REPX.AMEXRiley Exploration Permian, INC
DEF 14A: Riley Exploration Permian Announces 2024 Annual Meeting of Stockholders
Sentiment:
Proxy Statement
Riley Exploration Permian, Inc. will hold its 2024 Annual Meeting of Stockholders virtually on May 10, 2024, to vote on director elections, auditor ratification, and executive compensation.
Summary
- Riley Exploration Permian, Inc. is holding its 2024 Annual Meeting of Stockholders on May 10, 2024, in a virtual-only format.
- Stockholders will vote on the election of six directors, the ratification of BDO USA, P.C. as the independent registered public accounting firm for the fiscal year ending December 31, 2024, and an advisory vote on named executive officer compensation.
- The board of directors recommends voting for all proposals.
- The record date for determining stockholders eligible to vote is April 10, 2024.
- The company experienced a transformational year in 2023, driven by the acquisition of New Mexico assets from Pecos Oil & Gas, LLC.
- The company's focus in 2024 is on strengthening the balance sheet, reducing debt, and returning cash to stockholders through quarterly dividends.
- The company will continue to invest in high rate-of-return inventory and evaluate accretive acquisitions.
Sentiment
Score: 7
Explanation: The document presents a positive outlook for the company, highlighting its transformational year, strategic acquisitions, and focus on shareholder returns. However, it also acknowledges risks associated with price volatility and includes cautionary language regarding forward-looking statements.
Positives
- The company experienced a transformational year in 2023 due to strategic acquisitions and investments.
- The acquisition of New Mexico assets from Pecos Oil & Gas, LLC was immediately accretive and substantially increased the company's size and scale.
- The company is focused on strengthening its balance sheet, reducing debt, and returning cash to stockholders through quarterly dividends.
- The company is committed to diversity in its leadership and actively seeks out women and minority candidates for the Board.
Negatives
- The meeting will be held virtually, which may not be preferred by all stockholders.
- The advisory vote on executive compensation is non-binding, meaning the board is not obligated to act on the results.
Risks
- The company acknowledges risks associated with ongoing price volatility in the oil and gas industry.
- Forward-looking statements are subject to risks and uncertainties detailed in the company's filings with the Securities and Exchange Commission, including the Risk Factors section of the Annual Report on Form 10-K for the year ended December 31, 2023.
Future Outlook
The company will continue to invest in the development of its high rate-of-return inventory to maintain or slightly grow production and drive further operational efficiencies. It will also continue to evaluate and pursue opportunities to increase stockholder value through accretive balance sheet enhancing acquisitions.
Management Comments
- Our success over the past year is a result of our disciplined operating strategy, our asset portfolio, and our excellent financial position, which have enabled us to provide cash returns to our stockholders in the form of increased quarterly dividends.
- Our efforts in 2024 remain squarely focused on strengthening of our balance sheet, reducing debt and returning cash to our stockholders in the form of quarterly dividends.
- We believe our value focused, proven strategy retains the discipline and flexibility necessary to manage the risks associated with ongoing price volatility and should position the Company to return capital to our stockholders in the future.
Industry Context
The announcement reflects trends in the oil and gas industry, including a focus on strategic acquisitions, balance sheet strength, and returning capital to stockholders. Companies are increasingly focused on capital discipline and shareholder returns in response to investor demands and market volatility.
Comparison to Industry Standards
- The peer group used for executive compensation benchmarking includes companies such as Amplify Energy Corp., Berry Corp., Earthstone Energy, Inc., and others with similar revenue, reserves, production, and market capitalization.
- The executive compensation program aims to balance cash and non-cash compensation similar to peers, with a significant portion being incentive-based to emphasize pay-for-performance.
- The company's corporate governance practices, such as having independent directors on key committees and adopting a clawback policy, align with industry best practices.
Management Changes
| Role | Previous Person | New Person | Effective Date | Reason |
|---|---|---|---|---|
| President | Kevin Riley | Bobby D. Riley | December 31, 2023 | Kevin Riley resigned from the Company. |
Corporate Governance
| Change Type | Description | Effective Date | Impact Assessment |
|---|---|---|---|
| Clawback Policy | The Company adopted a Clawback Policy in accordance with Rule 10D-1, NYSE American adopted Section 811 of the Company Guide. | December 1, 2023 | The Rule 10D-1 Clawback Policy provides that, in the event the Company is required to prepare an accounting restatement due to the material noncompliance of the Company with any financial reporting requirement under the federal securities laws, the Company will recover (on a pre-tax basis) the amount of incentive-based compensation received by its current and former executive officers in excess of the amount of incentive-based compensation that would have been received had it been determined based on the restated amount, subject to limited exceptions. |
Related Party Transactions
- The company has a registration rights agreement with several entities, including Riley Exploration Group, LLC, Yorktown Energy Partners, and Bluescape Riley Exploration Holdings LLC, providing them with customary rights to demand the filing of a resale shelf registration statement and certain piggyback rights.
- RPOC provides certain administrative and operational services to Riley Exploration Group, LLC (REG) in exchange for a monthly fee of $100 thousand pursuant to a contract services agreement.
- Beth A. di Santo serves as General Counsel for the Company pursuant to an engagement letter with di Santo Law PLLC, a law firm owned by Ms. di Santo. Legal fees paid by the Company to di Santo Law, PLLC during the Company's year ended December 31, 2023 were $0.9 million.
- The Compensation Committee approved a renewal of the engagement letter with di Santo Law, PLLC that provides for a monthly cash payment of $60,000 and a one-time grant of $450,000 in restricted stock, subject to a one-year vesting period from January 1, 2024 (of which $350,000 worth of shares of restricted stock will be awarded to Ms. di Santo).
Stakeholder Impact
- Stockholders are encouraged to vote on the proposals presented at the Annual Meeting.
- The company's focus on strengthening its balance sheet and returning cash to stockholders is expected to benefit shareholders.
- The company's commitment to diversity in leadership may positively impact employees and the company's reputation.
Next Steps
- Stockholders are encouraged to review the proxy materials and vote on the proposals.
- The company will hold the 2024 Annual Meeting of Stockholders on May 10, 2024.
- The Board will consider properly presented proposals of stockholders intended to be presented for action at the 2025 Annual Meeting.
Key Dates
| Date | Description |
|---|---|
| April 1, 2019 | Effective date of the contribution transaction between Polaris E&P, LLC and Oakspring Energy Holdings, LLC to newly-formed Combo Resources, LLC. |
| April 2019 | Named executive officers entered into substantially similar written employment agreements. |
| April 2019 | BDO USA, P.C. began serving as the company's independent registered public accounting firm. |
| October 2020 | REP LLC entered into a second amended and restated registration rights agreement. |
| February 26, 2021 | Beth di Santo was appointed as Corporate Secretary. |
| March 15, 2021 | Effective date of Philip Riley's employment agreement. |
| April 7, 2021 | The Company filed a registration statement on Form S-3. |
| September 1, 2021 | Philip Riley was appointed as Riley Permian's Chief Financial Officer. |
| September 1, 2021 | Beth di Santo was appointed as a director and General Counsel. |
| August 31, 2021 | Amber Bonney was appointed as Riley Permian's Chief Accounting Officer. |
| January 25, 2022 | Rebecca Bayless was appointed as an independent director. |
| April 21, 2023 | 2023 Annual Meeting of Stockholders. |
| April 2023 | The company closed the acquisition of New Mexico assets from Pecos Oil & Gas, LLC. |
| December 1, 2023 | The Company adopted a Clawback Policy in accordance with Rule 10D-1, NYSE American adopted Section 811 of the Company Guide. |
| December 2023 | The company announced changes to its executive leadership team. |
| December 31, 2023 | Kevin Riley resigned from the Company. |
| January 1, 2024 | Kevin Riley performed services on an independent contractor basis in transitioning his duties to other Company personnel between January 1, 2024 and January 31, 2024. |
| January 8, 2024 | The Company filed a prospectus supplement updating the registration statement on Form S-3. |
| January 31, 2024 | The management services agreement between RPOC and Combo Resources, LLC was terminated. |
| January 31, 2024 | The participation agreement between Riley and Combo was terminated. |
| April 8, 2024 | Form 4 filed by Alvin Libin. |
| April 10, 2024 | Form 4 filed by Riley Exploration Group, LLC. |
| April 10, 2024 | Form 4 filed by Bryan H. Lawrence. |
| April 15, 2024 | Date for security ownership information. |
| April 19, 2024 | The Compensation Committee approved a renewal of the engagement letter with di Santo Law, PLLC. |
| April 22, 2024 | Date of the Proxy Statement. |
| April 23, 2024 | Anticipated date for mailing the Notice of Annual Meeting and Proxy Statement along with the form of proxy card and the Company's Annual Report on Form 10-K and Form 10-K/A for the year ended December 31, 2023 to stockholders. |
| May 6, 2024 | Pre-registration begins on or about May 6, 2024 at 9:00 a.m. Central Time. |
| May 10, 2024 | 2024 Annual Meeting of Stockholders at 10:00 a.m. Central Time. |
| December 24, 2024 | Deadline for receipt of stockholder proposals for inclusion in the proxy statement for the 2025 Annual Meeting. |
| January 10, 2025 | Latest date for stockholder notice of proposals to be presented at the 2025 Annual Meeting. |
| April 10, 2025 | Earliest date for stockholder notice of proposals to be presented at the 2025 Annual Meeting. |
Keywords
Annual Meeting, Proxy Statement, Stockholders, Directors, Executive Compensation, Riley Exploration Permian, BDO USA, Corporate Governance, Oil and Gas
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