Riley Exploration Permian, Inc. (NYSE: REPX)

Riley Exploration Permian, Inc. (REPX) is a company that operates in the oil and natural gas industry, with a focus on the acquisition, exploration, development, and production of oil, natural gas, and natural gas liquids (NGLs) in Texas and New Mexico. The company's primary business activities involve the exploration and production of oil and natural gas from the San Andres formation, a shelf margin deposit on the Northwest Shelf of the Permian Basin.

REPX generates revenue primarily through the sale of oil, natural gas, and NGLs to various customers, including refiners, marketers, and other oil and gas companies. The company's primary products are oil, natural gas, and NGLs, which are extracted from its properties in Texas and New Mexico. The company's customer base includes major oil and gas companies, as well as smaller independent operators.

The company's oil and gas operations are primarily focused on the San Andres formation, a shelf margin deposit on the Northwest Shelf of the Permian Basin. REPX's properties are located in Yoakum County, Texas, and Lea and Roosevelt Counties, New Mexico. The company's oil and gas operations involve the drilling and completion of wells, as well as the production and transportation of oil, natural gas, and NGLs.

As of December 31, 2022, REPX had approximately 77.7 million barrels of oil equivalent (MMBoe) of proved reserves, with 48.9 million barrels of oil, 86.0 billion cubic feet of natural gas, and 14.5 million barrels of NGLs. The company's proved developed producing reserves were 49.1 MMBoe, with 29.6 million barrels of oil, 59.3 billion cubic feet of natural gas, and 9.6 million barrels of NGLs. The company's proved undeveloped reserves were 28.6 MMBoe, with 19.3 million barrels of oil, 26.7 billion cubic feet of natural gas, and 4.9 million barrels of NGLs.

REPX drilled 171 productive oil wells and 21 exploratory oil wells during the year ended December 31, 2022. The company's gross and net acres of developed and undeveloped leasehold as of December 31, 2022 were 44.0 million acres and 30.5 million net acres, respectively. The company's developed acreage was 37.9 million gross acres and 27.1 million net acres, while its undeveloped acreage was 6.0 million gross acres and 3.4 million net acres.

The company's competitive strengths include its proven and incentivized management team, its premier, low-decline asset in one of North America's leading oil resource plays, and its high degree of operational control. The company's management team has a proven track record of operating and managing oil and gas companies across industry cycles, and the company's assets are characterized by a multi-year, oil-weighted inventory of horizontal drilling locations that provide attractive growth and return opportunities.

REPX maintains financial flexibility through its cash flow from operations, borrowings under its revolving credit facility, and other sources of capital. As of December 31, 2022, the company's borrowing base under its revolving credit facility was $225 million, and it had $169 million available for borrowing. The company also has the ability to scale up or draw down on its commodity hedging program to manage its exposure to downside commodity price fluctuations.

In the regulatory environment, REPX operates under various federal, state, and local laws and regulations related to environmental and occupational safety and health, including those related to hazardous substances and waste handling, water discharges, subsurface injections, and air emissions. The company is also subject to regulations related to greenhouse gas emissions, including those related to methane and volatile organic compound emissions from oil and natural gas operations. Compliance with these regulations has the potential to delay the development of oil and natural gas projects and increase the company's costs of development.