  
 

 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
 

 
 
 Liabilities

 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
 

 
 
 Liabilities from derivative contracts

 
  
 $
 -
  
  
 $
 (1,936
 )
  
 $
 -
  
  
 $
 (1,936
 )
 

 

Derivative contracts classified as Level 2 include fixed-price swaps that are recorded at fair value. The Level 2 observable data include, but are not limited to, the contractual price of the underlying position, current market prices, and crude oil forward curves. There were no transfers between fair value hierarchy levels for any period presented. See Note 10, “Derivative Instruments,” for additional discussion of derivatives.

 

The Company’s derivative contracts are with major financial institutions with investment grade credit ratings which are believed to have minimal credit risk. As such, the Company is exposed to credit risk to the extent of nonperformance by the counterparties in the derivative contracts; however, the Company does not anticipate such nonperformance.

 

 

10. Derivative Instruments

 

The Company is exposed to commodity price risks relating to its ongoing business operations. From time to time, the Company will manage commodity price risks by entering into certain derivative financial instruments. Derivative instruments are carried at fair value on the unaudited condensed consolidated balance sheets as assets or liabilities, with the changes in the fair value included in the unaudited condensed consolidated statements of income for the period in which the change occurs. With respect to the Company’s derivative assets and liabilities measured at fair value, refer to Note 9, “Fair Value Disclosures,” for discussion of their classification within the fair value hierarchy. The Company has elected not to designate any of its derivative contracts for hedge accounting. Accordingly, the Company records the net change in the mark-to-market valuation of these derivative contracts, as well as all payments and receipts on settled derivative contracts, in “unrealized (loss) on derivative instruments” on the unaudited condensed consolidated statements of income.

 

As of March 31, 2026, the Company’s derivative financial instruments consisted of fixed price swaps indexed to West Texas Intermediate (“WTI”) crude oil, whereby the Company receives or makes payments based on a differential between fixed and variable prices for the volumes under contract. The derivative agreements do not contain credit-risk-related contingent features. There are no amounts of related financial collateral received or pledged. The Company does not use any of its derivative instruments for speculative or trading purposes.

 

8

 

 

The following table summarizes the location and fair value amounts of all commodity derivative contracts in the unaudited condensed consolidated balance sheets as of March 31, 2026, and December 31, 2025 (in thousands):

 

 
 
 Balance sheet location

 
  
 
 March 31, 2026

 
  
  
 
 December 31, 2025

 
  
 

 
 
 Current assets

 
  
 $
 -
  
  
 $
 -
  
 

 
 
 Noncurrent assets

 
  
  
 -
  
  
  
 -
  
 

 
 
 Total assets

 
  
 $
 -
  
  
 $
 -
  
 

 
  
  
  
  
  
  
  
  
  
 

 
 
 Current liabilities

 
  
 $
 (1,936
 )
  
 $
 -
  
 

 
 
 Noncurrent liabilities

 
  
  
 -
  
  
  
 -
  
 

 
 
 Total liabilities

 
  
 $
 (1,936
 )
  
 $
 -
  
 

 

The following table summarizes the location and amounts of the Company’s realized and unrealized gains and losses on derivative contracts in the Company’s unaudited condensed consolidated statements of income (in thousands):

 

 
  
  
 
 Location of gain (loss) on 

 derivative contracts on Statement 

 
  
 
 Three Months Ended March 31,

 
  
 

 
 
 Type

 
  
  of Income
  
 
 2026

 
  
  
 
 2025

 
  
 

 
 
 Commodity contracts:

 
  
  
  
  
  
  
  
  
  
  
 

 
 
  

 
 Unrealized (loss) on derivative instruments
  
 $
 (1,936
 )
  
 $
 -
  
 

 
 
 Total net gain (loss)

 
  
 $
 (1,936
 )
  
 $
 -
  
 

 

As of March 31, 2026, the Company had the following open crude oil derivative contracts:

 
  
  
 
 2026

 
  
 

 
 
 NYMEX WTI Crude Swaps:

 
  
  
  
  
 

 
 
 Total volumes (Bbls)

 
  
  
 518,000
  
 

 
 
 Weighted average price

 
  
 $
 74.92
  
 

 

As of March 31, 2026, the Company is party to derivative contracts with one counterparty. The Company believes the counterparty is of acceptable credit risk, and the creditworthiness of the counterparty is subject to periodic review. The assets and liabilities are netted given that all positions are held by a single counterparty and subject to a master netting arrangement. The combined fair value of derivatives included in the unaudited condensed consolidated balance sheets as of March 31, 2026, and December 31, 2025, is summarized below (in thousands):

 

 
  
  
 Assets from Derivative Contracts
  
  
 Liabilities from Derivative

 Contracts
  
 

 
 
 Offsetting of Derivative Assets and 

 Liabilities

 
  
 
 March 31, 

 2026

 
  
  
 
 December 31, 

 2025

 
  
  
 
 March 31, 

 2026

 
  
  
 
 December 31, 

 2025

 
  
 

 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
 

 
 
 Gross amounts of recognized assets and liabilities

 
  
 $
 2,557
  
  
 $
 -
  
  
 $
 (4,493
 )
  
 $
 -
  
 

 
 
 Gross amounts offset in the balance sheet

 
  
  
 (2,557
 )
  
  
 -
  
  
  
 2,557
  
  
  
 -
  
 

 
 
 Net amounts of assets and liabilities presented in the balance sheet

 
  
 $
 -
  
  
 $
 -
  
  
 $
 (1,936
 )
  
 $
 -