Riley Exploration Permian, Inc. · AMEX:REPX
Riley Exploration Permian — Tengasco — Merger or Acquisition (October 2020)
23 slides from Riley Exploration Permian's merger presentation, Oct 22, 2020
Slide 1: Riley Exploration – Permian / Tengasco Business Combination Transaction Overview
RILEY EXPLORATION – PERMIANTENGASCO Business Combination Transaction Overview CONFIDENTIAL
Slide 2: Forward-Looking Statements
Forward-Looking Statements CERTAIN STATEMENTS IN THIS PRESENTATION CONCERNING THE PROPOSED TRANSACTION, INCLUDING ANY STATEMENTS REGARDING THE EXPECTED TIMETABLE FOR COMPLETING THE PROPOSED TRANSACTION, THE RESULTS, EFFECTS, AND BENEFITS OF THE PROPOSED TRANSACTION, FUTURE OPPORTUNITIES FOR THE COMB
Slide 3: Participants and Additional Information
Participants and Additional Information NO OFFER OR SOLICITATIONCOMMUNICATIONS IN THIS PRESENTATION DO NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO SUBSCRIBE FOR OR BUY ANY SECURITIES OR A SOLICITATION OF ANY VOTE OR APPROVAL WITH RESPECT TO THE PROPOSED TRANSACTION OR OTHERWIS
Slide 4: Transaction Details
Transaction Details On October 21, 2020 Tengasco, Inc. (“Tengasco”) and Riley Exploration – Permian (“Riley Permian”) announced that they had entered into a definitive merger agreement in an all-stock transaction.Business Combination of Riley Permian and TengascoAll-stock consideration of approximat
Slide 5: Strategic Rationale
Strategic Rationale StrengthsLong-lived oil-weighted conventional production and reserves, provide low base decline as compared to unconventional productionHybrid growth and capital return (dividend paying)Expansive drilling inventory of over 328 Gross locations (1)Combination FacilitatesLiquidity e
Slide 6: Investment Highlights
Investment Highlights Targeting reinvestment rates of 50-60% of operating free cash flowGenerates modest growth with significant free cash flow that can be used for continued debt reduction and dividend growth Maintain Low Debt Profile, currently at < 1.4x Net Debt/EBITDAX and being reduced, cash fl
Slide 7: Performance Based Culture
Performance Based Culture Culture of continuous improvement, cost controls, and value creation Net Production Per Day (Boe/d) Proved Reserves (MMBOE) Adjusted EBITDA ($MM) Operating Costs Per BOE (1) (1) Operating Cost – LOE + WOE + Capitalized WorkoversNote: Fiscal year ends September 30th
Slide 8: Proven Track Record of Value Creation
Proved Reserves (MBoe) Since REP commenced operations on the Champions Assets in April 2015, management has successfully executed its program, growing production from 308 Boe/d for FY’16 to 7,073 Boe/d for Year to Date Fiscal 2020 Average Net Production (MBoe/d) (1) (2) Proven Track Record of Value
Slide 9: Competitive Cash Margins and Operating Costs
Cash Margins (1)(2) Cash Operating Costs (2) Competitive Cash Margins and Operating Costs (1) Cash margin calculated as realized price, including differentials and hedges, net of gathering and transportation expense per boe less LOE, production taxes, and G&A expenses per Boe(2) G&A excludes unit-ba
Slide 10: Company Overview
RILEY EXPLORATION – PERMIANTENGASCO Company Overview CONFIDENTIAL
Slide 11: Introduction to Riley Permian
Introduction to Riley Permian Montaña Asset (1)Location: New MexicoYear Entered: 2018Net Acres(2): 18,304Gross Producing Hz Wells: 3Current Net Oil Production: 126 BOE/DUndeveloped Locations: 112 (62 net) Champions Asset (1)Location: TexasYear Entered: 2015Net Acres: 26,576Gross Producing Hz Wells:
Slide 12: Sponsor Overview
Sponsor Overview Yorktown Partners Yorktown Partners LLC (“Yorktown”) is a private equity firm founded in 1991, based in New York City, New YorkYorktown has raised 12 private equity funds totaling over $8BNCo-investments by top-tier investors including: Och-Ziff, Neuberger-Berman, BlackRock, Lexingt
Slide 13: Management Biographical Summary
Name Title Biographical Summary Bobby Riley Chairman of the Board and Chief Executive Officer Mr. Riley has been the Chief Executive Officer of Riley Exploration Group (“REG”) since it was founded in 2012 and was the Chairman and Chief Executive Officer of its affiliate, Riley Exploration, LLC, or R
Slide 14: Production Growth Via the Drill Bit
Production Growth Via the Drill Bit Primary growth driver is to increase production, reserves and cash flow via conversion of undeveloped locations into PDP through organic growth and accretive acquisitionsLow development risk due to operating experience, offset success, and historic activity in the
Slide 15: Primary Asset is an Extension of Giant, Legacy Oilfields
Primary Asset is an Extension of Giant, Legacy Oilfields Our Champions Asset is a massive untapped continuation of the Wasson & Brahaney Field ComplexREP Producing Well Count 126 Gross (68 Net) (1)REP Undrilled Well Count 328 Gross (229 Net) (1)Champions – 216 Gross (167 Net)Montaña - 112 Gross (62
Slide 16: REP Assets vs. Unconventional Resources
REP Assets vs. Unconventional Resources Assessment of remaining recoverable oil in selected major oil fields of the Permian Basin, Texas and New Mexico, 2012. Source: U.S. Geological Survey. Unconventional Reservoirs Conventional Reservoirs 100.0 1.0 0.1 0.01 0.001 0.0001 10.0 Permeability (mD) Poor
Slide 17: Fiscal Year End Reserves Summary (SEC)
Fiscal Year End Reserves Summary (SEC) Note: Assumes 6:1 oil to natural gas conversion ratioSEC pricing based on 12-month unweighted arithmetic average of the first-day-of-the-month price for each month in the period October 2015 through September 2016 (average WTI price of $38.17 / Bbl and average
Slide 18: Crude Oil Swaps and Hedging
Crude Oil Swaps Period Volume (Bbls) $/Bbl (1)(2) % Hedged of Forecasted Oil Production Q3’20 342,000 $57.18 64% Q4’20 339,000 $57.15 61% Q1’21 405,000 $53.01 71% Q2’21 405,000 $53.01 65% Q3’21 405,000 $53.01 59% Q4’21 405,000 $53.01 61% Q1’22 90,000 $45.25 14% Q2’22 90,000 $45.25 14% Q3’22 90,000 $
Slide 19: Champions Assets Overview
Primary formation targeted: San Andres86%+ liquid weighted reservesHigh-degree of well control Growing production component from 123 gross / 66 net wells (1)66 operated wells currently producingFQ3’20 average net production 6,629 Boe/d (87% operated)Contiguous acreage positionTotal acreage: 36,519 g
Slide 20: New Mexico Assets Overview
New Mexico Assets Overview (1) As of 6/30/2020 Asset Location Map | Northwest Shelf – New Mexico Closed acquisition of asset on May 15, 2018 with an effective date of April 1, 2018Large, contiguous 18,304 net acre position (1) representing 41% of REP’s consolidated net acreageFQ3’20 average net prod
Slide 21: Environmental, Social and Governance ("ESG")
Environmental, Social and Governance (“ESG”) Vapor Recovery Units Minimal Flaring Leak Detection & Repair CO2 Emission Reduction Water Disposal Minimized emissions by installing Vapor Recovery Units Installation of operable gas lines ahead of first productions minimizes the need for flaring Implemen
Slide 22: Future Drivers of Value
Future Drivers of Value Incremental recoveries up to 40% per sectionAccelerated production, higher oil cutsNo negative impact to parent wells Feasibility study underway for a CO2 pilot project within Champions based upon performance of the offsetting CO2 flood unit in Wasson FieldExpected recovery o
Slide 23: Transaction Process
Transaction Process Anticipated symbol File Registration Statement on S-4Complete SEC review processSchedule special meeting of Tengasco stockholdersHold special meeting of Tengasco stockholdersClose mergerAt the Closing, Change NameReverse Stock Split in a range of 8:1 to 12:1New Management & Board