Riley Exploration Permian (REPX) Sidoti Micro-Cap Virtual Conference summary

Strategy and operations overview

• Focuses on growth-oriented oil and gas development in the Permian Basin using modern horizontal drilling and hydraulic fracturing in conventional carbonate and clastic reservoirs, not shale.

• Operates 58,000 net acres, with Q2 production averaging 21,300 BOE/day, 69% crude oil.

• Maintains a 5.7% dividend yield, with 14 consecutive quarters of payments and annual growth targets of 5%-10%.

• Insider and private equity ownership is significant, with Yorktown and Bluescape holding 22% and 21%, respectively.

• Asset base is concentrated in Yoakum County, TX, and Eddy County, NM, on the Northwest Shelf.

Capital efficiency and financial performance

• Drilling in shallower, higher-porosity rocks results in 20%-40% lower well costs compared to shale, with similar 5-year cumulative production.

• Achieves 5%-10% annual organic production growth, with 2024 expected at the high end of this range.

• Free cash flow has grown 80% in the last 12 months; capital reinvestment rate reduced from 79% in 2020 to 47% in H1 2024.

• Free cash flow now exceeds 50% of internal cash flow, supporting dividends, debt reduction, and opportunistic M&A.

• Debt reduced by $75 million in the past year, with $320 million outstanding and $250 million in available liquidity.

Operational improvements and cost management

• Efficiency gains from pad drilling, zipper fracs, and service sector cost reductions have cut operating costs by 20% year-over-year.

• EBITDA margin stands at 71%, with 66% of cash flow from operations converted to free cash flow.

• Guidance for 2024: drilling 20-26 wells with $100-$110 million CapEx, down from $120 million, while maintaining high production growth.

• Free cash flow yield is 23%, highest in class, with 20% allocated to dividends and $20 million/year to debt reduction.