Ring Energy, Inc. · AMEX:REI
Ring Energy — Q3 2021 Earnings Presentation
29 slides from Ring Energy's earnings presentation, Nov 17, 2021
Slide 1: Q3 2021 Earnings Presentation
www. ringenergy.com NYSE American: REI FRESH PERSPECTIVE PR OVEN S TRATEGY Q3 2021 Earnings Presentation
Slide 2: Forward-Looking Statements and Cautionary Note Regarding Hydrocarbon Disclosures
www.ringenergy.com NYSE American: REI Forward - Looking Statements and Cautionary Note Regarding Hydrocarbon Disclosures 2 Forward – Looking Statements This Presentation includes "forward - looking statements" within the meaning of the Private Securities Litigation Reform Act of 19 95, the Securitie
Slide 3: Currently Focused on Conventional Permian Assets in Texas & New Mexico
www.ringenergy.com NYSE American: REI Currently Focused on Conventional Permian Assets in Texas & New Mexico 2020 SEC Proved Reserves 76.5 MMBoe /PV10 $638MM 87% Oil October 2021 Net Sales 2 Over 9,000 Boe /d 87% oil Gross / Net Acres 104,455 / 76,745 Ring Energy – Independent Oil & Gas Company Deli
Slide 4: Q3 2021 Highlights Executing our Strategy
www.ringenergy.com NYSE American: REI Q3 2021 Highlights Executing our Strategy 4 ▪ Delivered net cash provided by operating activities of $17.5 million ▪ Further reduced debt by $5.5 million utilizing a portion of Free Cash Flow ▪ Completed and placed on production 4 Phase III wells (2 NWS & 2 CBP)
Slide 5: Focus on FCF and Strengthening the Balance Sheet
www.ringenergy.com NYSE American: REI Focus on FCF and Strengthening the Balance Sheet Invest in High - Margin, High ROR Projects Completed 12 Successful Wells 2 Generated $59 MM in Adj. EBITDA Sustainably low LOE at <$10/ Boe Generated $11 MM FCF Reduced Debt by $18 MM 5 Performed 24 CTRs 3 Provide
Slide 6: Asset Areas
Asset Areas
Slide 7: Proven, Conventional, Oily San Andres Reservoir
www.ringenergy.com NYSE American: REI Proven, Conventional, Oily San Andres Hz Delaware Hz Midland Hz High ROR Oil Play x x x Low D&C Costs x Lower 1 st Year Decline x Low Lease Acquisition Cost x Long life wells x IPs >750 Bo/d x x Multiple Benches x x > 90% Black Oil x < $25/ Bbl D&C Break - even
Slide 8: Significant Organic Growth Platform: Northwest Shelf Asset
www.ringenergy.com NYSE American: REI Significant Organic Growth Platform 2020 Avg Sales 5,399 Boe /d (85% Oil) YTD 2021 D&C Completed 4 Phase I wells (~99% WI) Completed 3 Phase II wells (~74% WI) Completed 2 Phase III wells (~100% WI) Gross / Net Acres 46,972 / 32,915 ▪ Actively developing asset ▪
Slide 9: Improving Performance & Cost
www.ringenergy.com NYSE American: REI $2.0 M $2.5 M $3.0 M $3.5 M 2019 2020 2021 1,000 10,000 100,000 0 365 2015 2016 2017 2018 2019 2020 Improving Performance & Cost Significant Improvement Driving Top Tier Returns 9 Annual D&C Cost Range (1 Mile) 1 NWS Annual Average Cum BOE vs Time (1 Mile) 2,3 1
Slide 10: Central Basin Platform Asset
www.ringenergy.com NYSE American: REI ▪ Completing 1 more HZ wells in Phase IV drilling program by year - end 2021 (100% WI) ▪ Low D&C and LOE costs drive strong economics ▪ Actively working through CTR inventory to reduce costs and extend reserve life, completed 6 CTRs YTD in CBP ▪ Meaningful inven
Slide 11: Maintains Solid PDP Reserve Base that Generates Consistent FCF
www.ringenergy.com NYSE American: REI 0 50 100 150 200 2018 2019 2020 2021 YTD NWS CBP Maintains Solid PDP Reserve Base that Generates Consistent FCF ▪ Increasing reserves by extending well longevity and reducing operating & well repair costs ▪ ~50% long - term reduction in LOE ▪ Up to 80% reduction
Slide 12: Turnkey Asset with Predictable Cash Flow: Delaware Basin Asset
www.ringenergy.com NYSE American: REI Turnkey Asset with Predictable Cash Flow and Upside Potential Delaware Basin Asset 12 ▪ Launched sales process for Delaware Assets in 2021 ▪ Truist Securities running a marketed process ▪ Asset infrastructure in - place to enable efficient development ▪ Produced
Slide 13: Financials
Financials
Slide 14: Generating Sustainable Results
www.ringenergy.com NYSE American: REI Generating Sustainable Results 9,549 9,307 7,960 8,709 8,243 0 2,000 4,000 6,000 8,000 10,000 12,000 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Boe /d Net Sales $9.7 $12.2 $10.8 $10.8 $10.6 $0.0 $2.0 $4.0 $6.0 $8.0 $10.0 $12.0 $14.0 Q3 2020 Q4 2020 Q1 2021 Q2 2021
Slide 15: Historical Metrics: Quarterly Analysis of FCF
www.ringenergy.com NYSE American: REI Historical Metrics Quarterly Analysis of FCF 1 $MM Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Adj EBITDA 1 $19.9 $24.5 $19.0 $20.6 $19.7 Capital - $4.3 - $7.8 - $14.5 - $11.5 - $13.7 Interest Exp. 2 - $4.3 - $4.0 - $3.6 - $3.5 - $3.4 Proceeds from Divestiture $2.0
Slide 16: Continued FCF Generation is Key; Pays Down Debt
www.ringenergy.com NYSE American: REI $375.0 $360.0 $313.0 $305.5 $300.5 $295.0 $0.0 $100.0 $200.0 $300.0 $400.0 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 RBL Balance $313 MM outstanding debt with $36 MM in Surplus Cash Continued FCF Generation is Key Pays Down Debt and Improves Balance Sheet
Slide 17: Committed to ESG
www.ringenergy.com NYSE American: REI Committed to ESG Foundational Cornerstone of Our Culture 17 Providing a safe work environment and corporate culture that promotes the health and well - being of all employees Investing in our workforce, the communities in which we operate, and future generations
Slide 18: Building a Sustainable Corporate Culture
www.ringenergy.com NYSE American: REI Building a Sustainable Corporate Culture Operate Efficiently and Effectively Highly Profitable Development Drilling Generate FCF and Strengthen Balance Sheet Evaluate Accretive Acquisition Opportunities Fresh Prospective Proven Strategy 18
Slide 19: Appendix
Appendix
Slide 20: Q4 2021 Guidance
www.ringenergy.com NYSE American: REI 38% 54% 8% D&C CTRs/Recomp/Cap Workovers Land/Other CAPEX Allocation Mid Point $13 million Q4 2021 Guidance Maintain Production, Generate FCF, Pay Down Debt 20 Sales Volumes Q4 2021 Total ( Boe /d) 8,800 – 9,200 Oil (Bo/d) 7,500 – 7,900 Operating Expenses (per B
Slide 21: SEC Proved Reserves Year-End 2020
www.ringenergy.com NYSE American: REI PDP 69% PUD 31% PDP 58% PUD 42% 1P Summary Reserve Category Net Oil, MBbl Net Gas, MMcf Net MBOE Net Capex, $MM PV - 10, $MM PD 38,261 34,336 43,983 $25 $438 PUD 28,004 26,970 32,499 $219 $200 TOTAL 66,264 61,305 76,482 $244 $638 SEC Proved Reserves 1 Year - End
Slide 22: Financial Overview: Oil Hedges as of 10/1/2021
www.ringenergy.com NYSE American: REI Commodity Effective Date End Date Structure Daily Volume (Bbls/d) Total Volume (Bbls) Weighted Avg. Swap Price (per Bbl) Weighted Avg. Put/Floor Price (per Bbl) Weighted Avg. Call/Ceiling Price (per Bbl) WTI - Crude 10/1/21 12/31/21 Collar 1,000 92,000 $45.00 $5
Slide 23: Income Statement and Operational Stats
www.ringenergy.com NYSE American: REI Income Statement and Operational Stats 23 Income Statement Operational Stats Oil and Natural Gas Revenues $ 49,376,176 $ 47,760,102 $ 31,466,544 $ 136,638,810 $ 81,673,465 Costs and Operating Expenses Lease operating expenses 6,983,196 7,424,488 7,819,639 22,634
Slide 24: Balance Sheet and Cash Flow Statement
www.ringenergy.com NYSE American: REI Balance Sheet and Cash Flow Statement 24 Balance Sheet Cash Flow Statement ASSETS Current Assets Cash and cash equivalents $ 2,046,946 $ 3,578,634 Accounts receivable 20,306,264 14,997,979 Joint interest billing receivable 1,672,334 1,327,262 Derivative receivab
Slide 25: Non-GAAP Disclosure
www.ringenergy.com NYSE American: REI Non - GAAP Disclosure 25 Non - GAAP Information Certain financial information included in Ring’s financial results are not measures of financial performance recognized by ac cou nting principles generally accepted in the United States, or GAAP. These non - GAAP
Slide 26: Non-GAAP Reconciliations
www.ringenergy.com NYSE American: REI Non - GAAP Reconciliations 26 ` Net (Loss) Income $ 14,163,934 $ (15,887,159) $ (1,961,603) $ (20,789,318) $ (93,157,551) Share-based compensation 777,461 351,775 565,819 1,484,730 2,557,156 Ceiling test write impairment - - - - 147,937,943 Unrealized loss (gain
Slide 27: Management Team
www.ringenergy.com NYSE American: REI Add Photo Add Photo Add Photo Add Photo Add Photo Paul D. McKinney Chairman & Chief Executive Officer 35+ years of domestic & international oil & gas industry experience Executive & board roles include CEO, President, COO, Region VP and public & private board di
Slide 28: Board of Directors
www.ringenergy.com NYSE American: REI 28 Add Photo Paul D. McKinney Chairman & Chief Executive Officer 35+ years of domestic & international oil & gas industry experience Executive & board roles include CEO, President, COO, Region VP and public & private board directorships Anthony D. Petrelli Lead
Slide 29: Analyst Coverage and Company Contact
ANALYST COVERAGE Alliance Global Partners (A.G.P.) Jeff Campbell (203) 577 - 5427 jcampbell@allianceg.com Tuohy Brothers Investment Noel Parks (215) 913 - 7320 nparks@tuohybrothers.com ROTH Capital Partners John M. White (949) 720 - 7115 jwhite@roth.com Truist Financial Neal Dingmann (713) 247 - 900