Ring Energy, Inc. · AMEX:REI
Ring Energy — Merger or Acquisition (July 2022)
14 slides from Ring Energy's merger presentation, Jul 8, 2022
Slide 1: Ring Energy Acquires Stronghold Energy II Transaction Summary
www. ringenergy.com NYSE American: REI RING ENERGY ACQUIRES STRONGHOLD ENERGY II TRANSACTION SUMMARY July 5, 202 2 INCREASING SHAREHOLDER VALUE ENHANCING SIZE AND SCALE LOWERING BREAK - EVEN COSTS
Slide 2: Forward-Looking Statements and Cautionary Notes
www.ringenergy.com NYSE American: REI 2 Forward - Looking Statements and Cautionary Notes 2 Forward – Looking Statements This Presentation includes "forward - looking statements" within the meaning of the Private Securities Litigation Reform Act of 19 95, Section 27A of the Securities Act of 1933, a
Slide 3: Transformational Transaction
www.ringenergy.com NYSE American: REI 3 Increases Free Cash Flow 1 Enhances Size & Scale Strengthens Balance Sheet Accelerates Ability to Pay Down Debt Improves Low Break - even Costs Transformational Transaction Immediately Accretive to: x Cash flow/share 1 x FCF/share 1 x FCF yield 1 x Production/
Slide 4: Purchase Price and Funding Overview
www.ringenergy.com NYSE American: REI 4 Purchase Price and Funding Overview $1 billion underwritten credit facility with upgraded borrowing base to $600 million, improves liquidity and lowers leverage ratio $280 $435 - $475 $70 $125 - $165 $0 $50 $100 $150 $200 $250 $300 $350 $400 $450 $500 $550 $60
Slide 5: Operational and Financial Metrics Increase by 50% to Over 100%
www.ringenergy.com NYSE American: REI 5 Operational and Financial Metrics increase by 50% to over 100% Nearly doubles production, proved developed reserves, and free cash flow x Establishes premier CBP and NWS operator positioned to drive consolidation & value creation x Enhanced free cash flow prof
Slide 6: Significantly Accretive on All Key Share Metrics
www.ringenergy.com NYSE American: REI 6 Significantly Accretive on ALL KEY Share Metrics Cash flow/share 1 197% $0.32 Standalone 4 Pro Forma 15% Free cash flow/share 1 $0.37 Free cash flow yield 1 Production/share 1 Reserves/share 1 $0.03 0.03 $0.36 3.1% 197% $0.09 0.04 $0.46 10.5% 242% 32% 26% 242%
Slide 7: Stronghold Energy II Asset Overview
www.ringenergy.com NYSE American: REI 7 Stronghold Energy II Asset Overview Acquisition Highlights x Predictable PDP base with shallow declines & long - life Proved reserves x Meaningful low - risk, high rate - of - return inventory x Margin enhancing ownership with high NRI’s, x Stacked pay zones i
Slide 8: Step Change in Proved Reserve Value
www.ringenergy.com NYSE American: REI 8 Step Change in Proved Reserve Value Pro Forma Proved Reserves 5 1P Reserves PV - 10 1 $MM Proved Developed $1,739 Proved Undeveloped $906 Total Proved $2,645 60% 40% PD PUD Total Proved 144 MMBOE Stacked Pay Zones High Quality Conventional Asset Legacy Simple
Slide 9: Approvals and Timing
www.ringenergy.com NYSE American: REI 9 Approvals and Timing Unanimously approved by Ring Board of Directors x Subject to customary closing conditions, including regulatory approvals x Transaction effective date is June 1, 2022 x Anticipated closing in third quarter 2022 x Hold Special Stockholders
Slide 10: Transaction Enhances Shareholder Value
www.ringenergy.com NYSE American: REI 10 Significantly Increases Size and Scale Enhances Free Cash Flow Generation and Cash Margins Increases Proved Reserves & High IRR Inventory Accelerates Ability to Pay Down Debt Accretive on Key Financial Metrics Transaction Enhances Shareholder Value 10 Nearly
Slide 11: 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
Slide 12: Appendix
www. ringenergy.com NYSE American: REI APPENDIX
Slide 13: Pricing assumptions and footnotes
• June 21, 2022 NYMEX Strip Pricing for WTI /HH used throughout the presentation: 2022:$107.12 / $7.10; 2023: $92.89 / $5.35; 2 024 : $83.09 / $4.76; 2025: $76.31 / $4.63; 2026+: $71.68 / $4.62 • Based on NYMEX strip pricing as of June 21, 2022. Expected impact on Ring’s guidance is dependent upon t
Slide 14: Non-GAAP Information
Certain financial information utilized by the Company are not measures of financial performance recognized by accounting prin cip les generally accepted in the United States (“GAAP”). The Company defines Adjusted EBITDA as net income (loss) plus net interest expense, unrealized loss (gain) on change