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In a recent filing with the SEC, Riley Exploration Permian, Inc. (NYSE American:REPX), a profitable oil and gas company with a market capitalization of $649 million, announced the approval of new compensation arrangements for its executive officers, including the CEO and CFO. According to InvestingPro analysis, the company appears undervalued at its current trading price, with strong profitability metrics including a 75% gross margin. The changes, sanctioned by the Compensation Committee on March 24, 2025, encompass both short-term and long-term incentive plans designed to align executive rewards with the company’s performance and stockholder interests.
The short-term incentive plan (STIP) for 2025 sets payout targets as a percentage of base salary, ranging from 50% to 200% based on the achievement of specific performance metrics. These metrics include oil production, lease operating expenses, general and administrative expenses, upstream free cash flow, and health, safety, and environmental standards. The company’s focus on financial performance is reflected in its strong operational results, with revenue growth of 9.4% and an EBITDA of $274 million in the last twelve months. CEO Bobby D. Riley’s target is set at 100% of his base salary, while Philip Riley, presumably another executive officer, has a target of 80%.
Long-term incentives for 2025 (2025 LTI Award) include both time-based and performance-based restricted stock awards. The time-based awards will vest over three years, while the performance-based awards will vest in 2028, contingent upon the company’s total shareholder return performance relative to its peer group. Bobby D. Riley is set to receive 33,679 performance-based shares and 78,584 time-based shares, and Philip Riley will receive 15,252 performance-based shares and 35,588 time-based shares.
Additionally, the company has amended and restated employment agreements with its named executive officers, effective April 8, 2025. These agreements outline terms of employment, including base salary, benefits, severance, and change in control benefits. They also include provisions for annual short-term and long-term incentive compensation, as well as restrictive covenants related to competition, confidentiality, and non-solicitation.
The new compensation arrangements reflect Riley Exploration Permian’s commitment to maintaining competitive executive compensation practices within the industry. The information is based on a press release statement filed with the SEC.
In other recent news, Riley Exploration Permian Inc. reported its fourth-quarter 2024 earnings, which revealed a notable shortfall in expectations. The company announced an earnings per share (EPS) of $0.96, significantly missing the forecasted $1.60. Revenue also came in below expectations at $102.7 million, compared to the anticipated $106.26 million. Despite these results, the company experienced a 22% increase in total production for the year, supported by operational efficiencies and strategic investments. Riley Exploration Permian is also making significant investments in infrastructure and power projects, which are expected to enhance its competitive position. Looking forward, the company forecasts a total production growth of 9-14% for 2025. On the analyst front, there was no specific mention of upgrades or downgrades, but firms continue to monitor Riley Exploration Permian’s strategic initiatives closely. The company’s future plans include increased drilling and completion capital expenditures by 9%, with a focus on New Mexico’s midstream infrastructure.
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