Five Shale Stocks to Watch Before Third-Quarter Earnings | OilPrice.com
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By Michael Kern – Oct 13, 2026, 4:00 PM CDT
- Permian Resources netted 38 cents per thousand cubic feet on its gas in the second quarter while Waha averaged negative $3.14, and posted record free cash flow of $751 million.
- Kinetik and Kodiak set records and raised 2026 guidance, but Kinetik guided third-quarter EBITDA below the second quarter and Kodiak’s free cash flow was negative $87.5 million.
- Texas Pacific Land’s water sales volumes fell 19 percent, while Chord Energy is dropping a frac crew and lifting shareholder returns to 75 percent of free cash flow.
Permian producers spent much of this year paying buyers to haul away the natural gas that comes up with their oil. Waha Hub spot prices stayed below zero for a record 90 days in a row before turning positive on June 16, Reuters reported, and the hub had averaged minus $2.19 per million British thermal units for the year up to that point.
Four of the five companies below still posted record results in the second quarter. Three of the five don’t drill at all, and one of the two that do works mostly in North Dakota, far from Waha. The U.S. Energy Information Administration’s October outlook has domestic crude output rising from 13.9 million barrels per day this year to 14.3 million in 2027 and assumes Middle East oil flows stay constrained through the fourth quarter. Permian-focused executives surveyed by the Dallas Fed in June named gas takeaway capacity and regulatory issues as the constraints on drilling they cited most often. Third-quarter earnings start arriving in the coming weeks, so the second-quarter figures below are the latest each company has reported.
Permian Resources
Permian Resources Corporation (NYSE: PR) netted 38 cents per thousand cubic feet for its natural gas in the second quarter, hedges included, in a period when Waha averaged negative $3.14. Management said on the earnings call that it curtailed gas from wells with a high gas-to-oil ratio, which cut gas output by about 20 percent from the first quarter, and that firm transportation and hedges did the rest. Unhedged, the company still realized negative $1.74, though that was $1.40 better than Waha, and the hedges added $2.12 on top. It turned every curtailed well back on in late June once prices recovered.
Adjusted free cash flow came in at a record $751 million, up from $312 million a year earlier, on oil production of 198,071 barrels per day. The company raised its full-year oil guidance to 199,000 barrels per day, 10,000 more than it projected in February, and expects second-half production above 200,000 barrels per day on less than $1 billion of capital spending. Co-CEO James Walter said it will produce nearly 10 percent more oil than last year on less capital than it spent in 2025.
Permian Resources also spent $1.05 billion this year on about 190 acquisitions, picking up roughly 54,000 net acres and 20,000 net royalty acres in the Delaware Basin in deals struck at a weighted average front-month WTI price of $72.50 a barrel. Net debt is down to about 0.5 times EBITDAX, and total debt has fallen roughly 35 percent since the end of 2024, from $4.2 billion to $2.7 billion.
Derivatives cost Permian Resources $12.44 a barrel in the second quarter, which took its realized oil price from $97.81 to $85.37, and about 70,000 barrels per day, roughly a third of production, are swapped at between $67 and $69 through December. Realized prices in the quarter were well above those swap levels, so that portion of production missed the rally.
Kinetik
Kinetik Holdings Inc. (NYSE: KNTK) processed 1.74 billion cubic feet of gas per day in the second quarter, the same as a year earlier, even though producers shut in an estimated 250 million cubic feet per day because of Waha prices. Adjusted EBITDA still reached a record $280.8 million, up from $242.9 million, and free cash flow roughly tripled to $105.2 million. The company credited better natural gas liquids recoveries and condensate yields, optimization work and favorable commodity prices and spreads, so part of the beat came from commodity margins and not from volumes.
Kinetik raised its 2026 adjusted EBITDA guidance to between $1.04 billion and $1.1 billion, a midpoint 7 percent above the February forecast, and assumes curtailments will average only about 25 million cubic feet per day in the second half. In May it approved Kings Landing II, a roughly $260 million sour gas processing expansion that will lift system capacity to 2.7 billion cubic feet per day in 2028. It is also building a 40-megawatt power plant at its Diamond Cryo complex, due in service in the second quarter of 2027, and has secured firm Gulf Coast market access for residue gas starting that year. CEO Jamie Welch said customer activity is “pulling forward” now that curtailments have eased.
Kinetik guided third-quarter adjusted EBITDA to between $260 million and $270 million, below the second quarter’s record, and its $3.94 billion of net debt works out to about 3.8 times trailing EBITDA. The guidance assumes a fourth-quarter processed gas exit rate of nearly 2.2 billion cubic feet per day, up roughly 20 percent exit to exit, and a full-year Waha average of minus 26 cents per million British thermal units. Both depend on the new pipeline capacity holding up and producers keeping their wells on.
Kodiak Gas Services
Kodiak Gas Services Inc. (NYSE: KGS) burned through $87.5 million of free cash flow in the second quarter and raised its full-year guidance anyway. The cash is going into power, where Kodiak closed its $576 million purchase of Distributed Power Solutions on April 1, spent $134 million of growth capital in the quarter and agreed to buy up to one gigawatt of gas turbines for delivery by 2030. It expects $400 million to $450 million of power capital spending this year against $95 million to $125 million of power revenue, and it raised about $836 million by selling stock at $71 a share in May. Total debt was $2.8 billion at the end of June, or 3.2 times EBITDA under its credit agreement, and adjusted earnings per share slipped to 55 cents from 59 cents
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