REPX - Earnings call transcript Q2 2024 | Riley Exploration Permian, Inc.

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Operator

Hello, and thank you for standing by. My name is Regina, and I will be your conference operator today. At this time, I would like to welcome everyone to Riley Exploration Permian Inc.'s Second Quarter 2024 Earnings Conference Call. [Operator Instructions] I would now like to turn the conference over to Philip Riley, CFO. Please go ahead.

Philip Riley

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

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

Bobby. to over call the turn now I'll

Bobby Riley

welcome primarily in of generate joint an since added resulting our and venture to to guidance QX ancillary acquisition as our Power Expanding footprint. the shares on including million, key plans Thank the improving scope million ownership X.XXX QX will issuance common proceeds million in of which morning, electricity our which of locations we free the Today, producing exceeding XX%. Raising Philip. services JV our used fund $XX XXXX and increasing in XXXX, sell changes significant several joint existing and through venture stock, Mexico call. was Good net investment. the with $XX.X of updates to to ERCOT operating key well metrics highlight New and and Power and as within acquisition planned to County, meeting or development asset flow. and for efficiency earnings Closing properties capital cash Eddy you, the

to results forecast execute seeing overall production the we the results to It's generally to and far, are relative compared for annual early longer-term XXXX year outperformance on report positive results. continue year's prior on in results. medium-term wells. vintage thus as with to our But We year to still plan this

savings largest cost objective million and experience of We flow cash our year. cash represent free on primary the We continue cash $XX for free Well our and this and favorable this drilling efficiencies driver Free flow to as was generation improvement $XX savings second cost completion return. generated activity. of performance million both a shareholder of quarter a in measure us year-to-date. year and of flow

over months, we to public facilitated XX last to balance debt or $XXX consecutive million contributing the $XX we're paying with XXXX. an the a which XXnd Today, investments dividend, $XX new company Over consecutive of quarterly as our reduction million acquisition. million, $XX generated XX% since our year-over-year, with XXth returned of million dividends and public shareholders dividend

executive Additionally, XX Accounting as our company industry. of and we with strengthen and our X debt. the initiatives, of Operating return operational experience additions reduce will and deliver industry. growth leadership our companies strategic to various the private joined all the in public XX enhance management These And welcome Officer private shareholders to joined and improve team ability within Gutman Suter public years roles across Chief Principal Officer, as bringing within new us team Chief as Jeff experience capital us the John quarter. executive second Officer, to on in additions years Financial efficiency,

the COO, will CFO, Now quarter, discuss to financial operational our results call guidance. who to followed Suter, I turn the Riley, our by will discuss John Philip over and the for results

John Suter

assets the acquired X%. our quarter. Total and including quarter team Eddy through closed second the X integration Mexico. for continual in assets. second improvement New the and bolt-on in during in XX.X good a our to practices early equivalent today. The results of of and you, successfully plan was increase for that and legacy from safe May months the County, here in results performance shared the evidenced Riley performance and contributed of newly both Thank operating production say operations like The acquisition quarter, MBoe is excellence first Bobby, bolt-on by reflect I'd quarter-over-quarter acquisition The morning. implemented strives day, from closing per our

Mexico as production of from barrels Boe, on per overall a to prior of XX.XX the vertical this X the workover with that late day, XXXX, may the $X.XX were the of lower seeing that the drove point. we average acquisition as for Oil closing than activity up from from the That workover production $X.XX at past levels quarter We're about lift. of was over the quarters. inherited Lease at artificial package closing a spring benefits some XX% bigger efforts of last higher thousand XX% which volumes we LOE Since expenses that and be optimize during our operating increase wells quarter-over-quarter lessening with X%. of per year. embarked well vertical effort many year, campaign New in to first

for electrical our power to quarter. Power, like of continue the transition I'd to performance our the balance coming following development we of and approximately online As quarter. And then XX% finally, our We'll in power a with third to activity. Texas of in second in highlight self-generated the self-generated our team's supported majority units load larger

flow by very capital cost represent year-over-year million-plus average, by well or $XXX down more free to of our XX% We leads compared down are, year on that savings. driver costs than meaningful well XX% cash more budget, as this believe with to savings mentioned, than improvement Bobby largest As some XXXX.

now with a balance. of times year-over-year or the by down XXXX. better XX% production. savings both for account representing wells and are and Drilling using to XX% just frac believe as compared We're in cost leads generally better completing efficiencies we half Drilling completion gains design, over or more which to these pricing market pairs redesigns zipper

programs. see, we vigilant completion in are and As improvements we can savings drilling capturing as about technical you cost gain our

integrate our to legacy incorporating year's from turn practices call and taking and asset and the cost Thank for year's focused optimization you. New Mexico. Philip. production further I'll With Texas foothold in acquisition this that, over on Mexico we them New best we improvement are last As bolt-on,

Philip Riley

John. you, Thank

Second quarter $XX.X very before cash $XX.X by quarter-over-quarter. declining modestly in million operating X% or was million capital, working flow changes

Second quarter-over-quarter, margin second $X total oil Year-to-date, of higher by or negative with the despite quarter EBITDAX another to by prices, million, quarter. to year-over-year. improvement $X months cash XXXX adjusted of from representing and million hedge in gas EBITDAX XX% the first flow higher million was driver XX% X improving settlements improved $XX XX% the versus oil

to and both pre-fee slightly Henry to driven Texas is quarter, are realized specifically NGL Midstream turned for by domestically, at the the West this leading more negative differentials in relative index. we Hub and how generally negative which to then gas revenue. slightly prices wider region, Natural fees revenue, arrive market weaker fundamentals, counterparty allocated the

working this While disappointing, how the think we we're few to there manage exposure. about and are a ways

basis, revenue, by absolute in $X negative our of an of was which million on $XXX NGL and million First, the quarter-over-quarter. combined revenue quarter is oil gas million $X up dwarfed the second

as gas to generation one positive Second, lead for gas the the project. third, which negative And pursuing by feedstock the gas attractive negative power hedge power than can this of natural additional an picture, offset us. very we're quarter. big revenue economics, $X.X the can hedge or Low reasons cost of is gas ultimately was during work settlements more million

to for $XX operating XX% rate us cash quarter XX% cash single record an quarter. cash million basis. Year-to-date, reinforcing the and CapEx a or of last of second operating efficiency. million reinvestment Moving XX XX% months, That's on free basis converted accrual cash on Hence, converted we've very flow cash exciting. capital and operating flow CapEx cash into excellent flow in $XXX million XX% is the was flow this to for of flow free upstream we $XX a of on, of

paydown dividends allocated In to and free the fund with cash XX% asset to partially JV flow to second the the quarter, allocated Power of we and acquisition. the balance debt XX%

million debt, cash for from in ago, representing the free liquidity. a increase dividend, included joint the of to million for million credit million raise. Power is benefited $XX of we facility million acquisition, funds utilization contribution to $XX reduce in Total XX% venture. equity cash, The use $X.X a Beyond the significant flow, build now for proceeds net year down to quarter XX%, the $XX $XX million the $X from at from

issuance. We EBITDAX. TEV paid since down quarter XX.X% was by end Debt adjusted our X.Xx XX%, million $XX to or senior notes LTM at to debt

to optionality that continue pay the but liquidity debt, will affords. extra we're the We because rather and believe we we because overlevered flexibility down prefer not

guidance the midpoint ahead, XX%, Looking spending guidance. while few comments a year-over-year provided. XX% annual we production materials announced provide our spending Admittedly, to than on XX% to exclude at small growth, prior The in from written the improve. I'll Meanwhile, oil volumes beginning recap offer will an on continues about we're guidance called of And the of when for more plan. for plan, average modestly by year, That the X/X while cutting XX%. current the to the oil which day which contribute for by just increasing the original At XX% a we year-over-year. to per reduction reducing by volume calls updated equates XXX that, which year, viewed acquisition, basis. barrels to annual only CapEx adjusting annual wasn't still the growth. from oil benefit XXX to in

believe planned volumes will with that activity So to this meaningful less cash translate we'll essentially, We continue free forecasting flow. the less we're to spending. achieve and

on growth year of and a compared the equity $XXX X% on to to on growth At has approximately yield cash wider cash based more company E&Ps you. value. XX% year-over-year S&P turn of using value flow free XX% the I'll closing. $XX yield and the distinguishing balance yield X% the currently the XX% XXX free and our is of the back year, consensus forecast of public we companies, corresponding of WTI consider our gassier for across company XX% approximately yesterday. about to the median it equity area free full million, these sizes all approximately to cash The market. for equity of Thank growth the across flow for of comparison, market as year-over-year of estimates average approximately and year-over-year current XXXX We corresponding of the metrics in value flow Bobby as on excluding By some data.

Bobby Riley

and investors our our with focused interest creation. call up for your for primarily and again, shareholders will and that questions. value growth term. we you focus our We results. confident profitability strategic these believe drive in may and Once strong, time now open that over we company. we you. we results continue recent are results the pleased Operator, We're And to our on remain operational long quarterly the long-term appreciate while are Thank remind excellence

Operator

with Dingmann Neal Instructions] Securities. [Operator of Truist will question the Our come from first line

Julian Broche

Neal. maybe volumes This for is throughout about year bit -- impacts think May? there the And given the a any potential go-forward the like follow-up, like us give to a said hedge, you the Julian more Broche And I want And the revised Power on in incremental there. should then How guidance? on acts on then JV? a consequential I dynamic as kind so just then know acquisition of understand it how little we recent color

Philip Riley

can Sure. this I Philip. in mentioned cover that it Julian, remarks. since my I prior is

So closed is XXX to day April about really X. XXX that production. acquisition on barrels the only a We

by an you them a a contributing XXX math to And the year. that barrels is annual you day do XXX on see when XXX-day basis, you when what about divide so

the was logic So that there.

are growth about I forecasting -- the We of midpoint for XX%. shows the think year

and still you're We're at less slightly doing activity. that XX%. exclude you So

that see Anything That's the move before additional can want there first in on the some CapEx in that to You showing there counts cost clarify got your I part Power. We've of we're there. question. reflecting the as savings. well to well as reductions you

Julian Broche

No that's helpful.

Philip Riley

is selling to our Bobby we effectively as And in services. well market more ancillary JV had more ERCOT XX and ERCOT scope like ownership this JV the ability done to that along of the to of all planned you energy have Power fancy is a have expand established word U.S. that from was resilient. adding set XX% in power, at right there beginning. not point increased power. the We On in they're challenges the as Texas as hot the we this mentioned, ISOs capacity it the that in everything is to we the services with various other that we've a for has ancillary up. But generation had standby in the and cold February to between, sell What into in and service grid more when energy the make with basically the

and paying people to by. they're stand be So ready

words the doing some Thermal would like mix still planning gas in then optimal being what And self-generated we've What mix we're be. fire our planning is natural We're got in with battery. be generators help generation. other on could These and a batteries thermal the can recent of power. for ancillary. Texas,

This as, growth X/X highly than we clearing that both demand solar wind out a isn't peaker on increased of play. with wind. time prices as area the most will actually. is Texas. And we're talking about these frankly, of more stack is think grid, is well much variable, You dispatch In can for in power highly days variable ancillary. with see especially do something so the we the This where the load approximately West generation based that

to quite that we where periods nat often. And gas dispatch so generators are going got you've believe

that. hopeful significantly of going hit. our to it's guess solar hope That online bigger and thing. that excited or next have expedited projects, some plan we than something quarter to even we're of about, to we're to That's we're and is the on an take so a the is queue, you faster third interconnection that it's quarter type for So year. wind update coming second continue

Operator

of will next Our John with question the come line Capital. ROTH from White

John White

Congratulations that? and you drilling savings and highlighted do an release where standpoint, to on quarter. a idea prepared want give you geographic strong your you you're experiencing us remarks, on completion press and provided a detail activities, additional from some that, on In

John Suter

over keep anticipate Suter. good bit move same well as as carry some into experiencing in are to Mexico, a that those John Really, we'll us. well we over we different having far this little We still, in play John. we Thank Yes. of these Texas. savings completions there go, with the champions as They're savings. but our This modifying is as think you, we New

John White

well And second acquisition, New you program workover the in on bolt-on a Okay. there Mexico plan the to do embark on half?

John Suter

Yes.

have We larger have Mexico -- of we escalated a one we continue it. just to part New certainly, in bit. program workover a that But that's little

$XX,XXX a off wells wells there. We those generators We've system. the a value there taken a gained of and them also number of on we've have of to done taking and power the month lot connecting wells by number saved probably

in integrated, workover but So getting program. certainly, all we're doing the we're at including that usual work them our

Operator

Tower Jeff will Research. of Our come next line question from the Robertson with Water

Jeffrey Robertson

John, bolt-on? is factored either that the the workover Mexico, or the that XXXX would -- have barrels New when program on you not adding in the into been for acquisition economics acquisition

John Suter

segment our Yes, I really small an think it's a production, still one. but of important

a I probably workovers with think we've compared think doing, controllers, of opening remarks, lift. with various been certainly, our artificial improving those the said the in increased wells. I XX% I But horizontal like impact pump-off volumes it's smaller our to we've production

Jeffrey Robertson

year all together program it's the next with for base? can you know capital talk But about I at way too putting guidance. think about asset XXXX all a how you early current

Philip Riley

I'll Jeff. take it,

is time backdrop with little you if -- early. get meant done we're we the -- or in we political think East we're new it XXXX a It's every something yes, a think such. 'XX, talking I Middle volatility,

reinvest So we and have to cash and ahead here fall. and the We'll got business general, on months flow, we But strategy efficiency. that. few model to a in free is capital amount in of noisy focusing busy minimizing us that watch grow our the really

This bouncing WTI or are great level and $XX is is around between for $XX not We're us us. prices a out where for see fantastic. we'll So holding a affords and that level what frankly, $XX $XXX.

seeing Hoping there. the hopefully to free to modest of be a far, that. is growth amount looking cost It's good still, envelope mindful managing value. kind concern cash sufficient want economic excited grow appropriately below it where But going all year-over-year XX% a growth continue a it. of this us have award on can we some we're maintaining at well to of to we're Our that, about push super that year. inventory, level you are balance that's to savings. team of wells continued Kind XX% John's far Hoping but how flow

we'll may collect So thinking. see AFEs continue our shape that coming bids out to on that's how to

is lot a I allocation we of we And opportunities about want the just out there bit And think tied this segue, finally, see a of to but now on then how capital to is. front. it's say a right inorganic

that And the a lot landed have a those little to will exciting bit being have so as there we dry things of in measured better we're out keep powder later fall. of idea see bit just a a little will of where

Operator

Parks Next from Noel with Brothers. line question of Tuohy will come the

Noel Parks

couple. a had Just

sort -- just do as basin, overall needs see actually inflationary far of balanced maybe as and touched getting Or your do into capacity you are the market just process as you of as for AFE pretty or the at And service next at, point? part trends You looking you're the this think rolling. well year? on your either you or well, look ahead deflationary

John Suter

that to think at number there's and that we excellent doing Yes. that The small we're able them market for that as rig job of moved seeing prices. need what have reasonable -- really an of No, of stimulation are is out large kind as our we're I there a that a is both mixture companies area services get well.

stabilized. the what's and in pricing, really market So of X from We're a I half a quality I value good getting of our as months, come right now. have think it's about for we don't out there last, certainly that good but know, savings said, think service

Philip Riley

every And system We've not, a services. of these they're bigger I "Oh, these tremendous Look had reduce gobbled or from obviously Noel, watch pulling growers, demand one saying, guy, the macro corporate something often X gets we Look more all time companies than that's XX the of Diamondback year-over-year announced, up what the out just at of consolidation. rig more down you this is even by happening, smaller do could add that, it's view, it just I'll count. for to faster all by actually by point now Maybe amount going consolidation. deals a we're we mean rigs. a XXX. thought of

environment competing -- pretty it's so the it for we're with that thing system. Same but not necessarily with just pressure we're guys of pulls same favorable -- It's us, fracking. generally All those out about excited of the for that. rig, a

Noel Parks

for the Thanks observation. Great.

just get for do? some that to, the conservative benefiting it's about that from? now more the you in lot some on just assets that the on owners think or just thoughts in looking didn't timely. or in could I at just some overly they of were a really just seen the expectations And take relative to acquired Or the benefit of just resources maybe you're old you've there's to thought is that fruit you low-hanging just retrospect And what original think hindsight, do outperformance your weren't able technical get it the stuff to areas. of have your capital

John Suter

recipe that little I really know, just just is the it's I I bit from time, here really change, type solid, this Yes, we things. wells on stimulation do of I previous number neglect some think outperforming were a we had number the a it's We're in think I've have the wells what good of think a in We one their wells of turned what the learned of are number what I job people. X but -- positive homing tell certainly quarter very a also a to stimulation things, kind also that curves on. it's that you from coming but results. just that primarily a -- but us from don't not really the I these on optimal We're for it's under really doing wells. of giving can are don't review, I of at wasn't number but change down far, so a a is still of believe, stimulation thing.

Operator

all Ladies for call. question-and-answer conference will Thank you that joining. conclude and and our gentlemen, session today's

You disconnect. may now

Riley Exploration Permian (REPX) 8 Aug 242024 Q2 Earnings call transcript