Group 1 - Riley Exploration Permian (NYSE: REPX) announced a $142 million acquisition while reducing its 2025 capex budget by nearly $100 million, indicating a strategic shift towards enhancing future development opportunities [2] - The company is projected to end 2025 with a leverage ratio of 1.2x, suggesting a manageable debt level in relation to its earnings [2] Group 2 - The investing group Distressed Value Investing focuses on value opportunities and distressed plays, particularly in the energy sector, highlighting the potential for investment in this area [3]

Financial Data and Key Metrics Changes - The company generated $54 million of operating cash flow before working capital, converting it to $39 million of upstream free cash flow, with a capital expenditure (CapEx) of only 35% reinvested into upstream while keeping volumes mostly flat [24] - Debt was reduced by $21 million quarter over quarter, resulting in a leverage ratio of 0.9 times [24] - Operating costs were lowered, with lease operating expenses (LOE) per barrel of oil equivalent (BOE) at $8.34, a 2% reduction from the previous quarter and an 8% reduction year over year [14] Business Line Data and Key Metrics Changes - Net production slightly declined from 1.46 million barrels of oil to 1.41 million barrels quarter over quarter, but increased by 19% year over year from 1.85 million barrels to 2.2 million barrels of oil equivalent [13] - The company completed 10 wells in Q1 2025, with five wells flowing back and expected to begin production in May, while the other five will come online in the second half of 2025 [12][14] Market Data and Key Metrics Changes - The company noted a 10% compression in many service costs compared to the previous year, despite potential tariff impacts [15] - The average daily net production was 15,620 barrels of oil per day and 24,430 barrels of oil equivalent per day for Q1 2025 [14] Company Strategy and Development Direction - The company announced a strategic acquisition of Silverback Exploration for $142 million, which includes approximately 47,000 net working interest acres and enhances long-term upstream development potential [5][6] - The focus for the year is on acquiring and preserving high-quality inventory rather than converting inventory to production [9] - The company plans to extend proven processes from Texas to New Mexico, enhancing power generation capabilities [9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term outlook for the industry and the company, emphasizing a disciplined capital allocation philosophy and a robust hedging profile [9] - The company is adjusting its 2025 CapEx guidance down by $105 million or 50%, including a 41% reduction in upstream CapEx [29] - Management believes that the current market conditions present a better time to procure and preserve inventory [30] Other Important Information - The company achieved a total recordable incident rate of zero for Q1 2025, with 93% safe days [11] - The first phase of the New Mexico gathering and compression project was completed on time and on budget, increasing gas delivery capabilities [19] Q&A Session Summary Question: What do you think the motivation for the seller was regarding the Silverback acquisition? - The seller was a large private equity firm that often focuses on larger entities and exits, and the asset may have been too small for them [41] Question: Does the larger contiguous acreage position change the scope of your midstream project? - The acquisition supports the decision to invest in infrastructure, and additional gathering and compression may be needed over time [46][47] Question: What impact could the Silverback assets have on Riley's borrowing base during the redetermination in the fall? - The PDP value is likely half of the purchase price, and while not counting on it, some incremental benefit is expected [55] Question: Can you discuss how you are thinking about hedging downside risk in the current market environment? - Hedging is viewed as a risk management tool, and the company has hedged oil prices for 70% of forecasted PDP volumes at a weighted average downside price [58][59] Question: Are there any significant permitting differences for power projects in New Mexico versus Texas? - The air permits in New Mexico add a little cost, but overall permitting is looking fine [61]

Financial Data and Key Metrics Changes - The company generated $54 million of operating cash flow before working capital, converting it to $39 million of upstream free cash flow, with a capital expenditure (CapEx) of only 35% reinvested into upstream while keeping volumes mostly flat [21] - Debt was reduced by $21 million quarter over quarter, resulting in a leverage ratio of 0.9 times [21] - Average daily net production was 15,620 barrels of oil per day and 24,430 barrels of oil equivalent per day for Q1 2025, with a slight decline in net production from 1.46 million to 1.41 million barrels quarter over quarter, but a 19% increase compared to the same quarter last year [11][12] Business Line Data and Key Metrics Changes - The company completed 10 wells in Q1 2025, with five wells flowing back and beginning production in May, while the other five will come online in the second half of 2025 [11] - Operating costs were lowered, with lease operating expenses (LOE) per BOE for Q1 2025 at $8.34, a 2% reduction from Q4 2024 and an 8% reduction from the same quarter last year [12] Market Data and Key Metrics Changes - The company noted a 10% compression in many service costs compared to last year, despite potential tariff impacts [13] - The acquisition of Silverback Exploration is expected to enhance the company's long-term upstream development potential and increase its working interest in existing units [6][8] Company Strategy and Development Direction - The company is prioritizing the acquisition and preservation of high-quality inventory over the conversion of inventory to production, indicating a focus on long-term growth [8] - The strategic acquisition of Silverback Exploration for $142 million in cash is aimed at expanding the company's footprint in New Mexico and enhancing its operational capabilities [5][6] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's position to succeed in the current market environment, citing a strong asset base and disciplined capital allocation philosophy [8] - The company anticipates that favorable market conditions will return for bringing on new production, despite current market volatility [26] Other Important Information - The company achieved a total recordable incident rate of zero for Q1 2025, with 93% safe days, marking a record percentage of safe days in a quarter [9][10] - The company is exploring financing alternatives for midstream projects and may reaccelerate project spending based on market conditions [27] Q&A Session Summary Question: What do you think the motivation for the seller was regarding the Silverback acquisition? - The seller was a large private equity firm that often focuses on larger entities, and the asset may have been too small for them [33] Question: Does the larger contiguous acreage position change the scope of your midstream project? - The acquisition supports the decision to invest in infrastructure, and additional gathering and compression may be needed over time [39] Question: What impact could the Silverback assets have on Riley's borrowing base during redetermination? - The PDP value is estimated to be about half of the purchase price, and the company expects some incremental benefit to the borrowing base [46] Question: Can you discuss how you are thinking about hedging downside risk in the current market environment? - The company views hedging as a risk management tool and has laid in some swaps for 2026 to provide clearer cash flow streams [47] Question: Are there any significant permitting differences between power projects in New Mexico versus Texas? - The permitting process is manageable, with some additional costs for air permits in New Mexico [51]

Corporate Overview and Strategy - Riley Permian's 1Q25 production was 24.4 Mboe/d[11] - The company's equity market capitalization is approximately $560 million[11] - The enterprise value is around $800 million[11] - Last Twelve Months (LTM) total free cash flow was about $130 million[11] - The company's debt leverage is approximately 0.9x[11] - The dividend yield is 6.0%[11] - Insider ownership stands at 25%[11] Silverback Acquisition - The purchase price of the Silverback acquisition was $142 million at closing[29] - Recent production from the acquired assets is 5.0 Mboe/d, with 52% oil and 75% liquids[29] - The acquisition includes approximately 47,000 net working interest acres, with around 19,000 net acres prospective for the Yeso Trend (79% undeveloped)[29] New Mexico Gas Midstream Project - The estimated capital expenditure for the New Mexico Gas Midstream Project is approximately $120 million, to be invested during 2025-2026[34] - The project involves constructing a 20-inch diameter high-pressure pipeline with 150 MMcfd capacity[34] 1Q25 Results Summary - The company generated $56 million of Cash Flow From Operations (CFFO) and $71 million of Adjusted EBITDAX (69% margin) in 1Q25[51] - The company reinvested 35% of CFFO into Upstream Capex on an accrual basis and 29% on a cash basis[51] - The company converted 71% of CFFO into Upstream Free Cash Flow (FCF) and 66% into Total FCF[51]

Company Performance - Riley Exploration Permian, Inc. reported quarterly earnings of $1.62 per share, slightly missing the Zacks Consensus Estimate of $1.63 per share, and showing a year-over-year increase from $1.61 per share [1] - The company posted revenues of $102.46 million for the quarter ended March 2025, which was 2.51% below the Zacks Consensus Estimate and an increase from $99.74 million a year ago [2] - Over the last four quarters, the company has consistently failed to surpass consensus EPS and revenue estimates [2] Stock Performance - Riley Exploration Permian shares have declined approximately 20.6% since the beginning of the year, compared to a decline of 4.7% for the S&P 500 [3] - The current Zacks Rank for the stock is 5 (Strong Sell), indicating expectations of underperformance in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $1.42 on revenues of $98.94 million, and for the current fiscal year, it is $6.34 on revenues of $408.46 million [7] - The trend for estimate revisions ahead of the earnings release has been unfavorable, which may impact future stock performance [6] Industry Context - The Oil and Gas - Exploration and Production - United States industry is currently ranked in the bottom 25% of over 250 Zacks industries, suggesting a challenging environment for companies within this sector [8]

[Part I. FINANCIAL INFORMATION](index=6&type=section&id=Part%20I.%20FINANCIAL%20INFORMATION) This section details the company's financial performance and position for Q1 2025, including statements, management analysis, market risks, and controls [Financial Statements](index=6&type=section&id=Item%201.%20Financial%20Statements) The company's Q1 2025 financial statements show increased assets and equity, with net income rising to **$28.6 million** despite lower operating cash flow [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2025, total assets increased slightly to **$994.9 million**, liabilities decreased, and shareholders' equity grew to **$532.4 million** Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Current Assets** | $53,812 | $68,125 | | **Total Assets** | **$994,944** | **$993,501** | | **Total Current Liabilities** | $121,834 | $122,764 | | **Total Liabilities** | **$462,561** | **$482,886** | | **Total Shareholders' Equity** | **$532,383** | **$510,615** | [Condensed Consolidated Statements of Operations](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q1 2025 total revenues rose to **$102.5 million**, with net income significantly increasing to **$28.6 million** or **$1.36 per diluted share** Condensed Consolidated Statements of Operations Highlights (in thousands, except per share amounts) | Metric | Three Months Ended Mar 31, 2025 | Three Months Ended Mar 31, 2024 | | :--- | :--- | :--- | | **Total Revenues** | $102,457 | $99,744 | | **Income from Operations** | $49,502 | $50,567 | | **Net Income** | **$28,633** | **$18,758** | | **Diluted EPS** | **$1.36** | **$0.94** | [Condensed Consolidated Statements of Changes in Shareholders' Equity](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Shareholders%27%20Equity) Shareholders' equity increased to **$532.4 million** by March 31, 2025, driven by net income, partially offset by dividends - The increase in shareholders' equity during Q1 2025 was primarily due to net income of **$28.6 million**, which was partially offset by **$8.2 million** in declared dividends[17](index=17&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Q1 2025 net cash from operations was **$50.4 million**, with significant cash used in investing and financing activities Summary of Cash Flows (in thousands) | Cash Flow Activity | Three Months Ended Mar 31, 2025 | Three Months Ended Mar 31, 2024 | | :--- | :--- | :--- | | **Net Cash Provided by Operating Activities** | $50,381 | $56,125 | | **Net Cash Used in Investing Activities** | $(25,403) | $(42,608) | | **Net Cash Used in Financing Activities** | $(29,245) | $(22,272) | | **Net Decrease in Cash** | $(4,267) | $(8,755) | [Notes to the Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) Notes detail accounting policies, derivative positions, debt, and significant acquisitions, including the **$142 million** Silverback Exploration II purchase - In March 2025, the company agreed to acquire undivided interest in oil, natural gas, and minerals in its Red Lake field for approximately **$2.1 million**[41](index=41&type=chunk) - The company uses fixed price swaps and costless collars to hedge its oil and natural gas production against price fluctuations[43](index=43&type=chunk)[44](index=44&type=chunk) - On May 3, 2025, the company entered into an agreement to acquire Silverback Exploration II, which owns assets in Eddy County, New Mexico, for an aggregate purchase price of **$142 million** plus potential earnout payments[102](index=102&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Q1 2025 oil and gas sales increased due to higher production volumes, offsetting lower prices, while managing liquidity and strategic projects [Results of Operations](index=28&type=section&id=Results%20of%20Operations) Q1 2025 total oil and natural gas sales increased by **3%** to **$102.5 million**, driven by a **20%** rise in daily production despite lower oil prices Production and Realized Prices (Q1 2025 vs Q1 2024) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | **Total Production (MBoe)** | 2,199 | 1,854 | | **Daily Production (Boe/d)** | 24,433 | 20,374 | | **Avg. Realized Oil Price ($/Bbl)** | $70.12 | $75.25 | | **Avg. Realized Nat Gas Price ($/Mcf)** | $0.71 | $0.42 | - The increase in oil revenues was driven by a **10%** rise in daily oil volumes, which more than offset a **$5.13 per barrel** decrease in realized prices[115](index=115&type=chunk) - Lease Operating Expenses (LOE) increased by **$1.6 million**, primarily due to the addition of assets from the 2024 New Mexico Asset Acquisition[120](index=120&type=chunk) - General & Administrative (G&A) expense increased by **$1.8 million**, mainly due to increased employee headcount and higher legal fees associated with the midstream project development[127](index=127&type=chunk) [Liquidity and Capital Resources](index=32&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains liquidity through cash from operations and its credit facility, managing a working capital deficit and significant capital commitments - As of March 31, 2025, the company had a working capital deficit of **$68.0 million**, cash of **$8.9 million**, and **$301 million** of undrawn capacity under its Credit Facility[133](index=133&type=chunk) Cash Flow Summary (Q1 2025 vs Q1 2024, in thousands) | Cash Flow Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $50,381 | $56,125 | | Net cash used in investing activities | $(25,403) | $(42,608) | | Net cash used in financing activities | $(29,245) | $(22,272) | - The company has a remaining commitment to invest up to **$21.5 million** in the RPC Power joint venture and is committed to spend approximately **$130 million** in capital expenditures through 2026 for its midstream buildout, of which **$16 million** has been incurred[143](index=143&type=chunk)[144](index=144&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=35&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces significant commodity price and interest rate risks, partially mitigated by derivative contracts, with a **10%** price change impacting sales by **$10.2 million** - The company's results are highly sensitive to commodity price volatility; a **10%** change in realized pricing would have changed Q1 2025 oil and natural gas sales by approximately **$10.2 million**[148](index=148&type=chunk)[150](index=150&type=chunk) - A **10%** change in the forward price curves for oil and natural gas would have changed the net fair value of the company's derivative contracts by approximately **$26 million** as of March 31, 2025[150](index=150&type=chunk) - The company is subject to interest rate risk, which could increase its cost of capital, partially mitigated through the use of interest rate derivative contracts[151](index=151&type=chunk) [Controls and Procedures](index=35&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal controls - Based on an evaluation as of March 31, 2025, the CEO and CFO concluded that the company's disclosure controls and procedures were effective[153](index=153&type=chunk)[154](index=154&type=chunk) - No changes occurred in the company's internal control over financial reporting during the quarter ended March 31, 2025, that materially affected, or are reasonably likely to materially affect, these controls[155](index=155&type=chunk) [Part II. OTHER INFORMATION](index=36&type=section&id=Part%20II.%20OTHER%20INFORMATION) This section covers legal proceedings, risk factors, equity sales, other information, and exhibits filed with the Form 10-Q [Legal Proceedings](index=36&type=section&id=Item%201.%20Legal%20Proceedings) The company is not involved in any legal proceedings expected to materially adversely affect its financial condition or operations - The company is not currently involved in any legal proceedings that are expected to have a material adverse effect on its financial condition, liquidity, or results of operations[156](index=156&type=chunk) [Risk Factors](index=36&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the company's risk factors have occurred since the 2024 Annual Report filing - No material changes to the company's risk factors have occurred since the filing of its 2024 Annual Report[158](index=158&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=36&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased **2,123** common shares from employees in Q1 2025 for tax withholding purposes, not as part of a public program Issuer Repurchases of Equity Securities (Q1 2025) | Month Ended | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | January 31 | 1,703 | $34.24 | | February 28 | 420 | $33.81 | | March 31 | 0 | $0.00 | - The repurchased shares were received from employees to cover tax withholding on vesting transactions and were not part of a publicly announced repurchase program[159](index=159&type=chunk) [Other Information](index=36&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during Q1 2025 - No directors or officers adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during Q1 2025[160](index=160&type=chunk) [Exhibits](index=37&type=section&id=Item%206.%20Exhibits) The report includes a list of exhibits, such as CEO/CFO certifications and corporate documents incorporated by reference - The report includes a list of exhibits filed, such as CEO/CFO certifications and various corporate and financial agreements incorporated by reference[161](index=161&type=chunk)

Exhibit 99.1 Riley Permian Reports First Quarter 2025 Results and Announces Acquisition and Modified Development Outlook OKLAHOMA CITY, May 7, 2025 -- Riley Exploration Permian, Inc. (NYSE American: REPX) ("Riley Permian" or the "Company"), today reported financial and operating results for the first quarter ended March 31, 2025. FIRST QUARTER 2025 AND RECENT HIGHLIGHTS Bobby D. Riley, Chief Executive Officer and Chairman of the Board commented, "Riley Permian delivered another capital-efficient quarter of ...

OKLAHOMA CITY, May 7, 2025 /PRNewswire/ -- Riley Exploration Permian, Inc. (NYSE American: REPX) ("Riley Permian" or the "Company"), today reported financial and operating results for the first quarter ended March 31, 2025.FIRST QUARTER 2025 AND RECENT HIGHLIGHTS Averaged 24.4 MBoe/d of total equivalent production (oil production of 15.6 MBbls/d) Generated $50 million of operating cash flow or $56 million before changes in working capital(1), $36 million of Total Free Cash Flow(1) and $39 million of Upstre ...

Group 1 - The article focuses on analyzing oil and gas companies, specifically highlighting Riley Exploration Permian (REPX) as an undervalued entity in the industry [1][2] - Riley Exploration Permian benefits from its strategic location on the Northwest Shelf, which is advantageous for its operations [2] - The oil and gas industry is characterized as a boom-bust, cyclical market, requiring patience and experience for successful investment [2] Group 2 - The analysis includes a comprehensive breakdown of companies' balance sheets, competitive positions, and development prospects [1] - The article emphasizes the importance of understanding company documents and press releases for potential investors [4]

Financial Data and Key Metrics Changes - In 2024, the company achieved a 15% increase in oil production and a 22% increase in total production, while upstream cash capital expenditures declined by 27% [6][7] - Upstream free cash flow allocation in 2024 included 38% for growth initiatives, 38% for debt reduction, and 24% for dividends, resulting in a $90 million year-over-year debt reduction [25][26] - The company maintained a flat LOE per BOE at $8.66, with clean-out costs down 16% year-over-year [17][18] Business Line Data and Key Metrics Changes - The company drilled 30 wells, completed 20, and turned in line 22 gross operated wells in 2024, with a 20% increase in lateral feet drilled per day [11][12] - Net production grew from 4.8 million to 5.52 million barrels of oil year-over-year, while equivalent production increased from 6.79 million to 8.25 million barrels of oil equivalent [14][15] Market Data and Key Metrics Changes - The company captured and sold more produced gas in Texas, resulting in a lower percentage of oil in the overall production mix [15] - The company plans to shift more development activity to New Mexico, where significant long-term growth potential is anticipated [7][8] Company Strategy and Development Direction - The company aims to build complementary assets across upstream, midstream, and power sectors, focusing on capital efficiency and strategic infrastructure investments [33][36] - A 15-year gas purchase agreement and plans for a high-pressure natural gas pipeline capable of transporting up to 150 million cubic feet per day were announced [8][9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the capital efficiency of the asset base and the ability to generate positive free cash flow, with a production growth forecast of 9% to 14% for 2025 [26][27] - The company is exploring opportunities in the ERCOT market and assessing the potential for battery generation as part of its power strategy [41][43] Other Important Information - The company achieved a total recordable incident rate of zero for 2024, demonstrating a strong commitment to safety [11] - The initial construction phases of the New Mexico gathering and compression project are underway, with commissioning expected soon [19][20] Q&A Session Summary Question: Inquiry about the power side and potential upside - Management discussed the progress of the ERCOT project and the potential for battery generation, noting the current market dynamics and pricing trends [40][41] Question: Focus on the New Mexico Gas Midstream project - Management explained the decision to build the midstream project in response to limited takeaway capacity in the region, emphasizing the long-term benefits of the infrastructure [50][52] Question: Discussion on D&C cost per foot and 2025 plans - Management confirmed a continued improvement in D&C costs, with a focus on strategic drilling locations and infrastructure readiness for 2025 [55][57] Question: Update on ERCOT efforts and deal status - Management provided insights into ongoing negotiations and the potential for future deals in the ERCOT market, highlighting the importance of gas reserves [68][70] Question: Service availability and cost pressures - Management indicated that service availability is stable, with slight improvements in drilling costs due to market consolidation [75][76] Question: Timing of midstream projects and financial impacts - Management outlined the expected timeline for midstream project completion and its potential financial benefits, including midstream revenue and operational efficiencies [84][88]