REPX(US:REPX)2025-11-06 16:00Financial Data and Key Metrics Changes - Riley Exploration Permian generated $39.4 million of upstream free cash flow in Q3 2025, representing a 73% conversion of operating cash flow before working capital [19] - Year-to-date, the company generated $100 million of upstream free cash flow, equal to the same nine-month period for 2024, despite a 14% lower realized oil price [19] - Adjusted EBITDA margin was 59%, down from 66% in the previous quarter, primarily due to increased costs associated with the Silverback acquisition [17] Business Line Data and Key Metrics Changes - Average daily net production was 18.4 thousand barrels of oil per day and 32.3 thousand barrels of oil equivalent per day for Q3 2025 [5] - Total net oil production increased from 1.38 million barrels to 1.69 million barrels quarter over quarter, a 22% increase [6] - Total equivalent production rose 34% quarter over quarter, from 2.22 million to 2.98 million barrels of oil equivalent [6] Market Data and Key Metrics Changes - The company experienced a weak natural gas market in September and October, with select operators shutting in an estimated 1.5 to 2 BCF a day of gas production [15] - Prices after hedges were roughly flat quarter over quarter, with oil representing all revenue last quarter due to negative natural gas and NGL revenues [15] Company Strategy and Development Direction - The company is focused on disciplined capital allocation, strategic infrastructure investments, and operational excellence to create long-term value [24] - The Silverback acquisition is expected to drive down fixed costs in the field by 10-20% through synergies and cost-saving opportunities [12] - The company plans to maintain flexibility in capital allocation in response to softer oil markets while striving for growth [22] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about lowering the cost structure and improving margins over time, citing a successful track record in this area [18] - The company is committed to maintaining a consistent and growing dividend, having increased it to $0.40 per share, up 5% from the previous quarter [4] - Management highlighted the importance of the midstream project in New Mexico for enhancing flow assurance and enabling growth in production [33] Other Important Information - The company completed five and turned in line 10 gross operated wells in Q3 2025, with plans to drill 8-10 gross wells in Q4 [8] - The company has over 60% of 2026 oil volumes hedged at a weighted average downside price of $60, with upside optionality [23] Q&A Session Summary Question: Thoughts on capital efficiency and allocation in a below $60 per barrel environment - Management indicated that in a $55 scenario, they could maintain volumes while spending around $85 million, with the dividend well covered [29] Question: Potential improvement in NetBacks for the upstream business - Management noted that flow assurance and efficient processing would lead to economic improvements, but it would take time to realize the full benefits [31][32] Question: Capital to spend for the midstream project and its impact on free cash flow - Management stated that they could maintain free cash flow positive even after combined upstream and midstream CapEx, with potential project financing options being considered [40][41] Question: Production performance on Silverback assets and future workovers - Management confirmed that there is significant potential for further workovers and optimization on the Silverback assets, with many wells still to be addressed [49] Question: Interest in external financing and current market conditions - Management acknowledged the healthy credit markets and the appetite for capital for infrastructure projects, indicating various financing options are being explored [65][66]