Ring Energy, Inc. · AMEX:REI
Ring Energy — Investor Presentation (June 2020)
34 slides from Ring Energy's investor presentation, Jun 19, 2020
Slide 1: Corporate Presentation June 2020
www.ringenergy.com NYSE American: REI www.ringenergy.com OTCQX:RNGE www.ringenergy.com Corporate Presentation June 2020
Slide 2: Forward-Looking Statements and Cautionary Note Regarding Hydrocarbon Disclosures
www.ringenergy.com 2 NYSE American: REI Forward - Looking Statements and Cautionary Note Regarding Hydrocarbon Disclosures Forward – Looking Statements This Presentation includes "forward - looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 , the Securitie
Slide 3: Ring Energy Team: Management Team and Key Board Members
www.ringenergy.com 3 NYSE American: REI Kelly Hoffman Chief Executive Officer and Director ▪ Co - Founded AOCO and pioneered Fuhrman Mascho field down - spacing beginning in 1996 David A. Fowler President and Director ▪ Co - Founder and former President of Simplex Energy Solutions, the leading Permi
Slide 4: Investment Highlights
www.ringenergy.com 4 NYSE American: REI Investment Highlights • The management team has extensive experience in the Central Basin Platform and has successfully operated through multiple cycles • Ring’s co - founders were formerly co - founders and senior managers of Arena Resources Proven Management
Slide 5: Executive Summary
www.ringenergy.com 5 NYSE American: REI Gross Acres Net Acres Central Basin Platform 90,611 63,500 Northwest Shelf 48,188 36,599 Delaware Basin 20,219 19,998 Total Acreage 159,018 120,097 Executive Summary (1) Ring reserves as of 12/31/2019 based on SEC pricing ($52.19/Bbl of oil and $2.58/ Mcf of g
Slide 6: Why REI Is Different
www.ringenergy.com 6 NYSE American: REI Lea Gaines Andrews Yoakum TX NM Why REI Is Different (1) Ring reserves as of 12/31/2019 based on SEC pricing ($52.19/Bbl of oil and $2.58/ Mcf of gas) Existing San Andres fields Ring acreage ▪ “Conventional” producer, NOT an unconventional “shale” producer ▪ S
Slide 7: San Andres Overview: Proven Conventional Reservoir
www.ringenergy.com 7 NYSE American: REI Proven Conventional Reservoir Source: US Department of Energy & DrillingInfo San Andres Overview Permian Basin Geology Denotes Ring acreage San Andres Hz Delaware Basin Hz Midland Basin Hz High ROR Oil Play x x x IPs >750 Bo/d x x Lower 1 st Year Decline x Low
Slide 8: San Andres Formation
www.ringenergy.com 8 NYSE American: REI San Andres Formation
Slide 9: Northwest Shelf Asset
www.ringenergy.com 9 NYSE American: REI Northwest Shelf Asset (1) Based on 12/31/2019 CGA reserve report using SEC pricing ($52.19/Bbl of oil and $2.58/ Mcf of gas) (2) Based on 12/31/2019 Ring internal reserve report using SEC pricing ($52.19/Bbl of oil and $2.58/ Mcf of gas) ▪ 48 , 188 gross / 36
Slide 10: Northwest Shelf Accretive Drilling Inventory
www.ringenergy.com 10 NYSE American: REI 82 58 231 PUD Probable & Possible Prospective San Andres Horizontal $300 $21 $355 (1) (2) (2) Northwest Shelf Accretive Drilling Inventory Note: Locations reflect gross locations on this page (1) Based on 12/31/2019 CGA reserve report using SEC pricing ($52.1
Slide 11: Northwest Shelf Well Economics & Type Curve
www.ringenergy.com 11 NYSE American: REI $35.00 $40.00 $45.00 IRR (%) 71% 98% 129% Years to Payout 1.5 1.2 1.0 ROI Disc 2.49x 2.92x 3.34x ROI Undisc 4.97x 5.87x 6.77x PV-10 (000s) $3,503 $4,492 $5,479 Net EUR (MBOE) 457 458 460 Net Realized Price Received ($/Boe) 1 10 100 1000 0 5 10 15 20 25 30 BOP
Slide 12: Central Basin Platform Asset
www.ringenergy.com 12 NYSE American: REI Central Basin Platform Asset (1) Based on 12/31/2019 CGA reserve report using SEC pricing ($52.19/Bbl of oil and $2.58/ Mcf of gas) (2) Based on 12/31/2019 Ring internal reserve report using SEC pricing ($52.19/Bbl of oil and $2.58/ Mcf of gas) ▪ 90 , 611 gro
Slide 13: Central Basin Drilling Inventory
www.ringenergy.com 13 NYSE American: REI 29 37 667 PUD Probable & Possible Prospective San Andres Horizontal $68 $20 $253 Spacing Assumptions: Central Basin Drilling Inventory Note: Locations reflect gross locations on this page (1) As of 12/31/2019 (2) Based on 12/31/2019 CGA reserve report using S
Slide 14: Central Basin Well Economics & Type Curve
www.ringenergy.com 14 NYSE American: REI $35.00 $40.00 $45.00 IRR (%) 46% 65% 89% Years to Payout 2.2 1.7 1.4 ROI Disc 2.03x 2.37x 2.71x ROI Undisc 4.22x 4.98x 5.75x PV-10 (000s) $2,077 $2,773 $3,469 Net EUR (MBOE) 335 337 338 Net Realized Price Received ($/Boe) Oil Gas Peak Rate 305 BOPD 95 MCFPD I
Slide 15: Delaware Basin Assets
www.ringenergy.com 15 NYSE American: REI Delaware Basin Assets (1) Based on 12/31/2019 CGA reserve report using SEC pricing ($52.19/Bbl of oil and $2.58/ Mcf of gas) (2) Based on 12/31/2019 Ring internal reserve report using SEC pricing ($52.19/Bbl of oil and $2.58/ Mcf of gas) Culberson and Reeves
Slide 16: Delaware Basin Drilling Inventory
www.ringenergy.com 16 NYSE American: REI 43 165 154 468 109 47 174 577 PUD Probable & Possible Prospective Delaware Mountain Group Horizontal Additional Prospective Locations $21 $22 $43 Behind pipe zones of interest Vertical Cherry Canyon (1) (2) (2) (2) Vertical 165 Horizontal 9 Vertical 43 Horizo
Slide 17: Potential Locations by Tier and Area
www.ringenergy.com 17 NYSE American: REI Potential Locations by Tier and Area ▪ Tier 1 : Highest confidence wells . These wells would represent “type curve” production . At $ 50 /Boe realized price received, they reflect an IRR over 80 % , a net reserve of greater than 325 MBoe and PV - 10 of approx
Slide 18: Peer Comparison: Realized Price per Boe
www.ringenergy.com 18 NYSE American: REI $40.25 $38.25 $36.23 $34.30 $33.09 $31.96 $30.70 $26.91 $49.58 $35.22 $37.50 $44.92 $36.73 $38.23 $36.84 $31.39 - $10.00 $20.00 $30.00 $40.00 $50.00 $60.00 Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 Peer 7 Q1 2020 Q4 2019 Q1 2020 Production Mix Oil 86% 61% 64%
Slide 19: Crude Oil Hedge Positions
www.ringenergy.com 19 NYSE American: REI 500,500 506,000 506,000 1,642,500 $50.00 $50.00 $50.00 $42.22 $61.06 $61.06 $61.06 $54.57 $30.00 $34.00 $38.00 $42.00 $46.00 $50.00 $54.00 $58.00 $62.00 $66.00 $70.00 - 200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000 1,600,000 1,800,000 Q2'20 Q3
Slide 20: REI Shortened Cycle Times by Improving Efficiencies
www.ringenergy.com 20 NYSE American: REI 49 48 39 32 30 35 32 26 30 0 10 20 30 40 50 60 2016 2017 2018 2019 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 REI Shortened Cycle Times by Improving Efficiencies 1 - Mile – 6 1.5 Mile – 1 1 - Mile – 9 1.5 Mile – 4 1 - Mile – 6 1 - Mile – 4 • Past two years impro
Slide 21: Path to Free Cash Flow (Capital Discipline)
www.ringenergy.com 21 NYSE American: REI $39.5 $84.5 $360.5 $45.0 $260.0 $6.0 $16.0 $84.5 $360.5 $366.5 $366.5 $366.5 $- $50 $100 $150 $200 $250 $300 $350 $400 $450 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Hz S.A. Wells Drilled/Comp (2) 7 / 7 13 / 9 6 / 11 Northwest Shelf acquisition closed 4/19. Last well dri
Slide 22: Recent Developments & 2020 Capex
www.ringenergy.com 22 NYSE American: REI Recent Developments & 2020 Capex ▪ During Q1’20 Ring drilled four horizontal San Andres wells on its Northwest Shelf assets (2 – 1.0 mile, 2 – 1.5 mile) in Yoakum County, Texas. All four new drills reported IP’s, plus two additional horizontal wells drilled i
Slide 23: 2020 Capex Objectives
www.ringenergy.com 23 NYSE American: REI 2020 Capex Objectives ▪ Capex Objectives: ▪ Revised 2020 Capex of estimated $25 - 27 MM (reduced from $85 - 90 MM) ▪ Suspend 2020 drilling to protect balance sheet and outspend ▪ Design 2020 capex to stay within cash flow ▪ Agility to immediately start drilli
Slide 24: Growth in Reserves & Production
www.ringenergy.com 24 NYSE American: REI 59 317 1,270 1,401 1,222 1,824 2,739 3,180 3,636 4,652 4,688 5,563 5,845 5,080 4,604 4,112 3,936 3,488 625 1,224 1,132 975 907 951 981 1,158 959 935 1,267 1,172 1,132 980 821 5,320 4,949 5,789 6,489 6,589 0 2,000 4,000 6,000 8,000 10,000 12,000 3.9 7.3 10.4 8
Slide 25: REI Valuation Matrix
www.ringenergy.com 25 NYSE American: REI Shares Outstanding 68.0 MM Share Price (6/17/2020) $1.36 Market Capitalization $92.5 MM Debt $375.0 MM Cash $12.5 MM Enterprise Value (1) $455.0 MM Borrowing Base (Reaffirmed June 2020) $375.0 MM ▪ Indicates Market is giving little value to upside ▪ Borrowing
Slide 26: Net Asset Value
www.ringenergy.com 26 NYSE American: REI $273 $109 $1,103 $389 $63 $651 $1,123 $336 $160 Proved Probable Possible Net Asset Value (1) NAV/share calculated as YE2019 PV - 10 based on SEC pricing ($52.19/Bbl of oil and $2.58/ Mcf of gas) less current outstandings of $375 MM divided by current shares o
Slide 27: Appendix
www.ringenergy.com NYSE American: REI Appendix
Slide 28: Management Team
www.ringenergy.com 28 NYSE American: REI Management Team Lloyd T. (Tim) Rochford Co - Founder and Chairman of the Board Mr. Rochford, 73, has been active as an entrepreneur in the oil and gas industry since 1973. During that time, he has person all y founded, or co - founded, multiple oil companies
Slide 29: Management Team (cont'd)
www.ringenergy.com 29 NYSE American: REI Management Team (cont'd) Daniel D. Wilson Executive Vice President and Chief Operating Officer Mr. Wilson, 58, has 30 years of experience in operating, evaluating and exploiting oil and gas properties. He has experience in production, drilling and reservoir e
Slide 30: Oil and Gas Reserves
www.ringenergy.com 30 NYSE American: REI Oil and Gas Reserves (1) Cawley Gillespie YE2019 SEC report with prices of $52.19/ bbl and $2.58/ mmbtu (2) Ring Internal engineering report using SEC pricing of $52.19/ bbl and $2.58/ mmbtu As Of December 31, 2019 Proved Developed Reserves: 37,841 31,504 43,
Slide 31: Income Statement
www.ringenergy.com 31 NYSE American: REI Income Statement (1) Per Fully Diluted Share (2) Cash flow from operations before working capital changes 3 Months Ended March 31, 12 Months Ended December 31, 2020 2019 2019 2018 Revenue $39,570,328 $41,798,315 $195,702,831 $120,065,361 Pre - Tax Income $56,
Slide 32: Balance Sheet
www.ringenergy.com 32 NYSE American: REI Balance Sheet (1) Includes Operating Lease Asset, Derivative Asset and Deferred Financing Costs As of As of ($ thousands) 3/31/2020 12/31/2019 Assets: Cash and Cash Equivalents $12,531 $10,005 Other Current Assets 52,261 28,704 Total Current Assets $64,792 $3
Slide 33: Analyst Coverage
www.ringenergy.com 33 NYSE American: REI Analyst Coverage Ring Energy, Inc. Analyst Coverage FIRM ANALYST(S) Alliance Group Partners (A.G.P.) Bhakti Pavani (949) 296 - 3196 bpavani@allianceg.com Capital One Securities, Inc. Richard Tullis (504) 593 - 6118 richard.tullis@capitalone.com Coker Palmer I
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