Riley Permian Lifts 2026 Oil Guidance After Midstream Outage

The Tip Desk · August 6, 2026 · 3 min read

Second-quarter oil averaged 21.2 MBbls/d as the company raised full-year oil guidance to 22.5-23.5 MBbls/d and third-quarter oil to 25.1-26.1 MBbls/d.

Riley Exploration Permian (REPX), a growth-oriented upstream oil and gas company operating in Texas and New Mexico, raised its full-year 2026 oil production outlook after a second quarter in which New Mexico midstream constraints cut volumes, but June output recovered and the company lifted both oil and capital plans.

The company now guides full-year 2026 oil production of 22.5-23.5 MBbls/d and total equivalent production of 37.5-38.5 MBoe/d, implying about 30% year-over-year oil growth, and total capital expenditures of $230-242 million. Third-quarter oil is guided at 25.1-26.1 MBbls/d, with oil expected to grow more than 20% sequentially.

Second-quarter oil averaged 21.2 MBbls/d, up from 20.2 MBbls/d in the first quarter. Total equivalent production was 34.3 MBoe/d. Texas oil was 15.8 MBbls/d and New Mexico oil was 5.4 MBbls/d.

Certain New Mexico operations were affected in April and May by processing and takeaway limits after an unplanned outage at a third-party facility in late March. Temporary shut-ins reduced second-quarter production by about 1.9 MBbls/d. June oil production was 24.4 MBbls/d. In December 2025, the company contracted with Targa Northern Delaware LLC to build gathering and high-pressure trunkline infrastructure in Eddy County, New Mexico, with an in-service date currently expected in the fourth quarter of 2026.

Oil and natural gas sales, net, were $165.9 million. Income from operations was $87.2 million. Adjusted EBITDAX was $80.1 million. Cash flow from operations was $63.5 million. Net income was $87.4 million, or $4.11 a share.

Average realized oil before derivatives was $94.28 a barrel. Realized natural gas was $(4.12) per Mcf and NGLs were $(4.71) per barrel, as Waha pricing remained negative after gathering, processing and transportation costs. The company reported a $36 million realized loss on derivative settlements and a $69 million non-cash gain on contracts settling later, for a $33 million net gain on derivatives.

Lease operating expense was $29.4 million, or $9.44 per Boe, including $11 million of workover expense. Administrative costs were $8.7 million, or $2.80 per Boe. Production and ad valorem taxes were $11 million, or $3.67 per Boe.

Total accrual capital expenditures were $86.6 million; cash capital expenditures were $68.3 million. Total Free Cash Flow was $6.3 million. The company invested $3 million in RPC Power.

Debt rose $26 million, including a $31 million increase on the Credit Facility and a $5 million reduction on Senior Notes, leaving $273 million of combined principal debt at June 30. The quarter-end debt-to-Adjusted EBITDAX ratio was 1.0x. Cash was $20.7 million.

The company repurchased 25 thousand shares at a weighted average of $34.13 a share for $1 million and paid a $0.40 a share cash dividend totaling $9 million.

Chief Executive Officer Bobby Riley said the company delivered oil production near the high end of guidance and is increasing full-year oil production guidance. He said the outlook calls for the largest production increase of the year in the third quarter.

Third-quarter guidance also called for 4.9-6.9 net operated wells drilled, 8.2-10.2 completed and 15.2-17.2 turned to sales, with lease operating expenses of $8.50-$9.50 per Boe. Full-year 2026 drilling is guided at 51.6-53.6 net operated wells.