Riley Exploration (REPX) Price Target Update - Aug 8

[dan_s]

Notes from Truist Financial
Neal Dingmann rates it a BUY with a price target of $53

Riley Exploration Permian, Inc. (REPX)
2Q23 FCF Beat and Improved 2023 Guide as FCF to Ramp Further

Riley reported higher 2Q23 FCF than Truist Securities/Consensus estimates along with
in-line quarterly EBITDAX driven by much lower than expected spend and higher than
anticipated production. Given the strength of its 1H23 operations and current market
conditions, the company is curtailing activity in 2H23 while maintaining its previous
production levels likely to result in notably improved FCF (assuming commodity prices
remain stable). We remain optimistic over upcoming incremental well results from the Pecos
(private) locations.

Financial/Operational Highlights
• REPX’s power generation facility is expected to be in service in late 3Q or early 4Q
• 3Q23 accrual capex guidance of $36-48mm versus Truist Securities & Street estimates
of $44mm/$42mm
• 3Q23 production guidance of 18.6-19.8 mboepd versus Truist Securities & Street
estimates of 19.6/20.4 mboepd < IMO Riley is under-promising to over-deliver on full-year production.
• FY23 production guidance was reiterated, but capex was lowered as the company
curtailed activity
• Operating expenses were reiterated, with cash tax guidance increased

[dan_s]

Updating Riley's forecast will be at the top of my list when I get back from PV. BTW we are having very nice weather (cool mornings) and lots of fun.

[ChuckGeb]

Anybody have any thoughts on why Riley got slammed today? Results appeared positive. Stock down 10%.

[allen46]

Sell off makes no sense to me. Volume was 2.5 times normal so maybe someone wanted out. I think it is a buying opportunity along with VTLE

[ChuckGeb]

Looks like a big sale at the open, recovering rest of day. Seemed to make no sense to me either. Thanks for your input. I like this company.

[dan_s]

Small caps can make big moves up or down for no reason other than more sellers than buyers. Riley's Q2 results were very good and guidance points to strong 2H 2023 results.
I will update my model early next week.