Riley Exploration Permia (REPX) Reports Q2 Loss of $2.12

Riley Exploration Permia (NYSE: REPX) reported Q2 EPS of ($2.12), versus $4.55 reported last year. Revenue for the quarter came in at $37.26 million, versus $25.41 million reported last year.

HIGHLIGHTS

• Closed reverse merger transaction with Tengasco on February 26, 2021
• Increased total equivalent sales volumes to 8.3 MBoe per day for the second quarter 2021, an increase of 11% over the same period in 2020, despite significant reductions in capital expenditures and production outages due to two severe storms
• Generated Cash Flow from Operations of $38.1 million for the six months ended March 31, 2021
• Reported a Net Loss of $48.5 million for the three months ended March 31, 2021, with Adjusted Net Income of $8.6 million for the same period
• Incurred capital expenditures of $17.1 million for the six months ended March 31, 2021, which corresponds to 43% of EBITDAX1, representing a significant decrease of 49% compared to the same period for 2020
• Generated Free Cash Flow1 of $20.6 million for the six months ended March 31, 2021
• Paid cash common dividends of $3.8 million during the three months ended March 31, 2021; announced latest dividend of $0.28 per share with a record date of April 16, 2021, which was paid May 7, 2021, for a total of $5.0 million
• Exited the second quarter with $10.1 million in cash and $97.5 million drawn on the credit facility
• Decreased flaring by 35% quarter-over-quarter
• Production, cash flow, capital investing and leverage trends all performing in line with previously released guidance and the Company's capital allocation framework
• Began operations on enhanced oil recovery ("EOR") project, which will utilize a combination of water and C02 injection, including the goal of using anthropogenic CO2 ("ACO2")

Bobby Riley, Chief Executive Officer of Riley Permian, stated, "We're excited to have closed our reverse merger transaction and welcome the positive reception by markets thus far. Riley Permian performed strongly during our fiscal second quarter of 2021, during which we overcame the extreme operating challenges presented by Winter Storm Uri, and we continued to create value for our shareholders.

"Halfway through our fiscal year, which ends on September 30, 2021, we remain firmly adhered to our capital allocation framework, including reinvesting less than 70% of EBITDAX1 in capital expenditures, as evidenced by our year-to-date allocation of only 43% of EBITDAX1. Combined with our robust operating performance, this capital discipline allowed us to generate over $38 million of Cash Flow from Operations and $20 million of Free Cash Flow1 during our fiscal year-to-date."

"Further, we were pleased to raise the dividend to $0.28 per share, which was paid on May 7th. The payment of a regular quarterly dividend has long been a priority for Riley Permian, dating back to its predecessor entity as a private company. Going forward, one of Riley Permian's core priorities is to continue to pay – and grow – a regular quarterly dividend, consistent with our shareholder-focused business model."

"Finally, we have formally begun operations on our EOR pilot after several years of extensive technical studies internally and with world-class partners. Our core asset in Yoakum County, TX, is an ideal candidate for EOR for both geologic and geographic reasons, and is directly adjacent to several of the largest and most successful EOR projects in the U.S. We forecast benefits of increased recoveries and further flattening of decline curves, leading to steadier cash flows, which fits our shareholder-focused business model. Riley aims to use anthropogenic sources of CO2 (ACO2), in accord with international calls for reducing emissions and CO2, and which fits our goal of producing low-carbon barrels."

2021 OUTLOOK AND GUIDANCE

Based on current market conditions, the Company expects fiscal 2021 capital expenditures to total approximately $54 million to $56 million, which we believe will be consistent with our capital allocation framework of reinvesting approximately 65-70% of EBITDAX3, and which we believe will be funded entirely by Cash Flow from Operations.

The Company forecasts full-year fiscal 2021 oil production to average 6.3 MBbls per day to 6.5 MBbls per day, with total equivalent production to average 8.3 MBoe per day to 8.7 MBoe per day, representing year-over-year growth of approximately 17% to 23%.

The Company forecasts third fiscal quarter of 2021 cash operating costs to include LOE of approximately $6.50 to $7.50 per Boe; cash G&A expenses (after offset from our contract services – related parties revenue) of approximately $2.80 to $3.30 per Boe, and production taxes of approximately $2.20 to $2.50 per Boe.

For earnings history and earnings-related data on Riley Exploration Permia (REPX) click here.

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