8-K: Riley Permian Boosts Dividend, Production After Strong Q3

Riley Exploration Permian, Inc. reported strong third-quarter 2025 results, marked by increased production, significant free cash flow, and a 5% dividend hike, alongside successful integration of the Silverback acquisition.

Summary

• Averaged 32.3 MBoe/d of total equivalent production (18.4 MBbls/d oil) in Q3 2025.
• Daily oil volumes increased 21% and daily total equivalent volumes increased 33% quarter-over-quarter.
• Generated $64 million of operating cash flow, $54 million before changes in working capital, $25 million of Total Free Cash Flow, and $39 million of Upstream Free Cash Flow in Q3 2025.
• Incurred total accrual capital expenditures (before acquisitions) of $18 million ($13 million for upstream) and cash capital expenditures (before acquisitions) of $29 million ($15 million for upstream).
• Closed the acquisition of Silverback Exploration II, LLC for $120 million in cash plus $3.1 million in contingent consideration in July 2025.
• Increased the annual dividend by 5% to $0.40 per share during October 2025.
• Raised guidance for full-year oil production by 2% at the midpoint (4% at the midpoint for Q4 2025).
• Maintained guidance for full-year total capital expenditures and investments at the midpoint.
• Reported net income of $16 million, or $0.77 per diluted share, for Q3 2025.
• Adjusted EBITDAX was $64 million for Q3 2025.
• Total debt as of September 30, 2025, was $375 million, including $225 million on the Credit Facility and $150 million in Senior Notes.
• Increased total debt by $91 million, primarily due to $125 million in Credit Facility proceeds to fund the Silverback acquisition, partially offset by $29 million in repayments.
• The New Mexico midstream project continues to advance with a planned 2026 in-service date for pipeline connection.
• RPC Power LLC, a 50% joint venture, served approximately 70% of the company's load for its Champions field in Texas during Q3 2025, with an increase forecasted for 2026.
• RPC Power's project to build 40 MW of generation capacity in West Texas has its first site planned for commissioning with ERCOT during Q1 2026.

Sentiment

Score: 8

Explanation: The company demonstrated strong operational performance with significant production increases, successful acquisition integration, and robust free cash flow generation. The dividend increase and raised production guidance indicate strong management confidence and positive future prospects, despite an increase in debt to fund the acquisition and some negative realized prices for natural gas and NGLs.

Positives

• Achieved significant quarter-over-quarter production increases: 21% for oil and 33% for total equivalent volumes.
• Generated strong free cash flow: $25 million Total Free Cash Flow and $39 million Upstream Free Cash Flow in Q3 2025.
• Successfully closed and began integrating the Silverback acquisition, leading to increased production and reduced costs above pre-acquisition levels.
• Increased the annual dividend by 5% to $0.40 per share, reflecting confidence in financial performance and outlook.
• Raised full-year oil production guidance by 2% at the midpoint, indicating improved operational expectations.
• Progressing midstream and power generation projects that are expected to provide critical infrastructure for scaling operations in 2026 and beyond.

Negatives

• Net income for Q3 2025 decreased to $16 million from $25.663 million in Q3 2024.
• Net income for the nine months ended September 30, 2025, decreased to $75.443 million from $77.969 million in the same period of 2024.
• Total debt increased by $91 million, primarily to fund the Silverback acquisition.
• Average realized prices for natural gas and NGLs were negative in Q3 2025, before derivative settlements, due to gathering, processing, and transportation costs exceeding prices received.
• Lease operating expenses increased to $26.874 million in Q3 2025 from $18.532 million in Q3 2024.

Risks

• Volatility of oil, natural gas, and NGL prices.
• Regional supply and demand factors, production delays, curtailments, or governmental orders imposing production limits.
• Cost and availability of gathering, pipeline, refining, transportation, power, and other midstream and downstream activities, potentially leading to prolonged well shut-ins.
• Inability or failure to successfully integrate acquired assets, such as Silverback, into operations and development activities.
• Potential delays in the development, construction, or start-up of planned projects, including midstream and power initiatives.
• Failure to realize any of the anticipated benefits of joint ventures or other equity investments.
• Risks relating to operations, including development drilling and testing results and performance of acquired properties and newly drilled wells.
• Inability to prove up undeveloped acreage and maintain production on leases.
• Any reduction in the borrowing base on the Credit Facility and the ability to repay any excess borrowings.
• The impact of the derivative strategy and the results of future settlements.
• Ability to comply with financial covenants contained in the Credit Facility and Senior Notes.
• Changes in general economic, business, or industry conditions, including inflation rates, interest rates, and foreign currency exchange rates.
• Conditions in the capital, financial, and credit markets and the ability to obtain capital needed to fund exploration, development, and midstream projects on favorable terms or at all.
• Legislative or regulatory changes, including initiatives related to hydraulic fracturing, greenhouse gases, water conservation, seismic activity, weatherization, or protection of certain species of wildlife or sensitive environmental areas.
• Restrictions on the use of water, including limits on produced water and a moratorium on new produced water well permits recently imposed by the Railroad Commission of Texas in the Permian Basin.
• Cybersecurity threats, technology system failures, and data security issues.

Future Outlook

Riley Permian is raising its full-year oil production guidance by 2% at the midpoint, with a 4% increase for the fourth quarter of 2025, while maintaining full-year total capital expenditures and investments guidance. The company anticipates its New Mexico midstream pipeline to be in-service in 2026 and expects increased load served by RPC Power in 2026. The first RPC Power generation site in West Texas is planned for commissioning with ERCOT in Q1 2026, with remaining sites throughout 2026.

Management Comments

• Riley Permian delivered another solid quarter, marked by disciplined execution and strategic progress.
• Closed the Silverback acquisition in July and began integrating the asset, where we are already seeing increased production and reduced costs.
• The execution of our development and capital plan has generated significant free cash flow year-to-date.
• The combination of these factors gave us confidence to increase our quarterly dividend by 5% to $0.40 per share.
• Continue to progress our midstream and power generation projects, which provide critical infrastructure for Riley Permian to scale its operations in 2026 and beyond.

Industry Context

The company's focus on the Permian Basin, a key U.S. oil and gas producing region, positions it within a highly active and competitive environment. The successful integration of the Silverback acquisition and ongoing midstream and power generation projects reflect a broader industry trend towards optimizing infrastructure and operational efficiency to support production growth and reduce costs, especially in mature basins. The increase in oil production guidance suggests a positive outlook for the company's operational capabilities within the current market conditions, despite volatile natural gas and NGL prices impacting realized prices.

Comparison to Industry Standards

• The filing does not provide specific comparable companies, projects, or results to assess against global benchmarks.
• The reported quarter-over-quarter oil production increase of 21% and total equivalent production increase of 33% are strong growth metrics within the upstream sector, particularly following an acquisition.
• The generation of significant free cash flow and a dividend increase are generally positive indicators for investor returns, aligning with a focus on capital efficiency seen across the industry.

Stakeholder Impact

• Shareholders: Positive impact due to increased dividend, strong free cash flow generation, and raised production guidance, potentially leading to increased share value.
• Employees: Successful integration of the Silverback acquisition suggests stability and potential growth opportunities within the expanded operations.
• Customers: Increased production and expanded midstream and power infrastructure could lead to more reliable supply and services.
• Creditors: Increased debt for the acquisition is noted, but strong cash flow generation provides a basis for managing debt obligations.
• Suppliers: Ongoing capital projects in midstream and power, along with continued drilling activity, indicate sustained demand for services and equipment.

Next Steps

• Host a conference call for investors and analysts on November 6, 2025, at 9:00 a.m. CT.
• Continue integration of Silverback assets to realize increased production and reduced costs.
• Progress midstream and power generation projects to scale operations in 2026 and beyond.
• Achieve a planned 2026 in-service date for the New Mexico midstream pipeline connection.
• Increase the forecasted load served by RPC Power for the Champions field during 2026.
• Install battery energy storage systems for RPC Power in 2026.
• Commission the first RPC Power generation site with ERCOT during Q1 2026, with remaining sites throughout 2026.
• Receive delivery of three additional compressors for the New Mexico midstream project in late 2026 and early 2027.

Key Dates

Recommendation

The company demonstrated strong operational execution in Q3 2025, evidenced by significant quarter-over-quarter production growth (21% oil, 33% total equivalent) and robust free cash flow generation. The successful integration of the Silverback acquisition, leading to increased production and reduced costs, is a key positive. Management's confidence is further underscored by a 5% dividend increase and raised full-year oil production guidance. While debt increased to fund the acquisition, the strong cash flow profile and strategic investments in midstream and power projects position the company for scalable growth and improved efficiency in 2026 and beyond. These factors suggest a positive outlook for future performance and shareholder returns.

Keywords

Riley Permian, REPX, Oil and Gas, Permian Basin, Exploration, Production, Free Cash Flow, Dividend, Acquisition, Silverback, Midstream, Power Generation, EBITDAX, Capital Expenditures, Earnings Report, Energy Sector