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REPX After Q1 Earnings: Is This Permian Play Worth Buying?
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Key Takeaways
Riley Exploration Permian beat Q1 EPS as total production rose to 35.6 MBOE/d from 24.4.
REPX delivered $24M free cash flow, cut debt $8M, bought back $4M of stock, and paid a $0.40 dividend.
REPX guided 2026 output of 22-23 kb/d oil and 37.5-39.5 MBOE/d, with $200-$220M capex in TX/NM.
Riley Exploration Permian (REPX - Free Report) has become an interesting Permian Basin oil and gas idea after its reported first-quarter results. The company delivered an earnings beat, higher year-over-year production and positive free cash flow, even as weak natural gas and NGL realizations weighed on results. For investors looking at Permian-focused exploration and production names, REPX offers a different profile from larger peers such as Diamondback Energy (FANG - Free Report) and Permian Resources (PR - Free Report) : it is smaller, more growth-oriented and trading at a discounted valuation. Diamondback Energy and Permian Resources also posted solid Q1 updates, but REPX’s production growth and improving estimates make the stock worth a closer look.
REPX’s Q1 Beat Highlights Production Momentum
REPX reported first-quarter 2026 adjusted earnings of $1.02 per share, topping the Zacks Consensus Estimate of 99 cents by 3%. Revenues of $114 million rose 11.1% from the year-ago period but came in slightly below expectations. The bigger story was production. Total equivalent production averaged 35.6 thousand barrels of oil equivalent per day (MBOE/d), up from 24.4 MBOE/d a year earlier, while oil production averaged 20.2 thousand barrels per day. Management said production exceeded the high end of guidance, while capital spending came in below the low end of its guided range.
Like Diamondback Energy and Permian Resources, REPX benefited from strong Permian activity. However, the quarter also showed the basin’s biggest near-term challenge: gas takeaway constraints. Riley Exploration Permian’s natural gas and NGL revenues after fees were negative, reducing total net revenue. Diamondback Energy and Permian Resources also faced weak gas realizations, showing that this is not just a REPX issue but a broader Permian theme. REPX’s oil-heavy output mix helped soften the impact.
Price Performance, Estimates and Valuation Support the Case
Riley Exploration Permian shares have gained more than 30% in three months, outperforming other Permian-focused E&Ps such as Diamondback Energy, which is up 19%, and Permian Resources, which has advanced 17%. That relative strength suggests investors are recognizing the company’s growth story.
The earnings estimate picture is encouraging. Zacks Consensus Estimate for REPX’s 2026 earnings implies 9% growth, while the 2027 estimate points to a stronger 50% increase. That gives REPX an attractive earnings-growth setup compared with larger Permian names, which offer scale but may not have the same small-cap growth leverage.
Image Source: Zacks Investment Research
Free Cash Flow and Shareholder Returns Add Appeal
REPX generated $47 million of operating cash flow, or $55 million before working-capital changes, and $24 million of total free cash flow in the quarter. Adjusted EBITDAX was $61 million. The company used its cash generation to reduce debt by $8 million, repurchase 152,000 shares for $4 million and pay a quarterly dividend of 40 cents per share.
Image Source: Riley Exploration Permian
This shareholder-return angle matters when comparing REPX with Diamondback Energy and Permian Resources. Diamondback Energy returned significant cash to shareholders in the first quarter through buybacks and dividends, while Permian Resources emphasized its base dividend and balance-sheet priorities. REPX is following a similar playbook, but on a smaller base. If free cash flow continues to rise, the company may have more flexibility to reduce debt, repurchase stock and maintain its dividend.
Growth Outlook Remains the Key Driver
Management guided second-quarter oil production of 20.7-21.3 thousand barrels per day and total equivalent production of 35-37 MBOE/d. For full-year 2026, REPX expects oil production of 22-23 thousand barrels per day and total equivalent production of 37.5-39.5 MBOE/d. Riley Exploration Permian also plans $200-$220 million of full-year activity-based capital spending, focused on Texas and New Mexico.
This growth plan gives REPX meaningful upside if oil prices stay supportive. Diamondback Energy and Permian Resources remain larger, more diversified Permian operators, but REPX’s smaller size means successful execution can have a bigger impact on per-share results. The company’s power and midstream initiatives may also help offset weak regional gas pricing over time.
Conclusion
REPX is not without risks, especially given Permian gas constraints, commodity-price volatility and its smaller scale compared with Diamondback Energy and Permian Resources. Still, last week’s earnings showed strong execution, rising production, free cash flow generation and disciplined capital allocation. The valuation discount and improving earnings outlook keep the story attractive. For investors seeking a Permian-focused stock with growth, income and value characteristics, REPX looks like a solid candidate to consider now. REPX stock is currently a Zacks Rank #1 (Strong Buy).
View the Zacks #1 Rank List
Image: Bigstock
REPX After Q1 Earnings: Is This Permian Play Worth Buying?
Key Takeaways
Riley Exploration Permian (REPX - Free Report) has become an interesting Permian Basin oil and gas idea after its reported first-quarter results. The company delivered an earnings beat, higher year-over-year production and positive free cash flow, even as weak natural gas and NGL realizations weighed on results. For investors looking at Permian-focused exploration and production names, REPX offers a different profile from larger peers such as Diamondback Energy (FANG - Free Report) and Permian Resources (PR - Free Report) : it is smaller, more growth-oriented and trading at a discounted valuation. Diamondback Energy and Permian Resources also posted solid Q1 updates, but REPX’s production growth and improving estimates make the stock worth a closer look.
REPX’s Q1 Beat Highlights Production Momentum
REPX reported first-quarter 2026 adjusted earnings of $1.02 per share, topping the Zacks Consensus Estimate of 99 cents by 3%. Revenues of $114 million rose 11.1% from the year-ago period but came in slightly below expectations. The bigger story was production. Total equivalent production averaged 35.6 thousand barrels of oil equivalent per day (MBOE/d), up from 24.4 MBOE/d a year earlier, while oil production averaged 20.2 thousand barrels per day. Management said production exceeded the high end of guidance, while capital spending came in below the low end of its guided range.
Like Diamondback Energy and Permian Resources, REPX benefited from strong Permian activity. However, the quarter also showed the basin’s biggest near-term challenge: gas takeaway constraints. Riley Exploration Permian’s natural gas and NGL revenues after fees were negative, reducing total net revenue. Diamondback Energy and Permian Resources also faced weak gas realizations, showing that this is not just a REPX issue but a broader Permian theme. REPX’s oil-heavy output mix helped soften the impact.
Price Performance, Estimates and Valuation Support the Case
Riley Exploration Permian shares have gained more than 30% in three months, outperforming other Permian-focused E&Ps such as Diamondback Energy, which is up 19%, and Permian Resources, which has advanced 17%. That relative strength suggests investors are recognizing the company’s growth story.
3-Month Price Performance
Still, the stock does not look expensive. From a valuation standpoint, REPX trades at a discount to the Oil and Gas - Exploration and Production - United States subindustry on a forward price-to-earnings basis.
The earnings estimate picture is encouraging. Zacks Consensus Estimate for REPX’s 2026 earnings implies 9% growth, while the 2027 estimate points to a stronger 50% increase. That gives REPX an attractive earnings-growth setup compared with larger Permian names, which offer scale but may not have the same small-cap growth leverage.
Free Cash Flow and Shareholder Returns Add Appeal
REPX generated $47 million of operating cash flow, or $55 million before working-capital changes, and $24 million of total free cash flow in the quarter. Adjusted EBITDAX was $61 million. The company used its cash generation to reduce debt by $8 million, repurchase 152,000 shares for $4 million and pay a quarterly dividend of 40 cents per share.
This shareholder-return angle matters when comparing REPX with Diamondback Energy and Permian Resources. Diamondback Energy returned significant cash to shareholders in the first quarter through buybacks and dividends, while Permian Resources emphasized its base dividend and balance-sheet priorities. REPX is following a similar playbook, but on a smaller base. If free cash flow continues to rise, the company may have more flexibility to reduce debt, repurchase stock and maintain its dividend.
Growth Outlook Remains the Key Driver
Management guided second-quarter oil production of 20.7-21.3 thousand barrels per day and total equivalent production of 35-37 MBOE/d. For full-year 2026, REPX expects oil production of 22-23 thousand barrels per day and total equivalent production of 37.5-39.5 MBOE/d. Riley Exploration Permian also plans $200-$220 million of full-year activity-based capital spending, focused on Texas and New Mexico.
This growth plan gives REPX meaningful upside if oil prices stay supportive. Diamondback Energy and Permian Resources remain larger, more diversified Permian operators, but REPX’s smaller size means successful execution can have a bigger impact on per-share results. The company’s power and midstream initiatives may also help offset weak regional gas pricing over time.
Conclusion
REPX is not without risks, especially given Permian gas constraints, commodity-price volatility and its smaller scale compared with Diamondback Energy and Permian Resources. Still, last week’s earnings showed strong execution, rising production, free cash flow generation and disciplined capital allocation. The valuation discount and improving earnings outlook keep the story attractive. For investors seeking a Permian-focused stock with growth, income and value characteristics, REPX looks like a solid candidate to consider now. REPX stock is currently a Zacks Rank #1 (Strong Buy).
You can see the complete list of today’s Zacks #1 Rank stocks here.