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Water Tower Research is a leading equity research firm that provides research on micro, small and mid cap companies.

Water Tower Research was founded by Wall Street veterans after witnessing a fundamental shift in the investment research industry with the result being a declining knowledge base among investors, a lack of awareness and a shrinking pool of fundamental research being conducted on companies across the small-cap and micro-cap spectrum. The same issues are now increasingly occurring in the mid-cap space. This sea change within the investment community is impacting not only the companies themselves but also current shareholders and potential investors. With significantly less active sell-side sponsorship by Wall Street, a substantial information gap has developed between companies and various constituents in the financial community. The net result is fewer channels for insight and information to flow between companies and investors.

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Riley Exploration Permian / Equity Bottom-Up

<ul><li>We are adjusting our earnings and adjusted EBITDA estimates to reflect changes to our WTI oil price forecast and wider estimated 1Q26 oil price differentials. </li><li>Our FY26 estimates incorporate average NYMEX oil prices of $$79.43/Bbl for oil and $3.29/MMBtu for natural gas compared with $76.79/Bbl and $3.47/MMBtu in our last update.</li><li>Our FY27 estimates incorporate average NYMEX prices of $70/Bbl and $3.94/MMBtu compared to $67.52/Bbl and $3.94/MMBtu in our last update. </li></ul>

We are adjusting our earnings and adjusted EBITDA estimates to reflect changes to our WTI oil price forecast and wider estimated 1Q26 oil price differentials. Our FY26 estimates incorporate average NYMEX oil prices of $$79.43/Bbl for oil and $3.29/MMBtu for natural gas compared with $76.79/Bbl and $3.47/MMBtu in our last update.Our FY27 estimates incorporate average NYMEX prices of $70/Bbl and $3.94/MMBtu compared to $67.52/Bbl and $3.94/MMBtu in our last update. 

<div><ul><li>Riley’s conventional oil-weighted asset base supports its goal to deliver meaningful oil volume growth while spending less than cash flow. </li><li>Lower drilling and completion costs and shallower production decline curves combine to generate discounted returns on investment of 2.0-3.0x for the majority of Riley’s undeveloped locations based on the $60 strip pricing in effect at year-end 2025.</li><li>The Red Lake Field is expected to command increased capital allocation following the completion (3Q26) of the midstream project that Riley sold to Targa Resources in December 2025.</li></ul></div>

Riley’s conventional oil-weighted asset base supports its goal to deliver meaningful oil volume growth while spending less than cash flow. Lower drilling and completion costs and shallower production decline curves combine to generate discounted returns on investment of 2.0-3.0x for the majority of Riley’s undeveloped locations based on the $60 strip pricing in effect at year-end 2025.The Red Lake Field is expected to command increased capital allocation following the completion (3Q26) of the midstream project that Riley sold to Targa Resources in December 2025.

REPX: Solid Foundation Supports Growth Objectives

<div><ul><li>Riley is targeting Y/Y oil production growth of ~25% in 2026 at the midpoint of management’s oil production guidance range of 21.0-22.0 MBo/d. </li><li>The strong growth profile reflects a full-year contribution from the Silverback assets acquired early in 3Q25 and the ability to expand development in the Yeso Trend.</li><li>In 4Q25, Riley sold the New Mexico Midstream project and relates assets to Targa Resources for $123 million and the opportunity to earn an additional $60 million from earnout payments tied to certain volume thresholds. </li></ul></div>

Riley is targeting Y/Y oil production growth of ~25% in 2026 at the midpoint of management’s oil production guidance range of 21.0-22.0 MBo/d. The strong growth profile reflects a full-year contribution from the Silverback assets acquired early in 3Q25 and the ability to expand development in the Yeso Trend.In 4Q25, Riley sold the New Mexico Midstream project and relates assets to Targa Resources for $123 million and the opportunity to earn an additional $60 million from earnout payments tied to certain volume thresholds. 

REPX: Expect Solid Oil Production Growth in 2026

<div><ul><li>Riley entered 2026 from a position of strength buoyed by the sales proceeds from midstream asset sales, which closed in December 2025. </li><li>We estimate net proceeds of ~$118 million (assuming 4% transaction costs) were used to reduce RBL borrowings in December.</li><li>As of September 30, 2025, outstanding borrowings under the RBL were $225 million and liquidity was $192 million. </li></ul></div>

Riley entered 2026 from a position of strength buoyed by the sales proceeds from midstream asset sales, which closed in December 2025. We estimate net proceeds of ~$118 million (assuming 4% transaction costs) were used to reduce RBL borrowings in December.As of September 30, 2025, outstanding borrowings under the RBL were $225 million and liquidity was $192 million. 

REPX: Balance Sheet Provides Capital Flexibility for 2026

<div><ul><li>Riley closed the acquisition of Silverback Exploration II on July 1, 2025, for cash considerations of $142 million. </li><li>The transaction added ~47,000 net acres, including ~19,000 that are prospective for the Yeso Trend, with more than 300 gross undeveloped drilling locations.</li><li>Before the acquisition was announced on May 3, 2025, the assets were producing 5 MBoe/d (52% oil, 75% liquids).</li></ul></div>

Riley closed the acquisition of Silverback Exploration II on July 1, 2025, for cash considerations of $142 million. The transaction added ~47,000 net acres, including ~19,000 that are prospective for the Yeso Trend, with more than 300 gross undeveloped drilling locations.Before the acquisition was announced on May 3, 2025, the assets were producing 5 MBoe/d (52% oil, 75% liquids).

REPX: Well Positioned to Continue Growth Trajectory

United States

Riley Exploration Permian, Inc. operates as an independent oil and natural gas company. The Company focuses on growth of its reserves, production, and cash flow through the acquisition, exploration, development, and production of oil, natural gas, and natural gas liquids. Riley Exploration Permian serves customers in the United States.

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Riley Exploration Permian (REPX US)

REPX: Updating Estimates

We are adjusting our earnings and adjusted EBITDA estimates to reflect changes to our WTI oil price forecast and wider estimated 1Q26 oil price...

Water Tower Research

REPX: Solid Foundation Supports Growth Objectives

Riley’s conventional oil-weighted asset base supports its goal to deliver meaningful oil volume growth while spending less than cash flow.

Water Tower Research

REPX: Expect Solid Oil Production Growth in 2026

Riley is targeting Y/Y oil production growth of ~25% in 2026 at the midpoint of management’s oil production guidance range of 21.0-22.0 MBo/d.

Water Tower Research

REPX: Balance Sheet Provides Capital Flexibility for 2026

Riley entered 2026 from a position of strength buoyed by the sales proceeds from midstream asset sales, which closed in December 2025. We...

Water Tower Research

REPX: Well Positioned to Continue Growth Trajectory

The transaction added ~47,000 net acres, including ~19,000 that are prospective for the Yeso Trend, with more than 300 gross undeveloped drilling...

Water Tower Research

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