Riley's first quarter results were inline with my forecast. I will update my forecast model this afternoon.
FIRST QUARTER 2025 AND RECENT HIGHLIGHTS
Averaged 24.4 MBoe/d of total equivalent production (oil production of 15.6 MBbls/d) < Total production 100 bpd below my forecast and oil slightly higher than my forecast.
Generated $50 million of operating cash flow or $56 million before changes in working capital(1), $36 million of Total Free Cash Flow(1) and $39 million of Upstream Free Cash Flow(1)
Incurred total accrual (activity-based) capital expenditures before acquisitions of $24 million ($19 million for upstream) and cash capital expenditures before acquisitions of $19 million ($16 million for upstream)
Reduced debt outstanding by $21 million with a debt-to-Adjusted EBITDAX(1) ratio of 0.9x(2)
Reaffirmed the borrowing base on the Company's senior secured revolving credit facility at $400 million in May 2025
Announcing agreement to acquire Silverback Exploration for $142 million in cash, adding 5 MBoe/d of total equivalent production and 300+ gross undeveloped locations < I love more "Running Room".
Management has elected to modify previously announced investment and development activity in light of recent market conditions and the pending acquisition
Bobby D. Riley, Chief Executive Officer and Chairman of the Board commented, "Riley Permian delivered another capital-efficient quarter of strong performance. Our modest capital investing during the first quarter allowed us to generate substantial Total Free Cash Flow and further reduce debt, positioning us for the year ahead."
"We're excited to announce another strategic acquisition of a largely undeveloped asset base in New Mexico. Despite current market volatility, we believe this acquisition is justified at present given our long-term outlook for our industry and our company. The acquisition adds significant, long-term upstream development potential and supports our prior decision to invest in gas midstream infrastructure in the region."
"In conjunction with changes in the macro environment, we are reducing 2025 investing midpoint guidance on a standalone basis (excluding the pending acquisition) by 50% while reducing midpoint total production guidance by 3%. Inclusive of the acquisition, we forecast 5% of incremental total investing on a full-year 2025 basis, as compared to our standalone guidance. This year we are prioritizing the acquisition and preservation of high-quality inventory over the conversion of inventory to production. We believe Riley Permian is well-positioned to succeed in the current market environment, with our strong asset base, disciplined capital allocation philosophy and robust hedging profile."
Riley Exploration Permian (REPX) Q1 Results - May 7
Riley Exploration Permian (REPX) Q1 Results - May 7
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Riley Exploration Permian (REPX) Q1 Results - May 7
SILVERBACK ACQUISITION
On May 3, 2025, Riley Exploration - Permian, LLC, a wholly-owned subsidiary of Riley Permian, entered into a securities purchase agreement ("Purchase Agreement") with Silverback Legacy, LLC and Silverback Blocker, LLC (collectively, "Sellers"), pursuant to which the Company has agreed to acquire 100% of the ownership interests of Silverback Exploration II, LLC and its subsidiaries (the "Silverback Acquisition") for an aggregate purchase price of approximately $142 million, subject to customary purchase price adjustments, plus quarterly earnout payments of up to $1.875 million per fiscal quarter during calendar years 2026 and 2027 if the NYMEX WTI quarterly average exceeds certain stated amounts set forth in the Purchase Agreement, ranging from $70 to $75 per barrel or higher.
The Silverback Acquisition assets comprise an approximate 47,000 net acre position, directly adjacent to and overlapping with the Company's existing acreage in Eddy County, providing for significant operational flexibility and synergies. Of the total acreage position, Riley Permian estimates that approximately 19,000 net acres are prospective for the Yeso Trend, with an estimated 300+ gross undeveloped locations. Recent production was 5.0 MBoe/d, of which 52% was oil and 75% was liquids.
The transaction is expected to close early in the third quarter of 2025, subject to customary closing conditions. Greenhill, a Mizuho affiliate, acted as financial advisor to Riley Permian, and Holland & Knight LLP acted as Riley Permian's legal counsel on the transaction.
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RPC Power LLC ("RPC Power"), our power-focused joint venture, provides a portion of Riley Permian's electric power needs for its field operation at our Champions field in Texas. During the first quarter 2025, RPC Power served approximately 56% of the Company's load for this field.
RPC Power's phase 2 project is designed to sell power into ERCOT. During the first quarter RPC Power continued to progress on this project with thermal generators secured for 50MW of nameplate capacity, physical sites secured, and numerous utility and gas interconnection agreements executed. We continue to progress toward our planned in-service date of late 2025 or early 2026.
During the first quarter, Riley Permian made an additional capital contribution of $6 million to RPC Power. The Company has invested a total of $30 million to date and has 50% ownership.
On May 3, 2025, Riley Exploration - Permian, LLC, a wholly-owned subsidiary of Riley Permian, entered into a securities purchase agreement ("Purchase Agreement") with Silverback Legacy, LLC and Silverback Blocker, LLC (collectively, "Sellers"), pursuant to which the Company has agreed to acquire 100% of the ownership interests of Silverback Exploration II, LLC and its subsidiaries (the "Silverback Acquisition") for an aggregate purchase price of approximately $142 million, subject to customary purchase price adjustments, plus quarterly earnout payments of up to $1.875 million per fiscal quarter during calendar years 2026 and 2027 if the NYMEX WTI quarterly average exceeds certain stated amounts set forth in the Purchase Agreement, ranging from $70 to $75 per barrel or higher.
The Silverback Acquisition assets comprise an approximate 47,000 net acre position, directly adjacent to and overlapping with the Company's existing acreage in Eddy County, providing for significant operational flexibility and synergies. Of the total acreage position, Riley Permian estimates that approximately 19,000 net acres are prospective for the Yeso Trend, with an estimated 300+ gross undeveloped locations. Recent production was 5.0 MBoe/d, of which 52% was oil and 75% was liquids.
The transaction is expected to close early in the third quarter of 2025, subject to customary closing conditions. Greenhill, a Mizuho affiliate, acted as financial advisor to Riley Permian, and Holland & Knight LLP acted as Riley Permian's legal counsel on the transaction.
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RPC Power LLC ("RPC Power"), our power-focused joint venture, provides a portion of Riley Permian's electric power needs for its field operation at our Champions field in Texas. During the first quarter 2025, RPC Power served approximately 56% of the Company's load for this field.
RPC Power's phase 2 project is designed to sell power into ERCOT. During the first quarter RPC Power continued to progress on this project with thermal generators secured for 50MW of nameplate capacity, physical sites secured, and numerous utility and gas interconnection agreements executed. We continue to progress toward our planned in-service date of late 2025 or early 2026.
During the first quarter, Riley Permian made an additional capital contribution of $6 million to RPC Power. The Company has invested a total of $30 million to date and has 50% ownership.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group