4Q22 Results Update March 2023
2 Forward-Looking Statements Forward-Looking Statements This presentation contains projections and other forward-looking statements within the meaning of federal securities laws. These projections and statements reflect Riley Exploration Permian, Inc.’s (“Riley Permian”) current views with respect to future events and financial performance. No assurances can be given, however, that these events will occur or that these projections will be achieved, and actual results could differ materially from those projected as a result of certain factors. A discussion of these factors is included in Riley Permian’s periodic reports filed with the U.S. Securities and Exchange Commission (“SEC”). All statements, other than historical facts, that address activities that Riley Permian assumes, plans, expects, believes, intends or anticipates (and other similar expressions) will, should or may occur in the future are forward-looking statements. The forward-looking statements are based on management’s current beliefs, based on currently available information, as to the outcome and timing of future events, including the volatility of oil, natural gas and NGL prices; the scope, duration, and reoccurrence of any epidemics or pandemics (including, specifically, the coronavirus disease 2019 (“COVID-19”) pandemic and any related variants), including reactive or proactive measures taken by governments, regulatory agencies and businesses related to the pandemic, and the effects of COVID-19 on the oil and natural gas industry, pricing and demand for oil and natural gas and supply chain logistics; 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 and divestitures; the risk that the Company's EOR project 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; 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; 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; inability to prove up undeveloped acreage and maintain production on leases; risks associated with concentration of operations in one major geographic area; legislative or regulatory changes, including initiatives related to hydraulic fracturing, emissions, and disposal of produced water, which may be negatively impacted by regulation or legislation; 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; risks related to litigation; evolving geopolitical and military hostilities in other areas of the world; and cybersecurity threats, technology system failures and data security issues. These forward-looking statements involve certain risks and uncertainties that could cause the results to differ materially from those expected by the management of Riley Permian. These forward-looking statements involve significant risks and uncertainties that could cause actual results to differ materially from those anticipated, including, but not limited to, the risk that Riley Permian may reduce, suspend or totally eliminate dividend payments in the future, whether variable or fixed, due to insufficient liquidity or other factors, potential adverse reactions or changes to the business or operations of Riley Permian resulting from the recently completed merger, including Riley Permian’s future financial condition, results of operations, strategy and plans; changes in capital markets and the ability of Riley Permian to finance operations in the manner expected; the risk that the Company’s EOR and CCUS projects may not perform as expected or produce the anticipated benefits; the risks of oil and gas activities; and the fact that operating costs and business disruption may be greater than expected following the consummation of the merger. Riley Permian encourages readers to consider the risks and uncertainties associated with projections and other forward-looking statements. In addition, Riley Permian assumes no obligation to publicly revise or update any forward-looking statements based on future events or circumstances. For additional discussion of the factors that may cause us not to achieve our financial projections and/or production estimates, see Riley Permian’s filings with the SEC, including its forms 10-K, 10-Q and 8-K and any amendments thereto. We do not undertake any obligation to release publicly the results of any future revisions we may make to this prospective data or to update this prospective data to reflect events or circumstances after the date of this presentation. Therefore, you are cautioned not to place undue reliance on this information. None of the information contained in this presentation has been audited by any independent auditor. This presentation is prepared as a convenience for securities analysts and investors and may be useful as a reference tool. Riley Permian may elect to modify the format or discontinue publication at any time, without notice to securities analysts or investors. Use of non-GAAP Financial Information This presentation includes certain financial measures that are not calculated in accordance with U.S. generally accepted accounting principles (“GAAP”). These measures include (i) Adjusted Net Income, (ii) Adjusted EBITDAX, (iii) Cash Margins, (iv) Free Cash Flow and (v) PV-10. These non-GAAP financial measures are not measures of financial performance prepared or presented in accordance with GAAP and may exclude items that are significant in understanding and assessing our financial results. Therefore, these measures should not be considered in isolation, and users of any such information should not place undue reliance thereon. See the Company’s website, www.rileypermian.com, for the descriptions and reconciliations of non-GAAP measures presented in this presentation to the most directly comparable financial measures calculated in accordance with GAAP. Oil & Gas Reserves The SEC generally permits oil and natural gas companies, in filings made with the SEC, to disclose proved reserves, which are reserve estimates that geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions, and certain probable and possible reserves that meet the SEC’s definitions for such terms. In this presentation, Riley Permian may use the terms “resource potential,” “resource play,” “estimated ultimate recovery,” or “EURs,” “type curve” and “standardized measure,” each of which the SEC guidelines restrict from being included in filings with the SEC without strict compliance with SEC definitions. These terms refer to Riley Permian’s internal estimates of unbooked hydrocarbon quantities that may be potentially discovered through exploratory drilling or recovered with additional drilling or recovery techniques. “Resource potential” is used by Riley Permian to refer to the estimated quantities of hydrocarbons that may be added to proved reserves, largely from a specified resource play potentially supporting numerous drilling locations. A “resource play” is a term used by Riley Permian to describe an accumulation of hydrocarbons known to exist over a large areal expanse and/or thick vertical section potentially supporting numerous drilling locations, which, when compared to a conventional play, typically has a lower geological and/or commercial development risk. “EURs” are based on Riley Permian’s previous operating experience in a given area and publicly available information relating to the operations of producers who are conducting operations in these areas. Unbooked resource potential or “EURs” do not constitute reserves within the meaning of the Society of Petroleum Engineer’s Petroleum Resource Management System or SEC rules and do not include any proved reserves. Actual quantities of reserves that may be ultimately recovered from Riley Permian’s interests may differ substantially from those presented herein. Factors affecting ultimate recovery include the scope of Riley Permian’s ongoing drilling program, which will be directly affected by the availability of capital, decreases in oil, natural gas liquids and natural gas prices, well spacing, drilling and production costs, availability and cost of drilling services and equipment, lease expirations, transportation constraints, regulatory approvals, negative revisions to reserve estimates and other factors, as well as actual drilling results, including geological and mechanical factors affecting recovery rates. “EURs” from reserves may change significantly as development of Riley Permian’s core assets provides additional data. In addition, Riley Permian’s production forecasts and expectations for future periods are dependent upon many assumptions, including estimates of production decline rates from existing wells and the undertaking and outcome of future drilling activity, which may be affected by significant commodity price declines or drilling cost increases. “Type curve” refers to a production profile of a well, or a particular category of wells, for a specific play and/or area.
Highlights of 4Q22 Results 3 RILEY PERMIAN NYSE: REPX Share Price1 [$25.95] Shares Out1 [19.54MM] Market Cap1 [$507MM] Debt1 [$61MM] Insider Holdings [32%] Current Qrtly. Dividend1 [$0.34/Sh.] Ann. Dividend Yield1,2 [4.8%] 1) As of [10/28/22]. 2) Future dividends are subject to approval by the board of directors. Production CFFO(1) E&P Capex (Accrual)(2) 10.0 MBbls/d 13.3 MBoe/d $44MM for 4Q22 $169MM for 12 Mos. $27MM for 4Q22 $123MM for 12 Mos. 6% oil increase Q/Q 37% oil increase Y/Y for the quarter 31% oil increase Y/Y for the 12 mo. period 12% decrease Q/Q 77% increase Y/Y for the quarter 89% increase Y/Y for the 12 mo. period 28% decrease Q/Q 31% increase Y/Y for the quarter 49% increase Y/Y for the 12 mo. period FCF(3) Dividends(4) Debt $15MM for 4Q22 $56MM for 12 Mos. $0.34/Sh. Paid in 4Q $0.34/Sh. Paid in 1Q23 $8MM Draw $56MM Balance 5% decrease Q/Q 455% increase Y/Y for the quarter 572% increase Y/Y for the 12 mo. Period 10% increase in 4Q vs. 3Q 17% increased balance Q/Q 14% decreased balance Y/Y Note: The Company recently changed its fiscal year from a 9/30 fiscal year-end to 12/31 fiscal year-end. The fourth quarter of 2022 above reflects the quarter ending 12/31/22. (1) Cash Flows from Operations before the impact of changes in working capital. (2) Activity-based capital expenditures before acquisitions. (3) A non-GAAP financial measure as defined in the supplemental financial tables available on the company’s website at www.rileypermian.com. (4) Future dividends are subject to approval by the board of directors.
Drivers of Growth in Cash Flow from Operations(1) 4 RILEY PERMIAN NYSE: REPX Share Price1 [$25.95] Shares Out1 [19.54MM] Market Cap1 [$507MM] Debt1 [$61MM] Insider Holdings [32%] Current Qrtly. Dividend1 [$0.34/Sh.] Ann. Dividend Yield1,2 [4.8%] 1) As of [10/28/22]. 2) Future dividends are subject to approval by the board of directors. Q/Q: 3 Months Ending 12/31/22 vs 9/30/22 Y/Y: 12 Months Ending 12/31/22 vs 12/31/21 12% decrease Q/Q due to 13% lower realized oil prices 89% higher Y/Y driven by volumes and price (1) Cash Flows from Operations before the impact of changes in working capital. (2)
Improving Capital Efficiency: More Growth with Less Spending Increased Allocation of Capital to Dividends + Balance Sheet Materially Increased FCF(1) 5 Reinvesting for Significant Growth While Also Increasing FCF(1) $MM Note: All periods shown above are for the 12 months ended 12/31/21 or 12/31/22. (1) A non-GAAP financial measure as defined in the supplemental financial tables available on the company’s website at www.rileypermian.com. 0% 10% 20% 30% 40% 0% 25% 50% 75% 100% Y/ Y Oi l P ro du ct io n G ro w th Reinvestment Rate: Cash Capex before Acquisitions vs CFFO 2021 2022 88% 66% 12% 34% 2021 2022 Dividends and Balance Sheet Cash Capex before Acquisitions
Acquisitions and New Ventures 6 EOR Pilot • Injecting water and CO2 but still early in the process of repressurizing the reservoir CCUS • Advancing with partners on the potential development of a large-scale CO2 storage hub in our immediate region of the Permian Basin Onsite Power JV • Formed JV for the purposes of improving operations via electric power supply quality and consistency, controlling costs and reducing emissions from flare gas Land Acquisition • Closed acquisitions of large surface land acreage within Yoakum County footprint which will lead to operating synergies, including for the power JV New Mexico Acquisition • Announced transformational acquisition in new region (Yeso trend of Eddy County, NM) with similar Northwest Shelf and other qualities to core asset in Yoakum County, TX
Transaction Overview Regional Map • Strategic acquisition in the prolific Yeso trend (Eddy County, NM) • Purchase price of $330 million with 100% cash consideration • To be funded through a combination of borrowings under the Company's revolving credit facility and the proceeds from the issuance of new senior unsecured notes (5-year maturity, 10.5% annual interest) • Transaction is valued at 3.4x 2023 Adjusted EBITDAX(1) and a 15% free cash flow yield(1) • Accretive to relevant financial and valuation metrics • Adds high-quality drilling inventory including locations primarily in the Blinebry, Glorieta and Paddock formations Asset Highlights Net Acres 11,700 (99% HBP) Current Production 7.2 Mboe/d, 4.2 Mbo/d Gross Undeveloped Locations 100+ PDP PV10 at NYMEX Pricing(1)(2) $260MM PDP Reserves(2) 16.5 MMBoe 7 Enhancing Scale with Transformative New Mexico Acquisition (1) A non-GAAP financial measure as defined in the supplemental financial tables available on the Company’s website at www.rileypermian.com. (2) Riley Permian's estimate of proved developed reserve volumes and values as of January 1, 2023, discounting cash flows at a rate of 10% and utilizing NYMEX strip pricing as of February 24, 2023. SWD infrastructure Crude takeaway Gas takeaway Acreage Position Legacy Champions Asset
8 Forward Guidance (1) Full year 2023 guidance information here reflects Riley Permian for the first quarter of 2023 and Riley Permian with the New Mexico Acquisition for the second, third and fourth quarters of 2023 based on assumption that the New Mexico Acquisition closes early in the second quarter of 2023. (2) Pro forma full year 2023 guidance information reflects combined Riley Permian with the New Mexico Acquisition as if the New Mexico Acquisition closed on January 1, 2023. This is shown for illustrative purposes only. (3) Activity-based investing expenditures before acquisitions. (4) A non-GAAP financial measure as defined and reconciled in the supplemental financial tables available on the Company’s website at www.rileypermian.com. Act ivity and Investing Guidance Production, Realizat ions and Cost Guidance 1Q23 2023 Reporting( 1) 1Q23 2023 Reporting( 1) 2023 Il lustrative Pro Forma( 2) Forecasted Contribution of New Mex ico Asset to Period 0% 75% Forecasted Contribution of New Mex ico Asset to Period 0% 75% 100% Texas Activity Net Production Gross Operated Wells Drilled # 7 - 9 13 - 15 Total MBoe/d 13.2 - 13.8 18.4 - 19.2 20.1 - 21.2 Avg. WI on Gross Oper. Wells Drilled % 99% - 100% 98% - 99% Oil MBbls/d 9.8 - 10.2 12.8 - 13.4 13.8 - 14.6 New Mex ico Activity % Oil % 74% - 75% 70% - 71% 68% - 69% Gross Wells Drilled # 0 7 - 9 % Natural Gas % 16% - 14% 16% - 15% 18% - 16% Avg. WI on Gross Oper. Wells Drilled % NA 90% - 97% % NGL % 10% - 11% 14% - 14% 14% - 15% Investing Expenditures by Category (Accrual) ( 3) Basis Differentials and Fees E&P $MM 44 - 50 150 - 165 Oil $/Bbl (3.65) - (3.15) (3.90) - (2.90) Power JV Investment $MM 3 - 4 10 - 15 Natural Gas $/Mcf (2.90) - (2.50) (2.70) - (2.10) Total Investments $MM 47 - 54 160 - 180 NGL as a % of WTI % of WTI 9% - 13% 12% - 16% E&P Capital Expenditures by Region (Accrual) ( 3) Operating and Corporate Costs Texas % 99% - 100% 65% - 75% LOE & Workover Expense (WOE) $/Boe 8.00 - 9.00 8.00 - 9.00 New Mexico % 0% 25% - 35% Severance & Ad Valorem Tax % of revenue 6.0% - 8.0% 6.0% - 8.0% Cash G&A(4) $/Boe 3.80 - 4.40 3.00 - 3.50 Assumed year-over-year inflation on service costs: 15-20% Cash Income Taxes $MM 0.0 - 0.5 6.0 - 8.0
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Capitalization Summary 10 RILEY PERMIAN NYSE: REPX Share Price1 [$25.95] Shares Out1 [19.54MM] Market Cap1 [$507MM] Debt1 [$61MM] Insider Holdings [32%] Current Qrtly. Dividend1 [$0.34/Sh.] Ann. Dividend Yield1,2 [4.8%] 1) As of [10/28/22]. 2) Future dividends are subject to approval by the board of directors. (1) Values in MM except for share price (2) Source: SEC Filings. Insiders include Yorktown, management and the board of directors. (3) Affiliated entity holdings aggregated from Form 4 filings (4) Future dividends are subject to approval by the board of directors > 5% Holders and Insiders as of 3/7/231 Shares (MM) Ownership % Share Price (3/7/23) $33.32 Yorktown Energy Partners2 5.51 27.3% Shares Outstanding, MM (3/7/23) 20.2 Bluescape Energy Partners 5.22 25.9% Equity Value, $MM $671.7 Balmon Investments2 2.02 10.0% VandenBrink Estate2 1.97 9.8% Credit Facility Debt, $MM (12/31/22) $56.0 Riley Permian Management 0.83 4.1% Cash and Cash Equivalents, $MM (12/31/22) (13.3) Board of Directors 0.03 0.2% Enterprise Value, $MM $714.4 Estimated Public Float 4.58 22.7% Total 20.16 100.0% Total Insider Ownership 6.37 31.6% Current Qrtly. Dividend3: $0.34/Sh Total shares inclusive of restricted stock awards Balance as of: 12/31/2022 Annual Dividend Yield3: 4.1% Syndication: 6 banks with Truist Bank as Administrative Agent Debt to EV: 7.8% Interest Rate: Term SOFR + 285-385bps Maturity: April 2026 Equity Ownership Credit FacilityMarket Capitalization NYSE: REPX $56MM Drawn $169MM Available Liquidity $- $50 $100 $150 $200 $250 $M M $225MM Borrowing Base
11 Hedging Positions as of 3/3/23 Note: Q1 2023 derivative positions shown include contracts that have settled as of 3/3/23 2023 2024 2025 Calendar Quarters 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q CRUDE OIL Fixed Swap - Volume, Bbls/Qtr 225,000 315,000 216,000 189,000 60,000 60,000 60,000 60,000 - Weighted Average Price, $/Bbl $53.65 $62.78 $63.04 $62.51 $71.60 $71.60 $71.60 $71.60 $0.00 Collars - Volume, Bbls/Qtr 210,000 300,000 330,000 330,000 363,000 330,000 300,000 300,000 315,000 Weighted Average Floor Price, $/Bbl $70.95 $71.50 $68.64 $68.64 $61.16 $60.91 $61.00 $61.00 $60.00 Weighted Average Ceiling Price, $/Bbl $89.96 $88.98 $88.85 $88.85 $86.95 $87.41 $85.50 $85.50 $77.98 Total Oil Price Hedges, Bbls/Qtr 435,000 615,000 546,000 519,000 423,000 390,000 360,000 360,000 315,000 CRUDE OIL BASIS Mid/Cush Basis Swaps - Volume, Bbls/Qtr 240,000 360,000 360,000 360,000 240,000 240,000 240,000 240,000 - Weighted Average Price, $/Bbl $1.28 $1.28 $1.28 $1.28 $0.87 $0.87 $0.87 $0.87 $0.00 NATURAL GAS Swaps - Volume, MMBtu/Qtr - 450,000 450,000 400,000 375,000 375,000 375,000 375,000 375,000 Weighted Average Price, $/MMBtu $0.00 $2.60 $2.60 $3.23 $3.61 $3.17 $3.17 $3.75 $4.05 Collars - Volume, MMBtu/Qtr - 300,000 300,000 300,000 300,000 255,000 255,000 255,000 255,000 Weighted Average Floor Price, $/MMBtu $0.00 $2.55 $2.55 $3.12 $3.40 $2.95 $2.95 $3.42 $3.65 Weighted Average Ceiling Price, $/MMBtu $0.00 $3.20 $3.20 $4.07 $4.50 $3.72 $3.72 $4.54 $4.95 Total NG Price Hedges, MMBtu/Qtr - 750,000 750,000 700,000 675,000 630,000 630,000 630,000 630,000
Additional Information 12 Company www.rileypermian.com 29 E. Reno Ave., Ste 500 Oklahoma City, OK 73104 Investor Relations Direct: 405-415-8699 ir@rileypermian.com
