What changed in this filing

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Item 1. Financial Statements

2022-11-14 compared with 2022-08-10 · 172 added, 170 removed, 552 unchanged (38% of the section changed)

2 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

June 30, 2022 September 30, 2021

September 30, 2022 December 31, 2021

(In thousands, except share amounts)

2 unchanged sentences

Accounts receivable 27,463 18,002

Accounts receivable - related parties — 456

Prepaid expenses and other current assets 3,377 4,902

26 unchanged sentences

Common stock, $ 0.001 par value, 240,000,000 shares authorized;

19,865,116 and 19,672,050 shares issued and outstanding at June 30, 2022 and September 30, 2021, respectively

20,181,872 and 19,836,885 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively

Additional paid-in capital 273,821 271,737

Accumulated deficit ( 14,845 ) ( 49,167 )

Retained earnings (Accumulated deficit) 38,813 ( 33,919 )

Total Shareholders' Equity 312,654 237,838

3 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended June 30, Nine Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2022 2021 2022 2021

18 unchanged sentences

Interest expense, net ( 585 ) ( 963 ) ( 1,960 ) ( 3,299 )

Loss on derivatives ( 12,363 ) ( 35,396 ) ( 67,188 ) ( 74,208 )

Total Other Expense ( 13,060 ) ( 36,567 ) ( 69,459 ) ( 77,779 )

Gain (loss) on derivatives 17,600 ( 14,987 ) ( 44,395 ) ( 75,286 )

Total Other Income (Expense) 17,015 ( 15,950 ) ( 46,355 ) ( 78,585 )

Net Income (Loss) From Continuing Operations Before Income Taxes 76,134 10,941 116,334 ( 25,389 )

Income tax expense ( 10,927 ) ( 3,245 ) ( 14,682 ) ( 16,953 )

Income tax benefit (expense) ( 16,317 ) 3,937 ( 25,130 ) ( 13,539 )

Net Income (Loss) From Continuing Operations 59,817 14,878 91,204 ( 38,928 )

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - (Continued)

Three Months Ended June 30, Nine Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2022 2021 2022 2021

1 unchanged sentence

Discontinued Operations:

Loss from discontinued operations — ( 882 ) — ( 19,513 )

Income tax expense on discontinued operations — ( 85 ) — ( 60 )

Loss on Discontinued Operations — ( 967 ) — ( 19,573 )

Gain (loss) from discontinued operations — 775 — ( 18,738 )

Income tax benefit (expense) on discontinued operations — 1 — ( 59 )

Gain (Loss) on Discontinued Operations — 776 — ( 18,797 )

Net Income (Loss) 59,817 15,654 91,204 ( 57,725 )

4 unchanged sentences

Diluted $ 3.05 $ 0.76 $ 4.65 $ ( 2.29 )

Net Loss per Share/Unit from Discontinued Operations:

Net Income (Loss) per Share/Unit from Discontinued Operations:

Basic $ — $ 0.04 $ — $ ( 1.09 )

10 unchanged sentences

(In Thousands)

Nine Months Ended June 30, 2022

Nine Months Ended September 30, 2022

Members' Equity Shareholders' Equity

Units Outstanding Amount Shares Amount Additional Paid-in Capital Accumulated Deficit Total Shareholders' Equity

Balance, September 30, 2021 — $ — 19,672 $ 20 $ 270,837 $ ( 49,167 ) $ 221,690

Share-based compensation expense — — — — 919 — 919

Repurchased shares for tax withholding — — ( 10 ) — ( 19 ) — ( 19 )

Issuance of common shares under long-term incentive plan — — 175 — — — —

Dividends declared — — — — — ( 6,150 ) ( 6,150 )

Net income — — — — — 21,398 21,398

Units Outstanding Amount Shares Amount Additional Paid-in Capital Retained Earnings (Accumulated Deficit) Total Shareholders' Equity

Balance, December 31, 2021 — $ — 19,837 $ 20 $ 271,737 $ ( 33,919 ) $ 237,838

11 unchanged sentences

Balance, June 30, 2022 — $ — 19,865 $ 20 $ 273,035 $ ( 14,845 ) $ 258,210

Share-based compensation expense, net — — — — 795 — 795

Repurchased shares for tax withholding — — — — ( 9 ) — ( 9 )

Issuance of common shares under long-term incentive plan, net — — 317 — — — —

Dividends declared — — — — — ( 6,159 ) ( 6,159 )

Net income — — — — — 59,817 59,817

Balance, September 30, 2022 — $ — 20,182 $ 20 $ 273,821 $ 38,813 $ 312,654

The accompanying notes are an integral part of these condensed consolidated financial statements.

2 unchanged sentences

(In Thousands)

Nine Months Ended June 30, 2021

Nine Months Ended September 30, 2021

Members' Equity Shareholders' Equity

Units Outstanding Amount Shares Amount Additional Paid-in Capital Accumulated Deficit Total Shareholders' Equity

Balance, September 30, 2020 1,555 $ 166,617 — $ — $ — $ — $ —

Issuance of common units under long-term incentive plan 13 — — — — — —

Dividends on preferred units — ( 917 ) — — — — —

Dividends on common units — ( 3,801 ) — — — — —

Unit-based compensation expense — 413 — — — — —

Net loss — ( 7,941 ) — — — — —

Balance, December 31, 2020 1,568 $ 154,371 — $ — $ — $ — $ —

13 unchanged sentences

Balance, March 31, 2021 — $ — 17,825 $ 18 $ 218,974 $ ( 37,752 ) $ 181,240

Dividends paid — — — — — ( 55 ) ( 55 )

Share-based compensation expense — — — — 779 — 779

Issuance of common shares under long-term incentive plan — — 197 — 4,165 — 4,165

Dividends paid — — — — — ( 55 ) ( 55 )

Net loss — — — — — ( 21,501 ) ( 21,501 )

Balance, June 30, 2021 — $ — 18,022 $ 18 $ 223,918 $ ( 59,308 ) $ 164,628

Share-based compensation expense — — — — 751 — 751

Repurchased shares for tax withholding — — ( 17 ) — ( 514 ) — ( 514 )

Common stock sold to public, net of issuance costs — — 1,667 2 46,682 — 46,684

Dividends declared — — — — — ( 5,513 ) ( 5,513 )

Net income — — — — — 15,654 15,654

Balance, September 30, 2021 — $ — 19,672 $ 20 $ 270,837 $ ( 49,167 ) $ 221,690

The accompanying notes are an integral part of these condensed consolidated financial statements.

1 unchanged sentence

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Nine Months Ended June 30,

Nine Months Ended September 30,

(In thousands)

31 unchanged sentences

Payment of common share/unit dividends ( 18,257 ) ( 14,568 )

Proceeds from issuance of common stock — 50,000

Public offering costs — ( 3,316 )

Payment of preferred unit dividends — ( 1,491 )

2 unchanged sentences

Net Cash Used in Financing Activities - Continuing Operations ( 37,579 ) ( 7,666 )

Net Increase (Decrease) in Cash and Cash Equivalents from Continuing Operations ( 267 ) 1,324

Net Increase in Cash and Cash Equivalents from Continuing Operations 9,591 11,291

The accompanying notes are an integral part of these condensed consolidated financial statements.

1 unchanged sentence

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - (Continued)

Nine Months Ended June 30,

Nine Months Ended September 30,

(In thousands)

3 unchanged sentences

Net Increase in Cash and Cash Equivalents from Discontinued Operations — 3,899

Net Increase (Decrease) in Cash and Cash Equivalents ( 267 ) 5,234

Net Increase in Cash and Cash Equivalents 9,591 15,190

Cash and Cash Equivalents, Beginning of Period 8,317 1,877

6 unchanged sentences

Right of use assets obtained in exchange for operating lease liability $ 1,624 $ —

Preferred unit dividends paid in kind $ — $ 904

Preferred unit dividends $ — $ 574

Common stock issued in exchange for common units $ — $ 192,191

18 unchanged sentences

(2) Basis of Presentation

These unaudited condensed consolidated financial statements as of June 30, 2022 and for the three and nine months ended June 30, 2022 and 2021 include the accounts of Riley Permian and its wholly owned subsidiaries REP LLC, Riley Permian Operating Company, LLC ("RPOC"), Tengasco Pipeline Corporation, Tennessee Land & Mineral Corporation, and Manufactured Methane Corporation, and have been prepared in accordance with U.S.

On August 16, 2022, the Board acting by written consent resolved to amend and restate the Company's Second Amended and Restated Bylaws to change the Company's fiscal year period from October 1st through September 30th each year to January 1st through December 31st each year commencing with the 2022 calendar year.

On August 19, 2022, the holders of approximately 75 % of our outstanding Common Stock acting by written consent approved the Bylaws Restatement and adopted the Third Amended and Restated Bylaws.

In accordance with Rule 14c-2 under the Exchange Act, the aforementioned actions taken by written consent became effective on September 23, 2022.

As a result, the Company's 2022 fiscal year is now the period from January 1, 2022 to December 31, 2022.

As a result of the change in the Company's fiscal year, this document reflects the Company's Quarterly Report for the three and nine months ended September 30, 2022 and comparative information for the 2021 periods.

These unaudited condensed consolidated financial statements as of September 30, 2022 and for the three and nine months ended September 30, 2022 and 2021 include the accounts of Riley Permian and its wholly owned subsidiaries REP LLC, Riley Permian Operating Company, LLC ("RPOC"), Tengasco Pipeline Corporation, Tennessee Land & Mineral Corporation, and Manufactured Methane Corporation, and have been prepared in accordance with U.S.

All intercompany balances and transactions have been eliminated upon consolidation.

6 unchanged sentences

GAAP have been condensed or omitted pursuant to the rules and regulations of the SEC.

These condensed consolidated financial statements should be read in conjunction with the Company's most recent Annual Report on Form 10-K for the year ended September 30, 2021.

Certain prior period amounts have been reclassified to conform to the current period financial statement presentation.

These reclassifications had an immaterial effect on the previously reported balance sheets and results of operations or cash flows.

These condensed consolidated financial statements should be read in conjunction with the Company's Annual Report on Form 10-K for the year ended September 30, 2021 and the Company's Transition Report on Form 10-QT for the period ended December 31, 2021.

These condensed consolidated financial statements have not been audited by an independent registered public accounting firm.

In the opinion of the Company’s management, the accompanying unaudited financial statements contain all adjustments necessary for fair presentation of the results of operations for the periods presented, which adjustments were of a normal recurring nature, except as disclosed herein.

The results of operations for the three and nine months ended June 30, 2022 are not necessarily indicative of the results to be expected for the full fiscal year ending September 30, 2022, for various reasons, including as a result of the impact of fluctuations in prices received for oil and natural gas, natural production declines, the uncertainty of exploration and development drilling results, fluctuations in the fair value of derivative instruments, the future impacts of COVID-19, the current and future impacts of the military conflict between Russia and Ukraine, the volatile inflationary environment in U.S.

The results of operations for the three and nine months ended September 30, 2022 are not necessarily indicative of the results to be expected for the full fiscal year ending December 31, 2022, for various reasons, including as a result of the impact of fluctuations in prices received for oil and natural gas, natural production declines, the uncertainty of exploration and development drilling results, fluctuations in the fair value of derivative instruments, the current and future impacts of the military conflict between Russia and Ukraine, the volatile inflationary environment in U.S.

markets and other factors.

RILEY EXPLORATION PERMIAN, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(3) Summary of Significant Accounting Policies

2 unchanged sentences

GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes.

RILEY EXPLORATION PERMIAN, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

These estimates and assumptions may also affect disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

5 unchanged sentences

Accounts receivable is summarized below:

June 30, 2022 September 30, 2021

September 30, 2022 December 31, 2021

(In thousands)

3 unchanged sentences

Total accounts receivable $ 27,463 $ 18,002

The Company had no allowance for credit losses at June 30, 2022 and September 30, 2021.

The Company had no allowance for credit losses at September 30, 2022 and December 31, 2021.

RILEY EXPLORATION PERMIAN, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Other Non-Current Assets, Net

Other non-current assets consisted of the following:

June 30, 2022 September 30, 2021

September 30, 2022 December 31, 2021

(In thousands)

5 unchanged sentences

The Company incurred $ 1.7 million in financing costs related to the amendment of its revolving credit facility in April 2022.

The Company also extended certain existing leases and entered into a new lease during the three months ended June 30, 2022, which resulted in additions to the right of use assets.

The Company extended certain existing leases and entered into a new lease during the nine months ended September 30, 2022, which resulted in additions to the right of use assets.

Accrued Liabilities

Accrued liabilities consisted of the following:

June 30, 2022 September 30, 2021

September 30, 2022 December 31, 2021

(In thousands)

7 unchanged sentences

Asset Retirement Obligations

Components of the changes in ARO for the nine months ended June 30, 2022 and year ended September 30, 2021 are shown below:

June 30, 2022 September 30, 2021

Components of the changes in ARO for the nine months ended September 30, 2022 and the year ended December 31, 2021 are shown below:

September 30, 2022 December 31, 2021

(In thousands)

1 unchanged sentence

Liabilities incurred 348 56

Revision of estimated obligations 326 —

Liability settlements and disposals ( 178 ) ( 58 )

9 unchanged sentences

The Company assessed the goodwill balance for impairment since the Company entered into a purchase and sale agreement ("PSA") in March 2021 for $ 3.5 million before closing adjustments.

As the carrying value exceeded the implied fair value at the time of the closing of the Merger, the Company concluded the goodwill balance associated with the Kansas Reporting Unit was impaired and recognized a goodwill impairment loss, included within loss from discontinued operations on the condensed consolidated statement of operations, of $ 18.5 million for the nine months ended June 30, 2021.

See further discussion in Note 12 - Discontinued Operations and Assets Held for Sale.

1 unchanged sentence

The following table presents oil and natural gas sales disaggregated by product:

Three Months Ended June 30, Nine Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2022 2021 2022 2021

11 unchanged sentences

The adoption of this ASU did not have a material impact on the Company's condensed consolidated financial statements.

In March 2020, the FASB issued ASU No.

2020-04, “Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting” (“ASU 2020-04”), which provides companies with optional guidance to ease

RILEY EXPLORATION PERMIAN, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

the potential accounting burden associated with transitioning away from reference rates (e.g., LIBOR) that are expected to be discontinued.

ASU 2020-04 allows, among other things, certain contract modifications, such as those within the scope of Topic 470 on debt, to be accounted as a continuation of the existing contract.

In March 2020, the FASB issued ASU No.

2020-04, “Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting” (“ASU 2020-04”), which provides companies with optional guidance to ease the potential accounting burden associated with transitioning away from reference rates (e.g., LIBOR) that are expected to be discontinued.

ASU 2020-04 allows, among other things, certain contract modifications, such as those within the scope of Topic 470 on debt, to be accounted for as a continuation of the existing contract.

The Company adopted this ASU effective concurrent with the amendment of the Company's revolving credit facility in April 2022.

15 unchanged sentences

Total consideration $ 26,392

The Company incurred approximately $ 5.0 million of related costs for the Merger, of which $ 0.3 million and $ 3.4 million was expensed for the three and nine months ended June 30, 2021 as transaction costs on the condensed consolidated statements of operations.

The Company incurred approximately $ 5.0 million of related costs for the Merger, of which $ 0.2 million and $ 2.6 million was expensed for the three and nine months ended September 30, 2021 as transaction costs on the condensed consolidated statements of operations.

RILEY EXPLORATION PERMIAN, INC.

24 unchanged sentences

Pro Forma Operating Results (Unaudited)

The following unaudited pro forma combined results for the three and nine months ended June 30, 2021 reflect the consolidated results of operations of the Company as if the Merger had occurred on October 1, 2019.

The unaudited pro forma information includes adjustments for $ 3.4 million of transaction costs being reclassified to the first quarter of fiscal year 2020 instead of $ 0.3 million and $ 3.4 million of transaction costs recorded in the three and nine months ended June 30, 2021, respectively.

The following unaudited pro forma combined results for the year ended September 30, 2021 reflect the consolidated results of operations of the Company as if the Merger had occurred on October 1, 2019.

Subsequent to the Merger, the Company changed its fiscal year period from October 1st through September 30th each year to January 1st to December 31st each year commencing with the 2022 calendar year.

The unaudited pro forma information includes adjustments for $ 3.6 million of transaction costs being reclassified to the fourth quarter of calendar year 2019 which were incurred during the year ended September 30, 2021.

Additionally, the Company adjusted for $ 0.9 million of oil and natural gas property impairment that Tengasco recognized under the full-cost method of accounting, which would not have been recognized under the successful efforts method, during the three months ended December 31, 2020.

Also, the unaudited pro forma information has been tax affected

Also, the unaudited pro forma information has been tax

RILEY EXPLORATION PERMIAN, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

using a 21% tax rate.

effected using a 21% tax rate.

The common stock was also adjusted for the conversion of the REP LLC preferred units into common units and retroactively adjusted for the Exchange Ratio and one-for-twelve reverse stock split.

Three Months Ended June 30, 2021 Nine Months Ended June 30, 2021

For the year ended September 30, 2021

(In thousands, except per share/unit amounts)

6 unchanged sentences

Diluted $ ( 1.88 )

Net Loss per Share/Unit from Discontinued Operations:

Basic $ ( 0.05 ) $ ( 0.05 )

Net Income per Share/Unit from Discontinued Operations:

Diluted $ 0.02

The unaudited pro forma combined financial information is for informational purposes only and is not intended to represent or to be indicative of the combined results of operations that the Company would have reported had the Merger been completed as of October 1, 2019 and should not be taken as indicative of the Company's future combined results of operations.

The unaudited pro forma combined financial information is for informational purposes only and was based off of the fiscal year period October 1st through September 30th as this was the fiscal year in effect at the time of the Merger.

The unaudited pro forma financial information was not modified for the change in the Company's fiscal year.

It is not intended to represent or to be indicative of the combined results of operations that the Company would have reported had the Merger been completed as of October 1, 2019 and should not be taken as indicative of the Company's future combined results of operations.

The actual results may differ significantly from that reflected in the unaudited pro forma combined financial information for a number of reasons, including, but not limited to, differences in assumptions used to prepare the unaudited pro forma combined financial information and actual results.

1 unchanged sentence

Oil and natural gas properties are summarized below:

June 30, 2022 September 30, 2021

September 30, 2022 December 31, 2021

(In thousands)

5 unchanged sentences

Total oil and natural gas properties, net $ 431,067 $ 359,131

Depletion and amortization expense for proved oil and natural gas properties was $ 7.0 million and $ 6.7 million respectively, for the three months ended June 30, 2022 and 2021.

Depletion and amortization expense for proved oil and natural gas properties was $ 20.1 million and $ 18.7 million, respectively, for the nine months ended June 30, 2022 and 2021.

Exploration expense was $ 22 thousand and $ 2.8 million, respectively, for the three months ended June 30, 2022 and 2021, and $ 2.1 million and $ 8.7 million, respectively, for the nine months ended June 30, 2022 and 2021.

Exploration expense was primarily attributable to the expiration of oil and natural gas leases for the nine months ended June 30, 2022 and three and nine months ended June 30, 2021.

Depletion and amortization expense for proved oil and natural gas properties was $ 8.2 million and $ 6.5 million for the three months ended September 30, 2022 and 2021.

Depletion and amortization expense for proved oil and natural gas properties was $ 21.7 million and $ 19.3 million for the nine months ended September 30, 2022 and 2021, respectively.

Exploration expense was $ 20 thousand and $ 0.9 million for the three months ended September 30, 2022 and 2021, respectively, and $ 1.5 million and $ 9.1 million for the nine months ended September 30, 2022 and 2021, respectively.

Exploration expense was primarily attributable to the expiration of oil and natural gas leases for the nine months ended September 30, 2022 and three and nine months ended September 30, 2021.

RILEY EXPLORATION PERMIAN, INC.

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While the use of these contracts limits the downside risk for adverse price changes, their use also limits future revenues from favorable price changes.

For the three and nine months ended June 30, 2022 and 2021, we have not designated our derivative contracts as hedges for accounting purposes, and therefore changes in the fair value of derivatives are included and recognized in other income (expense) in the condensed consolidated statement of operations.

As of June 30, 2022, the Company's oil and natural gas derivative instruments consisted of fixed price swaps, costless collars, and basis protection swaps.

The following table summarizes the open financial derivative positions as of June 30, 2022, related to oil and natural gas production:

We have not designated our derivative contracts as hedges for accounting purposes, and therefore changes in the fair value of derivatives are included and recognized in other income (expense) in the condensed consolidated statement of operations.

As of September 30, 2022, the Company's oil and natural gas derivative instruments consisted of fixed price swaps, costless collars, and basis protection swaps.

The following table summarizes the open financial derivative positions as of September 30, 2022, related to oil and natural gas production:

Weighted Average Price

2 unchanged sentences

Q4 2022 270,000 $ 56.03 $ — $ —

2023 720,000 $ 53.27 $ — $ —

1 unchanged sentence

Q4 2022 540,000 $ 3.26 $ — $ —

Oil Collars (Bbl)

Q4 2022 90,000 $ — $ 35.00 $ 42.63

2023 — $ — $ — $ —

2 unchanged sentences

Q4 2022 240,000 $ 0.41 $ — $ —

Interest Rate Contracts

The Company has entered into floating-to-fixed interest rate swaps, in which it receives a floating market rate equal to one-month LIBOR and pays a fixed interest rate, to manage interest rate exposure related to the Company's revolving credit facility.

The following table summarizes the open interest rate derivative positions as of June 30, 2022:

The following table summarizes the open interest rate derivative positions as of September 30, 2022:

Open Coverage Period Notional Amount Fixed Rate

1 unchanged sentence

Floating-to-Fixed Interest Rate Swaps

July 2022 - September 2023 $ 40,000 0.24 %

October 2022 - September 2023 $ 40,000 0.24 %

RILEY EXPLORATION PERMIAN, INC.

1 unchanged sentence

Balance Sheet Presentation of Derivatives

The following table presents the location and fair value of the Company’s derivative contracts included in the condensed consolidated balance sheets as of June 30, 2022 and September 30, 2021:

June 30, 2022

The following tables present the location and fair value of the Company’s derivative contracts included in the condensed consolidated balance sheets as of September 30, 2022 and December 31, 2021:

September 30, 2022

Balance Sheet Classification Gross Fair Value Amounts Netted Net Fair Value

5 unchanged sentences

Total $ ( 23,345 ) $ — $ ( 23,345 )

September 30, 2021

December 31, 2021

Balance Sheet Classification Gross Fair Value Amounts Netted Net Fair Value

5 unchanged sentences

Total $ ( 40,149 ) $ — $ ( 40,149 )

The following table presents the components of the Company's loss on derivatives for the three and nine months ended June 30, 2022 and 2021:

Three Months Ended June 30, Nine Months Ended June 30,

The following table presents the components of the Company's gain (loss) on derivatives for the three and nine months ended September 30, 2022 and 2021:

Three Months Ended September 30, Nine Months Ended September 30,

2022 2021 2022 2021

2 unchanged sentences

Non-cash gain (loss) on derivatives 34,640 ( 3,816 ) 16,803 ( 53,809 )

Loss on derivatives $ ( 12,363 ) $ ( 35,396 ) $ ( 67,188 ) $ ( 74,208 )

Gain (loss) on derivatives $ 17,600 $ ( 14,987 ) $ ( 44,395 ) $ ( 75,286 )

(7) Fair Value Measurements

5 unchanged sentences

The carrying values of financial instruments comprising cash and cash equivalents, payables, receivables, and advances from joint interest owners approximate fair values due to the short-term maturities of these instruments.

The carrying value reported for the revolving line of credit approximates fair value because the underlying instruments are at interest rates which approximate current market rates.

The carrying value reported for the revolving credit facility approximates fair value because the underlying instruments are at interest rates which approximate current market rates.

The revolving line of credit is considered a Level 3 measurement.

Assets and Liabilities Measured on a Recurring Basis

The fair value of commodity derivatives and interest rate swaps is estimated using internal discounted cash flow calculations based upon forward curves.

The following table presents the Company’s financial assets and liabilities that were

RILEY EXPLORATION PERMIAN, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

accounted for at fair value on a recurring basis as of June 30, 2022 and September 30, 2021, by level within the fair value hierarchy:

June 30, 2022

Assets and Liabilities Measured on a Recurring Basis

The fair value of commodity derivatives and interest rate swaps is estimated using discounted cash flow calculations based upon forward curves.

The following table presents the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of September 30, 2022 and December 31, 2021, by level within the fair value hierarchy:

September 30, 2022

Level 1 Level 2 Level 3 Total

6 unchanged sentences

Interest rate liabilities $ — $ — $ — $ —

September 30, 2021

December 31, 2021

Level 1 Level 2 Level 3 Total

10 unchanged sentences

Additionally, RPOC provides certain administrative and operational services to Riley Exploration Group, LLC ("REG") in exchange for a monthly fee of $ 100 thousand pursuant to a contract services agreement.

The following table presents revenues from contract services for related parties:

Three Months Ended June 30, Nine Months Ended June 30,

The following table presents revenues from and related cost for contract services for related parties:

Three Months Ended September 30, Nine Months Ended September 30,

2022 2021 2022 2021

4 unchanged sentences

Cost of contract services $ 89 $ 147 $ 263 $ 329

The Company had amounts due (to) from Combo of $( 0.4 ) million and $ 0.5 million at June 30, 2022 and September 30, 2021, respectively, which are reflected in accounts payable - related parties and accounts receivable - related parties on the accompanying condensed consolidated balance sheets.

Amounts due (to) from Combo reflect the revenue, net of any expenditures for wells and fees due under the contract services agreement, for Combo's net working interest in wells that the Company operates on Combo's behalf.

The Company had amounts due to Combo of $ 0.1 million and $ 0.2 million at September 30, 2022 and December 31, 2021, respectively, which are reflected in accounts payable - related parties on the accompanying condensed consolidated balance

RILEY EXPLORATION PERMIAN, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Amounts due to Combo reflect the revenue, net of any expenditures for wells and fees due under the contract services agreement, for Combo's net working interest in wells that the Company operates on Combo's behalf.

Consulting and Legal Fees

On January 25, 2022, the Company and di Santo Law PLLC ("di Santo Law"), a law firm owned by a member of our Board of Directors, entered into an engagement letter that provides a monthly fixed fee in exchange for general corporate legal services.

The agreement has an initial term of one year and provides for a monthly cash payment of $ 30 thousand and an aggregate one-time grant of 10,500 shares of restricted stock that will vest in four equal installments at the end of each quarter in calendar year 2022.

The agreement has an initial term of one year and provides for a monthly cash payment of $ 30 thousand and an aggregate one-time grant of 10,500 shares of restricted stock that vest in four equal installments at the end of each quarter in calendar year 2022.

Prior to entry into this agreement, di Santo Law's attorneys provided legal services to the Company based on hourly rates.

The Company incurred legal fees from di Santo Law of approximately $ 0.1 million and $ 0.6 million for the three months ended June 30, 2022 and 2021, respectively.

The Company incurred legal fees from di Santo Law of approximately $ 0.6 million and $ 1.0 million for the nine months ended June 30, 2022 and 2021.

As of June 30, 2022 and September 30, 2021, the Company had approximately $ 30 thousand and $ 0.8 million, respectively, accrued for di Santo Law.

Such amounts were included in accounts payable - related parties in the accompanying condensed consolidated balance sheets.

The Company incurred legal fees from di Santo Law of approximately $ 0.2 million and $ 0.5 million for the three months ended September 30, 2022 and 2021, respectively.

The Company incurred legal fees from di Santo Law of approximately $ 0.5 million and $ 1.3 million for the nine months ended September 30, 2022 and 2021.

As of September 30, 2022, there were no amounts due to di Santo Law.

As of December 31, 2021, the Company had approximately $ 0.2 million accrued for di Santo Law.

Such amounts were included in accrued liabilities in the accompanying condensed consolidated balance sheets.

(9) Revolving Credit Facility

3 unchanged sentences

On April 29, 2022, the Company amended its Credit Agreement to, among other things, increase the borrowing base from $ 175 million to $ 200 million, extend the maturity date to April 2026, replace LIBOR with SOFR and change the requirements for hedging to be based on utilization of the borrowing base and the Company's leverage ratio.

On October 25, 2022, the Company amended its Credit Agreement to, among other things, increase the borrowing base from $ 200 million to $ 225 million and change the semi-annual redeterminations to April 1 and October 1 to align with the Company's new fiscal year end of December 31st..

The borrowing base is subject to periodic redeterminations, mandatory reductions and further adjustments from time to time.

The facility currently requires semi-annual redeterminations on February 1 and August 1.

During these redetermination periods, the Company’s borrowing base may be increased or may be reduced in certain circumstances.

3 unchanged sentences

The Company is also subject to an unused commitment fee of between 0.375 % and 0.500 % (depending on the borrowing base utilization percentage).

The Credit Agreement contains certain covenants, which, among other things, require the maintenance of (i) a total leverage ratio of not more than 3.25 to 1.0 and (ii) a minimum current ratio of not less than 1.0 to 1.0 as of the last day of any fiscal quarter.

The Credit Agreement also contains a total leverage ratio for Restricted Payments, as defined in the Credit Agreement, after giving pro forma effect to such Restricted Payments, which includes payments to any holder of the Company's shares, would not exceed 2.50 to 1.0.

4 unchanged sentences

The Company's minimum hedging requirement is between 0 % and 50 % (depending on the borrowing base utilization percentage and leverage ratio as of the hedge evaluation date) of its proved developed producing ("PDP") volumes on a rolling 24-month basis.

As of June 30, 2022, the Company was required to have at least 25 % of its PDP volumes hedged on a rolling 24-month basis.

As of September 30, 2022, the Company's minimum hedging requirement was 0 %.

RILEY EXPLORATION PERMIAN, INC.

1 unchanged sentence

The following table summarizes the Company's interest expense:

Three Months Ended June 30, Nine Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2022 2021 2022 2021

2 unchanged sentences

Amortization of deferred financing costs 175 170 548 498

182 168 655 483

Unused commitment fees 137 65 362 156

Total interest expense, net $ 585 $ 963 $ 1,960 $ 3,299

_____________________

(1) Includes $ 0.1 million of unamortized deferred financing costs written off during the nine months ended June 30, 2022 in conjunction with the amendment of the Credit Agreement in October 2021.

As of June 30, 2022 and September 30, 2021, the weighted average interest rate on outstanding borrowings under the revolving credit facility was 4.52 % and 2.83 %, respectively.

As of June 30, 2022, the Company was in compliance with all covenants contained in the Credit Agreement and had $ 61 million of outstanding borrowings and $ 139 million available under the borrowing base.

As of September 30, 2022 and December 31, 2021, the weighted average interest rate on outstanding borrowings under the revolving credit facility was 5.88 % and 3.10 %, respectively.

As of September 30, 2022, the Company was in compliance with all covenants contained in the Credit Agreement and had $ 48 million of outstanding borrowings and $ 152 million available under the borrowing base.

(10) Members’/Shareholders' Equity

For the three months ended June 30, 2022, the Company declared quarterly dividends on its common stock totaling approximately $ 6.2 million.

No dividends were declared during the three months ended June 30, 2021.

Public Offering of Common Stock

On June 30, 2021, the Company entered into an Underwriting Agreement (the "Underwriting Agreement") with Truist Securities, Inc., as the representative of the other several underwriters named in the Underwriting Agreement.

On July 2, 2021, the Company issued 1,666,667 shares of common stock at a price to the public of $ 30.00 per share in accordance with the Underwriting Agreement.

Net proceeds from the issuance were approximately $ 46.7 million, after deducting the underwriting fees and other offering costs incurred.

For the three months ended September 30, 2022 and 2021, the Company declared quarterly dividends on its common stock totaling approximately $ 6.2 million and $ 5.5 million, respectively.

See Note 9 - Revolving Credit Facility for discussion over the Company's restrictions on certain payments, including dividends.

2 unchanged sentences

The holders of unvested restricted units issued under the 2018 LTIP were issued substitute awards under the 2021 LTIP at the closing of the Merger.

Upon the closing of the Merger and after giving effect to the adjustment resulting from the one-for-twelve reverse stock split, the 2021 LTIP had 1,387,022 shares of common stock available for issuance, of which 761,635 shares remained available as of June 30, 2022.

Upon the closing of the Merger and after giving effect to the adjustment resulting from the one-for-twelve reverse stock split, the 2021 LTIP had 1,387,022 shares of common stock available for issuance, of which 444,549 shares remained available as of September 30, 2022.

RILEY EXPLORATION PERMIAN, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

2021 Long-Term Incentive Plan

The following table presents the Company's restricted stock activity during the nine months ended June 30, 2022 under the 2021 LTIP:

The following table presents the Company's restricted stock activity during the nine months ended September 30, 2022 under the 2021 LTIP:

2021 Long-Term Incentive Plan

Restricted Shares Weighted Average Grant Date Fair Value

Unvested at September 30, 2021 228,369 $ 15.35

Unvested at December 31, 2021

366,789 $ 19.41

Granted 366,669 $ 17.61

1 unchanged sentence

Forfeited ( 3,625 ) $ 23.46

Unvested at June 30, 2022

Unvested at September 30, 2022

632,995 $ 18.45

RILEY EXPLORATION PERMIAN, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

For the three months ended June 30, 2022 and 2021, the total equity-based compensation expense of $ 0.8 million and $ 0.8 million, respectively, is included in general and administrative costs on the Company's condensed consolidated statement of operations for the restricted share awards granted under the 2021 LTIP.

For the nine months ended June 30, 2022 and 2021, the total equity-based compensation expense of $ 2.8 million and $ 5.4 million, respectively, is included in general and administrative costs on the Company's condensed consolidated statement of operations for the restricted share awards granted under the 2021 LTIP.

Approximately $ 5.0 million of additional equity-based compensation expense will be recognized over the weighted average life of 23 months for the unvested restricted share awards as of June 30, 2022 granted under the 2021 LTIP.

For the three months ended September 30, 2022 and 2021, the total equity-based compensation expense is $ 0.8 million for both periods and is included in general and administrative costs on the Company's condensed consolidated statement of operations for the restricted share awards granted under the 2021 LTIP.

For the nine months ended September 30, 2022 and 2021, the total equity-based compensation expense of $ 2.7 million and $ 6.1 million, respectively, is included in general and administrative costs on the Company's condensed consolidated statement of operations for the restricted share awards granted under the 2021 LTIP.

Approximately $ 9.4 million of additional equity-based compensation expense will be recognized over the weighted average life of 30 months for the unvested restricted share awards as of September 30, 2022 granted under the 2021 LTIP.

2018 Long-Term Incentive Plan

1 unchanged sentence

The holders of unvested restricted units issued under the 2018 LTIP were issued substitute awards under the 2021 LTIP at the closing of the Merger.

Restricted Units:

The Company granted 13,309 restricted units to executives and employees of the Company during the nine months ended June 30, 2021 under the 2018 LTIP.

These restricted units had a vesting period of 36-months with a fair value price of $ 112.47 .

The Company determined the fair value of the common units in accordance with ASC 718 using an options pricing model.

Immediately prior to the consummation of the Merger and in accordance with the Merger Agreement, any accrued but unpaid cash dividends on the unvested restricted units issued under the 2018 LTIP was paid.

Total unit-based compensation expense of $ 0.7 million is for all of the issuances outstanding during the nine months ended June 30, 2021.

Total unit-based compensation expense of $ 0.3 million is for all of the issuances outstanding during the period of January 2021 through the date of the merger, February 26, 2021.

Unit-based compensation expense is included in general and administrative costs on the Company's condensed consolidated statement of operations.

4 unchanged sentences

As a result, the Company is responsible for federal and state income taxes and must record deferred tax assets and liabilities for the tax effects of any temporary differences that exist.

RILEY EXPLORATION PERMIAN, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

The components of the Company's consolidated provision for income taxes from continuing operations are as follows:

Three Months Ended June 30, Nine Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2022 2021 2022 2021

(In thousands)

Current income tax expense (benefit):

Current income tax expense:

Federal $ 142 $ 2 $ 1,442 $ 2

State 291 284 486 52

Total current income tax expense (benefit) $ 715 $ ( 1,009 ) $ 1,608 $ ( 232 )

Total current income tax expense 433 286 1,928 54

Deferred income tax expense (benefit):

1 unchanged sentence

State 424 2,204 763 ( 717 )

Total deferred income tax expense 10,212 4,254 13,074 17,185

Total income tax expense $ 10,927 $ 3,245 $ 14,682 $ 16,953

RILEY EXPLORATION PERMIAN, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Total deferred income tax expense (benefit) 15,884 ( 4,223 ) 23,202 13,485

Total income tax expense (benefit) $ 16,317 $ ( 3,937 ) $ 25,130 $ 13,539

A reconciliation of the statutory federal income tax rate to the Company's effective income tax rate is as follows:

Three Months Ended June 30, Nine Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2022 2021 2022 2021

6 unchanged sentences

Income subject to taxation by REP LLC's unitholders — % — % — % ( 15.8 ) %

Other ( 0.5 ) % — % ( 0.3 ) % — %

Effective income tax rate 21.4 % ( 36.2 ) % 21.6 % ( 53.3 ) %

The Company's federal income tax returns for the years subsequent to September 30, 2018 remain subject to examination.

The Company's income tax returns in major state income tax jurisdictions remain subject to examination for various periods subsequent to September 30, 2018.

The Company's federal income tax returns for the years subsequent to December 31, 2018 remain subject to examination.

The Company's income tax returns in major state income tax jurisdictions remain subject to examination for various periods subsequent to December 31, 2017.

The Company currently believes that all other significant filing positions are highly certain and that all of its other significant income tax positions and deductions would be sustained under audit or the final resolution would not have a material effect on the consolidated financial statements.

8 unchanged sentences

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

The following table presents the components of the loss on discontinued operations reported in the condensed consolidated statements of operations for the periods ended June 30, 2021:

The following table presents the components of the loss on discontinued operations reported in the condensed consolidated statements of operations for the periods ended September 30, 2021:

Three Months Ended Nine Months Ended

June 30, 2021 June 30, 2021

September 30, 2021 September 30, 2021

(In thousands)

4 unchanged sentences

Total expenses — 18,631

Other expenses 882 882

Loss from discontinued operations before income taxes ( 882 ) ( 19,513 )

Income tax expense ( 85 ) ( 60 )

Net loss from discontinued operations, net of tax $ ( 967 ) $ ( 19,573 )

The Company did not have any discontinued operations during the three and nine months ended June 30, 2022.

Other income (expenses) 775 ( 107 )

Gain (loss) from discontinued operations before income taxes 775 ( 18,738 )

Income tax benefit (expense) 1 ( 59 )

Gain (loss) from discontinued operations, net of tax $ 776 $ ( 18,797 )

The Company did not have any discontinued operations during the three and nine months ended September 30, 2022.

(13) Net Income (Loss) Per Share/Unit

1 unchanged sentence

The Company calculated net income or loss per share/unit using the treasury stock method.

The table below sets forth the computation of basic and diluted net income (loss) per share/unit for the three and nine months ended June 30, 2022 and 2021:

Three Months Ended June 30, Nine Months Ended June 30,

The table below sets forth the computation of basic and diluted net income (loss) per share/unit for the three and nine months ended September 30, 2022 and 2021:

Three Months Ended September 30, Nine Months Ended September 30,

2022 2021 2022 2021

13 unchanged sentences

_____________________________________________________

(1) Used in basic and diluted net loss per share calculation when the Company is in a net loss position.

(1) Used in the basic and diluted net loss per share/unit calculation when the Company is in a net loss position.

RILEY EXPLORATION PERMIAN, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

For the three and nine months ended June 30, 2022 and 2021, the following shares/units were excluded from the calculation of diluted net income (loss) per share/unit due to their anti-dilutive effect:

Three Months Ended June 30, Nine Months Ended June 30,

For the three and nine months ended September 30, 2022 and 2021, the following shares/units were excluded from the calculation of diluted net income (loss) per share/unit due to their anti-dilutive effect:

Three Months Ended September 30, Nine Months Ended September 30,

2022 2021 2022 2021

3 unchanged sentences

Legal Matters

The Company has been named as a defendant in an action commenced on October 25, 2021 in United States Bankruptcy Court for the Northern District of Texas, Dallas Division, by the Chapter 7 Trustee for the Hoactzin Bankruptcy.

The Company was served with this lawsuit on or about December 7, 2021.

The complaint alleges that in October of 2018, one year prior to the Hoactzin bankruptcy filing in October of 2019, Peter Salas ("Salas"), Chairman of the Board of Tengasco during the period of the purported fraudulent transfers, caused Hoactzin to transfer its working interests in certain wells on its Kansas acreage (the “Kansas Working Interests”) to the Company for an amount the complaint alleges was purportedly less than the reasonable equivalent value of such Kansas Working Interests.

The Company was named as a defendant in an adversary proceeding (the "Adversary Proceeding") commenced on October 25, 2021 in United States Bankruptcy Court for the Northern District of Texas, Dallas Division (the "Bankruptcy Court"), by the Trustee of the Chapter 7 bankruptcy of the Hoactzin Partners, L.P.

("Hoactzin").

The complaint in the Adversary Proceeding alleges that in October of 2018, one year prior to the Hoactzin bankruptcy filing in October of 2019, Peter Salas ("Salas"), Chairman of the Board of Tengasco during the period of the purported fraudulent transfers, caused Hoactzin to transfer its working interests in certain wells on its Kansas acreage (the “Kansas Working Interests”) to the Company for an amount the complaint alleges was purportedly less than the reasonable equivalent value of such Kansas Working Interests.

The complaint includes avoidance actions and other causes of action in connection with the transfer of the Kansas Working Interests, as well as other causes of action alleged related to certain transactions to which the Company was not a party.

3 unchanged sentences

On April 2, 2021, the Company closed on the sale of all the assets it held in Kansas (of which the Kansas Working Interests were a small part) to a third party for an agreed upon purchase price of $ 3.3 million.

The Company believes that the claims are without merit and is asserting a vigorous defense.

The Company has filed an answer denying the allegations.

The parties are conducting discovery.

The Company did not recognize any material liability as of June 30, 2022 and September 30, 2021.

The Company's assessment of probability and/or estimates of liabilities are based on information known about the pending legal matters and its experience in contesting, litigating, and settling similar matters.

Although actual amounts could differ from management's estimates, none of the actions are believed by management to involve future amounts that would be material to the Company's financial position or results of operations, or liquidity after consideration of recorded accruals.

Management does not expect that the losses from any litigation matters or claims that are reasonably possible to occur will have a material adverse effect on the Company's financial position, results of operations, or liquidity.

On October 13, 2022, the Company entered into a Compromise Settlement Agreement and Mutual General Release (the “Settlement Agreement”) with the Trustee for the bankruptcy estate for Hoactzin to resolve certain claims against the Company in the Adversary Proceeding.

Under the terms of the Settlement Agreement, the Company will pay $ 80 thousand to the Trustee in full settlement and satisfaction of (a) all claims, causes of action, and damages that have been asserted against the Company or could be asserted against the Company in the Adversary Proceeding;

and (b) all claims which might arise from or relate to any actions taken by the Company while acting in connection with Debtor.

The effectiveness of the Settlement Agreement is contingent upon its approval by the Bankruptcy Court.

On October 13, 2022, the Trustee filed a motion to approve the Settlement Agreement with the Bankruptcy Court (the “Settlement Motion”).

A hearing will be held on November 16, 2022 on the Settlement Motion.

Should the Court decline to approve the proposed settlement, the Trustee's claims against Riley Permian would proceed to trial, absent a subsequent settlement approved by the Court.

If the Bankruptcy Court grants the Settlement Motion, after Riley Permian makes the settlement payment contemplated under the Settlement Agreement, Riley Permian and the Trustee intend to file a joint motion requesting dismissal of the Adversary Proceeding with prejudice, as contemplated by the Settlement Agreement.

The Settlement Agreement will have no effect on the Trustee’s claims against any of the other defendants in the Adversary Proceeding, including without limitation, those claims against Peter Salas, our former Chief Executive Officer.

Environmental Matters

1 unchanged sentence

These laws, which are often changing, regulate the discharge of materials into the environment and may require the Company to remove or mitigate the environmental effects of the disposal or release of petroleum or chemical substances at various sites.

The Company had no environmental liabilities as of June 30, 2022 or September 30, 2021.

The Company had no material environmental liabilities as of September 30, 2022 or December 31, 2021.

Contractual Commitments

In July 2021, as part of a planned expansion of the primary gas processing plant owned by the Company's primary midstream counterparty, Stakeholder Midstream LLC ("Stakeholder"), the Company committed to annually drill, complete and connect a minimum number of wells or deliver an annual target volume to Stakeholder's gathering system.

While the minimum number of wells is below our planned development activity, there are financial penalties if the minimum activity levels are not met.

The annual well or volume target is for each of five years beginning January 2022.

The additional capacity from the gas processing plant expansion is expected to lead to increased natural gas sales and decreased gas flaring for the Company.

RILEY EXPLORATION PERMIAN, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

On October 7, 2021, the Company executed two agreements related to its EOR project.

The first agreement is a CO 2 purchase agreement with Kinder Morgan CO 2 Company, LLC and the second agreement is a connection agreement that also established a delivery point for the purchased CO 2 with the Cortez Pipeline Company.

On March 25, 2022, the Company executed a purchase order for facility and support equipment for its EOR project.

Under the order, the Company has remaining commitments totaling approximately $ 2.0 million, and the equipment will be delivered within 29 weeks of executing the purchase order.

On April 22, 2022, the Company entered into a purchase agreement for pipe related to its fiscal 2023 drilling program.

Under the agreement, the Company has commitments to purchase approximately $ 10.6 million of pipe by December 2022.

In October 2021, the Company executed two agreements related to its EOR project.

The first agreement is a CO 2 purchase agreement with Kinder Morgan CO 2 Company, LLC that has a primary term extending through the earlier of the total contract quantity delivered or December 31, 2025.

The agreement also has a daily contract quantity for Kinder Morgan to deliver CO 2 to the Company.

The second agreement is a connection agreement that also established a delivery point for the purchased CO 2 with the Cortez Pipeline Company.

In April 2022, the Company entered into a purchase agreement for pipe related to its 2023 drilling program.

Under the agreement, the Company has commitments to purchase an additional approximately $ 10.1 million of pipe by first quarter of 2023.

In August 2022, the Company entered into a second amendment on its gas gathering and processing agreement with its primary midstream counterparty, Stakeholder Midstream LLC (“Stakeholder”).

Stakeholder committed to expand their gathering and processing system with a commitment from the Company to deliver an annual minimum volume to Stakeholder’s gathering system for a minimum of seven years beginning on the in-service date of the expanded plant.

(15) Subsequent Events

On July 11, 2022, the Board of Directors of the Company declared a cash dividend of $ 0.31 per share of common stock, payable on August 8, 2022 to its shareholders of record at the close of business on July 25, 2022.

On October 10, 2022, the Board of Directors of the Company declared a cash dividend of $ 0.34 per share of common stock payable on November 7, 2022 to its shareholders of record at the close of business on October 24, 2022.

On October 25, 2022, the Company amended its Credit Agreement to, among other things, increase the borrowing base from $ 200 million to $ 225 million and change the semi-annual redetermination dates to April 1 and October 1 to align with the Company's new fiscal year end of December 31st.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements