Presidio Production Company 2026 Q2 Earnings Call
Review the key takeaways and the transcript of this earnings call.
- Presidio Production Company reported second quarter 2026 net income attributable to Presidio of $14.4 million, or $0.34 per class A share, and adjusted EBITDA of $33.2 million, beating guidance by $3.2 million or roughly 11%.
- Average production was 22,755 barrels of oil equivalent per day with minimal capital expenditures of $600,000, reflecting a low reinvestment model.
- The company generated $15.7 million of free cash flow in the quarter, approximately $0.50 per share, against a quarterly dividend of $0.05 per share, with an annualized dividend of $1.35 per share representing about a 12% yield.
- Presidio closed the Canyon Creek acquisition on July 1st, entering the Arkoma Basin with 42 operated wells producing about 3,500 net BOE per day, establishing a new land and expand platform.
- Lease operating expenses improved to $9.39 per BOE from $9.47 in the prior quarter, and total operating expenses including taxes decreased to $11.22 per BOE from $11.68, driven by optimization, AI, and cost efficiencies.
- The company realized approximately $13 million of cash from leasehold monetization over the trailing 12 months through July.
- Presidio refinanced its asset-backed securitization (ABS) with a $350 million investment grade facility at a weighted average coupon of 6.38%, reducing cost of capital by 184 basis points and improving amortization structure to support dividends and acquisitions.
- The Canyon Creek acquisition was funded with a $55 million draw under the $1 billion ABS warehouse facility, which now includes Citizens Bank as a 40% participant alongside Goldman Sachs.
- Production uplift of approximately 2.3% was achieved through AI initiatives, including the Doug production surveillance agent contributing 1.4%, AI-enhanced weekend coverage increasing weekend production by 2.5%, and AI plunger box installations providing about 0.2% total company production lift.
- The wedge Workover program completed 25 of 69 identified jobs with returns exceeding 100% and a payout period compressed to 0.75 years from an original forecast of one year.
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Transcript
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Please note this conference is being recorded. I will now hand the call over to Mr. Connor Fair, Director of Investor Relations.
Please go ahead, sir. Good morning, and welcome to Presidio Production Company's second quarter 2026 earnings conference call.
I am Connor Fair, Director of Investor Relations, and joining me today are our Chairman and Co-CEO, Will Ulrich, Co-CEO and Director, Chris Cagnazzi, EVP and CFO, John Brawley, EVP and General Counsel, Brett Barnes, and Chief Technology Officer, Jason Hudak. As a reminder, today's call includes forward-looking statements. These statements are based on management's current expectations and assumptions and are subject to risks, uncertainties, and other factors, many of which are beyond the company's control, that could cause actual results to differ materially from those expressed or implied on this call. For a discussion of these risks, please refer to the cautionary language in yesterday's earnings release and the risk factors in our filings with the SEC, which are available on the investor relations section of our website.
We will also refer to certain non-GAAP financial measures. The most directly comparable GAAP measures, together with definitions and reconciliations, are included in yesterday's earnings release, which is available on the investor relations section of our website. With that, I will turn the call over to Will.
Thank you, Connor, and good morning, everyone. We all have mountains to climb, the ones set before us and the ones we choose to set for ourselves. Chris and I started this business with nothing more than a friendship and an idea that we could create massive value from investing in oil and gas without ever drilling a well, a direct challenge to 150-year-old industry philosophy. I thought often these past two weeks about the passing of Nims Purja, who died in an avalanche in Pakistan on July 30th. If you do not know his story, I would encourage you to watch the Netflix documentary, "14 Peaks: Nothing Is Impossible". Nims set out to do the impossible, to climb all 14 of the world's 8,000-meter peaks in six months, and he did it. He called it Project Possible. At Presidio, we also believe in the possible.
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