Riley Exploration Permian (RPEX) Update - Nov 22

Riley Exploration Permian (RPEX) Update - Nov 22

Postby dan_s » Mon Nov 22, 2021 8:00 pm

Comments below are from Keith Kohl at The Energy Investor

Riley Exploration Permian (RPEX) is an independent oil and natural gas company focused on the acquisition, exploration, development, and production of oil and natural gas resources in the Permian Basin.
Riley’s primary targets are found in the San Andres Formation, a shelf margin deposit on the Central Basin Platform and Northwest Shelf of the Permian Basin.

The company’s acreage is located on contiguous blocks in Yoakum County, Texas, as well as Lea, Roosevelt, and Chaves counties in New Mexico.

There hasn’t been much news out of Riley since the company announced its latest dividend last month. We did learn that the company successfully boosted its credit facility borrowing base by $40 million in mid-October and that there were a few insiders selling a small number of shares. However, our outlook remains strong as long as oil prices stay strong.

I hope to have more news for you on Riley’s operations soon.

Riley Exploration Permian (NYSE: REPX) is rated a BUY under $35
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RPEX closed at $19.19 today. First Call's price target is $48.00 per share. This might be a good replacement for GDP, but I need to spend more time on it.
Dan Steffens
Energy Prospectus Group
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Re: Riley Exploration Permian (RPEX) Update - Nov 22

Postby ajootian » Tue Nov 23, 2021 10:21 pm

I'm a big RPEX fan so its great to see that you are considering covering them. The recent drawdown in the stock price is puzzling but I'm hoping that its nothing more than the fact that they have not put out much news in a while. They could also be getting some pretty big cost overruns on their EOR project but IMO they were ready for that, having done an equity raise when the stock price was > 50% higher than it is today.

I'm going to be real interested to see what the PV10 value of their reserves comes in at for their fiscal year-end, which was last quarter. When they put that out I hope they also put out what the value would be at current strip prices. I believe that would be a number well in excess of the company's current enterprise value.

BTW, I'm not totally convinced that GDP is going to be sold for just $23/share. The merger agreement with Paloma provides for a break fee of just $15M. I think there's a chance that someone else might jump in and try a higher bid. In any event, I'm going to make some money on that investment and I thank you Dan for covering the company.
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Re: Riley Exploration Permian (RPEX) Update - Nov 22

Postby dan_s » Wed Nov 24, 2021 9:10 am

I definitely agree with you on GDP. Paloma might just be a "Stalking Horse". I've seen this game played before.

I will be working most of the holiday finalizing the rest of the Sweet 16 profile updates and my November newsletter. I will be taking a hard look at Riley sometime in December.
Dan Steffens
Energy Prospectus Group
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