Riley Permian Declares Quarterly Cash Dividend and Reports Debt Reduction

Rhea-AI Summary

Riley Exploration Permian, Inc. (REPX) has approved a cash dividend of $0.36 per share for its common stock, payable on February 8, 2024, to stockholders of record as of January 25, 2024. The company also reduced its outstanding debt by $30 million in the fourth quarter of 2023, with a remaining principal balance of $185 million on its senior unsecured notes and outstanding borrowings of $185 million under its credit facility as of December 31, 2023.

Insights

Financial Analyst

The announcement of a cash dividend by Riley Exploration Permian, Inc. signals a positive reinforcement of shareholder value, indicative of the company's current liquidity and profit distribution policy. The consistency of the dividend, being the 20th consecutive distribution, suggests a stable and predictable income stream for investors, which can be particularly attractive to income-focused shareholders. The reduction of debt principal by $30 million in the fourth quarter enhances the company's balance sheet and potentially improves its creditworthiness. This deleveraging action, when using available cash, indicates management's confidence in operational cash flow sufficiency and a strategic approach to maintaining a healthy debt-to-equity ratio.

However, the impact on the stock price will depend on whether the dividend and debt reduction were anticipated by the market. If the actions were in line with previous guidance, the immediate market reaction may be muted. Long-term implications for stakeholders include the potential for increased financial flexibility and a stronger position to weather economic downturns. The undrawn credit facility capacity provides additional liquidity buffer, which is a positive sign for future investments or unforeseen expenses.

Market Research Analyst

The declaration of a consistent dividend and the reduction of debt by Riley Exploration Permian, Inc. may reflect broader industry trends within the energy sector, where companies strive to balance growth with returns to shareholders. This approach can be seen as a response to investor demands for fiscal discipline, especially in a sector that is subject to volatile commodity prices. The company's actions could be interpreted as a commitment to operational efficiency and shareholder returns, which might influence peer companies to follow suit in order to remain competitive in attracting and retaining investors.

Analyzing the company's market position, the dividend announcement and debt reduction might also be seen as strategic moves to differentiate itself from competitors. In a sector where many players are still recovering from the impacts of fluctuating oil prices, such financial decisions could position Riley Permian favorably among its peers, potentially leading to a re-rating of the company's stock by analysts.

Economist

In the macroeconomic context, Riley Exploration Permian, Inc.'s decision to pay out dividends and reduce debt reflects a broader economic environment where interest rates and inflation may play a critical role. A company reducing its debt load can be seen as preparing for a scenario of rising interest rates, which would increase the cost of borrowing. This proactive approach to debt management might be viewed favorably by the market as a hedge against future economic uncertainty.

Additionally, the distribution of dividends could be a sign that the company is prioritizing immediate shareholder returns over reinvestment, which could be due to a forecast of moderate growth or a saturated market. This decision might also reflect the company's assessment of the opportunity cost of holding excess cash versus rewarding shareholders, especially in a potentially low-interest-rate environment where the return on cash holdings could be minimal.

OKLAHOMA CITY, Jan. 16, 2024 /PRNewswire/ -- Riley Exploration Permian, Inc. (NYSE American: REPX) ("Riley Permian" or the "Company") today announced that its Board of Directors has approved a cash dividend on the Company's common stock in the amount of $0.36 per share. The dividend is payable on February 8, 2024 to stockholders of record as of the close of business on January 25, 2024. The February 2024 dividend will represent the 20^th consecutive distribution made by the Company or its predecessor.

Additionally, the Company reported that it reduced the principal value of debt outstanding by $30 million during the fourth quarter of 2023 using available cash on hand. As of December 31, 2023, the Company had a principal balance of $185 million on its senior unsecured notes and outstanding borrowings of $185 million under its credit facility with $190 million of undrawn capacity.

About Riley Exploration Permian, Inc.
Riley Permian is a growth-oriented, independent oil and natural gas company focused on the acquisition, exploration, development and production of oil, natural gas, and natural gas liquids. For more information please visit www.rileypermian.com.

Investor Contact:

Rick D'Angelo
405-438-0126
IR@rileypermian.com

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SOURCE Riley Exploration Permian, Inc.

FAQ

What is the cash dividend approved by Riley Exploration Permian, Inc. for its common stock?

The cash dividend approved by Riley Exploration Permian, Inc. for its common stock is $0.36 per share.

When is the cash dividend payable to stockholders of Riley Exploration Permian, Inc.?

The cash dividend is payable on February 8, 2024, to stockholders of record as of January 25, 2024.

How much did Riley Exploration Permian, Inc. reduce its outstanding debt by in the fourth quarter of 2023?

Riley Exploration Permian, Inc. reduced its outstanding debt by $30 million in the fourth quarter of 2023.

What was the remaining principal balance on Riley Exploration Permian, Inc.'s senior unsecured notes as of December 31, 2023?

The remaining principal balance on Riley Exploration Permian, Inc.'s senior unsecured notes as of December 31, 2023, was $185 million.

How much were the outstanding borrowings under Riley Exploration Permian, Inc.'s credit facility as of December 31, 2023?

The outstanding borrowings under Riley Exploration Permian, Inc.'s credit facility as of December 31, 2023, were $185 million.