OKLAHOMA
CITY, Aug. 7, 2023 /PRNewswire/ --Riley
Exploration Permian, Inc. (NYSE American: REPX) ("Riley Permian" or
the "Company"), today reported financial and operating results for
the second quarter ended June 30,
2023.
SECOND QUARTER 2023 HIGHLIGHTS
- Closed on the acquisition of oil and natural gas assets in
New Mexico and successfully
transitioned operations to the Company
- Averaged oil production of 15.1 MBbls/d (21.2 MBoe/d total
equivalent production), representing an increase of 80% as compared
year-over-year to the second quarter 2022 and an increase of 52% as
compared quarter-over-quarter to the first quarter of 2023
- Reported net income of $33
million, or $1.65 per diluted
share, which includes $11 million of
non-cash gain on derivative contracts and income from operations of
$45 million
- Generated $66 million of Adjusted
EBITDAX(1) and $56 million
of operating cash flow
- Incurred total accrual (activity-based) capital expenditures
before acquisitions of $39 million
and total cash capital expenditures before acquisitions of
$48 million
- Paid dividends of $0.34 per share
in the second quarter for a total of $7
million
Bobby Riley, Chairman and CEO of
Riley Permian, stated, "We're pleased to report another successful
quarter with record-high metrics across production and cash flow
from operations. Production results exceeded the high-end of
guidance while capital expenditures were materially below guidance.
Results were driven by a combination of the closing of the
New Mexico acquisition early in
the quarter as well as continued execution with our legacy assets.
Transition and integration efforts for the new assets have
proceeded as planned, including initial drilling activity beginning
in April."
Mr. Riley continued, "Looking ahead to the second half of 2023,
and based on the strength of production in the first half of 2023,
we see the opportunity to reduce activity and capital expenditures
from our previously released guidance levels, while maintaining
full-year average production levels per previous guidance. We're
optimistic that this combination of factors may lead to materially
increased Free Cash Flow(1) for the year, as compared to
what we forecasted following the first quarter of 2023".
___________________
|
(1)
|
A non-GAAP financial
measure as defined and reconciled in the supplemental financial
tables available on the Company's website
at www.rileypermian.com.
|
Selected Operating
and Financial Data
|
|
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
June 30,
2023
|
|
March 31,
2023
|
|
June 30,
2022
|
|
June 30,
2023
|
|
June 30,
2022
|
Select Financial
Data (in thousands):
|
|
|
|
|
|
|
|
|
|
|
Oil and natural gas
sales, net
|
|
$
99,312
|
|
$
66,412
|
|
$
87,781
|
|
$
165,724
|
|
$
154,426
|
Net income
|
|
$
33,068
|
|
$
31,851
|
|
$
38,555
|
|
$
64,919
|
|
$
31,387
|
Adjusted
EBITDAX(1)
|
|
$
66,265
|
|
$
43,508
|
|
$
44,797
|
|
$
109,773
|
|
$
79,280
|
|
|
|
|
|
|
|
|
|
|
|
Production Data,
net:
|
|
|
|
|
|
|
|
|
|
|
Oil (MBbls)
|
|
1,370
|
|
893
|
|
761
|
|
2,263
|
|
1,435
|
Natural gas
(MMcf)
|
|
1,677
|
|
949
|
|
572
|
|
2,626
|
|
1,254
|
Natural gas liquids
(MBbls)
|
|
283
|
|
134
|
|
70
|
|
417
|
|
163
|
Total
(MBoe)
|
|
1,933
|
|
1,185
|
|
926
|
|
3,118
|
|
1,807
|
|
|
|
|
|
|
|
|
|
|
|
Daily combined volumes
(Boe/d)
|
|
21,236
|
|
13,169
|
|
10,176
|
|
17,225
|
|
9,983
|
Daily oil volumes
(Bbls/d)
|
|
15,055
|
|
9,922
|
|
8,363
|
|
12,503
|
|
7,926
|
|
|
|
|
|
|
|
|
|
|
|
Average Realized
Prices:
|
|
|
|
|
|
|
|
|
|
|
Oil ($ per
Bbl)
|
|
$
71.41
|
|
$
72.76
|
|
$
108.41
|
|
$
71.94
|
|
$
100.96
|
Natural gas ($ per
Mcf)
|
|
0.02
|
|
0.55
|
|
4.98
|
|
0.21
|
|
3.70
|
Natural gas liquids ($
per Bbl)
|
|
5.10
|
|
6.83
|
|
34.71
|
|
5.65
|
|
30.12
|
Total average price ($
per Boe)
|
|
$
51.38
|
|
$
56.04
|
|
$
94.80
|
|
$
53.15
|
|
$
85.46
|
|
|
|
|
|
|
|
|
|
|
|
Average Realized
Prices, including the effects
of derivative
settlements(2):
|
|
|
|
|
|
|
|
|
|
|
Oil ($ per
Bbl)
|
|
$
69.46
|
|
$
67.06
|
|
$
77.31
|
|
$
68.51
|
|
$
72.31
|
Natural gas ($ per
Mcf)
|
|
0.24
|
|
0.55
|
|
1.29
|
|
0.35
|
|
1.27
|
Natural gas liquids ($
per Bbl)(3)
|
|
5.10
|
|
6.83
|
|
34.71
|
|
5.65
|
|
30.12
|
Total average price ($
per Boe)
|
|
$
50.19
|
|
$
51.74
|
|
$
66.97
|
|
$
50.78
|
|
$
61.02
|
|
|
|
|
|
|
|
|
|
|
|
Cash Costs ($ per
Boe)(1)
|
|
$
21.17
|
|
$
16.02
|
|
$
19.63
|
|
$
19.20
|
|
$
18.09
|
Cash Margin ($ per
Boe)(1)
|
|
$
30.21
|
|
$
40.02
|
|
$
75.17
|
|
$
33.95
|
|
$
67.37
|
Cash Margin, including
derivative settlements
($ per
Boe)(1)
|
|
$
29.02
|
|
$
35.72
|
|
$
47.34
|
|
$
31.59
|
|
$
42.93
|
_____________________
|
(1)
|
A non-GAAP financial
measure as defined and reconciled in the supplemental financial
tables available on the Company's website
at www.rileypermian.com.
|
(2)
|
The Company's
calculation of the effects of derivative settlements includes
losses on the settlement of its commodity derivative contracts.
These losses are included under other income (expense) on the
Company's condensed consolidated statements of
operations.
|
(3)
|
During the periods
presented, the Company did not have any NGL derivative
contracts in place.
|
OPERATIONS AND DEVELOPMENT ACTIVITY UPDATE
Riley Permian averaged oil production of 15.1 MBbls per day for
the three months ended June 30, 2023,
representing an increase of 80% as compared year-over-year to the
second quarter 2022 and 52% increase compared to the first quarter
of 2023. The Company averaged total equivalent production of 21.2
MBoe per day for the second quarter, an increase of 109% as
compared to the same period in 2022 and 61% increase compared to
the first quarter of 2023. The increase in production is
attributable to the impact of the acquired assets as well as
organic growth. The Company experienced some disruptions on gas
processing which led to modestly lower gas sales and equivalent Boe
production figures.
Consistent with prior guidance, the Company drilled 8 gross (6.9
net) horizontal wells during the second quarter, including 4 gross
(3.6 net) wells in Texas and 4
gross (3.3 net) in New Mexico. The
Company completed 5 gross (4.2 net) horizontal wells during the
quarter, including 4 gross (3.2 net) wells in Texas and 1 gross (1 net) well in New Mexico. The Company turned to sales 6
gross (5.2 net) horizontal wells during the second quarter 2023.
The Company incurred $39 million in total accrued capital
expenditures before acquisitions for the second quarter, lower than
the Company's previously released guidance due primarily to
deferred completion activity. On a cash basis, the Company had
total capital expenditures before acquisitions of $48 million for the quarter.
The Company progressed with construction of its onsite power
generation joint venture during the second quarter of 2023. The
Company contributed its share of capital which corresponds to
approximately $2 million during the
second quarter of 2023. The onsite power generation facility is
expected to be placed in service late in the third quarter or
during the fourth quarter of 2023.
FINANCIAL RESULTS
For the three months ended
June 30, 2023, the Company reported
net income of $33 million, or
$1.65 per diluted share, and Adjusted
Net Income(1) of $27
million, or $1.37 per diluted
share. The Company generated Adjusted EBITDAX(1) of
$66 million, operating cash flow of
$56 million and Free Cash
Flow(1) of $3 million.
Second quarter 2023 average realized prices, before derivative
settlements, were $71.41 per barrel
of oil, $0.02 per Mcf of natural gas
and $5.10 per barrel of natural gas
liquids. Quarter-over-quarter, realized prices declined by 2% for
oil, 96% for natural gas, and 25% for natural gas liquids. Oil
represented 99% of second quarter revenue. Total oil and natural
gas sales revenue, net of derivative settlements, was $97 million, an increase of $36 million or 58% over the first quarter of
2023. The Company reported a $9
million gain on derivatives, which includes a $2 million loss on settlements and a $11 million non-cash gain due to changes in the
fair value of derivatives.
Riley Permian's total Cash Costs(1) for the second
quarter of 2023 were $41 million, or
$21.17 per Boe. Lease operating
expense ("LOE") was $18 million, or
$9.06 per Boe, which is at the upper
end of our guidance range and 21% above the first quarter 2023. On
a per unit basis, certain increases in LOE costs were expected and
were reflected in higher guidance ranges as compared to past
results, while additional costs were incurred related to higher
than anticipated workover activity on the newly acquired assets.
Cash G&A expense(1) was $6
million, or $3.11 per Boe,
near the low end of our guidance range and 26% below the first
quarter 2023. Interest expense was $10 million or $5.26 per Boe, which reflects increased debt
related to the financing for the New Mexico Acquisition.
During the second quarter 2023, the Company paid a cash dividend
of $0.34 per share, or $7 million in total. Subsequent to the quarter
end, the Company declared a cash dividend of $0.34 per share, payable in August 2023.
In April 2023 and in conjunction
with the closing of the New Mexico Acquisition, the Company amended
its credit facility to, among other things, increase the borrowing
base to $325 million. The Company
also issued $200 million of senior
unsecured notes upon closing, whose net proceeds along with
borrowings under the credit facility, were used to fund the closing
of the New Mexico Acquisition and related expenses.
As of June 30, 2023, the Company
had $394 million of total debt,
including $215 million drawn on its
credit facility and $179 million of
senior unsecured notes; on a principal basis, the Company had
$410 million of total debt, including
$195 million principal value of
senior unsecured notes.
________________
|
(1)
|
A non-GAAP financial
measure as defined and reconciled in the supplemental financial
tables available on the Company's website
at www.rileypermian.com.
|
OUTLOOK AND GUIDANCE
Riley Permian is providing third quarter 2023 and updated
full-year 2023 guidance based on currently scheduled development
activity and current market conditions. The average working
interest on gross operated wells drilled is subject to change and
may have corresponding impacts on investing expenditures.
Activity and
Investing Guidance
|
|
Q3
2023
|
|
Updated
Full-Year
2023
|
|
|
|
Texas
Activity
|
|
|
|
|
Gross operated wells
drilled
|
|
4
|
|
13
|
Average working
interest on gross operated wells drilled
|
|
98% - 100%
|
|
98% - 100%
|
|
|
|
|
|
New Mexico
Activity
|
|
|
|
|
Gross operated wells
drilled
|
|
0
|
|
4
|
Average working
interest on gross operated wells drilled
|
|
NM
|
|
91% - 98%
|
|
|
|
|
|
Investing
Expenditures by Category (Accrual, in millions)
|
|
|
|
|
E&P(1)
|
|
$35 - 45
|
|
$130 - 140
|
Joint Venture
investment
|
|
$1 - 3
|
|
$10 - 12
|
Total
|
|
$36 -48
|
|
$140 - 152
|
|
|
|
|
|
E&P Capital
Expenditures by Region (Accrual)
|
|
|
|
|
Texas
|
|
63% - 73%
|
|
74% - 84%
|
New Mexico
|
|
37% - 27%
|
|
26% - 16%
|
__________________
|
(1)
|
Expenditures are before
acquisitions.
|
OUTLOOK AND GUIDANCE, Continued
Production,
Realizations and Cost Guidance
|
|
Q3
2023
|
|
Updated
Full-Year
2023
|
|
|
|
Net
Production
|
|
|
|
|
Total
(MBoe/d)
|
|
18.6 - 19.8
|
|
18.4 - 19.2
|
Oil
(MBbl/d)
|
|
13.0 - 14.0
|
|
12.8 - 13.4
|
|
|
|
|
|
Oil (%)
|
|
70% - 71%
|
|
70% - 71%
|
Natural gas
(%)
|
|
16% - 14%
|
|
16% - 15%
|
NGL (%)
|
|
14% - 15%
|
|
14 %
|
|
|
|
|
|
Basis Differentials
and Fees
|
|
|
|
|
Oil ($ per
Bbl)
|
|
($3.25) -
(2.25)
|
|
($3.00) -
(2.00)
|
Natural gas ($ per
Mcf)
|
|
($2.70) -
(2.10)
|
|
($2.70) -
(2.10)
|
NGL (% of
WTI)
|
|
5% - 9%
|
|
8% - 14%
|
|
|
|
|
|
Operating and
Corporate Costs
|
|
|
|
|
Lease operating
expense, including workover expense ($ per Boe)
|
|
$8.50 - 9.50
|
|
$8.00 - 9.00
|
Production tax (% of
revenue)
|
|
6.0% - 8.0%
|
|
6.0% - 8.0%
|
Cash
G&A(1) ($ per Boe)
|
|
$3.00 - 3.50
|
|
$3.00 - 3.50
|
|
|
|
|
|
Cash payments for
income taxes ($ in millions)
|
|
$3.0 - 4.0
|
|
$8.0 - 10.0
|
_______________
|
(1)
|
A non-GAAP financial
measure as defined and reconciled in the supplemental financial
tables available on the Company's website
at www.rileypermian.com.
|
CONFERENCE CALL
Riley Permian management will host a
conference call for investors and analysts on August 8, 2023 at 10:00
a.m. CT to discuss the Company's results. Interested parties
are invited to participate by calling:
- U.S./Canada Toll Free, (888) 330-2214
- International, +1 (646) 960-0161
- Conference ID number 5405646
An updated company presentation, which will include certain
items to be discussed on the call, will be posted prior to the call
on the Company's website (www.rileypermian.com). A replay of the
call will be available until August 22,
2023 by calling:
- (800) 770-2030 or (647) 362-9199
- Conference ID number 5405646
About Riley Exploration Permian, Inc.
Riley
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. For more
information, please visit www.rileypermian.com.
Investor Contact:
Rick
D'Angelo
405-438-0126
IR@rileypermian.com
Cautionary Statement Regarding Forward Looking
Information
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. The statements contained in this release that are not
historical facts are forward-looking statements that represent
management's beliefs and assumptions based on currently available
information. Forward-looking statements include information
concerning our possible or assumed future results of operations,
business strategies, need for financing, competitive position and
potential growth opportunities. Our forward-looking statements do
not consider the effects of future legislation or regulations.
Forward-looking statements include all statements that are not
historical facts and can be identified by the use of
forward-looking terminology such as the words "believes,"
"intends," "may," "should," "anticipates," "expects," "could,"
"plans," "estimates," "projects," "targets," "forecasts" or
comparable terminology or by discussions of strategy or trends. You
should not place undue reliance on these forward-looking
statements. These forward-looking statements are subject to a
number of risks, uncertainties and assumptions. Moreover, we
operate in a very competitive and rapidly changing environment. New
risks emerge from time to time. It is not possible for our
management to predict all risks, nor can we assess the impact of
all factors on our business or the extent to which any factor, or
combination of factors, may cause actual results to differ
materially from those contained in any forward-looking statements
we may make. Although we believe that our plans, intentions and
expectations reflected in or suggested by the forward-looking
statements we make in this release are reasonable, we can give no
assurance that these plans, intentions or expectations will be
achieved or occur, and actual results could differ materially and
adversely from those anticipated or implied by the forward-looking
statements.
Among the factors that could cause actual future results to
differ materially are the risks and uncertainties the Company is
exposed to. While it is not possible to identify all factors, we
continue to face many risks and uncertainties including, but not
limited to: the volatility of oil, natural gas and NGL
prices; regional supply and demand factors, any delays,
curtailment delays or interruptions of production, and any
governmental order, rule or regulation that may impose production
limits; cost and availability of gathering, pipeline, refining,
transportation and other midstream and downstream activities;
severe weather and other risks that lead to a lack of any available
markets; our ability to successfully complete mergers, acquisitions
and divestitures; the inability or failure of the Company to
successfully integrate the acquired assets into its operations and
development activities; the potential delays in the development,
construction or start-up of planned projects; the risk that the
Company's EOR project may not perform as expected or produce the
anticipated benefits; risks relating to our operations, including
development drilling and testing results and performance of
acquired properties and newly drilled wells; any reduction in our
borrowing base on our revolving credit facility from time to time
and our ability to repay any excess borrowings as a result of such
reduction; the impact of our derivative strategy and the results of
future settlement; our ability to comply with the financial
covenants contained in our credit agreement; conditions in the
capital, financial and credit markets and our ability to obtain
capital needed for development and exploration operations on
favorable terms or at all; the loss of certain tax deductions;
risks associated with executing our business strategy, including
any changes in our strategy; inability to prove up undeveloped
acreage and maintain production on leases; risks associated with
concentration of operations in one major geographic area;
legislative or regulatory changes, including initiatives related to
hydraulic fracturing, emissions, and disposal of produced water,
which may be negatively impacted by regulation or legislation; the
ability to receive drilling and other permits or approvals and
rights-of-way in a timely manner (or at all), which may be
restricted by governmental regulation and legislation; restrictions
on the use of water, including limits on the use of produced water
and a moratorium on new produced water well permits recently
imposed by the RRC in an effort to control induced seismicity in
the Permian Basin; changes in government environmental policies and
other environmental risks; the availability of drilling equipment
and the timing of production; tax consequences of business
transactions; public health crisis, such as pandemics and
epidemics, and any related government policies and actions and the
effects of such public health crises on the oil and natural gas
industry, pricing and demand for oil and natural gas and supply
chain logistics; general domestic and international economic,
market and political conditions, including the military conflict
between Russia and Ukraine and the global response to such
conflict; risks related to litigation; and cybersecurity threats,
technology system failures and data security issues. Additional
factors that could cause results to differ materially from those
described above can be found in Riley Permian's Annual Report on
Form 10-K for the year ended December 31,
2022 filed with the SEC and available from the Company's
website at www.rileypermian.com under the "Investor" tab, and
in other documents the Company files with the SEC.
The forward-looking statements in this press release are made as
of the date hereof and are based on information available at that
time. The Company does not undertake, and expressly disclaims, any
duty to update or revise our forward-looking statements based on
new information, future events or otherwise.
Cautionary Statement Regarding Guidance
The estimates and guidance presented in this release are based
on assumptions of current and future capital expenditure levels,
prices for oil, natural gas and NGLs, available liquidity,
indications of supply and demand for oil, well results, and
operating costs. The guidance provided in this release does not
constitute any form of guarantee or assurance that the matters
indicated will be achieved. While we believe these estimates and
the assumptions on which they are based are reasonable as of the
date on which they are made, they are inherently uncertain and are
subject to, among other things, significant business, economic,
operational, and regulatory risks, and uncertainties, some of which
are not known as of the date of the statement. Guidance and
estimates, and the assumptions on which they are based, are subject
to material revision. Actual results may differ materially from
estimates and guidance. Please read the "Cautionary Statement
Regarding Forward Looking Information" section above, as well as
"Risk Factors" in our annual report on Form 10-K and our quarterly
reports on Form 10-Q, which are incorporated herein.
RILEY EXPLORATION
PERMIAN, INC.
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
|
|
(Unaudited)
|
|
|
|
|
June 30,
2023
|
|
December 31,
2022
|
|
|
(In thousands,
except share amounts)
|
Assets
|
|
|
|
|
Current
Assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
6,741
|
|
$
13,301
|
Accounts
receivable
|
|
32,584
|
|
25,551
|
Prepaid expenses and
other current assets
|
|
2,254
|
|
3,236
|
Inventory
|
|
9,630
|
|
8,886
|
Current derivative
assets
|
|
3,924
|
|
20
|
Total current
assets
|
|
55,133
|
|
50,994
|
Oil and natural gas
properties, net (successful efforts)
|
|
841,891
|
|
440,102
|
Other property and
equipment, net
|
|
20,058
|
|
20,023
|
Non-current derivative
assets
|
|
3,799
|
|
—
|
Other non-current
assets, net
|
|
11,042
|
|
4,175
|
Total
Assets
|
|
$
931,923
|
|
$
515,294
|
Liabilities and
Shareholders' Equity
|
|
|
|
|
Current
Liabilities:
|
|
|
|
|
Accounts
payable
|
|
$
5,404
|
|
$
3,939
|
Accrued
liabilities
|
|
28,880
|
|
35,582
|
Revenue
payable
|
|
25,234
|
|
17,750
|
Current derivative
liabilities
|
|
2,117
|
|
16,472
|
Current portion of
long-term debt
|
|
20,000
|
|
—
|
Other current
liabilities
|
|
7,216
|
|
2,562
|
Total Current
Liabilities
|
|
88,851
|
|
76,305
|
Non-current derivative
liabilities
|
|
260
|
|
12
|
Asset retirement
obligations
|
|
21,005
|
|
2,724
|
Long-term
debt
|
|
374,256
|
|
56,000
|
Deferred tax
liabilities
|
|
59,493
|
|
45,756
|
Other non-current
liabilities
|
|
1,205
|
|
1,051
|
Total
Liabilities
|
|
545,070
|
|
181,848
|
Commitments and
Contingencies
|
|
|
|
|
Shareholders'
Equity:
|
|
|
|
|
Preferred stock,
$0.0001 par value, 25,000,000 shares authorized; 0 shares
issued
and outstanding
|
|
—
|
|
—
|
Common stock, $0.001
par value, 240,000,000 shares authorized; 20,181,704
and 20,160,980 shares issued and outstanding at June 30, 2023 and
December
31, 2022, respectively
|
|
20
|
|
20
|
Additional paid-in
capital
|
|
276,828
|
|
274,643
|
Retained
earnings
|
|
110,005
|
|
58,783
|
Total Shareholders'
Equity
|
|
386,853
|
|
333,446
|
Total Liabilities
and Shareholders' Equity
|
|
$
931,923
|
|
$
515,294
|
|
|
|
|
|
RILEY EXPLORATION
PERMIAN, INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(Unaudited)
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
(In
thousands)
|
Revenues:
|
|
|
|
|
|
|
|
|
Oil and natural gas
sales, net
|
|
$
99,312
|
|
$
87,781
|
|
$
165,724
|
|
$
154,426
|
Contract services -
related parties
|
|
600
|
|
600
|
|
1,200
|
|
1,200
|
Total
Revenues
|
|
99,912
|
|
88,381
|
|
166,924
|
|
155,626
|
Costs and
Expenses:
|
|
|
|
|
|
|
|
|
Lease operating
expenses
|
|
17,514
|
|
8,062
|
|
26,389
|
|
14,892
|
Production and ad
valorem taxes
|
|
7,221
|
|
5,526
|
|
11,331
|
|
9,028
|
Exploration
costs
|
|
80
|
|
22
|
|
412
|
|
1,520
|
Depletion,
depreciation, amortization and accretion
|
|
18,601
|
|
7,188
|
|
27,684
|
|
13,821
|
General and
administrative:
|
|
|
|
|
|
|
|
|
Administrative
costs
|
|
6,500
|
|
4,399
|
|
11,967
|
|
8,413
|
Share-based
compensation expense
|
|
1,225
|
|
553
|
|
2,339
|
|
1,570
|
Cost of contract
services - related parties
|
|
109
|
|
89
|
|
219
|
|
174
|
Transaction
costs
|
|
3,652
|
|
—
|
|
5,539
|
|
2,638
|
Total Costs and
Expenses
|
|
54,902
|
|
25,839
|
|
85,880
|
|
52,056
|
Income From
Operations
|
|
45,010
|
|
62,542
|
|
81,044
|
|
103,570
|
Other Income
(Expense):
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
|
(10,161)
|
|
(697)
|
|
(11,177)
|
|
(1,375)
|
Gain (loss) on
derivatives
|
|
8,665
|
|
(12,363)
|
|
14,420
|
|
(61,995)
|
Loss from equity
method investment
|
|
(4)
|
|
—
|
|
(236)
|
|
—
|
Total Other Income
(Expense)
|
|
(1,500)
|
|
(13,060)
|
|
3,007
|
|
(63,370)
|
Net Income From
Operations Before Income Taxes
|
|
43,510
|
|
49,482
|
|
84,051
|
|
40,200
|
Income tax
expense
|
|
(10,442)
|
|
(10,927)
|
|
(19,132)
|
|
(8,813)
|
Net
Income
|
|
$
33,068
|
|
$
38,555
|
|
$
64,919
|
|
$
31,387
|
Net Income per
Share:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
1.68
|
|
$
1.97
|
|
$
3.30
|
|
$
1.61
|
Diluted
|
|
$
1.65
|
|
$
1.96
|
|
$
3.25
|
|
$
1.60
|
Weighted Average
Common Shares Outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
|
19,671
|
|
19,542
|
|
19,660
|
|
19,521
|
Diluted
|
|
19,985
|
|
19,660
|
|
19,951
|
|
19,646
|
RILEY EXPLORATION
PERMIAN, INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(Unaudited)
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
(In
thousands)
|
Cash Flows from
Operating Activities:
|
|
|
|
|
|
|
|
|
Net income
|
|
$
33,068
|
|
$
38,555
|
|
$
64,919
|
|
$
31,387
|
Adjustments to
reconcile net income to net cash provided
by operating activities:
|
|
|
|
|
|
|
|
|
Oil and natural gas
lease expirations
|
|
56
|
|
—
|
|
388
|
|
1,464
|
Depletion,
depreciation, amortization and accretion
|
|
18,601
|
|
7,188
|
|
27,684
|
|
13,821
|
(Gain) loss on
derivatives
|
|
(8,665)
|
|
12,363
|
|
(14,420)
|
|
61,995
|
Settlements on
derivative contracts
|
|
(2,303)
|
|
(25,783)
|
|
(7,391)
|
|
(44,158)
|
Amortization of
deferred financing costs and discount
|
|
1,088
|
|
182
|
|
1,281
|
|
373
|
Share-based
compensation expense
|
|
1,225
|
|
828
|
|
2,485
|
|
1,889
|
Deferred income tax
expense
|
|
8,454
|
|
10,212
|
|
13,737
|
|
7,319
|
Other
|
|
4
|
|
—
|
|
236
|
|
—
|
Changes in operating
assets and liabilities
|
|
4,387
|
|
614
|
|
(199)
|
|
1,410
|
Net Cash Provided
by Operating Activities
|
|
55,915
|
|
44,159
|
|
88,720
|
|
75,500
|
Cash Flows from
Investing Activities:
|
|
|
|
|
|
|
|
|
Additions to oil and
natural gas properties
|
|
(48,090)
|
|
(36,876)
|
|
(83,023)
|
|
(47,042)
|
Net assets acquired in
business combination
|
|
(292,094)
|
|
—
|
|
(325,094)
|
|
—
|
Acquisitions of oil
and natural gas properties
|
|
(5,443)
|
|
—
|
|
(5,443)
|
|
—
|
Contributions to
equity method investment
|
|
(1,726)
|
|
—
|
|
(3,566)
|
|
—
|
Additions to other
property and equipment
|
|
(168)
|
|
(92)
|
|
(277)
|
|
(1,470)
|
Net Cash Used in
Investing Activities
|
(347,521)
|
|
(36,968)
|
|
(417,403)
|
|
(48,512)
|
Cash Flows from
Financing Activities:
|
|
|
|
|
|
|
|
|
Deferred financing
costs
|
|
(6,165)
|
|
(1,690)
|
|
(6,214)
|
|
(1,716)
|
Proceeds from
revolving credit facility
|
|
145,000
|
|
1,000
|
|
178,000
|
|
4,000
|
Repayments under
revolving credit facility
|
|
(19,000)
|
|
(3,000)
|
|
(19,000)
|
|
(8,000)
|
Proceeds from senior
notes
|
|
188,000
|
|
—
|
|
188,000
|
|
—
|
Repayments of senior
notes
|
|
(5,000)
|
|
—
|
|
(5,000)
|
|
—
|
Payment of common
share dividends
|
|
(6,695)
|
|
(6,058)
|
|
(13,363)
|
|
(12,198)
|
Common stock
repurchased for tax withholding
|
|
(68)
|
|
(252)
|
|
(300)
|
|
(591)
|
Net Cash Provided
by (Used in) Financing
Activities
|
|
296,072
|
|
(10,000)
|
|
322,123
|
|
(18,505)
|
Net Increase
(Decrease) in Cash and Cash Equivalents
|
|
4,466
|
|
(2,809)
|
|
(6,560)
|
|
8,483
|
Cash and Cash
Equivalents Cash, Beginning of Period
|
|
2,275
|
|
19,609
|
|
13,301
|
|
8,317
|
Cash and Cash
Equivalents Cash, End of Period
|
|
$
6,741
|
|
$
16,800
|
|
$
6,741
|
|
$
16,800
|
|
|
|
|
|
|
|
|
|
OIL, NATURAL GAS AND NGL RESERVES
The Company prepared estimates of reserves using an average
price equal to the unweighted arithmetic average of the first day
of each month within the 12-month period ended June 30, 2023 of $83.23 per Bbl for oil and $4.76 per Mcf for gas in accordance with SEC
guidelines. The Company also prepared estimates of proved reserves
as of June 30, 2023 using NYMEX
pricing. Netherland, Sewell & Associates, Inc. ("NSAI") is the
Company's third-party reservoir engineer, which prepares estimates
of the Company's proved reserves annually as of its year-end, in
accordance with the rules and regulations of the SEC. NSAI has not
reviewed our proved reserves at June 30,
2023 using SEC or NYMEX pricing. A summary of these internal
estimates as of June 30, 2023 is
presented below.
|
|
SEC
Pricing
|
|
NYMEX
Pricing(1)
|
Reserves as of June
30, 2023
|
|
Proved
Developed
Reserves
|
|
Total Proved
Reserves
|
|
Proved
Developed
Reserves
|
|
Total Proved
Reserves
|
Oil (MBbls)
|
|
39,040
|
|
63,028
|
|
37,854
|
|
61,240
|
Natural gas
(MMcf)
|
|
72,746
|
|
109,100
|
|
70,466
|
|
105,837
|
Natural gas liquids
(MBbls)
|
|
11,995
|
|
18,613
|
|
11,621
|
|
18,066
|
Total
(MBoe)
|
|
63,159
|
|
99,824
|
|
61,219
|
|
96,945
|
PV-10(2)
(in thousands)
|
|
$
1,184,354
|
|
$
1,621,310
|
|
$
806,537
|
|
$
1,012,955
|
___________________
|
(1)
|
See table below for
the NYMEX pricing used to prepare internal reserve
estimates.
|
|
Oil
|
|
Natural Gas
|
|
($ per Bbl)
|
|
($ per Mcf)
|
July-December
2023
|
$
70.52
|
|
$
3.01
|
Calendar year
2024
|
$
68.50
|
|
$
3.52
|
Calendar year
2025
|
$
65.54
|
|
$
3.94
|
Calendar year
2026
|
$
63.04
|
|
$
3.91
|
Calendar year
2027
|
$
60.83
|
|
$
3.78
|
After 2027
|
$
59.90
|
|
$
4.20
|
|
(2)
|
A non-GAAP financial
measure as defined and reconciled in the supplemental financial
tables available on the Company's website
at www.rileypermian.com.
|
OIL, NATURAL GAS AND NGL RESERVES, Continued
NSAI prepared the estimates of the Company's proved reserves as
of December 31, 2022, in accordance
with the rules and regulations of the SEC using an average price
equal to the unweighted arithmetic average of the first day of each
month within the 12-month period ended December 31, 2022 of $94.14 per Bbl for oil and $6.36 per Mcf for natural gas. The Company
prepared estimates of proved reserves as of December 31, 2022 using NYMEX pricing, which were
not reviewed by NSAI. The table below presents a summary of our
proved reserves as of December 31,
2022.
|
|
SEC
Pricing
|
|
NYMEX
Pricing(1)
|
Reserves as of
December 31, 2022
|
|
Proved
Developed
Reserves
|
|
Total Proved
Reserves
|
|
Proved
Developed
Reserves
|
|
Total Proved
Reserves
|
Oil (MBbls)
|
|
29,632
|
|
48,882
|
|
28,270
|
|
45,151
|
Natural gas
(MMcf)
|
|
59,314
|
|
86,018
|
|
56,492
|
|
79,762
|
Natural gas liquids
(MBbls)
|
|
9,604
|
|
14,454
|
|
9,170
|
|
13,393
|
Total
(MBoe)
|
|
49,122
|
|
77,673
|
|
46,855
|
|
71,838
|
PV-10(2)
(in thousands)
|
|
$
1,010,251
|
|
$
1,401,148
|
|
$
652,817
|
|
$
802,174
|
___________________
|
(1)
|
See table below for
the NYMEX pricing used to prepare internal reserve
estimates.
|
|
Oil
|
|
Natural Gas
|
|
($ per Bbl)
|
|
($ per Mcf)
|
Calendar year
2023
|
$
79.07
|
|
$
4.24
|
Calendar year
2024
|
$
73.89
|
|
$
4.27
|
Calendar year
2025
|
$
69.77
|
|
$
4.39
|
Calendar year
2026
|
$
66.55
|
|
$
4.46
|
Calendar year
2027
|
$
63.87
|
|
$
4.50
|
After 2027
|
$
63.87
|
|
$
4.50
|
|
|
(2)
|
A non-GAAP financial
measure as defined and reconciled in the supplemental financial
tables available on the Company's website
at www.rileypermian.com.
|
Reserve estimates above do not include any value for probable or
possible reserves that may exist, nor do they include any value for
undeveloped acreage. The reserve estimates represent our net
revenue interest in our properties, all of which are located within
the continental United States.
NYMEX pricing does not comport with the reporting requirements of
the SEC and should not be used as a substitute for or compared with
estimates of proved reserves using SEC pricing.
DERIVATIVE CONTRACTS
The following table summarizes the open financial derivatives as
of August 4, 2023, related to oil and
natural gas production.
|
|
|
|
Weighted Average
Price
|
Period
(1)
|
|
Notional
Volume
|
|
Fixed
|
|
Put
|
|
Call
|
|
|
|
|
($ per unit)
|
Oil Swaps
(Bbl)
|
|
|
|
|
|
|
|
|
Q3 2023
|
|
437,000
|
|
$
68.18
|
|
$
—
|
|
$
—
|
Q4 2023
|
|
392,000
|
|
$
68.06
|
|
$
—
|
|
$
—
|
2024
|
|
690,000
|
|
$
70.54
|
|
$
—
|
|
$
—
|
2025
|
|
135,000
|
|
$
69.19
|
|
$
—
|
|
$
—
|
|
|
|
|
|
|
|
|
|
Oil Collars
(Bbl)
|
|
|
|
|
|
|
|
|
Q3 2023
|
|
330,000
|
|
$
—
|
|
$
68.64
|
|
$
88.85
|
Q4 2023
|
|
330,000
|
|
$
—
|
|
$
68.64
|
|
$
88.85
|
2024
|
|
1,621,000
|
|
$
—
|
|
$
61.12
|
|
$
84.39
|
2025
|
|
423,000
|
|
$
—
|
|
$
60.00
|
|
$
77.23
|
|
|
|
|
|
|
|
|
|
Natural Gas Swaps
(MMBtu)
|
|
|
|
|
|
|
|
|
Q3 2023
|
|
470,000
|
|
$
2.61
|
|
$
—
|
|
$
—
|
Q4 2023
|
|
670,000
|
|
$
3.26
|
|
$
—
|
|
$
—
|
2024
|
|
2,400,000
|
|
$
3.38
|
|
$
—
|
|
$
—
|
2025
|
|
525,000
|
|
$
3.90
|
|
$
—
|
|
$
—
|
|
|
|
|
|
|
|
|
|
Natural Gas
Collars (MMBtu)
|
|
|
|
|
|
|
|
|
Q3 2023
|
|
300,000
|
|
$
—
|
|
$
2.55
|
|
$
3.20
|
Q4 2023
|
|
300,000
|
|
$
—
|
|
$
3.12
|
|
$
4.07
|
2024
|
|
1,065,000
|
|
$
—
|
|
$
3.19
|
|
$
4.14
|
2025
|
|
555,000
|
|
$
—
|
|
$
3.30
|
|
$
4.49
|
|
|
|
|
|
|
|
|
|
Oil Basis
(Bbl)
|
|
|
|
|
|
|
|
|
Q3 2023
|
|
420,000
|
|
$
1.28
|
|
$
—
|
|
$
—
|
Q4 2023
|
|
450,000
|
|
$
1.28
|
|
$
—
|
|
$
—
|
2024
|
|
1,320,000
|
|
$
0.97
|
|
$
—
|
|
$
—
|
__________________
|
(1)
|
Q3 2023 derivative
positions shown include July and August 2023 contracts, some of
which have settled as of August 4, 2023.
|
In April 2023, the Company entered
into interest rate swaps for $80
million notional at an average fixed rate on the adjusted
term secured overnight financing rate of 3.09% for the period
April 2024 through April 2026.
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SOURCE Riley Exploration Permian, Inc.