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][14][25] - The company reduced debt by $90 million year-over-year, achieving a leverage ratio of one times at year-end [25][30] - The average daily net production for Q4 2024 was 15.91 thousand barrels of oil per day and 25.03 thousand barrels of oil equivalent per day [14] Business Line Data and Key Metrics Changes - The company drilled 30 wells, completed 20, and turned in line 22 gross operated wells in 2024 [11] - The cost per foot for drilling decreased by 11% year-over-year, with an average of approximately $520 per foot in Q4 2024 [12][56] - The company maintained low operating costs, with lease operating expenses per BOE for 2024 at $8.66, roughly flat compared to 2023 [17] 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 is focusing on developing its New Mexico assets, which are expected to provide significant long-term growth potential [7][46] Company Strategy and Development Direction - The company plans to shift more development activity to New Mexico in 2025, with a focus on midstream projects to enhance operational control [7][8] - The strategic development includes a 15-year gas purchase agreement and a high-pressure natural gas pipeline capable of transporting up to 150 million cubic feet per day [8] - The company aims to build complementary assets across upstream, midstream, and power sectors to create multiple revenue opportunities [33] 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 [26][30] - The 2025 plan includes a total production growth range of 9% to 14%, with oil production growth of 5% to 8% [26] - Management highlighted the importance of maintaining balance sheet flexibility and access to capital markets for future opportunities [10][30] Other Important Information - The company achieved a total recordable incident rate of zero for 2024, demonstrating excellence in operational safety [11] - The company is expanding its power joint venture to reduce reliance on the grid and capitalize on market fundamentals within the Texas power grid [9] Q&A Session Summary Question: Can you provide updates on the ERCOT project and potential upside? - Management confirmed that the ERCOT project is progressing well, with construction expected to start soon and potential for additional projects being explored [41][70] Question: What are the benefits of the New Mexico Gas Midstream project? - Management explained that building the midstream project allows for better control over gas transportation and processing, addressing the regional lack of takeaway capacity [51][52] Question: How did D&C costs progress throughout 2024? - Management noted a continued improvement in D&C costs, with a decrease of 11% year-over-year, and plans to maintain this trend in 2025 [56][57] Question: What is the status of the ERCOT deals? - Management indicated that they are deep into Phase 2 of the ERCOT project and are exploring various opportunities, with updates expected in the near future [70][72] Question: Are there concerns regarding service availability or cost pressures? - Management stated that service availability is good, with slight improvements in drilling costs, and they are modeling a slight increase in well costs for 2025 [76][77]

Company Performance - Riley Exploration Permian, Inc. reported quarterly earnings of $1.47 per share, missing the Zacks Consensus Estimate of $1.61 per share, but showing an increase from $0.70 per share a year ago, representing an earnings surprise of -8.70% [1] - The company posted revenues of $102.7 million for the quarter ended December 2024, missing the Zacks Consensus Estimate by 1.98%, compared to year-ago revenues of $99.83 million [2] - Over the last four quarters, the company has surpassed consensus EPS estimates just once and topped consensus revenue estimates only once [2] Stock Performance - Riley Exploration Permian shares have lost about 11.4% since the beginning of the year, while the S&P 500 has declined by -1.8% [3] - The current status of estimate revisions is mixed, leading to a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market in the near future [6] Future Outlook - The current consensus EPS estimate for the coming quarter is $1.70 on revenues of $108.66 million, and for the current fiscal year, it is $7.16 on revenues of $445.59 million [7] - The outlook for the industry can significantly impact the stock's performance, with the Oil and Gas - Exploration and Production - United States industry currently in the top 10% of Zacks industries [8]

Production and Reserves - As of December 31, 2024, the company had 58,270 net acres and a total of 612 net producing wells, with an average net daily production of approximately 22,546 Boe/d[32]. - The company's total proved reserves increased to 123,602 MBoe as of December 31, 2024, compared to 107,715 MBoe in 2023, representing a growth of approximately 14.7%[34]. - Proved developed producing reserves of oil increased from 36,731 MBbls in 2023 to 40,111 MBbls in 2024, a rise of about 9.5%[34]. - Proved undeveloped reserves decreased slightly to 46,956 MBoe as of December 31, 2024, from 47,537 MBoe in 2023, with notable changes due to acquisitions and revisions[37]. - Average net production increased from 18,590 Boe/d in 2023 to 22,546 Boe/d in 2024, with production composition being approximately 67% oil, 15% natural gas, and 18% NGLs[60]. - As of December 31, 2024, the company reported total oil production of 5,519 MBbls, an increase of 15% from 4,802 MBbls in 2023[57]. - The company's natural gas production reached 7,484 MMcf in 2024, up 27.5% from 5,865 MMcf in 2023[57]. - The company produced from 782 total wells as of December 31, 2024, with 612 net wells[61]. - The company operated 657 gross wells with an average working interest of 91%[62]. - Approximately 38% of the company's total estimated proved reserves, equating to about 46,956 MBoe, are classified as proved undeveloped reserves, requiring an estimated $279 million in development capital[168]. Acquisitions and Development - The company completed two significant acquisitions in the Yeso trend of the Permian Basin, adding approximately 24,500 contiguous net acres and multiple wells to its portfolio[25][26]. - Estimated costs for future development of proved undeveloped reserves at December 31, 2024, were approximately $279 million, expected to be financed through cash flow from operations and borrowings[39]. - The company completed 21 productive development wells in 2024, compared to 24 in 2023, reflecting a decrease of 12.5%[46]. - The company has 15 gross (10.9 net) wells currently in the drilling or active completion stages as of December 31, 2024[47]. - The company approved approximately $130 million in capital expenditures for initial projects of its midstream development plan[72]. Financial Performance and Risks - The average realized price for oil in 2024 was $74.10 per Bbl, a decrease of 2% from $75.62 per Bbl in 2023[58]. - One purchaser accounted for 70% of the company's revenue for the years ended December 31, 2024, and 2023, indicating a significant reliance on a limited number of customers[68]. - The company may face challenges in obtaining required capital or financing on satisfactory terms, which could lead to a decline in reserves[139]. - If commodity prices decrease significantly, the company may incur impairment losses, adversely affecting its results of operations[137]. - The company recognized impairment losses on proved properties during the year ended December 31, 2024, primarily due to lower well performance assessments[138]. - The company faces risks related to the concentration of its assets in the Northwest Shelf of the Permian Basin, which may lead to increased competition for qualified personnel and operational challenges[159]. - The company may incur substantial losses and liabilities due to operational risks, including fire, explosions, and environmental hazards, which are not fully insurable[175][179]. Regulatory and Environmental Compliance - The company is vulnerable to risks associated with operating in one major geographic area, which could impact its business and financial condition[18]. - REPX's operations are subject to stringent environmental regulations, which may impose substantial penalties for non-compliance and affect financial performance[91]. - Changes in federal or state regulations may impact the availability and reliability of transportation services, but REPX does not anticipate material differences compared to competitors[90]. - The company is required to develop and maintain a Spill Prevention, Control, and Countermeasure (SPCC) plan for oil handling operations, which must be reviewed every five years[100]. - Compliance with the Clean Air Act (CAA) may necessitate significant capital expenditures for air pollution control equipment due to stricter emissions standards[106]. - The Inflation Reduction Act includes fees on methane emissions starting in 2025, which could impact REPX's financials[107]. - The company is not currently subject to material adverse effects from existing laws, but new regulations could lead to significant compliance costs and operational delays[115]. Workforce and Corporate Governance - REPX employs 103 people as of December 31, 2024, and relies on a highly skilled workforce across multiple disciplines[120]. - The company supports employee training and development to enhance professional skills, which is critical for long-term strategy[120]. - The company is committed to diversity and inclusion, fostering an innovative workforce and providing equal opportunities in hiring and development[122]. - Compliance with OSHA and other safety regulations is essential for protecting workers and minimizing risks associated with hazardous materials[117]. Market Conditions and Pricing - Oil, natural gas, and NGL prices are volatile; for example, WTI oil prices ranged from a high of $123.64 per Bbl to a low of negative $36.98 per Bbl from January 1, 2016, to December 31, 2024[133]. - Average daily prices for NYMEX Henry Hub gas ranged from a high of $13.20 per MMBtu to a low of $1.21 per MMBtu during 2024[133]. - The prices received for production are significantly influenced by local supply and demand factors, with potential negative impacts from widening price differentials[165][166]. Debt and Financing - The Credit Facility and Senior Notes impose substantial restrictions on the company's ability to finance operations, engage in acquisitions, or declare dividends[192][194]. - The company's indebtedness could reduce financial flexibility and impact operations due to potential reductions in the borrowing base under its Credit Facility[195]. - A significant portion of cash flow may be used to service the indebtedness, increasing vulnerability to adverse economic conditions[197]. - The ability to generate sufficient cash to service all indebtedness is uncertain, potentially forcing the company to delay investments or sell assets[200]. Operational Challenges - The company may face challenges in integrating acquired businesses, which could disrupt operations and hinder growth[181]. - The company may not be able to renew leases on commercially reasonable terms, affecting future drilling opportunities[186]. - The construction of new midstream infrastructure assets may not be completed on schedule or at budgeted costs, impacting financial condition and cash flows[206]. - Regulatory approval processes for new midstream assets have become increasingly challenging, potentially delaying projects and increasing costs[207]. - Joint ventures may not perform as expected, exposing the company to risks and uncertainties beyond its control[214].

Core Insights - Riley Exploration Permian, Inc. reported strong financial and operational results for the fourth quarter and full year of 2024, exceeding initial production and capital expenditure goals [3][12][30] Financial Performance - Fourth quarter revenues reached $103 million, with a net income of $11 million or $0.52 per diluted share [8] - For the full year 2024, revenues totaled $410 million, net cash provided by operating activities was $246 million, and net income was $89 million or $4.26 per diluted share [12] - The company achieved a 67% increase in Total Free Cash Flow and an 82% increase in Upstream Free Cash Flow year-over-year [3] Production and Operational Highlights - Oil production grew by 15% and total production increased by 22% in 2024, with upstream cash capital expenditures reduced by 27% [3] - The company averaged 25.0 MBoe/d of total equivalent production in Q4 2024, with oil production at 15.9 MBbls/d [5] - For the full year 2025, the company projects total production of 24.6 - 25.6 MBoe/d, with oil production of 15.8 - 16.3 MBbls/d [5][30] Capital Expenditures and Debt Management - Total accrued capital expenditures for Q4 2024 were $31 million, with $20 million allocated for upstream activities [10] - The company reduced total debt by $20 million in Q4 2024, achieving a debt-to-Adjusted EBITDAX ratio of 1.0x [11][12] Reserves and Future Growth - Proved reserves increased by 15% to 124 MMBoe as of December 31, 2024, with a reserve replacement ratio of 293% for the year [18][19] - The company plans to focus on strategic investments in New Mexico and advance its gas midstream project to enhance operational control and growth [3][21] Guidance and Future Plans - The company has provided guidance for 2025 capital expenditures ranging from $188 million to $232 million, with a focus on upstream, midstream, and power joint venture investments [5][30] - The New Mexico gas midstream project is expected to enhance processing and transportation capabilities, with an estimated $130 million in capital expenditures approved for initial projects [22][23]

Core Viewpoint - The market anticipates Riley Exploration Permian, Inc. (REPX) will report a year-over-year increase in earnings driven by higher revenues when it releases its results for the quarter ended December 2024 [1] Earnings Expectations - The upcoming earnings report is expected on March 5, 2025, with a consensus EPS estimate of $1.61, reflecting a year-over-year increase of +130% [3] - Revenues are projected to be $104.77 million, which is a 5% increase from the same quarter last year [3] Estimate Revisions - The consensus EPS estimate has been revised 4.94% higher in the last 30 days, indicating a positive reassessment by analysts [4] - The Most Accurate Estimate is higher than the Zacks Consensus Estimate, resulting in an Earnings ESP of +1.56%, suggesting a bullish outlook on the company's earnings prospects [10][11] Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that a positive Earnings ESP reading is a strong predictor of an earnings beat, especially when combined with a Zacks Rank of 1 (Strong Buy), 2 (Buy), or 3 (Hold) [8] - Stocks with this combination have historically produced a positive surprise nearly 70% of the time [8] Historical Performance - In the last reported quarter, the company was expected to post earnings of $1.56 per share but actually reported $1.43, resulting in a surprise of -8.33% [12] - Over the past four quarters, the company has only beaten consensus EPS estimates once [13] Industry Comparison - California Resources Corporation (CRC), another player in the Oil and Gas - Exploration and Production - United States industry, is expected to report earnings of $0.96 per share for the same quarter, indicating a year-over-year change of +3.2% [17] - CRC's revenues are expected to be $907.09 million, up 24.9% from the previous year [17] - However, CRC has an Earnings ESP of -11.00%, making it challenging to predict a beat on the consensus EPS estimate [18]

Group 1 - Riley Exploration Permian, Inc. (NYSE: REPX) successfully extended its credit facility maturity by over two and a half years [2] - The company is continuing to invest in projects aimed at enhancing returns from its non-oil operations [2] - The focus of the investment group Distressed Value Investing is on value opportunities and distressed plays, particularly in the energy sector [2]

Core Viewpoint - Riley Exploration Permian, Inc. is set to release its financial and operational results for Q4 and full year 2024 on March 5, 2025, after U.S. market close [1] Group 1: Earnings Release Details - The earnings release will be followed by a conference call on March 6, 2025, at 9:00 a.m. CT for discussion and Q&A [2] - An updated company presentation will be available on the company's website prior to the call [2] Group 2: Company Overview - Riley Exploration Permian is an independent oil and natural gas company focused on the acquisition, exploration, development, and production of oil, natural gas, and natural gas liquids [3]

Core Points - Riley Exploration Permian, Inc. has announced a cash dividend of $0.38 per share on its common stock [1] - The dividend is scheduled to be paid on February 6, 2025, to stockholders of record as of January 23, 2025 [1] Company Overview - Riley Exploration Permian is an independent oil and natural gas company focused on the acquisition, exploration, development, and production of oil, natural gas, and natural gas liquids [2]

Core Points - Riley Exploration Permian, Inc. has completed an amendment to its senior secured revolving credit facility, extending the maturity and increasing borrowing capacity [1][2] Group 1: Credit Facility Amendment Highlights - The maturity of the credit facility has been extended from April 2026 to December 2028 [2] - The borrowing base and commitment levels have increased by 7%, from $375 million to $400 million [2] - The syndicate has expanded to include a total of nine lenders [2] - As of December 13, 2024, the company had $117 million drawn on the credit facility, with $283 million available [2] - The management team and board of directors expressed gratitude to the banking syndicate partners for their continued support [2] Group 2: Company Overview - Riley Exploration 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 [3]

Financial Data and Key Metrics Changes - Third quarter 2024 operating cash flow was $72.1 million, with $60.5 million before changes in working capital, which increased by 5% quarter-over-quarter due to higher oil production volumes and lower total unit costs [22] - Net income decreased by 24% or $8 million quarter-over-quarter, while adjusted net income, excluding impairment and hedging gains, was down by 5% [27] - Free cash flow for the year reached $99 million, which is 2.7 times the same metric for the first nine months of 2023, corresponding to approximately a 21% yield on equity value [25][28] Business Line Data and Key Metrics Changes - Net production grew from 1.34 million to 1.42 million barrels of oil quarter-over-quarter, a 6% increase, while equivalent production rose 11% from 1.94 million to 2.16 million barrels of oil equivalent [16] - Lease operating expenses were $8.60 per BOE, remaining stable compared to the previous quarter and down 7% year-over-year [19] - The company drilled 12, completed 3, and turned in line 6 gross operated wells in Q3, with a total of 9 DUCs generated for future completions [14] Market Data and Key Metrics Changes - The company successfully implemented its New Mexico plans, completing its first 2 Red Lake wells, with 9 more planned for drilling this year [18] - The company achieved a 42% increase in gas produced sent to sales compared to the previous quarter, driven by enhancements from its midstream provider [17] Company Strategy and Development Direction - The company plans to invest in infrastructure to support future growth, including a gathering and compression system in New Mexico, with a capital spend of approximately $12 million [20] - The company aims for 10% year-over-year oil volume growth while cutting capital spending by 10%, with current guidance suggesting a 14% to 15% increase in full-year 2024 oil production over 2023 [29][30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving growth despite macroeconomic volatility, with a focus on maintaining capital efficiency and operational excellence [36] - The company is hedged approximately 40% on total oil production for the next year, providing some cushion against price volatility [38] Other Important Information - The company paid down $35 million in debt this quarter, reducing total debt to $300 million, with a debt-to-total enterprise value of 34% [27][28] - The company has returned $98 million to shareholders since 2021, with an annual dividend growth rate of 11% [6] Q&A Session Summary Question: Capital efficiency and upcoming D&C plan - Management indicated that the strategy for 2025 would likely remain similar, with potential adjustments based on oil price environments [36][38] Question: Power-focused joint venture - Management discussed the two phases of the power JV, with the first phase focused on powering operations and the second on selling power to ERCOT, highlighting progress in permitting and interconnection agreements [41][42] Question: Infrastructure investment details - Management elaborated on the infrastructure investment for the Red Lake asset, emphasizing the importance of a compressor station for reliable gas takeaway and future development [46][47] Question: Economic benefits of the compression system - Management confirmed that the new compression system would enhance operational reliability and potentially lower operating costs [49][50] Question: Impact of CO2 pilot discontinuation - Management clarified that discontinuing the CO2 pilot would not significantly impact operating costs, with some savings expected from avoided CO2 contract costs [54]