REPX(REPX) - 2024 Q4 - Annual Report

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].