Riley Exploration Permian, Inc. (REPX) Cash Flow Statement

The recurring pattern of OCF surpassing NI, particularly the 3.90x ratio in 2025Q3 and 6.07x in 2024Q4, indicates that D&A is a major reconciling item, masking strong underlying cash generation from operations. However, the decoupling in 2026Q2, where a large net income was paired with a lower OCF ratio, may signal a shift in working capital or non-cash adjustments that warrants monitoring.

The FCF margin trajectory is erratic, swinging from double-digit positives to a negative value in 2026Q2 as CapEx surged to 40.1% of revenue. This suggests the company is in a heavy investment phase, prioritizing production growth over immediate cash yield, a trend that contrasts with the stable, positive FCF margins of peers like Civitas and Matador.

The high and variable CapEx intensity, far exceeding maintenance levels implied by D&A, suggests REPX is funding significant exploration or development activity, likely tied to the Q4 2025 acquisition. This elevated spending is currently consuming the majority of operating cash flow, constraining free cash flow despite strong operational performance.

The large positive WC change in 2025Q4 contributed meaningfully to operating cash flow that quarter, while the negative swings in early 2025 and mid-2024 acted as a drag. This pattern suggests inconsistent working capital management or timing effects, which investors should monitor as it can mask the true cash conversion efficiency of the core business.

This long-term positive divergence, primarily driven by substantial non-cash depreciation charges exceeding cumulative D&A of ~$220M, suggests the company's core operations are more cash-productive than the income statement implies. However, this structural gap is narrowing in the most recent quarter, where the ratio fell below 1.0.