REPX - Earnings call transcript Q4 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 the Riley Exploration Permian, Inc. Fourth Quarter and Full Year 2024 Earnings Conference Call.

Instructions]. [Operator like conference now Riley, to turn CFO. to would over the Philip I go Please ahead.

Philip Riley

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

John Riley, Joining are Chairman Suter, COO. and me Bobby CEO; today and

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

our reference can turn the website. appropriate non-GAAP certain reconciliations The call GAAP over also to be to our measures in Bobby. these on I'll We'll found now measures. disclosure supplemental

Bobby Riley

accomplished. Philip. proud reducing you, had We and exceptional Thank our to capital morning, what plan XX% XXXX, welcome XX%. to of expenditures earnings oil our the I'm Good QX production all while grow call. XXXX has by we outlined year At measures, extremely start a by by of an and team

cash production actual production growing total with results targets XX%, XX%. increasing declined expenditures oil by significantly while and XX% Our by by exceeded upstream capital these

less into Our allowed reinvesting dividends midstream paydown, which of than the base cash business, half past flow investments XXXX asset our our these capital excess result upstream while performance of and underscores and for infrastructure achieved and the efficiency our of results, investments. into for We power. debt cash

multiple regional over flow and greater our treating assurance. our in growth significant project. midstream our and excited Mexico, ship the provide where transportation, In processing are to New to access see operational investment activity Mexico and advance we Thus, will development more networks plant optimize will robust New XXXX, strategic we to development enabling to gathering potential. long-term more development This gas control we

could that third-party commercial Additionally, we with generate revenue. significant see producers opportunities incremental

In gas we This a secure capacity needs, the gas while announced much-needed takeaway third-party feet to purchase providing region. XX-inch plans infrastructure XX-year capable natural agreement transporting pipeline cubic XXXX up takeaway future and and high-pressure volumes, for growth day. our million early of per will for a accommodating XXX

Finally, make which initially reduce on power joint our an we Permian's continue intermittent designed was and grid. to reliable reliance XXXX progress venture, less Riley on to in

sale the ERCOT, expanded the fundamentals in XXXX include generation We capitalizing attractive to within scope of new into grid. power project Texas power on market energy for the

to future we strategically, to our while continue of opportunities actionable sheet and flexibility maintaining strategy, should focused invest will capital balance part arise. access As markets additional preserving

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

John Suter

in morning. over good the incident through of practices. and Bobby, spills incidents, or recordable XXXX. safe demonstrated accidents in Riley A no you, days X Thank total operating recordable team The vehicle barrels. excellence operations We rate again, XX% Once XX requiring safe achieved achieved metric year. for a

The completed activity. XX, and line are drilled wells. from turned turned we over wells In completion XX line XXXX in gross carried XXXX, QX operated additional XX in

assets our measurable We and campaign foot metrics. drilling year-over-year achieved and completion cost Texas XX% operational XXXX. success by New Mexico XXXX both both Our in and decreased across fiscal per in

zipper-style note, that pump completions moves all rig drilled drilled our day setting per wells same on XXXX, XX% that the laterals. X completed multi-well in Of X.X saving mile time, since for in Texas we lateral XXXX also were and times. and mile feet by At pads and increased were records both on had

savings, TD better targeting times. driving selection, Other BHA assets sand minimize spud or to which spacing be higher increasing These single shown bit cost us allowed strategies lateral reserve capable. made our steering optimized cost efficiency value, and have to in achieve as of on loading. runs focus to and were drilling exceeding completions to changes and our the through maintaining to through while optimize continue cluster decreasing shorter We production such and reductions resulting

from Net X.XX million from an to up million X.X production production of in increase barrels year-over-year XX%, X.XX million XX%, equivalent. of grew oil of barrels to oil XXXX, is equivalent while billion and X.XX

for of net XX.XX production MBo was XXXX. MBoe the Our day day average quarter XX.XX per and daily per fourth

sell in produced the were same the to and lower percentage strategic our work sales Texas oil projects overall but oil partners midstream to of of Of maximize with continue through able in we our production, at mix. gas to gas We optimizations. note, more capture infrastructure in and resulting a

in to development The allowed flexible field considerations. and a controlled at to by us other pace Allowing strategy drive has us. to conditions industry Texas full be market us

is We will on maintaining added focus assets. XXXX. The develop infrastructure increase achieved, continue for to was basis value as This creation the Mexico while main operating costs. this production utilize approach our we our low in New

XXXX metric. per per with roughly the LOE flat equivalent XXXX Our $X.XX barrel, for was BOE full year

of more workovers as selection. our efficiencies, chemical Texas treatments asset gotten cleanout These operations. efficient we've timing work including refine our of in overs and Routine continued have to optimization tool

longer proactively less years doing production is them per a expense cost they ago, resulting result, higher year-over-year Overall, did intervening. XX% in than X BOE our basis XXXX. and on a we Texas As before for down in workover began XX% just cleanouts

substantially fourth result gathering New budget. quarter in ARO Bobby of XXXX New development that a discussed, the Mexico initial in on project. This to Also phases that of we construction acquisition the a and our part as saw in Related the came midstream our for compression XXXX. and the spend XXXX completed plugging XXXX, will lower of requirements schedule within Mexico

the currently of high-pressure end portion the is of Commissioning before compression month. the of with project sales first underway, this this

existing to begin to gatherers the high-pressure low-pressure in capacity system XX will fill roughly leaving the million interim. capacity process, our the compression We and a project in an additional with day

gathering compression, transmission will be to increasing built infrastructure and gas out continue XXXX, to over and reliably. consistently our ability deliver Further

our with on currently using station This in greater Texas benefits of generation existing more power percentage power control We're of our utilize utilities We're self-generated than development lets a XXXX. without plan of to drive assets. to installation relying us continue the end evaluating roughly XX% development our Texas New Mexico. the at We similar a our timing.

XX% turned operated it equivalent of efficient delivering to while LOE to want capital the summary driven development less Philip, a line per impressive XX% wells base. spend development year, XX% dollars team net equivalent wells, year In all more produced with the for D&C more and more in I XX% net you. spent barrel we and production over for technically stellar very our safe, asset safety metrics. It I'll was an congratulate Riley XXXX. operational for successful turn and flat

Philip Riley

business, of but free I the we've assets color metrics. from are as in results residual in our flow. separate established recent and forward stages metric financials CapEx, after add this the straightforward, I'll won't cash for address these total to new the Thank financial on different outside transparency acquisitions. a CapEx be us is separately flow turn, disclosures to or We lifted as and free is midstream which flow growth to of midstream cash newer cash guidance, pure upstream cash and maturity most production upstream believe shareholders free a compared will which, upstream XXXX John. of you, some helpful well Upstream volume Beginning with maintenance flow assets. most show given allows reinvesting

project. the capital-intensive most follows: be upstream reduction, allocated flow. To the XX% including cash by maturity million debt XX% our often to flow of acquisition to initiatives, businesses, the to For JV generate having year-end. will X% leverage as upstream ability free new was XXXX positive XX% businesses went we cash free power in debt to Xx to with apply example, $XX at an and investments growth operating capital to lowering business flow XX% early-stage year-over-year with the growth to additional midstream exceeding the correlated allocated cash

With the of dividends. final XX%

to building plan XXXX was primary If can characterized upstream objective full we're option then guidance. range core in activity. the John showing of in XXXX reflect the of the be a some wider range Texas, given XXXX partially of to and uncertainty gassier aggregation. flow our the to the should X% business, total and and with higher The the to up total impact benefit as demonstrate year as oil Beginning of annual We've business cash capital D&C Moving we and positioning, and to base objective X%. full production generate partially longer-term on efficiency our asset optionality of our year to XX% plan free a with referenced. leads processing growth mix increased non-op is to X% from oil rate CapEx growth broad rate which that of gas fairly got production than

showing basis, back-end but production CapEx higher increase operated full higher maybe CapEx upstream could a relative D&C growth increasing Full is weighted. than including to year we're well being to year, spend last X%, while due currently rates costs development be million percent year. zero last volume from up higher year We're percentage essentially to by primarily $XX non-op by forecast seeing about

XXXX, is percentage measurement is the year. in captured purposes, production CapEx smaller the within for a of captured So fully while

New also upstream, quarter, by land XXXX of most put wells a which There's operational are outside line the an smaller of new our project. infrastructure collect of scenario, us flow Mexico. we Other accelerate items, the allow including then are this Specifically, midstream set online midstream basis. spending and XX% to in might which from might accrual the in for net the with levels late currently it's operated the revenue. pipe if for and aspects And of midstream other year, gas on scheduled fourth into some where mostly are project,

or on debt flow, from $XX million of fund We year to is $XX staying shown to timing though faster. million ranges hand at construction borrowings on needed. schedule spending could and for it a neutral slower $XX credit cash our believe about WTI. plan to Midstream the we approximately this reasonable what cash facility forecast be with We correspond as

on have build-out we develops in cash well to can with as as balance but modestly possibility we explored midstream sheet simple, good that during as flow project, phase. the chosen note full sheet it balance to we our increase I'll the currently our alternative reconsider fortunate to of the takes the should with for We're shape while options debt financing revolver shape. low-cost equity keep ownership, and have project choose

the tighter investing investment from method range show Riley rather at project the CapEx after Recall million and partner. we there. of a joint not This level, ERCOT We our $XX funding each to Riley project, level JV presentation. to investor an of $XX XX down the progress the Power, net updates benefit good Page equity venture is of on level XX% the is the is financing but For listed for at and million. several year's team this spend to a JV making to contribution the

and trying midstream for and challenges allow well multiple Aiming trying To ways upstream, complementary build situations opportunities. create power across to that into summarize, win. that work turn we're assets to together to are to

working interest. in our XX% New is Mexico if benefit. wells working Note, midstream asset a interest example, have than is and in our XXX%, operated lower average to we For about

we wells, If turn to then remains basis $X have GOR And for index to spark in million a midstream roughly basis gas to to stay Mexico to oil for compared revenue yet cost New just our elevated, Thank million the Bobby for ERCOT. closing. context, we the feedstock could on gas selling time asset gas have power for we prices effective If $XX if price lastly, lower to spreads Permian tough, increase materially year might back negative correspond stays year. benefit. to for I'll last higher $XX generation, over an to leading negative, $X.X of realize $X, still million you. which of somewhat it then

Bobby Riley

again, Riley appreciate we and time Philip. you, Once in interest your Thank Permian.

on firmly strong pleased results, remains with our we're our future. While the XXXX focus

building operational excellence. value infrastructure capital long-term and We strategic investments are through committed to allocation, disciplined

upcoming Our long-term sustained turn will strategy call Operator, continue this recent for for now Thank initiatives beyond for you believe over position questions. growth and you to the your us drive continued we may shareholder our well year. value support.

Operator

Neal Instructions]. [Operator of Securities. take line Dingmann the from our Truist with We'll question first

Neal Dingmann

other you've ramp-up, love things one, coming upside? Phil, side. see the of the wonder on what agreed are maybe first got to that could my you've wondering And second, just of just do power contract? maybe we the I'm the the you us for type I'm there? I just the just gas potential tell for, then wondering, continue And maybe quite project what for would consider, upside ERCOT on you that, you maybe besides soon. one what heels midstream

Philip Riley

Yes. going all Thanks, some a the slide about Neal. great. we've got tight the Yes, in power updates merchant there put out it, on excited thermal market project investor there. It's generation. Really our is deck,

So we're Those a for to both gas. We've have We've agreements. that. done have take procured that. to thermal. and excited got of interconnection excited while. We're several sites our power all got There's

last be That steps And that's XX decommissioning. power the some Next following that then a XX-day will days, we've ERCOT in to got maybe maybe X- gas X-month interconnect construction. start infrastructure, quarter, will maybe build. there,

first much of the kind think still how fourth a testing that's do. to depending into we we quarter So It roll year next on deal. want of part might

of kind that's timing. the So

we on economics market, a then some assessing and As tariff we It's still. both with developments noted, volatile batteries and latest are been such.

Battery quick that's to guess, battery bit thought been LED like been very is the has a a pricing. Just loaded there. first I price. large. This the TVs, grid generation

as price of been supply, been The has falling You've falling. has well. got a ton margin

excited how good. And assess nice Overall looking this there. for we just though, to are do business we're to a much think it. be could want continuing Prices project year. next We so about

to company. for whole, like relatively the On as for it's of We hedge natural our it gas small basis. total like a a think

higher And Henry prices, gas investment. on as nice as this long spark spread. still is these Hub even poor. the As at an basis some gas you We report get equity Permian very method nat

through are up that down which They need a there. our So of showing the invest just have equity to to JV. equity We've also financials the than below financing the form at other down trickle got to in us method. limits project the capital we're there,

might you kind about overview. about to talk there. answer give of outlook more, just midstream some midstream, an to let know that's asked if exciting helpful. I So Happy some But I Bobby you

Bobby Riley

as for Yes. we as Thanks, of we're make develop Philip. of sure molecule to excited control New gain quickly on develop. not we about somebody Mexico we're as No, our reliant can that else's kind capacity us to and assets our takeaway

what water up did think really we to in infrastructure operate a expect with us able -- I the place led started to year includes we long-term plan to which some power, to the Texas So New of to that efficiencies to in Texas and putting able for Mexico. in that this that we're and we're now solve benefits after in getting see gas, when future in in all be is in Mexico we initially there, us New

of the So getting staying that's just part and of molecules to is top on the market, we're it. business

Operator

the line Our with next from come question of will Capital. Whitfield Derrick Texas

Derrick Whitfield

decision project. operator? you to seek a I build your to wanted to from project, midstream the speak my Gas midstream the the versus need for a With could solution I first question, Mexico certainly focus perhaps New on understand it

Bobby Riley

a building The and in only dig me of whole lack in difficult with of some net the potential operators looked from over the into we of to our in New right had the the area development that The kind choices were XXX takeaway us, lot plant upwards regulations XXX would that because limited. basically, other locations. one-off of be Yes, basically of suffering but gross a at a close the state when we Mexico, and not locations region let now. in what area capacity permitting is somewhat probably treating

opted needs to a that for what low-pressure move through tie processing would plants. high-pressure long-term to so our molecule plant into -- just compression option be and is different the looped we're XX quite midstream to into miles, XX were into along company to a processing building the service line roughly something that that treating neighborhood for gathering And were large actually a and we about have

So downtime. no efficiency with it for create more will or us limited really

I from that, of in long upside area. to pill think going big but swallow see the other lot only it's of operators not I to term, from a kind think initially, in So production, a our you're but

Philip Riley

Yes.

those Derrick. and gross. Let little said there, one locations nugget add net on He Bobby XXX for me thing paying a you XXX attention. gave

our interest that tells what less So XXX%. you working is is than

got XX%, of and think for probably XX% to there. interest that is in non-owned -- XX%, closer operated for I means working even a it's amount -- your got inherently, you've but produced molecule, sorry, your what you've fair or

And so to are true than if that amount up, for benefiting rate working know there third-party got market producer can even a other represent project shows non-owned yet incremental talking we've of midstream going zero while we're and about that interest that, and fair revenue. there revenue we're just not charge this parties fees a

Derrick Whitfield

the then your in Great Slide you could of location throughout Slide progressed the cost referencing your and to lateral referencing then length Terrific. color. X, and XXXX? And how for optimization But what's color And X, from then per D&C also into D&C prepared foot thanks mix, perspective speak plan cost baked maybe foot? remarks. per XXXX on

Bobby Riley

Yes.

Mexico us looks our just asset. So Texas as Champions predominantly of in our year. Again, probably about. those an and XX drilled We're as we XXXX that was excited we're into our wells our asset, a horizontal and excellent really worked completed way predecessor, exciting wells couple between it New wells in really

if have the number think did -- $XXX from around we Like I a I foot, seen to down to around upfront. continue Champions kind we were But fourth we were until foot, you've of a going think, with. XX%, figured had of infrastructure we've it's that no, go I fully we out, quarter why, in we slide, heavily strategically right cost to which improve. said, -- we per for were for have That's again, the kind XXXX. our plan But wait

of strategy rig we're XXXX, our prior starting to we the in picking spend in we've back money 'XX our the years, again, in In the I -- there in, up place. where same put that thing in the that kind Champions, allows you'll think see infrastructure soon infrastructure, where get development. we doing money and which again, once flexibility same us very for be And we'll have

wells. of of to have some our New the our by speak we also testing late complete We're drilled be technical last putting we're some us Mexico. the place. as back able year. doing go year of advantages So to drilling there will the to second in we time of completing wells in think We in and give short-term some our as we current start gatherer on half all that half the 'XX. some in those compression that upgrades Mexico We'll we completions New our

year. So of New and Champions kind start that's this Mexico in we why for in

Derrick Whitfield

clarify for just And length on to lateral XXXX.

an that You improvement, XX% saw continue I to project Would XXXX. longer you in to think, lengthen?

Bobby Riley

-- are stimulation. of much purchased, very places of they're set the up we New are in where we Champions, we half mile we laterals the versus of cost what on setup, of other X Texas mile wise, is there. had Mexico, think we a there's the when We're think feasible. in units. Mexico Permian X.X still say tend have to I extra to But In

later. at frac gel are can stage provide slickwater around in could length. Texas. some do fracking which And crosslink of Mexico, New of I looking our in frac the already already recipe for also New with sampling We're what As more Mexico we increasing mentioned, upside with and we're in a playing

show. about that has -- the now at savings the could tests we But we're will excited We'll XXXX. least in opportunity results what see the significant. right As of be for see tests those that potential,

Operator

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

John White

And report. reserve very the results around, reserve especially congratulations way your on nice all -- proved

announce? are Wondering worked ERCOT you many do idea could on the something provide when us might what's can being deals about you you or how status And an your get talk give on? you more think if executed of that and Maybe of those deals some detail effort.

Philip Riley

about the the we project being I'll reserves, this centers Philip. you I'd for that to you X, middle we data John, same see We're and is that can and everybody's different far. the of deep -- -- amount the so got right of power What first We the large time, ways response that. news now, of We've ERCOT appreciate we're We're say our We're the going so supportive. people like happening over we're forth. gas the doing more. in Yes, increased intrigued At exploring what's some market got tell participate gas. one our we've we're have Phase in of control we're talking doing.

out some the So opportunity. first-mover we see a grateful to do We're how we're nice we're that this had want We by progressing. intrigued degree, to advantage. how works

of updates the just came of some interconnection with in Some agreements. our these week last in

something that's listening while and have these. you've frank, I'll all So a solicitations been realize inbound they if -- some calls, companies to these large their because on those earnings of they're XX be of got say take been them working can gas midstream

So it's first forward is reporting We'll be industry very exciting. hang and That's I'd here our responsive thinking. and it let's say, quarter. how months back goes. in both on X see Glad tight being topical.

Operator

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

Noel Parks

morning. Good

assuming Looking or into terms big a year, the to pressure availability you've Is been scenarios concern looking at? service cost I'm in of say? that like fair the are not

Bobby Riley

Yes.

been neutral of think actually services. So and through reduction a really doing side pretty -- more well. the I really we're there's slight in The to improvement is nice drilling consolidation stimulation

think in and a what we're experiencing I nice New availability, some good had we've savings say, from, has XXXX. there Mexico So been

Philip Riley

in prepared we well that's the mentioned add And there's up. That's confusion, what costs see modeling -- conservative. my Hopefully, years slightly remarks, we're for just Noel, currently. that, to any if I've to on

that of pushing new of some we're cost some areas well pads. facilities for accounts that fixed for what Some are into for these X our

drilling somewhat that benefits and cost John is completion. offsets facility fixed describing that got on it's the So that

Noel Parks

that year statistic you than mention you using have more where is of good a plateau the power that? for Great. And Or self-generated to that just think you're be? ago. there a sort for is you'll And you upside did XX% anticipate

Bobby Riley

were Yes, plenty continuing transfer doing of really and We've room. do to more overload. there. rate what time the high ensure test I we this our to to reliability got is got we're to think taking We've run

that. to you'll So we're next nice think, more overall that we're little I is LOE. much in venture. to keep all, our to see nice a time And All joint doing excited small company, bit some in a there translate it's ownership talking. it's that. in shouldn't have but doing party change we're This that to then that say And

Operator

our Instructions] next Research. the [Operator and from Water of Tower with question Robertson comes line Jeff

Jeffrey Robertson

a financial for reduction Can when timing up, On your except little about those you're you those a come will -- talk they you midstream the think to be outlined nonoperators, items? for up would LOE? it the on gas marketing Or in into bit benefits line you And where might the more show show Philip, service? you also, projects. would for if third-party example, of

John Suter

Yes, the take the this John. timing of midstream. is I'll

the I likely It's half, to regulatory away, right to think third route. XXXX. of down the is early of about it end the really somewhere longer end it, kind the possibly as of we as approval in as of variables. quarter, different mid it's And the case X first see comes then

in long run both The described. the a you it the for, It the the I pipeline is away pipe decision right that timing-wise, and And execution it's roll things. X of, approval. have kind extra comes type little to very parallel. are then most execution. is then the ultimately, really X there. obvious again, regulatory afterwards, don't -- And play Those the Bobby to know, a of They to down month

in we good able in bit the cheapest a would We go like we've parts excited order away earlier those the final the get as of pipe. jump that on little are on process. We're right approved, got a And about it. to see getting being But as this think quick possible. a whole regulatory to of route

pipe that get forecast laid. And so see to for the you a of exactly or it manpower to dilemma fits that 'XX the can what how is expenses when 'XX the actually into bigger us and

So of when those are triggers the kind will money of of spent. be key that some

Philip Riley

the working And high then, still through a but think on some We're revenue. geography. level, you'll it, income at Jeff, statement midstream see I

You to adjust intercompany for as interest may about versus And it then But that described can see elimination our you gross you'll the the out to the a the gross net owned it midstream starts, think see from OpEx. reminder, an working gross as I before. on to jump and gross about there out be to how future. look produce what that potential gas can much at we in do market Veris rates has a you and think the basis on could grow simple probably into some some how math as the and

Jeffrey Robertson

weighted said Mexico of system? that would some Is the New that be for XXXX. Is the progression dependent production quarter fourth you on Philip, I think on in midstream build,

Philip Riley

immediate completions, is we'll I production does through of late get existing either turn of be to assets. turn than much probably it lucky be -- it's depends that be don't absolutely, on half. quarter other getting fourth think some -- in that's first that when on, from we impact or second quarter, as They that there'll -- it's able I really newly we'll Yes, quarter come that But in be the to what the wells on drilled will those the done, it kind XXXX. whether if of it there, even fourth

Bobby Riley

But higher opportunity the as think own our you lenses produce gives then to there's cost flow that, system. it consider put you I And addressed, or if constraint just right, through to system. can own those, confidence for opportunity, add to if X the through the don't assurance your we're physical just is us John there's going also what

through doing we to it put all if of some be our fee would So the system own else and collect going we're these equal, rather revenue.

Philip Riley

other some production will But we'll are what of are already into that besides part where the some there drilling. just exists, already we And other phases again, asset, gathering the be what that some bring we've Mexico of described. laying on system project

Jeffrey Robertson

you midstream, further lastly, in does the -- footprint that acquisition does any the that give And on it the assets build-out? support could advantages of markets

Philip Riley

Well, thinking. Exactly we're perceptive. pretty what that's

Operator

that question-and-answer And joining. session call for Thank the conclude will you and today. our all

We disconnect. Permian's you conference us Riley quarterly may to You today. Welcome joining now call. appreciate Exploration

Riley Exploration Permian (REPX) 6 Mar 252024 Q4 Earnings call transcript