REPX - Earnings call 3 2023 | Riley Exploration Permian, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Thank you for standing by. At this time, I would like to welcome everyone to the Riley Permian Third Quarter 2023 Earnings Release and Conference Call. [Operator Instructions] Philip Riley, CFO, you may begin your conference.

Philip Riley

Good morning. Welcome to our conference call covering the third quarter 2023 results. CFO. Riley, Philip I'm

are Chairman today Kevin CEO; Riley, President. Bobby me and Riley, and Joining

those a differ materials, federal and These cause variety found published the to projections we Yesterday, of risks statements forward-looking These materially website conference contain in results these expressed within the actual statements and today's subject other on of or which may under Investors laws. implied in uncertainties section. the from that materials meaning call to certain securities our be can are statements.

measures. We'll certain supplemental reconciliations reference GAAP also appropriate our measures on be non-GAAP our The in to found the website. can disclosure

turn call the Bobby. to now I'll over

Bobby Riley

Thank and XXXX to you, call. QX Good our welcome morning, Philip. earnings

quarter metrics. or plans in which We with are pleased we across exceeded third our all the performance met in

are the of quarter. in past the some Here accomplishments

per operating oil Average on day $X.XX $XX day, of $XX per of the the barrels in increase share, declared quarter, represents amount. $XX quarter, the dividend of million in million. per XXXX, Also, of dividends paid equivalent after We reduced million million debt flow. totaling are approximately end by We XX,XXX of cash flow a oil XX,XXX X% a EBITDAX, company November the third X, payable $X.X per production share which $X.XX the of dividend oil of free generated cash quarter-over-quarter. of adjusted cash and $XX of barrels million

core by us lower in for third-party XXXX. We us ways. modestly production. midstream for the to quarter unplanned caused impacted remain into infrastructure gas other will similar planned We that some in constraints producers a Optimizing see also disruptions focus third and production midstream experienced curtail

the strategic our and reducing more Mexico to about growth, sharing details New on shareholders acquire properties. performance took we returning focused call. during while capital on look We to efficiency to remain forward We the debt our operational this

quarter. discuss Kevin turn the results call operational over for now the to will to I

Kevin Riley

represent Bobby. of of oil and I back is on XXXX. in production smooth the focused production of operating XXXX oil X% of XX,XXX to better a production you, unplanned XX,XXX a day. end for Permian instead planned we remain combination below thank and QX. with quarter. for guidance will the May We free from sold results end growth discuss We guidance, spending results of morning, barrels but flow of and Good equivalent high dating achieved of per previous barrels out to of as Riley look The capital cash reduction the the the now at of decrease value quarter. growth and emphasize quarter-over-quarter, the approximately production year-over-year low

servicing Upon our portion attributed in in is until forego again. receipt quarter procedures Mexico. shut-in from on midstream Red facility in gas the of at volumes to processed its to natural XX-Q, New decrease of a company the in voluntary our wells flaring issue third-party disclosed second notice of mid-July previously the be began provider, could impacted the the processing the assets the Lake production the maintenance unexpected As unplanned

the August, of operating production near impacted before early and all substantially levels resumed been of disruption. reestablished As production the the or company had at

X sustainable final have phases with with power the generator and continues the options generation commissioning in of set within Along hope coming along optimize work weeks. operational The on-site are midstream midstream we evaluating secure and providers our to lines, alternative to the to company those long-term of third-party Phase first capacity.

acquired primarily expenses from company's increased than the the guidance the due optimizing incur total $X.XX per to capital third BOE guidance for accrued along in company were announced expenditures BOE of to projects. We've quarter, $X.XX with million previously production. continued during workover $X.XX the timing expenses The previously activity the $XX to certain lower infrastructure associated properties, of the released with incurred third operating per newly for within Lease quarter. additional company

third the online quarter, rising X.X until of commodity X and net and operated which horizontal being wells, decided faced did net company latter had wells drilled not the service down quarter to the During some X.X in The operated the cost. fourth half the turned sales wells, with previously of net to operated slow while company completed declining prices come quarter.

intangible However, items XXXX the XX% to most wells at similar and drilled cost. completed than has favorable remainder able of XX% certain secure since changing the environment to and in for of new costs adapted less company XXXX been to type and averaging the With XXXX. well services, late

the for we days program year net not net, few turning X to X in contributions sales that well drilling quarter. anticipates the commenced production substantial drilling last operated during X are net have anticipated, While the completing current the fourth and

to the will to over discuss results. I call turn Philip now financial our

Philip Riley

Thank you, Kevin.

XX% some by up realized October. as XXXX $XX already production were in prices quarter those improved were more very offset improvements differentials. cash realized quarter million barrel gas benefited or before prices $X Third $X.XX to of prices reversed and in a were up NGL basis nearly pricing natural XX%. oil higher Quarter-over-quarter, from from quarter-over-quarter prices working X,XXX low per have last changes I'll caution day operating Improved $X.XX XX%, that $XX up decline. capital than oil to increased realized flow

offset settlements hedge XX% negative of price increases. Increased

were G&A. Operating was following quarter-over-quarter. So in increased differently, which downtime costs BOE workovers, flat LOE lower realized. XX% by some of were offset per price increases

fall CapEx slowdown rate hopeful before full following changes year. defined an months XXXX. working in cash the Reinvestment flow declined by over XX% CapEx quarter level of levels active forecasting the rate, our the very also for below run quarterly accrual for X We're the operations was higher from and of for third by could could spending XX% basis the capital half this first this on driven XX% through spending as and in We're more activity level be a indicative cash and second basis, that of the on XX% the quarter reinvestment planned cash year. by quarter that XX% rate in of September. primarily level

quarter fourth to other Looking inventory discussed. cadence. across development our or quite which corresponds Kevin procuring as we're services generally we're what quarterly encouraged ideally by We're smoother rates, including seeing. We're to operational realizing at sharing assets. spending And CapEx beyond, smooth rigs improved both and services efforts the synergies, and making we're pace, with

$XX cash higher for $X down, working has $XX and million of dividends and debt of flow allocation the reduced XX% prices. this led forecasting million for flow The been free flow quarter's XX% combination quarter. of Currently, CapEx The was to the balance cash pay significantly flow cash free good and operating modestly million for we're fourth the production lower cash balance with the Year-to-date, quarter the dividend, lower to despite in to the sheet. capital. allocation free

for to to somewhat fourth flow The and We're increase will be the delevering balance used XX% the quarter to lead oil in million This percentage XX% debt dividends. hoping reduction. would price allocation $XX full free cash by closer to total which first dividends, reduce delevering maybe additional year-end, dependent. is an an majority of by to year

unsecured debt, year-over-year. XX.X million, of on amounts the of our beginning as base, approximately November, $XXX increase X% the notes. of the principal On $XXX an of Shares million quarter ended totaled with principal including million outstanding value including we of capital value unvested

it closing. pass back for now to I'll Bobby

Bobby Riley

and your our again, we Thank value you. company. And in time interest

We our in are third the are our shareholders. profitability strategic drive pleased will and quarter that focus to with our continue to confident and excellence performance and operational growth

questions. up call Operator, for now open you the may

Operator

Your Instructions] question first [Operator Bert is of Donnes Truist. from

Bertrand Donnes

The wanted first to question, I on just M&A. touch

the you've New with to seen side Mexico the results seem be pleased of in things. You

just side New trying to assets I'm are you opportunities seeing add So to the understand, Mexico? on Texas or more

Kevin Riley

more our now Texas acreage both as right side mostly Mexico seeing opportunities is but -- New remain the areas. opportunistic in We're PDP, in that

Bertrand Donnes

any Or difference it as deal? the you in sizes? Would similar last characterize there is

Kevin Riley

a There package, sizes. but we bite-size smaller also There's see multiple several assets. large recently was

Bertrand Donnes

significant I free are term, sheet appreciate next towards in by like that. the the flow then there shifting is a dividend sounds our for jump increase, And balance in guys the cash you consensus near estimates, but on year. it

do or even to I maybe just strategy is wasn't 'XX? to repurchases maybe and sure, next think year? dividend reevaluate pivot carry Or you into So more share that going you'd

Philip Riley

Bert. I dividend with Yes, want that to line get allocation. say is Thanks, in the we would sure. This Philip. overall

base I think for frankly, in we caps. a industry, have dividend, the materials. rates We especially among small one of highest the some allocation out put

XX% presentation our allocation suggesting in this see You'll -- more been it's is year-to-date. than

additional allocate get think I for flow and debt paydown. more year the free we full decline cash will as that to

I We're a decreases you basis, that just talking on increasing year, surprised we're shouldn't if an think still next absolute about percentage allocation. be but bit.

debt down to flexible. recognize value remain We paying to shareholders want We accretes indirectly. equity that

the $XX year. doing for be $XX what can approved We'll assuming dividend, we're paying next that's to cash You to in roughly million be going forecast free flow. million

$X by to $X You got the $X balance to the that's worth to itself. there debt,

Operator

Your next from of Tuohy Noel Brothers. question is Parks

Noel Parks

So the may on opportunistic hedges. and getting the I more interested oil had [indiscernible] seen side a now. seen volatility thoughts environment I be little just on just hedging in your certainly was We've couple. overall have have people right a in

more the I you So sort preserving sort about ahead protecting curve, downside out you are concerned to of look more of or as guess upside? with

Philip Riley

to and rigs, We not say spring some we've generally certainty it's acquisition development put too hedging commitments, the gets a and trying new swaps at the so going we're time as That those more closing No, pretty cash cash and sure. given of want of near bit the honest, in we're a the to be What with swaps. where of collars was be a got And both. systematic Yes, forth. term, to financing. speculative. protect on volumes bit mix flow on process flows, I'd the that to a pipes taking of is for

especially this quarter. As to curve, That with helpful a backwardated us using been collars. you gives you even out has It go and more range. we're the past

even We for necessarily past this of a settles there settling not had bit quarter. cashless quite cash. You're

so strategy. that And we'll I think continue

a as downside protects away and the want some We're good giving right program that well. certainly upside We're in of have then retain now. not a that We upside. place to the

can We did I a for think use this misconception. leverage that be asset.

asset you've flow excuse a you've -- -- increase equity can settlements, but more basis offsets so price on change cash the me, disproportionately of of or small on when value basis the And got And any small in a or yes, levered and so settlements. recognize than large a value a some got those asset XX% when the a levered especially an that oil, increase value. you're you in impact hedge has negative

Noel Parks

then look you're what as issues the contributing spending consider that towards about changes some more I infrastructure, cropped changes of And you head Sure. looking I any as might up. If just doing either you thinking infrastructure, your ahead, thinking infrastructure. shift recently? far towards guess, thoughts in Absolutely. vendors gas own as capital you your any third-party your don't in on to, to know, that trying or improving be

Kevin Riley

current our or midstream on, capital what forward own. in on view that do production of continue always somewhat will don't But both allocation I opportunity consistent spend optimize and relative as we looking we've addition the capital materially been and and the both on take is to in have past. We the for new. invest going that providers and alongside opportunities we in long-term to legacy that takeaway opportunities field stayed we'll the amounts that, to sway the assets, think Our to better see

Noel Parks

you. it the a only infrastructure is Or so -- a of other to and running and you fix and facilities making pipelines? one world, just for of I can it different then unlimited to there's a just and those out bunch And sort perfect that incrementally. capital given sort In perfect your changes world, of be current mean, of trying Sure. do offset of just I in producers things would get upgrade so that guess, much keep fast, just an up Riley or

Kevin Riley

both think combination there's a constraints or both, I are challenged midstream assets of issues. with different

gathering looking are ongoing more in that addition which in Mexico and to legacy currently capacity some pipe, and to so into help plant for more is both of system, integrity sustainable expansions, build New system New Texas. put a older of Mexico

So of line we sight more some do XXXX into for capacity. have

such utilize which online projects, other working infield I In initiatives power on. addition generation, which, internal will with we be that will as the to own coming on-site that, we have gas some shortly, our along are mentioned, as

Philip Riley

opportunity I Noel. for just thing, as investment. see one an do add We more this capital

on Some of might these remediation, to goes opportunities. is it it capitalize be Bertrand's on ensuring we have opportunity absolutely capital an of investment. but back to question for allocation, some liquidity This

intensive, mentioned capital when could we're An What's interesting other type the interesting example with things is can't flat it has, that. Kevin be you analogous type typically for or of that even finding profile but of what's and about smaller, is this, an be incline. it So to that the modular an opportunities. is more mix E&P which power. that decline

So and for these now are on we're earmarking next year. things that potentially We're we're working some about. capital excited

Operator

Your is of David Dernick question from the next Dernick Companies.

David Dernick

for you on, us repressization, any sequestering of the on to waterflood you give COX is And into the on have any operational. that expand question ongoing project? are the Could going there the side? for that? My COX any Texas And there are updates potential plans movement any today more then secondly, you insights

Bobby Riley

the what pilot is program call David, Brushy on Bill our this Bobby. We're lease. start we that. I'll continuing

XX And pressure the has as response. injecting we're at obtained believe gas, we're last we -- to days. where now XX we have see We miscibility production what point the over

shut gas production drops. off, the we the As

now we in state. knew are immiscible So we that

So the though evaluate it's far, we're But still for a us we're with impact be what ultimate a seeing long-term in field-wide could field. so the in to encouraged project what application.

David, there discuss we're sequestration. a tremendous it's what the for us our wider a seeing have continually doesn't But because they using of COX. viability carbon out opportunities tremendous compete impact We volumes COX. on time, looking would opportunity the evolve. we're look to know out at the and But that exactly how take obviously -- for don't capital, as on little we're a project for there early I really for of tertiary spread it's on current that and radar, to

Operator

time. you further There this at are call. for questions conference today's no This concludes participation. Thank your

You may now disconnect.

Riley Exploration Permian (REPX) 8 Nov 232023 Q3 Earnings call transcript