Riley Exploration Permian, Inc.

In addition to the information set forth in this Quarterly Report, the risks that are discussed in the Company's Annual Report on Form 10-K for the year ended December 31, 2025, under the headings "Part I, Item 1 and 2. Business and Properties," "Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Part I, Item 1A. Risk Factors" should be carefully considered, as such risks could materially affect the Company's business, financial condition or future results. Other than those noted below, there have been no material changes in the Company's risk factors from those that were described in the Company's 2025 Annual Report.

Sustained negative or depressed natural gas prices at the Waha Hub, and widening basis differentials between Waha and Henry Hub, have adversely affected, and will continue to adversely affect, our realized natural gas and NGL prices. At times, we may not be able to fully recover our GP&T costs associated with the processing of our natural gas and recovery of our NGLs, resulting in negative natural gas and NGL realized prices, negative revenues and a reduction in our results of operations.

Substantially all of our natural gas production is sold at prices referenced, directly or indirectly, to the Waha Hub in West Texas. The Waha Hub has experienced sustained periods of negative cash pricing driven by Permian Basin natural gas production outpacing available pipeline takeaway capacity to downstream markets along the Texas Gulf Coast, Mexico and the U.S. West Coast. Waha daily cash prices periodically trade in negative territory including a sustained period of consecutive negative days in the first quarter of 2026. This trend has continued into the second quarter of 2026.

At times of negative gas prices, we may have insufficient NGL revenues to fully cover our GP&T costs resulting in negative realized prices for both natural gas and NGLs. Negative or depressed Waha pricing may cause us to curtail, defer, shut in wells or take other actions where the wellhead economics no longer support continued production after deduction of our GP&T costs and related fees. Prolonged negative pricing may also adversely affect the estimated economically producible quantity of our proved reserves and may trigger non-cash impairments to our oil and natural gas reserves.