Riley Exploration sells New Mexico midstream project

Riley Exploration’s (REPX) wholly-owned subsidiary, Riley Exploration – Permian, entered into a purchase and sale agreement with Targa Northern Delaware pursuant to which the company sold to buyer all of the membership interests in Dovetail Midstream, a wholly-owned subsidiary of the company for an aggregate cash purchase price of approximately $111M, subject to customary purchase price adjustments. Dovetail’s assets primarily consist of natural gas gathering infrastructure serving production in Eddy County, New Mexico. Closing proceeds from the transaction will be used to reduce borrowings on the company’s credit facility and to pay income taxes and transaction costs associated with the transaction. The company also has the right to earn up to an additional $60M in cash payments contingent on achieving certain volume-based performance thresholds over a five-year period. The purchase agreement also provides for the sale to the buyer of certain compressor station assets at a subsequent closing date anticipated to occur no later than Q1 2026 for an aggregate cash purchase price of approximately $10M, subject to the satisfaction of certain closing conditions.