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RE

Riley Exploration Permian, Inc. (REPX)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 was operationally solid with record volumes and disciplined spending, but headline EPS fell sequentially on hedge losses and higher G&A; oil production rose 3% q/q to 15.9 MBbl/d and total volumes reached 25.0 MBoe/d, Adjusted EBITDAX was $69M (66% margin) and Total FCF was $18M .
  • The company introduced 2025 guidance with total production of 24.6–25.6 MBoe/d (oil 15.8–16.3 MBbl/d) and $170–210M total capex (plus $18–22M Power JV), reflecting a pivot to New Mexico development and the start of a $60–80M midstream build in 2025 .
  • Strategic midstream inflection: REPX signed a long-term gas purchase agreement and approved ~20-inch, 150 MMcfd pipeline with ~$130M total midstream capex through 2026 to secure flow assurance and optional third-party revenues; initial compression is targeted in-service March 2025 and full pipeline completion before end of 2026 .
  • Capital allocation remains balanced: $90M debt reduction in 2024 to 1.0x leverage; dividend raised to $0.38/sh and 45% of LTM Total FCF returned via dividends; credit facility extended to Dec 2028 and borrowing base increased to $400M .

What Went Well and What Went Wrong

What Went Well

  • Efficiency/volume execution: Q4 oil volumes +3% q/q to 15.9 MBbl/d; total 25.0 MBoe/d; Adjusted EBITDAX $69M; CFFO before WC $51M; LOE $8.54/boe within prior guidance .
  • Strategic infrastructure: Signed gas purchase agreement; sanctioned high-pressure line (150 MMcfd) to access multiple processing plants; Board approved ~$130M midstream capex; near-term compression in-service March 2025 .
  • Management tone on capital efficiency: “Our actual performance materially exceeded these goals, with oil production growth of 15% and total production growth of 22%, combined with a reduction in upstream cash capital expenditures of 27%.” — CEO Bobby Riley .

What Went Wrong

  • EPS and hedge headwinds: Q4 diluted EPS fell to $0.52 vs $1.21 in Q3, driven by an $8.4M loss on derivatives (including $11M non-cash) and higher cash G&A ($3.77/boe) due to severance .
  • Realized pricing pressure: Average realized oil price declined q/q to $68.50/bbl; gas and NGL realizations remained very weak (gas $0.02/mcf; NGL $5.18/bbl) despite increased gas capture .
  • Capex cadence/back-half weighting: 2025 upstream capex and well turn-in-lines are back-half weighted (45% of net operated wells online in Q4), creating intra-year capital timing vs production recognition risk; midstream timing can affect Q4 2025 turn-in-lines .

Financial Results

Core P&L and Cash Flow (chronological: oldest → newest)

MetricQ2 2024Q3 2024Q4 2024Q4 2023Q4 2024 Consensus (S&P Global)
Revenue ($MM)$105.3 $102.3 $102.7 $99.2 N/A (unavailable)
Diluted EPS ($)$1.59 $1.21 $0.52 $1.90 N/A (unavailable)
Net Income ($MM)$33.5 $25.7 $10.9 $38.0 N/A (unavailable)
Adjusted EBITDAX ($MM)$73.3 $71.7 $69.1 $64.4 N/A (unavailable)
Operating Cash Flow ($MM)$51.6 $72.1 $66.4 $65.8 N/A (unavailable)
Total Free Cash Flow ($MM)$38.3 $37.8 $17.7 $33.3 N/A (unavailable)

Note: S&P Global consensus data was unavailable at query time due to provider rate limits; we could not retrieve Q4 2024 Street estimates for REPX.

Operating KPIs and Realizations (chronological: oldest → newest)

MetricQ2 2024Q3 2024Q4 2024Q4 2023
Oil Production (MBbl/d)14.747 15.478 15.913 13.554
Total Production (MBoe/d)21.319 23.424 25.033 19.924
Avg Realized Oil ($/Bbl)79.25 73.95 68.50 76.85
Avg Realized Gas ($/Mcf)(0.61) (0.60) 0.02 0.66
Avg Realized NGL ($/Bbl)(0.10) (4.40) 5.18 7.40
LOE ($/Boe)8.50 8.60 8.54
Cash G&A ($/Boe)3.39 2.73 3.77

Additional notes: Q4 derivative loss $8.4M (incl. $11M non-cash) and realized settlements +$3M; production and ad valorem taxes $8M (≈8% of revenue) .

Guidance Changes

Q4 2024 Guidance vs Actual (accuracy check)

MetricPrior Q4 2024 Guidance (Nov 6, 2024)Actual Q4 2024Outcome
Total MBoe/d23.5 – 24.5 25.0 Above
Oil MBbl/d15.5 – 16.1 15.9 In-line
Total E&P Capex (Accrual, $MM)32 – 42 31 (activity-based) Slightly below
LOE ($/Boe)8.00 – 9.00 8.54 In range
Cash G&A ($/Boe)2.50 – 3.00 3.77 (incl. severance) Above (non-recurring)
Production taxes (% of revenue)6% – 8% ~8% Top end
Interest expense ($MM)7.5 – 8.5 7.6 In range

2025 Guidance (new disclosure)

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total Production (MBoe/d)FY 2025N/A24.6 – 25.6 New
Oil (MBbl/d)FY 2025N/A15.8 – 16.3 New
D&C Capex (Accrual, $MM)FY 2025N/A92 – 105 New
Upstream Capex (Accrual, $MM)FY 2025N/A110 – 130 New
Midstream Capex (Accrual, $MM)FY 2025N/A60 – 80 New
Power JV Investment ($MM)FY 2025N/A18 – 22 New
Total Capex ($MM)FY 2025N/A170 – 210 New
LOE ($/Boe)Q1 2025N/A8.00 – 9.00 New
Cash G&A ($/Boe)Q1 2025N/A3.00 – 3.50 New
Prod. taxes (% revenue)Q1 2025N/A6% – 8% New
Interest expense ($MM)Q1 2025N/A7 – 8 New

Dividend: Company paid $0.38/sh in Q4 and paid $1.46/sh in 2024; history of raising fixed dividend (current $0.38) .

Earnings Call Themes & Trends

TopicQ2 2024 (previous mentions)Q3 2024 (previous mentions)Q4 2024 (current period)Trend
Gas processing/capture and mixEmphasized efficiencies; acquisition added NM acreage; power JV scope expanded Texas processing capacity increased in July, boosting gas/NGL volumes Increased gas sales in Texas; lower oil % of mix; compression in NM commencing; 15 MMcfd initial capacity Improving gas capture; gassier mix
Power JV / ERCOTExpanded RPC Power to sell into ERCOT; 2025 commercialization targeted 20 MW installed for self-generation; ERCOT project advancing ERCOT project timing targeted 4Q25/early 2026; assessing batteries amid tariff volatility Execution progressing; merchant power optionality
New Mexico midstreamEarly-stage; strategy forming Need for takeaway discussed at high level Signed gas purchase agreement; 20”/150 MMcfd pipeline; $60–80M 2025 spend; service late-2025/2026 From concept to execution
Cost/Service environmentWell cost savings key driver; D&C efficiency improving EOR project discontinued; cost discipline maintained Cost/ft down 11% YoY; service availability good; 2025 well costs modeled slightly up due to facilities Mixed: efficiencies vs facility adds
Safety/Operations——TRIR 0 for 2024; operational excellence highlighted Positive safety performance
Hedging/realizations—Derivative gains supported results 50% oil, 63% gas hedged next 12 months; Q4 non-cash hedge loss weighed on EPS Risk-managed but hedge P&L volatile

Management Commentary

  • “We had an exceptional year by all measures… oil production growth of 15% and total production growth of 22%… reduction in upstream cash capital expenditures of 27%.” — CEO Bobby Riley .
  • “In 2025, we will… shift increased development activity to New Mexico… advance our New Mexico gas midstream project… provide greater flow assurance for long-term growth.” — CEO Bobby Riley .
  • “We decreased our cost per foot across both Texas and New Mexico assets by 11% year-over-year in 2024… increased our lateral feet drilled per day by 20% since 2023.” — COO John Suter .
  • “We’re showing a range of total full-year production growth of 9% to 14% with oil up 5% to 8%… upstream capex increasing… development being back-end weighted… 45% of net operated wells online in Q4.” — CFO Philip Riley .
  • “If gas basis in the Permian stays materially negative, then we have lower-cost feedstock for power generation… we might realize an effective gas price of roughly $1 to $2, which could correspond to $10–$20 million of revenue.” — CFO Philip Riley .

Q&A Highlights

  • Power/merchant project timing and scope: All thermal generation procured; multiple interconnection agreements secured; construction expected to start next quarter; target 4Q25 COD with possible slip into early 2026; battery optionality under evaluation given tariff/economic volatility .
  • Build-vs-buy midstream rationale: Limited third-party solutions and NM permitting challenges; company-controlled 56-mile high-pressure line to access ~12 processing plants; long-term flow assurance and potential third-party volumes .
  • Working interest implications: ~100 net/200 gross locations implies ~50–60% working interest; midstream fees expected at market rates on non-owned working interest volumes, creating incremental revenue even without third-party producers .
  • 2025 cadence dependency on midstream: NM 2025 production is back-half weighted; midstream timing could push some turn-in-lines to 1Q26; will prioritize routing through owned system to capture fees .
  • Cost/service environment: Drilling environment neutral-to-better; stimulation availability improved; 2025 well costs modeled slightly higher due to fixed facility spend despite D&C efficiencies .

Estimates Context

  • We attempted to retrieve S&P Global (Capital IQ) consensus for Q4 2024 revenue, EPS, and EBITDA, but the provider rate limit prevented access at this time. As a result, we cannot compare reported results to Street consensus in this recap. If needed, we can refresh and add the beats/misses upon the next successful retrieval.

Key Takeaways for Investors

  • Volume growth with cost discipline: Record Q4 volumes and steady LOE point to continued operational excellence; sequential EPS softness tied to hedges and one-time G&A items rather than core operations .
  • 2025 is a build year for infrastructure: Expect more capex in back half and potential timing mismatch between spend and production recognition; midstream schedule is the swing factor for New Mexico turn-in-lines .
  • Midstream optionality could unlock incremental value: Owned pipeline/gathering enables flow assurance and fee capture on non-owned working interest and potential third-party volumes; revenue uplift potential into 2026 .
  • Power JV as a structural hedge: Merchant ERCOT exposure provides an outlet for low-basis Permian gas; management frames a $10–$20M annual revenue potential depending on gas prices/basis dynamics .
  • Balance sheet strength supports the plan: Leverage ~1.0x, extended revolver maturity to 2028 and $400M borrowing base provide flexibility to fund midstream and power build-out while maintaining dividends .
  • 2024 guidance execution was strong: Volumes beat Q4 guidance, LOE was in-range, and interest expense in-range; G&A variance was tied to non-recurring severance .
  • Catalysts: Midstream construction milestones, ERCOT project updates/PPAs, New Mexico well results and D&C cost trajectory, and any monetization/third-party midstream contracting could drive sentiment .

Appendix: Additional Data Points

  • Q4 2024 Selected Operating and Financial Data (company disclosure includes oil & gas sales $102.7M, Adjusted EBITDAX $69.1M, CFFO $66.4M, Total FCF $17.7M; oil 1,464 MBbl; gas 2,305 MMcf; NGL 455 MBbl; total 2,303 MBoe) .
  • Hedging program: Forward-12-month hedge levels ~50% oil and 63% gas; oil collars floors ~$66 and ceilings ~$74; HH collars ~$3.49 x $3.77 .
  • Debt summary at YE 2024: Credit facility $115M outstanding (SOFR + margin), Sr. Notes $165M at 10.5%, ~88% fixed/hedged through 1Q26 .

Sources: Q4 2024 8-K/press release and exhibits ; earnings call transcript (prepared remarks and Q&A) -; prior quarter press releases for trend analysis - -; credit facility extension (Dec 2024) .