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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.

Research from Water Tower Research

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Equity Bottom-Up

Riley Exploration Permian / Equity Bottom-Up

<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