New York, May 21, 2026, 16:01 EDT
- PrimeEnergy shares were last quoted down 1.2% after the company reported lower first-quarter profit.
- The pressure came from Permian Basin natural gas prices that fell below zero, meaning sellers effectively paid to move gas.
- President Charles E. Drimal, Jr. warned the pricing strain “may continue throughout 2026.”
PrimeEnergy Resources Corporation shares fell on Thursday after the small U.S. oil-and-gas producer reported that first-quarter profit roughly halved, even as it said its balance sheet stayed debt-free and cash flow held up.
The Nasdaq-listed stock was last quoted at $243.06, down 1.2%, after trading between $239.00 and $252.97. The move came on a weak day for energy shares: the SPDR S&P Oil & Gas Exploration & Production ETF, a basket of exploration-and-production stocks, fell 2.2%, while W&T Offshore dropped 1.9%.
The report matters now because PrimeEnergy put fresh numbers around a problem that has hit producers in the Permian Basin: too much gas and not enough pipeline room. When natural gas prices turn negative, producers may pay buyers or pipeline users to take gas away so oil wells can keep running.
PrimeEnergy said net income attributable to common stockholders fell to $4.3 million, or $2.67 per basic share, from $9.1 million, or $5.40 per basic share, a year earlier. The company said it still generated about $24 million in cash flow available for development and other corporate uses, kept zero debt and retained access to a $115 million revolving credit facility, a bank line that can be drawn when needed.
The weak spot was gas. In its quarterly filing, PrimeEnergy reported oil revenue of $35.4 million, up from $32.7 million a year earlier, but natural gas revenue swung to a negative $1.0 million from a positive $6.0 million. Natural gas liquids — heavier products such as propane and butane separated from gas — fell to $5.2 million from $8.5 million.
PrimeEnergy sold 2.566 million Mcf of gas in the quarter at an average price of negative 40 cents per Mcf. Mcf means 1,000 cubic feet, a standard gas-volume measure. The company’s oil production rose 8.1% to 494,000 barrels, and its average oil price edged up to $71.60 a barrel.
Charles E. Drimal, Jr., PrimeEnergy’s president, blamed a “lack of pipeline capacity” in the Permian Basin and said the pressure “could become more severe” until new capacity enters service. He also said PrimeEnergy’s shares traded at a “substantial discount” to its asset value, pointing to buybacks in the quarter.
The company bought back 14,500 shares in the first quarter at an average price of $180.81 each. It has repurchased about 3.93 million shares since the start of the program, for about $119.6 million.
PrimeEnergy said Apache Corporation told it that drilling on a Permian project in which PrimeEnergy participates is expected to start in June. PrimeEnergy expects to invest about $52 million in that project this year, while continuing work in West Texas and Oklahoma.
The broader issue is not just PrimeEnergy’s. Reuters reported earlier this month that Waha, a West Texas gas hub watched by Permian producers, had averaged negative $2.17 per mmBtu so far in 2026, versus positive prices in 2025. A mmBtu is a heat-content measure used in gas pricing.
But the risk is that oil strength does not offset gas weakness for long. PrimeEnergy said commodity-price swings, pipeline constraints, drilling costs and access to transport can all affect cash flow; a drop in oil prices, more negative gas pricing or slower drilling returns would make the company’s buyback and development plans harder to fund from cash alone.
