Riley Exploration Permian (REPX) Valuation Update - May 10

[dan_s]

REPX closed at $26.42 on May 9. First Call's Price Target is $50.50. Dividend Yield is 6.1%

I have updated my forecast/valuation for their solid Q1 2025 results and their updated guidance.
My valuation adjusts to $50.00, which is based on 4.5 X annualized operating cash flow per share.

Riley has a strong balance sheet. Debt will increase by $130 million when they close the Silverback Acquisition in July.
The Silverback Acquisition will add ~5,000 Boepd of production and it increases the number of high-quality of drilling locations in New Mexico.
Riley's balance sheet can handle the increased debt, and they have more than enough free cash flow to continue paying dividends of $0.38/quarter.
Riley is making some investments that should result in increased natural gas and NGL prices.
Their Power Joint Venture is also a positive.

Riley has reduced their CapEx budget for the remainder of 2025, so they are going to go into maintenance mode until oil prices rebound, which should continue if Team Trump keeps announcing better trade deals with significant countries.

Riley should generate over $100 million of free cash flow in 2025.

REPX is a "Growth + Income" stock, which should be a double for shareholders once we move on from FEAR of the Tariff War.

[grimaldi]

Bot a position two years ago, sadly red but pays a good divi

[ChuckGeb]

I am extremely impressed with management of this company. Oil names out of favor right now, small caps to an extreme. Expect for duration of Trump admin. Go gassers for the sizzle.

REPX however in my opinion has displayed a thoughtful, disciplined, and conservative business plan that is rare for a company of this size. They have convinced me and I am so committed and expect to be amply rewarded over the next 3 - 5 years. Nice dividends in meantime.

If you are looking for an immediate pop, you might get lucky but likely not.