Ring Energy, Inc. · AMEX:REI
Ring Energy — EnerCom Dallas 2023
36 slides from Ring Energy's conference presentation, Apr 17, 2023
Slide 1: Value Focused Proven Strategy
VALUE FOCUSED PROVEN STRATEGY EnerCom Dallas 2023 The Energy Investment & ESG Conference www.ringenergy.com NYSE American: REI
Slide 2: Forward-Looking Statements and Cautionary Note Regarding Hydrocarbon Disclosures
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, Section 27A of the Securities Act of 1933, as amended, and
Slide 3: Independent Oil & Gas Company
Independent Oil & Gas Company Focused on Conventional Permian Assets in Texas Generated Free Cash Flow for 13 Consecutive Quarters Q4 2022 Net Sales 17,856 Boe/d Highly oil weighted 68% oil 17% gas 15% NGL 2022 SEC Proved Reserves1,2 138.1 MMBoe/PV10 $2,774MM Proved Developed 65% Gross / Net Acres3
Slide 4: Value Focused Proven Strategy
Value Focused Proven Strategy Supporting Sustainable Returns KEY TAKEAWAYS Added Size & Scale - accretive acquisition of Stronghold assets Closed on August 31, 2022 Delivered Record Results1 - net sales, cash flow from operations, and Adj. EBITDA 2022 year-over-year increases of 45%, 149% and 134%,
Slide 5: Corporate Strategy
Corporate Strategy Value Focused for Sustainable Returns Attract and Retain Highly Qualified People ✓Successfully attracting key personnel with <3% attrition rates while decreasing G&A per Boe Pursue Operational Excellence with a Sense of Urgency ✓Safely set record production with increased efficien
Slide 6: Committed to ESG
Committed to ESG Critical to Sustainable Success Progressing our ESG Journey ▪ Created ESG Task Force to monitor Company’s adherence to ESG standards and formally communicate to CEO and the Board on ongoing basis ▪ Established Target Zero 365 (TZ-365) Safety & Environmental Initiative to further bui
Slide 7: 2022 Highlights
2022 Highlights1 Proven Strategy Leads to Record Results BOE Oil Cash Flow Adjusted Free Cash Leverage Liquidity4 Production Production From Ops2 EBITDA2 Flow2 Ratio3 Q4 17,856 12,189 $47.4 $56.3 $5.5 1.56x $188 2022 Boe/d BOPD Million Million Million Million FY 12,364 9,479 $172.9 $195.2 $34.8 1.56
Slide 8: Enhancing Value for Shareholders
Enhancing Value for Shareholders Executing Strategy Improves Key Metrics1 Production/Share CFFO ($million) 0.04 $200 0.04 $173 Up Up $150 Up 0.03 0.03 33% 33% $100 149% $70 $50 0.02 $- YE 2021 YE 2022 YE 2021 YE 2022 PV-10/Share2 FCF Yield3 $25.00 $22.88 14% 12% 12% $20.00 Up 10% 9% Up $15.00 $13.40
Slide 9: Enhancing Value for Shareholders
Enhancing Value for Shareholders Executing Strategy Improves Key Metrics ROCE1 All-in Cost Operating Margins2/BOE 25% $90.00 $80.00 20.7% 20% $76.95 $70.00 Up $60.00 $63.14 $52.59 15% 79% $50.00 11.6% $39.33 Up $40.00 10% 9.3% 34% $30.00 $35.13 $20.00 5% $12.96 $10.00 0% $- 2020 2021 2022 2020 2021
Slide 10: 2023 Outlook
2023 Outlook Proven Strategy Leads to Shareholder Value Sales Boe/d Oil Sales BOPD 20,000 15,000 Net Sales Pursue Operational 15,000 18,300 17,800 to 18,800 Boe/d 10,000 12,450 Excellence with a Mid-point 18,300 Boe/d 10,000 12,364 9,479 Sense of Urgency (68% Oil, 15% NGLs, 17% Gas) Up ~50% 5,000 Up
Slide 11: Simplifying and Enhancing the Capital Structure
Simplifying and Enhancing the Capital Structure Preparing to Pursue Balance Sheet Enhancing & Accretive Acquisitions Exercising Warrants Improving Financial Flexibility ▪ Shares issued pursuant to the exercise of the warrants were previously included in ▪ Continuing to pursue its value focused prove
Slide 12: Proved Reserves and Inventory
1 Proved Reserves and Inventory SEC YE 2022 Reserves by Category (%) Reserves by PV-102 ($MM) Reserves by Product (%) Locations Gaines 35% $867 17% 19% Lea Yoakum 3 138 138 400+ $2,774 Andrews Total Gross MMBoe MM MMBoe Locations & Opportunities Crane 65% $1,907 64% PD PUD PD PUD Oil Gas NGL 200+ PU
Slide 13: Compelling Value Proposition
Compelling Value Proposition Proven Strategy Leads to Shareholder Value1,2 EV/2023E Adjusted EBITDA3 EV/PV-103 YE22 1P Reserves 7.0x 1.0x 0.9x 6.0x 0.8x 5.0x 0.7x 0.6x 4.0x 0.5x 3.0x 0.4x 2.0x 0.3x 0.2x 1.0x 0.1x 0.0x 0.0x Peer 1 REI Peer 2 Peer 3 Median Peer 4 Peer 5 Peer 6 REI Peer 1 Peer 2 Peer 3
Slide 14: Value Proposition
Value Proposition 2023 and Beyond ❖ Trading at a discount to peer average ❖ Delivering higher returns than peer average ❖ Value focused strategy is proven by record 2022 results ❖ Disciplined and capital efficient budget is focused on maintaining production levels, FCF generation, and debt reduction
Slide 15: Appendix
Appendix
Slide 16: Experienced Management Team
Experienced Management Team Shared Vision with a Track Record of Success Add Add Add Add Add Photo Photo Photo Photo Photo Paul D. McKinney Alexander Dyes Stephen D. Brooks Travis Thomas Hollie Lamb Marinos Baghdati VP of Compliance & GM Chairman & Chief EVP of Engineering & EVP of Land, Legal, HR &
Slide 17: Refreshed Board of Directors
Refreshed Board of Directors Accomplished and Diversified Experience Paul D. McKinney Anthony D. Petrelli Roy I. Ben-Dor John A. Crum David S. Habachy Richard E. Harris Thomas L. Mitchell Regina Roesener Clayton E. Woodrum Chairman & Chief Lead Independent Director Independent Director Independent D
Slide 18: Asset Overview
Asset Overview ENERGY
Slide 19: Company Overview
Company Overview Core Assets Operating Statistics Q4 2022 Net Production (MBoe/d) 17.9 Oil (Bo/d) ~ 68% 12.2 Gas (Mcf/d) ~ 17% 18.3 NGLs (Bbls/d) ~ 15% 2.6 LOE ($ per Boe) $10.6 YE22 PD Reserves1 PV10 ($MM) $1,907 YE22 PD Reserves1 (MMBoe) 90 Net Acreage (thousand) ~102 Capex ($MM) $42.6 Shares Outs
Slide 20: Core Assets in NWS and CBP
Core Assets in NWS and CBP Record Sales Significant Increase in “PD” Reserves1 Focus investments on growing core asset areas in NWS & CBP 107% Increase YOY NWS CBP DLWR 160,000 PD PUD 14,000 140,000 2% 12,000 120,000 10,000 35% 42%1 Proved Reserves MBoe 100,000 Net Sales Boe/d 7% 5% 8,000 80,000 31%
Slide 21: New Drill Inventory Performance
Assets Overview New Drill Inventory Performance Consistent Hz Well Performance Consistent Vertical Well Performance SA Horizonal Play1 CBP Vertical Multi-Stacked Pay2 60,000 30,000 Shorter Cycles Times & Lower Capex Drive 50,000 25,000 Capital Efficiency Cum 180-Day/well Avg., BOE Cum 180-Day/well A
Slide 22: Inventory of High Quality, High-Return, Short Cycle Opportunities
Asset Overview Inventory of High Quality, High-Return, Short Cycle Opportunities Recent Hz Well Results – NWS Peak IP Lateral Geological Area Well Name 60 Oil (%) Length WI (%) Region (Boepd) (ft) Recent Vertical Well Results – CBP South NWS Platang Boomer 727 #3H 350 96% 5058 100% NWS Platang Bucky
Slide 23: San Andres Reservoir
San Andres Reservoir Proven, Conventional, Top Tier Returns San Delaware Midland Andres Hz Hz Hz ▪Permian Basin has produced >30 BBbl High ROR Oil Play ✓ ✓ ✓ ▪San Andres accounts for 40% Low D&C Costs ✓ ▪Low D&C costs1 $3.2 - $4.4 MM per well Lower 1st Year Decline ✓ ▪Vertical depth of ~5,000’ Low L
Slide 24: Southern Central Basin Platform
Southern Central Basin Platform Vertical Well Performance & Costs Stacked Pay Zones Modern Completion Crane Co. – Vertical Recompletion “RC” – Cum BOE vs Time (Days) CBP South Type Log Methods 100,000 10,000 Cum Production, BOE 1,000 Legacy Simple Single Modern Multi-Stage Stage Completion Completio
Slide 25: CTRs in NWS & CBP HZ Reduce Operating Costs
CTRs in NWS & CBP HZ Reduce Operating Costs Maintains Solid PDP Reserve Base that Generates Consistent FCF Increases reserves by reducing operating & well repair Cost Savings ESP vs ROD costs and extending well life $250,000 $240,000 ▪ ~50% long-term reduction in LOE $225,000 $200,000 ▪ Up to 75% re
Slide 26: Financial Overview
Financial Overview ENERGY
Slide 27: 2023 Guidance
2023 Guidance Grow Production, Generate FCF, Pay Down Debt Sales Volumes Q1 2023 FY 2023 Total (Boe/d) 17,800 – 18,300 17,800 – 18,800 Oil (%) 68% 66-70% CAPEX Allocation Gas (%) 17% 16-18% 7% NGLs (%) 15% 14-16% Capital Spending 23% Mid Point Capital spending1 (millions) $36 – $40 $135 – $170 $152.
Slide 28: Sustainable Value Focused Results
Sustainable Value Focused Results Executing Disciplined Strategy 14,000 Net Sales Adjusted Net Income1 $120 12,000 ~77% Oil $100 3-Stream2 10,000 $80 8,000 ~87% Oil ~86% Oil Boe/d $Million $60 6,000 12,364 $107.5 4,000 8,790 8,519 $40 2,000 $20 $30.6 $20.7 0 $0 2020 2021 2022 2020 2021 2022 $250 Adj
Slide 29: Historical Metrics
Historical Metrics1 Quarterly Analysis of FCF Leverage Ratio 3.5x 2.8x 2.1x 1.4x2 1.6x2 (LTM)2 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 $70 $60 $56.0 $56.3 $47.4 Adj. EBITDA/ Capital / Int Exp $50 $40 $35.6 $30 $24.0 $20 $12.6 $9.3 $9.7 $10 $5.5 $2.5 $0 -$11.3 -$10 -$19.7 -$3.4 -$20 -$3.2 -$41.8 -$40
Slide 30: Reducing Debt & Increasing Liquidity
Reducing Debt & Increasing Liquidity Disciplined Capital Spending & Sustainably Generating FCF is the Key Debt Paydown Liquidity1 $25 $200 $180 $188 $20 $20 $160 $165 $140 Stronghold $17 Acquisition $15 $120 $ Million Stronghold $ Million Acquisition $100 $313 MM outstanding debt $10 $80 with $36 MM
Slide 31: Derivative Summary
Financial Overview Derivative Summary Oil Hedges (WTI) Gas Hedges (Henry Hub) Q1 2023 Q2 2023 Q3 2023 Q4 2023 Annual Annual Q1 2023 Q2 2023 Q3 2023 Q4 2023 Annual Annual 2023 2024 2023 2024 Swaps: Hedged volume (BBL) 45,000 68,250 138,000 138,000 389,250 894,000 NYMEX Swaps: Weighted average swap pr
Slide 32: Income Statement and Operational Stats
Income Statement and Operational Stats Income Statement Operational Stats (Unaudited) Three Months Ended Twelve Months Ended Three Months Ended Twelve Months Ended December 31, September 30, December 31, December 31, December 31, December 31, September 30, December 31, December 31, December 31, 2022
Slide 33: Balance Sheet and Cash Flow Statement
Balance Sheet and Cash Flow Statement Balance Sheet Cash Flow (Unaudited) Three Months Ended Twelve Months Ended (Unaudited) December 31, September 30, December 31, December 31, December 31, 2022 2022 2021 2022 2021 December 31, December 31, 2022 2021 Cash Flows From Operating Activities ASSETS Net
Slide 34: Non-GAAP Disclosure
Non-GAAP Disclosure Certain financial information included in this Presentation are not measures of financial performance recognized by accounting principles generally accepted in the United States (“GAAP”). These non-GAAP financial measures are “Adjusted Net Income,” “Adjusted EBITDA,” “Free Cash F
Slide 35: Non-GAAP Reconciliations
Non-GAAP Reconciliations Adjusted Net Income (Unaudited) Free Cash Flow Three Months Ended Twelve Months Ended Three Months Ended Twelve Months Ended December 31, September 30, December 31, December 31, December 31, December 31, September 30, December 31, December 31, December 31, 2022 2022 2021 202
Slide 36: Company Contact / Analyst Coverage
COMPANY CONTACT Al Petrie (281) 975-2146 apetrie@ringenergy.com Chris Delange (281) 975-2146 cdelange@ringenergy.com ANALYST COVERAGE Alliance Global Partners (A.G.P.) Jeff Grampp (713) 349-1067 jgrampp@allianceg.com ROTH Capital Partners John M. White (949) 720-7115 jwhite@roth.com Truist Financial