Research from Water Tower Research, Water Tower Research

Water Tower Research

Research from Water Tower Research

Water Tower Research is a leading equity research firm that provides research on micro, small and mid cap companies.

Water Tower Research was founded by Wall Street veterans after witnessing a fundamental shift in the investment research industry with the result being a declining knowledge base among investors, a lack of awareness and a shrinking pool of fundamental research being conducted on companies across the small-cap and micro-cap spectrum. The same issues are now increasingly occurring in the mid-cap space. This sea change within the investment community is impacting not only the companies themselves but also current shareholders and potential investors. With significantly less active sell-side sponsorship by Wall Street, a substantial information gap has developed between companies and various constituents in the financial community. The net result is fewer channels for insight and information to flow between companies and investors.

Equity Research Firm

Equity Bottom-Up

Riley Exploration Permian / Equity Bottom-Up

<ul><li>We are updating our estimates to reflect average 2Q24 NYMEX reference prices of $80.66/bbl for oil and $2.32/MMBtu for natural gas.</li><li>Our 2Q24 adjusted EBITDA estimate is ~$74 million, based on estimated oil production of 14.6 MB/d.</li><li>Oil accounts for 70% of total estimated production and 99% of estimated revenue.</li></ul>

We are updating our estimates to reflect average 2Q24 NYMEX reference prices of $80.66/bbl for oil and $2.32/MMBtu for natural gas.Our 2Q24 adjusted EBITDA estimate is ~$74 million, based on estimated oil production of 14.6 MB/d.Oil accounts for 70% of total estimated production and 99% of estimated revenue.

Riley Exploration Permian, Inc. - Estimate Update

<ul><li>Riley’s asset base delivered 22% Y/Y organic growth in net operated oil production in FY23 from reinvesting about two-thirds of discretionary cash flow into the ground.</li><li>Solid growth reflects the manageable capital intensity of the company’s conventional oil-producing assets in the Permian Basin.</li><li>The midpoints of management’s FY24 capital and operating guidance imply that Riley expects to increase oil production ~10% Y/Y from a capital program that is ~10% lower than FY23.</li></ul>

Riley’s asset base delivered 22% Y/Y organic growth in net operated oil production in FY23 from reinvesting about two-thirds of discretionary cash flow into the ground.Solid growth reflects the manageable capital intensity of the company’s conventional oil-producing assets in the Permian Basin.The midpoints of management’s FY24 capital and operating guidance imply that Riley expects to increase oil production ~10% Y/Y from a capital program that is ~10% lower than FY23.

Riley Exploration Permian, Inc. - Strong Free Cash Flow Conversion

<div><div><div><div><ul style="list-style-type: disc;"><li><p>We are updating our 3Q23 estimates to reflect actual reference prices of $82.26/bbl for oil and $2.66/MMBtu for natural gas.</p></li><li><p>Our FY23 adjusted EBITDA estimate is $257 million, based on average oil and gas reference prices of $79.29/bbl and $2.69/MMBtu.</p></li><li><p>Riley’s 2Q23 production averaged 21.2 MBOE/d (71% oil), representing 109% Y/Y and 62% Q/Q gains. </p></li></ul></div></div></div></div>

We are updating our 3Q23 estimates to reflect actual reference prices of $82.26/bbl for oil and $2.66/MMBtu for natural gas.Our FY23 adjusted EBITDA estimate is $257 million, based on average oil and gas reference prices of $79.29/bbl and $2.69/MMBtu.Riley’s 2Q23 production averaged 21.2 MBOE/d (71% oil), representing 109% Y/Y and 62% Q/Q gains. 

Riley Exploration Permian, Inc. - Expect 2H23 Free Cash Flow Growth

<ul style="list-style-type: disc;"><li><p>Riley’s 2Q23 financial and operating results will include the impact of the $330-million New Mexico acquisition, which closed on April 3, 2023.</p></li><li><p>Around the time of the closing, the acquired assets were producing ~7.2 MBOE/d (58% oil / 81% liquids).</p></li><li><p>1Q23 production averaged ~13.2 MBOE/d. Riley’s 2Q23 production guidance range is 20.0-21.0 MBOE/d, representing a 56% Q/Q increase and a 101% Y/Y increase at the midpoints.</p></li></ul>

Riley’s 2Q23 financial and operating results will include the impact of the $330-million New Mexico acquisition, which closed on April 3, 2023.Around the time of the closing, the acquired assets were producing ~7.2 MBOE/d (58% oil / 81% liquids).1Q23 production averaged ~13.2 MBOE/d. Riley’s 2Q23 production guidance range is 20.0-21.0 MBOE/d, representing a 56% Q/Q increase and a 101% Y/Y increase at the midpoints.

Riley Exploration Permian, Inc. - New Mexico Acquisition to Lift 2Q23 Results

<ul><li>Riley is well-positioned to execute its strategy that aims to drive shareholder returns through a combination of growth in production and proved reserves from reinvesting a portion of cash flow into the asset base and using the balance to maintain a conservative balance sheet and return cash to shareholders.</li><li>The recent $330 million acquisition of assets in New Mexico's Yeso Trend added a second core area and provides management greater flexibility to allocate capital to maximize operational efficiency.</li><li>The Yeso Trend produces from conventional reservoirs that have similar drilling and completion characteristics to the San Andres formation in Riley's legacy Champions assets.</li></ul>

Riley is well-positioned to execute its strategy that aims to drive shareholder returns through a combination of growth in production and proved reserves from reinvesting a portion of cash flow into the asset base and using the balance to maintain a conservative balance sheet and return cash to shareholders.The recent $330 million acquisition of assets in New Mexico's Yeso Trend added a second core area and provides management greater flexibility to allocate capital to maximize operational efficiency.The Yeso Trend produces from conventional reservoirs that have similar drilling and completion characteristics to the San Andres formation in Riley's legacy Champions assets.

Riley Exploration Permian - Capital Flexibility

United States

Riley Exploration Permian, Inc. operates as an independent oil and natural gas company. The Company focuses on growth of its reserves, production, and cash flow through the acquisition, exploration, development, and production of oil, natural gas, and natural gas liquids. Riley Exploration Permian serves customers in the United States.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Riley Exploration Permian (REPX US)

Riley Exploration Permian, Inc. - Estimate Update

We are updating our estimates to reflect average 2Q24 NYMEX reference prices of $80.66/bbl for oil and $2.32/MMBtu for natural gas.

Water Tower Research

Riley Exploration Permian, Inc. - Strong Free Cash Flow Conversion

Riley’s asset base delivered 22% Y/Y organic growth in net operated oil production in FY23 from reinvesting about two-thirds of discretionary cash...

Water Tower Research

Riley Exploration Permian, Inc. - Expect 2H23 Free Cash Flow Growth

We are updating our 3Q23 estimates to reflect actual reference prices of $82.26/bbl for oil and $2.66/MMBtu for natural gas.

Water Tower Research

Riley Exploration Permian, Inc. - New Mexico Acquisition to Lift 2Q23 Results

Riley’s 2Q23 financial and operating results will include the impact of the $330-million New Mexico acquisition, which closed on April 3, 2023.

Water Tower Research

Riley Exploration Permian - Capital Flexibility

Riley is well-positioned to execute its strategy that aims to drive shareholder returns through a combination of growth in production and proved...

Water Tower Research

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)