Riley Exploration Permian, Inc. — Third Quarter 2026 Earnings Summary

Financial Performance:

• Total revenues were $201 million, a 21% increase quarter-over-quarter, driven by higher volumes and positive natural gas/NGL revenue offsetting a $10.65/Bbl decline in realized oil price.
• Operating income was $107 million, compared to $29 million in the second quarter of 2026 and $29 million in the third quarter of 2025.
• Operating cash flow increased 75% quarter-over-quarter and 75% year-over-year to $111 million.
• Net loss was $2 million ($0.11 per diluted share), compared to a net income of $87 million ($4.16 per share) in the second quarter of 2026 and $16 million ($0.77 per share) in the third quarter of 2025.
• Adjusted EBITDAX was $117 million, up from $80 million in the second quarter of 2026 and $64 million in the third quarter of 2025.
• Total Free Cash Flow was $42 million, compared to $6 million in the second quarter of 2026 and $25 million in the third quarter of 2025.
• Adjusted Net Income was $56 million ($2.66 per diluted share).
• Lease operating expenses were $34 million ($8.84 per Boe), including $11 million in workover expenses.
• Administrative costs were $9 million ($2.27 per Boe) and production/ad valorem taxes were $13 million ($3.30 per Boe).
• Total accrual capital expenditures were $53 million; cash capital expenditures were $66 million.
• Total debt was reduced by $28 million quarter-over-quarter to $245 million ($115 million on Credit Facility, $130 million Senior Notes).
• Interest expense, net was $7 million.
• Cash balance was $26.8 million as of September 30, 2026.

Guidance and Future Outlook:

• Q4 2026 Net Operated Well Activity: 13-17 drilled, 13-17 completed, 14-18 turned to sales.
• Q4 2026 Non-Operated Net Wells: 0-1.
• Q4 2026 Production Guidance: Oil 25.5-26.5 MBbls/d; Total Equivalent 42.5-43.5 MBoe/d.
• Q4 2026 Capital Expenditures Guidance: Upstream $60-$70 million; Infrastructure and Other $14-$16 million; Total $74-$86 million.
• Q4 2026 Power JV Investment: $2 million.
• Q4 2026 Operating Cost Guidance: Lease Operating Expenses $8.75-$9.75 per Boe; Production and Ad Valorem Taxes 7.5%-8.5% of revenue; Administrative Costs $2.00-$2.50 per Boe.
• Plans to allocate capital to initial development of the San Andres formation during the second quarter of 2027.
• Management intends to continue investing significantly in asset development supported by undeveloped inventory and improving infrastructure.

Business Segments and Product Lines:

• Average daily oil production increased 20% quarter-over-quarter and 38% year-over-year to 25.4 MBbls/d.
• Total equivalent production increased to 42.0 MBoe/d (Texas: 27.7 MBoe/d; New Mexico: 14.3 MBoe/d).
• Year-to-date 2026: 44.1 net wells drilled, 38.0 net wells completed, 33.8 net wells turned to sales.
• New third-party water and gas infrastructure in New Mexico commenced operations over the past seven weeks, including a natural gas gathering and high-pressure trunkline system.
• Water management services agreement with Waterbridge Stateline LLC in-service on September 15, 2026.
• Targa pipeline system placed in service on October 1, 2026, to mitigate processing and takeaway constraints in Eddy County, New Mexico.
• $2 million invested in power-focused joint venture, RPC Power.

Market and Competitive Landscape:

• Average realized prices (before derivative settlements): Oil $83.63/Bbl, Natural Gas $0.27/Mcf, NGLs $5.08/Bbl.
• Average realized prices (including derivative settlements): Oil $71.61/Bbl, Natural Gas $0.26/Mcf, NGLs $5.08/Bbl.
• Open derivative positions as of November 2, 2026, include WTI Oil Swaps and Collars, Henry Hub Natural Gas Swaps and Collars, and Waha Basis Swaps for 2026-2028.
• Interest rate derivative position: Long $45 million notional amount at 3.90% fixed rate for November 2026-April 2027.

Risks and Challenges:

• Significant net loss on derivatives of $100 million ($28 million realized loss, $72 million non-cash loss) due to changes in fair value and cash settlements.
• Natural gas and NGL realizations previously resulted in negative revenue in the second quarter of 2026.
• New Mexico production decreased year-over-year for the three months ended September 30, 2026, due to natural decline and zero new wells turned to sales since July 2025.
• Zero new wells turned to sales in New Mexico year-to-date; all new wells turned to sales were in Texas.
• Potential delays in development, construction, or start-up of planned projects.
• Risks related to commodity price volatility, midstream constraints, and regulatory changes.

Management Commentary and Tone:

• Bobby Riley, CEO and Chairman, stated the company plans to continue significant investment in asset development based on current market conditions, supported by a large base of undeveloped inventory and improving third-party infrastructure.
• Management reported strong results across operating and financial metrics, attributing production growth to new development well volumes and the return to production of select New Mexico wells following Q2 disruptions.
• Core operating costs improved on a per unit basis, contributing to stronger margins.

Other Key Points:

• Retired 10.5% unsecured senior notes in October 2026; prepaid $130 million plus $0.2 million accrued interest using borrowings under the Credit Facility.
• Entered into an amended and restated credit agreement on October 29, 2026, increasing borrowing base to $450 million, elected commitments to $450 million, extending maturity to October 2030, and reducing minimum hedging requirement to 18 months.
• Increased quarterly dividend by 5% to $0.42 per share in October 2026; paid $0.40 per share during the quarter.
• Completed zero share buybacks during the quarter.
• Shares outstanding were 22.15 million as of September 30, 2026, a 0.7% year-over-year increase.
• Acquired Silverback Exploration II, LLC and its subsidiaries on July 1, 2025, contributing to year-to-date production increases in New Mexico.