REPX

• Safety Performance

  • Reported zero total recordable incident rate for Q2 2026, with 98% of operating days classified as safe
  • Safe, reliable execution remains the foundational priority for all operational activity

• Q2 2026 Development Activity

  • On a net basis: 19.9 wells drilled, 17.3 wells completed, 13.9 wells turned to sales. Turn-in-line volumes were below guidance due to third-party infrastructure delays, but all delayed wells have now been brought online and will contribute to production starting in Q3 2026
  • Texas operations: Delivered 12 gross wells plus 1 saltwater disposal (SWD) well, improved average lateral footage per day by 19%, and reduced drilling cost per lateral foot by 7.5% compared to 2025. Set new county drilling records, reflecting broad operational efficiency gains across planning, execution and coordination
  • New Mexico operations: Resumed development after 2025 infrastructure wait times, increased average lateral feet per day by 67% and reduced average drilling cost per lateral foot by 32% compared to 2023-2024 combined campaigns. Successfully completed the first 1.5-mile lateral in the Red Lake area, a key technical milestone for the asset

• Operating Cost Management

  • Total lease operating expense (LOE) increased $5.4 million quarter-over-quarter: $1.9 million from recurring LOE, $3.5 million from workover expense. Much of the increase reflects intentional, value-creating investments: $2.3 million in workover expenditure added roughly 700 barrels of oil per day (bopd) of incremental production, one of the lowest-cost sources of growth for the company
  • Delivered cost offset gains: Trialed surface acid and chemical treatments that avoid costly downhole interventions, cutting intervention costs by 75% ($210,000 per treatment); 40 annual treatments could generate $8.4 million in annual savings. Chemical program changes in New Mexico reduced chemical costs by 50% and improved artificial lift runtimes to cut further workover expenses

• Silverback Acquisition Synergy

  • The Silverback acquisition within the company's existing footprint has outperformed expectations: monthly per-well workover costs have decreased 59%, and production has approximately doubled through strategic optimization, cleanouts and workovers, with more upside remaining

• Infrastructure Progress

  • New high-pressure gathering and trunk line system constructed by Targa (Target) is on track to enter service in early Q4 2026, which will resolve midstream takeaway constraints experienced in Q2 2026
  • A third-party water disposal agreement with WaterBridge for Red Lake development will launch in September 2026, providing sufficient capacity to accelerate New Mexico development
  • The company has adjusted its 2026 activity schedule to align New Mexico well completions with Targa pipeline in-service date to avoid stranding capital, shifting near-term activity to Texas where infrastructure is already mature to support near-term production growth

• Full-year 2026 oil production guidance has been raised to reflect ~30% year-over-year growth, with the guidance midpoint increased 2% to 23,000 barrels of oil per day
  • Q3 2026 oil production guidance midpoint is 25,600 barrels per day, which represents more than 20% sequential growth over Q2 2026
  • Management expects the largest year-over-year production increase to occur in Q3 2026, with production momentum continuing through the end of the year and into 2027
• Full-year 2026 accrual capital expenditure guidance midpoint has been increased 12% ($26 million) to $236 million. Approximately one-third of the increase comes from upstream drilling activity (partially offset by fewer completions), and two-thirds comes from infrastructure spending (60% of the infrastructure increase is for saltwater disposal projects, with most of the remainder for oil gathering projects in the Texas Champions asset)
• Q3 2026 accrual capital expenditure guidance is $59 million, a reduction from Q2 2026's $87 million, though cash capital expenditures may flip higher from Q2 as invoices are processed
• Management forecasts higher free cash flow in the second half of 2026 compared to the first half of the year
• No formal 2027 guidance has been issued, but management expects a steady pace of continuous development and year-over-year production growth, consistent with its 2026 trajectory

Riley Exploration Permian is an independent oil and gas producer focused on two core operating regions: the Texas (Champions) asset and the New Mexico (Red Lake) asset. No separate segment-level revenue figures were provided in the transcript. Aggregate company-wide financial results for Q2 2026: operating cash flow of $64 million, up 35% quarter-over-quarter driven by high oil prices; cash capital expenditures and other investments of $73 million, up 153% quarter-over-quarter; pre-working capital, pre-acquisition free cash flow of $6 million, with year-to-date free cash flow totaling approximately $30 million. Total accrual basis capital expenditures for Q2 2026 were $87 million, split between $70 million in drilling and completion expenditures (in line with guidance midpoint) and $17 million in infrastructure and other expenditures (above the guidance midpoint of $12.5 million due to accelerated development activity). End-of-quarter principal debt balance was $273 million, an 11% ($26 million) increase quarter-over-quarter. The company also has a small-scale power joint venture unrelated to its core oil and gas business, with 10 megawatts of generation capacity online as of Q2 2026.

• Midstream takeaway constraints in April and May 2026 required temporary well shut-ins, reducing Q2 2026 production by approximately 2,000 bopd. The company remains exposed to gas takeaway constraints on the New Mexico asset until the Targa pipeline enters service in Q4 2026
• Development activity has been delayed by third-party infrastructure for gas, oil and water takeaway in Texas, which reduced Q2 2026 turn-in-line volumes and pulled forward capital expenditure that was originally planned for the second half of 2026
• Input cost pressures from higher water disposal needs, steel and tubular costs, diesel, power, and general service activity have increased operating costs, though the company has mitigated much of this pressure through efficiency gains
• The small power joint venture is facing near-term headwinds from multi-year low summer power prices driven by a surge in solar supply, and new large-load interconnections are delayed in queue
• M&A activity is dependent on market conditions, as high volatility makes it difficult for buyers and sellers to agree on transaction pricing, limiting near-term acquisition opportunities

Q: Analyst Derek Whitfield asked about the 2027 production trajectory after 2026's heightened activity and low-cost workover opportunities at the Champions asset, and requested clarity on the depth of available workover opportunities and how these will be integrated into development plans. / A: Bobby Riley stated that with one rig running continuously, the company expects steady year-over-year production growth in 2027, with no major changes to its core strategy of growing production while spending within cash flow, reducing debt, and paying dividends. John Suter added that there are enough candidate wells for these low-cost surface treatments to support a couple years of inventory in Champions, with additional untapped opportunities in New Mexico, and added production from workovers has the benefit of lower decline rates than new well production.

Q: Analyst Neil Dingman asked about the company's capital allocation framework for organic growth versus M&A, and asked about current gas takeaway constraints and mitigation plans. / A: Philip Riley explained that the company prioritizes organic development of its large, high-return inventory of undeveloped locations, which is fully within the company's control, and will only pursue acquisitions opportunistically when transaction pricing makes sense, as high market volatility has limited M&A activity in recent quarters. John Suter noted that gas takeaway constraints on the New Mexico asset will be resolved when the Targa line enters service in early Q4 2026, with near-term exposure already largely under control ahead of the pipeline launch.

Q: Analyst Jeff Robertson asked how much of the Silverback acquisition production and cost improvement has already been realized, and asked about the company's capital allocation tradeoff between share buybacks, dividends, and debt reduction for 2027. / A: John Suter responded that while obvious high-return improvements have already been completed, there is still significant additional upside remaining, including untapped opportunities for low-cost surface treatments in New Mexico, and future drilling will unlock further value as infrastructure is completed. Bobby Riley and Philip Riley stated that the company will maintain its flexible approach, continue growing the dividend at its current steady pace, and use excess free cash flow above the dividend for buybacks and gradual debt reduction, with no plans for special dividends.