REPX

Riley Exploration Permian delivered a robust second quarter, with revenues surpassing Wall Street expectations and the market reacting positively to operational advancements. Management attributed the strong quarter to its most active development program to date, highlighted by increased well drilling and production enhancement projects. CEO Bobby Riley emphasized the significance of achieving a June oil production exit rate of 24,400 barrels per day and noted that, despite midstream constraints in April and May, the company’s underlying growth momentum remained intact. COO John Suter further credited operational improvements across both Texas and New Mexico, specifically pointing to record drilling efficiencies and cost reductions as key contributors. Is now the time to buy REPX? Find out in our full research report (it’s free). Revenue: $165.9 million vs analyst estimates of $148.3 million (94.2% year-on-year growth, 11.8% beat) Adjusted EPS: $1.54 vs analyst expectations of $1.63 (5.8% miss) Operating Margin: 52.6%, up from 33.7% in the same quarter last year Market Capitalization: $809.1 million While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention. Derrick Whitfield (Texas Capital): Asked about the sustainability of increased activity and workover opportunities into 2027. CEO Bobby Riley described the company as maintaining a steady development pace and emphasized continued year-over-year production growth. Neal Dingmann (William Blair): Questioned the balance between organic growth and M&A strategy. CFO Philip Riley explained that while acquisitions are opportunistic, the company’s undeveloped inventory provides strong organic growth options irrespective of deal activity. Neal Dingmann (William Blair): Followed up on gas takeaway constraints. Bobby Riley and Philip Riley detailed that the Targa line’s completion should resolve most near-term issues, with hedging used to manage current exposure. Jeffrey Robertson (Water Tower Research): Inquired about further production enhancement potential at Silverback. COO John Suter highlighted that while obvious opportunities have been addressed, more incremental improvements remain, particularly as infrastructure matures. Noel Parks (Tuohy Brothers): Asked for clarification on complex well designs and well spacing. Suter explained increased drilling complexity due to pad density and vertical well avoidance, with future studies underway for additional zones in New Mexico. Looking ahead, our analyst team will be closely monitoring (1) the finalization and operational impact of the Targa midstream project in New Mexico, (2) whether efficiency gains in drilling and workover programs continue to offset rising input costs, and (3) the pace of incremental production growth as additional wells come online. Progress in integrating recent acquisitions and the company’s ability to manage capital allocation will also be important markers for future performance. Riley Exploration Permian currently trades at $36.57, up from $33 just before the earnings. Is there an opportunity in the stock? See for yourself in our full research report (it’s free for active Edge members). ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI is taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies. Our AI system flagged Palantir before it ran 1,662% between October 2022 and February 2026. AppLovin before it ran 753% between February 2024 and February 2026. Nvidia before it ran 1,178% between January 2023 and February 2026. Each week it produces 6 new names that pass the same tests. Get Our Top 6 Stocks for Free HERE. Stocks that have made our list include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+271% between June 2020 and June 2025). Find your next big winner with StockStory today.

Image source: The Motley Fool. Thursday, Aug. 6, 2026 at 10:00 a.m. ET Chairman and Chief Executive Officer - Bobby Riley Chief Financial Officer - Philip Riley Chief Operating Officer - John Suter Operator: Good day, everyone, and welcome to the Riley Exploration Permian Inc. Second Quarter 2026 Earnings Call. This call is being recorded. At this time, I would like to hand the call over to Mr. Philip Riley, CEO. Please go ahead, sir. Philip Riley: Good morning. Welcome to our conference call covering our second quarter 2026 results. I'm Philip Riley, CFO. Joining me today are Bobby Riley, Chairman and CEO; and John Suter, COO. Yesterday, we published a variety of materials, which can be found on our website under the Investors section. These materials in today's conference call contain certain projections and other forward-looking statements within the meaning of the federal securities laws. These statements are subject to risks and uncertainties that may cause actual results to differ materially from those expressed or implied in these statements. We'll also reference certain non-GAAP measures. The reconciliations to the appropriate GAAP measures can be found in our supplemental disclosure on our website. I'll turn the call over to Bobby. Bobby Riley: Thank you, Philip. Earlier this year, we outlined our strategy to accelerate development activity and production growth in 2026, and we continued advancing that strategy during the second quarter. Our second quarter development program was the most active in Riley Permian's history. This heightened level of activity, together with production enhancement projects across both assets helped us deliver oil production near the high end of our guidance range and a June oil production exit rate of 24,400 barrels per day. While the quarter showed 5% sequential oil growth on average, we view the June exit rate as a better representation of the underlying momentum in the business and the foundation for the growth we expect during the second half of the year and into 2027. Importantly, a significant portion of the operational activity completed during the first half of the year has yet to be fully reflected in production. As a result, based upon our current outlook, we are increasing our full year oil production guidance, which now calls for approximately 30% year-over-year oil production growth. We forecast our largest increase of the year during the third quarter when we expect oil production to increase more than 20% sequentially. Our strong second quarter results were achieved despite midstream constraints during April and May that required temporary well shut-ins and reduced oil production by approximately 2,000 barrels per day. The disruption reinforces the strategic importance of the new high-pressure gathering and trunk line system being constructed by Targa, which is expected to enter service during the fourth quarter. While these disruptions limited the quarter's full potential, our underlying growth plan remains on track. The production growth we expect over the coming quarters reflects both the activity executed during the first half of the year and the development activity still ahead of us. As we bring those volumes online, we expect higher production to support stronger cash flows generation and improved returns on the capital we've invested. At the same time, continued infrastructure development in New Mexico is expanding our opportunity set and helping unlock a larger portion of our inventory for future development. We are encouraged by the progress made during the first half of the year and remain focused on safely and efficiently converting that activity into production growth during the balance of 2026 and throughout 2027. I'll now turn the call over to John Suter. John Suter: Thank you, Bobby, and good morning. I'll cover our operational results for the second quarter, the progress we are seeing across both of our core development areas and how we are positioning the business for the second half of '26 and beyond. As always, I'll start with safety because safe and reliable execution remains the foundation of everything we do. During the second quarter, operations reported a 0 total recordable incident rate, and we delivered 98% safe days. That is a strong result in any environment, but especially important given the level of activity our teams managed during the quarter. Development activity increased during the second quarter and was primarily focused in Texas. On a net basis, we drilled 19.9 wells, completed 17.3 wells and turned 13.9 wells to sales. Total capital spend on an accrual basis was $87 million for the second quarter. Drilling and completion capital expenditures were $70 million, which was in line with the midpoint of guidance. Infrastructure and other expenditures were approximately $17 million compared to the guidance midpoint of $12.5 million. The variance in infrastructure and other capital expenditures can primarily be attributed to accelerated development and bringing forward costs that would otherwise have been realized in the second half of 2026 or later. Turn-in lines came in below guidance for the quarter, primarily due to delays in third-party infrastructure needed to support the higher development pace in Texas. Those projects were related to gas, oil and water takeaway and were a driver of the higher capital spend. The production impact in the second quarter was minimal because these wells were scheduled to come online later in the quarter. They've all since been turned in line, and we expect to see the production contribution again in the third quarter. From an execution standpoint, the quarter was very strong. In Texas, the drilling team delivered 12 gross wells plus 1 SWD, improved average lateral footage per day by 19% and reduced drilling cost per lateral foot by 7.5% compared with 2025. We also set new Yoakum County records for both 1-mile and 1.5-mile wells. These were not isolated well results. They reflect broader improvement in planning, pad execution, bit and BHA selection, directional performance and day-to-day coordination across the drilling organization. New Mexico drilling also made a meaningful step forward after deferring development activity in 2025 while waiting on infrastructure build-outs. Compared with the 2023 and 2024 combined campaigns, we increased average lateral feet per day by 67% and reduced average drilling cost per lateral foot by 32%. We also successfully executed the first 1.5 mile lateral in Red Lake, which is an important milestone for the asset. The combination of faster drilling, lower cost per lateral foot and more complex well designs reflects the operational knowledge we've built over time and gives us confidence in the repeatability of future development. Another important point is that we have continued to mitigate operating cost pressures through disciplined execution even as several major input costs have moved against us. Total LOE increased $5.4 million quarter-over-quarter with approximately $1.9 million coming from recurring LOE and $3.5 million from workover expense. That increase came during a period when we were also absorbing pressure from higher water disposal needs, steel and tubular costs, diesel, power and service activity. Importantly, though, a meaningful portion of the workover spend was intentional and value creating. Approximately $2.3 million of WOE was associated with production maintenance and optimization projects that added roughly 700 barrels of oil per day of incremental production. We view that as one of the lowest cost sources of production growth available to us. So while operating costs were up quarter-over-quarter, a large portion of that increase was tied directly to projects that improved production, enhanced run time and created strong returns. At the same time, the team continued to offset broader cost pressure through field level efficiency gains, vendor optimization, chemical program improvements and lower cost workover execution. There are a few specific examples worth highlighting. In Texas, we successfully trialed 10 surface acid and chemical treatments to avoid costly downhole interventions. Those treatments saved approximately $210,000 per intervention, which represents roughly a 75% reduction compared with the alternative downhole work. We plan to expand this program more broadly considering the promising results. With a conservative estimate of 40 of those treatments per year, that could correspond to $8.4 million in annual savings. In New Mexico, changes to the chemical program implemented in January are already showing an approximate 50% reduction in chemical costs. Better chemical surveillance and improved ESP run times are also helping reduce workover expenses. On the topic of Silverback, that acquisition has become a strong case study in the type of value we believe Riley can create inside our existing operating footprint. Since closing, we've created value in 2 primary ways: lowering the cost structure and increasing production. With Silverback properties, monthly per well workover costs have decreased by approximately 59%, driven primarily by fewer short runs and improved chemical program surveillance. On the production side, Silverback has materially outperformed expectations. Through strategic workovers, return to production work, wellbore cleanouts, artificial lift optimization and conversion activity, production is now approximately double where the buy-side case projected it would be at this point, and that's been achieved with no new wells drilled. Despite the midstream-related shut-ins Bobby referenced, the underlying operating trend in the second quarter was much stronger than the quarterly average alone would suggest. Volumes were pressured early in the quarter, but as shut-in production returned, new wells came online and workovers contributed across both Texas and New Mexico, production improved materially in quarter end. The broader takeaway from the quarter is that both our Texas and New Mexico assets improved across the areas that matter most operationally, safety, efficiency, cost and technical execution. In Texas, we continue to benefit from a more overall mature infrastructure footprint and very high working interest, which allows us to move quickly and efficiently. In New Mexico, we're continuing to prove that the asset can be developed with improving costs and cycle times, while we also work through the infrastructure sequencing required to unlock the full value of the acreage. Looking ahead to the third quarter and the remainder of the year, our development sequencing is being influenced by the timing of the Targa pipeline. We are excited that the construction of the line is well underway. They've successfully completed a key river crossing and now are trenching, stringing pipe and welding the remainder of the line. The latest forecast projects the new Targa pipeline to be in service early in the fourth quarter of 2026. The full year activity schedule has been updated to reflect that timing by shifting some drilling and completion activity from Texas to New Mexico. Operationally, the way we are managing that timing is straightforward. We do not want to complete New Mexico wells too early and strand capital while waiting on gas takeaway. Instead, we are aligning completions with the expected pipeline in-service date and using the flexibility of the program to manage timing. This is also why Texas remains important to the 2026 plan. Texas infrastructure is more mature today and those wells can generally be brought online sooner. We've also been preparing for a more unconstrained development model in New Mexico in ways that go beyond gas takeaway. Water handling is a key part of that equation. Our third-party disposal agreement with WaterBridge begins supporting the Red Lake development plan this year with the initial commitment period beginning in September. That solution does come at a higher per barrel cost than our own disposal system. So we do expect it to create some upward pressure on LOE over time. But the trade-off is very clear. Additional water takeaway gives us the capacity and flexibility to bring wells online at the pace our development plan requires. With it, we can accelerate development, improve cycle times and convert more of the Red Lake inventory into production and cash flow sooner. In that context, we view the incremental disposal cost as a good trade for the development flexibility and long-term value it helps unlock. Putting it all together, the operational message for the quarter is positive. We executed safely. We improved drilling performance in both Champions and Red Lake in a highly active quarter. We continue to build the necessary infrastructure to support our asset development plans in Texas and New Mexico. Our production growth plan is on track. As we move through Q3 and into Q4, we will remain disciplined. We will continue to prioritize safe operations, capital efficiency and timing wells to infrastructure. Champions gives us near-term flexibility and production visibility, while Red Lake gives us an expanded growth platform as the Targaline WaterBridge solution, saltwater disposal capacity and supporting field infrastructure come together. That combination positions us well for the remainder of 2026 and provides a stronger foundation for 2027 and beyond. I'll now turn the call to Philip. Philip Riley: Thank you, John. I'll cover a few financial metrics very briefly before turning to our revised outlook. High oil prices drove operating cash flow 35% higher quarter-over-quarter to $64 million. Cash CapEx and other investments increased 153% quarter-over-quarter to $73 million. Free cash flow, which is calculated before changes in working capital and before acquisitions, decreased to $6 million this quarter. Year-to-date, free cash flow is approximately $30 million. In addition to the CapEx activity that John described, we completed a very small acquisition in the Red Lake area for $2.4 million, yielding 4.0 net undeveloped locations for an average cost of $600,000 per location. We used $9.5 million of cash for dividends and buybacks. Quarter end principal debt balance increased by 11% or $26 million to $273 million as we drew on our credit facility to fund our cash uses this quarter. Please see our published materials for a wider discussion of results. Now quickly on our power joint venture. Our first 10-megawatt merchant generation site was placed into commercial service midway through the second quarter, and we began selling into ERCOT's day ahead and real-time markets. The second site is finalizing commissioning, currently selling into real-time markets, while a third site is beginning commissioning. This project is very small scale relative to our core business, but we acknowledge the investor interest in the joint venture. Also, summer power prices are at multiyear lows following a surge in solar supply and new large load interconnections are stuck in the queue. But the long-term thesis remains an interesting option to monetize undervalued Permian gas. Now a few comments on forward guidance. We plan for a reduction in development activity and accrual CapEx in the third quarter of 2026 compared to the second quarter, and we're guiding to $59 million of accrual CapEx. However, consider that second quarter cash CapEx was $18 million or 21% lower than accrual CapEx. So that cash dynamic could certainly flip in the third quarter as invoices roll in. Third quarter guidance at the midpoint for oil production is 25,600 barrels per day, 5% above June's level and more than 20% above the full second quarter level. For full year CapEx, we're increasing guidance at the midpoint by 12% or $26 million to $236 million. Roughly 1/3 of the increase is associated with upstream activity and 2/3 relates to infrastructure. The upstream increase is primarily driven by increased drilling, partially offset by fewer completions. Our ratio of wells drilled to wells turned to sales this year is 1.2, implying we're carrying drilled but uncompleted wells into next year. Regarding the increase in infrastructure capital, 60% is associated with saltwater disposal projects with most of the balance related to oil gathering projects. Most of these are associated with our Champions project in Texas. Incorporating these updates, we're raising full year oil production volume guidance ranges by 2% to 23,000 barrels per day at the midpoint, corresponding with the over 30% year-on-year growth that Bobby mentioned at the start. Based on current forecasts and commodity prices, we forecast higher free cash flow in the second half of the year compared to the first. Thank you all for your attention today and for your interest in our company. Operator, you may now turn it over to questions. Operator: [Operator Instructions] Your first question will come from Derrick Whitfield, Texas Capital. Derrick Whitfield: Congrats on a positive quarter despite the many headwinds you faced. I wanted to start with your outlook and some of the comments you made in your prepared statements. While I realize you're not providing 2027 guidance to date, the heightened activity of your 2026 capital plan and the potential of your workover opportunities at Champions seemingly places you on a stronger trajectory headed into 2027 than what was the case that you outlined in Q1. How would you frame the trajectory based on increased activity and the potential for additional workovers. Bobby Riley: Derrick, this is Bobby. I'll try to start with that and then turn it over to the other guys. I mean I see us having a pretty steady pace of development. We have 1 rig running now continuously. So without any unforeseen hiccups in the current markets, I just think that we're steady as she goes is we're a growth company. We intend to grow production year-over-year, spend within our cash flow, reduce debt, pay dividends. So, I don't see anything too different next year than where we are today. Derrick Whitfield: And then maybe just on the follow-up on kind of leaning in on Champions, if I could. What you're highlighting on Slide, I think it is 10 of your deck, seems exceptionally capital efficient in terms of growing production. How should we think about the depth of workover opportunities you have at Champions and how you plan to feather those into your development plans? John Suter: Yes. So we talked about -- during our prepared remarks about those 10 wells that we've trialed this quarter. I think we've done 19 of them overall. And I think that really that entire asset base, certainly all the horizontal wells as the case is needed, all could be potential candidates for that. So there's potentially a couple of years of inventory right there. And New Mexico, we've done some of this, but really, there's a lot more wells there to try this on as we grow. So I think we do have a good inventory of it. And like I said, that's pretty easy to feather in, but we'll continue to watch the results. Let me remind you, too, that most of this is very low decline as opposed to new wells that come on. So you also have the benefit of that from those barrels that are added. Operator: Your next question today comes from Neal Dingmann from William Blair. Neal Dingmann: Maybe, Bobby, for you or Philip, just a little bit on capital allocation. Derrick asked around the growth, which I'm glad to hear that given your size, you're a growth company. Do you look at that sort of, call it, organic growth versus external M&A growth sort of externally from each other? I mean, if you grow it organically, does that -- is that going to limit how much M&A? Or maybe just talk about how you think about capital allocation for the 2. Philip Riley: I could start. I think about what's within our control versus what's not. We have a nice sized inventory of undeveloped locations. We can choose to develop those. That's what we're doing this year after building that up over the last few years. Those provide nice full cycle returns at current commodity prices. We're always opportunistically looking for acquisitions, but ultimately, that's out of our control. It was -- for the market in general, quite a quiet quarter in the second quarter, and I think that's rational given it's historically difficult to execute during times of high volatility for buyers and sellers to come together on an agreed price. We're certainly going to try to overcome that going forward. But in the meantime, we do have what we can control, which is this nice inventory to draw down. Neal Dingmann: Great point. And then just a follow-up on gas takeaway specifically. I know many peers have added -- I know you guys did some infrastructure work previously. Others out there have done some FT. I'm just wondering, again, is there still takeaway constraints for you all? Or -- and if there is other things that you're doing to continue to minimize that? Bobby Riley: Yes, I'll take the first part of that. From a gas takeaway, like we said, we believe that Targa line will be in very early fourth quarter. Up until then, we do have some exposure on the New Mexico side. But again, here, it's already August, and we believe we do have some of that under control. So really, we just need to get to October 1, and we should be in good shape, we hope. And I'll hand it to Philip to talk about some of the FT type stuff. Philip Riley: Yes. When we talk about infrastructure constraints, I know it can be confusing given it permeates the discussion both within our micro situation and then the kind of wider macro industry in the Permian. What we've been talking about for our own project, Targa and such and what John was talking about is for wet gas, getting that out of a smaller region to the processing plants. And then what you see written about more widely and what other companies are discussing is arguably that dry gas, egress out of the Permian to the Gulf Coast and other markets. I know we've all seen a couple of large projects come on in the last 2 months and price has rebounded, the Waha price very quickly and very significantly, I think, more than people anticipated. I'm not going to pretend to be an expert on this, but I'll regurgitate a bit what I've read. And it seems to be a combination of some really hot weather at the same time. So power burn was bigger than expected. That helped some of that price. I think you had some of the gas shut in from how bad April and May was. And so that should be coming back. The pipes, those new projects appear to have filled up very quickly and yet price remains pretty high. So we'll see how long that lasts. The forward curve has the price weakening again, albeit better than it was a few months ago. We're optimistic on that. We do what we can. We put on some Waha hedges recently with that better price. We wouldn't be surprised to see it weaken just with historical patterns, associated gas in the Permian increased drilling with $70-plus WTI. But we shall see a lot of the bigger power projects have been slower to come on, and so some of that burn has been slower. But that's kind of our point of view at the moment. Operator: [Operator Instructions] Next up is Jeff Robertson, Water Tower Research. Jeffrey Robertson: John, you talked about the production performance on the Silverback assets since the early assumptions. Has most of the heavy lifting been done to add production to or enhance production at lower cost on those assets through some of the workover activity that you all have performed? John Suter: I think we've picked off some really obvious ones. I think there's certainly more work to do. We haven't even tried pushing some of this surface acid kind of chemical injection projects over in New Mexico, not many of those. And so we think there's still a lot of running room with that. But again, we feel really proud of that since we haven't even drilled any wells there yet. And really, the reason for that is just it's not because those aren't great wells. We're kind of starting within our infrastructure and working our way out just to be more capital efficient. But we've done some great work over. So we're pretty excited about what that will mean for our drilling opportunities over there as well. Jeffrey Robertson: I guess as you think about 2027, Philip commented that free cash flow is going to expect it to increase in the second half of the year. Can you -- either Philip or Bobby, can you share some perspective on how you're thinking about free cash flow and with respect to returning cash to shareholders, the trade-offs between repurchasing shares through the authorization and the dividend? Bobby Riley: Yes. I think our main focus is to remain flexible with having all those choices in front of us in any given quarter. I mean, obviously, we've been paying dividends. We've been growing our dividend year-over-year. So I expect that trend to continue. I think some of the money that we're spending this year and early into next year is going to translate into higher production, which depending on oil price, it's going to be very positive for us. But we just have the choices. Stock buybacks seems to be one of them that we've used it, and we'll use it if we feel it's appropriate. I don't see us ever going to any type of special dividend or anything like that. We'll just kind of continue as we've been going. Our debt right now at 1.0x leverage is reasonable. We can continue to pay that down and will as a potential source of that use of that cash. I don't know, Philip, what do you think? Philip Riley: I'd echo that, and I'll repeat what I've said in the past, which is we like the idea of growing free cash flow faster than the dividend in that we've had consistent growth of the dividend. We see that continuing and not changing the slope of that increase. We've got the buybacks as a new tool. And so I think about it as what is the excess free cash flow above and beyond the dividend and then allocating that between debt and buybacks. Like Bobby said, debt is at a comfortable level. You could pay it down more and that creates a little more flexibility for doing acquisitions. It just gives you that much more leeway on how to finance an acquisition should you come across additional deals where sellers prefer cash instead of equity. And we know equity markets can be tough. And the more options you've got to not have to use that gives you more flexibility there. So we feel good about it looking at the forecast and excited for the next 2 quarters and the year ahead. Operator: Your next question is Noel Parks, William Blair. Noel Parks: Noel Parks with Tuohy Brothers. I was wondering if you could maybe just refresh my memory on sort of the back story of the more complex well designs you mentioned. And I was just trying to recall whether that's sort of like just geo-steering to stay in zone or more like U-shaped lateral designs for when you don't have the adjacent sections to extend into. John Suter: Yes. No, what I meant by that was as we're starting to drill quite a few wells per pad, we're having to back drill quite a bit, do different things to fit in all the laterals that you have quite a few 5, 6 wells in a 320 acre units. So also working around fields that have vertical wells in it. So it just makes a little bit more complex designs. We would love to be able to do some of those turns and different types of wells that make a lot of sense in deeper horizons. But I remind you that in New Mexico, we sit at about 3,500 feet and in Texas, about 5,500 feet. So there's not really a lot of options at that shallow depth for those kind of designs, mostly just speaking to having to back drill and do some other wellbore avoidance. Noel Parks: And just could you just sort of maybe update us on where things stand as far as just your well spacing in New Mexico? John Suter: Yes. We are studying that right now. We generally will have 2 wells in the Paddock and maybe 3 in the Blinebry. We're also taking a look our technical team now of the San Andres and the Lower Blinebry. We think that there's upside there in the future. We're studying that now and hope to have some updates in the coming quarters of what our plans are there. Operator: At this time, there are no further questions. That does conclude our question-and-answer session. It also concludes our conference for today. We would like to thank you all for your participation. You may now disconnect. 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This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Riley Exploration Permian (REPX) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

This article first appeared on GuruFocus. Operating Cash Flow: $64 million, up 35% quarter-over-quarter. Cash CapEx and Other Investments: $73 million, up 153% quarter-over-quarter. Free Cash Flow: Decreased to $6 million in Q2; year-to-date approximately $30 million. Total Capital Spend (Accrual Basis): $87 million for Q2. Drilling and Completion Capital Expenditures: $70 million, in line with guidance midpoint. Infrastructure and Other Expenditures: Approximately $17 million, above the $12.5 million guidance midpoint. Principal Debt Balance: Increased 11% or $26 million to $273 million. Dividends and Buybacks: Used $9.5 million of cash. Q3 2026 Accrual CapEx Guidance: $59 million. Full Year 2026 CapEx Guidance: Increased by 12% or $26 million to $236 million at the midpoint. Q2 Oil Production: 5% sequential growth; June oil production exit rate of 24.4 thousand barrels per day. Q3 2026 Oil Production Guidance: 25.6 thousand barrels per day at the midpoint, more than 20% above Q2 levels. Full Year 2026 Oil Production Guidance: Raised by 2% to 23,000 barrels per day at the midpoint, representing over 30% year-over-year growth. Lease Operating Expense (LOE): Increased $5.4 million quarter-over-quarter, with $1.9 million from recurring LOE and $3.5 million from workover expense. Warning! GuruFocus has detected 3 Warning Signs with REPX. Is REPX fairly valued? Test your thesis with our free DCF calculator. Release Date: August 06, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Riley Exploration Permian Inc (REPX) delivered oil production near the high end of guidance and a June exit rate of 24.4 thousand barrels per day, with 5% sequential oil growth. The company raised its full-year oil production guidance to approximately 30% year-over-year growth, with a forecasted 20% sequential increase in Q3. Drilling efficiency improved significantly: Texas saw a 19% increase in lateral feet per day and a 7.5% reduction in drilling costs per lateral foot, while New Mexico improved by 67% and 32%, respectively. The Silverback acquisition outperformed expectations, with production now approximately double the buy-side case projection, achieved without drilling new wells. The company executed cost-saving initiatives, including surface acid treatments that saved $210,000 per intervention and a 50% reduction in chemical costs in New Mexico. The new Targa pipeline is on track for early Q4 service, which is expected to alleviate midstream constraints and support future growth. Midstream constraints in April and May caused temporary well shut-ins, reducing oil production by approximately 2,000 barrels per day. Infrastructure capital expenditures exceeded guidance by $4.5 million due to accelerated development and third-party delays, increasing full-year CapEx guidance by 12%. Turn-in-line wells came in below guidance due to delays in third-party infrastructure, impacting production contribution timing. Total LOE increased $5.4 million quarter-over-quarter, driven by higher workover expenses and cost pressures from water disposal, steel, diesel, and power. Free cash flow decreased to $6 million in Q2, and the company drew $26 million on its credit facility, increasing debt to $273 million. The third-party water disposal agreement with Water Bridge will create upward pressure on LOE, though it provides necessary capacity for development. Q: How would you frame the production growth trajectory heading into 2027 based on the increased activity and the potential for additional workovers? A: Bobby Riley (Chairman and CEO) stated that the company is a growth company with a steady pace of development, intending to grow production year-over-year, spend within cash flow, reduce debt, and pay dividends. He sees nothing significantly different next year compared to the current trajectory. Q: How should we think about the depth of workover opportunities at Champions and how you plan to weave those into your development plans? A: John Suter (COO) explained that the entire asset base, particularly all horizontal wells, could be potential candidates for the surface acid and chemical treatments trialed. He noted there is potentially a couple of years of inventory for this program, which is easy to integrate into the plan and offers the benefit of very low decline rates compared to new wells. Q: How do you think about capital allocation between organic growth and external M&A? A: Philip Riley (CFO) stated that the company has a nice-sized inventory of undeveloped locations to develop, which provides full-cycle returns at current prices. While they are always opportunistically looking for acquisitions, that is out of their control, and the second quarter was quiet for M&A due to high volatility. In the meantime, they will focus on drawing down their existing inventory. Q: Is there still gas takeaway constraints for you all, and what are you doing to minimize that? A: John Suter (COO) said that the Targa line is expected to be in service early in the fourth quarter, and until then, they have some exposure on the New Mexico side, but they believe they have it under control. Philip Riley (CFO) added that their specific constraint is wet gas takeaway to processing plants, distinct from the wider dry gas egress issue. They have recently put on some Waha hedges given the better price environment. Q: Has most of the heavy lifting been done to add production at lower costs on the Silverback assets through workover activity? A: John Suter (COO) stated that while they have picked off some obvious opportunities, there is certainly more work to do. They haven't yet tried the surface acid and chemical injection projects in New Mexico, and they believe there is still a lot of running room. The production is already approximately double where the buy-side case projected it would be, achieved with no new wells drilled. Q: Can you share some perspective on how you're thinking about free cash flow and the trade-offs between repurchasing shares and the dividend? A: Bobby Riley (Chairman and CEO) stated their main focus is to remain flexible with all choices available. They have been growing the dividend year-over-year and expect that trend to continue. They will use stock buybacks if appropriate but do not foresee a special dividend. Philip Riley (CFO) added that they like the idea of growing free cash flow faster than the dividend and will allocate excess cash between debt paydown and buybacks, which provides more flexibility for potential acquisitions. Q: Could you refresh my memory on the backstory of the more complex well designs you mentioned? A: John Suter (COO) clarified that the complexity comes from drilling multiple wells per pad (five to six wells in a 320-acre unit) and working around fields with vertical wells, which requires back drilling and wellbore avoidance. He noted that at their shallow depths (3,500 feet in New Mexico and 5,500 feet in Texas), there aren't many options for U-turn type designs. Q: Where do things stand as far as well spacing in New Mexico? A: John Suter (COO) stated they are currently studying well spacing. They generally have two wells in the Paddock and maybe three in the Blindberry. Their technical team is also evaluating the San Andreas and Lower Blindberry formations, where they see future upside potential and hope to provide updates in coming quarters. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Riley Exploration Permian, Inc. (REPX) came out with quarterly earnings of $2.55 per share, beating the Zacks Consensus Estimate of $1.54 per share. This compares to earnings of $1.44 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +65.58%. A quarter ago, it was expected that this company would post earnings of $0.99 per share when it actually produced earnings of $1.02, delivering a surprise of +3.03%. Over the last four quarters, the company has surpassed consensus EPS estimates three times. Riley Exploration Permian, which belongs to the Zacks Oil and Gas - Exploration and Production - United States industry, posted revenues of $165.85 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 10.22%. This compares to year-ago revenues of $85.39 million. The company has topped consensus revenue estimates two times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Riley Exploration Permian shares have added about 27.5% since the beginning of the year versus the S&P 500's gain of 13%. While Riley Exploration Permian has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Riley Exploration Permian was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $1.75 on $147.13 million in revenues for the coming quarter and $6.13 on $579.33 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Oil and Gas - Exploration and Production - United States is currently in the bottom 13% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. One other stock from the same industry, Big Sky Industrial Inc. (BSIN), is yet to report results for the quarter ended June 2026. The results are expected to be released on August 11. This company is expected to post quarterly loss of $0.05 per share in its upcoming report, which represents a year-over-year change of +73.7%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Big Sky Industrial Inc.'s revenues are expected to be $2.1 million, up 3.5% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Riley Exploration Permian, Inc. (REPX) : Free Stock Analysis Report Big Sky Industrial Inc. (BSIN) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

OKLAHOMA CITY, Aug. 5, 2026 /PRNewswire/ -- Riley Exploration Permian, Inc. (NYSE American: REPX) ("Riley Permian" or the "Company"), today reported financial and operating results for the second quarter ended June 30, 2026. SECOND QUARTER 2026 HIGHLIGHTS Reported 34.3 MBoe/d of total equivalent production (oil production of 21.2 MBbls/d) Generated $64 million of operating cash flow or $75 million before changes in working capital(1) and $6 million of Total Free Cash Flow(1) Incurred total accrual (activity-based) capital expenditures before acquisitions of $87 million and cash capital expenditures before acquisitions of $68 million Generated $87 million of net income and $80 million of Adjusted EBITDAX(1) Increased debt by $26 million with a quarter-end debt-to-Adjusted EBITDAX(1) ratio of 1.0x(2) Revised full-year 2026 guidance to reflect higher forecasted oil production and total capital expenditures and investments Bobby Riley, Chief Executive Officer and Chairman of the Board commented, "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. We are increasing full-year oil production guidance, which now implies approximately 30% year-over-year growth in 2026. 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. 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." OPERATIONS AND DEVELOPMENT ACTIVITY UPDATE The tables below provide a summary of our operated well activity and production by state: Average Daily Production by State SECOND QUARTER 2026 FINANCIAL RESULTS Revenues totaled $166 million, operating income was $87 million, operating cash flow was $64 million and net income was $87 million, or $4.11 per diluted share. On a non-GAAP basis, Adjusted EBITDAX(1) was $80 million, cash flow from operations before changes in working capital(1) was $75 million, Total Free Cash Flow(1) was $6 million and Adjusted Net Income(1) was $33 million, or $1.54 per diluted share. Average realized prices, before derivative settlements, were $94.28 per barrel of oil, $(4.12) per Mcf of natural gas and $(4.71) per barrel of natural gas liquids ("NGL"). Realized natural gas prices were negative before gathering, processing and transportation costs ("GP&T costs") due to Waha pricing being negatively impacted from ongoing regional pipeline constraints. Realized NGL prices before GP&T costs increased primarily due to higher Mont Belvieu pricing during the quarter. The pricing benefit to NGL sales were more than offset by higher allocated GP&T costs from negative realized natural gas prices. Certain portions of our New Mexico operations were impacted during April and May of the second quarter of 2026 by ongoing gas processing and midstream constraints following an unplanned outage at a third-party facility beginning in late March. The disruptions resulted in periodic processing limitations, reduced gas takeaway capacity, and temporary well shut-ins, reducing production from affected areas. We estimate the temporary shut-ins reduced second quarter production by approximately 1.9 MBbls/d. June oil production was 24.4 MBbls/d. In December of 2025, we contracted with Targa Northern Delaware LLC ("Targa") to construct new gathering and high-pressure trunkline infrastructure in Eddy County, New Mexico pursuant to the A&R Gas Purchase Agreement, to mitigate processing and takeaway constraints of the nature experienced during the second quarter. The in-service date of the new Targa pipeline system is currently expected to occur in the fourth quarter of 2026. The Company reported a $36 million realized loss on derivative settlements, reflecting cash settlements on financial contracts linked to crude oil prices, and a $69 million non-cash gain due to the changes in the fair value of derivatives that will settle in future periods for a combined $33 million net gain on derivatives. Unrealized derivatives reflect the accounting remeasurement of the Company's derivative portfolio based on changes in the market value of contracts that remain open and do not represent current-period cash inflows or outflows. Operating expenses included lease operating expense of $29 million, or $9.44 per Boe, which included $11 million in workover expense. The Company executed a large number of workover projects during the quarter in an effort to capitalize on high oil prices as well as to supplement volumes operationally disrupted. Administrative costs were $9 million, or $2.80 per Boe and production and ad valorem taxes were $11 million or $3.67 per Boe. The Company incurred $87 million in total accrued capital expenditures. On a cash basis, the Company had total capital expenditures of $68 million. The Company invested $3 million in its power-focused joint venture, RPC Power. The Company increased total debt by $26 million, including a $31 million increase on the Credit Facility and $5 million reduction on the Senior Notes. As of June 30, 2026, the Company had $138 million of borrowings outstanding on its Credit Facility and $135 million principal value of its Senior Notes, for a combined principal value of debt of $273 million. Interest expense, net was $7 million. As part of our stock repurchase program, the Company repurchased 25 thousand shares of common stock at a weighted average price of $34.13 per share for a total of $1 million. The diluted weighted average shares outstanding during the quarter was 21.3 million. The Company paid a cash dividend of $0.40 per share, for a total of $9 million. 2026 GUIDANCE Riley Permian is providing third quarter detailed guidance and updated full-year 2026 activity guidance based on currently scheduled development activity and current market conditions. The average working interest on gross operated wells drilled is subject to change and may have corresponding impacts on net production volumes and investing expenditures. CONFERENCE CALLIn connection with the earnings release, Riley Permian management will host a conference call for investors and analysts on August 6, 2026 at 9:00 a.m. CT to discuss the Company's results and to host a Q&A session. Interested parties are invited to participate by calling: Toll Free Dial-In, +1 (888) 596-4144 Toll Dial-in, +1 (646) 968-2525 Conference ID number 1303008 An updated company presentation, which will include certain items to be discussed on the call, will be posted prior to the call on the Company's website (www.rileypermian.com). A replay of the call will be available until August 20, 2026 by calling: Toll Free Dial-In, +1 (800) 770-2030 Toll Dial-in, +1 (609) 800-9909 Conference ID number 1303008 About Riley Exploration Permian, Inc.Riley Permian is a growth-oriented upstream oil and gas company operating in Texas and New Mexico with infrastructure projects that complement our operations. For more information, please visit www.rileypermian.com. Investor Contact:Ben [email protected] Cautionary Statement Regarding Forward Looking Information and GuidanceThis press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The statements contained in this release that are not historical facts are forward-looking statements that represent management's beliefs and assumptions based on currently available information. Forward-looking statements include information concerning our possible or assumed future results of operations, business strategies, need for financing, competitive position and potential growth opportunities. Our forward-looking statements do not consider the effects of future legislation or regulations. Forward-looking statements include all statements that are not historical facts and can be identified by the use of forward-looking terminology such as the words "believes," "intends," "may," "should," "anticipates," "expects," "could," "plans," "estimates," "projects," "targets," "forecasts" or comparable terminology or by discussions of strategy or trends. You should not place undue reliance on these forward-looking statements. These forward-looking statements are subject to a number of risks, uncertainties and assumptions. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. Although we believe that our plans, intentions and expectations reflected in or suggested by the forward-looking statements we make in this release are reasonable, we can give no assurance that these plans, intentions or expectations will be achieved or occur, and actual results could differ materially and adversely from those anticipated or implied by the forward-looking statements. Among the factors that could cause actual future results to differ materially are the risks and uncertainties the Company is exposed to. While it is not possible to identify all factors, we continue to face many risks and uncertainties including, but not limited to: the volatility of oil, natural gas and NGL prices, including basis differentials between published indices and the prices we actually receive for our production; regional supply and demand factors, any delays, curtailment delays or interruptions of production, and any governmental order, rule or regulation that may impose production limits; cost and availability of gathering, pipeline, refining, transportation, power and other midstream and downstream activities, which could result in a prolonged shut-in of our wells that may adversely affect our reserves, financial condition and results of operations; severe weather and other risks that lead to a lack of any available markets; our ability to successfully complete mergers, acquisitions or divestitures; the inability or failure of the Company to successfully integrate the acquired assets into our operations and development activities; the potential delays in the development, construction or start-up of planned projects; failure to realize any of the anticipated benefits of our joint ventures or other equity investments; risks relating to our 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 our borrowing base on our Credit Facility from time to time and our ability to repay any excess borrowings as a result of such reduction; the impact of our derivative strategy and the results of future settlement; our ability to comply with the financial covenants contained in our Credit Facility and Senior Notes; changes in general economic, business or industry conditions, including changes in inflation rates, interest rates and foreign currency exchange rates; conditions in the capital, financial and credit markets and our ability to obtain capital needed to fund our exploration and development on favorable terms or at all; the loss of certain tax deductions; risks associated with executing our business strategy, including any changes in our strategy; risks associated with concentration of operations in one major geographic area; legislative or regulatory changes, including initiatives related to hydraulic fracturing, regulation of greenhouse gases, water conservation, seismic activity, weatherization, or protection of certain species of wildlife, or of sensitive environmental areas; the ability to receive drilling and other permits or approvals and rights-of-way in a timely manner (or at all), which may be restricted by governmental regulation and legislation; restrictions on the use of water, including limits on the use of produced water and any potential moratorium on new produced water well permits recently imposed by the Railroad Commission of Texas or New Mexico Oil Conservation Division in an effort to control induced seismicity in the Permian Basin; changes in government environmental policies and other environmental risks; the availability of drilling equipment and the timing of production; tax consequences of business transactions; public health crisis, such as pandemics and epidemics, and any related government policies and actions and the effects of such public health crises on the oil and natural gas industry, pricing and demand for oil and natural gas and supply chain logistics; general domestic and international economic, market and political conditions, including military conflicts, global economic growth, unpredictability of new tariffs, actions of OPEC+ countries and changes to the current political environment under the current administration; risks related to litigation; and cybersecurity threats, technology system failures and data security issues. The estimates and guidance presented in this release are based on assumptions of current and future capital expenditure levels, prices for oil, natural gas and NGLs, available liquidity, indications of supply and demand for oil, well results, operating costs and the timing and completion of pending projects and acquisitions. The guidance provided in this release does not constitute any form of guarantee or assurance that the matters indicated will be achieved. While we believe these estimates and the assumptions on which they are based are reasonable as of the date on which they are made, they are inherently uncertain and are subject to, among other things, significant business, economic, operational, and regulatory risks, and uncertainties, some of which are not known as of the date of the statement. Guidance and estimates, and the assumptions on which they are based, are subject to material revision. Actual results may differ materially from estimates and guidance. Please read the "Risk Factors" in our annual report on Form 10-K and our quarterly reports on Form 10-Q, which are incorporated herein. Additional factors that could cause results to differ materially from those described above can be found in Riley Permian's Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC and available from the Company's website at www.rileypermian.com under the "Investor" tab, and in other documents the Company files with the SEC. The forward-looking statements in this press release are made as of the date hereof and are based on information available at that time. The Company does not undertake, and expressly disclaims, any duty to update or revise our forward-looking statements based on new information, future events or otherwise. DERIVATIVE INSTRUMENTS The Company's oil and natural gas derivative contracts consisted of fixed price swaps, costless collars and basis swaps. The following table summarizes the open financial derivatives as of August 3, 2026, related to our future oil and natural gas production: Interest Rate Contracts The following table summarizes the open interest rate derivative positions as of August 3, 2026: View original content:https://www.prnewswire.com/news-releases/riley-permian-reports-second-quarter-2026-results-302844189.html

CNX Resources Corporation. (CNX) came out with quarterly earnings of $0.72 per share, beating the Zacks Consensus Estimate of $0.57 per share. This compares to earnings of $0.59 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +26.32%. A quarter ago, it was expected that this company would post earnings of $0.93 per share when it actually produced earnings of $1.21, delivering a surprise of +30.11%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. CNX Resources, which belongs to the Zacks Oil and Gas - Exploration and Production - United States industry, posted revenues of $389.44 million for the quarter ended June 2026, missing the Zacks Consensus Estimate by 5.66%. This compares to year-ago revenues of $450 million. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. CNX Resources shares have lost about 5.6% since the beginning of the year versus the S&P 500's gain of 6.9%. While CNX Resources has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for CNX Resources was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.56 on $411.37 million in revenues for the coming quarter and $2.84 on $1.91 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Oil and Gas - Exploration and Production - United States is currently in the bottom 12% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. One other stock from the same industry, Riley Exploration Permian, Inc. (REPX), is yet to report results for the quarter ended June 2026. The results are expected to be released on August 5. This company is expected to post quarterly earnings of $1.53 per share in its upcoming report, which represents a year-over-year change of +6.3%. The consensus EPS estimate for the quarter has been revised 6.6% lower over the last 30 days to the current level. Riley Exploration Permian, Inc.'s revenues are expected to be $149.13 million, up 74.7% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report CNX Resources Corporation. (CNX) : Free Stock Analysis Report Riley Exploration Permian, Inc. (REPX) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

The market expects Mach Natural Resources LP (MNR) to deliver a year-over-year decline in earnings on higher revenues when it reports results for the quarter ended June 2026. This widely-known consensus outlook is important in assessing the company's earnings picture, but a powerful factor that might influence its near-term stock price is how the actual results compare to these estimates. The earnings report might help the stock move higher if these key numbers are better than expectations. On the other hand, if they miss, the stock may move lower. While management's discussion of business conditions on the earnings call will mostly determine the sustainability of the immediate price change and future earnings expectations, it's worth having a handicapping insight into the odds of a positive EPS surprise. This company is expected to post quarterly earnings of $0.34 per share in its upcoming report, which represents a year-over-year change of -55.3%. Revenues are expected to be $369.3 million, up 28% from the year-ago quarter. The consensus EPS estimate for the quarter has been revised 6.31% higher over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period. Investors should keep in mind that the direction of estimate revisions by each of the covering analysts may not always get reflected in the aggregate change. Price, Consensus and EPS Surprise Estimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. Our proprietary surprise prediction model -- the Zacks Earnings ESP (Expected Surprise Prediction) -- has this insight at its core. The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier. Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only. A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP. Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell). For Mach Natural Resources LP, the Most Accurate Estimate is lower than the Zacks Consensus Estimate, suggesting that analysts have recently become bearish on the company's earnings prospects. This has resulted in an Earnings ESP of -2.94%. On the other hand, the stock currently carries a Zacks Rank of #3. So, this combination makes it difficult to conclusively predict that Mach Natural Resources LP will beat the consensus EPS estimate. While calculating estimates for a company's future earnings, analysts often consider to what extent it has been able to match past consensus estimates. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number. For the last reported quarter, it was expected that Mach Natural Resources LP would post earnings of $0.53 per share when it actually produced earnings of $0.74, delivering a surprise of +39.62%. Over the last four quarters, the company has beaten consensus EPS estimates four times. An earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss. That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported. Mach Natural Resources LP doesn't appear a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release. Riley Exploration Permian, Inc. (REPX), another stock in the Zacks Oil and Gas - Exploration and Production - United States industry, is expected to report earnings per share of $1.53 for the quarter ended June 2026. This estimate points to a year-over-year change of +6.3%. Revenues for the quarter are expected to be $149.13 million, up 74.7% from the year-ago quarter. Over the last 30 days, the consensus EPS estimate for Riley Exploration Permian has been revised 6.6% down to the current level. Nevertheless, the company now has an Earnings ESP of +6.63%, reflecting a higher Most Accurate Estimate. When combined with a Zacks Rank of #3 (Hold), this Earnings ESP indicates that Riley Exploration Permian will most likely beat the consensus EPS estimate. Over the last four quarters, the company surpassed consensus EPS estimates three times. Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Mach Natural Resources LP (MNR) : Free Stock Analysis Report Riley Exploration Permian, Inc. (REPX) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Diamondback Energy FANG is set to release second-quarter 2026 results on Aug. 3. The Zacks Consensus Estimate for the to-be-reported quarter is pegged at a profit of $6.08 per share on revenues of $4.8 billion. Let’s delve into the factors that might have influenced the Permian-focused oil and gas producer’s performance in the June quarter. But it’s worth taking a look at FANG’s previous-quarter performance first. In the last reported quarter, this Midland, TX-based upstream player reported adjusted earnings per share of $4.23, which beat the Zacks Consensus Estimate of $3.55, driven by strong production. Revenues of $4.2 billion also topped the consensus estimate by 10.6%. FANG beat the Zacks Consensus Estimate in three of the last four quarters and missed in one, delivering an average surprise of 5.3%. This is depicted in the graph below: Diamondback Energy, Inc. price-eps-surprise | Diamondback Energy, Inc. Quote The Zacks Consensus Estimate for the second-quarter bottom line has remained unchanged in the past seven days. The estimated figure indicates a 127.7% rise year over year. The Zacks Consensus Estimate for revenues, meanwhile, suggests a 31.1% increase from the year-ago period. Diamondback is a leading pure-play Permian Basin operator recognized for its low-cost production, capital discipline and shareholder-friendly approach. Its high-quality, high-margin asset base enables the company to generate robust free cash flow across commodity cycles. Diamondback held around 3,618 million barrels of oil equivalent in proved reserves, and its average daily output totaled 921 thousand barrels of oil equivalent per day in 2025. Diamondback could face softer second-quarter results despite a favorable oil backdrop. Deeply negative Waha natural gas prices likely pressured realized gas and NGL pricing, forcing the company to temporarily curtail roughly 2,000-3,000 barrels of daily production on economic grounds. While management raised activity by adding rigs and a fifth completion crew, higher operating activity may have lifted production-related costs before the associated volumes fully contributed. FANG also acknowledged continued macro uncertainty, making production decisions quarter by quarter. In addition, ongoing investments in Barnett development and debt reduction priorities could have limited the immediate benefit of elevated commodity prices on quarterly earnings. Our model suggests that the company’s total costs and expenses are expected to have increased to $4.3 billion from the year-ago level of $2.5 billion, weighing on its earnings in the to-be-reported quarter. However, on a bullish note, Diamondback’s strong well performance, reduced production downtime through automation and AI-driven optimization, and improved completion designs continued to enhance operational efficiency. Management increased activity with additional rigs and a fifth frac crew while maintaining capital discipline, positioning the company for higher oil production. Robust oil prices, effective crude marketing and extensive hedging against weak gas prices should have further supported cash flows and operating performance in the quarter to be reported. Our proven model does not predict an earnings beat for Diamondback this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) increases the odds of an earnings beat. However, that is not the case here. FANG presently has an Earnings ESP of -0.84% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter. Here are some firms from the energy space that you may want to consider, as these have the right combination of elements to post an earnings beat this reporting cycle. Riley Exploration Permian, Inc. REPX currentlyhas an Earnings ESP of +6.63% and a Zacks Rank #3. Itis scheduled to release earnings on Aug. 5. You can see the complete list of today’s Zacks #1 Rank stocks here. REPX beat the Zacks Consensus Estimate for earnings in three of the last four quarters and missed in the other, with the average being 22.3%. Valued at around $740.3 billion, Riley Exploration’s shares have gained 18.1% in a year. Magnolia Oil & Gas Corporation MGY has an Earnings ESP of +4.28% and a Zacks Rank #3 at present. The firm is scheduled to release earnings on Aug. 5. For 2026, MGY has a projected earnings growth rate of 50.3%. Valued at nearly $4.4 billion, Magnolia’s shares have lost 4.8% in a year. Permian Resources Corporation PR currently has an Earnings ESP of +0.77% and a Zacks Rank #3. The firm is scheduled to release earnings on Aug. 5. For 2026, PR has a projected earnings growth rate of 35.7%. Valued at nearly $17 billion, Permian Resources’ shares have rallied 36.8% in a year. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Diamondback Energy, Inc. (FANG) : Free Stock Analysis Report Magnolia Oil & Gas Corp (MGY) : Free Stock Analysis Report Riley Exploration Permian, Inc. (REPX) : Free Stock Analysis Report Permian Resources Corporation (PR) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Riley Exploration Permian, Inc. (REPX) is expected to deliver a year-over-year increase in earnings on higher revenues when it reports results for the quarter ended June 2026. This widely-known consensus outlook gives a good sense of the company's earnings picture, but how the actual results compare to these estimates is a powerful factor that could impact its near-term stock price. The earnings report, which is expected to be released on August 5, might help the stock move higher if these key numbers are better than expectations. On the other hand, if they miss, the stock may move lower. While management's discussion of business conditions on the earnings call will mostly determine the sustainability of the immediate price change and future earnings expectations, it's worth having a handicapping insight into the odds of a positive EPS surprise. This company is expected to post quarterly earnings of $1.53 per share in its upcoming report, which represents a year-over-year change of +6.3%. Revenues are expected to be $149.13 million, up 74.7% from the year-ago quarter. The consensus EPS estimate for the quarter has been revised 6.6% lower over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period. Investors should keep in mind that an aggregate change may not always reflect the direction of estimate revisions by each of the covering analysts. Price, Consensus and EPS Surprise Estimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. This insight is at the core of our proprietary surprise prediction model -- the Zacks Earnings ESP (Expected Surprise Prediction). The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier. Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only. A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP. Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell). For Riley Exploration Permian, the Most Accurate Estimate is higher than the Zacks Consensus Estimate, suggesting that analysts have recently become bullish on the company's earnings prospects. This has resulted in an Earnings ESP of +6.63%. On the other hand, the stock currently carries a Zacks Rank of #3. So, this combination indicates that Riley Exploration Permian will most likely beat the consensus EPS estimate. Analysts often consider to what extent a company has been able to match consensus estimates in the past while calculating their estimates for its future earnings. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number. For the last reported quarter, it was expected that Riley Exploration Permian would post earnings of $0.99 per share when it actually produced earnings of $1.02, delivering a surprise of +3.03%. Over the last four quarters, the company has beaten consensus EPS estimates three times. An earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss. That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported. Riley Exploration Permian appears a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release. Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Riley Exploration Permian, Inc. (REPX) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

If you are looking for a stock that has a solid history of beating earnings estimates and is in a good position to maintain the trend in its next quarterly report, you should consider Riley Exploration Permian, Inc. (REPX). This company, which is in the Zacks Oil and Gas - Exploration and Production - United States industry, shows potential for another earnings beat. This company has seen a nice streak of beating earnings estimates, especially when looking at the previous two reports. The average surprise for the last two quarters was 32.84%. For the last reported quarter, Riley Exploration Permian came out with earnings of $1.02 per share versus the Zacks Consensus Estimate of $0.99 per share, representing a surprise of 3.03%. For the previous quarter, the company was expected to post earnings of $0.83 per share and it actually produced earnings of $1.35 per share, delivering a surprise of 62.65%. With this earnings history in mind, recent estimates have been moving higher for Riley Exploration Permian. In fact, the Zacks Earnings ESP (Expected Surprise Prediction) for the company is positive, which is a great sign of an earnings beat, especially when you combine this metric with its nice Zacks Rank. Our research shows that stocks with the combination of a positive Earnings ESP and a Zacks Rank #3 (Hold) or better produce a positive surprise nearly 70% of the time. In other words, if you have 10 stocks with this combination, the number of stocks that beat the consensus estimate could be as high as seven. The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a version of the Zacks Consensus whose definition is related to change. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier. Riley Exploration Permian has an Earnings ESP of +6.63% at the moment, suggesting that analysts have grown bullish on its near-term earnings potential. When you combine this positive Earnings ESP with the stock's Zacks Rank #3 (Hold), it shows that another beat is possibly around the corner. The company's next earnings report is expected to be released on August 5, 2026. With the Earnings ESP metric, it's important to note that a negative value reduces its predictive power; however, a negative Earnings ESP does not indicate an earnings miss. Many companies end up beating the consensus EPS estimate, but that may not be the sole basis for their stocks moving higher. On the other hand, some stocks may hold their ground even if they end up missing the consensus estimate. Because of this, it's really important to check a company's Earnings ESP ahead of its quarterly release to increase the odds of success. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Riley Exploration Permian, Inc. (REPX) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research