REPX - Earnings call 4 2023 | Riley Exploration Permian, Inc.

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Operator

Welcome to the Riley Exploration Permian Fourth Quarter 2023 Earnings Conference Call. [Operator Instructions] I will now hand the call over to Philip Riley, Chief Financial Officer for introductions. Mr. Riley, please go ahead.

Philip Riley

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

Joining and expressed and uncertainties other differ laws. implied securities found that be Riley, published Bobby contains cause the GAAP These me is disclosure to today federal conference today's Chairman within under Investors These of website. call the supplemental statements We'll to those are measures which on our materials of actual non-GAAP to in website statements. projections materially these risks a materials, from certain CEO. measures. or subject statements can in results can our be reference and on the in our may certain also the found section. Reconciliations forward-looking appropriate variety we Yesterday, meaning

now I'll Bobby. the to over turn call

Bobby Riley

some our year discuss I'm to Thank over for the and the turn of you Philip. at discussion the call everyone for Permian. market, questions Yesterday, that year XXXX to joining was report us of quarter you, thank announced at Philip, today's call. XXXX. high I'm the year, close fourth and encourage we the pleased and operations full and going We Riley again call then the for to of end on highlights our to outstanding our points another the of today. results

XX and BOE, of producing XXX total the increased day. production XX% oil XX% increasing million increase XX% by New per XX.X organic an growth Mexico million in a equivalent increased year-over-year. XX% reached per acquisition. net net reaching excluding developed net year-over-year. production reserves year-over-year day Improved overall XX% to reserves XX.X oil achieved BOE, Our production, year-over-year Proved year-over-year by Riley MBoe to MBoe

million cash cash of We of million from operations and $XXX million flow. EBITDAX, generated flow free $XX continuing operating of adjusted $XXX

rate our for remain of quarterly a million, our paying continue long-term our years recently most sustainable capital corresponding million expenditures to value XXth acquisitions cash shareholders, year. reinvestment totaling We our business delivering remain of cash and come. committed $XX for operations. dividend flow consecutive in total from XX% returning growth shareholders to before $XXX We to We focused on value invest for of creating the to with to

The operational company initial successfully commencing of phase its RPC Power our the Construction in venture facility gas launched that power fully Utilizing electric by self-generated to power the operated of during XXXX. spring of operations take-in-kind around on-site power generation the facility I generation generation the we for on-site XXXX operations. be by to was well of last will facility powered generation currently note post-process The Texas XXX% anticipated joint baseload drilled Yoakum November natural generation power thermal temporary XXXX. our mostly with power finished is facility LLC. was by of XX% power. County, as provides fuel,

of day and the in EOR our purchased Regarding includes COX COX. XX feet day COX feet cubic reservoir. XXXX, equipment per pilot, of million MMcf This of X successfully day installed cubic currently compression are injecting COX recycled into per and million we per XX early

the thus a we comprehensive COX and of using gathered report will movement end fluids monitoring tracers. forward, testing invaluable, XXXX. reservoir the The from anticipate compiling closely As we of move evolve and the project insights have our feasibility far by been

reservoir substantial moderate ability into volumes minimal of the with breakthrough. our demonstrated inject to COX We've to

recovery. long-term water pressure the effects. sets opportunities which basis thesis, minimum of reach our expansion factors, was stage repressurization for This COX reservoir Looking promising oil to COX subsequent for the including and the the of initial emissions, our several industrial ongoing forward, depletion miscibility of on the the primary hinge of opportunities with enhanced and availability optimal production

recently, drilling most efficiency and significant we XXXX improvements. In achieved

With in spud just connection feet company's depth for these These total spud gains to were day bit we increased days. by XX%. well, Leveraging drilling new total depth optimized driven completing record and set decreasing drilled X.XX efficiencies, the practices, agitator by time additionally, run from per by technology times. our the to XX%, quickest X.X-mile increased

Moving steadfast to we further. are commitment technology in and practices efficiencies to forward, our best leveraging enhance

integration allowed establish significant supply witnessed this chain synergies Lastly, building Mexico across milestone momentum, through operating This representing a to a portfolio, asset operations. for on has with acquisition New our we base, streamlined us successful a to of existing our company. shared the leading our integration

Philip. over At to I'll the point, turn this call

Philip Riley

Bobby. you, Thank

Just financial a trailing additions here few data. on minor

increased year, Mexico but For New growth from acquisition organic cash quarters on flow. cash we're flow certainly could chosen the as as have of more faster, free We volumes X from benefited the mentioned. flow volumes reinvest and full our well to focused XXXX year cash to by Full XX%. grow growing new

out down even That That halfway The We to in weighted million. shareholders' allocated million repay free front debt, or alone. to flow the in in lower year, per some balance an in and helped is helped by was year-over-year contribute by confidence paid to $XX half the year dividends, targets. full million as share last had $XX contribute So of total X% XX% increasing volume activity of flow the cash production which used cash the activity free to to quarter increase second equity. XX% slowed dividends fourth through year-over-year we $XX we year-over-year. some hitting to spend action half increase intentionally year XX%

Looking ahead, our excited about we're XXXX plan.

benefit to in XX% We're to this electrical year, $XXX We JV, and XX which workovers. for method a anticipate tubing account wells aspects other of is year-over-year material materially investing approximately infrastructure efficiencies, the over midpoint the include drill assets, on Our looking uncompleted lead while sales will and some operations million, of to chemicals. Power capital On that basis, as as XXXX to for turning across described, and both contribution of we're savings to gas is such more well few capitalized with in which reductions well Bobby program allocated accounted is beyond. a and of some drilled per forecasting development This operations equity is having just as both which separate industry cost investment. in a better upgrades as an takeaway, from inventory. casing, which

this We about $X.X in have come contribution one estimates. final expected million. quarter there far, for has this below Thus cost

this rate to reinvestment XX% with to XX% of value correspond the the which rate or combination the XXs as would of year-over-year, from reduction we averaged excess more XX% or higher contingent of conversion no to year-over-year robust at current cash hold our would it XXXX free year-over-year We to levels. catalyst free on XX% a and to act flow operating volumes the in bring down remainder flow that down with of spending inverse oil If in In needing year, obviously CapEx, start to flow, whereas assumes price. cash growth would lower by our we As to the cash XX% cash in flow $XXX yield XX% operating the XX% low of free growth, very free of flow. a to grow potential for though for WTI scenario, market oil highlighting translates equity. forecasted that cash for slow probably down to flat see flow price $XX cash those million, the forecast on

compare guidance is to metric cash We would of of invested. Another CapEx, be cash for free these CapEx like of to I E&Ps in more which, they on of $X.XX the the you flow encourage this metrics to ratio other provided. dollar generated flow based than case, free have each types

companies many we've not have have free of cash the anticipate companies flow Some analyzed higher weaker they're cash but forecast. Whereas a growing like rate, flow may doing. we free bit conversion generally

back it turn Bobby I'll now. to

Bobby Riley

in driving today. Thank your thank open and you, us questions. joining Operator, again, the all our Thank remain up growth term. now on long focused Philip. you you business you may We for And it for for profitable support. investing for

Operator

first Truist line comes the Instructions] Dingmann of from question from Neal [Operator The Securities.

Neal Dingmann

call results. Could of me like plan and stack to it order It to situation in, nice needed guys hoping this. Phil, What's kind like and things you maybe needed for your you baseline the color and things one How far first to the those up hit 'XX decline? kind sort discuss, rig in that those hit could activity an you seems to as plan. now discuss target? efficiency the the growth of on capital advantaged Phil, sort more in a alluded of you're on XX% growth? just this, Bob I'm is of as are just of maybe order bit you just and question I'd seems My And situation.

Philip Riley

we're were wells, we over reinvestment got find Neal, is an that cash to last do We going Yes. the year. year the We've those We and talked savings. where year just out We the end and into ourselves opportunity. free XX rate, leads about flow. this high advantaged what this like at Philip. XX% of coming

see incremental flat prices. boost the from if On the think to growth cash probably we're going volume I even free most the flow,

Our then you're question about drivers of answer kind prices, XX% that. that or should current main savings at hedge good and coming for book type last. we noted, the the be into pretty is of yet CapEx more see Those that another year-over-year color... we are it's any thing talking increase year efficiencies. with as And kind the about the than that of this looking feel better Did

Neal Dingmann

be that, follow-up I a free of sort again, repayment as flow capital this could maybe with of material. Would You a just a I about how did, given pretty talk to dividend. And maybe -- does great the allocation buybacks? absolutely you've you, think just and fit on into think you got cash on little agree debt sort

wondering are with us just I'm this year? So the what thoughts

Philip Riley

think I free Right. flow. the be impacts the obviously one to say more there's a It before demonstrated, growth. growing grow few guess flow. I'll cash to Production we And on growth, just doesn't just production we that, but allocation. about think levers free have thing I about When cash

about may volume flow are growth. this bit a little have slower free So cash but growth we it year, excited that

on buckets right allocation So X have now. primary of we allocation,

the of we about First, versus probably dividend demonstrates very $XX the our confidence low impacts have our dividend our We've going oil forward. every noted, business. nature of I'd as grown hedge variable coverage prices Oil year. you but flows, fixed hope say dividend. large dividend current prices, The grow at we cash with even to here, future confidence have We our a book. it obviously in that

It we like Second, small that. opportunistic be could Power continue opportunities acquisitions. be this to investments. Those -- could JV, identify something

return then in, to a is run our purpose capital. think investors the should appreciate of things to but capital and primary return tend and ultimately opportunities, That's I think invest interesting business, that find earn I to we identify that.

think as there. I use I first So think it pay I then I debt bucket is X excess, it's used get a that down the long-term a book right for the is calls, about Currently, talked right? again, leverage on kind it's at to we've debt got cap, think the we XX% after lower third what XX% prior What's those we've [ repeat, and on you'll about think credit of basis, debt maybe XX% as we're basis. to Rents to level? cap a levels, find And But down. is facility to down on the naturally. us to pay ] it potential

buybacks. you made forward. -- comfortable then, debt an that I And going with we're look, think to paydown allusion with

think I we of debt in shareholder paid can bit return. then the down other with explore forms a more future,

Operator

comes from from Robertson Jeff Water Research. question of next the line Your Tower

Jeffrey Robertson

given you or how talk generation strong you Riley's be cash complement looks of XX% to can the what evaluate cash Bobby rate flow reinvestment flow XXXX, acquisitions capacity the could company? that about in and Philip, free

Bobby Riley

is Yes. This Bobby.

also. the begin and history building drilling of development. give take or the of production is comments me Philip Let most it then and organic through with of his this to most Obviously,

we in can available, look some that's we existing neighborhood acquisitions, that the our looking we're as to close inventory strong optimize actually or efficiencies. assets, So something when of same has at so for something

advantages we us like we at of keen the able year think, development the integration that if One New Mexico gives actually high-grade our Mexico some real the a with Yeso inventory shift and which we're of being New of really to drilling have to focused I advantage of the choose the is at key place trend, But continue this And assets, our not that something we right so acquirer right something inventory basically a say, like opportunities. production to see we're but that bolt-on numerous on. is that something buying the has PDP a and I the especially time. by or is thing held large much

Philip Riley

in returns add the got Yes, flow that we that. that's development. cash to exactly right. nice, our to is while I'd got capitalize earn the cash you've pay to And you for on best that flow, just on

with So allows if larger attractive undeveloped us we can earn those a inventory, amount to returns. find acquisition that's to of disproportionately higher us,

Jeffrey Robertson

a Yeso those how plan, Bobby, weighted is growth at the capital production of XXXX -- they the in wells impact part of you spend driving the way mentioned overall a what's in performance just the and your asset base? lower the

Bobby Riley

in we've going higher what or do basically, I we to the So make a that in did have and data infrastructure the first play. in of gather together very from I to Yoakum we're to along that deal, seen in mean, wells. X a best to County first excited we smoother say wells bunch deal. detailed as about And It's to We're the we nature and put drilling we the before thing that spend make get to much started place, a sure research see. efficiencies of things we the EURs. that it want money correct geological drilled in that takeaways X gas the when results lot go we you engineering is plan

of selective. just in are we we really X but front opportunity an and pretty where where it year returns production right us rate us. of to be profile, we basically now assets So are gives and is this just They're comparable on have

Jeffrey Robertson

in project to emitters Is feasibility County. convince the COX in be them industrial participate to elements the in of just Yoakum then And key one to study on able the go Bobby your to lastly, project? talk and

Bobby Riley

we decades. basically, our we -- also contiguous we've mean ability field, we're for It's we think what offsetting I a demonstrated And COX to recovery. oil to -- by flooded been East. I the the lot enhancing know have Wasson is whether definitely. have Most COX store great of it's

up, So with feasibility we're or open the opportunities be ready hoping sink our we'll be but those storage. to the

Operator

from of question Your Brothers. comes Noel Instructions] the next from [Operator line Tuohy Parks

Noel Parks

wanted Just check things. a on couple to of

sort that seeing having stabilized? any pretty you and I you do tubing leveling to your we on think inflation? come the mentioned of from back. benefit were some chemicals Do Where casing, cost in You there's go? much more off current you think think stand is of pricing

Philip Riley

the stabilized. I to the to It I can hate try to costs. address It seeing either here. that, does Noel. we're feels it's feel predict down try like like to future of flat on most

of and of I type that come some items you Bloomberg like hot-rolled clearly, Some was a Like much see how casing steel tubing down. said, and has efficiency. can the in

So some of certainly is material. that

always But by course. about to floating Other aspects going we impacted of of the We've Some the for services and out pretty see. material. of I something good pretty and control. much some feels can you're prices think that's areas, lock that as year China, tried though, we'll is areas, our that. in to chemicals feel as Other have

Noel Parks

curious, enough. of sort in across what the Is related environment, a levels activity the like overall far it And as Or flattish this up? woods your to the you larger creeping as just neck Sure. year are of service rig conventional the Fair for activity see industry? do Permian.

Bobby Riley

our We're in be and the our probably that. trying some I services specifically, in area operators drilling pretty flat like guess, to offset year. share stuff are assets where Well, New with communication last and Mexico would located, to constant rigs in

the But area. Philip. may what our that's has of little as be profile area, I past. see flat been I yes, as -- The in I slower a for kind drilling asset mean probably -- than immediate I pretty Texas it see bit So that think a far

Philip Riley

slow we're different Yes. Texas more our our area, to got drilled running down what and room chosen just mostly with are neighboring The assets finding have what more than have. We've that have for neighbors developed they have we up reasons. or inventory,

Operator

the Tower Water Jeff Your Research. comes next from line question from Robertson of

Jeffrey Robertson

what the you JV And by of up the reliability? was has Can cost County. follow will Yoakum well you and on there all on operations that the and drilled electricity mentioned that not powered to have on you field Power or impact talk wells? material capital out Philip, recent in new a most impact that whether about

Philip Riley

it. Yes, I'll we add then to costs, forecast improvement start can and on material a costs. operating On maybe Bobby don't in

it's we needle. be going to think in really sides That an or enjoy I relative so there. getting be it, flat to company the to both mostly to our investor said, it's are overall going move we immaterial

a power. his there. relative you be we capital have as though, power and the Generally, drill some well That's side less in electric as intro, Bobby to find electric on exciting. note, could on diesel. basis there capital, than the we did On expensive a using that That's noted reduction

major And that like difference. can Again, so pretty exciting. that's a things mover make it's Bobby? not a but little

Bobby Riley

say gives put we the Gulf I'll to basically, it Yes. the it in basin us gas for get also our to that to in a great try before use Coast. this the highways down

So run our our an our able the of also to kind dirty investor in power in on JV, times in and to with operations. had uplift an location looking in, the goal and [indiscernible] being we -- for reliability we're is we're that cleaner co-op efficiencies get We from Power our power. increase we're

gas basically, and use our kind that of taking we're processor. from the residue in -- So

Philip Riley

to control. what everything experiencing do prices we weak doing natural our Everybody to can in and can gas within the try value enhance is we basin you we're see that

And one the probably think us. and is so way step first this this is we for

Jeffrey Robertson

to natural to low gas it for price in off sending Gulf. it is like Seems goal as value the opposed a and the the for create selling to field

Bobby Riley

Exactly.

Jeffrey Robertson

has of assets been Basin, their on let's Riley sense a digest get sense conventional more Permian market the or next, the consolidation asset -- companies the you Bobby, focused a Lastly, years say, your X long-lived those lot of assets. in and there's bases. Do over for obviously what's as

Bobby Riley

The market or to clarify. for have unconventional, conventional

Jeffrey Robertson

Conventional.

Bobby Riley

involved, see of with both off And starting to basically smaller people from. there's at operations unconventional want exciting to have the wells. alluded on. that vertical secondary obviously, that. look some looking we new mean I our and amount focusing some for a back conventional room we we inventory. are assets a lot I like I opportunities people be PDP mean, Well, of the most lot a area, bit. thing for look of thousands out top earlier, choose And It's of that running opportunities at plays. that has a the tremendous and drill that to not think to drawing look consolidation there's chance have a their upcoming of we're some stuff I horizontal mean, bucket like to assets we'll in assets there and with at they're

Operator

Investments. Your [ next the from of Gary comes Kennedy line from question Kennedy Trust ]

Unknown Analyst

is see a I a just great last [indiscernible] prices better job. oil on to of so your year, that, They your and $X you what about wanted over congratulate I natural for book, did are a idea. they gas did natural and to going heck good doing whoever has hedge than like look the seems much selling hedged on gas

So good hopefully, congratulations work there. And continue. will the

Bobby Riley

you, Thank Gary.

Operator

], comes [indiscernible] VandenBrink Corp. [ [Operator next Sandra Capital Instructions] The from question

Unknown Analyst

quarter. good a on Congratulations

I you what had wondered sell happened you time if put to anything. looking had were ago, that, raise to cash. that Some to out And shares

Philip Riley

that outstanding registration Sure. including JV. various the we're that's fall, something remains an at, have at-the-money saw facility, opportunities that Sandy, looking as there. given a for we Last this Philip. did opportunistic It is Power we statement

very can limited used we've amount. you As a tell, it

business through far, we've cash opportunities flow. new and these the been So financing

plans, So the any to we nothing else change moment from have announce far, no that. at

Unknown Analyst

So it will until... open remain

Philip Riley

does, I deals differently companies any do like issuances, and you -- to overnight it do anything the It think mean, that. see announcing this public to about could but we you encourage else. some than ability others to has company no morning I just

in there Ours small allow is from or primary facility there, honestly type a it regular of not to secondary amounts, a do but sorry, too it's way, issuance. different it at-the-market us -- can

Operator

questions for like you us. As to presentation, time, there This further and conference. for our would no are today's all now joining this thank today's at I now speakers concludes thank

You may disconnect. now

Riley Exploration Permian (REPX) 7 Mar 242023 Q4 Earnings call transcript