OKLAHOMA CITY - Riley Exploration Permian, Inc. (NYSE American: REPX), an independent oil and natural gas company, announced the commencement of a public offering of 2.1 million shares of common stock today. The offering is divided between 700,000 shares from the company and 1.4 million shares from certain stockholders. Additionally, the underwriters will have a 30-day option to purchase up to 315,000 extra shares.
The proceeds from the company's portion of the offering are earmarked for general corporate purposes. These may include funding a pending acquisition of roughly 12,500 net acres in Eddy County, New Mexico, which is expected to close in May 2024. The acquisition is set to be primarily financed through the offering's proceeds, with any remaining balance covered by the company's credit facilities. No proceeds from the sale of stockholder shares will go to Riley Permian, but the company will bear certain associated costs.
Truist Securities, Inc. and Roth Capital Partners are serving as joint book-running managers for the offering, while Janney Montgomery Scott LLC and Tuohy Brothers Investment Research, Inc. are co-managers.
The offering is subject to market conditions, and there is no certainty regarding its completion or the terms. It is being made under a shelf registration statement filed with the U.S. Securities and Exchange Commission (SEC) on April 7, 2021, and declared effective as of May 12, 2021. Prospective investors can obtain copies of the prospectus from the SEC's website or directly from the managing firms.
InvestingPro Insights
Riley Exploration Permian, Inc. (REPX) has recently announced a significant public offering, which has drawn attention to the company's financial health and future prospects. According to InvestingPro data, the company's Price/Earnings (P/E) Ratio as of the last twelve months ending Q4 2023 stands at an attractive 5.37, suggesting that the stock may be undervalued relative to earnings. Additionally, REPX has demonstrated robust revenue growth, with a 27.91% increase in the most recent quarter of Q4 2023. This growth is a positive sign for investors looking at the company's potential for expansion and profitability.
Moreover, an InvestingPro Tip highlights that REPX has raised its dividend for three consecutive years, reflecting a commitment to returning value to shareholders. This could be particularly appealing to income-focused investors, especially in the context of the company's dividend yield of 4.25% as of the most recent data. Furthermore, analysts predict the company will be profitable this year, which might reassure investors concerned about the company's ability to sustain its dividend payments following the public offering.
For those interested in a deeper analysis, there are additional InvestingPro Tips available, which can provide further insight into the company's financial health and future outlook. To explore these tips and more detailed metrics, investors can visit https://www.investing.com/pro/REPX and use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
It's important to note that while REPX shows strong returns over the last month with a 38.06% increase, an InvestingPro Tip cautions that the Relative Strength Index (RSI) suggests the stock is currently in overbought territory. This could imply that the stock's recent price surge may be due for a correction, and investors should monitor the stock's performance closely in the near term.
Investors considering participating in the offering or adding REPX to their portfolio should weigh these insights along with the company's strategic focus in the Permian Basin and its upcoming acquisition plans to make a well-informed decision.
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