Check the appropriate box below if the Form 8-K
filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Indicate by check mark whether the registrant
is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the
Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
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.
On November 12, 2026, Presidio Production Company
(the “Company”) issued a press release announcing its financial results for the quarter ended September 30, 2026. A copy of
the Company’s press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
The information included herein and in Exhibit
99.1 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under
the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing.
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Exhibit 99.1
Presidio Production
Company Announces Third Quarter 2026 Results
Declares increased
3Q 2026 dividend of $0.375 per share ($1.50 per share per year)
FORT WORTH, Texas, November 12, 2026: Presidio Production
Company (NYSE: FTW) (“Presidio” or the “Company”) today announced recent highlights and results for the third
quarter ended September 30, 2026.
Recent Highlights
| ● | Declared increased 3Q 2026 dividend
of $0.375 per share ($1.50 per share per year) |
| | | |
| ● | Sold
$17.0 million of non-producing leasehold in Oklahoma year-to-date |
| | | |
| ● | 26.1
MBoe/d third quarter net production, an increase of 15% from the second quarter, 13% oil,
58% natural gas, and 29% NGLs |
| | | |
| ● | $29.1
million of Adjusted EBITDA and reported a net loss attributable to Presidio Production Company
of $46.4 million, (reflecting a $66.5 million non-cash, unrealized loss on commodity derivatives) |
| | | |
| ● | Established
dedicated AI product engineering team under Chief Technology Officer Jason Hudak and launched
The Gauntlet, the Company’s agentic software development platform |
| | | |
| ● | Asset
Intelligence programs added 3.2% to production in the third quarter |
Management Commentary
“Our third quarter results reflect
continued execution of our acquisition and optimization strategy,” said Will Ulrich, Chairman and Co-CEO. “Canyon Creek contributed
its first full quarter, and our continued focus on improving the performance of our existing assets has allowed us to increase our annualized
dividend to $1.50 per share. Each of these steps reinforces the acquisition model we are building to consolidate producing oil and gas
assets.”
Chris Hammack, Co-CEO and Director, added:
“When we closed Canyon Creek, we said the Arkoma Basin was a place to build scale through consolidation. In our first full quarter
operating the assets, we moved the wells onto our production systems, right-sized compression and changed chemical vendors, and Canyon
Creek helped lower our lease operating expense per Boe. In October, we added working interest in Arkoma properties where we already operate,
our first step in building around that position. Land-and-expand remains the strategy.”
Third Quarter 2026 Financial and
Operating Results
All financial metrics in this release
reflect the successor period for the three months ended September 30, 2026 and include the Canyon Creek acquisition, which closed in
July 2026. Comparisons are to the three months ended June 30, 2026 (Successor), which did not include Canyon Creek.
Third-quarter production averaged approximately
26.1 MBoe/d, or 2,404 MBoe for the quarter, up 15% from 22.8 MBoe/d in the second quarter, comprising approximately 13% oil, 58% natural
gas and 29% NGLs. Canyon Creek drove most of the increase.
Total revenue was $57.3 million, up 6%
from $54.0 million in the second quarter. The Company’s average realized price was $23.72 per Boe excluding derivatives and $25.49
per Boe including derivatives, reflecting a realized derivative gain of $1.77 per Boe.
Lease operating expense was $9.10 per
Boe, down from $9.39 per Boe in the second quarter, primarily reflecting the addition of Canyon Creek production. Production taxes were
$1.46 per Boe and ad valorem taxes were $0.53 per Boe, resulting in total operating expense of $11.09 per Boe.
Adjusted EBITDA was $29.1 million, in
line with the outlook provided in August.
The Company reported a net loss of $50.7
million, and a net loss attributable to Presidio Production Company of $46.4 million. The net loss primarily reflects a $66.5 million
non-cash, unrealized loss from marking the Company’s commodity derivatives to fair value at quarter-end, which did not represent
a cash outflow during the quarter and is
excluded from Adjusted EBITDA. The net loss was partially offset by a $13.8 million income tax benefit.
Capital expenditures remained minimal
at approximately $0.4 million during the quarter, consistent with the Company’s low-reinvestment model.
Quarterly Dividend
The Board approved a quarterly cash dividend
of $0.375 per share ($1.50 per share per year), an 11% increase from the second quarter.
The Q3 2026 cash dividend will be payable
on December 16, 2026 to stockholders of record as of December 2, 2026.
Future dividends, including the amount
and timing thereof, will be declared at the discretion of the Board of Directors and will depend on the Company’s financial condition,
results of operations, capital requirements, and other factors the Board deems relevant.
Acquisitions and Growth
The acquisition market remains active.
The Company remains focused on opportunities that meet its strategic and return criteria. Presidio’s $1.0 billion ABS Warehouse
Facility, led by Goldman Sachs with Citizens Bank, N.A. participating, funded Canyon Creek with an initial $55.0 million draw.
Presidio continues to sell undeveloped
acreage. During the third quarter, the Company sold leasehold and mineral interests in Oklahoma for $2.1 million, bringing year-to-date
proceeds to $9.9 million. Since quarter-end, the Company has sold an additional $7.1 million of leasehold and mineral interests in Oklahoma,
bringing year-to-date proceeds to $17.0 million.
The third quarter was the first full
quarter of production from the Canyon Creek assets in the Arkoma Basin, acquired in July 2026 from companies controlled by Vortus Investments
and additional sellers.
After quarter-end, the Company acquired
additional working interest in Arkoma Basin properties it already operates for approximately $4.3 million, funded with cash on hand.
The acquisition builds on the position established through Canyon Creek, consistent with the Company’s land-and-expand strategy.
AI and Asset Intelligence
Presidio uses AI to get more production
out of the wells it already owns and to help its employees work more efficiently. The Company plans to run all of its approximately 2,300
operated wells on the same technology platform and to add future acquisitions to this platform.
The Asset Intelligence Group is targeting
three to five percent production growth in 2026 across Presidio’s existing asset base. Its programs added approximately 3.2% to
production from the Company’s assets in the third quarter. These programs include:
| ● | Mainspring, the Company’s
AI-powered oil and gas operating system, which monitors well-level data, flags production
that falls outside expected patterns and sends recommendations to the responsible field engineer |
| | | |
| ● | AI-controlled
plunger lift on 25 wells, which adjusts each well’s plunger cycles based on its own
production data rather than a fixed timer |
| | | |
| ● | A
weekend coverage program that uses AI to tell smaller weekend crews which wells to visit
first |
The Company also used AI to find shut-in
wells that would be profitable to restart at lower water disposal rates and then negotiated those rates. The first of these wells came
back online in October, and the Company expects to bring back ten more by year-end. In October, Presidio also began using AI to review
each day’s workover jobs and flag the ones that need attention.
During the third quarter, Presidio built
out its product engineering team under Chief Technology Officer Jason Hudak, adding four software engineers, a head of product, a product
manager and an IT lead. The team built The Gauntlet, the Company’s agentic software development platform, where AI agents do much
of the coding and testing so a small team can deliver software far faster than it otherwise could.
Capital Structure
As of September 30, 2026, the Company
had total debt of $393.2 million, total debt principal outstanding of $400.6 million and Net Debt of $349.4 million. Principal outstanding
includes $54.3 million under the ABS Warehouse Facility, which funded the Canyon Creek acquisition.
Based on $349.4 million of Net Debt and
last-six-months annualized (L6A) Adjusted EBITDA of approximately $124.5 million, Leverage was approximately 2.8x.
Liquidity
As of September 30, 2026, the Company
had $37.4 million of unrestricted cash and no borrowings outstanding under its RBL, which had a borrowing base of $60 million, for total
liquidity of approximately
$97.4 million.
Equity Capitalization
As of September 30, 2026, the Company
had 29,825,480 shares of Class A common stock and 1,673,757 shares of Class B common stock outstanding, together with 126,628 shares
of Series A preferred stock (with an aggregate subscription amount of $126.6 million, including paid-in-kind dividends) and 27,173 shares
of Series B convertible preferred stock (convertible into 2,717,300 shares of Class A common stock).
In connection with the closing of the
Canyon Creek acquisition in July 2026, the Company issued 1,962,240 shares of Class A common stock to the sellers. Share counts by class
are also presented in the condensed consolidated balance sheet below.
Hedging Program
The Company maintains a multi-year commodity
hedging program to provide cash flow visibility across oil, natural gas, and NGL production. The hedge position reflects the hedge restructuring
executed concurrent with the closing of the business combination, the additional hedge protection added in connection with the ABS refinancing,
the hedges entered into in connection with the closing of the Canyon Creek acquisition, and incremental hedges added after quarter-end.
The following table summarizes Presidio’s current commodity hedge position as of November 12, 2026.
| | |
4Q26 | | |
1Q27 | | |
2Q27 | | |
3Q27 | | |
4Q27 | | |
FY28 | | |
FY29 | | |
Beyond | |
| Oil Swaps | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| |
| Volume (MBbl) | |
| 266 | | |
| 255 | | |
| 248 | | |
| 242 | | |
| 237 | | |
| 887 | | |
| 756 | | |
| 938 | |
| Avg. Strike ($/Bbl) | |
$ | 60.59 | | |
$ | 87.90 | | |
$ | 108.14 | | |
$ | 100.59 | | |
$ | 88.02 | | |
$ | 63.17 | | |
$ | 67.55 | | |
$ | 64.38 | |
| Natural Gas Swaps | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Volume (BBtu) | |
| 7,183 | | |
| 6,865 | | |
| 6,624 | | |
| 6,520 | | |
| 6,388 | | |
| 24,143 | | |
| 20,400 | | |
| 57,516 | |
| Avg. Strike ($/MMBtu) | |
$ | 5.30 | | |
$ | 4.94 | | |
$ | 4.30 | | |
$ | 3.43 | | |
$ | 3.76 | | |
$ | 3.56 | | |
$ | 3.58 | | |
$ | 3.44 | |
| Natural Gas Basis Swaps | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Volume (BBtu) | |
| 6,961 | | |
| 6,869 | | |
| 6,624 | | |
| 6,523 | | |
| 6,390 | | |
| 23,421 | | |
| 9,468 | | |
| - | |
| Avg. Strike ($/MMBtu) | |
$ | (0.41 | ) | |
$ | 0.11 | | |
$ | (0.55 | ) | |
$ | (0.49 | ) | |
$ | (0.40 | ) | |
$ | (0.42 | ) | |
$ | (0.50 | ) | |
| - | |
| NGL Swaps |
| Volume (MBbl) | |
| 613 | | |
| 593 | | |
| 580 | | |
| 528 | | |
| 517 | | |
| 1,864 | | |
| 1,380 | | |
| 1,316 | |
| Avg. Strike ($/Bbl) | |
$ | 23.14 | | |
$ | 24.86 | | |
$ | 23.02 | | |
$ | 26.76 | | |
$ | 25.66 | | |
$ | 25.61 | | |
$ | 23.50 | | |
$ | 21.49 | |
NGL hedges include a combination
of individual component hedges and WTI hedges allocated to NGL volumes.
Summary Financial and Operational
Data
The following table presents Presidio’s
key financial and operational metrics for the third quarter of 2026 on a successor basis (three months ended September 30, 2026). The
Company’s business combination closed on March 4, 2026, resulting in separate predecessor and successor periods that are not directly
comparable to the full three-month successor period presented for the third quarter. Accordingly, no comparative prior-period information
is presented below. Per-unit metrics are presented on a $/Boe basis.
| | |
| Three
Months Ended
September 30, 2026
(Successor) | |
| Production | |
| | |
| Net production (MBoe) | |
| 2,404 | |
| Average daily production (MBoe/d) | |
| 26.1 | |
| Production mix: oil / gas / NGLs | |
| 13% / 58% / 29 | % |
| Revenue and Realizations ($/Boe) | |
| | |
| Average realized price, excluding derivatives | |
$ | 23.72 | |
| Realized derivative gain (loss) | |
$ | 1.77 | |
| Average realized price, including derivatives | |
$ | 25.49 | |
| Operating Costs ($/Boe) | |
| | |
| Lease operating expense | |
$ | 9.10 | |
| Production taxes | |
$ | 1.46 | |
| Ad valorem taxes | |
$ | 0.53 | |
| Total operating expense | |
$ | 11.09 | |
| General and administrative | |
$ | 3.55 | |
| Adjusted general and administrative | |
$ | 2.50 | |
| Depletion, Depreciation & Amortization ($/Boe) | |
| |
| Depletion, oil and gas properties | |
$ | 6.63 | |
| Depreciation and amortization, other | |
$ | 0.26 | |
| Aggregate Financials ($ thousands,
except per share) | |
| | |
| Total revenue | |
| 57,331 | |
| Income (loss) from operations | |
| 556 | |
| Net income (loss) | |
| (50,727 | ) |
| Net income (loss) attributable to Presidio Production Company | |
| (46,387 | ) |
| Net income (loss) per Class A share, basic and diluted | |
$ | (1.80 | ) |
| Adjusted EBITDA | |
| 29,093 | |
| Adjusted Unhedged EBITDA | |
| 24,835 | |
Certain amounts are presented in thousands,
except per-share data. Adjusted general and administrative excludes non-cash share-based compensation, non-recurring compensation expense
related to the Company’s Class B Units and certain non-recurring costs. Adjusted General and Administrative Expense, Adjusted EBITDA
and Adjusted Unhedged EBITDA are non-GAAP measures; see “Non-GAAP Financial Measures and Reconciliations.”
Average realized prices by product for
the three months ended September 30, 2026 (Successor), before and after the impact of derivatives settled in cash, were as follows:
Three Months Ended September 30, 2026
(Successor) | |
Excluding
Derivatives
(Pre-Hedge) | | |
Including
Derivatives
(Post-Hedge) | |
| Oil ($/Bbl) | |
$ | 82.60 | | |
$ | 60.02 | |
| Natural gas ($/Mcf) | |
$ | 1.46 | | |
$ | 3.51 | |
| NGLs ($/Bbl) | |
$ | 26.57 | | |
$ | 18.72 | |
| Total ($/Boe) | |
$ | 23.72 | | |
$ | 25.49 | |
Conference Call Information
Presidio reported its third
quarter 2026 results on Thursday, November 12, 2026, and will host a conference call to discuss the results the following morning, Friday,
November 13, 2026 at 10:00 AM Eastern Time (9:00 AM Central Time). A live webcast and replay will be available on the Investor Relations
section of the Company’s website at https://ir.bypresidio.com/. The call may be accessed by dialing (877) 407-0779 (U.S.) or (201)
389-0914 (international); conference code 13763581. A replay of the call will be available shortly after the call by dialing (844) 512-2921
(U.S.) or (412) 317-6671 (international); passcode 13763581. The replay will be available through Friday, November 27, 2026.
About Presidio Production Company
Headquartered in Fort Worth, TX, Presidio
Production Company (NYSE: FTW) is a yield-focused, differentiated oil and gas operator in the United States focused on the acquisition
and optimization of producing oil and natural gas wells. Presidio applies engineering expertise and AI-driven analytics to enhance performance
and extend asset life. The Company’s Class A common stock is listed on the New York Stock Exchange under the ticker symbol “FTW”.
To learn more, visit https://bypresidio.com/.
Non-GAAP Financial Measures and
Reconciliations
This press release includes Adjusted
EBITDA, Adjusted Unhedged EBITDA, Adjusted General and Administrative Expense, Leverage and Net Debt, which are financial measures not
calculated in accordance with generally accepted accounting principles in the United States (“GAAP”).
Presidio defines Adjusted EBITDA as net
income (loss) before (1) interest expense, net, (2) depreciation, depletion, amortization and accretion, (3) unrealized loss (gain) on
derivative instruments, (4) non-cash share-based compensation, (5) non-recurring compensation expense related to our Class B Units, (6)
(gain) loss on sale of assets, net, (7) loss on ARO liabilities, (8) change in fair value of earnout liability, (9) loss on early extinguishment
of debt, (10) income tax expense (benefit), (11) acquisition and transaction costs, and (12) certain non-recurring costs that management
does not consider indicative of ongoing performance.
Adjusted EBITDA is used as a supplemental
financial performance measure by Presidio management and by external users of our financial statements, such as industry analysts, investors,
lenders, rating agencies and others, to evaluate our operating performance and Presidio’s results of operations from period to
period and against our peers without regard to financing methods, capital structure or historical cost basis. We exclude the items listed
above from net income (loss) in arriving at Adjusted EBITDA because these items and related amounts can vary substantially from company
to company within our industry depending upon accounting methods and book values of assets, capital structures and the method by which
the assets were acquired. Adjusted EBITDA is not a measurement of our financial performance under GAAP and should not be considered as
an alternative to, or more meaningful than, net income (loss) as determined in accordance with GAAP or as an indicator of our operating
performance. Certain items excluded from Adjusted EBITDA are significant components in understanding and assessing a company’s
financial performance, such as a company’s cost of capital and tax burden, as well as the historic costs of depreciable assets,
none of which are reflected in Adjusted EBITDA. Our presentation of Adjusted EBITDA should not be construed as an inference that our
results will be unaffected by unusual items. Our computations of Adjusted EBITDA may not be identical to other similarly titled measures
of other companies.
Presidio defines Adjusted Unhedged EBITDA
as Adjusted EBITDA further adjusted to remove realized gains and losses on derivative instruments. This measure is intended to show our
operating results without the impact of our hedging program. Management believes Adjusted Unhedged EBITDA is an important metric that
provides valuable insight into the Company’s underlying operational performance by removing the effects of financing decisions,
non-cash charges, and hedging activities. Adjusted Unhedged EBITDA is a supplemental non-GAAP measure and may not be comparable to similarly
titled measures of other companies.
Adjusted EBITDA and Adjusted Unhedged
EBITDA are not substitutes for, and should be considered in addition to, net income (loss), cash flows from operating activities, or
any other measure of financial performance or liquidity presented in accordance with GAAP. Adjusted EBITDA and Adjusted Unhedged EBITDA
as presented may not be comparable to similarly titled measures of other companies. A reconciliation of Adjusted EBITDA and Adjusted
Unhedged EBITDA to net income (loss), the most directly comparable GAAP measure, is provided below.
Presidio defines Adjusted General and
Administrative Expense as General and Administrative Expense adjusted to remove non-cash share-based compensation, non-recurring compensation
expense related to our Class B Units, and certain non-recurring costs that management does not consider indicative of ongoing performance.
This measure is intended to show our General and Administrative Expenses without the impact of non-cash and non-recurring items. Management
believes Adjusted General and Administrative Expense is an important metric that provides valuable insight into the Company’s underlying
operational performance. Adjusted General and Administrative Expense is a supplemental non-GAAP measure and may not be comparable to
similarly titled measures of other companies. A reconciliation of Adjusted General and Administrative Expense to General and Administrative
Expense, the most directly comparable GAAP measure, is provided below.
Presidio defines Net Debt as the aggregate
principal amount outstanding of the Company’s ABS notes, ABS Warehouse Facility borrowings, RBL borrowings and Trail Dust term
loan, excluding lease obligations, less total cash (including restricted cash). Presidio defines Leverage as Net Debt divided by last-six-months
annualized (L6A) Adjusted EBITDA, calculated by multiplying Adjusted EBITDA for the most recent six months by two. The Leverage ratio
presented in this press release is calculated using Adjusted EBITDA for the six months ended September 30, 2026.
Management believes Net Debt and Leverage
are useful to investors, analysts and rating agencies in evaluating the Company’s capital structure and ability to service its
indebtedness. Net Debt and Leverage are supplemental non-GAAP measures, should not be considered alternatives to total debt or net income
(loss) determined in accordance with GAAP, and may not be comparable to similarly titled measures of other companies. A reconciliation
of Net Debt to total debt, the most directly comparable GAAP measure, is set forth below.
Reconciliation of GAAP Financial
Measures to Adjusted EBITDA and Adjusted Unhedged EBITDA
The following table reconciles net income
(loss), the most directly comparable financial measure calculated in accordance with GAAP, to Adjusted EBITDA and Adjusted Unhedged EBITDA
for the three months ended September 30, 2026 (Successor), for the three months ended June 30, 2026 (Successor) and for the six months
ended September 30, 2026 (Successor), which is used to calculate L6A Adjusted EBITDA. The Company’s business combination closed
on March 4, 2026, resulting in separate predecessor and successor periods that are not directly comparable to the successor periods presented.
Accordingly, no comparative prior-period information is presented below.
| $ in thousands | |
Three
Months
Ended
September 30,
2026
(Successor) | | |
Three
Months
Ended
June 30,
2026
(Successor) | | |
Six
Months
Ended
September 30,
2026
(Successor) | |
| Net Income (Loss) (GAAP) (1) | |
$ | (50,727 | ) | |
$ | 15,479 | | |
$ | (35,248 | ) |
| Depletion, oil and gas properties | |
| 15,929 | | |
| 15,130 | | |
| 31,059 | |
| Depreciation of other property and equipment | |
| 616 | | |
| 859 | | |
| 1,475 | |
| Accretion of asset retirement obligation | |
| 1,199 | | |
| 1,150 | | |
| 2,349 | |
| (Gain) loss from sale of assets | |
| 5 | | |
| (158 | ) | |
| (153 | ) |
| Loss on ARO liabilities | |
| - | | |
| - | | |
| - | |
| Unrealized (gain) loss from derivative transactions | |
| 66,462 | | |
| (17,962 | ) | |
| 48,500 | |
| Change in fair value of earnout liability | |
| (4,531 | ) | |
| 2,972 | | |
| (1,559 | ) |
| Loss on early extinguishment of debt | |
| - | | |
| 4,475 | | |
| 4,475 | |
| Share-based compensation (2) | |
| 2,431 | | |
| 2,219 | | |
| 4,650 | |
| Acquisition and transaction costs | |
| 3,817 | | |
| 544 | | |
| 4,361 | |
| Interest expense | |
| 7,576 | | |
| 4,286 | | |
| 11,862 | |
| Non-recurring cost (3) | |
| 100 | | |
| 221 | | |
| 321 | |
| Income tax expense (benefit) | |
| (13,784 | ) | |
| 3,961 | | |
| (9,823 | ) |
| Adjusted EBITDA | |
$ | 29,093 | | |
$ | 33,176 | | |
$ | 62,269 | |
| Realized (gain) loss from derivative transactions | |
| (4,258 | ) | |
| (6,861 | ) | |
| (11,119 | ) |
| Adjusted Unhedged EBITDA | |
$ | 24,835 | | |
$ | 26,315 | | |
$ | 51,150 | |
| (1) | Reflects total GAAP net income (loss), which includes $4.3
million of net loss attributable to non-controlling interests for the three months ended September 30, 2026, $1.1 million of net income
attributable to non-controlling interests for the three months ended June 30, 2026 and $3.3 million of net loss attributable to non-controlling
interests for the six months ended September 30, 2026. Net income (loss) attributable to Presidio Production Company was $(46.4) million,
$14.4 million and $(32.0) million for those periods, respectively. (2) Includes share-based compensation expense related to restricted
stock units. (3) Includes one-time severance fees. |
Reconciliation of GAAP Financial
Measures to Adjusted General and Administrative Expense
The following table reconciles General
and Administrative Expense, the most directly comparable financial measure calculated in accordance with GAAP, to Adjusted General and
Administrative Expense for the three months ended September 30, 2026 (Successor). The Company’s business combination closed on
March 4, 2026, resulting in separate predecessor and successor periods that are not directly comparable to the full three-month successor
period presented for the third quarter. Accordingly, no comparative prior-period information is presented below.
| $ in thousands (except per Boe) | |
Three Months Ended September 30, 2026 (Successor) | |
| General and Administrative (GAAP) | |
$ | 8,532 | |
| Share-based compensation (1) | |
| (2,431 | ) |
| Non-recurring cost (2) | |
| (100 | ) |
| Adjusted General and Administrative | |
$ | 6,001 | |
| Adjusted General and Administrative per Boe | |
$ | 2.50 | |
(1) Includes share-based compensation
expense related to restricted stock units. (2) Includes one-time severance fees.
Reconciliation of Net Debt to Total
Debt
The following table sets forth the Company’s
outstanding debt and reconciles total debt, the most directly comparable GAAP measure, to Net Debt as of September 30, 2026 ($ in thousands).
| ($ in thousands) | |
September 30, 2026 | |
| ABS III Securitization notes | |
$ | 344,459 | |
| ABS Warehouse Facility | |
| 54,335 | |
| Citizens RBL (undrawn) | |
| - | |
| Trail Dust term loan | |
| 1,846 | |
| Equipment financing obligations | |
| 1,468 | |
| ABS III debt issuance costs, net | |
| (8,207 | ) |
| ABS Warehouse Facility debt issuance costs, net | |
| (741 | ) |
| Total Debt (GAAP) | |
$ | 393,160 | |
| Less: Equipment financing obligations | |
| (1,468 | ) |
| Plus: ABS III debt issuance costs, net | |
| 8,207 | |
| Plus: ABS Warehouse Facility debt issuance costs, net | |
| 741 | |
| Principal outstanding (ABS Notes, ABS Warehouse Facility, RBL, Trail Dust) | |
$ | 400,640 | |
| Less: Cash and cash equivalents | |
| (37,436 | ) |
| Less: Restricted cash | |
| (13,781 | ) |
| Net Debt | |
$ | 349,423 | |
Condensed Consolidated Statement
of Operations (Unaudited)
The following table presents the Company’s
condensed consolidated statement of operations for the three months ended September 30, 2026 (Successor) ($ in thousands, except per
share amounts). The Company’s business combination closed on March 4, 2026, resulting in separate predecessor and successor periods
that are not directly comparable to the full three-month successor period presented for the third quarter. Accordingly, no comparative
prior-period information is presented below.
| | |
Three Months Ended
September 30, 2026 (Successor) | |
| Revenues | |
| |
| Oil sales | |
$ | 26,183 | |
| Natural gas sales | |
| 12,088 | |
| Natural gas liquids sales | |
| 18,755 | |
| Field services revenue | |
| 305 | |
| Total revenues | |
| 57,331 | |
| | |
Three Months Ended September 30, 2026 (Successor) | |
| Operating Expenses | |
| | |
| Lease operating expenses | |
| 21,881 | |
| Production taxes | |
| 3,513 | |
| Ad valorem taxes | |
| 1,283 | |
| Depletion, oil and gas properties | |
| 15,929 | |
| Depreciation and amortization, other | |
| 616 | |
| Accretion of asset retirement obligation | |
| 1,199 | |
| General and administrative | |
| 8,532 | |
| Acquisition and transaction costs | |
| 3,817 | |
| Cost of field services revenue | |
| - | |
| Loss (gain) on sale of assets | |
| 5 | |
| Total operating expenses | |
| 56,775 | |
| Income (loss) from operations | |
| 556 | |
| Other Income (Expense) | |
| | |
| Gain (loss) on commodity derivatives | |
| (62,204 | ) |
| Change in fair value of earnout liability | |
| 4,531 | |
| Loss on early extinguishment of debt | |
| - | |
| Interest expense | |
| (7,576 | ) |
| Other income (expense) | |
| 182 | |
| Total other income (expense) | |
| (65,067 | ) |
| Net income (loss) before income taxes | |
| (64,511 | ) |
| Income tax benefit (expense) | |
| 13,784 | |
| Net income (loss) | |
| (50,727 | ) |
| Net income (loss) attributable to non-controlling interests | |
| (4,340 | ) |
| Net income (loss) attributable to Presidio Production Company | |
$ | (46,387 | ) |
| Less: preferred stock and unvested RSU dividends | |
| (5,443 | ) |
| Net income (loss) available to Class A common stockholders | |
$ | (51,830 | ) |
| Net income (loss) per Class A share, basic and diluted | |
$ | (1.80 | ) |
| Weighted average Class A shares outstanding, basic and diluted | |
| 28,751,538 | |
Condensed Consolidated
Balance Sheet (Unaudited)
The following table presents
the Company’s condensed consolidated balance sheet as of September 30, 2026 ($ in thousands). The Company’s business combination
closed on March 4, 2026, resulting in separate predecessor and successor periods that are not directly comparable to the successor period
presented. Accordingly, no comparative prior-period information is presented below.
| ($ in thousands) | |
September 30, 2026 | |
| Assets | |
| | |
| Cash and cash equivalents | |
$ | 37,436 | |
| Restricted cash | |
| 13,781 | |
| Accounts receivable, oil and gas | |
| 22,567 | |
| Accounts receivable, joint interest owners | |
| 11,186 | |
| Derivative assets, current | |
| 48,457 | |
| Hedge receivable | |
| 7,117 | |
| Prepaid expenses and other current assets | |
| 2,376 | |
| Total current assets | |
| 142,920 | |
| Oil and natural gas properties, net | |
| 743,988 | |
| Other property and equipment, net | |
| 4,271 | |
| Derivative assets, noncurrent | |
| 176 | |
| ($ in thousands) | |
September 30, 2026 | |
| Right-of-use assets | |
| 3,464 | |
| Deferred tax assets, noncurrent | |
| 14,093 | |
| Other noncurrent assets | |
| 4,819 | |
| Total assets | |
$ | 913,731 | |
| Liabilities and Equity | |
| | |
| Accounts payable | |
$ | 14,148 | |
| Production taxes payable | |
| 5,556 | |
| Revenue and royalties payable | |
| 32,760 | |
| Derivative liabilities, current | |
| 25,974 | |
| Hedge payable | |
| 8,881 | |
| Current portion of long-term debt | |
| 37,844 | |
| Lease liabilities, current | |
| 367 | |
| Other current liabilities | |
| 22,919 | |
| Total current liabilities | |
| 148,449 | |
| Long-term debt, net | |
| 355,316 | |
| Asset retirement obligations | |
| 82,485 | |
| Lease liabilities | |
| 3,233 | |
| Derivative liabilities, noncurrent | |
| 34,247 | |
| Earnout liability | |
| 13,241 | |
| Total liabilities | |
| 636,971 | |
| Series A redeemable preferred stock (126,628 shares) | |
| 113,389 | |
| Series B convertible redeemable preferred stock (27,173 shares) | |
| 24,701 | |
| Class A common stock (29,825,480 shares issued and outstanding) | |
| 3 | |
| Class B common stock (1,673,757 shares issued and outstanding) | |
| - | |
| Additional paid-in capital | |
| 219,048 | |
| Accumulated deficit | |
| (93,695 | ) |
| Total stockholders’ equity attributable to Presidio Production
Company | |
| 125,356 | |
| Non-controlling interest | |
| 13,314 | |
| Total stockholders’ equity | |
| 138,670 | |
| Total liabilities, redeemable preferred stock
and stockholders’ equity | |
$ | 913,731 | |
Cautionary Note Regarding
Hydrocarbon Disclosures
The U.S. Securities and
Exchange Commission (“SEC”) permits oil and gas companies, in their filings with the SEC, to disclose only proved, probable
and possible reserves that meet the SEC’s definitions for such terms. Presidio uses certain terms in this press release, such as
estimated production, reserves estimates, and resource potential, that the SEC’s guidelines may prohibit it from including in filings
with the SEC. Investors are urged to consider closely the disclosure in the Company’s filings with the SEC, including its Quarterly
Report on Form 10-Q for the quarter ended September 30, 2026, when available, each of which may be obtained without charge at www.sec.gov.
Cautionary Note Regarding
Forward-Looking Statements
The statements contained
in this press release that are not purely historical are forward-looking statements. These forward-looking statements include, but are
not limited to, statements regarding our expectations, hopes, beliefs, intentions or strategies regarding the future, including statements
regarding Adjusted EBITDA, Adjusted Unhedged EBITDA, and other financial and operational results; the payment and maintenance of the
Company’s dividend; the Canyon Creek acquisition and its anticipated benefits and returns; the Company’s cost of capital,
liquidity and capital structure; the Company’s ABS Warehouse Facility and future borrowings thereunder; the Company’s acquisition
pipeline and its ability to identify, finance and complete future acquisitions; the Company’s hedging program; the Company’s
leasehold monetization; and the Company’s investment in artificial intelligence, including the development, deployment and potential
commercialization of its AI platform and applications, the reactivation of shut-in wells, and the Asset Intelligence production target.
In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including
any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” “continue,”
“could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,”
“possible,” “potential,” “predict,” “project,” “should,” “would”
and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not
forward-looking.
The forward-looking statements
contained in this press release are based on our current expectations and beliefs concerning future developments and their potential
effects on the Company. There can be no assurance that future developments affecting the Company will be those that we have anticipated.
These forward-looking statements speak only as of the date this press release is issued and involve a number of risks, uncertainties
(some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from
those expressed or implied by these forward-looking statements. Should one or more of these risks or uncertainties materialize, or should
any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements.
Factors that may cause
actual results to differ materially from current expectations include, but are not limited to: (1) the ability to recognize the anticipated
benefits of the Canyon Creek acquisition, which may be affected by, among other things, competition, the ability of the Company to reduce
operating costs, grow and manage growth profitably, maintain relationships with customers and suppliers, successfully integrate the Canyon
Creek assets into the assets of the Company and retain its management and key employees; (2) the Company’s ability to identify,
finance and complete future acquisitions and to realize the anticipated benefits thereof; (3) changes in applicable laws or regulations;
(4) the possibility that the Company may be adversely affected by other economic, business, and/or competitive factors; (5) changes in
domestic and foreign business, market, financial, political conditions, and in applicable laws and regulations; (6) the ability to meet
stock exchange listing standards; (7) the ability of the Company to build or maintain relationships with customers and suppliers and
retain its management and key employees; (8) risks related to commodity price volatility and its impact on cash flows and dividend sustainability;
(9) risks related to oil and gas operations, including production declines, operational challenges, and regulatory changes; (10) risks
related to the Company’s indebtedness and borrowings under the ABS Warehouse Facility and the RBL; (11) the ability to recognize
the anticipated benefits of the Company’s investment in artificial intelligence and the development and potential commercialization
of its AI platform; (12) risks related to the Company’s ability to pay, maintain or increase dividend payments; and (13) other
risk factors described herein as well as the risk factors and uncertainties described in documents filed by the Company with the U.S.
Securities and Exchange Commission (the “SEC”), the sections entitled “Risk Factors” and “Cautionary Note
Regarding Forward-Looking Statements” and similar sections in its filings with the SEC, and any periodic Exchange Act reports filed
with the SEC such as its Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K. The recipient
of this press release should carefully consider the foregoing risk factors and the other risks and uncertainties which will be more fully
described in the documents filed by the Company from time to time with the SEC. If any of these risks materialize or the underlying assumptions
prove incorrect, actual results could differ materially from the results implied by these forward-looking statements.
In addition, there may
be additional risks that the Company does not presently know, or that it currently believes are immaterial, that could also cause actual
results to differ from those contained in the forward-looking statements. Nothing in this communication should be regarded as a representation
or warranty, either express or implied, by any person that the forward-looking statements set forth herein will be achieved or that any
of the contemplated results of such forward-looking statements will be achieved. You should not place undue reliance on forward-looking
statements, which speak only as of the date they are made.
In addition, the information
contained in this press release is provided as of the date hereof and may change, and the Company and its representatives and affiliates
specifically disclaim any obligation to, and do not intend to, update or revise any forward-looking statements, whether as a result of
new information, inaccuracies, future events or otherwise, except as may be required under applicable securities laws.
Information contained on
our website is not a part of or incorporated into this press release. Dividends are not guaranteed and may be adjusted, suspended, or
discontinued at the discretion of the Board of Directors based on liquidity, legal surplus, business conditions, commodity price volatility,
market conditions and other factors.
Notes
| (1) | Non-GAAP measure. See “Non-GAAP Financial Measures and Reconciliations” for
definitions and reconciliations. |
| (2) | Debt balances given as principal outstanding
and reflect principal outstanding for borrowed money; refer to the Company’s Form 10-Q
for additional information. |
Presidio Media and Investor
Contact:
Connor Fair, Director of Investor Relations
investors@bypresidio.com
