Q2 2026 Riley Exploration Permian Inc Earnings Call Transcript
Key Points
- Riley Exploration Permian Inc (REPX) delivered oil production near the high end of guidance and a June exit rate of 24.4 thousand barrels per day, with 5% sequential oil growth.
- The company raised its full-year oil production guidance to approximately 30% year-over-year growth, with a forecasted 20% sequential increase in Q3.
- Drilling efficiency improved significantly: Texas saw a 19% increase in lateral feet per day and a 7.5% reduction in drilling costs per lateral foot, while New Mexico improved by 67% and 32%, respectively.
- The Silverback acquisition outperformed expectations, with production now approximately double the buy-side case projection, achieved without drilling new wells.
- The company executed cost-saving initiatives, including surface acid treatments that saved $210,000 per intervention and a 50% reduction in chemical costs in New Mexico.
- The new Targa pipeline is on track for early Q4 service, which is expected to alleviate midstream constraints and support future growth.
- Midstream constraints in April and May caused temporary well shut-ins, reducing oil production by approximately 2,000 barrels per day.
- Infrastructure capital expenditures exceeded guidance by $4.5 million due to accelerated development and third-party delays, increasing full-year CapEx guidance by 12%.
- Turn-in-line wells came in below guidance due to delays in third-party infrastructure, impacting production contribution timing.
- Total LOE increased $5.4 million quarter-over-quarter, driven by higher workover expenses and cost pressures from water disposal, steel, diesel, and power.
- Free cash flow decreased to $6 million in Q2, and the company drew $26 million on its credit facility, increasing debt to $273 million.
- The third-party water disposal agreement with Water Bridge will create upward pressure on LOE, though it provides necessary capacity for development.
Good day, everyone, and welcome to the Reilly Exploration Permian, Inc. Second Quarter 2026 Earnings Call. This call is being recorded. At this time, I would like to hand the call over to Mr. Philip Reilly, CFO. Please go ahead, sir.
Good morning. Welcome to our conference call covering our second quarter 2026 results. I'm Philip Reilly, CFO. Joining me today are Bobby Reilly, Chairman and CEO, and John Suter, COO.
Yesterday we published a variety of materials which can be found on our website under the investors section. These materials and today's conference call contain certain projections and other forward-looking statements within the meaning of the federal securities laws. These statements are subject to risks and uncertainties that may cause actual results to differ materially from those expressed or implied in these statements. We'll also reference certain non-GAAP measures. The reconciliations to the appropriate gap measures can be found
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