On August 7, 2024, Riley Exploration Permian Inc (REPX, Financial) released its 8-K filing detailing the financial and operational results for the second quarter ended June 30, 2024. Riley Exploration Permian Inc is engaged in the exploration and production of oil and natural gas, with operations in Kansas Properties and Tennessee Properties, among others.
Performance Overview
Riley Exploration Permian Inc (REPX, Financial) reported revenues of $105.4 million for Q2 2024, falling short of the analyst estimate of $108.48 million. The company’s net income was $33.5 million, or $1.59 per diluted share, missing the estimated earnings per share of $1.65. Despite these misses, the company showed resilience in several key areas.
Key Financial Achievements
During the second quarter, Riley Exploration Permian Inc (REPX, Financial) generated $51.6 million in operating cash flow and $57.6 million before changes in working capital. The company also reported Free Cash Flow of $38.3 million. These metrics are crucial for the oil and gas industry as they indicate the company’s ability to generate cash from its operations, which is essential for funding future growth and paying dividends.
Income Statement Highlights
| Metric | Q2 2024 | Q1 2024 | Q2 2023 |
|---|---|---|---|
| Revenue | $105.4 million | $99.4 million | $99.3 million |
| Net Income | $33.5 million | $33.1 million | $33.1 million |
| EPS (Diluted) | $1.59 | $1.65 | $1.65 |
Operational Highlights
The company averaged 21.3 MBoe/d of total equivalent production, with oil production at 14.7 MBbls/d. Average realized prices were $79.25 per barrel of oil, $(0.61) per Mcf of natural gas, and $(0.10) per barrel of natural gas liquids. Lease operating expenses were $16.5 million, or $8.50 per Boe, and cash G&A expenses were $6.6 million, or $3.39 per Boe.
Balance Sheet and Cash Flow
Riley Exploration Permian Inc (REPX, Financial) reduced its debt by $20.0 million and raised $25.4 million in net proceeds from an equity offering. The company’s total debt stood at $322.7 million as of June 30, 2024, with $215.0 million available for future borrowing under its Credit Facility. Shareholders’ equity was $489.0 million, and the company paid dividends of $0.36 per share, totaling $7.5 million.
Management Commentary
“We continue to execute our annual plan with overall positive results,” said Bobby D. Riley, Chief Executive Officer and Chairman of the Board. “It’s early in the year to report on medium-term to longer-term well results, but thus far we are generally seeing outperformance on 2024 legacy well production results relative to our internal forecasts. We continue to experience favorable efficiencies and cost savings on our drilling and completion activity. Well cost savings represent our largest driver of free cash flow improvement this year. The team has also done a great job in smoothing development activity and spend, one of our core objectives coming into the year.”
Investment and Expansion
In Q2 2024, Riley Exploration Permian Inc (REPX, Financial) closed an acquisition that added approximately 13,900 contiguous net acres to its New Mexico position. The company also signed agreements to expand its power joint venture, RPC Power, LLC, increasing its ownership position from 35% to 50%.
Conclusion
Despite missing analyst estimates, Riley Exploration Permian Inc (REPX, Financial) demonstrated strong operational and financial performance in Q2 2024. The company’s ability to generate significant cash flow, reduce debt, and expand its asset base positions it well for future growth. Investors will be keen to see how the company continues to execute its strategy in the coming quarters.
Explore the complete 8-K earnings release (here) from Riley Exploration Permian Inc for further details.
