Riley Exploration Permian has announced a significant upward revision to its 2025 capital expenditure forecast, adding nearly $35 million to its budget. This strategic reallocation of funds is earmarked for critical investments in midstream infrastructure and the replenishment of its inventory of drilled but uncompleted wells. The move signals the company's commitment to enhancing its operational capabilities and securing future production growth, even as it navigates the complexities of the energy market.
This increased investment comes as Riley seeks to optimize its asset base and maximize value. A substantial portion of the new capital will support the expansion of midstream facilities, which are essential for processing and transporting hydrocarbons from wellheads to market. Improved midstream capacity will not only facilitate higher production volumes but also potentially enhance efficiency and reduce operational bottlenecks. Furthermore, the decision to restock drilled uncompleted wells reflects a proactive approach to maintaining a robust drilling pipeline, ensuring a steady stream of new production in the coming years.
The company's strategic financial adjustments also project a positive outlook for its production targets. Riley anticipates that these investments will enable it to bring several additional net wells into production throughout 2025. Consequently, the firm has raised its total production guidance for the latter half of 2025 by an impressive 9%. Specifically, oil production guidance has been increased by 4%, underscoring the company's focus on its most valuable commodity. These revised forecasts indicate a concerted effort to capitalize on existing assets and drive growth in its core operational areas.
While the company is optimistic about its future production capabilities, it acknowledges current challenges related to non-oil output. At present, Riley realizes only marginal revenues from its non-oil production, highlighting an area that may require further strategic attention or market adjustments. Nevertheless, the emphasis remains firmly on optimizing overall production and leveraging key investments to boost profitability and long-term sustainability within the dynamic energy sector.
In sum, Riley Exploration Permian's decision to augment its 2025 capital expenditure underscores a clear strategy aimed at fostering significant growth in production and strengthening its infrastructure. The targeted investments in midstream assets and DUC inventory are poised to deliver tangible benefits, paving the way for increased output and enhanced operational efficiency in the foreseeable future.