Riley Exploration Permian (REPX) Fiscal Q3 - Aug 11

[dan_s]

Riley's fiscal Q3 (6/30/22) beat my forecast. My pre-release valuation was $51/share.

HIGHLIGHTS FOR THE FISCAL THIRD QUARTER ENDING JUNE 30, 2022

> Averaged oil production of 8.4 MBbls per day, which exceeds the high end of guidance and represents an increase of 24% as compared year-over-year to the fiscal third quarter 2021 and 12% as compared quarter-over-quarter to the fiscal second quarter 2022 < My Q2 production forecast was 7,900 bbls of oil per day and 10,500 Boepd.

> Reported net income of $39 million, which includes $13 million of non-cash gain on derivative contracts and income from operations of $63 million
Generated $45 million of Adjusted EBITDAX and $44 million of operating cash flow, representing an increase of 29% and 47%, respectively, over the prior quarter < My Adjusted Net Income forecast was $24.5 million (not including the MTM gain on their hedges.

> Incurred total accrual (activity-based) capital expenditures of $34 million and total cash capital expenditures of $37 million

> Paid dividends of $0.31 per share for a total of $6 million

> Reported proved reserves of 79 MMBoe (64% oil) with a standardized measure of future discounted cash flows of $1,046 million

> PV-10 value of total proved reserves and total proved developed reserves of $1,098 million and $807 million (~$40.50/share), respectively, as of June 30, 2022 based on NYMEX strip pricing

"In the fiscal third quarter, we generated record oil production, revenue and operating cash flow," said Riley Permian Chairman and CEO, Bobby Riley. "Our cash flow benefited from a decreased impact of financial hedges this past quarter, and we see a continuation of that trend for the quarters and year ahead. We are experiencing increased costs like many other companies in our industry, but we are proud of our team's efforts to control costs where we can. Based on the strength of our fiscal third quarter production, and given modest increased activity plans, we are increasing previously released midpoint guidance for oil production for the fiscal fourth quarter by 6% and for the fiscal year by 4%. Related, we are increasing our midpoint guidance for fiscal year capital expenditures by approximately 5%, driven by increased activity and cost increases. We continue to return a substantial portion of our cash flow to shareholders in the form of dividends, and we see opportunity to pay down our debt in the coming quarters, further strengthening our balance sheet."