PrimeEnergy Resources is a tightly held Midland Basin non-operator whose second-quarter profit doubled even as the gas stream paid the company to take it. Charles Drimal's Houston shop is living off an oil price near one hundred a barrel while Permian takeaway constraints turn associated gas into a cash drain. The investment debate is whether the next pad program restores oil volumes before that gas penalty and a shrinking well count consume the cash that now funds buybacks.
Oil revenue rose even as barrels sold fell by nearly a third. Realized oil near ninety-nine a barrel more than offset the volume drop. Gas realizations went negative and opened a $9 million revenue hole. Cash climbed toward $29 million with the bank line undrawn. That is a fortress balance sheet sitting on a production base that is rolling off last year's Reagan and Midland pads.
Drilling has started on twenty-four horizontals in Martin and Upton counties, with first oil scheduled for the fourth quarter. The Apache Upton package is the real capital. Whether those wells replace the lost oil stream, and whether Waha gas stays negative, decides if this cash machine compounds or merely buys back a shrinking reserve base.