Riley Exploration Permian, Inc.

and I will be your conference operator today. At this time, I would like to welcome everyone to the Riley Exploration Terminate Second Quarter 2025 Earnings Conference Call. All lines can be placed on mute to prevent any background noise. After the speakers are marked, there will be a question and answer section. If you would like to ask a question during this time, simply press star, followed by the number one on your telephone keypad. If you would like to withdraw your question, again, press star and one. I'm now gonna call over to Philip Riley, CEO, you may begin.

Good morning. Welcome to our conference call covering the second quarter 2025 results. I'm Philip Riley, CFO. Joining me today are Bobby Riley, Chairman and CEO, and Dan Doherty, SVP of Operations. 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 security laws. These statements are subject to risks and uncertainty 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 now turn the call over to Bobby.

Thank you, Philip. Good morning and welcome to our earnings call. Riley Permian demonstrated solid overall performance in the second quarter despite a less favorable oil macro backdrop and regional operating environment. We adjusted our development activity and capex downward in response to lower oil prices and we generated significant free cash flow for the first half of the year. Our development activity was a success and our activity was moderated but demonstrated good execution overall with positive momentum continuing on growing completion times and costs. We experienced some production impacts from infrastructure challenges common to many companies in the Permian Basin. Most notably was unreliable natural gas processing in New Mexico which leads to strutting wells and deferred production. As a courtesy reminder for our investors, the larger value driver at hand is not to defer gas revenue which is immaterial but rather the oil revenue. New Mexico is a zero-flaring state so disruptions on gas locally or downstream can result in disruptions to oil production. While disruptions in the second quarter are frustrating, fortunately this is a timing issue versus fundamental well performance issues. Also these types of hurdles present opportunities that underpin several of our initiatives including midstream and power generation projects which we continue to advance. These projects are designed to enhance gas and oil flow assurance and support access to a stable power supply. Together these efforts strengthen our ability to scale operations through acquisitions providing a competitive edge to our peers in a dynamic energy environment. We closed our acquisition of silverback exploration in July. With this deal we've increased our yeso trend footprint to 30,000 net acres, 98% of which is held by production. This region today represents only a quarter of the company's total production yet offers substantial undeveloped potential for future growth. I will now turn the call over to Dan Doherty who is sitting in today for John Suter, our COO to discuss operational results for the quarter followed by Philip Riley, our CFO who will discuss the company's financial performance and forward looking guidance. Thank you Bobby and good morning. Riley Cronian has once again shown excellence in safe operations, achieving a total recordable incident rate of zero in the second quarter. We achieved 97% safe days, a metric requiring no reportable incidents, vehicle accidents or spills over 10 barrels. This is a record number of safe days for the second quarter in a row, a testament to our commitment to safe operating. As for activity, for the second quarter of 2025, we drilled 10, completed two and turned in line seven gross operated wells. Five of those wells turned in line were completed at the end of the first quarter. We mentioned on the previous call that we picked up a rig in Q1, splitting the first low in that campaign in Texas in late March. That rig completed its general program in the second quarter, replenishing our duck inventory that will carry completions into 2026. During this drilling campaign, Riley set multiple Yolkin County records in the sanators, including longest lateral drill at 10,375 feet, as well as fastest fled to TD and fastest fled to rig release for both one and two mile wells. We did see some impact from tariffs during the campaign, most significantly in the form of higher pipe pricing, due to the added drilling efficiency, however, we were able to keep total cost down compared to our previous drilling efforts, reducing our total average drilling cost per lateral flip by 15% over our previous program in 2024, despite the added tariff costs. Overall, this campaign was the most efficient and cost effective to date. Net production declined marginally from 1.41 to 1.38 million barrels of oil, quarter over quarter in Q2, but increased 3% compared to the 10 quarter last year. Barrel of oil equivalent production is up 1% quarter over quarter, and up 14% compared to 10 quarter last year, from 1.94 to 2.22 million barrels of oil equivalent. Our average daily net production was 15.2 thousand barrels of oil per day, and 24.4 thousand barrels of oil equivalent per day for the second quarter of 2025. Despite the decline in oil production within the quarter was due primarily to gas takeaway constraints with our current midstream partner in New Mexico. These gas takeaway constraint events result in us deferring oil volumes to future quarters, and are the foundational reason for our investing in gathering compression in the asset. Last quarter we announced that we had completed our first phase of this gathering compression. Since then, this initial phase has allowed us to sell up to 15 million cubic feet in high pressure gas for our current midstream partner, mitigating some of the gathering constraints that we've experienced and allowing us to bring on new production. During the second quarter, we continue to make progress on the subsequent phases of the project as we work towards planned 2026 in-service case for deliveries to our new midstream partner. An expansion of the initial BIRDY compression stations to 55 million cubic feet a day is already underway, with the additional compression schedules to arrive in late Q4. Maintaining low operating costs remains a primary focus for our operations team. Our average upstream LOE per DOE in the first two quarters of 2025 is down .7% over our 2024 average. As power becomes an increasingly precious commodity in the Permian Basin, managing our own power production will be an integral piece to our unconstrained development. In the second quarter, we add an additional 9% to our sub-generated power in Texas. The continued efficiency and reliability of the power project has led to the initial training phases at a similar installation of our next process. With the Silverback acquisition closing, the Wiley Permian operations team has already identified numerous opportunities, synergies, and cost savings to underscore the intrinsic value of the acquisition. Managing water handling costs is integral to our business, and leveraging our expertise in the matter will decrease operating expenditures within the new asset. Combining water infrastructure between our legacy assets and Silverback will also drive efficiencies and opportunities as we continue to develop in New Mexico. Due to the significant overlap of the legacy and Silverback acreage, we are able to increase the expected net interest of many of our development locations. This will allow us to produce more net barrels for the same amount of gas, water, and power infrastructure investments. Nearly doubling the scale of our operations in the region will also give us a strategic advantage when going to close services. We believe this could lead to savings of 5% to 15% for many regularly used services. Finally, with minimal build-outs, existing gas production in the Silverback wells can be brought to our construction station, allowing for quicker scale and improving project economics. To summarize, in the second quarter, the Liley-Permian team had a low successful drilling target and to date, he maintained low operating costs. Our mid-stream and power projects are continuing to prove their value in the form of reliability and increased optionality, and we continue to find significant synergies in our recent Silverback acquisition. And all of this was done while achieving record safety metrics. Congratulations to the team on a job well done. Philip, I'll now turn the call back to you.