Presidio Production Company

What they do

Presidio is an independent energy company headquartered in Texas, founded in 2017, engaged in oil and gas exploration and production with operations concentrated across the Western Anadarko Basin of Texas, Oklahoma, and Kansas. The company acquires existing producing assets and applies engineering expertise and AI-driven data analytics to enhance performance and extend asset life, focusing on long-lived reserves rather than new resource development. Production is approximately 16% oil, 57% natural gas, and 27% NGLs, and the company uses derivative instruments to hedge commodity price exposure, as required by its ABS III Notes and Citizens RBL agreements.

Revenue drivers

• Crude Oil — Approximately 16% of production; revenue driven by WTI prices and hedged under required hedging strategy.
• Natural Gas — Approximately 57% of production; revenue driven by Henry Hub prices and subject to basis differentials.
• Natural Gas Liquids (NGLs) — Approximately 27% of production; revenue driven by Mont Belvieu prices and hedged in line with debt agreements.

Recent performance

For Q2 2026, Presidio averaged approximately 22.8 MBoe/d (2,071 MBoe for the quarter) with total revenue of $54.0 million. Average realized price was $25.93 per Boe excluding derivatives and $29.24 per Boe including derivatives, reflecting a realized derivative gain of $3.31 per Boe. The company reported income from operations of $6.1 million, net income of $15.5 million, and net income attributable to Presidio of $14.4 million, or $0.34 per Class A share. Adjusted EBITDA was $33.2 million, and lease operating expense was $9.39 per Boe. A quarterly dividend of $0.3375 per share was declared.

Strategy

Presidio's strategy centers on acquiring existing producing assets and applying engineering expertise and AI data-driven analytics to enhance performance and extend asset life. The company emphasizes operating cash flow and a low-reinvestment model, with minimal capital expenditures. In Q2 2026, it closed a $350 million investment-grade ABS refinancing at a weighted average coupon of 6.38% to lower cost of capital, and appointed a Chief Technology Officer to develop an AI platform for its operations. The company also closed the Canyon Creek acquisition in July 2026, marking its first acquisition in the Arkoma Basin, and continues to consolidate producing oil and gas assets.

Risks

• Commodity price volatility — Prices for oil, natural gas, and NGLs are volatile; unhedged production is exposed to material declines, and hedging limits upside during rising price periods.
• Hedging obligations — Debt agreements require maintaining commodity hedges at 85% (ABS III) and 75% (Citizens RBL) of projected production for 24 and 36 months respectively, which may restrict flexibility.
• Regional infrastructure dependence — Operations rely on infrastructure to gather, process, and transport production in Texas, Oklahoma, and Kansas; weather, capacity limits, and regulatory matters can adversely impact results.
• Acquisition integration risk — The company's growth strategy depends on successfully integrating acquisitions like Canyon Creek; failure to execute its optimization playbook could impair returns.

Outlook

Management expects continued commodity price volatility influenced by geopolitical events (war in Ukraine, Middle East conflict), OPEC+ potential production increases from November 2025, interest rate volatility, and tariff concerns. The company plans to deploy AI workflows across its operations and continue its acquisition model, with the Canyon Creek acquisition integrated on day one. Future dividends remain at the Board's discretion, depending on financial condition, results, and capital requirements.