REPX - Earnings call transcript Q3 2024 | Riley Exploration Permian, Inc.

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Operator

Good morning. My name is John, and I'll be your conference operator today. At this time, I'd like to welcome everyone to the Riley Exploration Permian, Inc.'s Third Quarter 2024 Earnings Conference Call. [Operator Instructions] I would now like to turn the call over to Philip Riley, Chief Financial Officer.

You may begin your conference.

Philip Riley

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

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

Bobby Riley

growth back million welcome dividend to Today, including updates distributing QX per public shareholders, with Good our Philip. $XX our to This of XXXX in to planned you, we're team guidance, and an XXth X% our to that shareholders. Today, Riley rate call. earnings key from for cash dividend us paying or resulting continue consecutive met XX%. morning, up metrics share, dividends debt Thank recent increase has our flow. free exceeded XXXX, down Since on several highlight since as returned we've paying company and public significant $X.XX a our a we allowed to previous annual quarter. QX, achieving

shareholder happy drilling delivering report completion to our this debt prudent that our financial in is delivering management. I'm million underscoring to $XX down maintaining paid consistent campaign results. growing and while we commitment returns excellent and XXXX Additionally, quarter,

outperform are generate opportunities ability strategies acquisitions that of and also driving to invest value. This generally reinforces both underscores results infrastructure the year cost strengthens Mexico. highlights in successfully growth. future our our production to quality support New and in to effectiveness new our West seeing operational Texas down and of relative forecast This will prior while We the success and

presentation. both that potential outperforming production Basin Texas, Midland of in we've build did compare primary from Just how to beginning X wells our for analysis core Delaware insights per in production maximize demonstrate transportation the as oil data and capital and breakeven area COX. on regions. We favorably which been assets and America provider as and believe to were metrics suited champions from on X future valuable oil-focused QX COX opportunities this take well among in we be in will reliable, NGLs foot asset, horizontal infrastructure hydrocarbons, North slides mobilizing vertical post Basin a longer-term with cumulative pilot efficient later consisted long-term industry, of footprint in the that a plan both for Riley's are in and the The and successful a assets of showed applications, reservoir's we and and be gathered to advantage believe our the fall top our XXXX, that Enverus, and provides most Using will these in positioned pilot continuous to This small life. data can operating we forecasted ensuring wells we in best wells. providing our investor out data new lateral we EOR to both processing, takeaway, value in efficiency see enhance productive we early one our for prices. Since

installation Yoakum County, economic these of significant across RPC power the power projects. will crucial supporting the both joint anthropogenic in evaluate Power, progress with to be venture, to operations load final and continue will transferring are that actively We units In sources units. our outcome. We made we our COX completed

equipment well permitting our advanced siting, with positioning orders, we us project, for larger continued merchant For and development.

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

John Suter

Thank gross turned spills barrels. you, in our turned safe in demonstrated achieved focus practices. metric for completions QX on wells. year-to-date. a start X requiring and these line of achieved morning. efforts. In activity. for QX for incidents, operating Once accidents our rate total wells The line through operations recordable team and completion Bobby, safe good The program. Riley their QX carried Thanks team and XX, continued a X operated no X in to and quarter, provide the over completed We from remainder The are us the our DUCs again, healthy give in days to XX in XXXX incident of QX vehicle will X additional drilled generated or a recordable XXXX, we over excellence XXXX XX% of

fastest million to grew X-mile X.XX days at X.XX oil days production increase and This quarter-over-quarter, also day X.XX TD XX% to is XX% records XXXX TD. Net of down oil for County of completion drilling geosteering production continues an our costs fracs. We've to feet drilling, spud to XXXX lateral through mentioned, equivalent. from and We've operations. pad million per lateral Bobby relative X%, to Yoakum through scale year-to-date million drive lateral achieved been continuous while X.XX of efficiencies and for equivalent X.XX zipper of barrels in and and optimization from X.X-mile by set of our pad economies respectively. has practices, and drilling efficiencies million XX% X.XX As fastest drilling campaign barrels at day feet to in drilling and increased from spud per both XXXX, drilling up

MBoe daily net Our per this day average production quarter. was XX.XX for

and We XX% our backloaded steady exceeds New send costly well third wells moves quarter, expectations X% the rig year. more in this X% make production Lake to provider purposefully in these the is additional Mexico to implemented gas our opportunities quarter wells spacing the wells results Initial continue Red the gas. states. to completed completion down including produced methodologies to of year. continue for on within compared from previous provide alongside by first same efforts per associated The and our planned BOE to team expenses allowed with X area. progress completing this wells future were Red to last Lake offtake sales versus in last We enhancements Much meets our be plans of X asset. Lease quarter. The increasing to between to of successfully These the our of driven or test $X.XX avoid drilled development quarter improve operating of will to us midstream valuable the us. more

vertical our Mexico drilling for to New our in control $XX slightly, though the drive the has spend of as roughly a construction by With production to lift particularly and asset, program down even much offset quarter This quarter absolute gathering our is will look system an increase in costs, not at limited the as gas of of changes. In gas and to optionality inclusion and future. will this well our existing on allow gathering million continuing and increased in We're our manage, vertical in LOE of compression we our within wells infrastructure software fourth asset better compression the allow This optimize LOE capital production. wells. automate but and leveraging production. Mexico options to technology and fourth of artificial total New accounts includes, equivalent help XXXX to begin takeaway for of year, other

Texas in more the we we electrical generation of production for the results within on self-generated As now to in supported and over We'll a as power power, continue the approximately of footprint. I'll load quarter. to with larger financial majority QX XX% to third to discuss transition Philip bring turn call power our self-generated guidance.

Philip Riley

John. you, Thank

including capital tax converted flow That we've and repeats gas $XXX or average XX% hedge of this into flow flow. before significantly to CapEx cash on of settlements negative on oil total operating cash cash lower in basis. we record a higher Hence, $XX.X quarter. Year-to-date, by cash before higher million and XX by operating the cash CapEx by volumes, the working was flow XX% flow that free changes of cash flow last capital free $XX changes the costs, set basis converted production cash XX% for lower XX% prices. We X% XX% volumes cash and offset increase sales realized free lower of the an capital, approximately XXXX prices unit months. million The before million of last accrual of operating improved working income decline quarter million despite in levels working $XX to quarter realized reinvested was changes million driven partially increasing $XX.X a upstream or latter with quarter-over-quarter. flow prices, Third payments,

discontinuation, we're $XXX note $XX by of is cash income as down income, reduction was value We free with $X enterprise gains year. total million new quarter and months importantly, been on total credit growing year of from income the significant and debt-to-LTM we'll capitalized, less quarter the $X $XXX absorbed million of it cash million X% some XX% with and And months the down free was value will per in increase shares the reduced our based final million facility a million a of the on this to million I'll XX the was asset this noncash. A equity flow after-tax of close look forward. Net in and capital to utilization to -- while quarter We'll objective. Operating quarter last more yield debt flow. for XX% $X.X free impairment the EBITDAX. The year. unrealized quality quarter-over-quarter. the cash of approximately free ago, the has The hedges, company $XXX avoided in third still which in in still or $XX was cost, was hedging Power X past year our Debt our production to free price. half spending $X was combination by efficiency. The normal COX metric, commodity equity the X.XXx the useful on third yesterday the capital Adjusted of down accounted facility the but approximately to to the than million impairment. flow related mean, value credit from quarter-over-quarter our by value or EOR impact X% and of the most X-day I XXXX. a team was or by project the on book go-forward and for growth XX% cash and and cash believe higher key by by delivering per this increased free net cash to $XXX previously reinvesting debt allocation end flow $XX million early we're lower excludes XX%, flow. quarter as proud XX% share this the been So the We volumes be million. which save of stock a not this of over of gains, million is Generating about indicator impacted going on year our of million after at the flow basis, investing XX.X impairment the adjusted volumes, pursue now extension has growing cash increase but On outstanding. flow contributed with flow of Dividends amount objective the corresponds million cash JV. X.Xx for $XX million free reduced OpEx, XX% a even the is year, same through on realized, which first $X course shareholders'

year, which Moving XX%. our beginning volume of by on plan, called capital to for At guidance. the while annual year-over-year XX% growth the cutting oil we spending announced

based on year quarter XXXX actuals Our full for for X increasing oil X plus XXXX calls production guidance quarter full range of XX% to current XX% the full over quarters year production. of year guidance fourth by

oil on from to Approximately levels. for the over the beating attributed be still improvements quarter exit organic denominator the benefit rate has third is experienced by extent, for unit still increased quarter of a quarter to XX% ranges so XX% year, increasing fourth annual levels, to and which growth our is by the primarily growth, guidance oil range reduced not of to to with and development OpEx in illustrative cost to can both sales goal. Fourth original at be to volume acquisition, CapEx gas the effect in to volumes, funded fourth metrics. exclude guidance quarter XX% of bolt-on for overhead acquisition purposes, annual quarter in XX% were lesser Our up XX% prior attributed cost XXXX we'd our earlier which 'XX original the the owing the Adjusting plan. XX%

the range a CapEx or quarter the of year-over-year reduction fourth implies low end using Our of high XX% end XX% spending. using

it year CapEx compression project, huge for growth. Back we'd closing. that which gas XX% looking we achieving year, range illustrative Adjusting account the in will reduction a exclude did then full compression John on year, for increase to earlier from discussed, of the as Our didn't annual still from last Bobby, to contemplate you, benefits. new to project last be have you. Thank yet XX% purposes, at longer-term organic quarter for CapEx that

Bobby Riley

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

Operator

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

Neal Dingmann

My on plan capital the upcoming and specifically. first efficiency your question D&C

your looking maintain environment to seem the as growth? how all versus around Slide a wondering your X. with just do certainly You the at by plan continue when And more to to I'm still is would $XX year, next less similar affect $XX plans? notable

Philip Riley

Thanks, Neal. Yes. Right.

if you guidance providing we're saw. XXXX, not for the now So

that. done historically haven't We

Now typically few in same the a can it -- in early offer things. year. the do we We

the year, we So we've than alter more it We volatile. growth gains on growth, weakness in making quarter. track through macro for demand materially fairly the growth capacity, large keep and got each aim development, look got we places is China. spare supply might crude even like and small you non-OPEC last of multiyear similar. might a made we calendar backdrop achieve year, XX% of amount those of like gains Similar that Guyana, large turning looks pretty strategy. the to in record got shouldn't and account simply each loose This our quarter. XXXX incremental balances, this time We've may OPEC areas

that. we're So watching

the all Of course, some but got with with processing that optimism team Board. we've domestically and growth the election, still more the we're here outlook as post

that the some XX%, maybe on swaps XX% above us is maybe gives I than current that, about that some ballpark companies. on year, On $XX would We're think of the about then $XX, production in mid-XXs at And us in kind total price collars next hedged XX%, strip, volatility, to probably of oil affect $XX, less cushion. pricing. maybe XX% PDP. XX% got the so you've And

little $XX to maybe less with as bit you do protection with volatility. And and that able of that at assets. that started a certainly So things us some changes, think we're question, mitigates But have less. gives $XX, got to We've the be capital-efficient I we'll some one some don't more then at the we level. big make are If growth.

price, with a I tiny there. do So see production might problem don't we bit think there but a in quite less keeping a flat low

Neal Dingmann

quarters data that's No, more to I describe any focused maybe upside points -- specifically, of ask should next in then secondly, next could several thought. And on quarters? and I be looking few potential just power help sort what specifically on JV you the the the can't for significant maybe we

Philip Riley

this. of and Yes, a analysts, bit way is question, we're the are you We fair foray. of to it's right most a this for recognize new and do a looking upstream

So here. we've X got phases

own to power installed. our is effectively That's operations. a phase first behind-the-meter project The

to the to noted, we That's more second like the is soon progress invested being services, and the the and that making date. And capital to and easier ERCOT, of there. making an we've on going then great guidance of generation with services. more. over and sale one some which million the transferred is Bobby load As be give That's the hope little in larger great or business we're RPC forecast, backup mid-teens we've is power type and that $XX got a we'll over to is return, a project, ancillary But that. progress

And contributions forth. We're executing surface agreements so so obtaining and material great permitting the acreage, this interconnection quarter they're making equity JV. actually showing with and progress not to

items Some construction which some of certain project those have then are we sight on financing funding another of options, financing some some provide could have contingent milestones after line payments hit. and the And option. also

making progress We've That's midyear second favorable year. We're And prices potential to phase, We've that of prices ahead you, market, seeing an that's the Permian, on a for on a kind return out next at prices. scheduled on a with make there, part gas in of projects and higher the got so how lower hedge low with tougher our of implicit bit setup XX I there trade. this the the providing quickly. got wide currently business though, enjoy your to a those power We'll allows patience. gas see we is in and just come price can we're lower thesis you've there. midyear to upside volatility. selling if encourage there materialize. gas happy on and prices, They more trade should with be are that we got soon. want also to forecast, information appreciate at lowest ever We But even that quite minutes day power every we potential and money the

Operator

comes line ROTH with Capital. White John question next of the Your from

John White

very quarter. a on Congratulations fine

John Suter

Thank you, John.

John White

this I million. if believe you I some you've $XX XQ his infrastructure your to the provide item COO in a detail. your could In line but wondering got on more touched comments, $XX million in guidance, was of range

John Suter

Sure. Yes.

and -- long-term value delivered that key infrastructure found been we making investments earlier, mentioned that development. has Bobby in champions in value as Just delivering

Red the Our asset Lake has opportunity. same

installation So deliver would River help us along mostly to compressor with side our associated much and more not large a full. existing in manner Pecos reliable a likely XXXX west gathering will much on on the the low-pressure than possible gas of network reasonably existing that's program sales volumes of station system be development the

more have So gas the make drilling to needed, the want we future, X there. processors as years, this spend development significant to markets various optionality dollars in X gas sure us next give situation and if different station future we will to the optimal in

Operator

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

Jeffrey Robertson

follow on at in thinking benefiting am compression on up oil -- continuous for to that Is with just both system John, will there'd Lake. I be a benefit the also takeaway, gas operation right allow production? Red system that more that, but or obviously

John Suter

that be these more from Yes, that allows gas some the downtime absolutely. that, again, believe to of situation. We'll oil. capacity, which a to wells it's more able us in access let more to we new us to to produce we if is much get reliable compress turn, system high-pressure Certainly, going produce

So think in key development XXXX program kind our item it Red we on a side. Lake the will of be

Jeffrey Robertson

from Will too, operating it standpoint? positive, an a cost net be

John Suter

There'll those would should a paying but where the of get Yes, then for likely installation, else. be. fees we do on somebody that that, be pay we some it some discount might on we'll of normally have been fees we'll

Jeffrey Robertson

the third in back then you -- be to think the near or at in XXX%? close the power, -- you're at in And on you some XX% quarter. Will point with self-generated future said champions XXX% the in the fourth I

John Suter

years, whole for on we'll drilling new certainly that. think yet. we kind would -- adding that next of as the slower the the on couple a network going gradual is build there all But I that we'll wells not to drilling of get of imagine. of than be be a little it's I program to But footprint tied each bring we now, be bit as field expand as in grid, just programs, go. our There'll

Jeffrey Robertson

the might of thinking less unscheduled more also but if you than that power existing right maybe allows is, you you one, number rely on I that lower that supports oil costs grid? to to had economic downtime the am benefit more And power reliable and in produce

John Suter

Yes. But is with a power provides mentioned, downtime. like it I of savings you're say less perspective. right, would an it's you -- in operational does consistency do benefit what us from great less

being time the think kind grid at I issues had brownouts of of we the in past, electric end the with system there.

more downtime control time lot the the a produce which our on us not over more wells of our and lets gives this situation, good. us So is those control ESPs,

a And in so whenever down lot I drops just stays for future while. workovers think save that, a money something of and can that of

So about over costs as more down it. The time should we add more we're to and unit power excited the go installation.

about excited we're So it.

Jeffrey Robertson

were of were you will other that portion And lastly, being COX the Philip, said costs have the the pilot. related at capitalized But the being costs pilot? any that I operating pilot expensed to impacts know discontinuing on that

Philip Riley

compressors It's is it a there could on won't such. less water potentially which which No, through really expense. $X usage we with being roughly return, million a that avoided -- less and COX and little the see bit contract there power production flowing run, some less cost, year. Implicitly,

mild So significant the but maybe stuff, some on OpEx. not

Operator

the next comes question Tuohy Noel Brothers. Your of Parks with line from

Noel Parks

about of Just discussion piggybacking the some sort power JV. the on of

sort If walk through. you could me just of

of provides which to -- terms of that have, ripple is that how have projects in to gas we would power opposite the economics low of on you and side stronger would high-quality gas if the you through prices, head So problem of then a the much different sort shift? of scenario nat sort advantages couple that

Philip Riley

That's question, Noel. fair Yes. a

a or So price we first talking NYMEX negative scenario, which we Henry remember differential Texas, and talking significant we're Pool West higher if truly like this quarter. they did Waha, higher often higher a to are Plains and have basis and foremost, in have gas such, Hub all

still from, post kind. we gas out that are in gas basis our $X, baseload differential. But project, we realized say, there are long a So taking $X on way $X,

that -- kind So JV in instead it of we're kind. it RPC, selling to or the in taking sorry, is the taking market,

as feedstock. a So that acts

of and over it we're to sunny power of price comfort and of there and between historical that windy, demand a lower sunny discount day in in retirements take larger surge course, effectively. And of -- prices. some we would the disconnects, be talk correlation bought weather and be XX prices. But going the you're in type power deal, data marginal traditional merchant renewable California power oilfield to then growth, gas there outpacing especially setting in all there Texas, oilfield be a of the from what boom growth the have and that market the and of going out seeing economy nat and and price that There what of the course, is on sold technology market addition town and middle a centers is growth is to certain then, general price. material gas it's clearing can if such. at Texas West price a coal of even AI such the And this it's have the strong face all in We of the

So excited are the for the dynamics we're prospect. and still about good us,

Noel Parks

wider really localizing and of And part you talking pad of from implications I were necessarily geosteering, don't And there's you've if techniques that's interesting. you've to the I out just a you wondering, I surprise. some maybe with had for anything seen the the with out that call, was an success might be success inventory. anything any been wonder applicable And the efficiencies. But you just those, mentioned drilling, the It's results the -- about seen imagine just zipper earlier fracs. in the

John Suter

question. And I great you're right. Yes, think absolutely

pleased now same is with pad testing But just cheaper the We've continued We're with. is really, on I So we the Mexico production what there I we've position have again, some we've we the have for a well. tend methods have and see improvement, improvement again, in been results tackling placement. that of better But on costs, just the just way executing using rock a getting are had put quality at spacing level say the of really our New curve good we've basic But there's sand just It's to wells, ideas. industry type able just especially asset now. unexpected with Certainly, And again, great we our ourselves zipper to asset, well. things great that we're that. been and disposal. we wouldn't it's lot set performing and some seeing but any doing blocking it. I all of more we're just get fracs, the well think with transformative really mean, drilling. It's start results up are to I working with.

Operator

further participating. Thank you no and concludes session are call. our all conference this time, at that there As today's Q&A for questions

Have You may now disconnect. everyone. a day, pleasant

Riley Exploration Permian (REPX) 7 Nov 242024 Q3 Earnings call transcript