Riley Permian Boosts Oil Guidance, Increases Capital Expenditure
Riley Exploration Permian Inc., which operates in the Permian Basin, increased its full-year oil production guidance by 2% to a midpoint of 23,000 barrels per day. This projected growth represents more than 30% year-over-year growth for 2026.
The company also raised its full-year capital expenditure guidance by 12% to $236 million. In the second quarter, operating cash flow rose 35% quarter-over-quarter to $64 million, driven by high oil prices. However, free cash flow decreased to $6 million due to a surge in cash capital expenditures and other investments.
Oil production grew 5% sequentially in the second quarter, with a June exit rate of 24.4 thousand barrels per day. Management views this exit rate as a stronger indicator of underlying momentum than the quarterly average, which was impacted by midstream constraints in April and May that caused temporary well shut-ins reducing output by approximately 2,000 barrels per day.
Drilling costs per lateral foot dropped 7.5% in Texas and 32% in New Mexico compared to last year. The company expects oil production to increase more than 20% sequentially in the third quarter, with a midpoint guidance of 25.6 thousand barrels per day.