14 Best American Energy Stocks To Buy According to Analysts

8. Riley Exploration Permian, Inc. (NYSE:REPX)

Number of Hedge Fund Investors  in Q1 2024: 9

Average Analyst Share Price Target Upside: 65.91%

Average Analyst Share Price Target: $47.25

Riley Exploration Permian, Inc. (NYSE:REPX) produces oil and gas in Texas and New Mexico. Like other firms, it is on an acquisition spree, and the second half of 2023 was a game changer for Riley Exploration Permian, Inc. (NYSE:REPX). During Q3 and Q4 2023, its free cash flow sat at $21.5 million and $44.8 million, respectively. The Q1 2024 FCF figure was $21 million, which was quite an improvement over the year ago quarter’s negative $2.1 million. Its 2023 performance came on the back of a New Mexico acquisition, and Riley Exploration Permian, Inc. (NYSE:REPX) is also using its strong financial performance to further expand its presence in the region by announcing a new New Mexico acquisition in April 2024. Riley Exploration Permian, Inc. (NYSE:REPX) is also a profitable company, and its trailing twelve month revenue of $407 million marks an 8.8% growth over 2023’s figures. The higher Dril-Quip, Inc. (NYSE:DRQ)’s FCF is, the greater leeway it has to further grow its production base through acquisitions and also return capital to shareholders once the new projects start generating consistent revenue.

Commenting on the latest acquisition, Riley Exploration Permian, Inc. (NYSE:REPX)’s commented during the Q1 2024 earnings call:

“On Tuesday of this week, we closed our previously announced bolt-on acquisition in Eddy County, New Mexico. This will expand our existing operating footprint in New Mexico by adding 13,900 contiguous net acres.

The acreage is largely underdeveloped but is 99% held by production through legacy vertical wells. This acquisition enhances the optionality of our total development inventory by providing high-quality horizontal drilling locations, primarily in the Yeso trend, including the Blinebry, Glorieta and Paddock formations. Furthermore, the acquisition includes valuable infrastructure such as saltwater disposal wells which will optimize operations across our existing New Mexico footprint. We remain focused on creating long-term value for our shareholders and delivering predictable and sustainable growth for years to come. To achieve this, our capital strategy prioritizes discipline to allocate resources to support our growth objectives, while also delivering on our commitment to strengthen the balance sheet and return capital to shareholders in the form of dividends.”