I'll kick it off. So on behalf of the Barclays Energy Research Team, we're delighted to have you join us for the thirty-eighth CEO Power Energy Conference. My name is Betty Jiang. I cover the integrated and the. So this track is dedicated to the upstream company, so global. Next couple of days, you'll be hearing a lot from companies. Let me quickly talk about the three things that we're looking for next, and get started. One of the things, the key themes, topic du jour, is really about power. It's less consensus. It's, the debate is less about how much power growth is coming, but how are we going to power that growth? We are of the view that we need both conventional and new energy, specifically gas. So certainly, gas, macro and development.
The second thing we're listening for is capital efficiency. Like, we're hearing a lot about companies continuing to do more with less equipment, have to deal with 2025. So another area of listening for, on how that impacts, with companies continuing to focus on cash return and prioritizing that, which has been a theme. And lastly, certainly M&A is very topical. As we get through a record wave of consolidation, what's next industry? As buyers are now sellers and, and as we think about portfolio rationalization, where does that go from here? So with that, really delighted to have Permian Resources to kick us off on the E&P upstream track here. Permian Resources is a pure play Delaware E&P, that has grown significantly through M&A over the last few years.
From the company, we have Will Hickey, Co-CEO, and we have Guy Oliphint, EVP and CFO. With that, I will hand it off to Will to have some prepared remarks, and we'll go from there. Thank you.
Okay, thanks for having me. We've got about a fifteen-slide deck here we'll try to get through, and then we can do the fireside chat. Guy and I will split up this deck, but to kick it off, I thought, kind of, this is our placemat . First slide, we always show investor presentations, and for us, it's a little bit unique this year, so Barclays is actually the beginning of PR. If I think back, two years ago, we formed Permian Resources. It was a merger between Colgate and Centennial. The company's kind of first day was September first of 2022, so this is almost to the day, two years.
I remember this was the first conference we came to, and we were here getting questions about what, you know, co-CEOs and all sorts of kind of unique to PR questions that I think we've since kind of answered at length, and, and it feels like the questions are a lot different today. But, but it is fun to look at the stats. And if you think about the business, when we first went public, we were, you know, I went back and looked at this exact slide from two years ago. It was 180,000 acres and 155,000 barrels of oil equivalent per day. So I'd say more than double, depending on which metric you look at, is the size of the footprint.
It's really not just the growth that we've had over the last two years, it's really the way we've done it. I think we've done it the right way. We've been very, very focused on creating value on a per share basis, trying to grow the business, you know, on a per share basis, not just grow the business with kind of no value in mind, and the equity's performed because of that. You know, I think this has been a very good story, a story of a Delaware-based and focused company, a highly aligned management team, you know, conservative leverage through M&A, and really trying to find where the value is. Some years we're doing big deals, some years smaller deals, but always really focused on cost leadership and trying to drive value for shareholders in the Delaware Basin.
One thing that I think has come together, and I probably have a better answer today than I had two years ago, is really what is our corporate identity or what is our strategy? You know, this flywheel on the side, I think, is a good example of how we think about the business. I'd say, first, we're a Permian Basin pure play, but really, Delaware Basin is the focus. We've got. You know, that's where the overwhelming majority of our rigs will be. Over 90% of our capital will be allocated to the Delaware, and I really don't see that changing in the short term. Really, that focus on one basin allows us to be a cost leader. You know, we built this company to be a low-cost operator.
We are based in Midland. We are hyper-focused on trying to drive costs out of the business, drive the synergies that we talked about earlier every day, and I think having a single basin focus, it really allows us to be an expert in that basin. When you combine kind of our cost leadership, our focus on one basin, the relationships we have there and our understanding, it really all those three together, the understanding of the rock, the relationships in Midland and the cost leadership allows us to do very accretive M&A. You know, we know no rock is left unturned. We kind of know who owns every section, who's likely to sell, when they're likely to sell. We run into them at lunchtime, sometimes in the, you know, Petroleum Club, et cetera.
And so that, that's a big part of our M&A strategy. I wouldn't say M&A is something that we have to do, it's more opportunistic, but it's something that's been a big part of our story to date. And then last but not least is kind of our financial strength. I'd say this is a cyclical business, and we've learned over kind of the last 10 years out here in the Delaware Basin doing this, that, you know, having the balance sheet strength in a downturn is more valuable than you could ever imagine. And that flexibility allows us to do things that we otherwise wouldn't be able to do.
And so you'll see kind of through the M&A we've done, for example, our Oxy acquisition was a deal that we easily could have kind of taken down all on the balance sheet or done it all out of cash, but instead, we financed about 50% equity and 50% debt. And that, that's really just a long-term strategy to make sure that we keep our balance sheet very much kind of in check and conservative in nature. On the right side shows a little what this has driven. I'd say more than just the production growth, it's driven a one point five times production per share growth over the last two years... You can see free cash flow per share up 65% and doubled liquidity, all still kind of while maintaining less than one times leverage. So this is the strategy.
I don't really see this strategy changing, and we think there's still plenty to do in the Delaware. Speaking of the Delaware, just kind of high level, I'd say, I think this is a y'all know the Delaware Basin, but this is a unique chart to kind of really help visualize the magnitude of how big this basin is. It's not just big aerially, it's a huge footprint from just a square mile perspective. But if you look at it in three dimensions, I mean, this is with over four thousand feet of stacked pay, this is just a meaningful amount, more oil in place and more resource to go capture than the rest of the onshore U.S. basins. And kind of, so what does that mean? I'd say, you know, it means it's got thirteen producing intervals.
It means there's over 30,000 remaining kind of undeveloped locations. Those locations historically have driven the most productivity per foot of any oil well in the onshore U.S. And so this is a huge basin. I think that we still have work to do on the cost side. There are other basins that are, you know, cheaper to extract the oil, but from a per well basis and future running room, this is the place to be. And PR, this is where we are. You know, we show 12 rigs here. Those 12 rigs, on any given day, will be kind of 10 to 12 that are on the Delaware side of the basin, and this is where they will stay.
We think there's still plenty to do and kind of plenty of value to go capture on the Delaware side. I mentioned this earlier, but just from a cost perspective, this is really, really key to who we are. If we're gonna continue to be successful, this is our sustainable competitive advantage. We've got to continue to drive costs out of the system. This is really how we built the team. Like, everything we did when we built the company was around how do we manage costs and how do we continue to drive efficiencies. A lot of that's based being headquartered in Midland. A lot of that's the people we've hired. It's the. It's our approach to well development. It's really a big part of everything we've done.
I think it's worth noting that this kind of cost reduction that we've driven over the last couple of years has been in spite of a lot of big M&A. You know, we are, you know, on the LOE side, we integrated an Earthstone acquisition, which is a, you know, $2 billion acquisition. It was meaningfully higher operating costs than we were. And, you know, just four to five months later, we were able to kind of revert back to legacy Permian Resources cost metrics. And I think that's a big testament both to our team, kind of our strategy, and that this, the recipe that we've kind of laid out is working and working well. M&A, so, we mentioned, we talk about M&A. I'd say this is kind of how we think about M&A.
Obviously, it's been a big part of our story backward-looking. You know, what it will look like forward-looking, I think is a little bit TBD. But, everything we've done, I think fits pretty clearly into one of three buckets. The first being kind of corporate M&A. This is the Earthstone deal. This is buying businesses. I'd say typically these are, you know, opportunistic in nature and needs to have a willing buyer, a willing seller, kind of the stars have to align. I think the Earthstone deal is a unique one to talk about. I'd say that's one where we early on identified a lot of value. We thought that was a significantly undervalued business that we could drive value both via the rock that was already in place, but also our ability to execute on, you know, extracting that oil, drilling those wells meaningfully cheaper.
This is one that, like, when we signed up the Earthstone deal, us, our board, our team, were extremely convinced this was a home run deal, but I'd say it took the market a little time to get there. Like, the first reaction was, you know, "Really, Earthstone? And how do you feel about this?" et cetera. And this is one I think over the coming months and quarters, we were really able to demonstrate the value proposition. And kind of hindsight, looking back now, I think everyone can clearly see that why this made so much sense for PR. The bolt-on side, so we've done six bolt-ons over the last two years for about $1.4 billion of total value. The most recent being the Oxy deal, which should close sometime in the end of this quarter.
Really, those are, I'd say, much easier to do. They don't involve people as often. It's less kind of pro forma financials and all the tough integrations of accounting, but you can really still drive scale here. You know, there's, you know, we're doing now deals that are almost upwards of $1 billion. Calling them bolt-ons is kind of a new world to us, but I think that's the way we treat them. These are assets that share 20-25 miles of lease line. These are assets that we typically have a cost advantage in the underwriting. And, you know, I think the go-forward prospectivity on bolt-ons is still good, albeit the kind of big wave of them probably has kind of already passed over the last couple of years. Then the last slide is grassroots.
I don't want this to be kind of overlooked. This is something that. This is how we built the business when we started the predecessor company in twenty fifteen. This is how we got started. It was small scale, running brokers, really small deals that added up. And typically, these help get a foothold in an area before a bolt-on, or these are additive to an asset after a bolt-on. But kind of this is the stuff around the edges that I think really drives that incremental outperformance and will continue to be a big part of the business going forward. With that, I'll let Guy finish it up.
Thanks, Will. Moving to the balance sheet, an important part of the PR story has been a consistent, disciplined financial strategy, going back to the days of the Colgate predecessor. With our management team's significant PR ownership, we want to drive value through cycles and make sure we de-risk the balance sheet to thrive in these down markets. We have investment-grade credit metrics today. We are pushing for investment-grade credit ratings. We're working really closely with the agencies. We've received upgrades from all three in the last several months. Today, we're rated Ba2, BB, BB+ . We're on track to receive those ratings while we've executed on a really accretive M&A strategy, because we haven't compromised our financial strategy and priorities. A great example of this is the Oxy transaction. We announced that deal. It was $800 million.
Concurrently with that, we announced a $400 million equity offering and a $1 billion bond offering. That allowed us to finance that really accretive acquisition with about 50% equity, and at the same time, maintain leverage within our target, fully repay our RBL, and repay 2026 maturities. We don't think there's another story like this, where somebody's executed on this sort of free cash flow per share growth, also while maintaining and strengthening our balance sheet. Where does that put us today? We're in awesome shape on the balance sheet side. We've got a borrowing base of $4 billion. We have an elected commitment of $2.5 billion that's undrawn.
So we've got a strong hedge book in place that's consistent with our historical hedge policy, with 30% hedged in 2024 at $74 a barrel, and we have over 40,000 barrels a day hedged in 2025 at $73 per barrel. We've got leverage at one times, and we've got a long date of maturity profile. So in short, we are in position to play offense throughout the commodity price cycle. We really covered kind of what we've been focused on since the formation of PR, and this slide kind of really distills what the results of that were. Slide 11 is third-party research. It shows 2024 production and cash flow growth for debt-adjusted share, for us versus our peers. Will noted this. This is really our focus.
We want to build per share growth, either with our existing assets and team and through acquisitions. To date, this focus has translated to leading total shareholder return. This slide only shows this year. Our focus is really on long-term free cash flow per share growth. I'd say duration of accretion is really important to us. We aren't going to focus on short-term accretion for acquisitions that don't make our business better. I'd say we've really demonstrated this on both Earthstone and Oxy. We laid out both our near-term and long-term accretion estimates. How do we keep this up? Really just by keeping on doing what we're doing. We're going to work to continue to develop our high return inventory. We want to extend our cost leadership, and we want to continue to identify accretive consolidation opportunities.
In short, we have a lot of paths to continue our leading shareholder return track record. 12, we thought was a cool slide, just to kind of hopefully brought all together what we've accomplished. I think simultaneously, driving really high free cash flow per share growth with not compromising the balance sheet has been important. That's what Will talked about, and we've shown we've been able to do that. We do think that's unique in the E&P space, where our peers have either had less growth or pursued more growth through acquisitions that have been more leverage-weighted financings. We did make an announcement this morning on kind of updated shareholder return policy. But before we get into what that is, we kind of wanted to step back and talk about the drivers of the increase to our base dividend.
I'd say we do and have thought the base dividend is the best form of cash return for our shareholders. It's visible and predictable, allows our investors to underwrite that portion of the shareholder return thesis for PR. Once we came to that conclusion, we really just selected a base dividend that our business could support at below $50 oil for two years. And we kind of looked at the company and the foundation we have today, where we've noted we have much more meaningful scale, much more meaningful free cash flow per share, all the while having a really strong balance sheet. In short, we have a really high-quality, durable business. Why change at all? When PR formed, Will alluded to this two years ago, we had a lot of priorities.
Our priorities were getting a merger done, continuing to execute in a really efficient manner, and demonstrating we could drive leading shareholder return as a new company. Really, we're trying to prove our capabilities and our value proposition to the market. At the time, we knew we had to have a meaningful dividend payout, just like all of our peers, and the formula was pretty standard, payout somewhere between 50% and 100% of free cash flow. The thing we did feel strongly about was paying out 50% instead of 75%-100%, because we saw the consolidation opportunity in front of us, and luckily, that played out how we hoped. Today, we're just moving to a policy that's consistent with our belief that the base dividend is the most important and efficient mechanism for returning cash to our investors.
So here's what we're doing. We're increasing the base dividend by 150% to $0.60 per share. That increases our base dividend yield to over 4%, which compares favorably to our peers and the S&P 500. We're eliminating the variable component of our dividend, and we're increasing the buyback authorization to $1 billion from $500 million. The bottom line is we're keenly focused on total shareholder return for PR, and we think this gives people a clear view of the cash return portion of that equation. We have lots of routes to drive value and share price appreciation with the same smart capital allocation that we've demonstrated to date, with which our new dividend policy is a great combination for our shareholders. Last, just to kind of reemphasize the value proposition for our investors.
Since we were formed in 2022, we've delivered best-in-class returns, both for our sector and outpacing the S&P by over two times. Our performance has really been driven to date by low-cost execution, financial discipline, and accretive acquisitions. There's still a lot of room on the valuation side for our stock compared to peers. What we want to do is to continue to build on our track record quarter by quarter. We think there's a really clear path for us to continue to drive shareholder return.
Great. Thank you very much for that. All right, so let's kick it off. So Will, the company changed a lot in the last two years, so I want to start the conversation with, how do you think about the long-term vision for this company? What do you want to be? You're already one of the most cost-efficient operator in the Delaware. So do you want to get bigger? Do you want to look beyond the Delaware? How do you think about this company long term?
... I really think it's kind of similar to what I said in those prepared remarks around, like, we have a core strategy with a competitive advantage and have kind of formed our identity around low-cost leadership in the Delaware. And I don't want to put a hard line and say we would never leave the Delaware, but I do think as we look at M&A, we think about kind of why should we be the owner of these assets? What value can we drive for our shareholders? And it's really anchored in our understanding of the rock and our ability to execute low-cost operations in the Delaware. And as such, I feel like that's probably where we'll stay. I think what's less predictable is the pace of M&A.
You know, the last two years have been frantic, as probably a friendly word for it from our perspective. It feels like we've been in the middle of signing or closing a deal for two years straight, and my crystal ball says that pace should slow slightly, just given you know, the opportunity set on the horizon seems to be less. You know, the unicorns in the Delaware are not in a hurry, as I can tell, and the kind of typical private equity sales, I think a lot of that backlog has been flushed out, and there's less to be done, so my expectation is you'll naturally see it slow, and I think, frankly, we're okay with that. We have a great business plan.
We're gonna continue to execute on our business plan, and opportunistically, you know, I think the ground game piece of that M&A strategy will maintain its speed, and it, you know, it won't change much, but the corporate M&A or the bolt-ons may slow down, and I think we're fine with that, and you know, I could be wrong. You never know. M&A is an interesting cat where it takes both sides, and so you never know how it's gonna shake out.
Great. You did talk about how you think about the quality of doing quality M&A, and wondering, what's your assessment like? What's your criteria when you look at the opportunities that presented to you, whether that's on the corporate side or on the ground game side? And, maybe a follow-up to that is, feels like a lot of high-quality assets have already transacted. So based on your criteria, is there even that many really attractive packages that will perk your interest?
Yeah, I think typically when we say quality, it's to balance out the kind of near-term accretion side of the equation, and quality risk typically is focused on the inventory. It's kind of the balance being you need enough long-term inventory to drive long-term accretion, but you also wanna have that kind of cash-on-cash this year, next year, short-term accretion, and those are typically kind of the two ends of the tool to help make kind of balance out what I'd call good M&A. I don't necessarily think that we are short quality businesses in the Delaware to acquire. I think maybe the total flow of businesses that are going to transact over the next two years will be less than what we saw over the last two years.
But I think from a quality perspective, it, the percentage of those that are of high quality will be the same. And, like, frankly, a lot of the high-quality businesses were the ones who didn't sell over the last two years. And so time will tell, but we would not. Like, we're not looking to do M&A to get bigger and make the business worse. It's just, it's kind of fairly simple that if, you know, for deals we wanna do, we wanna make sure it has the duration, the durability of the inventory and enough kind of near-term free cash flow to make it kind of make sense across the whole span of what we look at. And if that's not what we can find, then we're happy to just kind of continue doing what we're doing with our own business.
Makes sense, and probably speaks volumes to the Delaware Basin as a whole, just given the deep bench of resources that's available and then the scale of the basin. Maybe just on a bigger philosophy, balancing organic growth with cash return. I think you guys talked a lot about focusing on growth per share, and at times, or at least in the past, a lot of that comes with some organic growth. So how and just given the speed of growth that Permian Resources has already seen, that's been an area that has differentiated you guys as well. So how are you guys thinking about balancing that against cash return and other priorities?
I, I think the way we think about development pace implicitly kind of embeds cash return in it. What we're really looking forward to figuring out pace is, how fast does the next development pay out? We're focused for incremental development on very short-term payout, you know, 12-18 months. Our model is not a three-year investment to go hit oil in, in 2028. I'd say the, the levers for us for increasing free cash flow organically are, could be production growth, but it could also be continuing to take costs out of the system so for the same barrels are costing less. And so that's why I go back to, we have plenty of ways to go grow free cash flow per share, both through acquisitions and through our organic business.
Great. Let's talk about the latest acquisition, the Barilla Draw. How do you see that fitting into the portfolio today, and any lessons that you have learned from all the deals that you have integrated in the past, like, what's the best way to extract value from new assets that you're just about to acquire?
Yeah, so I mean, Barilla Draw is an asset that we have. We've been buying all around it for a long time, so I'd say it's an asset we've had our eyes on for a long time, and kind of the timing finally lined up where we had a willing seller at the same time that we wanted to be a willing buyer. Look, as I think about where that fits in, just, like, general M&A, that's a typical bolt-on for us. I mean, that is. I don't wanna oversimplify what integrating that asset will look like, but on the grand scheme of things, that is a simple integration. We, you know, we don't inherit a lot of people. We don't. We share lease lines with it on, I think, about 20 miles of lease line.
Like, this is an asset that we're running kind of on any given day, two to six rigs directly offset. And so for us, kind of from a capital perspective, this is just as simple as take our well development process, move the rig two miles and drill the same package on what used to be Barilla Draw assets, and now will be our assets. The LOE side will take a little more time, just like you saw with the Earthstone integration. LOE kind of changes in downhole, you know, rod pump, ESP design, take time to flow through the system. Same with kind of water disposal strategy, et cetera. One thing that's unique to that asset, and gets us the most excited is it has a very robust midstream system.
Like, they've got their own, you know, crude gas gathering system, water disposal system, and a lot of surface acres. So, whether that is something that we opportunistically employ across our legacy position to kind of drive costs down or ultimately decide to monetize, I think is yet to be decided. But either way, that is a, I think, something unique that we'll be able to drive some value that, you know, potentially other buyers didn't value as much as we did. And then, yeah, like I think our integration M&A strategy has definitely become more refined. I'd say all deals are different. You know, the hardest part of corporate M&A is always going to be the people. The people side of this business is both the most important and the hardest.
For more asset-level deals like this, I think we're able to really tease out where the risks and where we need to focus our time in the underwriting. You know, some everyone's different, but some assets you buy are, you know, gold-plated and very nice, and there's less kind of operational change you have to make. And there's others that you really have to go kind of spend some money back behind the previous operator to do things the Permian Resources way. But no, I think that Barilla Draw is a great example of a large in dollar size, but very easy in ability to integrate. I may not say that in front of my ops team, because it'll be a lot of hard work for them. But I think generally speaking, it's a low-risk integration.
Oh, that's great color. Just shifting gear on the cost side of things, I've been really curious to see how Delaware costs just... Well, Permian Basin overall costs had just been trending down really rapidly, but Delaware has always been a bit more expensive than Midland, just a bit more complex, drilling deeper, et cetera. How far, given you guys are already leading edge on the cost side, like, how much more type of improvement could we see in the Delaware? And is there any best practices that you can extract from Midland that can be utilized in Delaware as well?
Yeah, it's a great question. I'll answer it in the reverse order. I'd say absolutely, we can learn from what the Midland Basin is doing. I mean, the Midland Basin is called a five-to-six-year older basin. It's five to six years further down development, five to six years further down, you know, drilling what would—what used to be tier two rock and having to do it at lower cost. And I think what they've done over the last two-to-three years is still relatively new to employ in the Delaware. So yeah, the answer is, for sure, we watch it closely. I do think there's some amount of gap that will always be there, just even on a few.
I think geologically, the Delaware Basin, what we view as an opportunity with the depth, the overpressured nature, and how much oil is in place, also comes with some challenges, as well. It's just fundamentally a little further away from Midland. And you know, a lot of service companies keep their equipment in Midland, and when you're thirty minutes away from the yard, typically, costs are a little less than when you're three hours away from the yard. But no, I think, like, if you think about specific to Permian Resources, we've kind of continued to see a stairstep decrease in well cost or increase in efficiencies over the last couple of years. You know, some quarters, it's flat from the quarter before, and then you have these breakthroughs like we had in Q2.
Q2 was primarily on the drilling side. There was a lot of work we've done with kind of downhole motors and BHAs, specifically in New Mexico, and I've seen meaningfully less failures, meaningfully less bit trips, and a lot more kind of tuning up more hole per day, and I think that really showed up. We were able to turn online more wells than we typically would in a quarter at lower cost per well. I think where the big step change is coming on the Delaware side is gonna be following what the Midland Basin's done on the frack side. Like, they're, they've done a lot of great stuff on, you know, fracking two wells at the time with one and a half times the equipment on location.
You know, simul-fracs with true number of pumps on location or number of blenders on location being reduced. And I think if we can replicate that on the Delaware, which, you know, we are and lots of companies are, but I do think kind of the amount of cost the Midland Basin drove out of the system relative to Delaware on that side of the business is, there's still a pretty big gap there. And so I think we'll continue to follow in their footsteps on that side. And then you mentioned this on the opening, but, like, all of us have the same problem on power. Like, if we can...
You know, we still run a lot of gas-powered generators in New Mexico, and I think ultimately, if we could get that on grid power, whether that's microgrids fueled with our own Waha gas, which is effectively free or, or worse than free today, that would be a huge synergies to the kind of overall LOE reduction. But even if it's not our own microgrid, our own gas, if it's just kind of the state in general and, and people eventually working together to kind of get more grid power in the area or less generators in the field, I think those are a lot of things we can do on the Delaware Basin that they've had such success as on the Midland Basin side.
Yeah. We've been really surprised by how the frac efficiency improvement just how quickly that materialized in Midland. How much of it is scale in the Delaware? Like, is it like bigger, chunkier block that you need to have that acreage to be in, and the size of operation to be able to park a E-frac and just be able to plow through that inventory very quickly?
Yeah, I think scale, especially if you think of scale in form of, like, pad size, really does make a difference. Like, if you're gonna go spend the time to line up the logistics to frack, you know, two or three wells at the same time, and just the sheer amount of water you need to do that, kind of all the logistics, you really need to make sure the juice is worth the squeeze. So if you're doing that over a six-well pad, it's probably not worth your time. If you're doing it over a 36-well pad, it's definitely worth your time. And I don't think that's necessarily something that unique, that only larger operators can prosecute developments of that size and scale. But typically, as you look at just how they do it, larger operators drill larger pads.
They can handle the, you know, the big pads are less lumpy over a bigger base. Kind of the upfront capital expenditures relative to total capital budgets are a smaller percentage for companies of that size and scale. And so, yeah, I think it's probably a fair conclusion that the larger companies drill larger pads. Larger pads make doing the extra work to line up multiple fracs at the same time, and all the logistics of doing so makes sense. And, and yeah, I think what we've seen from savings is, you know, there's a huge amount of just acceleration of production, which I think there's clear kind of NPV value in doing so. But we're starting to see now that there's also real kind of cost per foot savings and just, you know, less people on location, fracking more feet per day, et cetera.
Right. Maybe a basin overall, just when you talked about water and logistics and things like that, that's Delaware, is an area that we've seen some bottlenecks in the past. Do you think we're past that now, or is that something you still need to stay ahead?
We always have to stay ahead of it. The minute anyone says we're past it, we will be one gas pipeline or one oil pipeline short. So no, we will have to continue to stay on it. I think that's a big part of us, who are in Delaware, is kind of to continue to scream from the rooftops that we need a new gas pipeline every single year. Having said that, I think the specific one that you're probably referencing is Waha pricing today. It's been about as bad as it's ever been over the last few weeks. But Matterhorn is online, moving little bits of gas and coming online in a real way over the next month or two.
And so I think although it continues to get delayed more than we would hope, I feel like I've said it will be online a month from today, two or three times over the last two or three months. That is going to be online and moving a real amount of gas over the next couple of months. And so hopefully that we'll see at least Waha turn positive. I don't think this is gonna be the big game changer for gas. Like, ultimately, we have a lot more work to do, I think, with logistics of how we move gas around the nation and really to other countries, to solve the supply-demand side of the gas part of the equation.
But generally speaking, that would be a nice relief, you know, that it's a. It's not a super meaningful amount of Permian Resources' revenue or EBITDA. Like, even on a good day, gas isn't more than 5% of our revenue. But if you think about the marginal nature of free cash flow, like that 5% of revenue creeps right to our bottom line, and frankly, we'd like to sell gas for more than zero. So, yeah, I think that's the big challenge. I do find a lot of comfort for us specifically, we've never had bottlenecks, so to speak, affect our operations. Like, we have, you know, great midstream counterparties who are able to take and process our gas, take and dispose of, or recycle our water. And so we allocate capital where we think that capital is best fit.
It's not driven by constraints. Even in the toughest of gas takeaway markets, you've seen us being able to execute quarter over quarter. So I think it's less of an operational concern and more of just taking, you know, 50% of our gas prices at, you know, spot Waha, and that's not, hasn't been a fun place to sell gas over the last few months.
Yeah. Well, hopefully that, the bottlenecking is right on the horizon.
Great.
Unfortunately, we're out of time, but a lot more to listen out for and then, you know, improvements to see in the Delaware.
That's right.
Thank you for kicking us off.
Awesome.
Thank you.
Thank you. Thank you. Thank you.