Press Release

The Company highlights the following accomplishments:

• Executed the spin-off from LINN Energy, Inc. on August 7, 2018
• Returned more than $155 million of capital to shareholders through share repurchases
• Sold Arkoma Basin assets for proceeds of approximately $65 million, a premium to PDP PV-10 value
• Outperformed adjusted EBITDAX guidance for the last two quarters
• Fourth quarter 2018 average production exceeded midpoint of guidance
• Capital investment over the last two quarters of approximately $61 million was 35% lower than guidance
• Blue Mountain commissioned its Cryo I plant to its design capacity of 250 MMcf/d
• Blue Mountain signed an agreement to provide water gathering services to Roan Resources beginning in 2019

The Company’s strategic initiatives for 2019 include:

• Focusing upstream capital on high-return projects that maintain production and delineate the NW STACK while still generating significant free cash flow
• Continuing to use cash on hand, free cash flow, and opportunistic asset monetizations to return capital to our shareholders
• Continuing to grow and diversify Blue Mountain’s midstream business to best position it towards a strategic transaction

David Rottino, Riviera’s President and Chief Executive Officer, commented, “I am very pleased with Riviera’s progress since our spin last August. In the fourth quarter, our operational performance was excellent as we generated more cash flow than forecasted through higher production, lower G&A costs and lower capital spending.” Rottino continued, “We remain relentlessly focused on our commitment to maximizing shareholder value through our strategy of capital discipline, returning capital to shareholders and efficiently managing our assets. We continue to believe our shares are deeply undervalued and we are committed to finding ways to monetize assets and use cash on hand to return capital to shareholders. In the fourth quarter, we announced the sale of our Arkoma basin assets, which closed in January 2019, we completed an upsized tender offer returning over $133 million to shareholders, and we continued to execute repurchases through our ongoing share repurchase program. Finally, we intend to grow our exciting Blue Mountain midstream business to best position it towards a strategic transaction.”

Strategic Plan to Transform Assets to Drive Shareholder Value
The Board and management continue to believe the Company is trading at a significant discount to its sum-of-the-parts net asset value. To enhance shareholder value, the Company plans to increase the scale, scope and reach of Blue Mountain while preparing Blue Mountain for its eventual separation as a standalone entity or for another transaction that maximizes shareholder value. In addition, based on the Company’s successful track record of monetizing assets, the Company will continue to return capital to shareholders through further upstream asset monetizations.

Continuation of Share Repurchase Plan
On August 16, 2018, the Company’s Board of Directors authorized the repurchase of up to $100 million of the Company’s outstanding shares of common stock. Under this program, the Company repurchased an aggregate of 1,167,767 shares at an average price of $18.46 for a total cost of approximately $22 million, and approximately $78 million was available for share repurchase as of February 22, 2019.

Fourth Quarter 2018 Activity – Upstream Assets
Riviera’s production for the fourth quarter averaged approximately 299 MMcfe/d, 4% above the mid-point of our guidance range. The outperformance in production was mainly due to higher production from non-operated drilling in the NW Stack, production enhancing projects in East Texas and North Louisiana, and lower downtime across our mature asset base. The production outperformance, low annual decline of approximately 10%, and consistent operating expenses, all illustrate the predictability of our upstream assets. Additionally, we believe the development opportunities throughout our NW STACK, East Texas, and North Louisiana acreage positions provide significant upside.

With respect to costs, the Company had strong results in the fourth quarter. Capital expenditures were approximately $12 million compared to guidance of $29 million. Adjusted G&A expenses were approximately $15 million, 16% below the mid-point of our guidance range for the quarter. Operating expenses for the fourth quarter were in-line with guidance at approximately $53 million. 

Initiation of Northwest STACK / North Louisiana Operated Drilling Program
In December 2018, the Company initiated an operated drilling program in the NW STACK. To date, Riviera has finished drilling three wells and is currently drilling its fourth well. The Company has completed two wells and is encouraged by the early flow-back data.

The Company also began drilling in North Louisiana in late December 2018. It is currently drilling the second well of a two-well pad targeting the Upper Red formation. This pad is scheduled to be completed in March with first production expected in April 2019. At current prices, the Company expects to generate over 100% IRR on these wells.

Blue Mountain Business Update
The fourth quarter of 2018 ended a transformative year for Blue Mountain. During the year, Blue Mountain constructed and placed in-service a cryogenic processing facility at its full 250 MMcf/d capacity and made significant progress toward setting up its organization and systems consistent with a standalone operating entity.

For the fourth quarter 2018, Blue Mountain’s operating margin, also referred to as other revenues, net, came in at the top end of its guidance range. Fourth quarter 2018 average throughput was within the guidance range. On average, natural gas throughput was 132 MMcf/d and NGLs produced were 8,700 bpd, compared with 35 MMcf/d and 1,080 bpd for the fourth quarter of 2017.

During the fourth quarter of 2018, Blue Mountain continued to make progress on its strategic objective to diversify its service offerings through scalable growth platforms in Central Oklahoma. Recently, Blue Mountain finalized an agreement with Roan Resources to provide water management services beginning in the second quarter of 2019. Also, Blue Mountain is in active discussions to develop oil gathering infrastructure to capture additional midstream value in the Merge play.

In addition, Blue Mountain is currently developing opportunities to further extend its natural gas and water capabilities in the region and is in discussions with third-party producers to meet their needs in the expanding Merge/SCOOP/STACK plays. These expansion opportunities will allow Blue Mountain to grow its asset base and further diversify its producer counterparties, while leveraging existing infrastructure, capabilities and expertise.

Balance Sheet and Liquidity
Riviera and Blue Mountain have established separate credit facilities. As of December 31, 2018, Riviera had $20 million drawn on its revolving credit facility, and borrowing commitments of up to $425 million with available borrowing capacity of approximately $371 million, inclusive of outstanding letters of credit. As of December 31, 2018, Blue Mountain had $4.5 million drawn on its revolving credit facility, borrowing commitments of approximately $76 million, and available borrowing capacity of $72 million. The Company had a fourth quarter consolidated ending cash balance of approximately $19 million.

In January 2019, the Company closed on the sale of its Arkoma basin assets. The proceeds were used to pay off the $20 million drawn on Riviera’s credit facility. The sale resulted in a reduction of the borrowing commitment to $385 million. As of January 31, 2019, Riviera had no borrowings under its credit facility, Blue Mountain had $11.5 million drawn on its revolving credit facility, and the Company had a consolidated ending cash balance of approximately $80 million.

Proved Reserves Update
Proved reserves at December 31, 2018 were approximately 1,618 Bcfe, of which approximately 78% were natural gas, 21% were natural gas liquids and 1% were oil. Approximately 96% were classified as proved developed, with a total standardized measure of discounted future net cash flows of approximately $747 million. PV-10 (a non-GAAP measure) was approximately $1.02 billion with exclusion of income taxes and the inclusion of helium. See Schedule 2 below for a reconciliation of PV-10.

Upstream Segment - First Quarter and Full Year 2019 Guidance

The guidance below is for the upstream assets only. The Company anticipates providing 2019 guidance estimates for Blue Mountain by early second quarter.

The 2019 upstream guidance reflects the Arkoma Basin divestiture that closed in January, 2019. In 2019, the Company expects to invest approximately $66 million of capital on its upstream assets. Approximately 80% of upstream capital will be devoted to drilling expected high return wells in the NW STACK and North Louisiana to keep production relatively flat throughout the year while still generating significant free cash flow.

Earnings Call / Form 10‑K
The Company will host a conference call Thursday, February 28, 2019 at 10 a.m. (Central) to discuss the Company’s fourth quarter and full year 2018 results and expects to file its Annual Report on Form 10-K for the year ended December 31, 2018 with the U.S. Securities and Exchange Commission on or around that date. There will be prepared remarks by executive management followed by a question and answer session.

Investors and analysts are invited to participate in the call by dialing (866) 416-7462, or (409) 217-8223 for international calls using Conference ID: 8616887. Interested parties may also listen over the internet at www.rivieraresourcesinc.com. A replay of the call will be available on the Company’s website.

Supplemental information can be found at the following link on our website: http://ir.rivieraresourcesinc.com/events-and-presentations

ABOUT RIVIERA RESOURCES
Riviera Resources, Inc. is an independent oil and natural gas company with a strategic focus on efficiently operating its mature low-decline assets, developing its growth-oriented assets, and returning capital to its stockholders. Riviera’s properties are located in the Hugoton Basin, East Texas, North Louisiana, Michigan/Illinois, the Uinta Basin and Mid-Continent regions. Riviera also owns Blue Mountain Midstream LLC, a midstream company centered in the core of the Merge play in the Anadarko Basin.

Forward-Looking Statements
Statements made in this press release that are not historical facts are “forward-looking statements.” These statements are based on certain assumptions and expectations made by the Company which reflect management’s experience, estimates and perception of historical trends, current conditions, and anticipated future developments. These statements include, among others, statements regarding our 2019 guidance, planned capital expenditures, increases in oil and gas production, the number of anticipated wells to be drilled or completed after the date hereof, future cash flows and borrowings, our strategic objectives with respect to Blue Mountain Midstream, our financial position, business strategy and other plans and objectives for future operations. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the Company, which may cause actual results to differ materially from those implied or anticipated in the forward-looking statements. These include risks relating to the Company’s financial and operational performance and results, low or declining commodity prices and demand for oil, natural gas and natural gas liquids, ability to hedge future production, ability to replace reserves and efficiently develop current reserves, the capacity and utilization of midstream facilities and the regulatory environment. These and other important factors could cause actual results to differ materially from those anticipated or implied in the forward-looking statements. Please read “Risk Factors” in the Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other public filings. The Company undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information or future events.

CONTACT:
Investor Relations
(281) 840-4168
IR@RVRAresources.com

Adjusted EBITDAX (Non-GAAP Measure)

The non-GAAP financial measure of adjusted EBITDAX, as defined by the Company, may not be comparable to similarly titled measures used by other companies. Therefore, this non-GAAP measure should be considered in conjunction with net income (loss) and other performance measures prepared in accordance with GAAP. Adjusted EBITDAX should not be considered in isolation or as a substitute for GAAP.

Adjusted EBITDAX is a measure used by Company management to evaluate the Company’s operational performance and for comparisons to the Company’s industry peers. Management also believes this information may be useful to investors and analysts to gain a better understanding of the Company’s financial results.

Schedule 2 - PV-10 (Non-GAAP Measure)
PV-10 represents the present value, discounted at 10% per year, of estimated future net cash flows. The Company’s calculation of PV-10 herein differs from the standardized measure of discounted future net cash flows determined in accordance with the rules and regulations of the SEC in that it is calculated before income taxes and including the impact of helium, rather than after income taxes and not including the impact of helium, using the average price during the 12-month period, determined as an unweighted average of the first-day-of-the-month price for each month. The Company’s calculation of PV-10 should not be considered as an alternative to the standardized measure of discounted future net cash flows determined in accordance with the rules and regulations of the SEC.