8-K: Riley Exploration Permian Finalizes $142 Million Acquisition of New Mexico Permian Basin Assets

Riley Exploration Permian, Inc. has successfully completed its previously announced acquisition of Silverback Exploration II, LLC, significantly expanding its oil and gas footprint in the Permian Basin.

Summary

• Riley Exploration Permian, Inc. (REPX) completed the acquisition of 100% of the ownership interests of Silverback Exploration II, LLC and its subsidiaries on July 1, 2025.
• The acquired assets consist of oil and natural gas properties primarily located in the Yeso trend of the Permian Basin in Eddy County, New Mexico.
• The aggregate purchase price for the acquisition was approximately $142 million, subject to customary purchase price adjustments.
• The acquisition agreement includes potential quarterly earnout payments of up to $1,875,000 per fiscal quarter during calendar years 2026 and 2027, contingent on the NYMEX WTI quarterly average exceeding certain stated amounts ranging from $70 to $75 per barrel or higher.
• The purchase price was funded through a combination of borrowings under the Company's revolving credit facility and cash on hand.

Sentiment

Score: 7

Explanation: The completion of a significant acquisition is generally a positive strategic step, expanding the company's asset base and potential for future growth, especially with an earnout structure tied to higher oil prices. No immediate negative financial impacts or delays are reported.

Positives

• Successful completion of a strategic acquisition, expanding the company's oil and gas asset base in the highly productive Permian Basin.
• The acquisition includes potential earnout payments, providing upside linked to favorable future oil prices (NYMEX WTI exceeding $70-$75 per barrel).
• Funding for the acquisition utilized existing credit facilities and cash on hand, indicating financial flexibility without the immediate need for new external capital raises.

Risks

• Uncertainties exist regarding the commencement or completion dates of each phase of the midstream buildout plan.
• Future levels of natural gas production or the ability to successfully execute the development plan for the New Mexico Assets may differ from expectations.
• Anticipated costs related to the midstream buildout plan are subject to change due to potential cost overruns, change orders, necessity to acquire rights-of-way, delays or costs necessitated by regulatory requirements and/or approvals, adverse weather events, and increases in prices of construction materials or labor.
• The characteristics of intended systems and facilities, including volume capacity or the feasibility and cost of pipeline interconnections, are subject to change.
• The company's midstream business strategy and plans are subject to change.
• Access to sufficient capital to fund the midstream buildout plan, development plan, or any related matters is not guaranteed.

Future Outlook

The company expects to commence or complete construction of each phase of its midstream buildout plan by certain dates, and aims to successfully execute its development plan for the New Mexico Assets. Future natural gas production levels are anticipated, and the company intends for its planned systems and facilities to have specific characteristics, including volume capacity and feasible pipeline interconnections. The company also anticipates having access to sufficient capital to fund its midstream buildout and development plans.

Management Comments

• Riley Permian completed on July 1, 2025 its previously announced acquisition of Silverback Exploration II, LLC, which owns oil and gas assets located in Eddy County, New Mexico.

Industry Context

The acquisition of oil and gas assets in the Permian Basin, specifically the Yeso trend in Eddy County, New Mexico, aligns with a broader industry trend of consolidation and strategic expansion in highly productive and resource-rich shale plays. The Permian Basin remains a key focus for many independent and major oil and gas companies due to its extensive hydrocarbon reserves and established infrastructure. This move positions Riley Permian to potentially capitalize on future commodity price increases, as indicated by the earnout structure tied to WTI prices.

Comparison to Industry Standards

• The document does not provide specific financial or operational metrics for the acquired assets (e.g., production volumes, reserves, capital expenditure plans) that would allow for a direct comparison to global benchmarks or specific comparable companies/projects. Therefore, a detailed assessment against industry standards is not possible based solely on the information provided.

Stakeholder Impact

• Shareholders: The acquisition expands the company's asset base and potential for future revenue and earnings, particularly if oil prices trigger earnout payments, potentially increasing shareholder value.
• Creditors: The use of the revolving credit facility for funding implies increased leverage, which could be a consideration for creditors, though the specific impact depends on the company's overall financial health and credit terms.

Next Steps

• The company intends to file the financial statements of the acquired business as part of an amendment to this Current Report on Form 8-K.
• The company intends to file the pro forma financial information as part of an amendment to this Current Report on Form 8-K.
• These amendments will be filed no later than 71 calendar days after the date this Current Report on Form 8-K is required to be filed with the SEC.

Key Dates

Keywords

Oil and Gas, Permian Basin, Acquisition, Energy, Exploration, Production, New Mexico, Eddy County, Yeso trend, Midstream, REPX