What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2022-05-11 compared with 2022-02-14 · 243 added, 151 removed, 462 unchanged (46% of the section changed)

2 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

December 31, 2021 September 30, 2021

March 31, 2022 September 30, 2021

(In thousands, except share amounts)

31 unchanged sentences

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

19,836,885 and 19,672,050 shares issued and outstanding at December 31, 2021 and September 30, 2021, respectively

19,853,649 and 19,672,050 shares issued and outstanding at March 31, 2022 and September 30, 2021, respectively

Additional paid-in capital 272,459 270,837

5 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended December 31,

Three Months Ended March 31, Six Months Ended March 31,

2022 2021 2022 2021

(In thousands, except per share/unit amounts)

16 unchanged sentences

Other Income (Expense):

Interest expense ( 896 ) ( 1,235 )

Interest expense, net ( 678 ) ( 1,165 ) ( 1,574 ) ( 2,400 )

Loss on derivatives ( 49,632 ) ( 24,903 ) ( 54,825 ) ( 38,812 )

Total Other Income (Expense) ( 6,089 ) ( 15,144 )

Net Income (Loss) Before Income Taxes 27,267 ( 8,456 )

Total Other Expense ( 50,310 ) ( 26,068 ) ( 56,399 ) ( 41,212 )

Net Income (Loss) From Continuing Operations Before Income Taxes ( 9,282 ) ( 19,041 ) 17,985 ( 27,497 )

Income tax benefit (expense) 2,114 ( 14,231 ) ( 3,755 ) ( 13,716 )

Net Income (Loss) From Continuing Operations ( 7,168 ) ( 33,272 ) 14,230 ( 41,213 )

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

RILEY EXPLORATION PERMIAN, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - (Continued)

Three Months Ended March 31, Six Months Ended March 31,

2022 2021 2022 2021

(In thousands, except per share/unit amounts)

Discontinued Operations:

Loss from discontinued operations — ( 18,631 ) — ( 18,631 )

Income tax benefit on discontinued operations — 25 — 25

Loss on Discontinued Operations — ( 18,606 ) — ( 18,606 )

Net Income (Loss) ( 7,168 ) ( 51,878 ) 14,230 ( 59,819 )

1 unchanged sentence

Net Income (Loss) Attributable to Common Shareholders/Unitholders $ ( 7,168 ) $ ( 52,452 ) $ 14,230 $ ( 61,310 )

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

Basic $ ( 0.37 ) $ ( 2.33 ) $ 0.73 $ ( 3.15 )

Diluted $ ( 0.37 ) $ ( 2.33 ) $ 0.73 $ ( 3.15 )

Net Loss per Share/Unit from Discontinued Operations:

Basic $ — $ ( 1.28 ) $ — $ ( 1.37 )

Diluted $ — $ ( 1.28 ) $ — $ ( 1.37 )

Net Income (Loss) per Share/Unit:

8 unchanged sentences

(In Thousands)

Three Months Ended December 31, 2021

Six Months Ended March 31, 2022

Members' Equity Shareholders' Equity

7 unchanged sentences

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

Three Months Ended December 31, 2020

Share-based compensation expense — — — — 1,061 — 1,061

Repurchased shares for tax withholding — — ( 13 ) — ( 339 ) — ( 339 )

Issuance of common shares under long-term incentive plan, net — — 30 — — — —

Dividends declared — — — — — ( 6,154 ) ( 6,154 )

Net loss — — — — — ( 7,168 ) ( 7,168 )

Balance, March 31, 2022 — $ — 19,854 $ 20 $ 272,459 $ ( 47,241 ) $ 225,238

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

RILEY EXPLORATION PERMIAN, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN MEMBERS'/SHAREHOLDERS' EQUITY- (Continued)

(In Thousands)

Six Months Ended March 31, 2021

Members' Equity Shareholders' Equity

7 unchanged sentences

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

Purchase of common units under long-term incentive plan ( 3 ) ( 191 ) — — — — —

Dividends on preferred units — ( 574 ) — — — — —

Preferred units converted to common units 512 61,196 — — — — —

Dividends on common units — ( 3,770 ) — — — — —

Unit-based compensation expense — 276 — — — — —

Net loss from January 1, 2021 through February 26, 2021 — ( 19,117 ) — — — — —

Restricted common shares issued in exchange for common units issued under long-term incentive plan ( 24 ) — 198 — — — —

Common shares issued in exchange for common units (effected for 1-for-12 reverse stock split) ( 2,053 ) ( 192,191 ) 16,733 17 192,174 — 192,191

Common shares issued for business combination — — 891 1 26,391 — 26,392

Restricted common shares issued — — 3 — — — —

Share-based compensation expense — — — — 409 — 409

Dividends declared — — — — — ( 4,991 ) ( 4,991 )

Net loss from February 27, 2021 through March 31, 2021 — — — — — ( 32,761 ) ( 32,761 )

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

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

1 unchanged sentence

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended December 31,

Six Months Ended March 31,

(In thousands)

2 unchanged sentences

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Loss from discontinued operations — 18,606

Oil and gas lease expirations 2,053 5,827

5 unchanged sentences

Share-based compensation expense 1,968 4,571

Deferred income tax expense (benefit) 5,756 ( 515 )

Deferred income tax expense 2,863 12,938

Changes in operating assets and liabilities:

2 unchanged sentences

Prepaid expenses and other current assets ( 2,333 ) ( 433 )

Other non-current assets — 1

Accounts payable and accrued liabilities 2,851 1,366

Accounts payable - related parties ( 443 ) —

Income taxes payable 113 —

Revenue payable 4,429 3,253

Advances from joint interest owners — ( 2 )

Advances from related parties — 570

Other liabilities ( 63 ) —

Net Cash Provided By Operating Activities 21,727 17,193

Other current liabilities 654 799

Net Cash Provided by Operating Activities - Continuing Operations 51,722 38,146

Cash Flows from Investing Activities:

Additions to oil and natural gas properties ( 39,182 ) ( 17,133 )

Acquisitions of oil and natural gas properties — ( 171 )

Additions to other property and equipment ( 145 ) ( 380 )

Net Cash Used In Investing Activities ( 29,128 ) ( 9,707 )

Tengasco acquired cash — 859

Net Cash Used in Investing Activities - Continuing Operations ( 39,327 ) ( 16,825 )

Cash Flows from Financing Activities:

3 unchanged sentences

Payment of common share/unit dividends ( 12,196 ) ( 7,841 )

Payment of preferred unit dividends — ( 1,491 )

Common stock repurchased for tax withholding ( 358 ) —

Net Cash Used in Financing Activities ( 1,349 ) ( 7,269 )

Net Increase (Decrease) in Cash and Cash Equivalents ( 8,750 ) 217

Cash and Cash Equivalents, Beginning of Period 17,067 1,660

Cash and Cash Equivalents, End of Period $ 8,317 $ 1,877

Purchase of common units under long-term incentive plan — ( 191 )

Net Cash Used in Financing Activities - Continuing Operations ( 9,853 ) ( 13,152 )

Net Increase in Cash and Cash Equivalents from Continuing Operations 2,542 8,169

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

1 unchanged sentence

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - (Continued)

Three Months Ended December 31,

Six Months Ended March 31,

(In thousands)

Cash Flows from Discontinued Operations:

Operating activities — 238

Investing activities — ( 5 )

Net Increase in Cash and Cash Equivalents from Discontinued Operations — 233

Net Increase in Cash and Cash Equivalents 2,542 8,402

Cash and Cash Equivalents, Beginning of Period 17,067 1,660

Cash and Cash Equivalents, End of Period $ 19,609 $ 10,062

Supplemental Disclosure of Cash Flow Information

Cash Paid For:

Interest $ 495 $ 850

Interest, net of capitalized interest $ 873 $ 1,856

Non-cash Investing and Financing Activities - Continuing Operations:

Changes in capital expenditures in accounts payable and accrued liabilities $ 6,601 $ 9,471

Common share/unit dividends incurred but not paid $ ( 114 ) $ ( 84 )

Asset retirement obligations $ 56 $ 17

Preferred unit dividends paid in kind $ — $ 904

Preferred unit dividends $ — $ 917

Dividends declared on common shares $ — $ 4,991

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

Assets acquired and liabilities assumed in business combination $ — $ 3,497

Common stock issued for business combination $ — $ 26,392

Preferred units converted to common units $ — $ 61,196

Non-cash Investing - Discontinued Operations:

Goodwill incurred in business combination $ — $ 19,057

Assets acquired and liabilities assumed in business combination $ — $ 2,978

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

11 unchanged sentences

(2) Basis of Presentation

These unaudited condensed consolidated financial statements as of December 31, 2021 and for the three months ended December 31, 2021 and 2020 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.

These unaudited condensed consolidated financial statements as of March 31, 2022 and for the three and six months ended March 31, 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.

8 unchanged sentences

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 total liabilities and results of operations or cash flows.

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

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 months ended December 31, 2021, 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 and other factors.

The results of operations for the three and six months ended March 31, 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.

markets and other factors.

(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.

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.

RILEY EXPLORATION PERMIAN, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

The Company evaluates these estimates on an ongoing basis, using historical experience, consultation with experts and other methods the Company considers reasonable in the particular circumstances.

1 unchanged sentence

Any effects on the Company’s business, financial position or results of operations resulting from revisions to these estimates are recorded in the period in which the facts that give rise to the revision become known.

Significant items subject to such estimates and assumptions include, but are not limited to, estimates of proved oil and natural gas reserves and related present value estimates of future net cash flows therefrom, the carrying value of oil and natural gas properties, accounts receivable, accrued capital expenditures and operating expenses, AROs, the fair value determination of acquired assets and assumed liabilities, certain tax accruals and the fair value of derivatives.

Significant items subject to such estimates and assumptions include, but are not limited to, estimates of proved oil and natural gas reserves and related present value estimates of future net cash flows therefrom, the carrying value of oil and natural gas properties, accounts receivable, accrued capital expenditures and operating expenses, ARO, the fair value determination of acquired assets and assumed liabilities, certain tax accruals and the fair value of derivatives.

Accounts Receivable

Accounts receivable is summarized below:

December 31, 2021 September 30, 2021

March 31, 2022 September 30, 2021

(In thousands)

1 unchanged sentence

Joint interest accounts receivable 379 413

Realized derivative receivable — 42

Other accounts receivable 24 52

Total accounts receivable $ 25,782 $ 17,473

The Company had no allowance for doubtful accounts at December 31, 2021 and September 30, 2021.

The Company had no allowance for doubtful accounts at March 31, 2022 and September 30, 2021.

Other Non-Current Assets, Net

Other non-current assets consisted of the following:

December 31, 2021 September 30, 2021

March 31, 2022 September 30, 2021

(In thousands)

6 unchanged sentences

Accrued liabilities consisted of the following:

December 31, 2021 September 30, 2021

March 31, 2022 September 30, 2021

(In thousands)

4 unchanged sentences

Total accrued liabilities $ 21,971 $ 18,555

RILEY EXPLORATION PERMIAN, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Asset Retirement Obligations

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

December 31, 2021 September 30, 2021

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

March 31, 2022 September 30, 2021

(In thousands)

9 unchanged sentences

(1) Current ARO is included within other current liabilities on the accompanying condensed consolidated balance sheets.

At the closing of the Merger, the Company determined it had two reporting units, and the entire goodwill balance was included in the reporting unit acquired in the Merger (the "Kansas Reporting Unit").

The Company did not fully integrate the Kansas Reporting Unit in the Company's operations as it was deemed to be held for sale upon acquisition.

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 three and six months ended March 31, 2021.

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

Revenue Recognition

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

Three Months Ended December 31,

Three Months Ended March 31, Six Months Ended March 31,

2022 2021 2022 2021

(In thousands)

10 unchanged sentences

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

RILEY EXPLORATION PERMIAN, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Issued Accounting Standards Not Yet Adopted

4 unchanged sentences

This ASU was effective upon the issuance and its optional relief can be applied through December 31, 2022.

RILEY EXPLORATION PERMIAN, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(4) Acquisitions

5 unchanged sentences

The combination between REP LLC and Tengasco qualified as a business combination with REP LLC being treated as the accounting acquirer.

The assets acquired and liabilities assumed were recognized on the consolidated balance sheet at fair value as of the acquisition date.

The assets acquired and liabilities assumed were recognized on the condensed consolidated balance sheet at fair value as of the acquisition date.

The consideration paid in the Merger by REP LLC as the accounting acquirer totaled approximately $ 26.4 million and was determined based on the closing price of Tengasco’s common stock on February 26, 2021 and the total number of shares outstanding immediately prior to the Merger.

4 unchanged sentences

Total consideration $ 26,392

The Company incurred $ 1.0 million of costs related to the Merger during the three months ended December 31, 2020, which is included in transaction costs on the condensed consolidated statement of operations.

The Company incurred approximately $ 5.0 million of related costs for the Merger, of which $ 2.2 million and $ 3.1 million was expensed for the three and six months ended March 31, 2021 as transaction costs on the condensed consolidated statement of operations.

RILEY EXPLORATION PERMIAN, INC.

24 unchanged sentences

Pro Forma Operating Results (Unaudited)

The following unaudited pro forma combined results for the three months ended December 31, 2020 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 $ 0.9 million of transaction costs being reclassified to the first quarter of fiscal year 2020 which were incurred during the three months ended December 31, 2020.

The following unaudited pro forma combined results for the three and six months ended March 31, 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 $ 3.1 million of transaction costs being reclassified to the first quarter of fiscal year 2020 instead of $ 2.1 million and $ 1.0 million of transaction costs recorded in the three months ended March 31, 2021 and December 31, 2020, respectively.

Additionally, the Company adjusted for $ 0.9 million of oil and natural gas property impairment 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 using a 21% tax rate.

The common stock was also adjusted for the

Also, the unaudited pro forma information has been tax

RILEY EXPLORATION PERMIAN, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

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 December 31, 2020

affected 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 March 31, 2021 Six Months Ended March 31, 2021

(In thousands, except per share/unit amounts)

Total Revenues $ 37,259 $ 60,273

Pro Forma Net Income (Loss) before Taxes ( 6,647 )

Pro forma income tax benefit (expense) 1,396

Pro Forma Net Income (Loss) $ ( 5,251 )

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

Pro Forma Net Loss before Taxes ( 16,902 ) ( 23,339 )

Pro forma income tax benefit 3,549 4,901

Pro Forma Net Loss $ ( 13,353 ) $ ( 18,438 )

Net Loss per Share/Unit from Continuing Operations:

Basic $ ( 0.96 ) $ ( 1.33 )

4 unchanged sentences

Oil and natural gas properties are summarized below:

December 31, 2021 September 30, 2021

March 31, 2022 September 30, 2021

(In thousands)

5 unchanged sentences

Total oil and natural gas properties, net $ 376,531 $ 345,797

Depletion and amortization expense for proved oil and natural gas properties was $ 6.7 million and $ 5.9 million for the three months ended December 31, 2021 and 2020, respectively.

The Company incurred $ 0.6 million and $ 0.4 million of exploration costs, which primarily related to the expiration of oil and natural gas leases for the three months ended December 31, 2021 and 2020, respectively.

Depletion and amortization expense for proved oil and natural gas properties was $ 6.4 million and $ 6.1 million respectively, for the three months ended March 31, 2022 and 2021.

Depletion and amortization expense for proved oil and natural gas properties was $ 13.1 million and $ 12.0 million, respectively, for the six months ended March 31, 2022 and 2021.

Exploration expense was $ 1.5 million and $ 5.5 million, respectively, for the three months ended March 31, 2022 and 2021, and $ 2.1 million and $ 5.9 million, respectively, for the six months ended March 31, 2022 and 2021.

Exploration expense was primarily attributable to the expiration of oil and natural gas leases for the three and six months ended March 31, 2022 and 2021.

RILEY EXPLORATION PERMIAN, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(6) Derivative Instruments

1 unchanged sentence

The Company uses commodity based derivative contracts to reduce exposure to fluctuations in oil and natural gas prices.

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

For the three months ended December 31, 2021 and 2020, 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 (expenses) in the condensed consolidated statement of operations.

RILEY EXPLORATION PERMIAN, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

As of December 31, 2021, 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 December 31, 2021, related to oil and natural gas production:

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

For the three and six months ended March 31, 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 (expenses) in the condensed consolidated statement of operations.

As of March 31, 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 March 31, 2022, related to oil and natural gas production:

Weighted Average Price

Calendar Quarter Notional Volume Fixed Put Call

Calendar Quarter / Year Notional Volume Fixed Put Call

Oil Swaps (Bbl)

2 unchanged sentences

Q4 2022 270,000 $ 56.03 $ — $ —

2023 720,000 $ 53.27 $ — $ —

3 unchanged sentences

Q4 2022 540,000 $ 3.26 $ — $ —

Oil Collars (Bbl)

2 unchanged sentences

Q4 2022 90,000 $ — $ 35.00 $ 42.63

2023 — $ — $ — $ —

2024 3,000 $ — $ 50.00 $ 88.00

Oil Basis (Bbl)

2 unchanged sentences

Q4 2022 240,000 $ 0.41 $ — $ —

Interest Rate Contracts

The Company has entered into floating-to-fixed interest rate swaps (we receive a floating market rate equal to one-month LIBOR and pay 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 December 31, 2021:

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.

RILEY EXPLORATION PERMIAN, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

The following table summarizes the open interest rate derivative positions as of March 31, 2022:

Open Coverage Period Notional Amount Fixed Rate

1 unchanged sentence

Floating-to-Fixed Interest Rate Swaps

January 2022 - September 2023 $ 40,000 0.24 %

RILEY EXPLORATION PERMIAN, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

April 2022 - September 2023 $ 40,000 0.24 %

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 December 31, 2021 and September 30, 2021:

December 31, 2021

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

March 31, 2022

Balance Sheet Classification Gross Fair Value Amounts Netted Net Fair Value

13 unchanged sentences

Total $ ( 50,970 ) $ — $ ( 50,970 )

The following table presents the Company's derivative activities for the three months ended December 31, 2021 and 2020:

Three Months Ended December 31,

The following table presents the Company's derivative activities for the three and six months ended March 31, 2022 and 2021:

Three Months Ended March 31, Six Months Ended March 31,

2022 2021 2022 2021

(In thousands)

2 unchanged sentences

Settlements on derivatives 18,375 2,594 34,389 ( 2,579 )

Fair value of net asset (liability), end of period $ ( 40,149 ) $ 2,839

Fair value of net liability, end of period $ ( 71,406 ) $ ( 19,470 ) $ ( 71,406 ) $ ( 19,470 )

(7) Fair Value Measurements

4 unchanged sentences

Level 3 are unobservable inputs for an asset or liability.

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

RILEY EXPLORATION PERMIAN, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

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.

2 unchanged sentences

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 December 31, 2021 and September 30, 2021, by Level within the fair value hierarchy:

December 31, 2021

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

March 31, 2022

Level 1 Level 2 Level 3 Total

19 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.

RILEY EXPLORATION PERMIAN, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

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

Three Months Ended December 31,

Three Months Ended March 31, Six Months Ended March 31,

2022 2021 2022 2021

(In thousands)

Combo $ 300 $ 300 $ 600 $ 600

REG 300 300 600 600

Contract services - related parties $ 600 $ 600 $ 1,200 $ 1,200

Cost of contract services $ 85 $ 91 $ 235 $ 239

The Company had amounts (payable to) and due from Combo of $( 0.2 ) million and $ 0.5 million at December 31, 2021 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.

There were no amounts due to the Company from REG as of December 31, 2021 and September 30, 2021.

The Company had amounts due from Combo of $ 1.1 million and $ 0.5 million at March 31, 2022 and September 30, 2021, respectively, which are reflected in accounts receivable - related parties on the accompanying condensed consolidated balance sheets.

There were no amounts due to the Company from REG as of March 31, 2022 and September 30, 2021.

Consulting and Legal Fees

RILEY EXPLORATION PERMIAN, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

The Company has an engagement agreement with di Santo Law PLLC ("di Santo Law"), a law firm owned by Beth di Santo, a member of our Board of Directors, pursuant to which di Santo Law's attorneys provide legal services to the Company.

For the three months ended December 31, 2021 and 2020, the Company incurred legal fees from di Santo Law of approximately $ 0.2 million and $ 0.2 million, respectively.

As of December 31, 2021 and September 30, 2021, the Company had approximately $ 0.2 million and $ 0.8 million in amounts accrued for di Santo Law.

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

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 $ 30,000 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.

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 $ 0.2 million for both of the three month periods ended March 31, 2022 and 2021.The Company incurred legal fees from di Santo Law of approximately $ 0.4 million for both of the six month periods ended March 31, 2022 and 2021.

As of March 31, 2022 and September 30, 2021, the Company had approximately $ 0.4 million and $ 0.8 million accrued for di Santo Law.

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

(9) Revolving Credit Facility

On September 28, 2017, REP LLC entered into a credit agreement (the "Credit Agreement") to establish a senior secured revolving credit facility with a syndicate of banks including SunTrust Bank, now Truist Bank as successor by merger, as administrative agent.

The revolving credit facility had an initial borrowing base of $ 25 million with a maximum facility amount of $ 500 million.

On October 12, 2021, the revolving credit facility was amended to, among other things, increase the borrowing base to $ 175 million from $ 135 million, provide for the transition away from LIBOR to an alternative reference rate and change the requirements for Restricted Payments (as defined in the Credit Agreement) to consider the Company's total leverage ratio and available free cash flow under certain circumstances.

Substantially all of the Company’s assets are pledged to secure the revolving credit facility.

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

The revolving credit facility had an initial borrowing base of $ 25 million with a maximum facility amount of $ 500 million.

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 maturing date to April 2026, replace LIBOR with SOFR and changed the requirements for hedging to be based on utilization of the borrowing base and the Company's leverage ratio.

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.

3 unchanged sentences

The annual interest rate on each Base Rate Loan is (i) the greatest of (a) the administrative agent’s prime lending rate, (b) the federal funds rate plus 0.5 % per annum or (c) the adjusted LIBOR determined on a daily basis for an interest period of one-month, plus 1.00 % per annum, plus (ii) a margin between 1.75 % and 2.75 % (depending on the borrowing base utilization percentage).

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 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 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.

If the Company's leverage ratio, after giving pro forma effect to such Restricted Payments (as defined in the Credit Agreement), is below 2.0 to 1.0, then an additional test of free cash flow is applied, and the Company will only be permitted to make such Restricted Payments if such payment does not exceed the Company's free cash flow.

The Credit Agreement also contains a total leverage ratio for Restricted Payments after giving pro forma effect to

RILEY EXPLORATION PERMIAN, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

such Restricted Payments, which includes payments to any holder of the Company's shares, would not exceed 2.50 to 1.0.

If the Company's leverage ratio, after giving pro forma effect to such Restricted Payments (as defined in the Credit Agreement), is above 2.0 to 1.0, then an additional test of free cash flow is applied, and the Company will only be permitted to make such Restricted Payments if such payment does not exceed the Company's free cash flow.

The Company is also required to limit its cash balance to less than $ 15 million or 10 % of the borrowing base, whichever is greater.

1 unchanged sentence

The Credit Agreement also contains other customary affirmative and negative covenants and events of default.

As of December 31, 2021, the Company's minimum hedging requirement was 50 % of its PDP volumes on a rolling 24 month basis.

As of March 31, 2022, the Company's minimum hedging requirement was 50 % of its proved developed producing ("PDP") volumes on a rolling 24 month basis.

The following table summarizes the Company's interest expense:

Three Months Ended December 31,

Three Months Ended March 31, Six Months Ended March 31,

2022 2021 2022 2021

(In thousands)

Interest expense $ 512 $ 1,041

Interest expense, net of capitalized interest $ 384 $ 962 $ 896 $ 2,002

Amortization of deferred financing costs (1)

191 160 473 316

Unused commitment fees 103 43 205 82

Total interest expense $ 896 $ 1,235

Total interest expense, net $ 678 $ 1,165 $ 1,574 $ 2,400

_____________________

(1) Includes $ 0.1 million of unamortized deferred financing costs written off during the three months ended December 31, 2021 in conjunction with the amendment of the Credit Agreement in October 2021.

RILEY EXPLORATION PERMIAN, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

As of December 31, 2021 and September 30, 2021, the weighted average interest rate on outstanding borrowings under the revolving credit facility was 3.10 % and 2.83 %, respectively.

As of December 31, 2021 and September 30, 2021, the Company was in compliance with all covenants contained in the Credit Agreement and had $ 65 million and $ 60 million, respectively, of outstanding borrowings and an additional $ 110 million and $ 75 million, respectively, available under the borrowing base.

As of March 31, 2022 and September 30, 2021, the weighted average interest rate on outstanding borrowings under the revolving credit facility was 3.46 % and 2.83 %, respectively.

As of March 31, 2022, the Company was in compliance with all covenants contained in the Credit Agreement and had $ 63 million of outstanding borrowings and an additional $ 112 million available under the borrowing base.

(10) Members’/Shareholders' Equity

For the three months ended December 31, 2021 and 2020, the Company declared quarterly dividends on its common stock and common units totaling approximately $ 6.1 million and $ 3.8 million, respectively.

For the three months ended March 31, 2022 and 2021, the Company declared quarterly dividends on its common stock and common units totaling approximately $ 6.2 million and $ 8.8 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 814,707 shares remained available as of December 31, 2021.

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 782,529 shares remained available as of March 31, 2022.

RILEY EXPLORATION PERMIAN, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

2021 Long-Term Incentive Plan

Restricted Shares:

The Company granted 174,575 restricted shares to executive officers and employees of the Company during the three months ended December 31, 2021.

The restricted shares granted to executive officers and employees vest over a period of 36 months with a grant date fair value of $ 23.46 .

The holder of these restricted shares receives dividends, in arrears, once the shares vest.

The Company has accrued for these dividends which are reported in accrued liabilities and other non-current liabilities.

The following table presents the Company's restricted stock activity during the three months ended December 31, 2021 under the 2021 LTIP:

The following table presents the Company's restricted stock activity during the six months ended March 31, 2022 under the 2021 LTIP:

2021 Long-Term Incentive Plan

4 unchanged sentences

Forfeited ( 2,774 ) $ 23.46

Unvested at December 31, 2021 366,789 $ 19.41

During the three months ended December 31, 2021, total share-based compensation expense of $ 1.0 million 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.

Unvested at March 31, 2022

332,725 $ 20.92

For the three months ended March 31, 2022 and 2021, the total share-based compensation expense of $ 1.0 million and $ 4.6 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 six months ended March 31, 2022 and 2021, the total share-based compensation expense of $ 2.0 million and $ 4.6 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 $ 5.3 million of additional share-based compensation expense will be recognized over the weighted average life of 25 months for the restricted share awards granted under the 2021 LTIP.

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.

RILEY EXPLORATION PERMIAN, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Restricted Units:

The Company granted 13,309 restricted units to executives and employees of the Company during the three months ended December 31, 2020.

The Company granted 13,309 restricted units to executives and employees of the Company during the six months ended March 31, 2021 under the 2018 LTIP.

These restricted units vest over a period of 36 months with a fair value price of $ 112.47 .

1 unchanged sentence

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 $ 0.4 million, respectively, is included in general and administrative costs on the Company's condensed consolidated statement of operations for all of the issuances outstanding for the three months ended December 31, 2020.

Total unit-based compensation expense of $ 0.3 million and $ 0.7 million, respectively, is for all of the issuances outstanding for the three and six months ended March 31, 2021.

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

(11) Income Taxes

3 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 on the date of the change.

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 December 31,

Three Months Ended March 31, Six Months Ended March 31,

2022 2021 2022 2021

(In thousands)

1 unchanged sentence

Federal $ 768 $ 780 $ 768 $ 780

State 11 363 124 ( 2 )

Total current income tax expense 779 1,143 892 778

5 unchanged sentences

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

Three Months Ended December 31,

Three Months Ended March 31, Six Months Ended March 31,

2022 2021 2022 2021

Tax at statutory rate 21.0 % 21.0 % 21.0 % 21.0 %

Nondeductible compensation ( 0.4 ) % ( 0.3 ) % 0.3 % ( 0.2 ) %

Transaction costs — % ( 0.4 ) % — % ( 0.3 ) %

Stock compensation 1.9 % — % ( 1.4 ) % 0.1 %

State income taxes, net of federal benefit 0.4 % ( 2.5 ) % 0.9 % — %

Change in tax status — % ( 71.6 ) % — % ( 49.6 ) %

Income subject to taxation by REP LLC's unitholders — % ( 20.9 ) % — % ( 20.9 ) %

2 unchanged sentences

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

Therefore, the Company has not established any significant reserves for uncertain tax positions.

(12) Discontinued Operations and Assets Held For Sale

Kansas Reporting Unit

On March 10, 2021, the Company entered into a PSA to divest of the Kansas Reporting Unit for an agreed upon purchase price of $ 3.5 million before certain closing adjustments.

In addition, the Company also agreed to assign to the buyer its lease associated with Tengasco's former corporate office in Greenwood Village, Colorado.

With Tengasco qualifying as a business and the Kansas Reporting Unit making up a significant portion of the assets of Tengasco, the Company concluded that the transaction met the requirements of assets held for sale and discontinued operations upon the acquisition date.

The sale closed on April 2, 2021 for an adjusted purchase price of $ 3.3 million, after customary closing adjustments.

RILEY EXPLORATION PERMIAN, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

would not have a material effect on the consolidated financial statements.

Therefore, the Company has not established any significant reserves for uncertain tax positions.

The following table presents the components of the loss on discontinued operations reported in the condensed consolidated statement of operations for the three months ended March 31, 2021 (in thousands):

Oil and natural gas sales $ —

Total revenues —

Lease operating expenses 115

Goodwill impairment 18,516

Total expenses 18,631

Loss from discontinued operations before income taxes ( 18,631 )

Income tax benefit 25

Net loss from discontinued operations, net of tax $ ( 18,606 )

The Company did not have any discontinued operations during the three months ended December 31, 2020 or for the three and six months ended March 31, 2022.

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

2 unchanged sentences

The Company calculated net income or loss per share/unit using the two-class method for those shares.

The table below sets forth the computation of basic and diluted net income (loss) per share/unit for the three months ended December 31, 2021 and 2020:

Three Months Ended December 31,

The table below sets forth the computation of basic and diluted net income (loss) per share/unit for the three and six months ended March 31, 2022 and 2021:

Three Months Ended March 31, Six Months Ended March 31,

2022 2021 2022 2021

(In thousands, except per share/unit)

Continuing Operations:

Net income (loss) - Diluted $ ( 7,168 ) $ ( 33,272 ) $ 14,230 $ ( 41,213 )

6 unchanged sentences

Diluted weighted-average common shares/units outstanding 19,501 14,542 19,584 13,575

Continuing Operations:

Basic net income (loss) per common share/unit $ ( 0.37 ) $ ( 2.33 ) $ 0.73 $ ( 3.15 )

1 unchanged sentence

_____________________________________________________

(1) Used in basic and diluted net loss per share calculation for December 31, 2020 since the Company was in a net loss position.

For the three months ended December 31, 2021 and 2020, 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 December 31,

(In thousands)

Series A preferred units — 4,170

(1) Used in basic and diluted net loss per share 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 six months ended March 31, 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 March 31, Six Months Ended March 31,

2022 2021 2022 2021

Restricted shares/units 332,725 103,276 233,717 70,764

7 unchanged sentences

("DDEP"), an entity substantially owned by Salas, and the Company are jointly and severally liable for the damages incurred by Hoactzin.

In connection with the

RILEY EXPLORATION PERMIAN, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Company’s merger in February 2021, Salas resigned his position from the Company’s Board and no longer holds any position as an officer or director of the Company.

In connection with the Company’s merger in February 2021, Salas resigned his position from the Company’s Board and no longer holds any position as an officer or director of the Company.

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.

As of the date of this Quarterly Report, the Company has filed its initial Answer denying the allegations against it.

Due to the nature of the Company's business, the Company may at times be subject to claims and legal actions.

The Company accrues liabilities when it is probable that future costs will be incurred, and such costs can be reasonably estimated.

Such accruals are based on developments to date and the Company’s estimates of the outcomes of these matters.

The Company did not recognize any material liability as of December 31, 2021 and September 30, 2021.

At this time, management does not expect the impact of this litigation to be material to our financial position or results of operations.

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 March 31, 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.

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 December 31, 2021 or September 30, 2021.

The Company had no environmental liabilities as of March 31, 2022 or September 30, 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 partner, 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.

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.

2 unchanged sentences

In August 2021, the Company entered into a purchase agreement for supplies for its EOR project.

Under the agreement, the Company has remaining commitments totaling approximately $ 0.8 million and $ 2.6 million to purchase supplies by January 2022 and April 2022, respectively.

Under the agreement, the Company has remaining commitments totaling approximately $ 2.6 million to purchase supplies by April 2022.

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 $ 2.1 million, and the equipment will be delivered within 29 weeks of executing the purchase order.

(15) Subsequent Events

On January 12, 2022, the Board of Directors of the Company declared a cash dividend of $ 0.31 per share of common stock, payable on February 9, 2022 to its shareholders of record at the close of business on January 26, 2022.

On January 25, 2022, the Company and di Santo Law PLLC, 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.

RILEY EXPLORATION PERMIAN, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

On April 11, 2022, the Board of Directors of the Company declared a cash dividend of $ 0.31 per share of common stock, payable on May 5, 2022 to its shareholders of record at the close of business on April 21, 2022.

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.

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 maturing date to April 2026, replace LIBOR with the SOFR and changed the requirements for hedging to be based on utilization of the borrowing base and the Company's leverage ratio.

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