Independent oil and natural gas company Riley Exploration—Permian filed a Form S-1 with the U.S. Securities and Exchange Commission (SEC) Wednesday morning announcing its intention to proceed with an initial public offering (IPO). The company was formed in June 2016 as a wholly owned subsidiary of Riley Exploration Group, and as of June 30, 2018, the company claims leases totaling 64,839 net acres and net production in the first nine months of its current fiscal year of approximately 3,136 barrels of oil equivalent per day.
Riley focuses its efforts on the San Andres Formation, a shelf margin deposit on the Central Basin Platform and Northwest Shelf, which accounts for approximately 24% of the nearly 30 billion barrels of oil so far produced from the Permian Basin and where horizontal production has increased by more than 425% since January 2014. On its corporate website, Riley cites estimates of remaining Permian Basin reserves ranging from 43 billion to 2 trillion barrels of oil.
The proposed maximum IPO amount the company is seeking is $115 million. Once the IPO is completed the company’s name will change to Riley Exploration Permian and the common stock will trade on the NYSE American exchange under the ticker symbol REPX.
The company plans to use the proceeds from the offering to fund its fiscal 2019 capital program, for general corporate purposes, fully to repay its revolving loan balance, and to pay cash bonuses totaling $2.1 million dollars to certain executives and employees. As of the filing date, the company reported $53.6 million in outstanding debt and $46.5 million remaining under its revolving credit facility.
Riley named five shareholders with at least a 5% interest in the company but did not specify share or ownership percentage totals: Riley Exploration Group, Yorktown Energy Partners XI, Boomer Petroleum, Bluescape Riley Exploration Acquisition and Bluescape Riley Exploration Holdings.
Joint bookrunners for the offering are SunTrust Robinson Humphrey and Seaport Global Securities.