REPX(REPX) - 2025 Q2 - Quarterly Report

Part I. FINANCIAL INFORMATION Item 1. Financial Statements The company's total assets increased to $1.03 billion as of June 30, 2025, from $993.5 million at year-end 2024, with net income rising to $59.1 million despite a decrease in total revenues Condensed Consolidated Balance Sheets Balance Sheet Summary (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Current Assets | $66,994 | $68,125 | | Total Assets | $1,033,567 | $993,501 | | Total Current Liabilities | $104,775 | $122,764 | | Total Liabilities | $476,686 | $482,886 | | Total Shareholders' Equity | $556,881 | $510,615 | | Total Liabilities and Shareholders' Equity | $1,033,567 | $993,501 | - Total assets grew by approximately $40 million, primarily driven by increases in oil and natural gas properties and other property and equipment[13] - Total liabilities decreased slightly, while shareholders' equity increased by over $46 million, mainly due to retained earnings growth[13] Condensed Consolidated Statements of Operations Statement of Operations Summary (in thousands, except per share amounts) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Total Revenues | $85,394 | $105,403 | $187,851 | $205,147 | | Income from Operations | $28,754 | $53,612 | $78,256 | $104,179 | | Net Income | $30,470 | $33,548 | $59,103 | $52,306 | | Diluted EPS | $1.44 | $1.59 | $2.80 | $2.55 | - For the six months ended June 30, 2025, net income increased to $59.1 million from $52.3 million year-over-year, primarily due to a significant net gain on derivatives of $12.9 million compared to a $17.4 million loss in the prior year period[15] - A non-cash impairment charge of $1.2 million on oil and natural gas properties was recognized in the second quarter of 2025[15] Condensed Consolidated Statements of Cash Flows Cash Flow Summary for Six Months Ended June 30 (in thousands) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | $84,021 | $107,766 | | Net Cash Used in Investing Activities | ($70,457) | ($87,656) | | Net Cash Used in Financing Activities | ($12,662) | ($24,519) | | Net Increase (Decrease) in Cash | $902 | ($4,409) | - Net cash from operating activities decreased by $23.7 million year-over-year, primarily due to changes in operating assets and liabilities and lower revenues before derivative settlements[21] - Cash used in investing activities decreased, mainly due to lower spending on acquisitions of oil and natural gas properties ($2.1 million in 2025 vs. $18.1 million in 2024)[21] Notes to the Condensed Consolidated Financial Statements - On July 1, 2025, the company closed the acquisition of Silverback Exploration II, LLC for approximately $142 million, adding 47,000 net acres in Eddy County, New Mexico, with a $14.2 million deposit held in escrow as of June 30, 2025[40][41][108] - The company has a joint venture, RPC Power LLC, for power generation assets, with $30 million invested and a remaining commitment of up to $21.5 million as of June 30, 2025[62] - As of June 30, 2025, the company had $129 million outstanding on its $400 million borrowing base Credit Facility and $155 million in principal outstanding on its Senior Notes[74][75][77] - The company declared dividends totaling $16.5 million for the first six months of 2025[87] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses a decrease in oil and gas revenues for the first half of 2025 compared to 2024, driven by lower realized commodity prices, partially offset by increased production volumes, while highlighting strong liquidity and strategic acquisitions Results of Operations Production and Realized Prices (Six Months Ended June 30) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Total Production (MBoe) | 4,415 | 3,794 | | Daily Production (Boe/d) | 24,392 | 20,846 | | Average Realized Oil Price ($/Bbl) | $66.18 | $77.29 | | Oil and Natural Gas Sales, net (in thousands) | $187,851 | $204,767 | - For the six months ended June 30, 2025, total oil and natural gas revenues decreased by $16.9 million compared to the same period in 2024, primarily due to a $31.0 million decrease from lower realized oil prices, partially offset by a $12.1 million increase from higher oil production volumes[128][129] - Lease Operating Expenses (LOE) increased by $4.0 million for the first six months of 2025 compared to 2024, mainly due to higher production volumes[136] - The company recorded a net gain on derivatives of $12.9 million for the first six months of 2025, compared to a net loss of $17.4 million in the prior-year period, significantly impacting net income[149] Liquidity and Capital Resources - Primary sources of liquidity are cash on hand, cash flow from operations, and borrowings under the Credit Facility, which the company believes are adequate to meet short and long-term needs[152] - As of June 30, 2025, the company had a working capital deficit of $37.8 million, an improvement from a $54.6 million deficit at year-end 2024, which includes $20 million for the current portion of Senior Notes[154] - At June 30, 2025, the company had $14.0 million in cash and $271 million of available borrowing capacity under its $400 million Credit Facility[154][160] - The company is committed to spending approximately $130 million in capital expenditures through 2026 to complete its midstream buildout plan in New Mexico, with about $22 million incurred to date[165] Quantitative and Qualitative Disclosures About Market Risk The company's primary market risks are from commodity price volatility and interest rate fluctuations, which are mitigated through derivative contracts, with a 10% change in commodity prices impacting sales by approximately $18.8 million for the first half of 2025 - The company's main market risks are commodity price risk (crude oil, natural gas, NGLs) and interest rate risk[168] - To manage price volatility, the company utilizes commodity-based derivative contracts, with a fair value of these contracts being a net asset of $10 million as of June 30, 2025[169][171] - A 10% change in realized commodity pricing for the six months ended June 30, 2025, would have changed oil and natural gas sales by approximately $18.8 million[171] - The company uses interest rate derivative contracts to partially reduce exposure to interest rate fluctuations on its debt[172] Controls and Procedures Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of June 30, 2025, with no material changes in internal control over financial reporting during the second quarter of 2025 - Based on an evaluation as of June 30, 2025, the CEO and CFO concluded that the company's disclosure controls and procedures were effective[174] - There were no changes in internal control over financial reporting during the three months ended June 30, 2025, that materially affected, or are reasonably likely to materially affect, internal controls[175] Part II. OTHER INFORMATION Legal Proceedings The company is involved in various legal proceedings in the ordinary course of business but does not believe the ultimate liability, if any, will have a material adverse effect on its financial condition or results of operations - The company may be involved in various legal proceedings and claims in the ordinary course of business[176] - Management believes that the outcome of any such proceedings will not have a material adverse effect on the company's financial condition, liquidity, or results of operations[176] Risk Factors There have been no material changes to the company's risk factors from those described in its Annual Report on Form 10-K for the year ended December 31, 2024 - There has been no material change in the Company's risk factors from those described in the 2024 Annual Report and subsequently filed Quarterly Report[178] Unregistered Sales of Equity Securities and Use of Proceeds During the second quarter of 2025, the company repurchased 10,473 shares at an average price of $29.15 per share, related to employee tax withholding obligations on vesting transactions Issuer Repurchases of Equity Securities (Q2 2025) | Month Ended | Total Number of Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | April 30 | 10,473 | $29.15 | | May 31 | — | $— | | June 30 | — | $— | - The repurchased shares were received from employees for the payment of personal income tax withholding on vesting transactions and were not part of a publicly announced repurchase program[179] Other Information On June 29, 2025, CEO Bobby Riley adopted a Rule 10b5-1 trading plan for the potential sale of up to 50,000 shares of common stock, with the plan expiring on August 31, 2026 - On June 29, 2025, CEO Bobby Riley adopted a Rule 10b5-1(c) trading plan for the sale of up to 50,000 shares of Common Stock[180] - The trading plan is set to expire on August 31, 2026[180] Exhibits This section lists the exhibits filed with the Form 10-Q, including the Securities Purchase Agreement for the Silverback acquisition, corporate governance documents, debt agreements, and officer certifications