#United States #Oklahoma City #oil production #Riley Permian #REPX

Riley Exploration Permian's First Quarter 2026 Results

Riley Exploration Permian, Inc. (NYSE American: REPX) released its financial and operational results for the first quarter ending March 31, 2026, revealing a robust performance in a challenging market. The highlights of the report indicate that the company achieved a total production of 35.6 MBoe/d, comprising 20.2 MBbls/d of oil production. Notably, Riley Permian generated $47 million in operating cash flow, or $55 million before changes in working capital, alongside a total free cash flow of $24 million.

The company has made significant strides to enhance its financial health, incurring total accrual capital expenditures of $47 million and cash capital expenditures of $31 million before acquisitions. Importantly, Riley managed to reduce its debt by $8 million, achieving a debt-to-Adjusted EBITDAX ratio of 1.0x by the quarter's end. As part of its commitment to returning value to shareholders, the company repurchased 152,000 shares of stock for $4 million.

CEO Bobby Riley remarked on the company's performance, indicating strong operational execution with production numbers surpassing expectations and capital spending remaining under projected levels. However, he acknowledged regional gas egress constraints that negatively affected gas and NGL realizations, tempering cash flow results. Despite these setbacks, the overall market landscape appears promising, and the company is optimistic about achieving significant year-over-year growth in production and overall value throughout 2026.

Operational and Development Activity

Riley Permian provided a detailed summary of its well activity for the first quarter. The company drilled a total of 17 wells—13 in Texas and 4 in New Mexico—with completed wells totaling 13. Eight wells were turned to sales, of which all were located in Texas. This operational activity reflects the company’s strategic focus on maximizing production and enhancing its resource base.

In terms of daily production over the past year, there has been a remarkable increase. Month-on-month comparisons show Texas oil production rise from 12.0 to 12.8 MBbls/d, while New Mexico production increased dramatically from 3.6 to 7.4 MBbls/d, contributing to a combined total oil production of 20.2 MBbls/d for the quarter.

For the financial metrics, Riley Permian reported total revenues reaching $114 million. However, operational challenges reflected a net loss of $70 million, or $(3.38) per diluted share. Adjusted EBITDAX was reflected at $61 million, and cash flows from operations before changes in working capital stood at $55 million, marking a robust operational efficiency.

Price Realizations and Market Challenges

The average realized prices for the quarter were $68.89 per barrel of oil, $(1.68) per Mcf for natural gas, and $(6.22) per barrel for natural gas liquids. The significant declines in natural gas realization prices were attributed to constraints in regional pipeline infrastructure impacting market dynamics. This situation resulted in a greater proportion of gathering, processing, and transportation costs being allocated to NGLs, further pressuring their pricing.

Riley Permian also dealt with a $12 million realized loss on derivative settlements linked to crude oil prices as well as an unrealized loss of $115 million, driven by changes in the fair value of its derivatives portfolio. While these losses significantly impacted the quarterly net results, Riley remains optimistic about the future, holding potential for higher revenues from corresponding production in the long term.

Future Outlook and Guidance

Going forward, Riley Exploration Permian has provided guidance that encompasses a comprehensive view of its operational objectives for the second quarter of 2026 and the full year. Planned net operated well activity includes drilling between 18 to 20 wells in Q2 and 42 to 48 wells across the entire year. They forecast turning to sales around 22 to 24 wells in the next quarter, which supports an anticipated increase in production.

Total capital expenditures for the upcoming quarter are projected to range between $75-90 million, covering both upstream activities and infrastructure enhancements. This investment strategy underscores Riley's commitment to sustainable growth and long-term value creation.

In relation to corporate activities, Riley has scheduled a conference call for investors and analysts on May 7, 2026, to discuss these results in detail and answer questions, demonstrating transparency and accessibility in its communication strategy.

Conclusion

Riley Exploration Permian’s Q1 2026 results exhibit resilience and an ability to navigate through unfavorable market conditions. With a strong operational foundation and a well-defined roadmap for future growth, the company is well-positioned to enhance its standing in the oil and gas sector. Investors and stakeholders can look forward to continued updates as Riley progresses through 2026 and beyond.