Riley Exploration Permian: Avoiding Competition

2025-04-21 05:03:39 ET

Summary

• Riley Exploration Permian benefits from a prime location.
• The company focuses on conventional opportunities.
• Lines are blurring between conventional and unconventional businesses.
• Conventional wells usually have lower breakeven costs and flow more freely. However, the opportunity is smaller than is the case for unconventional.
• The debt ratio is conservative. The dividend, therefore, has some advantages over other upstream companies.

The last article noted that Riley Exploration Permian (REPX) has an extremely good location by focusing on the Northwest Shelf. This company also has an advantage in that it basically got started after the big oil price decline in 2015 when a lot of acreage costs took a sizable drop. More to the point, operations really got going after the covid challenges that marked the end of a really challenging period for many competitors. As a result, the company has great cash flow and relatively low debt for the location that it operates in. That makes the future a bit less challenging than it is for other companies that compete with Riley Permian....

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