EX-99.1 2 q22024earningsrelease.htm EX-99.1 Document
Exhibit 99.1
Riley Permian Reports Second Quarter 2024 Results

OKLAHOMA CITY, August 7, 2024 -- Riley Exploration Permian, Inc. (NYSE American: REPX) (“Riley Permian” or the “Company”), today reported financial and operating results for the second quarter ended June 30, 2024.

SECOND QUARTER 2024 HIGHLIGHTS
•Averaged 21.3 MBoe/d of total equivalent production (oil production of 14.7 MBbls/d)
•Generated $51.6 million of operating cash flow or $57.6 million before changes in working capital(1)
•Incurred total accrual (activity-based) capital expenditures before acquisitions of $21.4 million and cash capital expenditures before acquisitions of $19.3 million
•Generated Free Cash Flow(1) of $38.3 million
•Paid dividends of $0.36 per share in the second quarter for a total of $7.5 million
•Reduced debt outstanding by $20.0 million
•Raised $25.4 million in net proceeds from an equity offering
•Closed acquisition that added approximately 13,900 contiguous net acres to our New Mexico position
•Signed agreements to expand the scope of our power joint venture RPC Power, LLC (“RPC Power”) and increased our ownership position from 35% to 50%

MANAGEMENT COMMENTARY

“We continue to execute our annual plan with overall positive results,” said Bobby D. Riley, Chief Executive Officer and Chairman of the Board. “It’s early in the year to report on medium-term to longer-term well results, but thus far we are generally seeing outperformance on 2024 legacy well production results relative to our internal forecasts. We continue to experience favorable efficiencies and cost savings on our drilling and completion activity. Well cost savings represent our largest driver of free cash flow improvement this year. The team has also done a great job in smoothing development activity and spend, one of our core objectives coming into the year.”

Exhibit 99.1
OPERATIONS UPDATE AND FINANCIAL RESULTS
SECOND QUARTER 2024 RESULTS

For the quarter ended June 30, 2024, the Company’s revenues totaled $105.4 million, net cash provided by operating activities was $51.6 million and net income was $33.5 million, or $1.59 per diluted share.
On a non-GAAP basis, Adjusted EBITDAX(1) was $73.3 million, cash flow from operations before changes in working capital(1) was $57.6 million, Free Cash Flow(1) was $38.3 million and Adjusted Net Income(1) was $33.1 million, or $1.57 per diluted share.
Average oil production was 14.7 MBbls/d and average total equivalent production was 21.3 MBoe/d (69% oil and 86% liquids).
Average realized prices were $79.25 per barrel of oil, $(0.61) per Mcf of natural gas and $(0.10) per barrel of natural gas liquids.
Lease operating expense (“LOE”) was $16.5 million, or $8.50 per Boe, cash G&A expense(1) was $6.6 million, or $3.39 per Boe, and production and ad valorem taxes were $7.2 million or $3.70 per Boe.
Total accrued capital expenditures before acquisitions were $21.4 million and $19.3 million on a cash basis. The Company drilled 2 gross operated horizontal wells, completed 8 gross operated horizontal wells, and brought online to production 4 gross operated horizontal wells.
The Company made an additional capital contribution of $9.5 million to its joint venture RPC Power LLC. The Company has invested a total of $21.0 million to date and has 50% ownership.
The Company reduced total debt by $20.0 million, including a principal reduction of $15.0 million on its Credit Facility and $5.0 million on its Senior Notes. Interest expense was $8.9 million.
The Company had $322.7 million of total debt, or $335.0 million principal balance, as of June 30, 2024, with approximately $215.0 million available for future borrowing under its Credit Facility. During the quarter, the Company completed its semi-annual redetermination of its revolving credit borrowing base. The borrowing base and elected commitments were reaffirmed at $375 million.
Shareholders’ equity was $489.0 million as of June 30, 2024 and the number of common shares outstanding was 21.6 million.
On April 8, 2024, the Company issued and sold 1,015,000 shares of common stock at a price of $27.00 per share. Net proceeds from the issuance were approximately $25.4 million, after deducting underwriting discounts and commissions and expenses.

INVESTMENT UPDATE
On May 7, 2024, the Company closed on the purchase of oil and natural gas properties in Eddy County, New Mexico for approximately $17.6 million plus $0.5 million in transaction costs. The acquisition adds approximately 13,900 total net acres to our existing New Mexico position.
On May 21, 2024, the Company entered into definitive agreements to expand the scope of its joint venture, RPC Power. The expanded scope will enable RPC Power to build new power generation and storage assets for the sale of energy and ancillary services to ERCOT, the Texas power grid operator. The facilities are targeted for commercial operations throughout 2025.

___________________
(1)A non-GAAP financial measure as defined and reconciled in the supplemental financial tables available on the Company’s website at www.rileypermian.com.


Exhibit 99.1

Selected Operating and Financial Data
(Unaudited)
Three Months EndedSix Months Ended
June 30, 2024March 31, 2024June 30, 2023June 30, 2024June 30, 2023
Select Financial Data (in thousands):
Oil and natural gas sales, net$105,343 $99,424 $99,312 $204,767 $165,724 
Income from Operations$53,612 $50,567 $45,010 $104,179 $81,044 
Adjusted EBITDAX(1)
$73,264 $70,146 $66,265 $143,410 $109,773 
Cash Flow from Operations
$51,641 $56,125 $55,915 $107,766 $88,720 
Free Cash Flow(1)
$38,263 $23,308 $3,270 $61,571 $5,619 
Production Data, net:
Oil (MBbls)1,3421,2891,3702,6312,263
Natural gas (MMcf)1,6081,6311,6773,2392,626
NGLs (MBbls)
330 293 283 623 417 
Total (MBoe)1,940 1,854 1,933 3,794 3,118 
Daily combined volumes (Boe/d)21,31920,37421,23620,84617,225
Daily oil volumes (Bbls/d)14,74714,16515,05514,45612,503
Average Realized Prices:
Oil ($ per Bbl)$79.25 $75.25 $71.41 $77.29 $71.94 
Natural gas ($ per Mcf)$(0.61)$0.42 $0.02 $(0.09)$0.21 
NGLs ($ per Bbl)
$(0.10)$5.97 $5.10 $2.75 $5.65 
Average Realized Prices, including the effects of derivative settlements(2):
Oil ($ per Bbl)$76.96 $74.33 $69.46 $75.68 $68.51 
Natural gas ($ per Mcf)$0.16 $1.20 $0.24 $0.69 $0.35 
NGLs ($ per Bbl)(3)
$(0.10)$5.97 $5.10 $2.75 $5.65 
Weighted Average Common Shares Outstanding (in thousands):
Basic20,866 19,891 19,671 20,378 19,660 
Diluted21,087 19,992 19,985 20,539 19,951 

_____________________
(1)A non-GAAP financial measure as defined and reconciled in the supplemental financial tables available on the Company’s website at www.rileypermian.com.
(2)The Company's calculation of the effects of derivative settlements includes gains and losses on the settlement of its commodity derivative contracts. These gains and losses are included under other income (expense) on the Company’s condensed consolidated statements of operations.
(3)During the periods presented, the Company did not have any NGL derivative contracts in place.


Exhibit 99.1
2024 GUIDANCE

Riley Permian is providing third quarter detailed guidance and reiterating, previously disclosed full-year 2024 activity guidance based on currently scheduled development activity and current market conditions. The average working interest on gross operated wells drilled is subject to change and may have corresponding impacts on investing expenditures. Total equivalent production estimates, inclusive of production from natural gas and NGLs, may be subject to variability based on natural gas dynamics.

Activity, Production, and Investing Guidance
Q3 2024

Full-Year 2024
Gross Operated Well Activity
Drilled
10 - 12
24 - 26
Completed
1 - 3
18 - 20
Turned to Sales
4 - 7
20 - 22
Net Production
Total (MBoe/d)
21.0 - 23.0
21.0 - 22.5
Oil (MBbls/d)14.8 - 15.3
14.5 - 15.2
Investing Expenditures by Category (Accrual, in millions)(1)
Drilling and Completions and Capital Workovers
$20 - 25
$79 - 84
Infrastructure and Other
7 - 9
21 - 26
Total E&P Capex
$27 - 34
$100 - 110
Joint Venture Investment
$4 - 5
$21 - 22
Total Investments
$31 - 39
$121 - 132
Cost Guidance
Q3 2024
Operating and Corporate Costs
Lease operating expense, including workover expense ($ per Boe)
$8.50 - 9.50
Production tax (% of revenue)
6% - 8%
Cash G&A(2) ($ per Boe)
$3.00 - 3.50
Interest expense ($ in millions)(3)
$8.5 - 9.5
Income Tax Cash Payment ($ in millions)(4)
$5 - 7
Income Tax Cash Payment (Full-year 2024) ($ in millions)(4)
$22 - 25
_______________
(1)Activity-based investing expenditures before acquisitions.
(2)A non-GAAP financial measure as defined and reconciled in the supplemental financial tables available on the Company’s website at www.rileypermian.com.
(3)Interest expense is net of interest rate derivative settlements.
(4)Low end of guidance is based on $73-80/Bbl WTI, West Texas Intermediate, for the remainder of 2024.

Exhibit 99.1
CONFERENCE CALL
In connection with the earnings release, Riley Permian management will host a conference call for investors and analysts on August 8, 2024 at 9:00 a.m. CT to discuss the Company's results and to host a Q&A session. Interested parties are invited to participate by calling:
•Toll Free Dial-In, +1 (888) 596-4144
•Toll Dial-in, +1 (646) 968-2525
•Conference ID number 1303008

An updated company presentation, which will include certain items to be discussed on the call, will be posted prior to the call on the Company's website (www.rileypermian.com). In addition to a webcast of the call available on the Company’s website, a replay of the call will be available until August 22, 2024 by calling:
•Toll Free Dial-In, +1 (800) 770-2030
•Toll Dial-in, +1 (609) 800-9909
•Conference ID number 1303008

About Riley Exploration Permian, Inc.
Riley Permian is a growth-oriented, independent oil and natural gas company focused on the acquisition, exploration, development and production of oil, natural gas and natural gas liquids. For more information, please visit www.rileypermian.com.

Investor Contact:
Rick D'Angelo
405-438-0126
IR@rileypermian.com

Exhibit 99.1

Cautionary Statement Regarding Forward Looking Information
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The statements contained in this release that are not historical facts are forward-looking statements that represent management’s beliefs and assumptions based on currently available information. Forward-looking statements include information concerning our possible or assumed future results of operations, business strategies, need for financing, competitive position and potential growth opportunities. Our forward-looking statements do not consider the effects of future legislation or regulations. Forward-looking statements include all statements that are not historical facts and can be identified by the use of forward-looking terminology such as the words “believes,” “intends,” “may,” “should,” “anticipates,” “expects,” “could,” “plans,” “estimates,” “projects,” “targets,” “forecasts” or comparable terminology or by discussions of strategy or trends. You should not place undue reliance on these forward-looking statements. These forward-looking statements are subject to a number of risks, uncertainties and assumptions. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. Although we believe that our plans, intentions and expectations reflected in or suggested by the forward-looking statements we make in this release are reasonable, we can give no assurance that these plans, intentions or expectations will be achieved or occur, and actual results could differ materially and adversely from those anticipated or implied by the forward-looking statements.
Among the factors that could cause actual future results to differ materially are the risks and uncertainties the Company is exposed to. While it is not possible to identify all factors, we continue to face many risks and uncertainties including, but not limited to: the volatility of oil, natural gas and NGL prices; regional supply and demand factors, any delays, curtailment delays or interruptions of production, and any governmental order, rule or regulation that may impose production limits; cost and availability of gathering, pipeline, refining, transportation and other midstream and downstream activities; severe weather and other risks that lead to a lack of any available markets; our ability to successfully complete mergers, acquisitions or divestitures; the inability or failure of the Company to successfully integrate the acquired assets into its operations and development activities; the potential delays in the development, construction or start-up of planned projects; failure to realize any of the anticipated benefits of our joint ventures or other equity investments; the risk that the Company’s enhanced oil recovery, or EOR, or carbon capture, utilization and sequestration, or CCUS, projects may not perform as expected or produce the anticipated benefits; risks relating to our operations, including development drilling and testing results and performance of acquired properties and newly drilled wells; inability to prove up undeveloped acreage and maintain production on leases; any reduction in our borrowing base on our revolving credit facility from time to time and our ability to repay any excess borrowings as a result of such reduction; the impact of our derivative strategy and the results of future settlement; our ability to comply with the financial covenants contained in our credit agreement and senior notes; changes in general economic, business or industry conditions, including changes in inflation rates, interest rates and foreign currency exchange rates; conditions in the capital, financial and credit markets and our ability to obtain capital needed for development and exploration operations on favorable terms or at all; the loss of certain tax deductions; risks associated with executing our business strategy, including any changes in our strategy; risks associated with concentration of operations in one major geographic area; legislative or regulatory changes, including initiatives related to hydraulic fracturing, regulation of greenhouse gases, water conservation, seismic activity, weatherization, or protection of certain species of wildlife, or of sensitive environmental areas; the ability to receive drilling and other permits or approvals and rights-of-way in a timely manner (or at all), which may be restricted by governmental regulation and legislation; restrictions on the use of water, including limits on the use of produced water and a moratorium on new produced water well permits recently imposed by the Railroad Commission of Texas in an effort to control induced seismicity in the Permian Basin; changes in government environmental policies and other environmental risks; the availability of drilling equipment and the timing of production; tax consequences of business transactions; public health crisis, such as pandemics and epidemics, and any related government policies and actions and the effects of such public health crises on the oil and natural gas industry, pricing and demand for oil and natural gas and supply chain logistics; general domestic and international economic, market and political conditions, including the military conflict between Russia and Ukraine, the Israel-Hamas conflict and the global response to such conflicts; risks related to litigation; and cybersecurity threats, technology system failures and data security issues. Additional factors that could cause results to differ materially from those described above can be found in Riley Permian’s Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC and available from the Company’s website at www.rileypermian.com under the “Investor” tab, and in other documents the Company files with the SEC.
 
The forward-looking statements in this press release are made as of the date hereof and are based on information available at that time. The Company does not undertake, and expressly disclaims, any duty to update or revise our forward-looking statements based on new information, future events or otherwise.



Exhibit 99.1
Cautionary Statement Regarding Guidance
The estimates and guidance presented in this release are based on assumptions of current and future capital expenditure levels, prices for oil, natural gas and NGLs, available liquidity, indications of supply and demand for oil, well results, and operating costs. The guidance provided in this release does not constitute any form of guarantee or assurance that the matters indicated will be achieved. While we believe these estimates and the assumptions on which they are based are reasonable as of the date on which they are made, they are inherently uncertain and are subject to, among other things, significant business, economic, operational, and regulatory risks, and uncertainties, some of which are not known as of the date of the statement. Guidance and estimates, and the assumptions on which they are based, are subject to material revision. Actual results may differ materially from estimates and guidance. Please read the "Cautionary Statement Regarding Forward Looking Information" section above, as well as "Risk Factors" in our annual report on Form 10-K and our quarterly reports on Form 10-Q, which are incorporated herein.



Source: Riley Exploration Permian, Inc.



































Exhibit 99.1
RILEY EXPLORATION PERMIAN, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
June 30, 2024December 31, 2023
(In thousands, except share amounts)
Assets
Current Assets:
Cash$10,910 $15,319 
Accounts receivable42,077 35,126 
Prepaid expenses1,766 1,625 
Inventory5,685 6,177 
Current derivative assets1,426 5,013 
Total current assets61,864 63,260 
Oil and natural gas properties, net (successful efforts)889,270 846,901 
Other property and equipment, net20,630 20,653 
Non-current derivative assets631 2,296 
Equity method investment20,757 5,620 
Other non-current assets, net9,805 6,981 
Total Assets$1,002,957 $945,711 
Liabilities and Shareholders' Equity
Current Liabilities:
Accounts payable$12,581 $3,855 
Accrued liabilities19,156 33,159 
Revenue payable32,902 30,695 
Current derivative liabilities8,292 360 
Current portion of long-term debt20,000 20,000 
Other current liabilities4,691 6,276 
Total Current Liabilities97,622 94,345 
Non-current derivative liabilities2,527 — 
Asset retirement obligations31,503 19,255 
Long-term debt302,720 335,959 
Deferred tax liabilities78,418 73,345 
Other non-current liabilities1,135 1,212 
Total Liabilities513,925 524,116 
Commitments and Contingencies
Shareholders' Equity:
Preferred stock, $0.0001 par value, 25,000,000 shares authorized; 0 shares issued and outstanding— — 
Common stock, $0.001 par value, 240,000,000 shares authorized; 21,559,918 and 20,405,093 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively
21 20 
Additional paid-in capital309,341 279,112 
Retained earnings179,670 142,463 
Total Shareholders' Equity489,032 421,595 
Total Liabilities and Shareholders' Equity$1,002,957 $945,711 

Exhibit 99.1
RILEY EXPLORATION PERMIAN, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
(In thousands)
Revenues:
Oil and natural gas sales, net$105,343 $99,312 $204,767 $165,724 
Contract services - related parties60 600 380 1,200 
Total Revenues105,403 99,912 205,147 166,924 
Costs and Expenses:
Lease operating expenses16,492 17,514 33,261 26,389 
Production and ad valorem taxes7,174 7,221 14,405 11,331 
Exploration costs60 80 64 412 
Depletion, depreciation, amortization and accretion17,470 18,601 35,249 27,684 
General and administrative:
Administrative costs6,644 6,500 11,983 11,967 
Share-based compensation expense3,281 1,225 4,973 2,339 
Cost of contract services - related parties— 109 363 219 
Transaction costs670 3,652 670 5,539 
Total Costs and Expenses51,791 54,902 100,968 85,880 
Income from Operations53,612 45,010 104,179 81,044 
Other Income (Expense):
Interest expense, net(8,857)(10,161)(17,924)(11,177)
Gain (loss) on derivatives, net(359)8,665 (17,436)14,420 
Loss from equity method investment(192)(4)(25)(236)
Total Other Income (Expense)(9,408)(1,500)(35,385)3,007 
Net Income from Operations before Income Taxes44,204 43,510 68,794 84,051 
Income tax expense(10,656)(10,442)(16,488)(19,132)
Net Income$33,548 $33,068 $52,306 $64,919 
Net Income per Share:
Basic$1.61 $1.68 $2.57 $3.30 
Diluted$1.59 $1.65 $2.55 $3.25 
Weighted Average Common Shares Outstanding:
Basic20,866 19,671 20,378 19,660 
Diluted21,087 19,985 20,539 19,951 


Exhibit 99.1
RILEY EXPLORATION PERMIAN, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
(In thousands)
Cash Flows from Operating Activities:
Net income$33,548 $33,068 $52,306 $64,919 
Adjustments to reconcile net income to net cash provided by operating activities:
Exploratory well costs and lease expirations— 56 — 388 
Depletion, depreciation, amortization and accretion17,470 18,601 35,249 27,684 
(Gain) loss on derivatives, net359 (8,665)17,436 (14,420)
Settlements on derivative contracts(1,829)(2,303)(1,725)(7,391)
Amortization of deferred financing costs and discount1,317 1,088 2,632 1,281 
Share-based compensation expense3,281 1,225 4,973 2,485 
Deferred income tax expense3,187 8,454 5,073 13,737 
Loss from equity method investment192 4 25 236 
Other31 — (42)— 
Changes in operating assets and liabilities(5,915)4,387 (8,161)(199)
Net Cash Provided by Operating Activities51,641 55,915 107,766 88,720 
Cash Flows from Investing Activities:
Additions to oil and natural gas properties(18,987)(48,090)(53,926)(83,023)
Net assets acquired in business combination— (292,094)— (325,094)
Acquisitions of oil and natural gas properties(18,138)(5,443)(18,138)(5,443)
Contributions to equity method investment(9,543)(1,726)(15,162)(3,566)
Funds held in escrow1,926 — — — 
Additions to other property and equipment(306)(168)(430)(277)
Net Cash Used in Investing Activities(45,048)(347,521)(87,656)(417,403)
Cash Flows from Financing Activities:
Deferred financing costs(69)(6,165)(69)(6,214)
Proceeds from credit facility15,000 145,000 15,000 178,000 
Repayments under credit facility(30,000)(19,000)(40,000)(19,000)
Proceeds from senior notes, net of issuance costs— 188,000 — 188,000 
Repayments of senior notes(5,000)(5,000)(10,000)(5,000)
Payment of common share dividends(7,541)(6,695)(14,707)(13,363)
Proceeds from issuance of common shares, net25,415 — 25,415 — 
Common stock repurchased for tax withholding(52)(68)(158)(300)
Net Cash (Used in) Provided by Financing Activities(2,247)296,072 (24,519)322,123 
Net Increase (Decrease) in Cash and Cash Equivalents4,346 4,466 (4,409)(6,560)
Cash, Beginning of Period6,564 2,275 15,319 13,301 
Cash, End of Period$10,910 $6,741 $10,910 $6,741 


Exhibit 99.1
DERIVATIVE CONTRACTS
The Company’s oil and natural gas derivative instruments consisted of fixed price swaps, costless collars, and basis swaps. The following table summarizes the open financial derivatives as of August 2, 2024, related to oil and natural gas production.
Weighted Average Price
Period (1)
Notional VolumeFixedPutCall
($ per unit)
Oil Swaps (Bbl)
Q3 2024455,000 $74.91 
Q4 2024435,000 $74.90 
2025645,000 $73.63 
Natural Gas Swaps (Mcf)
Q3 2024600,000 $3.21 
Q4 2024450,000 $3.67 
20251,470,000 $3.71 
2026555,000 $4.02 
Oil Collars (Bbl)
Q3 2024366,000 $61.00 $83.61 
Q4 2024390,000 $61.92 $83.39 
20251,635,000 $63.41 $76.42 
2026356,000 $60.53 $80.29 
Natural Gas Collars (MMBtu)
Q3 2024405,000 $3.01 $3.68 
Q4 2024405,000 $3.50 $4.45 
20251,395,000 $3.29 $4.30 
Oil Basis (Bbl)
Q3 2024330,000 $0.97 
Q4 2024330,000 $0.97 
__________________
(1)Q3 2024 derivative positions shown include 2024 contracts, some of which have settled as of August 2, 2024.

Interest Rate Contracts
The Company entered into floating-to-fixed interest rate swaps, in which it will receive a floating market rate equal to one-month CME Term Secured Overnight Financing Rate and will pay a fixed interest rate, to manage future interest rate exposure related to the Company’s Credit Facility. In March 2024, the Company entered into a fixed-to-floating interest rate swap for the period May 2024 - December 2024, to reduce our interest rate exposure, which resulted in a gain of approximately $1 million on a notional amount of $80 million. This gain will be realized upon settlement of the contracts in 2024.



The following table summarizes the open interest rate derivative positions as of June 30, 2024:


Exhibit 99.1
Open Coverage PeriodPositionNotional AmountFixed Rate
(In thousands)
July 2024 - April 2026
Long
$30,000 3.180 %
July 2024 - April 2026
Long
$50,000 3.039 %
July 2024 - December 2024
Short
$80,000 4.910 %