Loading...
01/10 18:20
Loading...
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call reveals strong production growth and strategic investments, like the Silverback acquisition and midstream projects, which are expected to enhance flexibility and scalability. Despite a slight increase in LOE and a decrease in EBITDAX margin, the company maintains solid cash flow and debt levels. The Q&A section highlights management's focus on capital allocation and strategic flexibility, with positive analyst sentiment. The overall outlook, including optimistic production and financial strategies, suggests a positive stock price movement.
Upstream Free Cash Flow $100 million generated over the last 9 months, approximately flat compared to the same period a year ago despite a 14% lower realized oil price.
Dividend Increased to $0.40 per share in October, up 5% from the previous quarter, marking the 19th consecutive quarterly dividend.
Average Daily Net Production 18,400 barrels of oil per day and 32,300 barrels of oil equivalent per day for Q3 2025. Oil volumes increased by 3,200 barrels per day during the quarter due to the Silverback acquisition and strong performance from new wells.
Total Net Oil Production Increased from 1.38 million to 1.69 million barrels of oil quarter-over-quarter in Q3, a 22% increase quarter-over-quarter and a 19% increase compared to the same quarter last year.
Total Equivalent Production Increased from 2.22 million to 2.98 million barrels of oil equivalent quarter-over-quarter in Q3, a 34% increase quarter-over-quarter and a 38% increase compared to the same quarter last year. Growth driven by midstream upgrades and the Silverback acquisition.
LOE per BOE Maintained near $9 per BOE, a 6% increase over Q2 and a 5% increase over the same quarter last year, despite higher costs from acquired Silverback vertical wells.
Cash Paid for Silverback Acquisition $120 million, 15% lower than the $142 million unadjusted purchase price due to favorable adjustments.
Adjusted EBITDAX Margin 59%, down from 66% last quarter, primarily due to higher costs associated with the Silverback acquisition and increased workover activity.
Cash Flow from Operations $54 million before changes in working capital for Q3, a 17% increase quarter-over-quarter due to higher volumes and slightly higher oil prices before hedges.
Upstream Free Cash Flow for Q3 $39.4 million, representing 73% conversion of operating cash flow before working capital.
Debt $375 million at quarter end, corresponding to 1.3x leverage based on pro forma adjusted EBITDAX, including Silverback.
Silverback acquisition: Closed in July and began integration, realizing synergies, reducing costs, and increasing production. Production on the acquired asset exceeded underwriting case by over 50% for September and October.
New wells: Completed 5 and turned in line 10 gross operated wells in Q3 2025. Production increased significantly due to new wells and Silverback acquisition.
Production growth: Average daily net production was 18,400 barrels of oil per day and 32,300 barrels of oil equivalent per day in Q3 2025. Oil volumes increased by 22% quarter-over-quarter and 19% year-over-year.
Midstream and power projects: Progressing on midstream and power generation projects to scale operations in 2026 and beyond. Includes upgrades to compression facilities and new power generation projects in Texas and New Mexico.
Operational efficiency: Maintained LOE per BOE near $9 despite doubling operated well count in New Mexico. Achieved cost reductions through synergies from Silverback acquisition and operational improvements.
Safety: Achieved a total recordable incident rate of 0 in Q3 2025, with 93% safe days.
Dividend increase: Increased quarterly dividend to $0.40 per share, up 5% from the previous quarter, reflecting commitment to capital discipline and sustainable free cash flow.
Cost management: Reduced fixed costs in the field by 10%-20% through integration efforts and achieved $70,000 per month cost savings in water handling.
Market Conditions: The industry experienced an especially weak September and October gas market in the Permian, with select operators voluntarily shutting in an estimated 1.5 to 2 Bcf a day of gas production. This could impact revenue and operational efficiency.
Operational Costs: Higher LOE (Lease Operating Expenses) were reported due to the contribution of higher-cost Silverback vertical wells and increased workover activity. This could pressure margins and profitability.
Regulatory and Taxation: Production taxes were higher as a percentage of revenue due to more volume shifting to New Mexico, which has a higher tax rate than Texas. This could increase operational costs.
Supply Chain and Infrastructure: Delays in non-op activity and infrastructure spending were noted, with some of this shifted to the fourth quarter. This could impact project timelines and operational efficiency.
Strategic Execution Risks: While synergies from the Silverback acquisition are being realized, there is a risk of not achieving the anticipated cost reductions and operational efficiencies, which could affect long-term profitability.
Economic Uncertainty: Softer oil markets and the need for flexibility in capital allocation were highlighted. This could impact future growth and investment decisions.
Scaling Operations: Critical infrastructure projects, including midstream and power generation, are expected to enable Riley Permian to scale operations in 2026 and beyond.
Dividend Growth: The company increased its dividend to $0.40 per share in October, up 5% from the previous quarter, and plans to maintain a consistent and growing dividend.
Drilling and Completion Activity: Riley Permian plans to drill 8 to 10 gross wells in Q4 2025, setting up for early completions in Q1 2026. Additionally, 3 to 5 gross operated wells will be completed in Q4 2025.
Cost Reductions: Initial look at D&C pricing for upcoming wells in the Red Lake asset shows a nearly 10% reduction due to softening prices in rigs, frac spreads, and steel.
Midstream Expansion: The company plans to upgrade its compression facility in New Mexico in Q4 2025, adding 40 million cubic feet per day of capacity. A high-pressure transmission line is scheduled for service in mid-2026.
Power Generation Projects: In New Mexico, a new behind-the-meter generation project is planned, with construction beginning in 2026. The Texas project continues to grow in scope and reliability.
Production Guidance: Fourth quarter oil production guidance is raised by 4% at the midpoint to 19,200 barrels per day, representing 5% quarter-over-quarter growth and 21% year-over-year growth. Full-year oil production guidance is increased by 2% to 17,100 barrels per day, corresponding to 13% year-over-year growth.
2026 Production Scenarios: Preliminary forecasts suggest maintaining Q3 2025 oil volume levels of 18,400 barrels per day in 2026 with a 15% reduction in upstream CapEx. Alternatively, keeping 2025 upstream CapEx flat could result in 12%-15% year-over-year oil volume growth in 2026.
Hedging Strategy: Over 60% of 2026 oil volumes are hedged at a weighted average downside price of $60, with upside optionality as 44% of hedges are in the form of collars.
Quarterly Dividend: Today, we are paying our 19th consecutive quarterly dividend as a public company. In October, we increased the dividend to $0.40 per share, up 5% from the previous quarter. Maintaining a consistent and growing dividend underscores our commitment to capital discipline and focus on sustainable free cash flow.
Dividend Allocation: Year-to-date, we've allocated 31% of total free cash flow to dividends.
Dividend Coverage: We forecast the dividend being well covered across 2026 activity and oil price scenarios, benefiting from capital efficiency and hedges in place.
The earnings call reveals strong production growth and strategic investments, like the Silverback acquisition and midstream projects, which are expected to enhance flexibility and scalability. Despite a slight increase in LOE and a decrease in EBITDAX margin, the company maintains solid cash flow and debt levels. The Q&A section highlights management's focus on capital allocation and strategic flexibility, with positive analyst sentiment. The overall outlook, including optimistic production and financial strategies, suggests a positive stock price movement.
The earnings call reveals several concerning factors: a decline in realized oil prices both before and after hedges, a reduced EBITDAX margin, and a higher debt level. The Q&A session highlights management's lack of clarity on funding and economic impacts, raising uncertainty. Despite some positive production growth, the overall sentiment is negative due to financial declines and vague guidance.
The earnings call presents a positive outlook with increased oil production, improved operational efficiency, and significant debt reduction. The commitment to dividends and strategic investments in growth initiatives indicate strong financial health. Although some uncertainties were noted in the Q&A, particularly regarding the ERCOT effort and midstream project, the overall sentiment remains positive due to the company's proactive approach to infrastructure development and cost management. The positive market conditions and expected revenue from gas sales further support a favorable stock price reaction.
The earnings call presents mixed signals. Positive aspects include strong free cash flow growth, debt reduction, and increased dividends. However, concerns arise from regulatory risks, supply chain challenges, and a 24% drop in net income. The Q&A section reveals management's reluctance to provide guidance for 2025, adding uncertainty. Despite positive shareholder returns, the lack of guidance and economic pressures suggest a neutral stock price movement in the next two weeks.
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
