OKLAHOMA
CITY, May 11, 2022 /PRNewswire/ -- Riley
Exploration Permian, Inc. (NYSE American: REPX) ("Riley Permian" or
the "Company"), today reported financial and operating results for
the fiscal second quarter ended March 31,
2022.
HIGHLIGHTS FOR THE FISCAL SECOND
QUARTER ENDING MARCH 31,
2022
- Averaged oil production of 7.5 MBbls per day, which is at the
high end of guidance and represents an increase of 24% as compared
year-over-year to the fiscal second quarter 2021
- Reported a net loss of $7
million, which includes $31
million of non-cash loss on derivative contracts, Adjusted
Net Income(1) of $19
million and income from operations of $41 million
- Generated $34 million of Adjusted
EBITDAX(1) and $30 million
of operating cash flow
- Incurred activity-based total capital expenditures of
$25 million and cash capital
expenditures of $10 million
- Paid dividends of $0.31 per share
for a total of $6 million
- Proved reserves of 73 MMBoe (64% oil) with a standardized
measure of future discounted cash flows of $863 million
- PV-10 value(1) of total proved reserves and total
proved developed reserves of $1,090
million and $790 million,
respectively, as of March 31, 2022
based on NYMEX strip pricing
- Subsequent to quarter-end, amended our credit facility to
extend the maturity to April 2026,
increase the borrowing base by 14% to $200
million, and relax minimum hedging requirements to allow for
more discretionary hedging decisions when the Company is less
levered
- Increasing guidance for fiscal third quarter and fiscal year
2022 production volumes
Mr. Bobby D. Riley, Chairman of
the Board and Chief Executive Officer, commented, "We are very
pleased with our fiscal second quarter results. Based on the
execution by our operations team and the results of wells brought
on line, we had oil production at the high end of guidance.
We have also achieved drilling and completion efficiencies further
advancing our development and growth objectives. The Company
continues to make progress on its EOR pilot project and has started
water injection in one well and expects to commence water injection
in additional wells in fiscal third quarter.
Our financial metrics demonstrate that our capital discipline
and strategy generated free cash flow and a strong balance sheet
enabling us to return capital to shareholders in the form of
quarterly dividends. The Company declared and paid a dividend of
$0.31 a share, which is the
thirteenth consecutive quarter Riley Permian has returned capital
to our shareholders.
The Company amended its credit facility by increasing the
borrowing base, extending maturity to April
2026, rebalanced allocations among the six lenders in the
syndicate, and most importantly relaxed minimum hedging
requirements."
Mr. Riley further noted that "As we look forward, our team is
taking several steps to navigate through inflationary pressure for
services and products. Additionally, we continue to focus on
executing a disciplined model of low leverage, production growth
and return of capital through dividends to our shareholders."
____________________
|
(1)
|
Non-GAAP financial
measure, which is defined and reconciled below.
|
Selected Operating
and Financial Data
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
Three Months Ended
March 31,
|
|
Six Months Ended
March 31,
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Select Financial
Data (in thousands):
|
|
|
|
|
|
|
|
|
Oil and natural gas
sales, net
|
|
$
66,645
|
|
$
36,659
|
|
$
123,295
|
|
$
59,073
|
Net income
(loss)
|
|
$
(7,168)
|
|
$
(51,878)
|
|
$
14,230
|
|
$
(59,819)
|
Adjusted
EBITDAX(1)
|
|
$
34,439
|
|
$
23,168
|
|
$
61,513
|
|
$
42,905
|
|
|
|
|
|
|
|
|
|
Production Data,
net:
|
|
|
|
|
|
|
|
|
Oil (MBbls)
|
|
675
|
|
543
|
|
1,343
|
|
1,090
|
Natural gas
(MMcf)
|
|
682
|
|
602
|
|
1,526
|
|
1,063
|
Natural gas liquids
(MBbls)
|
|
93
|
|
103
|
|
198
|
|
177
|
Total (MBoe)
|
|
881
|
|
746
|
|
1,796
|
|
1,445
|
|
|
|
|
|
|
|
|
|
Daily combined volumes
(Boe/d)
|
|
9,791
|
|
8,293
|
|
9,867
|
|
7,937
|
Daily oil volumes
(Bbls/d)
|
|
7,497
|
|
6,031
|
|
7,381
|
|
5,988
|
|
|
|
|
|
|
|
|
|
Average Realized
Prices:
|
|
|
|
|
|
|
|
|
Oil
($ per Bbl)
|
|
$
92.44
|
|
$
56.71
|
|
$
84.11
|
|
$
48.53
|
Natural gas ($ per Mcf)
|
|
2.62
|
|
7.51
|
|
2.95
|
|
4.36
|
Natural gas liquids ($ per Bbl)
|
|
26.71
|
|
13.16
|
|
29.25
|
|
8.72
|
Total average price ($ per Boe)
|
|
$
75.63
|
|
$
49.12
|
|
$
68.64
|
|
$
40.89
|
|
|
|
|
|
|
|
|
|
Average Realized
Prices, including the effects of
derivative settlements(2):
|
|
|
|
|
|
|
|
|
Oil
($ per Bbl)
|
|
$
66.60
|
|
$
51.70
|
|
$
60.37
|
|
$
50.78
|
Natural gas ($ per Mcf)
|
|
1.25
|
|
7.72
|
|
1.31
|
|
4.48
|
Natural gas liquids ($ per Bbl)(3)
|
|
26.71
|
|
13.16
|
|
29.25
|
|
8.72
|
Total average price ($ per Boe)
|
|
$
54.78
|
|
$
45.64
|
|
$
49.50
|
|
$
42.68
|
|
|
|
|
|
|
|
|
|
Cash Costs ($ per
Boe)(1)
|
|
$
16.46
|
|
$
16.16
|
|
$
16.15
|
|
$
14.63
|
Cash Margin ($ per
Boe)(1)
|
|
$
59.17
|
|
$
32.96
|
|
$
52.49
|
|
$
26.26
|
Cash Margin, including
derivative settlements ($ per Boe)(1)
|
|
$
38.32
|
|
$
29.48
|
|
$
33.35
|
|
$
28.05
|
_____________________
|
(1)
|
Non-GAAP financial
measure, which is defined and reconciled below.
|
(2)
|
The Company's
calculation of the effects of derivative settlements includes gains
(losses) on the settlement of its commodity derivative contracts.
These gains (losses) are included under other income and expense on
the Company's consolidated statement of operations.
|
(3)
|
During the three and
six months ended March 31, 2022 and 2021, the Company did not have
any NGL derivative contracts in place.
|
OPERATIONS AND DEVELOPMENT
ACTIVITY UPDATE
Riley Permian averaged oil production of 7.5 MBbls per day for
the three months ended March 31,
2022, representing an increase of 24% as compared
year-over-year to the fiscal second quarter 2021. The Company
averaged total equivalent production of 9.8 MBoe per day for the
three months ended March 31, 2022, an
increase of 18% as compared to the same period in 2021. Beginning
in February 2022 and continuing
through the quarter end, the Company's primary midstream gas
gathering and processing counterparty underwent a temporary
curtailment and shutdown of their primary plant as part of an
overall capacity expansion project, which impacted sales of natural
gas and NGLs during this period and led to lower growth in natural
gas and NGL sales volumes as compared to oil sales volumes. For the
six months ended March 31, 2022, the
Company averaged total equivalent production of 9.9 MBoe per day,
an increase of 24% compared to the same period in 2021.
The Company conducted extensive development activity during the
fiscal second quarter, including drilling and completing 3 gross
(3.0 net) horizontal wells (currently in early stages of flowing
back), turning to production 2 gross (1.7 net) horizontal wells and
preparatory activity for 3 gross (3.0 net) horizontal wells to be
drilled and/or completed during the fiscal third quarter. Such
activity corresponds with $23.8
million in accrual basis drilling, completions and facility
capital expenditures, which also includes capitalized workovers,
midstream infrastructure and minor additions to land and working
interests.
The Company advanced its EOR pilot project in Yoakum County, Texas during the fiscal second
quarter, completing one of the six newly drilled injection wells,
and laying the high-pressure injection lines for both water and
CO2 during the quarter. Such activity corresponded with
$1.5 million of accrual basis capital
expenditures for the quarter. Previously, the Company anticipated
incurring additional capital expenditures for certain equipment and
the completion of additional injection wells during the fiscal
second quarter. Subsequent to quarter end, the Company began water
injection on the EOR pilot program in early April 2022.
The Company incurred $25.3 million in total accrued capital
expenditures for the three months ended March 31, 2022, which compares to the Company's
previously released guidance of $26
million to $32 million. On a
cash basis, the Company had total capital expenditures of
$10.2 million for the three months
ended March 31, 2022. The notable
variance between cash and accrual based capital expenditures is
driven by the majority of development activity occurring late in
the quarter with the related cash capital expenditures expected to
occur during the fiscal third quarter.
FINANCIAL RESULTS
For the three months ended March 31,
2022, the Company reported a net loss of $7.2 million and operating income of $41.0 million. The Company generated Adjusted
EBITDAX(1) of $34.4
million, operating cash flow from continuing operations of
$30.0 million and Free Cash
Flow(1) of $20.3
million.
For the six months ended March 31,
2022 (fiscal year to date), the Company reported net income
of $14.2 million and operating income
of $74.4 million. The Company
generated Adjusted EBITDAX(1) of $61.5 million, operating cash flow from
continuing operations of $51.7
million (inclusive of negative changes in working capital of
$3.8 million) and Free Cash
Flow(1) of $16.2 million.
The pattern of the Company's development activity affects cash
capital expenditures and may continue to cause fluctuations in Free
Cash Flow(1) from quarter to quarter with longer periods
more representative of Free Cash Flow(1) generation
potential than an individual quarter.
Fiscal second quarter 2022 average realized prices, before
derivative settlements were $92.44
per barrel of oil, $2.62 per Mcf of
natural gas and $26.71 per barrel of
natural gas liquids, resulting in a total equivalent price, before
derivative settlements, of $75.63 per
Boe. Adjusted for derivative settlements, total equivalent price
was $54.78 per Boe, corresponding to
realized derivative settlement losses of $20.85 per Boe or $18.4
million. The Company reported a $49.6
million loss on derivatives, which includes the $18.4 million loss on settlements and a
$31.2 million non-cash loss due to
changes in the fair value of derivatives.
__________________
|
(1)
|
Non-GAAP financial
measure, which is defined and reconciled below.
|
FINANCIAL RESULTS,
Continued
Riley Permian's total Cash Costs(1) for the fiscal
second quarter of 2022 were $16.46
per Boe, representing an increase of 4% compared to the fiscal
first quarter of 2022 and an increase of only 2% compared to the
fiscal second quarter 2021. Lease operating expense ("LOE") was
$6.8 million, which was at the low
end of guidance. On a per unit basis, LOE decreased by 4% as
compared to the fiscal first quarter 2022 and 3% for the fiscal
second quarter 2021. Production and ad valorem taxes increased 17%
and 27% compared to fiscal first quarter 2022 and fiscal second
quarter 2021 as a result of higher commodity prices. Cash G&A
expense(1) was $3.5
million, which was at the low end of guidance, or
$3.97 per Boe. Interest expense was
$0.7 million, a decrease of 24%
compared to fiscal first quarter 2022, primarily driven by
capitalizing a portion of interest on the Company's EOR project.
The decrease of 42% in interest expense as compared to fiscal
second quarter 2021 is due to a lower average balance on our
outstanding balance on our revolving credit facility as well as the
capitalization of interest on the EOR project.
The Company realized a fiscal second quarter 2022 Cash
Margin(1) of $59.17 per
Boe before derivative settlements, representing an increase of 28%
quarter-over-quarter or 80% year-over-year. After derivative
settlements, the Cash Margin(1) increased to
$38.32 per Boe, an increase of 34%
quarter-over-quarter and 30% year-over-year.
During the fiscal second quarter 2022, the Company paid common
dividends of $0.31 per share or
$6.1 million. Subsequent to the
quarter end, the Company paid common dividends of $0.31 per share in May
2022.
Subsequent to the quarter end, the Company completed an
amendment to its credit facility which extended the maturity to
April 2026 and increased the
borrowing base to $200 million. As of
May 9, 2022, we had $63 million drawn and $137
million, or approximately 68%, of availability on the
facility.
__________________
|
(1)
|
Non-GAAP financial
measure, which is defined and reconciled below.
|
FISCAL THIRD QUARTER AND REVISED
FULL YEAR 2022 OUTLOOK AND GUIDANCE
Based on current market conditions, the Company forecasts
drilling 5 gross (5 net), completing 4 gross (4 net) and putting on
production 6 gross (6 net) horizontal wells during the fiscal third
quarter 2022. Additional scheduled activity includes capital
workovers, and modest spending for non-operated new wells and
midstream infrastructure. Management forecasts accrual basis
capital expenditures related to such development activity to total
approximately $25 million to
$28 million, which also includes
estimates for anticipated non-operated drilling and completions,
capital workovers, infrastructure, minor additions to land and
existing working interests.
Riley Permian forecasts fiscal third quarter 2022 oil production
to average 7.6 MBbls per day to 8.1 MBbls per day, with the
midpoint average representing 5% quarter-over-quarter growth from
the fiscal second quarter. The midstream gas gathering and
processing expansion project is expected to be fully commissioned
in early June; however, the associated capacity constraint that
began in February and will continue into June 2022 will impact sales of natural gas and
NGLs during the fiscal third quarter. Following completion of the
expansion project, the Company will enjoy a larger volume of
contractual, firm capacity, which should lead to increased sales
for natural gas and NGLs and reduced flaring. Based on historical
averages and adjusting for some curtailment of natural gas and NGL
sales volumes during the period, oil production could represent
approximately 75% to 76% of total equivalent production,
corresponding to an average of 10.0 MBoe per day to 10.8 MBoe per
day for the fiscal third quarter.
The Company forecasts third fiscal quarter of 2022 LOE of
approximately $8.0 million to
$10.0 million. Management forecasts
higher LOE than the second quarter due to a combination of
increased workover activity (from which we are seeing corresponding
production increases) as well as from inflationary forces. We
forecast cash G&A expenses(1) for the fiscal third
quarter of approximately $3.7 million
to $4.7 million (excluding
share-based and unit-based compensation expense, shown after the
effect of gross profit from contract services derived from
management services agreements).
The Company will continue to advance its EOR pilot project in
the fiscal third quarter, with plans to complete 5 of 6 remaining
injection wells and progress on the CO2 tap
installation. Management forecasts approximately $3 million to $5
million of accrual basis capital expenditures for its EOR
program during the fiscal third quarter. Based on anticipated
delivery timing of compressors needed for CO2 injection,
the Company forecasts beginning CO2 injection during
late 2022 (calendar fourth quarter 2022).
Management forecasts total accrual basis expenditures of
$28 million to $33 million for the fiscal third quarter
2022.
___________________
|
(1)
|
Non-GAAP financial
measure, which is defined above.
|
REVISED FULL-YEAR 2022 OUTLOOK AND
GUIDANCE
Based on current market conditions, the Company has elected to
modestly increase planned development activity during the second
half of fiscal 2022, following consideration of alternatives and
with support from many of its shareholders. We have added 3 gross
(3.0 net) horizontal wells to our fiscal year 2022 development
program, with drilling scheduled to begin in fiscal third quarter
2022 and completions scheduled to occur in August or September 2022. Therefore, we anticipate
incurring capital expenditures for the additional wells during
fiscal year 2022 while production from these wells captured within
fiscal year 2022 may be modest.
Inclusive of 3 gross operated wells scheduled to come online
during the fiscal fourth quarter 2022, we forecast an annual total
of 15 gross (14.7 net) operated wells drilled, completed and
brought online during fiscal year 2022. The Company has secured
drilling rigs and casing for 100% of its fiscal year 2022
development activity and up to 14 wells for fiscal year 2023.
Correspondingly, and based on current market conditions, the
Company forecasts full-year fiscal 2022 accrued capital
expenditures to total approximately $102
million to $111 million. This
total includes estimates of (i) $84
million to $89 million for
drilling and completions (operated and anticipated non-operated),
capital workovers, infrastructure, minor additions to land and (ii)
$18 million to $22 million for our EOR program. Approximately
$2 million of $4 million of anticipated, accrual basis capital
expenditures for our EOR program, previously estimated to be
incurred during fiscal 2022, are now anticipated to be incurred in
fiscal 2023.
Based on current estimates, and availability, we forecast that
full-year fiscal 2022 oil production could average 7.5 MBbls per
day to 7.8 MBbls per day, representing 17% to 22% growth from
fiscal year 2021 average oil production. Based on historical
averages for oil contribution, and estimates for new gas processing
capacity, we forecast that full-year fiscal 2022 total equivalent
production could average 10.0 MBoe per day to 10.4 MBoe per
day.
CONFERENCE CALL
Riley Permian management will host a conference call for
investors and analysts on May 12,
2022 at 10:00 a.m. CT to
discuss the Company's results. Interested parties are invited to
participate by calling:
- U.S./Canada Toll Free, (888) 330-2214
- International, +1 (646) 960-0161
- Conference ID number 5405646
An updated company presentation, which will include certain
items to be discussed on the call, will be posted prior to the call
on the Company's website (www.rileypermian.com). A replay of the
call will be available until May 26,
2022 by calling:
- (800) 770-2030 or (647) 362-9199
- Conference ID number 5405646
About Riley Exploration
Permian, Inc.
Riley Permian is a growth-oriented, independent oil and natural
gas company focused on the acquisition, exploration, development
and production of oil, natural gas and natural gas liquids. For
more information please visit www.rileypermian.com.
Investor Contact:
Rick D'Angelo
405-438-0126
IR@rileypermian.com
Cautionary Statement Regarding
Forward Looking Information
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. The statements contained in this release that are not
historical facts are forward-looking statements that represent
management's beliefs and assumptions based on currently available
information. Forward-looking statements include information
concerning our possible or assumed future results of operations,
business strategies, need for financing, competitive position and
potential growth opportunities. Our forward-looking statements do
not consider the effects of future legislation or regulations.
Forward-looking statements include all statements that are not
historical facts and can be identified by the use of
forward-looking terminology such as the words "believes,"
"intends," "may," "should," "anticipates," "expects," "could,"
"plans," "estimates," "projects," "targets," "forecasts" or
comparable terminology or by discussions of strategy or trends. You
should not place undue reliance on these forward-looking
statements. These forward-looking statements are subject to a
number of risks, uncertainties and assumptions. Moreover, we
operate in a very competitive and rapidly changing environment. New
risks emerge from time to time. It is not possible for our
management to predict all risks, nor can we assess the impact of
all factors on our business or the extent to which any factor, or
combination of factors, may cause actual results to differ
materially from those contained in any forward-looking statements
we may make. Although we believe that our plans, intentions and
expectations reflected in or suggested by the forward-looking
statements we make in this release are reasonable, we can give no
assurance that these plans, intentions or expectations will be
achieved or occur, and actual results could differ materially and
adversely from those anticipated or implied by the forward looking
statements.
Among the factors that could cause actual future results to
differ materially are the risks and uncertainties the Company is
exposed to. While it is not possible to identify all factors, we
continue to face many risks and uncertainties including, but not
limited to: the volatility of oil, natural gas and NGL prices; the
scope, duration, and reoccurrence of any epidemics or pandemics
(including, specifically, the coronavirus disease 2019 ("COVID-19")
pandemic and any related variants), including reactive or proactive
measures taken by governments, regulatory agencies and businesses
related to the pandemic, and the effects of COVID-19 on the oil and
natural gas industry, pricing and demand for oil and natural gas
and supply chain logistics; regional supply and demand factors, any
delays, curtailment delays or interruptions of production, and any
governmental order, rule or regulation that may impose production
limits; cost and availability of gathering, pipeline, refining,
transportation and other midstream and downstream activities;
severe weather and other risks that lead to a lack of any available
markets; our ability to successfully complete mergers, acquisitions
and divestitures; the risk that the Company's EOR project may not
perform as expected or produce the anticipated benefits; risks
relating to our operations, including development drilling and
testing results and performance of acquired properties and newly
drilled wells; any reduction in our borrowing base on our revolving
credit facility from time to time and our ability to repay any
excess borrowings as a result of such reduction; the impact of our
derivative strategy and the results of future settlement; our
ability to comply with the financial covenants contained in our
credit agreement; conditions in the capital, financial and credit
markets and our ability to obtain capital needed for development
and exploration operations on favorable terms or at all; the loss
of certain tax deductions; risks associated with executing our
business strategy, including any changes in our strategy; inability
to prove up undeveloped acreage and maintain production on leases;
risks associated with concentration of operations in one major
geographic area; legislative or regulatory changes, including
initiatives related to hydraulic fracturing, emissions, and
disposal of produced water, which may be negatively impacted by
regulation or legislation; the ability to receive drilling and
other permits or approvals and rights-of-way in a timely manner (or
at all), which may be restricted by governmental regulation and
legislation; risks related to litigation; evolving geopolitical and
military hostilities in other areas of the world; and cybersecurity
threats, technology system failures and data security issues.
Additional factors that could cause results to differ materially
from those described above can be found in Riley Permian's Annual
Report on Form 10-K for the year ended September 30, 2021 filed with the SEC and
available from the Company's website at www.rileypermian.com
under the "Investor" tab, and in other documents the Company
files with the SEC.
The forward-looking statements in this press release are made as
of the date hereof and are based on information available at that
time. The Company does not undertake, and expressly disclaims, any
duty to update or revise our forward-looking statements based on
new information, future events or otherwise.
Cautionary Statement Regarding
Guidance
The estimates and guidance presented in this release are based
on assumptions of current and future capital expenditure levels,
prices for oil, natural gas and NGLs, available liquidity,
indications of supply and demand for oil, well results, and
operating costs. The guidance provided in this release does not
constitute any form of guarantee or assurance that the matters
indicated will be achieved. While we believe these estimates and
the assumptions on which they are based are reasonable as of the
date on which they are made, they are inherently uncertain and are
subject to, among other things, significant business, economic,
operational, and regulatory risks, and uncertainties, some of which
are not known as of the date of the statement. Guidance and
estimates, and the assumptions on which they are based, are subject
to material revision. Actual results may differ materially from
estimates and guidance. Please read the "Cautionary Statement
Regarding Forward-Looking Information" section above, as well as
"Risk Factors" in our annual report on Form 10-K and our quarterly
reports on Form 10-Q, which are incorporated herein.
Cautionary Statement Regarding
Reserves
The reserves information in this press release, including
standardized measure and PV-10 value are preliminary estimates that
have not yet been audited or reviewed by Netherland, Sewell &
Associates, Inc. or BDO USA, LLP
and are subject to material revision. These are estimates that
should not be regarded as a representation. Investors should not
place undue reliance on these estimates.
RILEY EXPLORATION
PERMIAN, INC.
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
|
|
(Unaudited)
|
|
|
|
|
March 31,
2022
|
|
September 30,
2021
|
|
|
(In thousands,
except share amounts)
|
Assets
|
|
|
|
|
Current
Assets:
|
|
|
|
|
Cash and cash equivalents
|
|
$
19,609
|
|
$
17,067
|
Accounts receivable
|
|
25,782
|
|
17,473
|
Accounts receivable - related parties
|
|
1,106
|
|
456
|
Prepaid expenses and other current assets
|
|
4,063
|
|
1,730
|
Current derivative assets
|
|
693
|
|
—
|
Total current
assets
|
|
51,253
|
|
36,726
|
Oil
and natural gas properties, net (successful efforts)
|
|
376,531
|
|
345,797
|
Other property and equipment, net
|
|
3,075
|
|
3,183
|
Non-current derivative assets
|
|
454
|
|
106
|
Other non-current assets, net
|
|
1,929
|
|
2,419
|
Total Assets
|
|
$
433,242
|
|
$
388,231
|
Liabilities and
Shareholders' Equity
|
|
|
|
|
Current
Liabilities:
|
|
|
|
|
Accounts payable
|
|
$
18,331
|
|
$
12,234
|
Accounts payable - related parties
|
|
357
|
|
800
|
Accrued liabilities
|
|
21,971
|
|
18,555
|
Revenue payable
|
|
13,437
|
|
9,008
|
Current derivative liabilities
|
|
58,254
|
|
42,144
|
Other current liabilities
|
|
1,533
|
|
874
|
Total Current
Liabilities
|
|
113,883
|
|
83,615
|
Non-current derivative liabilities
|
|
14,299
|
|
8,932
|
Asset retirement obligations
|
|
2,237
|
|
2,306
|
Revolving credit facility
|
|
63,000
|
|
60,000
|
Deferred tax liabilities
|
|
14,490
|
|
11,628
|
Other non-current liabilities
|
|
95
|
|
60
|
Total
Liabilities
|
|
208,004
|
|
166,541
|
Commitments and
Contingencies
|
|
|
|
|
Shareholders'
Equity:
|
|
|
|
|
Preferred stock, $0.0001 par value, 25,000,000 shares
authorized; 0 shares issued
and outstanding
|
|
—
|
|
—
|
Common stock, $0.001 par value, 240,000,000 shares
authorized; 19,853,649 and
19,672,050 shares issued and outstanding
at March 31, 2022 and September 30,
2021, respectively
|
|
20
|
|
20
|
Additional paid-in capital
|
|
272,459
|
|
270,837
|
Accumulated deficit
|
|
(47,241)
|
|
(49,167)
|
Total Shareholders'
Equity
|
|
225,238
|
|
221,690
|
Total Liabilities and
Shareholders' Equity
|
|
$
433,242
|
|
$
388,231
|
RILEY EXPLORATION
PERMIAN, INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(Unaudited)
|
|
Three Months Ended
March 31,
|
|
Six Months Ended
March 31,
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
(In
thousands)
|
Revenues:
|
|
|
|
|
|
|
|
Oil
and natural gas sales, net
|
$
66,645
|
|
$
36,659
|
|
$
123,295
|
|
$
59,073
|
Contract services - related parties
|
600
|
|
600
|
|
1,200
|
|
1,200
|
Total Revenues
|
67,245
|
|
37,259
|
|
124,495
|
|
60,273
|
Costs and
Expenses:
|
|
|
|
|
|
|
|
Lease operating expenses
|
6,830
|
|
5,955
|
|
14,249
|
|
10,523
|
Production and ad valorem taxes
|
3,502
|
|
2,755
|
|
6,507
|
|
4,044
|
Exploration costs
|
1,498
|
|
5,473
|
|
2,109
|
|
5,897
|
Depletion, depreciation, amortization and
accretion
|
6,633
|
|
6,251
|
|
13,500
|
|
12,241
|
General and administrative:
|
|
|
|
|
|
|
|
Administrative costs
|
4,014
|
|
2,696
|
|
7,647
|
|
5,141
|
Unit-based compensation expense
|
—
|
|
276
|
|
—
|
|
689
|
Share-based compensation expense
|
1,017
|
|
4,571
|
|
1,968
|
|
4,571
|
Cost of contract services - related parties
|
85
|
|
91
|
|
235
|
|
239
|
Transaction costs
|
2,638
|
|
2,164
|
|
3,896
|
|
3,213
|
Total Costs and
Expenses
|
26,217
|
|
30,232
|
|
50,111
|
|
46,558
|
Income From
Operations
|
41,028
|
|
7,027
|
|
74,384
|
|
13,715
|
Other Income
(Expense):
|
|
|
|
|
|
|
|
Interest expense, net
|
(678)
|
|
(1,165)
|
|
(1,574)
|
|
(2,400)
|
Loss on derivatives
|
(49,632)
|
|
(24,903)
|
|
(54,825)
|
|
(38,812)
|
Total Other
Expense
|
(50,310)
|
|
(26,068)
|
|
(56,399)
|
|
(41,212)
|
Net Income (Loss)
from Continuing Operations Before
Income Taxes
|
(9,282)
|
|
(19,041)
|
|
17,985
|
|
(27,497)
|
Income tax benefit (expense)
|
2,114
|
|
(14,231)
|
|
(3,755)
|
|
(13,716)
|
Net Income (Loss)
from Continuing Operations
|
(7,168)
|
|
(33,272)
|
|
14,230
|
|
(41,213)
|
Discontinued
Operations:
|
|
|
|
|
|
|
|
Loss from discontinued operations
|
—
|
|
(18,631)
|
|
—
|
|
(18,631)
|
Income tax benefit on discontinued operations
|
—
|
|
25
|
|
—
|
|
25
|
Loss on Discontinued
Operations
|
—
|
|
(18,606)
|
|
—
|
|
(18,606)
|
Net Income
(Loss)
|
(7,168)
|
|
(51,878)
|
|
14,230
|
|
(59,819)
|
Dividends on preferred units
|
—
|
|
(574)
|
|
—
|
|
(1,491)
|
Net Income (Loss) Attributable
to Common
Shareholders/Unitholders
|
$
(7,168)
|
|
$
(52,452)
|
|
$
14,230
|
|
$
(61,310)
|
RILEY EXPLORATION
PERMIAN, INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(Unaudited)
|
|
|
Three Months Ended
March 31,
|
|
Six Months Ended
March 31,
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
|
(In
thousands)
|
Cash Flows from
Operating Activities:
|
|
|
|
|
|
|
|
|
Net
income (loss)
|
|
$
(7,168)
|
|
$
(51,878)
|
|
$
14,230
|
|
$
(59,819)
|
Adjustments to reconcile net income (loss) to net
cash provided by operating
activities:
|
|
|
|
|
|
|
|
|
Loss from discontinued operations
|
|
—
|
|
18,606
|
|
—
|
|
18,606
|
Oil and gas lease expirations
|
|
1,465
|
|
5,403
|
|
2,053
|
|
5,827
|
Depletion, depreciation, amortization and
accretion
|
|
6,633
|
|
6,251
|
|
13,500
|
|
12,241
|
Loss on derivatives
|
|
49,632
|
|
24,903
|
|
54,825
|
|
38,812
|
Settlements on derivative contracts
|
|
(18,375)
|
|
(2,594)
|
|
(34,389)
|
|
2,579
|
Amortization of deferred financing
costs
|
|
191
|
|
160
|
|
473
|
|
316
|
Unit-based compensation expense
|
|
—
|
|
276
|
|
—
|
|
689
|
Share-based compensation
expense
|
|
1,017
|
|
4,571
|
|
1,968
|
|
4,571
|
Deferred income tax expense
(benefit)
|
|
(2,893)
|
|
13,088
|
|
2,863
|
|
12,938
|
Changes in operating assets and
liabilities
|
|
(507)
|
|
2,167
|
|
(3,801)
|
|
1,386
|
Net Cash Provided by Operating
Activities -
Continuing
Operations
|
|
29,995
|
|
20,953
|
|
51,722
|
|
38,146
|
Cash Flows from
Investing Activities:
|
|
|
|
|
|
|
|
|
Additions to oil and natural gas properties
|
|
(10,171)
|
|
(7,744)
|
|
(39,182)
|
|
(17,133)
|
Acquisitions of oil and natural gas properties
|
|
—
|
|
(171)
|
|
—
|
|
(171)
|
Additions to other property and equipment
|
|
(28)
|
|
(62)
|
|
(145)
|
|
(380)
|
Tengasco acquired cash
|
|
—
|
|
859
|
|
—
|
|
859
|
Net Cash Used in Investing
Activities -
Continuing
Operations
|
(10,199)
|
|
(7,118)
|
|
(39,327)
|
|
(16,825)
|
Cash Flows from
Financing Activities:
|
|
|
|
|
|
|
|
|
Deferred financing costs
|
|
(25)
|
|
(77)
|
|
(299)
|
|
(129)
|
Proceeds from revolving credit facility
|
|
3,000
|
|
3,500
|
|
8,000
|
|
5,500
|
Repayment under revolving credit facility
|
|
(5,000)
|
|
(3,500)
|
|
(5,000)
|
|
(9,000)
|
Payment of common share/unit dividends
|
|
(6,140)
|
|
(4,124)
|
|
(12,196)
|
|
(7,841)
|
Payment of preferred unit dividends
|
|
—
|
|
(1,491)
|
|
—
|
|
(1,491)
|
Common stock repurchased for tax withholding
|
|
(339)
|
|
—
|
|
(358)
|
|
—
|
Purchase of common units under long-term
incentive plan
|
|
—
|
|
(191)
|
|
—
|
|
(191)
|
Net Cash Used in Financing
Activities -
Continuing
Operations
|
|
(8,504)
|
|
(5,883)
|
|
(9,853)
|
|
(13,152)
|
Net Increase in Cash
and Cash Equivalents from
Continuing Operations
|
|
11,292
|
|
7,952
|
|
2,542
|
|
8,169
|
|
|
|
|
|
|
|
|
|
Cash Flows from
Discontinued Operations:
|
|
|
|
|
|
|
|
|
Operating activities
|
|
—
|
|
238
|
|
—
|
|
238
|
Investing activities
|
|
—
|
|
(5)
|
|
—
|
|
(5)
|
Net Increase in Cash
and Cash Equivalents from
Discontinued Operations
|
|
—
|
|
233
|
|
—
|
|
233
|
Net Increase in Cash
and Cash Equivalents
|
|
11,292
|
|
8,185
|
|
2,542
|
|
8,402
|
Cash and Cash
Equivalents, Beginning of Period
|
|
8,317
|
|
1,877
|
|
17,067
|
|
1,660
|
Cash and Cash
Equivalents, End of Period
|
|
$
19,609
|
|
$
10,062
|
|
$
19,609
|
|
$
10,062
|
|
|
|
|
|
|
|
|
|
OIL, NATURAL GAS AND NGL
RESERVES
The Company prepared estimates of proved reserves as of
March 31, 2022 using NYMEX pricing.
The Company also prepared estimates of reserves using an average
price equal to the unweighted arithmetic average of the first day
of each month within the 12-month period ended March 31, 2022 of $78.44 per Bbl for oil and $4.34 per Mcf for gas in accordance with SEC
guidelines. Netherland, Sewell & Associates, Inc. ("NSAI") is
the Company's third-party reservoir engineer, which prepares
estimates of the Company's proved reserves annually as of its
fiscal year-end, in accordance with the rules and regulations of
the SEC. NSAI has not reviewed our proved reserves at March 31, 2022 using SEC or NYMEX pricing. A
summary of these internal estimates as of March 31, 2022 is presented below.
|
|
SEC
Pricing
|
|
NYMEX
Pricing(2)
|
Reserves as of March
31, 2022
|
|
Proved
Developed
Reserves
|
|
Total Proved
Reserves
|
|
Proved
Developed
Reserves
|
|
Total Proved
Reserves
|
Oil
(MBbls)
|
|
27,285
|
|
46,916
|
|
27,253
|
|
46,873
|
Natural Gas (MMcf)
|
|
49,576
|
|
78,734
|
|
49,531
|
|
78,679
|
Natural Gas Liquids (MBbls)
|
|
8,046
|
|
13,325
|
|
8,039
|
|
13,316
|
Total (MBoe)
|
|
43,594
|
|
73,364
|
|
43,547
|
|
73,302
|
PV-10(1) (in thousands)
|
|
$
766,154
|
|
$
1,082,999
|
|
$
789,954
|
|
$
1,089,790
|
___________________
|
(1)
|
Non-GAAP financial
measure, which is defined and reconciled below.
|
(2)
|
See table below for the
NYMEX pricing used to prepare internal reserve
estimates.
|
|
Oil
|
|
Natural Gas
|
|
($ per Bbl)
|
|
($ per Mcf)
|
April 2022-December
2022
|
$
94.20
|
|
$
5.85
|
Calendar year
2023
|
$
85.99
|
|
$
4.53
|
Calendar year
2024
|
$
80.34
|
|
$
3.82
|
Calendar year
2025
|
$
76.03
|
|
$
3.81
|
After 2025
|
$
74.39
|
|
$
4.18
|
OIL, NATURAL GAS AND NGL RESERVES,
Continued
Estimates of reserves were prepared using an average price equal
to the unweighted arithmetic average of the first day of each month
within the 12-month period ended September
30, 2021 of $57.64 per Bbl for
oil and $2.94 per Mcf for gas in
accordance with SEC guidelines. Additionally, the Company prepared
estimates of proved reserves as of September
30, 2021 using NYMEX pricing. The table below presents a
summary of our proved reserves as of September 30, 2021.
|
|
SEC
Pricing
|
|
NYMEX
Pricing(2)
|
Reserves as of
September 30, 2021
|
|
Proved
Developed
Reserves
|
|
Total Proved
Reserves
|
|
Proved
Developed
Reserves
|
|
Total Proved
Reserves
|
Oil
(MBbls)
|
|
26,170
|
|
46,263
|
|
26,118
|
|
46,187
|
Natural Gas (MMcf)
|
|
46,173
|
|
76,019
|
|
46,087
|
|
75,899
|
Natural Gas Liquids (MBbls)
|
|
7,650
|
|
13,229
|
|
7,635
|
|
13,208
|
Total (MBoe)
|
|
41,516
|
|
72,163
|
|
41,434
|
|
72,045
|
PV-10(1) (in thousands)
|
|
$
492,642
|
|
$
680,729
|
|
$
542,673
|
|
$
729,942
|
___________________
|
(1)
|
Non-GAAP financial
measure, which is defined and reconciled below.
|
(2)
|
See table below for the
NYMEX pricing used to prepare internal reserve
estimates.
|
|
Oil
|
|
Natural Gas
|
|
($ per Bbl)
|
|
($ per Mcf)
|
October 2021 - December
2021
|
$
74.48
|
|
$
5.90
|
Calendar year
2022
|
$
70.09
|
|
$
4.41
|
Calendar year
2023
|
$
64.01
|
|
$
3.47
|
Calendar year
2024
|
$
59.71
|
|
$
3.17
|
Calendar year
2025
|
$
56.65
|
|
$
3.02
|
After 2024
|
$
55.59
|
|
$
3.23
|
Reserve estimates above do not include any value for probable or
possible reserves that may exist, nor do they include any value for
undeveloped acreage. The reserve estimates represent our net
revenue interest in our properties, all of which are located within
the continental United States.
NYMEX pricing does not comport with the reporting requirements of
the SEC and should not be used as a substitute for or compared with
estimates of proved reserves using SEC pricing.
DERIVATIVE CONTRACTS
The following table summarizes the open financial derivatives as
of May 9, 2022, related to oil and
natural gas production. Derivative positions in the table for
calendar Q2 2022 are as of March 31,
2022(1).
|
|
|
|
Weighted Average
Price
|
Calendar
Quarter
|
|
Notional
Volume
|
|
Fixed
|
|
Put
|
|
Call
|
|
|
|
|
($ per unit)
|
Oil Swaps
(Bbl)
|
|
|
|
|
|
|
|
|
Q2
2022
|
|
345,000
|
|
$
57.47
|
|
$
—
|
|
$
—
|
Q3
2022
|
|
270,000
|
|
$
56.03
|
|
$
—
|
|
$
—
|
Q4
2022
|
|
270,000
|
|
$
56.03
|
|
$
—
|
|
$
—
|
Q1
2023
|
|
225,000
|
|
$
53.65
|
|
$
—
|
|
$
—
|
Q2
2023
|
|
195,000
|
|
$
53.89
|
|
$
—
|
|
$
—
|
Q3
2023
|
|
150,000
|
|
$
52.58
|
|
$
—
|
|
$
—
|
Q4
2023
|
|
150,000
|
|
$
52.58
|
|
$
—
|
|
$
—
|
|
|
|
|
|
|
|
|
|
Natural Gas Swaps
(Mcf)
|
|
|
|
|
|
|
|
|
Q2
2022
|
|
540,000
|
|
$
3.26
|
|
$
—
|
|
$
—
|
Q3
2022
|
|
540,000
|
|
$
3.26
|
|
$
—
|
|
$
—
|
Q4
2022
|
|
540,000
|
|
$
3.26
|
|
$
—
|
|
$
—
|
|
|
|
|
|
|
|
|
|
Oil Collars
(Bbl)
|
|
|
|
|
|
|
|
|
Q2
2022
|
|
90,000
|
|
$
—
|
|
$
35.00
|
|
$
42.63
|
Q3
2022
|
|
117,000
|
|
$
—
|
|
$
37.31
|
|
$
59.43
|
Q4
2022
|
|
90,000
|
|
$
—
|
|
$
35.00
|
|
$
42.63
|
Q1
2024
|
|
3,000
|
|
$
—
|
|
$
50.00
|
|
$
88.00
|
|
|
|
|
|
|
|
|
|
Oil Basis
(Bbl)
|
|
|
|
|
|
|
|
|
Q2
2022
|
|
240,000
|
|
$
0.41
|
|
$
—
|
|
$
—
|
Q3
2022
|
|
240,000
|
|
$
0.41
|
|
$
—
|
|
$
—
|
Q4
2022
|
|
240,000
|
|
$
0.41
|
|
$
—
|
|
$
—
|
___________________
|
(1)
|
Q2 2022 derivative
positions shown include April 2022 contracts, some of which have
settled as of May 9, 2022.
|
NON-GAAP MEASURES
The Company presents certain non-GAAP financial measures to
supplement its financial statements prepared in accordance with
accounting principles generally accepted in the United States ("GAAP"). The non-GAAP
financial measures include Adjusted Net Income, Adjusted EBITDAX,
Cash G&A, Cash Costs and Cash Margin, Free Cash Flow and PV-10.
A reconciliation of each non-GAAP measure to the most directly
comparable GAAP financial measure is presented below.
We believe that these non-GAAP measures presented, in
conjunction with our financial and operating results prepared in
accordance with GAAP, provide a more complete understanding of the
Company's performance. We use these non-GAAP measures to compare
our financial and operating performance with that of other
companies in the oil and natural gas industry as well as our
financial and operating performance for current and historical
periods. These non-GAAP measures should not be considered in
isolation or as a substitute for GAAP measures, such as net income
(loss), operating income (loss), total costs and expenses, general
and administrative expenses, net cash provided by operating
activities or standardized measure of discounted future net cash
flows or any other GAAP measure of financial position or results of
operations.
As not all companies use the same calculation, our non-GAAP
measures may not be comparable to similarly titled measures
presented by other companies.
Adjusted Net Income: We define Adjusted Net Income
as net income (loss) plus loss on discontinued operations, non-cash
loss on derivative contracts, transaction costs and other, income
tax expense related to our change in tax status and the changes in
estimated income tax as a result of these adjustments. We believe
that Adjusted Net Income is a widely followed measure of operating
performance and is one of many metrics used by investors as well as
our management team. For example, Adjusted Net Income can be used
to assess our operating performance and return on capital in
comparison to other independent exploration and production
companies without regard to financial or capital structure and to
assess the financial performance of our assets and our company
without regard to capital structure or historical cost basis. The
following table provides a reconciliation of Net Income (Loss) to
Adjusted Net Income for the periods indicated:
|
Three Months Ended
March 31,
|
|
Six Months Ended
March 31,
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
(Unaudited, In
thousands)
|
Net income
(loss)
|
$
(7,168)
|
|
$
(51,878)
|
|
$
14,230
|
|
$
(59,819)
|
Loss on discontinued
operations
|
—
|
|
18,606
|
|
—
|
|
18,606
|
Non-cash loss on
derivatives
|
31,257
|
|
22,309
|
|
20,436
|
|
41,391
|
Transaction costs and
other
|
2,638
|
|
2,164
|
|
3,941
|
|
3,213
|
Income tax expense from
change in tax status
|
—
|
|
13,631
|
|
—
|
|
13,631
|
Tax effect of
adjustments(1)
|
(7,288)
|
|
406
|
|
(5,241)
|
|
406
|
Adjusted Net
Income
|
$
19,439
|
|
$
5,238
|
|
$
33,366
|
|
$
17,428
|
___________________
|
(1)
|
Computed by applying a
combined federal and state statutory rate of 21.5% and 21.25%
effective as of March 31, 2022 and 2021, respectively. The Company
was a flow-through entity for federal and state income tax purposes
for the periods through February 26, 2021.
|
Adjusted EBITDAX: We define Adjusted EBITDAX as
net income (loss) adjusted for loss on discontinued operations,
exploration costs, depletion, depreciation, amortization and
accretion, equity-based compensation expense, interest expense,
non-cash loss on commodity derivative contracts, income taxes, and
transaction costs and other. We believe Adjusted EBITDAX is useful
to investors because it provides an effective way to evaluate our
operating performance and compare the results of our operations
from period to period as well as to other companies in the oil and
natural gas industry without regard to our financing methods or
capital structure. The following table provides a reconciliation
from the GAAP measure of Net income (loss) to Adjusted EBITDAX.
|
|
Three Months Ended
March 31,
|
|
Six Months Ended
March 31,
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
|
(Unaudited, In
thousands)
|
Net income
(loss)
|
|
$
(7,168)
|
|
$
(51,878)
|
|
$
14,230
|
|
$
(59,819)
|
Loss on discontinued
operations
|
|
—
|
|
18,606
|
|
—
|
|
18,606
|
Exploration
costs
|
|
1,498
|
|
5,473
|
|
2,109
|
|
5,897
|
Depletion,
depreciation, amortization and accretion
|
|
6,633
|
|
6,251
|
|
13,500
|
|
12,241
|
Unit-based compensation
expense
|
|
—
|
|
276
|
|
—
|
|
689
|
Share-based
compensation expense
|
|
1,017
|
|
4,571
|
|
1,968
|
|
4,571
|
Interest expense,
net
|
|
678
|
|
1,165
|
|
1,574
|
|
2,400
|
Non-cash loss on
derivatives
|
|
31,257
|
|
22,309
|
|
20,436
|
|
41,391
|
Income tax expense
(benefit)
|
|
(2,114)
|
|
14,231
|
|
3,755
|
|
13,716
|
Transaction costs and
other
|
|
2,638
|
|
2,164
|
|
3,941
|
|
3,213
|
Adjusted
EBITDAX
|
|
$
34,439
|
|
$
23,168
|
|
$
61,513
|
|
$
42,905
|
Cash G&A: Cash G&A is defined as general and
administrative expense, excluding equity-based compensation, less
contract services–related parties revenue plus cost of contract
services–related parties. We believe Cash G&A is used by
analysts and others in valuation, comparison and investment
recommendations of companies in our industry to allow for analysis
of cash G&A spend without regard to equity based compensation
programs or amounts related to contract services. Administrative
costs exclude equity-based compensation as those expenses are
presented separately as components of general and administrative
expense on our condensed consolidated statement of operations. The
following table provides a calculation for Cash G&A for the
periods indicated:
|
|
Three Months Ended
March 31,
|
|
Six Months Ended
March 31,
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
|
(Unaudited, In
thousands)
|
Administrative
costs
|
|
$
4,014
|
|
$
2,696
|
|
$
7,647
|
|
$
5,141
|
Plus: Costs of contract
services - related parties
|
|
85
|
|
91
|
|
235
|
|
239
|
Less: Contract services
revenues - related parties
|
|
(600)
|
|
(600)
|
|
(1,200)
|
|
(1,200)
|
Total Cash
G&A
|
|
$
3,499
|
|
$
2,187
|
|
$
6,682
|
|
$
4,180
|
Cash Costs and Cash Margin per Boe: Cash Costs is a
non-GAAP financial measure that we use as an indicator of our total
cash-based cost of production and operations. We define "Cash
Costs" as lease operating expenses plus production and ad valorem
taxes, cash G&A, and interest expense. Management believes that
Cash Costs is an important financial measure for use in evaluating
the Company's operating and financial performance and for
comparison to other companies in the oil and natural gas industry.
We believe this is a useful measure for investors in evaluating our
results against other oil and natural gas companies. Cash Costs
should be considered in addition to, rather than as a substitute
for, Total Costs and Expenses. The following table provides a
calculation for Cash Costs and Cash Margin for the periods
indicated:
|
|
Three Months Ended
March 31,
|
|
Six Months Ended
March 31,
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
|
(Unaudited, In
thousands, except per Boe amounts)
|
Cash
Costs:
|
|
|
|
|
|
|
|
|
Lease operating expenses
|
|
$
6,830
|
|
$
5,955
|
|
$
14,249
|
|
$
10,523
|
Production and ad valorem taxes
|
|
3,502
|
|
2,755
|
|
6,507
|
|
4,044
|
Cash G&A(1)
|
|
3,499
|
|
2,187
|
|
6,682
|
|
4,180
|
Interest expense, net
|
|
678
|
|
1,165
|
|
1,574
|
|
2,400
|
Total Cash
Costs
|
|
$
14,509
|
|
$
12,062
|
|
$
29,012
|
|
$
21,147
|
|
|
|
|
|
|
|
|
|
Total Production
(MBoe)
|
|
881
|
|
746
|
|
1,796
|
|
1,445
|
|
|
|
|
|
|
|
|
|
Cash Margin ($ per
Boe):
|
|
|
|
|
|
|
|
|
Total average realized
price ($ per Boe)
|
|
$
75.63
|
|
$
49.12
|
|
$
68.64
|
|
$
40.89
|
Less:
|
|
|
|
|
|
|
|
|
Lease operating expenses
|
|
7.75
|
|
7.98
|
|
7.93
|
|
7.28
|
Production and ad valorem taxes
|
|
3.97
|
|
3.69
|
|
3.62
|
|
2.80
|
Cash G&A(1)
|
|
3.97
|
|
2.93
|
|
3.72
|
|
2.89
|
Interest expense, net
|
|
0.77
|
|
1.56
|
|
0.88
|
|
1.66
|
Total Cash Costs per Boe
|
|
16.46
|
|
16.16
|
|
16.15
|
|
14.63
|
Cash Margin per
Boe
|
|
$
59.17
|
|
$
32.96
|
|
$
52.49
|
|
$
26.26
|
|
|
|
|
|
|
|
|
|
Settlements on
derivatives ($ per Boe)
|
|
(20.85)
|
|
(3.48)
|
|
(19.14)
|
|
1.79
|
Cash Margin per Boe,
including derivative settlements
|
|
$
38.32
|
|
$
29.48
|
|
$
33.35
|
|
$
28.05
|
______________________
|
(1)
|
A non-GAAP financial
measure which is reconciled above.
|
Free Cash Flow: Free Cash Flow is a measure that we
use as an indicator of our ability to fund our development
activities and generate excess cash for other corporate purposes.
We define Free Cash Flow as Net Cash Provided by Operating
Activities, before changes in working capital and reduced by
capital expenditures before acquisitions. Free Cash Flow should be
considered in addition to, rather than as a substitute for, net
cash provided by operating activities as a measure of our
liquidity. The following table provides a reconciliation of Net
Cash Provided by Operating Activities to Free Cash Flow for the
periods indicated:
|
|
Three Months Ended
March 31,
|
|
Six Months Ended
March 31,
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
|
(Unaudited, In
thousands)
|
Net Cash Provided by
Operating Activities
|
|
$
29,995
|
|
$
20,953
|
|
$
51,722
|
|
$
38,146
|
Changes in working
capital
|
|
507
|
|
(2,167)
|
|
3,801
|
|
(1,386)
|
Additions to oil and
natural gas properties
|
|
(10,171)
|
|
(7,744)
|
|
(39,182)
|
|
(17,133)
|
Additions to other
property and equipment
|
|
(28)
|
|
(62)
|
|
(145)
|
|
(380)
|
Free Cash
Flow
|
|
$
20,303
|
|
$
10,980
|
|
$
16,196
|
|
$
19,247
|
PV-10: The non-GAAP financial measure of PV-10, as
defined and presented below, is intended to provide readers with
meaningful information that supplements our financial statements
prepared in accordance with GAAP.
PV-10 is derived from the standardized measure of discounted
future net cash flows ("Standardized Measure"), which is the most
directly comparable financial measure under GAAP. PV-10 is a
computation of the Standardized Measure on a pre-tax basis. PV-10
is equal to the Standardized Measure at the applicable date, before
deducting future income taxes, discounted at an annual rate of 10%,
determined in accordance with GAAP. We believe that the
presentation of PV-10 is relevant and useful to investors because
it presents the discounted future net cash flows attributable to
our estimated net proved reserves prior to taking into account
future corporate income taxes, and it is a useful measure for
evaluating the relative monetary significance of our oil and
natural gas properties. We believe that securities analysts and
rating agencies use PV-10 in similar ways. Further, investors may
utilize the measure as a basis for comparison of the relative size
and value of our estimated reserves to other companies. We use this
measure when assessing the potential return on investment related
to our oil and natural gas properties. PV-10, however, is not a
substitute for the Standardized Measure. Our PV-10 and the
Standardized Measure do not purport to present the fair value of
our estimated oil and natural gas reserves.
The following table provides a reconciliation of the
Standardized Measure to PV-10 of the Company's estimated total
proved reserves as of March 31, 2022
and September 30, 2021 (in
thousands):
|
March 31,
2022
|
|
September 30,
2021
|
Standardized measures
of discounted future net cash flows
|
$
862,503
|
|
$
552,936
|
Future income taxes,
discounted at 10%
|
220,496
|
|
127,793
|
Present value of
estimated future net revenues (PV-10)
|
$
1,082,999
|
|
$
680,729
|
Adjustment using NYMEX
pricing
|
6,791
|
|
49,213
|
PV-10 adjusted for
pricing
|
$
1,089,790
|
|
$
729,942
|
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SOURCE Riley Exploration Permian, Inc.