REPX shorts unwind ahead of earnings

Riley Exploration Permian heads into its May 7 earnings call with shorts in full retreat and options traders leaning firmly bullish — a combination that sharpens the stakes on tomorrow's print considerably.

The short-side story is one of rapid unwinding. Short interest has almost halved from its late-March peak above 5.3% of the free float, falling to 3.75% now. The decline has been steady and broad: positions were cut nearly every week through April as the stock recovered from its tariff-shock lows, and April's one-month drawdown in short shares is roughly 29%. The move is too large and too sustained to be noise. Availability remains very loose — borrow is cheap at 0.41% cost-to-borrow, down sharply from above 0.68% in early April, and the lending pool is far from full — so there is nothing structural in the borrow market forcing shorts to cover. They are choosing to leave.

Options positioning reinforces the bullish lean. The put/call ratio is just 0.37, running close to its 20-day average of 0.35 — roughly in the middle of its recent range, and nowhere near the defensive readings seen during the April 6-7 sell-off when it spiked above 0.45. The 52-week range on the PCR stretches from 0.14 to 1.97, so the current level places options traders firmly in the call-heavy camp going into results.

The Street is broadly positive, though analyst coverage is thin. Truist Securities initiated with a Buy and a $47 target in late March, while Freedom Broker maintained Buy after trimming its target from $56 to $52 in mid-March. The mean target of $48 implies roughly 30% upside to the current $36.85 price. The factor scorecard adds texture: the company ranks in the 96th percentile on earnings surprise, the 83rd percentile on 30-day EPS momentum, and the 98th percentile on dividend score. On the other side, EV/EBITDA has compressed over the past month, ticking down to 3.1x — a valuation that already prices in meaningful skepticism on commodity prices. The PE of 5.6x tells a similar story.

The ownership register flags a significant transition underway. Bluescape Energy Partners, the private equity backer that drove the Silverback acquisition, unloaded the bulk of its position in early March — roughly 964,000 shares in four days at prices ranging from ~$29.65 to ~$32.80, worth approximately $30.4 million. Its remaining holding has since dropped to 1.05 million shares, down from over 4 million. Meanwhile Riley Exploration Group LLC trimmed 1 million shares in early April, and founder Bobby Riley sold ~11,400 shares on April 1 alongside the CFO, COO, and CIO in what looks like a coordinated compensation-related distribution. On the institutional side, Yorktown Partners added 505,000 shares in their most recent filing — a meaningful increase from a long-term energy-focused holder.

History around earnings is instructive here. The last two confirmed results events both delivered strong reactions: the March 5 print moved the stock up almost 10% the next day and 13% over the following week, while the prior event produced a one-day jump of 11.3% and a five-day gain of nearly 14%. The ORTEX short score has also eased materially, falling from above 38 in late April to 34.4 now — consistent with a market that is de-risking the short thesis rather than building it. Close peers CHRD and PR both gained more than 6-7% on the week, with MTDR lagging slightly at 2.9%, broadly in line with REPX's own 3% weekly gain.

Tomorrow's call will test whether the Q1 production and free cash flow numbers justify the short cover rally — and whether the Silverback integration has delivered the inventory and oil-rate improvements the bull case is built on.