PR Drops 7.5% as Options Caution Builds Ahead of Q3 Earnings

Options positioning has grown noticeably more cautious. The put/call ratio climbed to 0.31 by Tuesday, well above its 20-day average of 0.24 and running at a z-score of 1.4 — the highest defensive reading since the 0.51 peak recorded over the past year. To put that in context: the PCR hovered near 0.19-0.20 throughout late April. Since mid-May it has stepped up steadily, mirroring the stock's price deterioration and suggesting hedging demand is building, not spiking — a methodical repositioning rather than a one-day panic. The next earnings date is August 4, and options traders appear to be pricing in downside risk early.

Short positioning itself tells a less alarming story. At 2.47% of the free float, short interest has eased roughly 8% over the past month — not a meaningful short base, and the borrow market is far from stressed. Availability is extraordinarily loose at over 7,400%, meaning shares to borrow dwarf the current short position by a factor of more than 74. Cost to borrow runs near 0.40%, down sharply from a brief spike above 0.60% on May 19. There is no mechanical squeeze setup here: the lending market is reflecting a commodity-name that anyone can short cheaply and easily if they choose to.

The Street remains tilted bullish, even as targets inch up with little urgency. Mizuho raised its target to $27 this week while maintaining Outperform — a constructive read given the price is sitting near $19.63, implying roughly 38% upside to the mean analyst target of $25.74. Earlier in April, Wells Fargo, Scotiabank, and Truist all lifted targets, predominantly from the low-$20s into the mid-$20s, without changing ratings. The only dissent came from Roth Capital, which stepped back to Neutral in early April, flagging valuation risk. Valuation multiples have compressed alongside the price: the EV/EBITDA multiple has contracted roughly 0.27x over the past 30 days to 4.5x, and the P/E has shed nearly a full turn to just under 9.8x. The bull case centres on 99% WTI oil realisation through new midstream contracts and 3-4% volume growth; the bear case points to declining well productivity and the risk that oil weakens below the $70/bbl threshold needed to sustain free cash flow.

Insider activity adds a cautionary note. The CFO sold $1.28 million worth of shares on May 21 at $20.44 — a price level the stock has since broken below. Earlier in the spring, Co-CEO Will Hickey sold over $16.5 million in early March, director William Quinn sold $10 million in mid-March, and Pearl Energy Investments disposed of $15.3 million. Net insider selling over the 90-day window totalled roughly $60 million across more than 3.1 million net shares. None of these trades carries unusually high significance scores, and selling by energy-company insiders around multi-year price levels is common. But the scale and breadth of the spring selling cluster — spread across the CFO, Co-CEO, General Counsel, and major director-level shareholders — is worth noting as the stock retreats toward the prices at which those sales were executed.

Earnings on August 4 will test whether improving midstream economics and volume guidance can offset the commodity price softness now being priced into both the shares and the options market.