Riley Permian Reports Third Quarter 2024 Results
OKLAHOMA CITY, Nov. 6, 2024 /PRNewswire/ -- Riley Exploration Permian, Inc. (NYSE:REPX) ("Riley Permian" or the "Company"), today reported financial and operating results for the third quarter ended September 30, 2024.
THIRD QUARTER 2024 HIGHLIGHTS
Averaged 23.4 MBoe/d of total equivalent production (oil production of 15.5 MBbls/d)
Generated $72.1 million of operating cash flow or $60.5 million before changes in working capital(1)
Incurred total accrual (activity-based) capital expenditures before acquisitions of $30.0 million and cash capital expenditures before acquisitions of $22.7 million
Generated Free Cash Flow(1) of $37.8 million
Paid dividends of $0.36 per share for a total of $8.1 million
Reduced the principal value of debt outstanding by $35.0 million
Completed the installation of our remaining electrical generation equipment used to power a portion of our field operations in Texas, with a total of 20 MW of installed capacity
MANAGEMENT COMMENTARY
Bobby D. Riley, Chief Executive Officer and Chairman of the Board commented: "Riley Permian delivered another quarter of strong results as we continued to execute our annual plan. Operating cash flow improved quarter-over-quarter despite lower commodity prices, driven by higher production and improved commodity hedge settlements. We've generated $99 million of Free Cash Flow(1) year-to-date, which has contributed to $70 million of principal debt reduction and $23 million of dividends paid. Our electric power projects continue advancing, which we believe will be increasingly valuable to our operations and the Company."
"Additionally, during the third quarter, we opted to discontinue our EOR Project, which was begun in 2021, and which follows an approximate two-year period of water and CO2 injection applied to three horizontal producing wells. Technical achievements were delivered from the pilot program, showing that our oil can be successfully mobilized with CO2. However, given the relatively early life stage of our assets, we believe that we can currently generate higher production levels with lower operating costs using primary production methods, and that secondary EOR may be more applicable for our assets later in their useful life, after the completion of the primary phase of production."
THIRD QUARTER 2024 OPERATIONS UPDATE AND FINANCIAL RESULTS
For the quarter ended September 30, 2024, the Company's revenues totaled $102.3 million, net cash provided by operating activities was $72.1 million and net income was $25.7 million, or $1.21 per diluted share.
On a non-GAAP basis, Adjusted EBITDAX(1) was $71.7 million, cash flow from operations before changes in working capital(1) was $60.5 million, Free Cash Flow(1) was $37.8 million and Adjusted Net Income(1) was $31.5 million, or $1.49 per diluted share.
Average oil production was 15.5 MBbls/d and average total equivalent production was 23.4 MBoe/d (66% oil and 85% liquids). Oil volumes increased by 6% quarter-over-quarter while natural gas and NGL volumes increased by 21% and 24%, respectively. The increased natural gas and NGL volumes were driven by additional processing capacity that came on-line in July at our primary third-party midstream gas processor in Texas, relieving prior gas processing constraints.
Average realized prices were $73.95 per barrel of oil, $(0.60) per Mcf of natural gas and $(4.40) per barrel of natural gas liquids. The Company's oil, natural gas and NGL sales are presented net of gathering, processing and transportation costs. These costs, related to natural gas and NGLs, at times exceeded the price received and resulted in negative average realized prices.
The Company recorded a $24.2 million gain due to commodity derivatives, including a $23.4 million non-cash, unrealized gain and a $0.8 million realized gain.
Lease operating expense ("LOE") was $18.5 million, or $8.60 per Boe, cash G&A expense(1) was $5.9 million, or $2.73 per Boe, and production and ad valorem taxes were $7.0 million or $3.25 per Boe.
Total accrued capital expenditures before acquisitions were $30.0 million and $22.7 million on a cash basis. The Company drilled 11.5 net operated horizontal wells, completed 3 net operated horizontal wells, and brought online to production 6 net operated horizontal wells.
The Company recorded a $30.2 million impairment related to the discontinuation of our EOR Project, including a $28.9 million non-cash impairment and $1.3 million cash impairment related to the termination of the Kinder Morgan CO2 contract. Select equipment from the EOR Project was salvaged for use in the Company's conventional vertical and horizontal development programs.
The Company reduced total debt by $35.0 million, including a principal reduction of $30.0 million on its Credit Facility and $5.0 million on its Senior Notes. Interest expense was $8.8 million.
The Company had $288.6 million of total debt, or $300.0 million principal balance, as of September 30, 2024, with approximately $245.0 million available for future borrowing under its Credit Facility.
Shareholders' equity was $507.4 million as of September 30, 2024, and the number of common shares outstanding was 21.5 million.
POWER ACTIVITY UPDATE
RPC Power LLC ("RPC Power"), our power-focused joint venture, completed the installation of the remaining electrical generation equipment used to power a portion of Riley Permian's field operations in Texas, with a total of 20 MW of installed capacity as of September 30, 2024. RPC Power advanced its larger, ERCOT-focused project during the third quarter with progress on siting, permitting and generation equipment procurement.
During the third quarter 2024, Riley Permian made an additional capital contribution of $1.5 million to RPC Power. The Company has invested a total of $22.5 million to date and has 50% ownership.
___________________
(1)
A non-GAAP financial measure as defined and reconciled in the supplemental financial tables available on the Company's website at www.rileypermian.com.
Selected Operating and Financial Data
(Unaudited)
Three Months Ended
Nine Months Ended
September 30, 2024
June 30, 2024
September 30, 2023
September 30, 2024
September 30, 2023
Select Financial Data (in thousands):
Oil and natural gas sales, net
$ 102,339
$ 105,343
$ 107,694
$ 307,106
$ 273,418
Income from Operations
$ 17,478
$ 53,612
$ 58,229
$ 121,657
$ 139,273
Adjusted EBITDAX(1)
$ 71,741
$ 73,264
$ 72,227
$ 215,151
$ 182,000
Cash Flow from Operations
$ 72,130
$ 51,641
$ 52,652
$ 179,896
$ 141,372
Free Cash Flow(1)
$ 37,809
$ 38,263
$ 31,280
$ 99,380
$ 36,897
Production Data, net:
Oil (MBbls)
1,424
1,342
1,292
4,055
3,555
Natural gas (MMcf)
1,940
1,608
1,616
5,179
4,242
NGLs (MBbls)
408
330
274
1,031
691
Total (MBoe)
2,155
1,940
1,835
5,949
4,953
Daily combined volumes (Boe/d)
23,424
21,319
19,949
21,712
18,143
Daily oil volumes (Bbls/d)
15,478
14,747
14,043
14,799
13,022
Average Realized Prices:(2)
Oil ($ per Bbl)
$ 73.95
$ 79.25
$ 80.87
$ 76.12
$ 75.19
Natural gas ($ per Mcf)
$ (0.60)
$ (0.61)
$ 0.61
$ (0.28)
$ 0.36
NGLs ($ per Bbl)
$ (4.40)
$ (0.10)
$ 8.11
$ (0.08)
$ 6.63
Average Realized Prices, including the effects of derivative settlements:(2)(3)
Oil ($ per Bbl)
$ 73.84
$ 76.96
$ 76.00
$ 75.03
$ 71.23
Natural gas ($ per Mcf)
$ (0.10)
$ 0.16
$ 0.63
$ 0.39
$ 0.46
NGLs ($ per Bbl)(4)
$ (4.40)
$ (0.10)
$ 8.11
$ (0.08)
$ 6.63
Weighted Average Common Shares Outstanding (in thousands):
Basic
20,992
20,866
19,680
20,584
19,667
Diluted
21,209
21,087
19,989
20,764
19,964
_____________________
(1)
A non-GAAP financial measure as defined and reconciled in the supplemental financial tables available on the Company's website at www.rileypermian.com.
(2)
The Company's oil, natural gas and NGL sales are presented net of gathering, processing and transportation costs. The costs, related to natural gas and NGLs, at times exceed the price received and result in negative average realized prices.
(3)
The Company's calculation of the effects of derivative settlements includes gains and losses on the settlement of its commodity derivative contracts. These gains and losses are included under other income (expense) on the Company's condensed consolidated statements of operations.
(4)
During the periods presented, the Company did not have any NGL derivative contracts in place.
2024 GUIDANCE
Riley Permian is providing fourth quarter guidance based on currently scheduled development activity and current market conditions. The average working interest on gross operated wells drilled is subject to change and may have corresponding impacts on investing expenditures. Total equivalent production estimates, inclusive of production from natural gas and NGLs, may be subject to variability based on natural gas dynamics.
Activity, Production, and Investing Guidance
Q4 2024
Gross Operated Well Activity
Drilled
7 - 9
Completed
3 - 5
Turned to Sales
4 - 6
Net Production
Total (MBoe/d)
23.5 - 24.5
Oil (MBbls/d)
15.5 - 16.1
Investing Expenditures by Category (Accrual, in millions)(1)
Drilling and Completions and Capital Workovers
$18 - 21
Infrastructure and Other
14 - 21
Total E&P Capex
