UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM			10-Q


x			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~December 31, 2021~~September 30, 2022


o			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 001-15555

Riley Exploration Permian, Inc.

(Exact name of registrant as specified in its charter)


Delaware						87-0267438
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

29 E. Reno Avenue, Suite 500 Oklahoma City, Oklahoma						73104
(Address of Principal Executive Offices)						(Zip Code)

Registrant's telephone number, including area code: (405) 415-8699

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, par value $0.001	REPX	NYSE American

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):


Large accelerated filer	o	Accelerated filer	o
Non-accelerated filer	x	Smaller reporting company	x
		Emerging growth company	o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No x

The total number of shares of common stock, par value $0.001 per share, outstanding as of ~~February 7,~~November 8, 2022 was ~~19,514,935.~~20,160,230.


RILEY EXPLORATION PERMIAN, INC.

QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED ~~DECEMBER 31, 2021~~SEPTEMBER 30, 2022
TABLE OF CONTENTS
		Page
Part I. FINANCIAL INFORMATION
Item 1.	Financial Statements	6
	Condensed Consolidated Balance Sheets	6
	Condensed Consolidated Statements of Operations	7
	Condensed Consolidated Statements of Changes in Members'/Shareholders' Equity	89
	Condensed Consolidated Statements of Cash Flows	911
	Notes to the Condensed Consolidated Financial Statements	1113
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	2529
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3338
Item 4.	Controls and Procedures	3438
Part II. OTHER INFORMATION
Item 1.	Legal Proceedings	3540
Item 1A.	Risk Factors	3540
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3542
Item 3.	Defaults Upon Senior Securities	3542
Item 4.	Mine Safety Disclosures	3542
Item 5.	Other Information	3542
Item 6.	Exhibits	3542

Signatures

Introductory Note

On August 16, 2022, the Company's Board of Directors (the "Board") acting by written consent resolved to amend and restate the Company's Second Amended and Restated Bylaws to change the Company's fiscal year period from October 1st through September 30th each year to January 1st through December 31st each year commencing with the 2022 calendar year (the "Bylaws Restatement"). On August 19, 2022, the holders of approximately 75% of our outstanding common stock acting by written consent approved the Bylaws Restatement and adopted the Third Amended and Restated Bylaws. In accordance with Rule 14c-2 under the Exchange Act, the aforementioned actions taken by written consent became effective on September 23, 2022. As a result, the Company's 2022 fiscal year is now the period from January 1, 2022 to December 31, 2022.

Unless the context requires otherwise or unless otherwise noted, all references in this Quarterly Report on Form 10-Q to the "Company," "Riley Permian," "REPX," "we," "us," or "our" are to Riley Exploration Permian, Inc., together with its consolidated subsidiaries.

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DEFINITIONS

The following are abbreviations and definitions of certain terms used within this Quarterly Report on Form 10-Q:


Measurements.
Bbl			One barrel or 42 U.S. gallons liquid volume of oil or other liquid ~~hydrocarbons.~~hydrocarbons



Boe			One stock tank barrel equivalent of oil, calculated by converting gas volumes to equivalent oil barrels at a ratio of 6 thousand cubic feet of gas to 1 barrel of oil and by converting NGL volumes to equivalent oil barrels at a ratio of 1 barrel of NGL to 1 barrel of ~~oil.~~oil
Boe/d			Stock tank barrel equivalent of oil per ~~day.~~day
Btu			British thermal unit. One British thermal unit is the amount of heat required to raise the temperature of one pound of water by one degree ~~Fahrenheit.~~Fahrenheit
MBbl			One thousand barrels of oil or other liquid ~~hydrocarbons.~~hydrocarbons

MBoe			One thousand ~~Boe.~~Boe
MBoe/d			One thousand Boe per day
Mcf			One thousand cubic feet of ~~gas.~~gas

MMBtu			One million British thermal ~~units.~~units
Abbreviations.
ARO			Asset Retirement ~~Obligation.~~Obligation
ASU			Accounting Standards ~~Update.~~Update

CO2			Carbon ~~Dioxide.~~Dioxide

EOR			Enhanced Oil Recovery

ESG			Environmental, social, and governance
FASB			Financial Accounting Standards Board

GHG			Greenhouse Gas

LIBOR			London Interbank Offered ~~Rate.~~Rate
LTIP			Long-Term Incentive Plan

NGL			Natural gas ~~liquids.~~liquids



NYSE			New York Stock ~~Exchange.~~Exchange
Oil			Crude oil and ~~condensate.~~condensate
RRC			Railroad Commission of Texas
SEC			Securities and Exchange ~~Commission.~~Commission
SOFR			Secured Overnight Financing Rate

U.S. GAAP			Accounting principles generally accepted in the United States of ~~America.~~America
WTI			West Texas Intermediate

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

Various statements contained in this Quarterly Report on Form 10-Q ("Quarterly Report") are "forward-looking statements" as defined by the SEC. All statements, other than statements of historical fact, contained in this Quarterly Report that include information concerning our possible or assumed future results of operations, business strategies, need for financing, competitive position and potential growth opportunities represent management's beliefs and assumptions based on currently available information and they do not consider the effects of future legislation or regulations. Forward-looking statements include all statements that are not historical facts and can be identified by the use of forward-looking terminology such as the words “believes,” “intends,” “may,” “should,” “anticipates,” “expects,” “could,” “plans,” “estimates,” “projects,” “targets” or comparable terminology or by discussions of strategy or trends. Such statements by their nature involve risks and uncertainties that could significantly affect expected results, and actual future results could differ materially from those described in such forward-looking statements.

Among the factors that could cause actual future results to differ materially are the risks and uncertainties discussed under “Item 1A1A. Risk Factors” in this Quarterly Report and in our Annual Report on Form 10-K for the year ended September 30, 2021. We continue to face many risks and uncertainties including, but not limited to:

•the volatility of oil, natural gas and NGL prices;

•the scope, duration, and reoccurrence of any epidemics or pandemics (including, specifically, the coronavirus disease 2019 ~~(COVID-19)~~(“COVID-19”) pandemic and any related variants), including reactive or proactive measures taken by governments, regulatory agencies and businesses related to the pandemic, and the effects of COVID-19 on the oil and natural gas industry, pricing and demand for oil and natural gas and supply chain logistics;

•regional supply and demand factors, any delays, curtailment delays or interruptions of production, and any governmental order, rule or regulation that may impose production limits;

•cost and availability of gathering, pipeline, refining, transportation and other midstream and downstream activities;

•severe weather and other risks that lead to a lack of any available markets;

•our ability to successfully complete mergers, acquisitions and divestitures;

•the risk that the Company's EOR project may not perform as expected or produce the anticipated benefits;

•risks relating to our operations, including development drilling and testing results and performance of acquired properties and newly drilled wells;

•any reduction in our borrowing base on our revolving credit facility from time to time and our ability to repay any excess borrowings as a result of such reduction;

•the impact of our derivative strategy and the results of future settlement;

•our ability to comply with the financial covenants contained in our ~~Credit Agreement;~~revolving credit facility;

•changes in general economic, business or industry conditions, including changes in inflation rates, interest rates, and foreign currency exchange rates;

•conditions in the capital, financial and credit markets and our ability to obtain capital needed for development and exploration operations on favorable terms or at all;

•the loss of certain tax deductions;

•risks associated with executing our business strategy, including any changes in our strategy;

•inability to prove up undeveloped acreage and maintain production on leases;

•risks associated with concentration of operations in one major geographic area;

•legislative or regulatory changes, including initiatives related to hydraulic fracturing, emissions and disposal of produced water, which may be negatively impacted by regulation or legislation;

•the ability to receive drilling and other permits or approvals and rights-of-way in a timely manner (or at all), which may be restricted by governmental regulation and legislation;

•restrictions on the use of water, including limits on the use of produced water and a moratorium on new produced water well permits recently imposed by the RRC in an effort to control induced seismicity in the Permian Basin;

•risks related to litigation;

•~~evolving geopolitical~~actions taken by the members of OPEC and ~~military hostilities in~~Russia affecting the production and pricing of oil, as well as other ~~areas of the world;~~domestic and global political, economic, or diplomatic developments; and

•cybersecurity threats, technology system failures and data security issues.

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All forward-looking statements speak only as of the date of this Quarterly Report. You should not place undue reliance on these forward-looking statements. These forward-looking statements are subject to a number of risks, uncertainties and assumptions. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. Although we believe that our plans, intentions and

expectations reflected in or suggested by the forward-looking statements we make in this Quarterly Report are reasonable, we can give no assurance that these plans, intentions or expectations will be achieved or occur, and actual results could differ materially and adversely from those anticipated or implied by the forward-looking statements.

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Part I. FINANCIAL INFORMATION

Item 1. Financial Statements


RILEY EXPLORATION PERMIAN, INC.	RILEY EXPLORATION PERMIAN, INC.					RILEY EXPLORATION PERMIAN, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS	CONDENSED CONSOLIDATED BALANCE SHEETS					CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
							(Unaudited)
		December 31, 2021		September 30, 2021			September 30, 2022		December 31, 2021
		(In thousands, except share amounts)					(In thousands, except share amounts)
Assets	Assets					Assets
Current Assets:	Current Assets:					Current Assets:
Cash and cash equivalents	Cash and cash equivalents	$	8,317	$	17,067	Cash and cash equivalents	$	17,908	$	8,317
Accounts receivable	Accounts receivable	18,002		17,473		Accounts receivable	27,463		18,002
Accounts receivable - related parties		—		456

Prepaid expenses and other current assets	Prepaid expenses and other current assets	4,902		1,730		Prepaid expenses and other current assets	3,377		4,902
Current derivative assets	Current derivative assets	83		—		Current derivative assets	1,607		83
Total current assets	Total current assets	31,304		36,726		Total current assets	50,355		31,304
Oil and natural gas properties, net (successful efforts)	Oil and natural gas properties, net (successful efforts)	359,131		345,797		Oil and natural gas properties, net (successful efforts)	431,067		359,131
Other property and equipment, net	Other property and equipment, net	3,174		3,183		Other property and equipment, net	4,822		3,174
Non-current derivative assets	Non-current derivative assets	267		106		Non-current derivative assets	—		267
Other non-current assets, net	Other non-current assets, net	2,293		2,419		Other non-current assets, net	4,307		2,293
Total Assets	Total Assets	$	396,169	$	388,231	Total Assets	$	490,551	$	396,169
Liabilities and Shareholders' Equity	Liabilities and Shareholders' Equity					Liabilities and Shareholders' Equity
Current Liabilities:	Current Liabilities:					Current Liabilities:
Accounts payable	Accounts payable	$	7,737	$	12,234	Accounts payable	$	10,854	$	7,737
Accounts payable - related parties	Accounts payable - related parties	164		—		Accounts payable - related parties	122		164
Accrued liabilities	Accrued liabilities	12,874		19,355		Accrued liabilities	28,785		12,874
Revenue payable	Revenue payable	11,370		9,008		Revenue payable	17,768		11,370

Current derivative liabilities	Current derivative liabilities	30,984		42,144		Current derivative liabilities	22,529		30,984
Other current liabilities	Other current liabilities	947		874		Other current liabilities	3,003		947
Total Current Liabilities	Total Current Liabilities	64,076		83,615		Total Current Liabilities	83,061		64,076
Non-current derivative liabilities	Non-current derivative liabilities	9,515		8,932		Non-current derivative liabilities	2,423		9,515
Asset retirement obligations	Asset retirement obligations	2,261		2,306		Asset retirement obligations	2,689		2,261
Revolving credit facility	Revolving credit facility	65,000		60,000		Revolving credit facility	48,000		65,000
Deferred tax liabilities	Deferred tax liabilities	17,384		11,628		Deferred tax liabilities	40,586		17,384
Other non-current liabilities	Other non-current liabilities	95		60		Other non-current liabilities	1,138		95
Total Liabilities	Total Liabilities	158,331		166,541		Total Liabilities	177,897		158,331
Commitments and Contingencies (Note 13)		0		0
Commitments and Contingencies (Note 14)						Commitments and Contingencies (Note 14)

Shareholders' Equity:	Shareholders' Equity:					Shareholders' Equity:
Preferred stock, $0.0001 par value, 25,000,000 shares authorized; 0 shares issued and outstanding	Preferred stock, $0.0001 par value, 25,000,000 shares authorized; 0 shares issued and outstanding	—		—		Preferred stock, $0.0001 par value, 25,000,000 shares authorized; 0 shares issued and outstanding	—		—
Common stock, $0.001 par value, 240,000,000 shares authorized; 19,836,885 and 19,672,050 shares issued and outstanding at December 31, 2021 and September 30, 2021, respectively		20		20
Common stock, $0.001 par value, 240,000,000 shares authorized; 20,181,872 and 19,836,885 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively						Common stock, $0.001 par value, 240,000,000 shares authorized; 20,181,872 and 19,836,885 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively	20		20
Additional paid-in capital	Additional paid-in capital	271,737		270,837		Additional paid-in capital	273,821		271,737
Accumulated deficit		(33,919)		(49,167)
Retained earnings (Accumulated deficit)						Retained earnings (Accumulated deficit)	38,813		(33,919)
Total Shareholders' Equity	Total Shareholders' Equity	237,838		221,690		Total Shareholders' Equity	312,654		237,838
Total Liabilities and Shareholders' Equity	Total Liabilities and Shareholders' Equity	$	396,169	$	388,231	Total Liabilities and Shareholders' Equity	$	490,551	$	396,169

The accompanying notes are an integral part of these condensed consolidated financial statements.

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RILEY EXPLORATION PERMIAN, INC.	RILEY EXPLORATION PERMIAN, INC.						RILEY EXPLORATION PERMIAN, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS	CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS						CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)	(Unaudited)						(Unaudited)
		Three Months Ended December 31,
		2021		2020				Three Months Ended September 30,				Nine Months Ended September 30,
						2022		2021		2022		2021
		(In thousands, except per share/unit amounts)						(In thousands, except per share/unit amounts)
Revenues:	Revenues:						Revenues:
Oil and natural gas sales, net	Oil and natural gas sales, net	$	56,650	$	22,414		Oil and natural gas sales, net	$	87,471	$	48,014	$	241,897	$	126,222
Contract services - related parties	Contract services - related parties	600		600			Contract services - related parties	600		600		1,800		1,800
Total Revenues	Total Revenues	57,250		23,014			Total Revenues	88,071		48,614		243,697		128,022
Costs and Expenses:	Costs and Expenses:						Costs and Expenses:
Lease operating expenses	Lease operating expenses	7,419		4,568			Lease operating expenses	8,813		5,686		23,705		17,407
Production and ad valorem taxes	Production and ad valorem taxes	3,005		1,289			Production and ad valorem taxes	5,826		2,575		14,854		7,347
Exploration costs	Exploration costs	611		424			Exploration costs	20		884		1,540		9,142
Depletion, depreciation, amortization and accretion	Depletion, depreciation, amortization and accretion	6,867		5,990			Depletion, depreciation, amortization and accretion	8,346		6,692		22,167		20,025
General and administrative:	General and administrative:						General and administrative:
Administrative costs	Administrative costs	3,633		2,445			Administrative costs	5,154		4,790		13,567		11,516
Unit-based compensation expense	Unit-based compensation expense	—		413			Unit-based compensation expense	—		—		—		276
Share-based compensation expense	Share-based compensation expense	951		—			Share-based compensation expense	704		751		2,274		6,101
Cost of contract services - related parties	Cost of contract services - related parties	150		148			Cost of contract services - related parties	89		147		263		329
Transaction costs	Transaction costs	1,258		1,049			Transaction costs	—		198		2,638		2,683
Total Costs and Expenses	Total Costs and Expenses	23,894		16,326			Total Costs and Expenses	28,952		21,723		81,008		74,826
Income From Operations	Income From Operations	33,356		6,688			Income From Operations	59,119		26,891		162,689		53,196
Other Income (Expense):	Other Income (Expense):						Other Income (Expense):
Interest expense		(896)		(1,235)
Loss on derivatives		(5,193)		(13,909)
Interest expense, net							Interest expense, net	(585)		(963)		(1,960)		(3,299)
Gain (loss) on derivatives							Gain (loss) on derivatives	17,600		(14,987)		(44,395)		(75,286)
Total Other Income (Expense)	Total Other Income (Expense)	(6,089)		(15,144)			Total Other Income (Expense)	17,015		(15,950)		(46,355)		(78,585)
Net Income (Loss) Before Income Taxes		27,267		(8,456)
Net Income (Loss) From Continuing Operations Before Income Taxes							Net Income (Loss) From Continuing Operations Before Income Taxes	76,134		10,941		116,334		(25,389)
Income tax benefit (expense)	Income tax benefit (expense)	(5,869)		515			Income tax benefit (expense)	(16,317)		3,937		(25,130)		(13,539)
Net Income (Loss) From Continuing Operations							Net Income (Loss) From Continuing Operations	59,817		14,878		91,204		(38,928)

Net Income (Loss)		21,398		(7,941)
Dividends on preferred units		—		(917)
Net Income (Loss) Attributable to Common Shareholders/Unitholders		$	21,398	$	(8,858)

Net Income (Loss) per Share/Unit:
Basic		$	1.10	$	(0.71)
Diluted		$	1.09	$	(0.71)
Weighted Average Common Shares/Units Outstanding:
Basic		19,470		12,469
Diluted		19,569		12,469

The accompanying notes are an integral part of these condensed consolidated financial statements.

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RILEY EXPLORATION PERMIAN, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - (Continued)
(Unaudited)
	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
	(In thousands, except per share/unit amounts)
Discontinued Operations:
Gain (loss) from discontinued operations	—		775		—		(18,738)
Income tax benefit (expense) on discontinued operations	—		1		—		(59)
Gain (Loss) on Discontinued Operations	—		776		—		(18,797)
Net Income (Loss)	59,817		15,654		91,204		(57,725)
Dividends on preferred units	—		—		—		(574)
Net Income (Loss) Attributable to Common Shareholders/Unitholders	$	59,817	$	15,654	$	91,204	$	(58,299)
Net Income (Loss) per Share/Unit from Continuing Operations:
Basic	$	3.06	$	0.77	$	4.67	$	(2.29)
Diluted	$	3.05	$	0.76	$	4.65	$	(2.29)
Net Income (Loss) per Share/Unit from Discontinued Operations:
Basic	$	—	$	0.04	$	—	$	(1.09)
Diluted	$	—	$	0.04	$	—	$	(1.09)
Net Income (Loss) per Share/Unit:
Basic	$	3.06	$	0.81	$	4.67	$	(3.38)
Diluted	$	3.05	$	0.80	$	4.65	$	(3.38)
Weighted Average Common Shares/Units Outstanding:
Basic	19,546		19,434		19,530		17,218
Diluted	19,587		19,540		19,632		17,218

RILEY EXPLORATION PERMIAN, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN MEMBERS'/SHAREHOLDERS' EQUITY
(Unaudited)
(In Thousands)
Three Months Ended December 31, 2021
Members' Equity Shareholders' Equity
Common Stock
Units Outstanding Amount Shares Amount Additional Paid-in Capital Accumulated Deficit Total Shareholders' Equity
Balance, September 30, 2021 — $ — 19,672 $ 20 $ 270,837 $ (49,167) $ 221,690
Share-based compensation expense — — — — 919 — 919
Repurchased shares for tax withholding — — (10) — (19) — (19)
Issuance of common shares under long-term incentive plan — — 175 — — — —
Dividends declared — — — — — (6,150) (6,150)
Net income — — — — — 21,398 21,398
Balance, December 31, 2021 — $ — 19,837 $ 20 $ 271,737 $ (33,919) $ 237,838
Three Months Ended December 31, 2020
Members' Equity Shareholders' Equity
Common Stock
Units Outstanding Amount Shares Amount Additional Paid-in Capital Accumulated Deficit Total Shareholders' Equity
Balance, September 30, 2020 1,555 $ 166,617 — $ — $ — $ — $ —
Issuance of common units under long-term incentive plan 13 — — — — — —
Dividends on preferred units — (917) — — — — —
Dividends on common units — (3,801) — — — — —
Unit-based compensation expense — 413 — — — — —
Net loss — (7,941) — — — — —
Balance, December 31, 2020 1,568 $ 154,371 — $ — $ — $ — $ —

The accompanying notes are an integral part of these condensed consolidated financial statements.

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RILEY EXPLORATION PERMIAN, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended December 31,
2021 2020
(In thousands)
Cash Flows from Operating Activities:
Net income (loss) $ 21,398 $ (7,941)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Oil and gas lease expirations 588 424
Depletion, depreciation, amortization and accretion 6,867 5,990
Loss on derivatives 5,193 13,909
Settlements on derivative contracts (16,014) 5,173
Amortization of deferred financing costs 282 155
Unit-based compensation expense — 413
Share-based compensation expense 951 —
Deferred income tax expense (benefit) 5,756 (515)
Changes in operating assets and liabilities:
Accounts receivable (529) (397)
Accounts receivable – related parties 456 (258)
Prepaid expenses and other current assets (3,172) (39)
Other non-current assets — 1
Accounts payable and accrued liabilities (2,625) (385)
Accounts payable - related parties 164 —
Income taxes payable 113 —
Revenue payable 2,362 95
Advances from joint interest owners — (2)
Advances from related parties — 570
Other liabilities (63) —
Net Cash Provided By Operating Activities 21,727 17,193
Cash Flows from Investing Activities:
Additions to oil and natural gas properties (29,011) (9,389)
Additions to other property and equipment (117) (318)
Net Cash Used In Investing Activities (29,128) (9,707)
Cash Flows from Financing Activities:
Deferred financing costs (274) (52)
Proceeds from revolving credit facility 5,000 2,000
Repayment under revolving credit facility — (5,500)
Payment of common share/unit dividends (6,056) (3,717)
Common stock repurchased for tax withholding (19) —
Net Cash Used in Financing Activities (1,349) (7,269)
Net Increase (Decrease) in Cash and Cash Equivalents (8,750) 217
Cash and Cash Equivalents, Beginning of Period 17,067 1,660
Cash and Cash Equivalents, End of Period $ 8,317 $ 1,877


RILEY EXPLORATION PERMIAN, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN MEMBERS'/SHAREHOLDERS' EQUITY
(Unaudited)
(In Thousands)
	Nine Months Ended September 30, 2022
	Members' Equity			Shareholders' Equity
				Common Stock
	Units Outstanding	Amount		Shares	Amount		Additional Paid-in Capital		Retained Earnings (Accumulated Deficit)		Total Shareholders' Equity






Balance, December 31, 2021	—	$	—	19,837	$	20	$	271,737	$	(33,919)	$	237,838
Share-based compensation expense	—	—		—	—		1,061		—		1,061
Repurchased shares for tax withholding	—	—		(13)	—		(339)		—		(339)
Issuance of common shares under long-term incentive plan, net	—	—		30	—		—		—		—
Dividends declared	—	—		—	—		—		(6,154)		(6,154)
Net loss	—	—		—	—		—		(7,168)		(7,168)
Balance, March 31, 2022	—	$	—	19,854	$	20	$	272,459	$	(47,241)	$	225,238
Share-based compensation expense	—	—		—	—		828		—		828
Repurchased shares for tax withholding	—	—		(9)	—		(252)		—		(252)
Issuance of common shares under long-term incentive plan	—	—		20	—		—		—		—
Dividends declared	—	—		—	—		—		(6,159)		(6,159)
Net income	—	—		—	—		—		38,555		38,555
Balance, June 30, 2022	—	$	—	19,865	$	20	$	273,035	$	(14,845)	$	258,210
Share-based compensation expense, net	—	—		—	—		795		—		795
Repurchased shares for tax withholding	—	—		—	—		(9)		—		(9)
Issuance of common shares under long-term incentive plan, net	—	—		317	—		—		—		—
Dividends declared	—	—		—	—		—		(6,159)		(6,159)
Net income	—	—		—	—		—		59,817		59,817
Balance, September 30, 2022	—	$	—	20,182	$	20	$	273,821	$	38,813	$	312,654

The accompanying notes are an integral part of these condensed consolidated financial statements.

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RILEY EXPLORATION PERMIAN, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - (Continued)
(Unaudited)
Three Months Ended December 31,
2021 2020
(In thousands)
Supplemental Disclosure of Cash Flow Information
Cash Paid For:
Interest $ 495 $ 850
Non-cash Investing and Financing Activities - Continuing Operations:
Changes in capital expenditures in accounts payable and accrued liabilities $ (8,443) $ (680)
Common share/unit dividends incurred but not paid $ (114) $ (84)
Asset retirement obligations $ 56 $ 17
Preferred unit dividends paid in kind $ — $ 904
Preferred unit dividends $ — $ 917


RILEY EXPLORATION PERMIAN, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN MEMBERS'/SHAREHOLDERS' EQUITY- (Continued)
(Unaudited)
(In Thousands)
	Nine Months Ended September 30, 2021
	Members' Equity			Shareholders' Equity
				Common Stock
	Units Outstanding	Amount		Shares	Amount		Additional Paid-in Capital		Accumulated Deficit		Total Shareholders' Equity






Balance, December 31, 2020	1,568	$	154,371	—	$	—	$	—	$	—	$	—
Purchase of common units under long-term incentive plan	(3)	(191)		—	—		—		—		—
Dividends on preferred units	—	(574)		—	—		—		—		—
Preferred units converted to common units	512	61,196		—	—		—		—		—
Dividends on common units	—	(3,770)		—	—		—		—		—
Unit-based compensation expense	—	276		—	—		—		—		—
Net loss from January 1, 2021 through February 26, 2021	—	(19,117)		—	—		—		—		—
Restricted common shares issued in exchange for common units issued under long-term incentive plan	(24)	—		198	—		—		—		—
Common shares issued in exchange for common units (effected for 1-for-12 reverse stock split)	(2,053)	(192,191)		16,733	17		192,174		—		192,191
Common shares issued for business combination	—	—		891	1		26,391		—		26,392
Restricted common shares issued	—	—		3	—		—		—		—
Share-based compensation expense	—	—		—	—		409		—		409
Dividends declared	—	—		—	—		—		(4,991)		(4,991)
Net loss from February 27, 2021 through March 31, 2021	—	—		—	—		—		(32,761)		(32,761)
Balance, March 31, 2021	—	$	—	17,825	$	18	$	218,974	$	(37,752)	$	181,240
Share-based compensation expense	—	—		—	—		779		—		779
Issuance of common shares under long-term incentive plan	—	—		197	—		4,165		—		4,165
Dividends paid	—	—		—	—		—		(55)		(55)
Net loss	—	—		—	—		—		(21,501)		(21,501)
Balance, June 30, 2021	—	$	—	18,022	$	18	$	223,918	$	(59,308)	$	164,628
Share-based compensation expense	—	—		—	—		751		—		751
Repurchased shares for tax withholding	—	—		(17)	—		(514)		—		(514)

Common stock sold to public, net of issuance costs	—	—		1,667	2		46,682		—		46,684
Dividends declared	—	—		—	—		—		(5,513)		(5,513)
Net income	—	—		—	—		—		15,654		15,654
Balance, September 30, 2021	—	$	—	19,672	$	20	$	270,837	$	(49,167)	$	221,690

The accompanying notes are an integral part of these condensed consolidated financial statements.

Table of Contents


RILEY EXPLORATION PERMIAN, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
	Nine Months Ended September 30,
	2022		2021
	(In thousands)
Cash Flows from Operating Activities:
Net income (loss)	$	91,204	$	(57,725)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Loss from discontinued operations	—		18,797
Oil and gas lease expirations	1,465		8,923
Depletion, depreciation, amortization and accretion	22,167		20,025

Loss on derivatives	44,395		75,286
Settlements on derivative contracts	(61,198)		(21,477)
Amortization of deferred financing costs	548		498

Unit-based compensation expense	—		276
Share-based compensation expense	2,684		6,101
Deferred income tax expense	23,202		13,352
Changes in operating assets and liabilities
Accounts receivable	(9,461)		(6,949)
Accounts receivable – related parties	—		(143)
Prepaid expenses and other current assets	1,513		241

Accounts payable and accrued liabilities	6,038		8,463
Accounts payable - related parties	(42)		800

Revenue payable	6,398		4,481


Other current liabilities	1,439		(763)
Net Cash Provided by Operating Activities - Continuing Operations	130,352		70,186
Cash Flows from Investing Activities:
Additions to oil and natural gas properties	(82,101)		(50,247)
Acquisitions of oil and natural gas properties	—		(445)
Additions to other property and equipment	(1,081)		(1,396)
Tengasco acquired cash	—		859
Net Cash Used in Investing Activities - Continuing Operations	(83,182)		(51,229)
Cash Flows from Financing Activities:
Deferred financing costs	(1,722)		(86)
Proceeds from revolving credit facility	4,000		3,500
Repayment under revolving credit facility	(21,000)		(41,000)
Payment of common share/unit dividends	(18,257)		(14,568)
Proceeds from issuance of common stock	—		50,000
Public offering costs	—		(3,316)
Payment of preferred unit dividends	—		(1,491)
Common stock repurchased for tax withholding	(600)		(514)
Purchase of common units under long-term incentive plan	—		(191)
Net Cash Used in Financing Activities - Continuing Operations	(37,579)		(7,666)
Net Increase in Cash and Cash Equivalents from Continuing Operations	9,591		11,291

The accompanying notes are an integral part of these condensed consolidated financial statements.

Table of Contents


RILEY EXPLORATION PERMIAN, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - (Continued)
(Unaudited)
	Nine Months Ended September 30,
	2022		2021
	(In thousands)
Cash Flows from Discontinued Operations:
Operating activities	—		7
Investing activities	—		3,892
Net Increase in Cash and Cash Equivalents from Discontinued Operations	—		3,899
Net Increase in Cash and Cash Equivalents	9,591		15,190
Cash and Cash Equivalents, Beginning of Period	8,317		1,877
Cash and Cash Equivalents, End of Period	$	17,908	$	17,067







Supplemental Disclosure of Cash Flow Information
Cash Paid For:
Interest, net of capitalized interest	$	1,866	$	2,384
Non-cash Investing and Financing Activities - Continuing Operations:
Changes in capital expenditures in accounts payable and accrued liabilities	$	11,971	$	10,576



Right of use assets obtained in exchange for operating lease liability	$	1,624	$	—

Preferred unit dividends	$	—	$	574

Common stock issued in exchange for common units	$	—	$	192,191
Assets acquired and liabilities assumed in business combination	$	—	$	3,695
Common stock issued for business combination	$	—	$	26,392
Preferred units converted to common units	$	—	$	61,196
Non-cash Investing - Discontinued Operations:
Goodwill incurred in business combination	$	—	$	19,013
Assets acquired and liabilities assumed in business combination	$	—	$	2,824

The accompanying notes are an integral part of these condensed consolidated financial statements.

Table of Contents

RILEY EXPLORATION PERMIAN, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(1)Nature of Business

Organization

Riley Permian is a growth-oriented, independent oil and natural gas company focused on the acquisition, exploration, development and production of oil, natural gas and NGLs in Texas and New Mexico. Our activities primarily include the horizontal development of the San Andres formation, a shelf margin deposit on the Northwest Shelf of the Permian Basin. Our acreage is primarily located on large, contiguous blocks in Yoakum County, Texas.

On February 26, 2021 (the “Closing Date”), Riley Permian (f/k/a Tengasco, Inc. (“Tengasco”)), consummated a merger, dated as of October 21, 2020, by and among Tengasco, Antman Sub, LLC, a newly formed Delaware limited liability company and wholly owned subsidiary of Tengasco (“Merger Sub”), and Riley Exploration – Permian, LLC (“REP LLC”). Merger Sub merged with and into REP LLC, with REP LLC as the surviving company and as a wholly owned subsidiary of Tengasco (collectively, with the other transactions described in the Merger Agreement, the “Merger”). On the Closing Date, the Registrant changed its name from Tengasco, Inc. to Riley Exploration Permian, Inc.

(2)Basis of Presentation

On August 16, 2022, the Board acting by written consent resolved to amend and restate the Company's Second Amended and Restated Bylaws to change the Company's fiscal year period from October 1st through September 30th each year to January 1st through December 31st each year commencing with the 2022 calendar year. On August 19, 2022, the holders of approximately 75% of our outstanding Common Stock acting by written consent approved the Bylaws Restatement and adopted the Third Amended and Restated Bylaws. In accordance with Rule 14c-2 under the Exchange Act, the aforementioned actions taken by written consent became effective on September 23, 2022. As a result, the Company's 2022 fiscal year is now the period from January 1, 2022 to December 31, 2022.

As a result of the change in the Company's fiscal year, this document reflects the Company's Quarterly Report for the three and nine months ended September 30, 2022 and comparative information for the 2021 periods.

These unaudited condensed consolidated financial statements as of ~~December 31, 2021~~September 30, 2022 and for the three and nine months ended ~~December 31,~~September 30, 2022 and 2021 ~~and 2020~~ include the accounts of Riley Permian and its wholly owned subsidiaries REP LLC, Riley Permian Operating Company, LLC ("RPOC"), Tengasco Pipeline Corporation, Tennessee Land & Mineral Corporation, and Manufactured Methane Corporation, and have been prepared in accordance with U.S. GAAP. All intercompany balances and transactions have been eliminated upon consolidation. The Merger was accounted for as a reverse merger and, as such, the historical operations of REP LLC are deemed to be those of the Company. Thus, the condensed consolidated financial statements included in this report reflect (i) the historical operating results of REP LLC prior to the Merger; (ii) the consolidated results of the Company following the Merger; (iii) the assets and liabilities of REP LLC at their historical cost; and (iv) the Company’s equity and earnings per share for all periods presented.

Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to the rules and ~~regulation~~regulations of the SEC. These condensed consolidated financial statements should be read in conjunction with the Company's ~~most recent~~ Annual Report on Form 10-K for the year ended September 30, ~~2021.~~

~~Certain prior~~2021 and the Company's Transition Report on Form 10-QT for the period amounts have been reclassified to conform to the current period financial statement presentation. These reclassifications had an immaterial effect on the previously reported total liabilities and results of operations or cash flows.

ended December 31, 2021.

These condensed consolidated financial statements have not been audited by an independent registered public accounting firm. In the opinion of the Company’s management, the accompanying unaudited financial statements contain all adjustments necessary for fair presentation of the results of operations for the periods presented, which adjustments were of a normal recurring nature, except as disclosed herein. The results of operations for the three and nine months ended ~~December 31, 2021,~~September 30, 2022 are not necessarily indicative of the results to be expected for the full fiscal year ending ~~September 30,~~December 31, 2022, for various reasons, including as a result of the impact of fluctuations in prices received for oil and natural gas, natural production declines, the uncertainty of exploration and development drilling results, fluctuations in the fair value of derivative instruments, the current and future impacts of ~~COVID-19~~the military conflict between Russia and Ukraine, the volatile inflationary environment in U.S. markets and other factors.

Table of Contents

RILEY EXPLORATION PERMIAN, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(Unaudited)

(3)Summary of Significant Accounting Policies

Significant Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. These estimates and assumptions may also affect disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

~~Table of Contents~~

~~RILEY EXPLORATION PERMIAN, INC.~~

~~NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)~~

~~(Unaudited)~~

The Company evaluates these estimates on an ongoing basis, using historical experience, consultation with experts and other methods the Company considers reasonable in the particular circumstances. Actual results may differ significantly from the Company’s estimates. Any effects on the Company’s business, financial position or results of operations resulting from revisions to these estimates are recorded in the period in which the facts that give rise to the revision become known. Significant items subject to such estimates and assumptions include, but are not limited to, estimates of proved oil and natural gas reserves and related present value estimates of future net cash flows therefrom, the carrying value of oil and natural gas properties, accounts receivable, accrued capital expenditures and operating expenses, ~~AROs,~~ARO, the fair value determination of acquired assets and assumed liabilities, certain tax accruals and the fair value of derivatives.

Accounts Receivable

Accounts receivable is summarized below:


		December 31, 2021		September 30, 2021			September 30, 2022		December 31, 2021

		(In thousands)					(In thousands)
Oil, natural gas and NGL sales	Oil, natural gas and NGL sales	$	17,562	$	17,008	Oil, natural gas and NGL sales	$	26,380	$	17,562
Joint interest accounts receivable	Joint interest accounts receivable	409		413		Joint interest accounts receivable	500		409
Realized derivative receivable		—		42

Other accounts receivable	Other accounts receivable	31		10		Other accounts receivable	583		31
Total accounts receivable	Total accounts receivable	$	18,002	$	17,473	Total accounts receivable	$	27,463	$	18,002

The Company had no allowance for ~~doubtful accounts~~credit losses at September 30, 2022 and December 31, ~~2021 and September 30,~~ 2021.

Table of Contents

RILEY EXPLORATION PERMIAN, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(Unaudited)

Other Non-Current Assets, Net

Other non-current assets consisted of the following:


		December 31, 2021		September 30, 2021			September 30, 2022		December 31, 2021

		(In thousands)					(In thousands)
Deferred financing costs, net	Deferred financing costs, net	$	1,345	$	1,353	Deferred financing costs, net	$	2,519	$	1,345
Prepayments to outside operators	Prepayments to outside operators	690		707		Prepayments to outside operators	248		690
Right of use assets	Right of use assets	208		309		Right of use assets	1,477		208
Other deposits	Other deposits	50		50		Other deposits	63		50

Total other non-current assets, net	Total other non-current assets, net	$	2,293	$	2,419	Total other non-current assets, net	$	4,307	$	2,293

The Company incurred $1.7 million in financing costs related to the amendment of its revolving credit facility in April 2022. The Company extended certain existing leases and entered into a new lease during the nine months ended September 30, 2022, which resulted in additions to the right of use assets.

Accrued Liabilities

Accrued liabilities consisted of the following:


		December 31, 2021		September 30, 2021			September 30, 2022		December 31, 2021

		(In thousands)					(In thousands)
Accrued capital expenditures	Accrued capital expenditures	$	5,618	$	9,718	Accrued capital expenditures	$	14,966	$	5,618
Accrued lease operating expenses	Accrued lease operating expenses	2,534		2,428		Accrued lease operating expenses	4,315		2,534

Accrued general and administrative costs	Accrued general and administrative costs	3,404		4,375		Accrued general and administrative costs	4,750		3,404

Other accrued expenditures	Other accrued expenditures	1,318		2,834		Other accrued expenditures	4,754		1,318
Total accrued liabilities	Total accrued liabilities	$	12,874	$	19,355	Total accrued liabilities	$	28,785	$	12,874

Table of Contents

RILEY EXPLORATION PERMIAN, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(Unaudited)

Asset Retirement Obligations

Components of the changes in ARO for the ~~three~~nine months ended September 30, 2022 and the year ended December 31, 2021 ~~and year ended September 30, 2021~~ are shown below:


		December 31, 2021		September 30, 2021			September 30, 2022		December 31, 2021

		(In thousands)					(In thousands)
ARO, beginning balance	ARO, beginning balance	$	2,434	$	2,326	ARO, beginning balance	$	2,453	$	2,434
Liabilities incurred	Liabilities incurred	56		113		Liabilities incurred	348		56

Revision of estimated obligations						Revision of estimated obligations	326		—
Liability settlements and disposals	Liability settlements and disposals	(58)		(92)		Liability settlements and disposals	(178)		(58)
Accretion	Accretion	21		87		Accretion	54		21
ARO, ending balance	ARO, ending balance	2,453		2,434		ARO, ending balance	3,003		2,453
Less: current ARO(1)	Less: current ARO(1)	(192)		(128)		Less: current ARO(1)	(314)		(192)
ARO, long-term	ARO, long-term	$	2,261	$	2,306	ARO, long-term	$	2,689	$	2,261

_____________________

(1)Current ARO is included within other current liabilities on the accompanying condensed consolidated balance sheets.

Goodwill

At the closing of the Merger, the Company determined it had two reporting units, and the entire goodwill balance was included in the reporting unit acquired in the Merger (the "Kansas Reporting Unit"). The Company did not fully integrate the Kansas Reporting Unit in the Company's operations as it was deemed to be held for sale upon acquisition. The Company assessed the goodwill balance for impairment since the Company entered into a purchase and sale agreement ("PSA") in March 2021 for $3.5 million before closing adjustments. As the carrying value exceeded the implied fair value at the time of the closing of the Merger, the Company concluded the goodwill balance associated with the Kansas Reporting Unit was impaired and recognized a goodwill impairment loss, included within loss from discontinued operations on the condensed consolidated statement of operations, of $18.5 million for the nine months ended September 30, 2021. See further discussion in Note 12 - Discontinued Operations and Assets Held for Sale.

Revenue Recognition

The following table presents oil and natural gas sales disaggregated by product:


		Three Months Ended December 31,					Three Months Ended September 30,				Nine Months Ended September 30,
		2021		2020					2022		2021		2022		2021
		(In thousands)				(In thousands)
Oil and natural gas sales:	Oil and natural gas sales:							Oil and natural gas sales:
Oil	Oil	$	50,623	$	22,107			Oil	$	80,017	$	44,026	$	224,895	$	114,314
Natural gas	Natural gas	2,705		119				Natural gas	4,216		1,908		8,855		7,381
Natural gas liquids	Natural gas liquids	3,322		188				Natural gas liquids	3,238		2,080		8,147		4,527
Total oil and natural gas sales, net	Total oil and natural gas sales, net	$	56,650	$	22,414			Total oil and natural gas sales, net	$	87,471	$	48,014	$	241,897	$	126,222

Recent Accounting Pronouncements

Recently Adopted Accounting Pronouncements

In December 2019, the FASB issued ASU No. 2019-12, "Income Taxes (Topic 740) - Simplifying the Accounting for Income Taxes." This update is intended to simplify the accounting for income taxes by removing certain exceptions and by clarifying and amending existing guidance and is effective for public business entities beginning after December 15, 2020 with early adoption permitted. The Company adopted this ASU effective October 1, 2021. The adoption of this ASU did not have a material impact on the Company's condensed consolidated financial statements.

~~Issued Accounting Standards Not Yet Adopted~~

Table of Contents

RILEY EXPLORATION PERMIAN, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(Unaudited)

In March 2020, the FASB issued ASU No. 2020-04, “Reference Rate Reform (Topic ~~840)~~848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting” (“ASU 2020-04”), which provides companies with optional guidance to ease the potential accounting burden associated with transitioning away from reference rates (e.g., LIBOR) that are expected to be discontinued. ASU 2020-04 allows, among other things, certain contract modifications, such as those within the scope of Topic 470 on debt, to be accounted for as a continuation of the existing contract. ~~This~~The Company adopted this ASU ~~was~~ effective ~~upon~~concurrent with the ~~issuance and its optional relief can be applied through December 31,~~amendment of the Company's revolving credit facility in April 2022. See Note 9 - Revolving Credit Facility for additional information on the amendment of the revolving credit facility. The adoption of this ASU did not have a material impact on the Company's condensed consolidated financial statements.

~~Table of Contents~~

~~RILEY EXPLORATION PERMIAN, INC.~~

~~NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)~~

~~(Unaudited)~~

(4)Acquisitions

Business Combination Between REP LLC and Tengasco

Immediately prior to the closing of the Merger on February 26, 2021, REP LLC converted all of its issued and outstanding Series A Preferred Units into common units of REP LLC. In connection with the Merger, holders of common units of REP LLC were entitled to receive, in exchange for each common unit, shares of common stock of Tengasco (which was renamed Riley Exploration Permian, Inc.), par value $0.001 per share (“Tengasco common stock”) based on the exchange ratio set forth in the Merger Agreement (the “Exchange Ratio”), with cash paid in lieu of the issuance of any fractional shares. The Exchange Ratio was 97.796467 shares of Tengasco common stock for each common unit of REP LLC (as adjusted for the reverse stock split). Immediately prior to the closing of the Merger, Tengasco effected a one-for-twelve reverse stock split resulting in outstanding common stock of approximately 17.8 million shares including shares of Tengasco common stock issued in the Merger.

The combination between REP LLC and Tengasco qualified as a business combination with REP LLC being treated as the accounting acquirer. The assets acquired and liabilities assumed were recognized on the condensed consolidated balance sheet at fair value as of the acquisition date.

The consideration paid in the Merger by REP LLC as the accounting acquirer totaled approximately $26.4 million and was determined based on the closing price of Tengasco’s common stock on February 26, 2021 and the total number of shares outstanding immediately prior to the Merger. The Merger was structured as a tax-free reorganization for United States federal income tax purposes.

The following table summarizes the consideration for the Merger (presented in thousands, except stock price):



Tengasco common stock price	$	29.64
Tengasco common stock - issued and outstanding as of February 26, 2021	891
Total consideration	$	26,392

The Company incurred ~~$1.0~~approximately $5.0 million of related costs ~~related to~~for the Merger, ~~during~~of which $0.2 million and $2.6 million was expensed for the three and nine months ended ~~December 31, 2020, which is included in~~September 30, 2021 as transaction costs on the condensed consolidated ~~statement~~statements of operations.

1317

Table of Contents

RILEY EXPLORATION PERMIAN, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(Unaudited)

The Company completed the determination of the fair value attributable to the assets acquired and liabilities assumed as of September 30, 2021. The following table presents the allocation of the purchase price to the assets acquired and liabilities assumed based on their fair values on February 26, 2021 (in thousands):



Assets
Cash and cash equivalents	$	860
Account receivable	325
Prepaid and other current assets	759
Total current assets	1,944

Oil and gas properties	4,525
Other property and equipment	91
Right of use assets	42
Other non-current assets	4
Deferred tax assets	2,987


Total assets acquired	9,593

Liabilities
Accounts payable	130
Accrued liabilities	409
Current lease liabilities, operating	42
Current lease liabilities, financing	68
Total current liabilities	649

Asset retirement obligations	1,565


Total liabilities assumed	2,214

Net identifiable assets acquired	7,379
Goodwill	19,013
Net assets acquired	$	26,392

The goodwill recognized was primarily attributable to a substantial increase in the stock price of Tengasco on the Closing Date, which increased the amount of the consideration transferred.

Pro Forma Operating Results (Unaudited)

The following unaudited pro forma combined results for the ~~three months~~year ended ~~December 31, 2020~~September 30, 2021 reflect the consolidated results of operations of the Company as if the Merger had occurred on October 1, 2019. Subsequent to the Merger, the Company changed its fiscal year period from October 1st through September 30th each year to January 1st to December 31st each year commencing with the 2022 calendar year. The unaudited pro forma information includes adjustments for ~~$0.9~~$3.6 million of transaction costs being reclassified to the ~~first~~fourth quarter of ~~fiscal~~calendar year ~~2020~~2019 which were incurred during the ~~three months~~year ended ~~December 31, 2020.~~September 30, 2021. Additionally, the Company adjusted for $0.9 million of oil and natural gas property impairment that Tengasco recognized under the full-cost method of accounting, which would not have been recognized under the successful efforts method, during the three months ended December 31, 2020. Also, the unaudited pro forma information has been tax ~~affected using a 21% tax rate. The common stock was also adjusted for the~~

1418

Table of Contents

RILEY EXPLORATION PERMIAN, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(Unaudited)

effected using a 21% tax rate. The common stock was also adjusted for the conversion of the REP LLC preferred units into common units and retroactively adjusted for the Exchange Ratio and one-for-twelve reverse stock split.

~~Three Months Ended December 31, 2020~~For the year ended September 30, 2021

(In thousands, except per share/unit amounts)

(Unaudited)

Total Revenues

~~23,014~~151,036

Pro Forma Net ~~Income (Loss)~~Loss before Taxes

(29,871)

~~(6,647)~~

Pro forma income tax benefit ~~(expense)~~

6,273

~~1,396~~

Pro Forma Net ~~Income (Loss)~~Loss

~~(5,251)~~(23,598)

Net ~~Income (Loss)~~Loss per Share/Unit from Continuing Operations:

Basic

~~(0.30)~~(1.88)

Diluted

~~(0.30)~~(1.88)

Net Income per Share/Unit from Discontinued Operations:

Basic

0.02

Diluted

0.02

The unaudited pro forma combined financial information is for informational purposes only and was based off of the fiscal year period October 1st through September 30th as this was the fiscal year in effect at the time of the Merger. The unaudited pro forma financial information was not modified for the change in the Company's fiscal year. It is not intended to represent or to be indicative of the combined results of operations that the Company would have reported had the Merger been completed as of October 1, 2019 and should not be taken as indicative of the Company's future combined results of operations. The actual results may differ significantly from that reflected in the unaudited pro forma combined financial information for a number of reasons, including, but not limited to, differences in assumptions used to prepare the unaudited pro forma combined financial information and actual results.

(5)Oil and Natural Gas Properties

Oil and natural gas properties are summarized below:


		December 31, 2021		September 30, 2021			September 30, 2022		December 31, 2021

		(In thousands)					(In thousands)
Proved	Proved	$	421,779	$	402,165	Proved	$	508,834	$	421,779
Unproved	Unproved	18,839		20,557		Unproved	12,937		18,839
Work-in-progress	Work-in-progress	13,534		11,411		Work-in-progress	26,008		13,534
		454,152		434,133			547,779		454,152
Accumulated depletion and amortization	Accumulated depletion and amortization	(95,021)		(88,336)		Accumulated depletion and amortization	(116,712)		(95,021)
Total oil and natural gas properties, net	Total oil and natural gas properties, net	$	359,131	$	345,797	Total oil and natural gas properties, net	$	431,067	$	359,131

Depletion and amortization expense for proved oil and natural gas properties was ~~$6.7~~$8.2 million and ~~$5.9~~$6.5 million for the three months ended ~~December 31, 2021~~September 30, 2022 and ~~2020, respectively.~~

~~The Company incurred $0.6~~2021. Depletion and amortization expense for proved oil and natural gas properties was $21.7 million and ~~$0.4~~$19.3 million ~~of exploration costs, which~~for the nine months ended September 30, 2022 and 2021, respectively.

Exploration expense was $20 thousand and $0.9 million for the three months ended September 30, 2022 and 2021, respectively, and $1.5 million and $9.1 million for the nine months ended September 30, 2022 and 2021, respectively. Exploration expense was primarily ~~related~~attributable to the expiration of oil and natural gas leases for the ~~three~~nine months ended ~~December 31, 2021~~September 30, 2022 and ~~2020, respectively.~~three and nine months ended September 30, 2021.

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RILEY EXPLORATION PERMIAN, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(Unaudited)

(6)Derivative Instruments

Oil and Natural Gas Contracts

The Company uses commodity based derivative contracts to reduce exposure to fluctuations in oil and natural gas prices. While the use of these contracts limits the downside risk for adverse price changes, their use ~~may~~ also ~~limit~~limits future revenues from favorable price changes. ~~For the three months ended December 31, 2021 and 2020, we~~We have not designated our derivative contracts as hedges for accounting purposes, and therefore changes in the fair value of derivatives are included and recognized in other income ~~(expenses)~~(expense) in the condensed consolidated statement of operations.

~~Table of Contents~~

~~RILEY EXPLORATION PERMIAN, INC.~~

~~NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)~~

~~(Unaudited)~~

As of ~~December 31, 2021,~~September 30, 2022, the Company's oil and natural gas derivative instruments consisted of fixed price swaps, costless collars, and basis protection swaps. The following table summarizes the open financial derivative positions as of ~~December 31, 2021,~~September 30, 2022, related to oil and natural gas production:

Weighted Average Price
Calendar Quarter Notional Volume Fixed Put Call
($ per unit)
Oil Swaps (Bbl)
Q1 2022 345,000 $ 57.47 $ — $ —
Q2 2022 345,000 $ 57.47 $ — $ —
Q3 2022 270,000 $ 56.03 $ — $ —
Q4 2022 270,000 $ 56.03 $ — $ —
2023 720,000 $ 53.27 $ — $ —
Natural Gas Swaps (Mcf)
Q1 2022 360,000 $ 3.26 $ — $ —
Q2 2022 540,000 $ 3.26 $ — $ —
Q3 2022 540,000 $ 3.26 $ — $ —
Q4 2022 540,000 $ 3.26 $ — $ —
Oil Collars (Bbl)
Q1 2022 90,000 $ — $ 35.00 $ 42.63
Q2 2022 90,000 $ — $ 35.00 $ 42.63
Q3 2022 90,000 $ — $ 35.00 $ 42.63
Q4 2022 90,000 $ — $ 35.00 $ 42.63
Oil Basis (Bbl)
Q1 2022 240,000 $ 0.41 $ — $ —
Q2 2022 240,000 $ 0.41 $ — $ —
Q3 2022 240,000 $ 0.41 $ — $ —
Q4 2022 240,000 $ 0.41 $ — $ —


		Weighted Average Price
Calendar Quarter / Year	Notional Volume	Fixed		Put		Call
		($ per unit)
Oil Swaps (Bbl)



Q4 2022	270,000	$	56.03	$	—	$	—
2023	720,000	$	53.27	$	—	$	—

Natural Gas Swaps (Mcf)



Q4 2022	540,000	$	3.26	$	—	$	—

Oil Collars (Bbl)



Q4 2022	90,000	$	—	$	35.00	$	42.63
2023	—	$	—	$	—	$	—
2024	3,000	$	—	$	50.00	$	88.00

Oil Basis (Bbl)



Q4 2022	240,000	$	0.41	$	—	$	—

Interest Rate Contracts

The Company has entered into floating-to-fixed interest rate swaps, ~~(we receive~~in which it receives a floating market rate equal to one-month LIBOR and ~~pay~~pays a fixed interest ~~rate)~~rate, to manage interest rate exposure related to the Company's revolving credit facility.

The following table summarizes the open interest rate derivative positions as of ~~December 31, 2021:~~September 30, 2022:

Open Coverage Period

Notional Amount

Fixed Rate

Open Coverage Period

Notional Amount

Fixed Rate

(In thousands)

Floating-to-Fixed Interest Rate Swaps

January 2022 - September 2023

40,000

0.24

October 2022 - September 2023

40,000

0.24

1620

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RILEY EXPLORATION PERMIAN, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(Unaudited)

Balance Sheet Presentation of Derivatives

The following ~~table presents~~tables present the location and fair value of the Company’s derivative contracts included in the condensed consolidated balance sheets as of September 30, 2022 and December 31, ~~2021 and September 30,~~ 2021:


		December 31, 2021							September 30, 2022
Balance Sheet Classification	Balance Sheet Classification	Gross Fair Value		Amounts Netted		Net Fair Value		Balance Sheet Classification	Gross Fair Value		Amounts Netted		Net Fair Value
		(In thousands)							(In thousands)
Current derivative assets	Current derivative assets	$	281	$	(198)	$	83	Current derivative assets	$	1,611	$	(4)	$	1,607
Non-current derivative assets	Non-current derivative assets	267		—		267		Non-current derivative assets	17		(17)		—
Current derivative liabilities	Current derivative liabilities	(31,182)		198		(30,984)		Current derivative liabilities	(22,533)		4		(22,529)
Non-current derivative liabilities	Non-current derivative liabilities	(9,515)		—		(9,515)		Non-current derivative liabilities	(2,440)		17		(2,423)
Total	Total	$	(40,149)	$	—	$	(40,149)	Total	$	(23,345)	$	—	$	(23,345)

		September 30, 2021							December 31, 2021
Balance Sheet Classification	Balance Sheet Classification	Gross Fair Value		Amounts Netted		Net Fair Value		Balance Sheet Classification	Gross Fair Value		Amounts Netted		Net Fair Value
		(In thousands)							(In thousands)
Current derivative assets	Current derivative assets	$	186	$	(186)	$	—	Current derivative assets	$	281	$	(198)	$	83
Non-current derivative assets	Non-current derivative assets	228		(122)		106		Non-current derivative assets	267		—		267
Current derivative liabilities	Current derivative liabilities	(42,330)		186		(42,144)		Current derivative liabilities	(31,182)		198		(30,984)
Non-current derivative liabilities	Non-current derivative liabilities	(9,054)		122		(8,932)		Non-current derivative liabilities	(9,515)		—		(9,515)
Total	Total	$	(50,970)	$	—	$	(50,970)	Total	$	(40,149)	$	—	$	(40,149)

The following table presents the components of the Company's ~~derivative activities~~gain (loss) on derivatives for the three and nine months ended ~~December 31, 2021~~September 30, 2022 and ~~2020:~~2021:

Three Months Ended December 31,
2021 2020
(In thousands)
Fair value of net asset (liability), beginning of period $ (50,970) $ 21,921
Loss on derivatives (5,193) (13,909)
Settlements on derivatives 16,014 (5,173)
Fair value of net asset (liability), end of period $ (40,149) $ 2,839


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
	(In thousands)
Settlements on derivative contracts	$	(17,040)	$	(11,171)	$	(61,198)	$	(21,477)
Non-cash gain (loss) on derivatives	34,640		(3,816)		16,803		(53,809)
Gain (loss) on derivatives	$	17,600	$	(14,987)	$	(44,395)	$	(75,286)

(7)Fair Value Measurements

The FASB has established a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy consists of three broad levels. Level 1 inputs are the highest priority and consist of unadjusted quoted prices in active markets for identical assets and liabilities. Level 2 are inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. Level 3 are unobservable inputs for an asset or liability.

The carrying values of financial instruments comprising cash and cash equivalents, payables, receivables, ~~related party accounts receivable and accounts payable,~~ and advances from joint interest owners approximate fair values due to the short-term maturities of these instruments. The carrying value reported for the revolving ~~line of~~ credit facility approximates fair value because the underlying instruments are at interest rates which approximate current market rates. The revolving line of credit is considered a Level 3 measurement.

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RILEY EXPLORATION PERMIAN, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(Unaudited)

Assets and Liabilities Measured on a Recurring Basis

The fair value of commodity derivatives and interest rate swaps is estimated using ~~internal~~ discounted cash flow calculations based upon forward curves. The following table presents the Company’s financial assets and liabilities that were

~~Table of Contents~~

~~RILEY EXPLORATION PERMIAN, INC.~~

~~NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)~~

~~(Unaudited)~~

accounted for at fair value on a recurring basis as of September 30, 2022 and December 31, 2021, ~~and September 30, 2021,~~ by ~~Level~~level within the fair value hierarchy:

~~December 31, 2021~~


	September 30, 2022
	Level 1		Level 2		Level 3		Total
	(In thousands)
Financial assets:
Commodity derivative assets	$	—	$	21	$	—	$	21
Interest rate assets	$	—	$	1,607	$	—	$	1,607
Financial liabilities:
Commodity derivative liabilities	$	—	$	(24,973)	$	—	$	(24,973)
Interest rate liabilities	$	—	$	—	$	—	$	—

	December 31, 2021
	Level 1		Level 2		Level 3		Total
	(In thousands)
Financial assets:
Commodity derivative assets	$	—	$	187	$	—	$	187
Interest rate assets	$	—	$	361	$	—	$	361
Financial liabilities:
Commodity derivative liabilities	$	—	$	(40,687)	$	—	$	(40,687)
Interest rate liabilities	$	—	$	(10)	$	—	$	(10)

~~Level 1~~

~~Level 2~~

~~Level 3~~

~~Total~~

~~(In thousands)~~

~~Financial assets:~~

~~Commodity derivative assets~~

—

~~187~~

—

~~Interest rate assets~~

—

~~361~~

—

~~Financial liabilities:~~

~~Commodity derivative liabilities~~

—

~~(40,687)~~

—

~~Interest rate liabilities~~

—

~~(10)~~

—

~~September 30, 2021~~

~~Level 1~~

~~Level 2~~

~~Level 3~~

~~Total~~

~~(In thousands)~~

~~Financial assets:~~

~~Commodity derivative assets~~

—

~~308~~

—

~~Interest rate assets~~

—

~~106~~

—

~~Financial liabilities:~~

~~Commodity derivative liabilities~~

—

~~(51,336)~~

—

~~Interest rate liabilities~~

—

~~(48)~~

—

(8)Transactions with Related Parties

Contract Services

RPOC provides certain administrative services to Combo Resources, LLC ("Combo") and is also the contract operator on behalf of Combo in exchange for a monthly fee of $100 thousand and reimbursement of all third party expenses pursuant to a contract services agreement. Additionally, RPOC provides certain administrative and operational services to Riley Exploration Group, LLC ("REG") in exchange for a monthly fee of $100 thousand pursuant to a contract services agreement.

The following table presents revenues from and related cost for contract services for related parties:


		Three Months Ended December 31,					Three Months Ended September 30,				Nine Months Ended September 30,
		2021		2020			2022		2021		2022		2021
		(In thousands)					(In thousands)
Combo	Combo	$	300	$	300	Combo	$	300	$	300	$	900	$	900
REG	REG	300		300		REG	300		300		900		900
Contract services - related parties	Contract services - related parties	$	600	$	600	Contract services - related parties	$	600	$	600	$	1,800	$	1,800

Cost of contract services	Cost of contract services	$	150	$	148	Cost of contract services	$	89	$	147	$	263	$	329

The Company had amounts ~~(payable to) and~~ due ~~from~~to Combo of ~~$(0.2)~~$0.1 million and ~~$0.5~~$0.2 million at September 30, 2022 and December 31, ~~2021 and September 30,~~ 2021, respectively, which are reflected in accounts payable - related parties ~~and accounts receivable - related parties~~ on the accompanying condensed consolidated balance ~~sheets. There were no amounts due to the Company from REG as of December 31, 2021 and September 30, 2021.~~

~~Consulting and Legal Fees~~

1822

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RILEY EXPLORATION PERMIAN, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(Unaudited)

~~The~~sheets. Amounts due to Combo reflect the revenue, net of any expenditures for wells and fees due under the contract services agreement, for Combo's net working interest in wells that the Company ~~has an engagement agreement with~~operates on Combo's behalf.

Consulting and Legal Fees

On January 25, 2022, the Company and di Santo Law PLLC ("di Santo Law"), a law firm owned by ~~Beth di Santo,~~ a member of our Board of Directors, ~~pursuant~~entered into an engagement letter that provides a monthly fixed fee in exchange for general corporate legal services. The agreement has an initial term of one year and provides for a monthly cash payment of $30 thousand and an aggregate one-time grant of 10,500 shares of restricted stock that vest in four equal installments at the end of each quarter in calendar year 2022. Prior to ~~which~~entry into this agreement, di Santo Law's attorneys ~~provide~~provided legal services to the ~~Company. For the three months ended December 31, 2021 and 2020, the~~Company based on hourly rates. The Company incurred legal fees from di Santo Law of approximately $0.2 million and ~~$0.2~~$0.5 million for the three months ended September 30, 2022 and 2021, respectively. The Company incurred legal fees from di Santo Law of approximately $0.5 million and $1.3 million for the nine months ended September 30, 2022 and 2021. As of September 30, 2022, there were no amounts due to di Santo Law. As of December 31, ~~2021 and September 30,~~ 2021, the Company had approximately $0.2 million ~~and $0.8 million in amounts~~ accrued for di Santo Law. Such amounts were included in accrued liabilities in the accompanying condensed consolidated balance sheets.

(9)Revolving Credit Facility

On September 28, 2017, REP LLC entered into a credit agreement (the "Credit Agreement") to establish a senior secured revolving credit facility with a syndicate of banks including SunTrust Bank, now Truist Bank as successor by merger, as administrative agent. Substantially all of the Company’s assets are pledged to secure the revolving credit facility. The revolving credit facility had an initial borrowing base of $25 million with a maximum facility amount of $500 million. On ~~October 12, 2021,~~April 29, 2022, the ~~revolving credit facility was~~Company amended its Credit Agreement to, among other things, increase the borrowing base tofrom $175 million ~~from $135~~to $200 million, ~~provide for~~extend the ~~transition away from~~maturity date to April 2026, replace LIBOR ~~to an alternative reference rate~~with SOFR and change the requirements for ~~Restricted Payments (as defined in~~hedging to be based on utilization of the ~~Credit Agreement) to consider~~borrowing base and the Company's ~~total~~ leverage ~~ratio~~ratio. On October 25, 2022, the Company amended its Credit Agreement to, among other things, increase the borrowing base from $200 million to $225 million and ~~available free cash flow under certain circumstances. Substantially all~~change the semi-annual redeterminations to April 1 and October 1 to align with the Company's new fiscal year end of ~~the Company’s assets are pledged to secure the revolving credit facility.~~December 31st..

The borrowing base is subject to periodic redeterminations, mandatory reductions and further adjustments from time to

time. ~~The facility currently requires semi-annual redeterminations on February 1 and August 1.~~ During these redetermination periods, the Company’s borrowing base may be increased ~~and~~or may ~~also~~ be reduced in certain circumstances. The revolving credit facility allows for ~~Eurodollar~~SOFR Loans and Base Rate Loans (each as defined in the Credit Agreement). The interest rate on each ~~Eurodollar~~SOFR Loan will be the adjusted ~~LIBOR~~Term SOFR for the applicable interest period plus a margin between 2.75% and 3.75% (depending on the borrowing base utilization percentage). The annual interest rate on each Base Rate Loan ~~is (i)~~will be the ~~greatest of (a)~~Base Rate for the ~~administrative agent’s prime lending rate, (b) the federal funds rate plus 0.5% per annum or (c) the adjusted LIBOR determined on a daily basis for an~~applicable interest period ~~of one-month,~~ plus ~~1.00% per annum, plus (ii)~~ a margin between 1.75% and 2.75% (depending on the borrowing base utilization percentage). The Company is also subject to an unused commitment fee of

between 0.375% and 0.500% (depending on the borrowing base utilization percentage).

The Credit Agreement contains certain covenants, which, among other things, require the maintenance of (i) a total leverage ratio of not more than 3.25 to 1.0 and (ii) a minimum current ratio of not less than 1.0 to 1.0 as of the last day of any ~~fiscal~~ quarter. The Credit Agreement also contains a total leverage ratio for Restricted Payments, as defined in the Credit Agreement, after giving pro forma effect to such Restricted Payments, which includes payments to any holder of the Company's shares, would not exceed 2.50 to 1.0. If the Company's leverage ratio, after giving pro forma effect to such Restricted Payments (as defined in the Credit Agreement), is ~~below~~above 2.0 to 1.0, then an additional test of free cash flow is applied, and the Company will only be permitted to make such Restricted Payments if such payment does not exceed the Company's free cash flow. The Company is also required to limit its cash balance to less than $15 million or 10% of the borrowing base, whichever is greater. If the Company's cash balance exceeds this limit ~~for~~ ~~five~~ ~~consecutive~~on the last business ~~days,~~day of the month, the Company will be required to apply the excess to reduce its credit facility borrowings. The Credit Agreement also contains other customary affirmative and negative covenants and events of default. The Company's minimum hedging requirement is between 0% and 50% (depending on the borrowing base utilization percentage and leverage ratio as of the hedge evaluation date) of its proved developed producing ("PDP") volumes on a rolling 24-month basis. As of ~~December 31, 2021,~~September 30, 2022, the Company's minimum hedging requirement was ~~50% of its PDP volumes on a rolling 24 month basis.~~

~~The following table summarizes the Company's interest expense:~~

Three Months Ended December 31,
2021 2020
(In thousands)
Interest expense $ 512 $ 1,041
Amortization of deferred financing costs(1)
282 155
Unused commitment fees 102 39
Total interest expense $ 896 $ 1,235
~~_____________________~~

~~(1)Includes $0.1 million of unamortized deferred financing costs written off during the three months ended December 31, 2021 in conjunction with the amendment of the Credit Agreement in October 2021.~~0%.

1923

Table of Contents

RILEY EXPLORATION PERMIAN, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(Unaudited)

The following table summarizes the Company's interest expense:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
	(In thousands)
Interest expense, net of capitalized interest	$	273	$	728	$	1,050	$	2,645
Amortization of deferred financing costs	175		170		548		498
Unused commitment fees	137		65		362		156
Total interest expense, net	$	585	$	963	$	1,960	$	3,299

As of September 30, 2022 and December 31, ~~2021 and September 30,~~ 2021, the weighted average interest rate on outstanding borrowings under the revolving credit facility was ~~3.10%~~5.88% and ~~2.83%~~3.10%, respectively.

As of ~~December 31, 2021 and~~ September 30, ~~2021,~~2022, the Company was in compliance with all covenants contained in the Credit Agreement and had ~~$65~~$48 million ~~and $60 million, respectively,~~ of outstanding borrowings and ~~an additional $110~~$152 million ~~and $75 million, respectively,~~ available under the borrowing base.

(10) Members’/Shareholders' Equity

Public Offering of Common Stock

On June 30, 2021, the Company entered into an Underwriting Agreement (the "Underwriting Agreement") with Truist Securities, Inc., as the representative of the other several underwriters named in the Underwriting Agreement. On July 2, 2021, the Company issued 1,666,667 shares of common stock at a price to the public of $30.00 per share in accordance with the Underwriting Agreement. Net proceeds from the issuance were approximately $46.7 million, after deducting the underwriting fees and other offering costs incurred.

Dividends

For the three months ended ~~December 31,~~September 30, 2022 and 2021, ~~and 2020,~~ the Company declared quarterly dividends on its common stock ~~and common units~~ totaling approximately ~~$6.1~~$6.2 million and ~~$3.8~~$5.5 million, respectively. See Note 9 - Revolving Credit Facility for discussion over the Company's restrictions on certain payments, including dividends.

Share-Based and Unit-Based Compensation

In connection with the Merger, the Company shareholders adopted an omnibus equity incentive plan, the 2021 LTIP, for the employees, consultants and the directors of the Company and its affiliates who perform services for the Company. The holders of unvested restricted units issued under the 2018 LTIP were issued substitute awards under the 2021 LTIP at the closing of the Merger. Upon the closing of the Merger and after giving effect to the adjustment resulting from the one-for-twelve reverse stock split, the 2021 LTIP had 1,387,022 shares of common stock available for issuance, of which ~~814,707~~444,549 shares remained available as of ~~December 31, 2021.~~September 30, 2022.

Table of Contents

RILEY EXPLORATION PERMIAN, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(Unaudited)

2021 Long-Term Incentive Plan

~~Restricted Shares:~~ The Company granted 174,575 restricted shares to executive officers and employees of the Company during the three months ended December 31, 2021. The restricted shares granted to executive officers and employees vest over a period of 36 months with a grant date fair value of $23.46. The holder of these restricted shares receives dividends, in arrears, once the shares vest. The Company has accrued for these dividends which are reported in accrued liabilities and other non-current liabilities.

The following table presents the Company's restricted stock activity during the ~~three~~nine months ended ~~December 31, 2021~~September 30, 2022 under the 2021 LTIP:


2021 Long-Term Incentive Plan	2021 Long-Term Incentive Plan				2021 Long-Term Incentive Plan
		Restricted Shares	Weighted Average Grant Date Fair Value			Restricted Shares	Weighted Average Grant Date Fair Value
Unvested at September 30, 2021		228,369	$	15.35
Unvested at December 31, 2021					Unvested at December 31, 2021	366,789	$	19.41
Granted	Granted	174,575	$	23.46	Granted	366,669	$	17.61
Vested	Vested	(36,155)	$	13.80	Vested	(96,838)	$	18.87
Forfeited	Forfeited	—	$	—	Forfeited	(3,625)	$	23.46
Unvested at December 31, 2021		366,789	$	19.41
Unvested at September 30, 2022					Unvested at September 30, 2022	632,995	$	18.45

~~During~~For the three months ended ~~December 31,~~September 30, 2022 and 2021, the total ~~share-based~~equity-based compensation expense is $0.8 million for both periods and is included in general and administrative costs on the Company's condensed consolidated statement of operations for the restricted share awards granted under the 2021 LTIP. For the nine months ended September 30, 2022 and 2021, the total equity-based compensation expense of ~~$1.0~~$2.7 million and $6.1 million, respectively, is included in general and administrative costs on the Company's condensed consolidated statement of operations for the restricted share awards granted under the 2021 LTIP. Approximately ~~$5.5~~$9.4 million of additional ~~share-based~~equity-based compensation expense will be recognized over the weighted average life of 2830 months for the unvested restricted share awards as of September 30, 2022 granted under the 2021 LTIP.

2018 Long-Term Incentive Plan

In connection with the Merger and in accordance with the Merger Agreement, each unvested restricted unit outstanding under the 2018 LTIP was converted into restricted shares of the Company under the 2021 LTIP. The holders of unvested restricted units issued under the 2018 LTIP were issued substitute awards under the 2021 LTIP at the closing of the Merger.

~~Table of Contents~~

~~RILEY EXPLORATION PERMIAN, INC.~~

~~NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)~~

~~(Unaudited)~~

~~Restricted Units:~~ The Company granted 13,309 restricted units to executives and employees of the Company during the three months ended December 31, 2020. These restricted units vest over a period of 36 months with a fair value price of $112.47. The Company determined the fair value of the common units in accordance with ASC 718 using an options pricing model. Immediately prior to the consummation of the Merger and in accordance with the Merger Agreement, any accrued but unpaid cash dividends on the unvested restricted units issued under the 2018 LTIP was paid.

Total unit-based compensation expense of ~~$0.4~~$0.3 million ~~respectively,~~is for all of the issuances outstanding during the period of January 2021 through the date of the merger, February 26, 2021. Unit-based compensation expense is included in general and administrative costs on the Company's condensed consolidated statement of ~~operations for all of the issuances outstanding for the three months ended December 31, 2020.~~operations.

(11)Income Taxes

REP LLC was organized as a limited liability company and treated as a flow-through entity for federal income tax purposes. As such, taxable income and any related tax credits were passed through to its members and included in their tax returns, even though such taxable income or tax credits may not have been distributed. In connection with the closing of the Merger, the Company's tax status changed from a limited liability company to a C-corporation. As a result, the Company is responsible for federal and state income taxes and must record deferred tax assets and liabilities for the tax effects of any temporary differences that ~~exist on the date~~exist.

Table of ~~the change.~~Contents

RILEY EXPLORATION PERMIAN, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(Unaudited)

The components of the Company's consolidated provision for income taxes from continuing operations are as follows:


		Three Months Ended December 31,					Three Months Ended September 30,				Nine Months Ended September 30,
		2021		2020			2022		2021		2022		2021
		(In thousands)					(In thousands)

Current income tax expense:	Current income tax expense:					Current income tax expense:
Federal	Federal	$	—	$	—	Federal	$	142	$	2	$	1,442	$	2
State	State	113		—		State	291		284		486		52
Total current income tax expense	Total current income tax expense	113		—		Total current income tax expense	433		286		1,928		54
Deferred income tax expense (benefit):	Deferred income tax expense (benefit):					Deferred income tax expense (benefit):
Federal	Federal	5,669		—		Federal	15,460		(6,427)		22,439		14,202
State	State	87		(515)		State	424		2,204		763		(717)
Total deferred income tax expense (benefit)	Total deferred income tax expense (benefit)	5,756		(515)		Total deferred income tax expense (benefit)	15,884		(4,223)		23,202		13,485
Total income tax expense (benefit)	Total income tax expense (benefit)	$	5,869	$	(515)	Total income tax expense (benefit)	$	16,317	$	(3,937)	$	25,130	$	13,539

A reconciliation of the statutory federal income tax rate to the Company's effective income tax rate is as follows:


		Three Months Ended December 31,					Three Months Ended September 30,				Nine Months Ended September 30,
		2021		2020			2022		2021		2022		2021

Tax at statutory rate	Tax at statutory rate	21.0	%	21.0	%	Tax at statutory rate	21.0	%	21.0	%	21.0	%	21.0	%
Nondeductible compensation	Nondeductible compensation	0.1	%	—	%	Nondeductible compensation	0.1	%	(32.1)	%	0.2	%	(1.3)	%

Transaction costs						Transaction costs	—	%	(47.7)	%	—	%	(2.1)	%
Stock compensation	Stock compensation	(0.3)	%	—	%	Stock compensation	—	%	0.2	%	(0.1)	%	(0.1)	%
State income taxes, net of federal benefit	State income taxes, net of federal benefit	0.7	%	2.0	%	State income taxes, net of federal benefit	0.8	%	22.9	%	0.8	%	(1.6)	%

Change in tax status						Change in tax status	—	%	(0.5)	%	—	%	(53.4)	%
Income subject to taxation by REP LLC's unitholders	Income subject to taxation by REP LLC's unitholders	—	%	(21.0)	%	Income subject to taxation by REP LLC's unitholders	—	%	—	%	—	%	(15.8)	%
Other						Other	(0.5)	%	—	%	(0.3)	%	—	%
Effective income tax rate	Effective income tax rate	21.5	%	2.0	%	Effective income tax rate	21.4	%	(36.2)	%	21.6	%	(53.3)	%

The Company's federal income tax returns for the years subsequent to ~~September 30, 2017~~December 31, 2018 remain subject to examination. The Company's income tax returns in major state income tax jurisdictions remain subject to examination for various periods subsequent to ~~September 30,~~December 31, 2017. The Company currently believes that all other significant filing positions are highly certain and that all of its other significant income tax positions and deductions would be sustained under audit or the final resolution

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~~RILEY EXPLORATION PERMIAN, INC.~~

~~NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)~~

~~(Unaudited)~~

would not have a material effect on the consolidated financial statements. Therefore, the Company has not established any significant reserves for uncertain tax positions.

(12)Discontinued Operations and Assets Held For Sale

Kansas Reporting Unit

On March 10, 2021, the Company entered into a PSA to divest of the Kansas Reporting Unit for an agreed upon purchase price of $3.5 million before certain closing adjustments. In addition, the Company also agreed to assign to the buyer its lease associated with Tengasco's former corporate office in Greenwood Village, Colorado. With Tengasco qualifying as a business and the Kansas Reporting Unit making up a significant portion of the assets of Tengasco, the Company concluded that the transaction met the requirements of assets held for sale and discontinued operations upon the acquisition date. The sale closed on April 2, 2021 for an adjusted purchase price of $3.3 million, after customary closing adjustments.

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RILEY EXPLORATION PERMIAN, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(Unaudited)

The following table presents the components of the loss on discontinued operations reported in the condensed consolidated statements of operations for the periods ended September 30, 2021:


	Three Months Ended		Nine Months Ended
	September 30, 2021		September 30, 2021
	(In thousands)
Oil and natural gas sales	$	—	$	—
Total revenues	—		—
Lease operating expenses	—		115
Goodwill impairment	—		18,516
Total expenses	—		18,631
Other income (expenses)	775		(107)
Gain (loss) from discontinued operations before income taxes	775		(18,738)
Income tax benefit (expense)	1		(59)
Gain (loss) from discontinued operations, net of tax	$	776	$	(18,797)

The Company did not have any discontinued operations during the three and nine months ended September 30, 2022.

(13)Net Income (Loss) Per Share/Unit

Net income (loss) per share/unit is calculated using a retroactive application of the Exchange Ratio and the one-for-twelve reverse stock split that occurred in conjunction with the Merger. ~~Certain restricted shares of the Company met the criteria of a participating security.~~ The Company calculated net income or loss per share/unit using the ~~two-class method for those shares.~~treasury stock method.

The table below sets forth the computation of basic and diluted net income (loss) per share/unit for the three and nine months ended ~~December 31, 2021~~September 30, 2022 and ~~2020:~~2021:


		Three Months Ended December 31,						Three Months Ended September 30,	Nine Months Ended September 30,
			2021		2020				2022		2021		2022		2021
			(In thousands, except per share/unit)						(In thousands, except per share/unit)

Continuing Operations:							Continuing Operations:
Net income (loss) - Diluted	Net income (loss) - Diluted		$	21,398	$	(7,941)	Net income (loss) - Diluted		$	59,817	$	14,878	$	91,204	$	(38,928)
Less: Dividends on preferred units	Less: Dividends on preferred units		—		(917)		Less: Dividends on preferred units		—		—		—		(574)
Net income (loss) attributable to common shareholders/unitholders - Basic(1)	Net income (loss) attributable to common shareholders/unitholders - Basic(1)		$	21,398	$	(8,858)	Net income (loss) attributable to common shareholders/unitholders - Basic(1)		$	59,817	$	14,878	$	91,204	$	(39,502)

Basic weighted-average common shares/units outstanding	Basic weighted-average common shares/units outstanding		19,470		12,469		Basic weighted-average common shares/units outstanding		19,546		19,434		19,530		17,218
Effecting of dilutive securities:	Effecting of dilutive securities:						Effecting of dilutive securities:

Restricted shares/units	Restricted shares/units		99		—		Restricted shares/units		41		106		102		—
Diluted weighted-average common shares/units outstanding	Diluted weighted-average common shares/units outstanding		19,569		12,469		Diluted weighted-average common shares/units outstanding		19,587		19,540		19,632		17,218

Continuing Operations:							Continuing Operations:
Basic net income (loss) per common share/unit	Basic net income (loss) per common share/unit		$	1.10	$	(0.71)	Basic net income (loss) per common share/unit		$	3.06	$	0.77	$	4.67	$	(2.29)
Diluted net income (loss) per common share/unit	Diluted net income (loss) per common share/unit		$	1.09	$	(0.71)	Diluted net income (loss) per common share/unit		$	3.05	$	0.76	$	4.65	$	(2.29)

_____________________________________________________

(1) Used in the basic and diluted net loss per ~~share~~share/unit calculation ~~for December 31, 2020 since~~when the Company ~~was~~is in a net loss position.

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RILEY EXPLORATION PERMIAN, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(Unaudited)

For the three and nine months ended ~~December 31,~~September 30, 2022 and 2021, ~~and 2020,~~ the following shares/units were excluded from the calculation of diluted net income (loss) per share/unit due to their anti-dilutive effect:

Three Months Ended December 31,
2021 2020
(In thousands)
Series A preferred units — 4,170
Restricted shares/units 268 281


	Three Months Ended September 30,		Nine Months Ended September 30,
	2022	2021	2022	2021
	(In thousands)

Restricted shares/units	293	127	232	228

~~(13)~~(14)Commitments and Contingencies

Legal Matters

The Company ~~has been~~was named as a defendant in an ~~action~~adversary proceeding (the "Adversary Proceeding") commenced on October 25, 2021 in United States Bankruptcy Court for the Northern District of Texas, Dallas Division (the "Bankruptcy Court"), by the Trustee of the Chapter 7 ~~Trustee for~~bankruptcy of the Hoactzin ~~Bankruptcy.~~Partners, L.P. ("Hoactzin"). The ~~Company was served with this lawsuit on or about December 7, 2021. The~~ complaint in the Adversary Proceeding alleges that in October of 2018, one year prior to the Hoactzin bankruptcy filing in October of 2019, Peter Salas ("Salas"), Chairman of the Board of Tengasco during the period of the purported fraudulent transfers, caused Hoactzin to transfer its working interests in certain wells on its Kansas acreage (the “Kansas Working Interests”) to the Company for an amount the complaint alleges was purportedly less than the reasonable equivalent value of such Kansas Working Interests. The complaint includes avoidance actions and other causes of action in connection with the transfer of the Kansas Working Interests, as well as other causes of action alleged related to certain transactions to which the Company was not a party.

The complaint also alleges that Salas, Dolphin Direct Equity Partners, L.P. ("DDEP"), an entity substantially owned by Salas, and the Company are jointly and severally liable for the damages incurred by Hoactzin. In connection with the

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~~RILEY EXPLORATION PERMIAN, INC.~~

~~NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)~~

~~(Unaudited)~~

Company’s merger in February 2021, Salas resigned his position from the Company’s Board and no longer holds any position as an officer or director of the Company. On April 2, 2021, the Company closed on the sale of all the assets it held in Kansas (of which the Kansas Working Interests were a small part) to a third party for an agreed upon purchase price of ~~$3.2~~$3.3 million.

AsOn October 13, 2022, the Company entered into a Compromise Settlement Agreement and Mutual General Release (the “Settlement Agreement”) with the Trustee for the bankruptcy estate for Hoactzin to resolve certain claims against the Company in the Adversary Proceeding. Under the terms of the ~~date of this Quarterly Report,~~Settlement Agreement, the Company ~~has filed its initial Answer denying the allegations against it.~~

~~Due~~will pay $80 thousand to the ~~nature~~Trustee in full settlement and satisfaction of (a) all claims, causes of action, and damages that have been asserted against the Company or could be asserted against the Company in the Adversary Proceeding; and (b) all claims which might arise from or relate to any actions taken by the Company while acting in connection with Debtor.

The effectiveness of the ~~Company's business,~~Settlement Agreement is contingent upon its approval by the ~~Company may at times be subject~~Bankruptcy Court. On October 13, 2022, the Trustee filed a motion to ~~claims and legal actions. The Company accrues liabilities when it is probable that future costs~~approve the Settlement Agreement with the Bankruptcy Court (the “Settlement Motion”). A hearing will be ~~incurred, and such costs can be reasonably estimated. Such accruals are based~~held on ~~developments~~November 16, 2022 on the Settlement Motion. Should the Court decline to ~~date~~approve the proposed settlement, the Trustee's claims against Riley Permian would proceed to trial, absent a subsequent settlement approved by the Court. If the Bankruptcy Court grants the Settlement Motion, after Riley Permian makes the settlement payment contemplated under the Settlement Agreement, Riley Permian and the ~~Company’s estimates~~Trustee intend to file a joint motion requesting dismissal of the ~~outcomes~~Adversary Proceeding with prejudice, as contemplated by the Settlement Agreement. The Settlement Agreement will have no effect on the Trustee’s claims against any of ~~these matters. The Company did not recognize any material liability as of December 31, 2021 and September 30, 2021. At this time, management does not expect~~ the ~~impact of this litigation to be material to~~other defendants in the Adversary Proceeding, including without limitation, those claims against Peter Salas, our ~~financial position or results of operations.~~former Chief Executive Officer.

Environmental Matters

The Company is subject to various federal, state and local laws and regulations relating to the protection of the environment. These laws, which are often changing, regulate the discharge of materials into the environment and may require the Company to remove or mitigate the environmental effects of the disposal or release of petroleum or chemical substances at various sites. The Company had no material environmental liabilities as of September 30, 2022 or December 31, ~~2021 or September 30,~~ 2021.

Contractual Commitments

~~In July 2021, as part~~

Table of a planned expansion of the primary gas processing plant owned by the Company's primary midstream partner, Stakeholder Midstream LLC ("Stakeholder"), the Company committed to annually drill, complete and connect a minimum number of wells or deliver an annual target volume to Stakeholder's gathering system. While the minimum number of wells is below our planned development activity, there are financial penalties if the minimum activity levels are not met. The annual well or volume target is for each of five years beginning January 2022. The additional capacity from the gas processing plant expansion is expected to lead to increased natural gas sales and decreased gas flaring for the Company.Contents

In August 2021, the Company entered into a purchase agreement for supplies for its EOR project. Under the agreement, the Company has remaining commitments totaling approximately $0.8 million and $2.6 million to purchase supplies by January 2022 and April 2022, respectively.RILEY EXPLORATION PERMIAN, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(Unaudited)

OnIn October 7, 2021, the Company executed 2two agreements related to its EOR project. The first agreement is a CO2 purchase agreement with Kinder Morgan CO2 Company, LLC ~~and~~that has a primary term extending through the earlier of the total contract quantity delivered or December 31, 2025. The agreement also has a daily contract quantity for Kinder Morgan to deliver CO2 to the Company. The second agreement is a connection agreement that also established a delivery point for the purchased CO2 with the Cortez Pipeline Company.

In April 2022, the Company entered into a purchase agreement for pipe related to its 2023 drilling program. Under the agreement, the Company has commitments to purchase an additional approximately $10.1 million of pipe by first quarter of 2023.

In August 2022, the Company entered into a second amendment on its gas gathering and processing agreement with its primary midstream counterparty, Stakeholder Midstream LLC (“Stakeholder”). Stakeholder committed to expand their gathering and processing system with a commitment from the Company to deliver an annual minimum volume to Stakeholder’s gathering system for a minimum of seven years beginning on the in-service date of the expanded plant.

~~(14)~~(15)Subsequent Events

On ~~January 12,~~October 10, 2022, the Board of Directors of the Company declared a cash dividend of ~~$0.31~~$0.34 per share of common stock payable on ~~February 9,~~November 7, 2022 to its shareholders of record at the close of business on ~~January 26,~~October 24, 2022.

On ~~January~~October 25, 2022, the Company amended its Credit Agreement to, among other things, increase the borrowing base from $200 million to $225 million and di Santo Law PLLC, a law firm owned by a member of our Board of Directors, entered into an engagement letter that provides a monthly fixed fee in exchange for general corporate legal services. The agreement has an initial term of onechange the semi-annual redetermination dates to April 1 and October 1 to align with the Company's new fiscal year ~~and provides for a monthly cash payment of $30,000 and an aggregate one-time grant of 10,500 shares of restricted stock that will vest in four equal installments at the~~ end of ~~each quarter in calendar year 2022.~~December 31st.

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~~RILEY EXPLORATION PERMIAN, INC.~~

~~NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)~~

~~(Unaudited)~~

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the Company’s condensed consolidated financial statements and related notes thereto presented in this report as well as the Company's audited consolidated financial statements and related notes included in the Company's Annual Report for the fiscal year ended September 30, 2021 and the Company's Transition Report on Form 10-QT for the period ended December 31, 2021. The following discussion contains “forward-looking statements” that reflect the Company’s future plans, estimates, beliefs and expected performance. The Company’s actual results could differ materially from those discussed in these forward-looking statements. See "Cautionary Statement Regarding Forward-Looking Statements" and "Part II. Item 1A. Risk Factors" below and the information set forth in the Risk Factors under Part I, Item 1A of the Company's Annual Report for the fiscal year ended September 30, 2021.

Overview

We operate in the upstream segment of the oil and natural gas industry and are focused on steadily growing conventional reserves, production and cash flow through the acquisition, exploration, development and production of oil, natural gas and NGLs primarily in the Permian Basin in West Texas. The Company’s activities are primarily focused on the San Andres Formation, a shelf margin deposit on the Central Basin Platform and Northwest Shelf. We intend to continue to develop our reserves and increase production through development drilling and exploration activities ~~on our multi-year inventory of identified potential drilling locations~~ and through acquisitions that meet our strategic and financial objectives.

Financial and Operating Highlights

Financial and operating results reflect the following:

•Increased total net equivalent production by ~~31%~~33% to ~~9.9~~12.7 MBoe/d for the three months ended ~~December 31, 2021,~~September 30, 2022, as compared to the same period in ~~2020~~2021 and 21% to 10.9 MBoe/d for the nine months ended September 30, 2022, as compared to the same period in 2021

•During the three and nine months ended ~~December 31, 2021, 5~~September 30, 2022, 7 gross ~~(4.1~~(4.2 net) and 14 gross (10.8 net) horizontal wells brought online to production, respectively

•Realized average combined price on production sold of ~~$61.94~~$74.76 per Boe, before derivative settlements, during the three months ended ~~December 31, 2021,~~September 30, 2022, including ~~$75.67~~$92.40 per barrel for oil

•Generated cash flow from operations of ~~$21.7~~$130.4 million for the ~~three~~nine months ended ~~December 31, 2021~~September 30, 2022

•Total accrued capital expenditures of ~~$20.7~~$36.7 million and $96.5 million for the three and nine months ended ~~December 31, 2021~~September 30, 2022, respectively

•Paid cash dividends on common shares of $6.1 million during the three months ended ~~December 31, 2021,~~September 30, 2022, and announced latest dividend of ~~$0.31~~$0.34 per share with a record date of ~~January 26,~~October 24, 2022, which was paid on ~~February 9,~~November 7, 2022, for a total of ~~$6.1~~$6.7 million

•Exited the ~~first~~third quarter with ~~$8.3~~$17.9 million in cash and ~~$65.0~~$48.0 million drawn on our revolving credit facility

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Recent Developments

Fiscal Year Change

On August 16, 2022, the Company's Board acting by written consent resolved to amend and restate the Company's Second Amended and Restated Bylaws to change the Company's fiscal year period from October 1st through September 30th each year to January 1st through December 31st each year commencing with the 2022 calendar year. On August 19, 2022, the holders of approximately 75% of our outstanding Common Stock acting by written consent approved Bylaws Restatement and adopted the Third Amended and Restated Bylaws. In accordance with Rule 14c-2 under the Exchange Act, the aforementioned actions taken by written consent became effective on September 23, 2022. As a result, the Company's 2022 fiscal year will now be the period from January 1, 2022 to December 31, 2022.

Market Conditions, Commodity Prices and Interest Rates

U.S. and global markets are experiencing heightened volatility following impactful geopolitical events, consistent evidence of widespread inflation, as well as increased fears of an economic recession. However, commodity prices have continued to remain high during the first nine months of 2022 due to OPEC+ and other oil and natural gas producers not rapidly increasing production levels, as well as from the recovery in demand related to the COVID-19 pandemic. The full-scale military invasion of Ukraine by Russian troops has continued unabated since February 2022 coupled with related economic sanctions imposed on Russia further exacerbating supply shortages, leading to disruptions in the credit and capital markets, including significant uncertainty in commodity prices, during the first nine months of 2022.

In addition, global markets are experiencing significant inflation attributable to a number of factors. Certain of our capital expenditures and expenses are affected by general inflation and we expect costs for the remainder of 2022 to continue to be a function of supply and demand. Specifically, costs for oilfield equipment and services continue to experience impacts from significant inflation, which we expect to continue for the foreseeable future.

In response to inflation concerns, the U.S. Federal Reserve initiated a monetary tightening policy in 2022, sharply increasing interest rates in June, July, September and November 2022 with public estimates of potential further increases in the future. The Company's floating-rate credit facility will be impacted by such rate increases.

The combination of geopolitical events, inflation and the rising rate environment has led to increasing forecasts of a U.S. or global recession. Any such recession could prolong market volatility or cause a decline in commodity prices, among other potential impacts.

The Company cannot estimate the length or gravity of the future impact these events will have on the Company's results of operations, financial position, liquidity and the value of oil and natural gas reserves.

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Results of Operations

Comparison for the three and nine months ended ~~December 31,~~September 30, 2022 and 2021 ~~and 2020~~

The following table sets forth selected operating data for the three and nine months ended ~~December 31, 2021~~September 30, 2022 and ~~2020:~~2021:

Three Months Ended December 31,
2021 2020
Revenues (in thousands):
Oil sales $ 50,623 $ 22,107
Natural gas sales 2,705 119
Natural gas liquids sales 3,322 188
Oil and natural gas sales, net $ 56,650 $ 22,414
Production Data, net:
Oil (MBbls) 669 547
Natural gas (MMcf) 844 461
Natural gas liquids (MBbls) 105 74
Total (MBoe) 915 698
Daily combined volumes (Boe/d) 9,940 7,583
Daily oil volumes (Bbls/d) 7,271 5,945
Average Realized Prices:
Oil ($ per Bbl) $ 75.67 $ 40.41
Natural gas ($ per Mcf) 3.20 0.26
Natural gas liquids ($ per Bbl) 31.64 2.54
Combined ($ per Boe) $ 61.94 $ 32.12
Average Realized Prices, including derivative settlements:(1)
Oil ($ per Bbl) $ 54.05 $ 49.87
Natural gas ($ per MMBtu) 1.37 0.26
Natural gas liquids ($ per Bbl) 31.64 2.54
Combined ($ per Boe) $ 44.43 $ 39.53


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Revenues (in thousands):
Oil sales	$	80,017	$	44,026	$	224,895	$	114,314
Natural gas sales	4,216		1,908		8,855		7,381
Natural gas liquids sales	3,238		2,080		8,147		4,527
Oil and natural gas sales, net	$	87,471	$	48,014	$	241,897	$	126,222

Production Data, net:
Oil (MBbls)	866		639		2,301		1,793
Natural gas (MMcf)	985		807		2,239		2,141
Natural gas liquids (MBbls)	140		109		303		306
Total (MBoe)	1,170		882		2,977		2,456

Daily combined volumes (Boe/d)	12,717		9,581		10,903		8,997
Daily oil volumes (Bbls/d)	9,413		6,940		8,428		6,569

Average Realized Prices:
Oil ($ per Bbl)	$	92.40	$	68.95	$	97.74	$	63.76
Natural gas ($ per Mcf)	4.28		2.36		3.95		3.45
Natural gas liquids ($ per Bbl)	23.13		19.16		26.89		14.79
Combined ($ per Boe)	$	74.76	$	54.46	$	81.26	$	51.39

Average Realized Prices, including derivative settlements:(1)
Oil ($ per Bbl)	$	75.80	$	52.30	$	73.63	$	51.97
Natural gas ($ per MMBtu)	1.57		1.69		1.40		3.28
Natural gas liquids ($ per Bbl)	23.13		19.16		26.89		14.79
Combined ($ per Boe)	$	60.20	$	41.79	$	60.69	$	42.65

_____________________

(1)The Company's calculation of the effects of derivative settlements includes ~~gains (losses)~~losses on the settlement of its commodity derivative contracts. These ~~gains (losses)~~losses are included under other income ~~and expense~~(expense) on the Company’s condensed consolidated statements of operations.

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Oil and Natural Gas Revenues

Our revenues are derived from the sale of our oil and natural gas production, including the sale of NGLs that are extracted from our natural gas during processing. Revenues from product sales are a function of the volumes produced, product quality, market prices, and gas Btu content. Our revenues from oil, natural gas and NGL sales do not include the effects of derivatives. Our revenues may vary significantly from period to period as a result of changes in volumes of production sold or changes in commodity prices. The Company’s total oil and natural gas revenue, net increased ~~$34.2~~$39.5 million and $115.7 million, or ~~153%~~82% and 92%, for the three and nine months ended ~~December 31, 2021~~September 30, 2022, respectively, compared to the same ~~period~~periods in ~~2020.~~2021. The Company’s realized average combined price on its production for the three and nine months ended ~~December 31, 2021~~September 30, 2022 increased by ~~$29.82~~$20.30 and $29.87, or ~~93%~~37% and 58%, respectively, compared to the same ~~period of 2020.~~periods in 2021.

Oil revenues

•For the three months ended ~~December 31, 2021,~~September 30, 2022, oil revenues increased by ~~$28.5~~$36.0 million, or ~~129%~~82%, compared to the same period in ~~2020.~~2021. Of the increase, ~~$23.6~~$20.3 million was attributable to an increase in our realized price and ~~$4.9~~$15.7 million was attributable to an increase in volume. Volumes increased by ~~22%~~36%, while realized prices increased by ~~87%~~34% compared to the same period in ~~2020.~~2021.

•For the nine months ended September 30, 2022, oil revenues increased by $110.6 million, or 97%, compared to the same period in 2021. Of the increase, $78.2 million was attributable to an increase in our realized price and $32.4 million was attributable to an increase in volume. Volumes increased by 28%, while realized prices increased by 53% compared to the same period in 2021.

•Oil volumes increased during the three and nine months ended ~~December 31, 2021~~September 30, 2022 due to production from new wells and workovers performed on existing wells. During the three and nine months ended ~~December 31, 2021,~~September 30, 2022, we brought online ~~5 new~~7 gross ~~(4.1~~(4.2 net) ~~wells.~~and 14 gross (10.8 net) horizontal wells, respectively.

•The average WTI price increased by $22.48 and $33.91 per Bbl during the three and nine months ended September 30, 2022, respectively, compared to the same periods in 2021.

Natural gas revenues

•For the three months ended ~~December 31, 2021,~~September 30, 2022, natural gas revenues increased by ~~$2.6~~$2.3 million, compared to the same period in ~~2020,~~2021, to ~~$2.7~~$4.2 million from ~~$0.1~~$1.9 million. Volumes increased by ~~83% and~~22%, while realized prices increased by ~~$2.94~~$1.92 per Mcf compared to the same period in 2021.

•For the nine months ended September 30, 2022, natural gas revenues increased by $1.5 million, compared to the same period in 2021, to $8.9 million from $7.4 million. Volumes increased by 5%, while realized prices increased by $0.50 per Mcf compared to the same period in ~~2020.~~2021.

•Natural gas sales volumes increased during the three months ended ~~December 31,~~September 30, 2022 compared to the same period in 2021 due to ~~increased~~ production from new wells ~~brought online~~ and ~~increased gas processing capacity available from the Company's midstream gathering and processing partner.~~workovers performed on existing wells.

•The average Henry Hub price increased by $3.67 and $3.14 per Mcf during the three and nine months ended September 30, 2022, respectively, compared to the same periods in 2021.

Natural gas liquids revenues

•For the three months ended ~~December 31, 2021,~~September 30, 2022, NGL revenues increased by ~~$3.1~~$1.1 million, compared to the same period in ~~2020,~~2021, to ~~$3.3~~$3.2 million from ~~$0.2~~$2.1 million. Volumes increased by ~~42% and~~29%, while realized prices increased ~~by $29.10~~$3.97 per Bbl compared to the same period in 2021.

•For the nine months ended September 30, 2022, NGL revenues increased by $3.6 million, compared to the same period in 2021, to $8.1 million from $4.5 million. Volumes remained flat, while realized prices increased $12.10 per Bbl compared to the same period in ~~2020.~~2021.

•NGL sales volumes increased during the three months ended ~~December 31,~~September 30, 2022 compared to the same period in 2021 due to ~~increased~~ production from new wells ~~brought online~~ and ~~increased gas processing capacity available from the Company's midstream gathering and processing partner.~~workovers performed on existing wells.

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Contract Services - Related Party ~~Revenue~~

The following ~~tables present~~table presents the Company's revenue and costs associated with its contract services - related party transactions:

Three Months Ended December 31,
2021 2020
(In thousands)
Contract services – related parties(1)
$ 600 $ 600
Cost of contract services - related parties(2)
150 148
Gross profit - related parties $ 450 $ 452


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
	(In thousands)
Contract services - related parties(1)	$	600	$	600	$	1,800	$	1,800
Cost of contract services - related parties(2)	89		147		263		329
Contract services revenues, net of costs	$	511	$	453	$	1,537	$	1,471

_____________________

(1)The Company’s contract services –- related parties revenue is derived from master services agreements with related parties to provide certain administrative support services.

(2)The Company's cost of contract services - related parties represents costs specifically attributable to the master service agreements the Company has in place with the respective related parties.

Costs and Expenses

The following table presents the Company's operating costs and expenses and other (income) expenses:


		Three Months Ended December 31,					Three Months Ended September 30,				Nine Months Ended September 30,
		2021		2020			2022		2021		2022		2021
Costs and Expenses:	Costs and Expenses:	(In thousands)				Costs and Expenses:	(In thousands)
Lease operating expenses	Lease operating expenses	$	7,419	$	4,568	Lease operating expenses	$	8,813	$	5,686	$	23,705	$	17,407
Production and ad valorem taxes	Production and ad valorem taxes	$	3,005	$	1,289	Production and ad valorem taxes	$	5,826	$	2,575	$	14,854	$	7,347
Exploration costs	Exploration costs	$	611	$	424	Exploration costs	$	20	$	884	$	1,540	$	9,142
Depletion, depreciation, amortization and accretion	Depletion, depreciation, amortization and accretion	$	6,867	$	5,990	Depletion, depreciation, amortization and accretion	$	8,346	$	6,692	$	22,167	$	20,025

Administrative costs	Administrative costs	$	3,633	$	2,445	Administrative costs	$	5,154	$	4,790	$	13,567	$	11,516
Equity-based compensation	Equity-based compensation	951		413		Equity-based compensation	704		751		2,274		6,377
General and administrative expense	General and administrative expense	$	4,584	$	2,858	General and administrative expense	$	5,858	$	5,541	$	15,841	$	17,893

Transaction costs	Transaction costs	$	1,258	$	1,049	Transaction costs	$	—	$	198	$	2,638	$	2,683
Interest expense		$	896	$	1,235
Loss on derivatives		$	5,193	$	13,909
Interest expense, net						Interest expense, net	$	585	$	963	$	1,960	$	3,299
(Gain) loss on derivatives						(Gain) loss on derivatives	$	(17,600)	$	14,987	$	44,395	$	75,286
Income tax expense (benefit)	Income tax expense (benefit)	$	5,869	$	(515)	Income tax expense (benefit)	$	16,317	$	(3,937)	$	25,130	$	13,539

Lease Operating Expenses

Lease operating expenses ("LOE") are the costs incurred in the operation and maintenance of producing properties. Expenses for compression, direct labor, saltwater disposal and materials and supplies comprise the most significant portion of our lease operating expenses. Certain operating cost components, such as direct labor and materials and supplies, generally remain relatively fixed across broad production volume ranges, but can fluctuate depending on activities performed during a specific period. For instance, repairs to our pumping equipment or surface facilities or subsurface maintenance result in increased production expenses in periods during which they are performed. Certain operating cost components, such as compression and ~~salt water~~saltwater disposal associated with completion water, are variable and increase or decrease as hydrocarbon production levels and the volume of completion water disposal increases or decreases.

The Company’s LOE increased by ~~$2.9~~$3.1 million for the three months ended ~~December 31, 2021~~September 30, 2022 compared to the same period in ~~2020.~~2021. For the three months ended ~~December 31, 2021, $1.4 million of the increase was attributable to an increase in variable LOE costs as production volumes increased and $1.1~~September 30, 2022, $1.7 million of the increase was due to higher workover ~~expense.~~expense as additional workovers were performed in the 2022 period and $2.3 million of the increase was attributable to costs

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associated with new wells and additional production volumes, partially offset by a $0.9 million decrease attributable to efficiencies on existing wells.

The Company’s LOE increased by $6.3 million for the nine months ended September 30, 2022 compared to the same period in 2021. For the nine months ended September 30, 2022, $4.3 million of the increase was attributable to costs associated with new wells and additional production volume and $4.0 million of the increase was due to higher workover expense as additional workovers were performed in the 2022 period, partially offset by a $2.0 million decrease attributable to efficiencies on existing wells.

Production and Ad Valorem Tax Expense

Production taxes are paid on produced oil, natural gas and NGLs based on a percentage of revenues at fixed rates established by federal, state or local taxing authorities. In general, the production taxes we pay correlate to changes in our oil, natural gas and NGL revenues. We are also subject to ad valorem taxes in the counties where our production is located. Ad valorem taxes are generally based on the valuation of our oil and natural gas properties, which also trend with oil and natural gas prices and vary across the different counties in which we operate.

Production and ad valorem taxes increased by ~~$1.7~~$3.3 million and $7.5 million for the three and nine months ended ~~December 31, 2021~~September 30, 2022, respectively, compared to the same ~~period~~periods in ~~2020,~~2021. Production taxes increased primarily due to increases in our ~~production sold resulting from additional wells brought online, workovers performed on existing wells that increased production~~oil and ~~significantly higher commodity prices. Also contributing to the increase is higher ad~~natural gas sales, net, as discussed above. Ad valorem taxes increased for the three and nine months ended September 30, 2022 based on ~~the increase in~~higher estimated property values ~~during~~for the ~~three months ended December 31, 2021.~~current taxable period.

Exploration Expense

Exploration expense ~~which~~ consists of expiration of unproved leasehold and geological and geophysical costs ~~that~~which include seismic survey costs, increased by $0.2 million, or 44%, for the three months ended December 31, 2021, as compared to the same period in 2020. For the three months ended December 31, 2021, the Company incurred higher exploration expense compared to the same period in 2020 primarily driven by higher acreage expirations in New Mexico.

costs. The following table presents exploration expense by area for the three and nine months ended ~~December 31, 2021~~September 30, 2022 and ~~2020:~~2021:

Three Months Ended December 31,
2021 2020
(In thousands, except acreage data)
Exploration expense(1)
$ 588 $ 424
Geological and geophysical costs 23 —
Total exploration expense $ 611 $ 424
Expired net acres - Texas 91 99
Expired net acres - New Mexico 1,146 905
Net acres renewed after expiration(2)
89 100


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
	(In thousands, except acreage data)

Exploration expense(1)	$	—	$	732	$	1,465	$	8,923
Geological and geophysical costs	20		152		75		219
Total exploration expense	$	20	$	884	$	1,540	$	9,142

Expired net acres - Texas	—		25		626		1,552
Expired net acres - New Mexico	—		2,171		518		15,334
Net acres renewed after expiration(2)	21		19		38		417

_____________________

(1)~~As of December 31, 2021,~~For the nine months ended September 30, 2022, exploration expense includes ~~$187 thousand~~$1.3 million and ~~$401 thousand~~$0.2 million related to expiration of unproved leasehold costs in Texas and New Mexico, respectively. ~~As of December 31, 2020,~~For the nine months ended September 30, 2021, exploration expense ~~includes $225 thousand~~included $3.3 million and ~~$199 thousand~~$5.6 million related to expiration of unproved leasehold costs in Texas and New Mexico, respectively.

(2)The Company did not renew any net acreage after expiration in New Mexico during the three and nine months ended ~~December 31, 2021~~September 30, 2022 and ~~2020.~~2021.

Depletion, Depreciation, Amortization and Accretion Expense

~~Depreciation, depletion,~~Depletion, depreciation and amortization is the systematic expensing of the capitalized costs incurred to acquire, explore and develop oil, natural gas and NGLs. All costs incurred in the acquisition, exploration and development of properties (excluding costs of surrendered and abandoned leaseholds, delay lease rentals, dry holes and overhead related to exploration activities) are capitalized. Capitalized costs are depleted using the units of production method.

Accretion expense relates to ARO. We record the fair value of the ~~legal~~ liability for ARO in the period in which the liability is incurred (at the time the wells are drilled or acquired) ~~at the asset’s inception,~~ with the ~~offsetting increase~~offset to property cost. The liability accretes each period until it is settled or the well is sold, at which time the liability is removed.

Depletion, depreciation, amortization and accretion expense increased by ~~$0.9~~$1.7 million and $2.1 million for the three and nine months ended ~~December 31, 2021,~~September 30, 2022, respectively, compared to the same ~~period~~periods for ~~2020.~~2021. The increase for the three and

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nine months ended ~~December 31, 2021~~September 30, 2022 was primarily due to higher production, partially offset by a lower depletion rate. The depletion rate is a function of capitalized cost and related underlying reserves. The lower depletion rate was primarily driven by an increase in reserves as a result of the Company's drilling activity and improved commodity prices.

General and Administrative Expense ("G&A")

G&A expenses include corporate overhead such as payroll and benefits for our corporate staff, equity-based compensation expense, office rent for our headquarters, audit and other fees for professional services and legal compliance. G&A expenses are reported net of overhead ~~recoveries from other owners in properties operated by us.~~recoveries.

Total G&A expense increased by ~~$1.7~~$0.3 million and decreased by $2.1 million for the three and nine months ended ~~December 31, 2021,~~September 30, 2022, respectively, compared to the same ~~period~~periods for ~~2020.~~2021. Administrative costs, which ~~includes~~include payroll, benefits and non-payroll costs, increased by ~~$1.2~~$0.4 million and $2.1 million for the three and nine months ended ~~December 31, 2021,~~September 30, 2022, respectively, compared to the same ~~period~~periods for ~~2020.~~2021. The increase in administrative costs was primarily attributable to increased professional services, insurance, technology and investor relations costs. ~~Equity~~Equity-based compensation expense ~~increased~~decreased by ~~$0.5~~$4.1 million for the ~~three~~nine months ended ~~December 31, 2021,~~September 30, 2022 compared to the same period in ~~2020.~~2021. The ~~increase is primarily attributable~~higher equity-based compensation during the nine months ended September 30, 2021 relates to ~~restricted shares awarded to employees in October 2021 and~~ restricted shares awarded to certain employees following completion of the ~~Merger.~~Merger that immediately vested.

Transaction Costs

Transaction costs represent costs incurred on successful or unsuccessful business combinations or unsuccessful property acquisitions. The transaction costs of $2.6 million for the nine months ended September 30, 2022 primarily relate to a potential business combination and related financing that the Company pursued but ultimately chose not to consummate due to changing market conditions. During the nine months ended September 30, 2021, the transaction costs of $2.7 million primarily relate to costs incurred on the Merger with Tengasco in February 2021.

Interest Expense

Interest expense ~~was $0.9~~decreased by $0.4 million and ~~$1.2~~$1.3 million ~~for~~during the three and nine months ended ~~December 31, 2021 and 2020, respectively.~~September 30, 2022, respectively, when compared to the same periods for 2021. Interest expense decreased due to a lower outstanding average balance on the Company's revolving credit facility as well as the capitalized interest related to the Company's EOR project, partially offset by an increase in interest rates, during the three and nine months ended ~~December 31, 2021~~September 30, 2022 when compared to the same ~~period~~periods for ~~2020.~~2021.

Gain/Loss on Derivatives

The Company recognizes settlements and changes in the fair value of its derivative contracts as a single component within other income ~~(expenses)~~(expense) on its condensed consolidated ~~statement~~statements of operations. We have oil and natural gas derivative contracts, including fixed price swaps, basis swaps and collars, that settle against various indices. The following table presents the components of the Company's gain (loss) on derivatives for the three and nine months ended ~~December 31, 2021~~September 30, 2022 and ~~2020:~~2021:

Three Months Ended December 31,
2021 2020
(In thousands)
Settlements on derivatives $ (16,014) $ 5,173
Non-cash gain (loss) on derivatives 10,821 (19,082)
Loss on derivatives $ (5,193) $ (13,909)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
	(In thousands)
Settlements on derivative contracts	$	(17,040)	$	(11,171)	$	(61,198)	$	(21,477)
Non-cash gain (loss) on derivatives	34,640		(3,816)		16,803		(53,809)
Gain (loss) on derivatives	$	17,600	$	(14,987)	$	(44,395)	$	(75,286)

Our earnings are affected by the changes in value of our ~~derivatives~~derivative portfolio between periods and the related cash received or paid upon settlement of our derivatives. To the extent the future commodity price outlook declines between periods, we will have mark-to-market ~~gains;~~gains, while ~~to the extent~~ future commodity price ~~outlook~~ increases between measurement periods ~~we will have~~result in mark-to-market losses.

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The gain on derivatives for the three months ended September 30, 2022 was $17.6 million, which increased from a loss position by $32.6 million compared to the same period in 2021. The loss on derivatives for the nine months ended September 30, 2021 was $44.4 million, which decreased by $30.9 million compared to the same period in 2021. The change in the non-cash gain (loss) on derivatives was impacted by the decrease in total contract volumes for our open derivative contracts and the change in the estimated forward-looking oil and natural gas prices used at the end of the period to calculate the fair value of the open derivative contracts for the three and nine months ended September 30, 2022 compared to the same periods in 2021. The increase in the loss on settlements on derivatives was due to the increase in oil and natural gas prices for the three and nine months ended September 30, 2022 compared to the same periods in 2021. For example, the average WTI price was $93.06 per Bbl for the three months ended September 30, 2022 compared to $70.58 per Bbl for the same period in 2021.

Income Tax Expense

The Company became a taxable entity as a result of its Merger with Tengasco on February 26, 2021. See further discussion in Note 4 - Acquisitions ~~and Divestitures~~ to the Company's condensed consolidated financial statements included herein. While REP LLC was organized as a limited liability company, taxable income passed through to its unit holders. Accordingly, a provision for federal and state corporate income taxes has been made for the operations of ~~REP LLC only from~~the Company beginning February 27, 2021 ~~through December 31, 2021~~ in the accompanying condensed consolidated financial statements. Deferred income taxes are provided to reflect the future tax consequences or benefits of differences between the tax basis of assets and liabilities and their reported amounts in the financial statements using enacted tax rates. Upon consummation of the Merger in February 2021, the Company established a $13.6 million provision for deferred income taxes with the conversion to a C-corporation. The majority of this deferred tax liability was established by a change in tax status which primarily was attributable to the oil and natural gas properties. See Note 11 - Income Taxes to the Company's condensed consolidated financial statements included herein for further discussion of income taxes.

Three Months Ended December 31,
2021 2020
(In thousands)
Current expense $ 113 $ —
Deferred expense (benefit) 5,756 (515)
Total expense (benefit) $ 5,869 $ (515)
Effective income tax rate 21.5 % 2.0 %


	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
	(In thousands)
Current income tax expense	$	433		$	286		$	1,928		$	54
Deferred income tax expense (benefit)	15,884			(4,223)			23,202			13,485
Total income tax expense (benefit)	$	16,317		$	(3,937)		$	25,130		$	13,539

Effective income tax rate	21.4		%	(36.2)		%	21.6		%	(53.3)		%

Liquidity and Capital Resources

The business of exploring for, developing and producing oil and natural gas is capital intensive. Because oil, natural gas and NGL reserves are a depleting resource, like all upstream operators, we must make capital investments to grow and even sustain production. The Company’s principal liquidity requirements are to finance its operations, fund capital expenditures and acquisitions, make cash distributions and satisfy any indebtedness obligations. Cash flows are subject to a number of variables, including the level of oil and natural gas production and prices, and the significant capital expenditures required to more fully develop the Company’s oil and natural gas properties. Historically, our primary sources of capital funding and liquidity have been our cash on hand, cash flow from operations and borrowings under our revolving credit facility. At times and as needed, we may also issue debt or equity securities, including through transactions under our shelf registration statement filed with the SEC. We estimate the combination of the sources of capital discussed above will continue to be adequate to meet our short and long-term liquidity needs.

Cash on hand and operating cash flow can be subject to fluctuations due to trends and uncertainties that are beyond our control. Likewise, our ability to issue equity and ~~our ability to~~ obtain credit facilities on favorable terms may be impacted by a variety of market factors as well as fluctuations in our results of operations. For instance, during the fiscal second quarter of 2022, the Company is expecting an impact to its natural gas and NGL sales due to its primary midstream gas gathering and processing partner curtailing volume capacity as work continues on their overall capacity expansion project. While the Company expects volumes to be impacted only for the months of February through April, the Company cannot estimate the full impact this will have on its results of operations. For more information on conditions impacting our liquidity and capital resources. For further discussion of risks related to our liquidity and capital resources, see "Item 1A. Risk Factors."

Working Capital

Working capital is the difference in our current assets and our current liabilities. Working capital is an indication of liquidity and potential need for short-term funding. The change in our working capital requirements ~~are~~is driven generally by

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changes in accounts receivable, accounts payable, commodity prices, credit extended to, and the timing of collections from customers, the level and timing of spending for expansion activity, and the timing of debt maturities. As of ~~December 31, 2021,~~September 30, 2022, we had a working capital deficit of ~~$32.8~~$32.7 million compared to ~~working capital~~a deficit of ~~$46.9~~$32.8 million as of ~~September 30,~~December 31, 2021. The working capital deficit at ~~December 31, 2021~~September 30, 2022 reflects ~~$31.0~~$22.5 million in current derivative liabilities compared to ~~$42.1~~$31.0 million in current derivative liabilities at December 31, 2021. As of September 30, ~~2021.~~2022, we had an additional $9.3 million in accrued capital expenditures, $2.4 million in accrued ad valorem taxes due to the projected increase in property taxes in 2022, and $3.1 million in accrued G&A and LOE. We utilize our revolving credit facility and cash on hand to manage the timing of cash flows and fund short-term working capital deficits. Our current derivative assets and liabilities represent the mark-to-market value as of September 30, 2022 of future commodity production which will settle on a monthly basis through the end of their contractual terms. This aligns with the receipt of oil and natural gas revenues on a monthly basis.

Cash Flows

The following table summarizes the Company’s cash flows from continuing operations:


		Three Months Ended December 31,				Nine Months Ended September 30,
		2021		2020				2022		2021
		(In thousands)						(In thousands)
Statement of Cash Flows Data from Continuing Operations:	Statement of Cash Flows Data from Continuing Operations:						Statement of Cash Flows Data from Continuing Operations:
Net cash provided by operating activities	Net cash provided by operating activities	$	21,727	$	17,193		Net cash provided by operating activities	$	130,352	$	70,186
Net cash used in investing activities	Net cash used in investing activities	$	(29,128)	$	(9,707)		Net cash used in investing activities	$	(83,182)	$	(51,229)
Net cash used in financing activities	Net cash used in financing activities	$	(1,349)	$	(7,269)		Net cash used in financing activities	$	(37,579)	$	(7,666)

Operating Activities

The Company’s net cash provided by operating activities increased by ~~$4.5~~$60.2 million or ~~26%~~86% to ~~$21.7~~$130.4 million for the ~~three~~nine months ended ~~December 31, 2021~~September 30, 2022 from ~~$17.2~~$70.2 million for the same period in ~~2020.~~2021. The increase was primarily driven by an increase in revenues of ~~$34.2~~$115.7 million, partially offset by ~~a $21.2~~an increase of $39.7 million ~~decrease in net cash received~~on settlements for ~~settlements of~~ commodity derivative contracts and an increase in operating expenses of ~~$6.0~~$15.6 million, which excludes non-cash expenses such as ~~equity based~~equity-based compensation, expiration of unproved leasehold costs, and depreciation, depletion, accretion and amortization expense.

Investing Activities

The Company's cash flows used in investing activities increased by ~~$19.4~~$32.0 million or ~~200%~~62% to ~~$29.1~~$83.2 million for the ~~three~~nine months ended ~~December 31, 2021~~September 30, 2022 from ~~$9.7~~$51.2 million for the same period in ~~2020.~~2021. The increase was primarily due to higher capital spending of ~~$19.6~~$31.9 million ~~primarily~~ related to the Company's increased drilling and completion activity and EOR project during the nine months ended September 30, 2022 compared to the same period in 2021.

Financing Activities

Net cash flow used in financing activities ~~decreased~~increased by ~~$5.9~~$29.9 million or ~~81%~~390% to ~~$1.3~~$37.6 million for the ~~three~~nine months ended ~~December 31, 2021~~September 30, 2022 from ~~$7.3~~$7.7 million for the same period in ~~2020.~~2021. During the ~~three~~nine months ended ~~December 31, 2021, the Company utilized proceeds from its revolving credit facility to fund capital expenditures. For the same period in 2020,~~September 30, 2022, the Company had a net paydown on its revolving credit facility of ~~$3.5~~$17.0 million, ~~based on decreased drilling and completion activity during this period.~~which compares to a net paydown of $37.5 million for the same period in 2021. In addition, the Company distributed an additional ~~$2.3~~$3.7 million of dividends on common stock during the ~~three~~nine months ended ~~December 31, 2021~~September 30, 2022 compared to the same period in ~~2020.~~

2021. The Company issued $46.7 million of equity, net of offering costs, during the nine months ended September 30, 2021. These proceeds were primarily used to paydown amounts outstanding on the revolving credit facility. There was no equity issued in 2022.

Revolving Credit Facility

The Company's borrowing base was ~~$175~~$200 million with outstanding borrowings of ~~$65~~$48 million on ~~December 31, 2021,~~September 30, 2022, representing available borrowing capacity of ~~$110~~$152 million. See further discussion in Note 9 —- Revolving Credit Facility to the Company's condensed consolidated financial statements included herein.

On April 29, 2022, the Company amended its Credit Agreement to, among other things, increase the borrowing base from $175 million to $200 million, extend the maturing date to April 2026, replace LIBOR with the SOFR and change the requirements for hedging to be based on utilization of the borrowing base and the Company's leverage ratio.

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On October 25, 2022, the Company amended its Credit Agreement to, among other things, increase the borrowing base from $200 million to $225 million and change the semi-annual redeterminations to April 1 and October 1 to align with the Company's new fiscal year end of December 31st..

Distributions

For the three months ended ~~December 31, 2021,~~September 30, 2022, the Company authorized and declared a quarterly dividend totaling approximately ~~$6.1~~$6.2 million, with ~~$6.0~~$6.1 million paid in cash and $0.1 million payable to restricted shareholders upon vesting.

Contractual Obligations

~~In July 2021, as part of a planned expansion of the primary gas processing plant owned by the Company's~~The Company has commitments with its primary midstream ~~partner, Stakeholder, the Company committed to annually drill, complete~~counterparty and connect a minimum number of wells or deliver an annual target volume to Stakeholder's gathering system. While the minimum number of wells is below our planned development activity, there are financial penalties if the minimum activity levels are not met. The annual well or volume target is for each of five years beginning January 2022. The additional capacity from the gas processing plant expansion is expected to lead to increased natural gas sales and decreased gas flaring for the Company.

~~In August 2021, the Company~~has entered into a purchase ~~agreement for supplies for its EOR project. Under~~commitments throughout the ~~agreement,~~nine months ended September 30, 2022. See Note 14 - Commitments and Contingencies in our notes to the ~~Company has remaining commitments to purchasing supplies totaling approximately $0.8 million and $2.6 million by January 2022 and April 2022, respectively.~~condensed consolidated financial statements.

~~On October 7, 2021, the Company executed two agreements related to its EOR project. The first agreement is a CO~~2 ~~purchase agreement with Kinder Morgan CO~~2 ~~Company, LLC and the second agreement is a connection agreement that also established a delivery point for the purchased CO~~2 ~~with the Cortez Pipeline Company.~~

Critical Accounting Estimates

The discussion and analysis of the Company’s financial condition and results of operations are based upon the Company’s unaudited condensed consolidated financial statements and accompanying notes included herein, which have been prepared in accordance with U.S. GAAP. The preparation of financial statements requires the Company to make estimates and assumptions that affect the amounts reported in the unaudited condensed consolidated financial statements and accompanying notes. These estimates and assumptions may also affect disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

Changes in facts and assumptions or the discovery of new information may result in revised estimates. Actual results could differ from these estimates and assumptions used in preparation of the Company’s unaudited condensed consolidated financial statements and it is at least reasonably possible these estimates could be revised in the near term and these revisions could be material.

Certain accounting policies involve judgments and uncertainties to such an extent that there is reasonable likelihood that materially different amounts could have been reported under different conditions, or if different assumptions had been used. The Company evaluates its estimates and assumptions on a regular basis. The Company bases its estimates on historical experience and various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Significant ~~areas requiring the use~~items subject to such estimates and assumptions include, but are not limited to, estimates of ~~assumptions, judgments and estimates include (i)~~proved oil and natural gas ~~reserves; (ii)~~reserves and related present value estimates of future net cash ~~flow estimates used in impairment testing~~flows therefrom, the carrying value of oil and natural gas ~~properties; (iii) depreciation, depletion, amortization~~properties, accounts receivable, accrued capital expenditures and ~~accretion, or DD&A; (iv) ARO; (v) assigning~~operating expenses, ARO, the fair value determination of

acquired assets and ~~allocating purchase price in connection with business combinations; (vi) valuation of commodity derivative instruments; (vii) income~~assumed liabilities, certain tax ~~provisions; (viii) carrying~~accruals and the fair value of ~~goodwill; and (ix) accrued amounts.~~derivatives. Actual results may differ from these estimates and assumptions used in preparation of the Company’s unaudited condensed consolidated financial statements included herein.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not applicable.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

Our management establishes and maintains disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Such information is accumulated and communicated to our management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), as appropriate to allow timely decisions regarding required disclosure. We have evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this ~~report,~~Quarterly Report, with the participation of our CEO and CFO, as well as other key members of our management. Based on this evaluation, our CEO and CFO concluded that our disclosure controls and procedures were effective as of ~~December 31, 2021.~~September 30, 2022.

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Changes in internal control over financial reporting

There have been no changes in our internal control over financial reporting that occurred for the quarter ending ~~December 31, 2021~~September 30, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

3339

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PART II. OTHER INFORMATION.

Item 1. Legal Proceedings

From time to time, we may be involved in various legal proceedings and claims in the ordinary course of business. As of ~~December 31, 2021,~~September 30, 2022, and through the filing date of this Quarterly Report, we do not believe the ultimate resolution of any such actions or potential actions of which we are currently aware will have a material effect on our consolidated financial position or results of operations.

Refer to Part I, Item 3—3 - Legal Proceedings of Riley Permian's Annual Report on Form 10-K for the fiscal year ended September 30, 2021, and Note ~~13—~~14 - Commitments and Contingencies in the ~~Notes~~notes to the unaudited condensed consolidated financial statements set forth in Part I, Item 1 of this Quarterly Report on Form 10-Q (which is hereby incorporated by reference herein), for a description of material legal proceedings.

Item 1A. Risk Factors

We are subject to certain risks and hazards due to the nature of the business activities we ~~conduct. Other than any risks described in this Quarterly Report, there have been no material changes to the risk factors described in our Annual Report on Form 10-K for the year ended September 30, 2021. W~~econduct. We may experience additional risks and uncertainties not currently known to us. Furthermore, as a result of developments occurring in the future, conditions that we currently deem to be immaterial may also materially and adversely affect us. Any such risk may materially and adversely affect our business, financial condition, cash flows and results of operations. Other than any risks described in this Quarterly Report, there have been no material changes to the risk factors described in our Annual Report on Form 10-K for the year ended September 30, 2021.

Risks Related to our Business

A Terrorist attack or armed conflict could harm our business.

Terrorist activities, anti-terrorist efforts and other armed conflicts involving the United States or other countries may adversely affect the United States and global economies and could prevent us from meeting our financial and other obligations. If any of these events occur, the resulting political instability and societal disruption could reduce overall demand for oil and natural gas causing a reduction in our revenues. Oil and natural gas related facilities could be direct targets of terrorist attacks, and our operations could be adversely impacted if infrastructure integral to our customers’ operations is destroyed or damaged. Costs for insurance and other security may increase as a result of these threats, and some insurance coverage may become more difficult to obtain, if available at all

Recent regulatory restrictions on use of produced water and a moratorium on new produced water disposal wells in the Permian Basin to stem rising seismic activity and earthquakes could increase our operating costs and adversely impact our business, results of operations and financial condition.

In September 2021, the RRC curtailed the amount of produced water companies were permitted to inject into some wells near Midland and Odessa in the Permian Basin, and has since indefinitely suspended some permits there and expanded the restrictions to other areas. These actions were taken in an effort to control induced seismic activity and recent increases in earthquakes in the Permian Basin, which have been linked by the U.S. and local seismologists to wastewater disposal in oil fields. These restrictions on the disposal of produced water and a moratorium on new produced water disposal wells could result in increased operating costs, requiring us or our service providers to truck produced water, recycle it or dispose of it by other means, all of which could be costly. We or our service providers may also need to limit disposal well volumes, disposal rates and pressures or locations, or require us or our service providers to shut down or curtail the injection of produced water into disposal wells. These factors may make drilling activity in the affected parts of the Permian Basin less economical and adversely impact our business, results of operations and financial condition.

Designation as “critical infrastructure” could subject us to additional regulation, including potential weatherization requirements.

In response to Winter Storm Uri, the February 2021 winter weather event that caused widespread power failure to Texas’ power grid for several days, the Texas legislature drafted new legislation designed to prepare for, prevent and respond to weather emergencies and power outages. On November 30, 2021, the RRC adopted rules to designate certain natural gas facilities as critical infrastructure. While the RRC did not adopt rules related to other sections of the legislation requiring such designees to implement weatherization measures, it is expected that the RRC will initiate a rulemaking at a later date for such purposes.

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Under the new rules, “critical gas suppliers” include, but are not limited to, gas wells, oil leases that produce gas, natural gas pipeline facilities, underground natural gas storage facilities and saltwater disposal facilities. “Critical customers,” which are a subset of critical gas suppliers, are facilities that require electricity to operate. The rules allow for certain facilities to apply for an exception to critical designation, but exclude certain types of highly critical facilities from eligibility for such exception.

If we are designated as a “critical gas supplier” or “critical customer,” we would become subject to additional regulation and compliance costs, including potential future operating and capital costs required to weatherize our assets.

Enhanced scrutiny on ESG matters could have an adverse effect on the Company’s operations.

Enhanced scrutiny on ESG matters related to, among other things, concerns raised by advocacy groups about climate change, hydraulic fracturing, natural gas flaring, GHG emissions, waste disposal, oil spills, and explosions of natural gas transmission pipelines may lead to increased regulatory scrutiny, which may, in turn, lead to new state and federal safety and environmental laws, regulations, guidelines, and enforcement interpretations. These actions may cause operational delays or restrictions, increased operating costs, additional regulatory burdens, increased risk of litigation, and adverse impacts on the Company’s access to capital. Moreover, governmental authorities exercise considerable discretion in the timing and scope of permit issuance, and the public may engage in the permitting process, including through intervention in the courts. Negative public perception could cause the permits the Company requires to conduct its operations to be withheld, delayed, or burdened by requirements that restrict the Company’s ability to profitably conduct its business.

We may be unable to quickly adapt to changes in market/investor priorities.

Historically, one of the key drivers in the unconventional resource industry has been growth in production and reserves. With historical volatility in oil and natural gas prices and the likelihood that rising interest rates will increase the cost of borrowing, capital efficiency and free cash flow from earnings have become the key drivers for energy companies, particularly shale producers. Such shifts in focus sometimes require changes in planning and resource management, which may not occur instantaneously. Any delay in responding to such changes in market sentiment or perception may result in the investment community having a negative sentiment regarding our business plan, potential profitability and our ability to operate in a manner deemed "efficient," which may have a negative impact on the price of our common stock.

The adoption of climate change legislation or regulations restricting emissions of "greenhouse gases" could result in increased operating costs and reduced demand for the oil, NGL and natural gas we produce, while potential physical effects of climate change could disrupt our operations and cause us to incur significant costs in preparing for or responding to those effects.

Restrictions on GHG emissions that may be imposed could adversely affect the oil and gas industry. The adoption of legislation or regulatory programs to reduce GHG emissions could require us to incur increased operating costs, such as costs to purchase and operate emissions control systems, acquire emissions allowances or comply with new regulatory requirements. Any GHG emissions legislation or regulatory programs applicable to power plants or refineries could also increase the cost of consuming, and thereby reduce demand for, the oil, NGL and natural gas we produce. Consequently, legislation and regulatory programs to reduce GHG emissions could have an adverse effect on our business, financial condition and results of operations.

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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

~~Not applicable.~~Unregistered Sales of Equity Securities

None.

Issuer Repurchases of Equity Securities

Our common stock repurchase activity for the nine months ended September 30, 2022 was as follows:


Quarter Ending	Total Number of Shares Purchased(1)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plan or Programs	Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plan or Programs
Q1	12,640	$	26.81	—	—
Q2	8,576	$	25.08	—	—
Q3	341	$	25.02	—	—

_____________________

(1)These amounts reflect the shares received by us from employees for the payment of personal income tax withholding on vesting transactions. The acquisition of the surrendered shares was not part of a publicly announced program to repurchase shares of our Common Stock. Any shares repurchased by the Company for personal tax withholdings are immediately retired upon repurchase.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Not applicable.

Item 6. Exhibits


Exhibit Number			Description

2.1			Agreement and Plan of Merger, by and among Tengasco, Inc., Antman Sub, LLC, and Riley Exploration - Permian, LLC, dated as of October 21, 2020 (incorporated by reference from Exhibit 2.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 22, 2020).
2.2			Amendment No. 1 to Agreement and Plan of Merger, by and among Tengasco, Inc., Antman Sub, LLC, and Riley Exploration - Permian, LLC, dated as of January 20, 2021 (incorporated by reference from Exhibit 2.1 to the Registrant’s Current Report on Form 8-K, as filed with the Securities and Exchange Commission on January 22, 2021).
3.1			First Amended and Restated Certificate of Incorporation of Riley Exploration Permian, Inc. (incorporated by reference to Exhibit 4.1 to the Registrant’s Registration Statement on Form S-8 filed with the Securities and Exchange Commission on March 1, 2021, Registration No. 333-253750).
3.2			Second Amended and Restated Bylaws of Riley Exploration Permian, Inc. (incorporated by reference to Exhibit 4.2 to the Registrant’s Registration Statement on Form S-8 filed with the Securities and Exchange Commission on March 1, 2021, Registration No. 333-253750).

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3.3			Third Amended and Restated Bylaws of Riley Exploration Permian, Inc. (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on September 23, 2022).
10.1			Credit Agreement dated as of September 28, 2017, by and among Riley Exploration – Permian, LLC, as borrower, Truist Bank, as administrative agent, and the lenders party thereto (incorporated by reference from Exhibit 10.1 to the Registrant’s Registration Statement on Form S-4/A, as filed with the Securities and Exchange Commission on December 31, 2020, Registration No. 333-250019).
10.2			First Amendment to Credit Agreement dated as of February 27, 2018, by and among Riley Exploration – Permian, LLC, as borrower, Truist Bank, as administrative agent, and the lenders party thereto (incorporated by reference from Exhibit 10.2 to the Registrant’s Registration Statement on Form S-4/A, as filed with the Securities and Exchange Commission on December 31, 2020, Registration No. 333-250019).
10.3			Second Amendment to Credit Agreement dated as of November 9, 2018, by and among Riley Exploration – Permian, LLC, as borrower, Truist Bank, as administrative agent, and the lenders party thereto (incorporated by reference from Exhibit 10.3 to the Registrant’s Registration Statement on Form S-4/A, as filed with the Securities and Exchange Commission on December 31, 2020, Registration No. 333-250019).
10.4			Third Amendment to Credit Agreement dated as of April 3, 2019, by and among Riley Exploration – Permian, LLC, as borrower, Truist Bank, as administrative agent, and the lenders party thereto (incorporated by reference from Exhibit 10.4 to the Registrant’s Registration Statement on Form S-4/A, as filed with the Securities and Exchange Commission on December 31, 2020, Registration No. 333-250019).
10.5			Fourth Amendment to Credit Agreement dated as of October 15, 2019, by and among Riley Exploration – Permian, LLC, as borrower, Truist Bank, as administrative agent, and the lenders party thereto (incorporated by reference from Exhibit 10.5 to the Registrant’s Registration Statement on Form S-4/A, as filed with the Securities and Exchange Commission on December 31, 2020, Registration No. 333-250019).
10.6			Fifth Amendment to Credit Agreement dated as of May 7, 2020, by and among Riley Exploration – Permian, LLC, as borrower, Truist Bank, as administrative agent, and the lenders party thereto (incorporated by reference from Exhibit 10.6 to the Registrant’s Registration Statement on Form S-4/A, as filed with the Securities and Exchange Commission on December 31, 2020, Registration No. 333-250019).
10.7			Sixth Amendment to Credit Agreement dated as of August 31, 2020, by and among Riley Exploration – Permian, LLC, as borrower, Truist Bank, as administrative agent, and the lenders party thereto (incorporated by reference from Exhibit 10.7 to the Registrant’s Registration Statement on Form S-4/A, as filed with the Securities and Exchange Commission on December 31, 2020, Registration No. 333-250019).
10.8			Seventh Amendment and Consent to Credit Agreement dated as of October 21, 2020, by and among Riley Exploration – Permian, LLC, as borrower, Truist Bank, as administrative agent, and the lenders party thereto (incorporated by reference from Exhibit 10.8 to the Registrant’s Registration Statement on Form S-4/A, as filed with the Securities and Exchange Commission on December 31, 2020, Registration No. 333-250019).
10.9			Eighth Amendment to Credit Agreement dated as of March 5, 2021, by and among Riley Exploration Permian, Inc., Riley Exploration - Permian, LLC, as borrower, Truist Bank, as administrative agent, and the lenders party thereto (incorporated by reference from Exhibit 10.9 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2021, as filed with the Securities and Exchange Commission on May 17, 2021).
10.10			Ninth Amendment to Credit Agreement dated as of May 5, 2021, by and among Riley Exploration Permian, Inc., Riley Exploration - Permian, LLC, as borrower, Truist Bank, as administrative agent, and the lenders party thereto (incorporated by reference from Exhibit 10.10 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2021, as filed with the Securities and Exchange Commission on May 17, 2021).
10.11			Tenth Amendment to the Credit Agreement dated as of October 12, 2021, by and among Riley Exploration Permian, Inc., Riley Exploration - Permian, LLC, as borrower, Truist Bank, as administrative agent, and the lenders party thereto (incorporated by reference from Exhibit 10.1 to the Registrant’s Current Report on Form 8-K, as filed with the Securities and Exchange Commission on October 14, 2021).
10.12			Form of Indemnity Agreement (incorporated by reference from Exhibit 10.14 to the Registrant’s Registration Statement on Form S-4/A, as filed with the Securities and Exchange Commission on January 21, 2021, Registration No. 333-250019).

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10.13			Form of Independent Director Agreement (incorporated by reference from Exhibit 10.13 to the Registrant’s Registration Statement on Form S-4/A, as filed with the Securities and Exchange Commission on January 21, 2021, Registration No. 333-250019).


10.14†			Riley Exploration Permian, Inc. 2021 Long Term Incentive Plan (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the Commission on February 25, 2021).
10.15†			Form of Common Stock Award Agreement (incorporated by reference from Exhibit 10.10 to the Registrant’s Current Report on Form 8-K, as filed with the Securities and Exchange Commission on March 15, 2021).
10.16†			Form of Restricted Stock Agreement (Time Vesting) (incorporated by reference to Exhibit 4.4 to the Registrant’s Registration Statement on Form S-8, as filed with the Securities and Exchange Commission on March 1, 2021, Registration No. 333- 253750).
10.17†			Form of Substitute Restricted Stock Agreement (Time Vesting) (incorporated by reference from Exhibit 4.5 to the Registrant’s Registration Statement on Form S-8 filed with the Commission on March 1, 2021, Registration No. 333-253750).
10.18†			Form of Restricted Stock Agreement (Non-Employee Director) (incorporated by reference from Exhibit 4.6 to the Registrant’s Registration Statement on Form S-8 filed with the Commission on March 1, 2021, Registration No. 333-253750).
10.19†			Employment Agreement dated effective as of March 15, 2021 by and between Riley Exploration Permian, Inc. and Corey Riley (incorporated by reference from Exhibit 10.1 to the Registrant’s Current Report on Form 8-K, as filed with the Securities and Exchange Commission on March 15, 2021).
10.20†			Employment Agreement dated effective as of March 15, 2021 by and between Riley Exploration Permian, Inc. and Philip Riley (incorporated by reference from Exhibit 10.2 to the Registrant’s Current Report on Form 8-K, as filed with the Securities and Exchange Commission on March 15, 2021).
10.21†			Employment Agreement dated April 1, 2019 by and between Riley Exploration – Permian, LLC and Bobby D. Riley and assigned by Riley Exploration – Permian, LLC to Riley Permian Operating Company, LLC on June 8, 2019 (incorporated by reference from Exhibit 10.9 to the Registrant’s Registration Statement on Form S-4/A, as filed with the Securities and Exchange Commission on December 31, 2020, Registration No. 333-250019).
10.22†			Amendment No. 1 to Employment Agreement dated October 1, 2020 by and between Riley Permian Operating Company, LLC and Bobby D. Riley (incorporated by reference from Exhibit 10.10 to the Registrant’s Registration Statement on Form S-4/A, as filed with the Securities and Exchange Commission on December 31, 2020, Registration No. 333-250019).
10.23†			Amendment No. 2 to Employment Agreement dated March 15, 2021 by and between Riley Permian Operating Company, LLC and Bobby D. Riley (incorporated by reference from Exhibit 10.7 to the Registrant’s Current Report on Form 8-K, as filed with the Securities and Exchange Commission on March 15, 2021).
10.24†			Employment Agreement dated April 1, 2019 by and between Riley Exploration – Permian, LLC and Kevin Riley and assigned by Riley Exploration – Permian, LLC to Riley Permian Operating Company, LLC on June 8, 2019 (incorporated by reference from Exhibit 10.11 to the Registrant’s Registration Statement on Form S-4/A, as filed with the Securities and Exchange Commission on December 31, 2020, Registration No. 333-250019)
10.25†			Amendment No. 1 to Employment Agreement dated March 15, 2021 by and between Riley Permian Operating Company, LLC and Kevin Riley (incorporated by reference from Exhibit 10.8 to the Registrant’s Current Report on Form 8-K, as filed with the Securities and Exchange Commission on March 15, 2021).
10.26			Second Amended and Restated Registration Rights Agreement dated October 7, 2020 by and among Riley Exploration – Permian, LLC, Riley Exploration Group, Inc., Yorktown Energy Partners XI, L.P., Boomer Petroleum, LLC, Bluescape Riley Exploration Holdings LLC, Bluescape Riley Acquisition Company LLC, Bobby D. Riley, Kevin Riley and Corey Riley (incorporated by reference to Exhibit 4.1 to the Registrant’s Registration Statement on Form S-4/A, as filed with the Securities and Exchange Commission on December 31, 2020, Registration No. 333-250019).
10.27†			Employment Agreement dated effective as of January 25, 2022 by and between Riley Exploration Permian, Inc. and Amber Bonney (incorporated by reference from Exhibit 10.2 to the Registrant’s Current Report on Form 8-K, as filed with the Securities and Exchange Commission on January 27, 2022).

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10.28			Eleventh Amendment to the Credit Agreement dated as of April 29, 2022, by and among Riley Exploration Permian, Inc., Riley Exploration - Permian, LLC, as borrower, Truist Bank, as administrative agent, and the lenders party thereto (incorporated by reference from Exhibit 10.1 to the Registrant's Current Report on Form 8-K, as filed with the Securities and Exchange Commission on May 2, 2022).
10.29			Twelfth Amendment to the Credit Agreement dated as of October 25, 2022, by and among Riley Exploration Permian, Inc., Riley Exploration - Permian, LLC, as borrower, Truist Bank, as administrative agent, and the lenders party thereto (incorporated by reference from Exhibit 10.1 to the Registrant's Current Report on Form 8-K, as filed with the Securities and Exchange Commission on October 26, 2022).



~~31.1~~31.1**			Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
~~31.2~~31.2**			Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
~~32.1~~32.1**			Certification of Chief Executive Officer pursuant to 18 U.S.C., Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
~~32.2~~32.2**			Certification of Chief Financial Officer pursuant to 18 U.S.C., Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002


101.INS*			XBRL Instance Document
101.SCH*			XBRL Taxonomy Extension Schema Document
101.CAL*			XBRL Taxonomy Calculation Linkbase Document
101.DEF*			XBRL Taxonomy Definition Linkbase Document
101.LAB*			XBRL Taxonomy Label Linkbase Document
101.PRE*			XBRL Taxonomy Presentation Linkbase Document

* Filed herewith.

† Compensatory plan or arrangement.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


	RILEY EXPLORATION PERMIAN, INC.

Date: ~~February~~November 14, 2022	By:	/s/ Bobby D. Riley
		Bobby D. Riley
		Chief Executive Officer

	By:	/s/ Philip Riley
		Philip Riley
		Chief Financial Officer

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		Weighted Average Price
Calendar Quarter	Notional Volume	Fixed		Put		Call
		($ per unit)
Oil Swaps (Bbl)
Q1 2022	345,000	$	57.47	$	—	$	—
Q2 2022	345,000	$	57.47	$	—	$	—
Q3 2022	270,000	$	56.03	$	—	$	—
Q4 2022	270,000	$	56.03	$	—	$	—
2023	720,000	$	53.27	$	—	$	—

Natural Gas Swaps (Mcf)
Q1 2022	360,000	$	3.26	$	—	$	—
Q2 2022	540,000	$	3.26	$	—	$	—
Q3 2022	540,000	$	3.26	$	—	$	—
Q4 2022	540,000	$	3.26	$	—	$	—

Oil Collars (Bbl)
Q1 2022	90,000	$	—	$	35.00	$	42.63
Q2 2022	90,000	$	—	$	35.00	$	42.63
Q3 2022	90,000	$	—	$	35.00	$	42.63
Q4 2022	90,000	$	—	$	35.00	$	42.63

Oil Basis (Bbl)
Q1 2022	240,000	$	0.41	$	—	$	—
Q2 2022	240,000	$	0.41	$	—	$	—
Q3 2022	240,000	$	0.41	$	—	$	—
Q4 2022	240,000	$	0.41	$	—	$	—