Riley Exploration Permian, Inc.: Q2 FY2026 earnings call

What management said about Q2 FY2026, from the documents filed with the SEC on 5 August 2026: press release. Guidance figures: 7 raised, 3 lowered, 1 narrowed, 14 new. The quarter’s numbers.

Read the filing

Key takeaways

• Oil production near high end: Oil output averaged 21.2 MBbl/d, against 15.2 a year earlier, and total equivalent production was 34.3 MBoe/d. Management described oil production as near the high end of guidance. Source
• Full-year oil guidance raised: Full-year net oil production guidance rose to 22.5-23.5 MBbl/d from 22.0-23.0, which management said implies about 30% year-over-year growth in 2026. Source
• Full-year capital budget raised: Full-year capital expenditures were raised to $230-242 million from $200-220 million, with upstream at $189-195 million and infrastructure and other at $41-47 million. Management tied the revision to higher forecast oil output. Source
• Third-quarter oil growth above 20%: Management expects third-quarter oil output to grow more than 20% sequentially, which it describes as the largest production increase of the year. Source
• New Mexico outage cut output: An unplanned third-party facility outage from late March caused processing limits and temporary well shut-ins in New Mexico during April and May, which management estimated reduced second-quarter production by about 1.9 MBbl/d. June oil output was 24.4 MBbl/d. Source
• Targa pipeline to address takeaway: The company contracted Targa in December 2025 to build gathering and high-pressure trunkline infrastructure in Eddy County, New Mexico, to mitigate processing and takeaway constraints. In-service is expected in the fourth quarter of 2026. Source
• Gas and NGL prices negative: Realized gas prices were negative before GP&T costs, with Waha pricing affected by ongoing regional pipeline constraints. Gas and NGL prices are presented net of GP&T costs, which at times exceeded the price received. Source

“We continued executing the growth strategy we outlined earlier this year during the second quarter, delivering oil production near the high end of guidance and building momentum for the quarters ahead.”

Bobby Riley, Chief Executive Officer and Chairman of the Board

Guidance

What changed from last quarter

• Guidance raised: Full-year 2026 net oil production guidance raised to 22.5-23.5 MBbls/d from 22.0-23.0 MBbls/d. Source
• Guidance raised: Full-year total capital expenditures and total investments raised; upstream, infrastructure and power JV amounts all increased. Source
• Guidance raised: Full-year net operated wells drilled raised to 51.6-53.6 from 42.0-48.0. Source
• Guidance lowered: Full-year total equivalent production top end reduced to 38.5 MBoe/d from 39.5; low end kept at 37.5. Source
• Guidance lowered: Full-year net wells completed, net wells turned to sales and non-operated net wells all lowered from prior ranges. Source
• New guidance: Third-quarter 2026 detailed guidance issued alongside updated full-year 2026 activity guidance. Source
• New: Targa pipeline work in Eddy County, New Mexico, contracted in December 2025, with in-service now expected in the fourth quarter of 2026. Source

Results and production growth

• Oil production near high end: Oil output averaged 21.2 MBbl/d, against 15.2 a year earlier, and total equivalent production was 34.3 MBoe/d. Management described oil production as near the high end of guidance. Source
• Net income included derivative gain: Net income was $87 million, or $4.11 per diluted share, against $30 million a year earlier. Derivatives added a $33 million net gain, combining a $69 million non-cash gain with a $36 million realized loss. Source
• EBITDAX and free cash flow: Adjusted EBITDAX was $80 million, up from $61 million in the first quarter. Operating cash flow was $64 million and Total Free Cash Flow was $6 million, down from $24 million in the first quarter. Source

Full-year and third-quarter guidance

• Full-year oil guidance raised: Full-year net oil production guidance rose to 22.5-23.5 MBbl/d from 22.0-23.0, which management said implies about 30% year-over-year growth in 2026. Source
• Full-year capital budget raised: Full-year capital expenditures were raised to $230-242 million from $200-220 million, with upstream at $189-195 million and infrastructure and other at $41-47 million. Management tied the revision to higher forecast oil output. Source
• Well counts reset for full year: Full-year net operated wells drilled rose to 51.6-53.6, while completions, turn-to-sales and non-operated wells were lowered to 41.1-43.1, 42.8-44.8 and 1.9-2.9. Source
• Third-quarter guidance issued: Third-quarter detailed guidance covers 4.9-6.9 net wells drilled, 25.1-26.1 MBbl/d of oil, 40.5-41.5 MBoe/d total production and $53-65 million of total capital expenditures. Source
• Third-quarter oil growth above 20%: Management expects third-quarter oil output to grow more than 20% sequentially, which it describes as the largest production increase of the year. Source

“Our outlook calls for the largest production increase of the year in the third quarter, with oil production expected to grow more than 20% sequentially.”

Bobby Riley, Chief Executive Officer and Chairman of the Board

New Mexico disruption and Targa pipeline

• New Mexico outage cut output: An unplanned third-party facility outage from late March caused processing limits and temporary well shut-ins in New Mexico during April and May, which management estimated reduced second-quarter production by about 1.9 MBbl/d. June oil output was 24.4 MBbl/d. Source
• Texas and New Mexico volumes by state: Texas averaged 24.0 MBoe/d against 16.5 a year earlier, and New Mexico 10.3 MBoe/d against 7.9. Oil was 15.8 MBbl/d in Texas and 5.4 MBbl/d in New Mexico. Source
• Targa pipeline to address takeaway: The company contracted Targa in December 2025 to build gathering and high-pressure trunkline infrastructure in Eddy County, New Mexico, to mitigate processing and takeaway constraints. In-service is expected in the fourth quarter of 2026. Source

Realized prices and gas differentials

• Oil realized price before hedges: Realized oil price before derivative settlements was $94.28 per barrel, against $68.89 in the first quarter. After derivative settlements the oil price was $74.25 per barrel. Source
• Gas and NGL prices negative: Realized gas prices were negative before GP&T costs, with Waha pricing affected by ongoing regional pipeline constraints. Gas and NGL prices are presented net of GP&T costs, which at times exceeded the price received. Source
• NGL gains offset by allocated costs: Realized NGL prices before GP&T costs rose on higher Mont Belvieu pricing, but higher allocated GP&T costs from negative gas prices more than offset the gain. Source

“We are encouraged by the progress made to date and believe the activity underway positions us for meaningful production growth through the remainder of 2026 and into 2027.”

Bobby Riley, Chief Executive Officer and Chairman of the Board

Operating costs and unit expenses

• Lease operating expense included workovers: Lease operating expense was $29 million, or $9.44 per Boe, including $11 million of workover expense. Management said the workovers aimed to capitalize on high oil prices and supplement volumes disrupted operationally. Source
• Administrative and production tax costs: Administrative costs were $9 million, or $2.80 per Boe, and production and ad valorem taxes were $11 million, or $3.67 per Boe. Source
• Third-quarter unit cost ranges: Third-quarter ranges are lease operating expense of $8.50-9.50 per Boe, production and ad valorem taxes of 7.5%-8.5% of revenue, and administrative costs of $2.25-2.75 per Boe. Source

Capital spending and well program

• Accrual capex $87 million: Accrual capital expenditures before acquisitions were $87 million and cash capital expenditures were $68 million, against $47 million and $31 million in the first quarter. Source
• Operated well program: Operated activity was 24 gross wells drilled, 18 completed and 15 turned to sales. Twelve wells were drilled in Texas and twelve in New Mexico, and New Mexico had no completions or turn-to-sales in the quarter. Source
• RPC Power investment: The company put $3 million into RPC Power, its power-focused joint venture, in the quarter. Source

Debt, cash and shareholder returns

• Debt rose on Credit Facility: Total debt rose $26 million after an $8 million reduction in the first quarter; the Credit Facility increased $31 million and the Senior Notes fell $5 million. Quarter-end debt-to-Adjusted EBITDAX was 1.0x. Source
• Principal debt and interest: Principal debt was $138 million on the Credit Facility and $135 million on the Senior Notes, a combined $273 million, with net interest expense of $7 million. Source
• Share repurchases in second quarter: The company repurchased 25 thousand shares for $1 million at a weighted average price of $34.13, after repurchasing 152 thousand shares for $4 million in the first quarter. Source
• Quarterly dividend paid at $0.40: A cash dividend of $0.40 per share, totaling $9 million, was paid in the quarter. Source
• Interest rate position: An interest rate position of $45 million notional at a 3.90% fixed rate covers August 2026 to April 2027. Source

Coming up, as management said on 5 August 2026

• Production growth through 2027: Management said current activity positions the company for production growth through the rest of 2026 and into 2027, with the largest increase of the year in the third quarter. Source
• Targa pipeline in service: The new Targa pipeline system in Eddy County is currently expected to be in service in the fourth quarter of 2026. Source

Figures management reported

Risks management discussed

• Operational: New Mexico gas processing and midstream constraints following a third-party outage led to temporary well shut-ins in April and May. Source
• External: Regional pipeline constraints depressed Waha pricing, which made realized natural gas prices negative before GP&T costs. Source

Earlier plans management reported on

• Met: Management said second-quarter oil production was near the high end of guidance. Source
• Not stated: The first-quarter release expressed confidence in meaningful year-over-year production growth. The second-quarter release puts full-year oil growth at about 30%.
• Not stated: Management said the in-service date is currently expected in the fourth quarter of 2026. Source

Other quarters

• Q3 FY2026 earnings call
• Q1 FY2026 earnings call
• Q4 FY2025 earnings call
• Q3 FY2025 results

Summarised with AI from the documents the company filed with the SEC. Every point is checked against the filing before it is shown: management’s own words word for word, figures against the line or table row they come from. A point that fails the check is left out. Source opens the filing at that line.