Ring Energy, Inc. · AMEX:REI
Ring Energy — Q4 2024 Earnings Presentation
40 slides from Ring Energy's earnings presentation, Mar 6, 2025
Slide 1: Q4 & FY 2024 Overview, 2025 Guidance
Q4 & FY 2024 OVERVIEW 2025 GUIDANCE www.ringenergy.com NYSE American: REI
Slide 2: Forward-Looking Statements and Supplemental Non-GAAP Financial Measures
Forward-Looking Statements and Supplemental Non-GAAP Financial Measures Forward –Looking Statements Supplemental Non-GAAP Financial This Presentation includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Measures Secur
Slide 3: Ring Energy - Independent Oil & Gas Company
Ring Energy - Independent Oil & Gas Company Focused on Conventional Permian Assets in Texas Q4 2024 Net Production 19,658 Boe/d Yoakum (66% oil and 85% liquids) Differentiated approach by 2024 SEC Proved Reserves1,2 Gaines applying unconventional ~134.2 MMBoe/ technology and thinking to conventional
Slide 4: 2024 Highlights - Improved Portfolio Comparison
2024 Highlights - Improved Portfolio Comparison Improved Portfolio Leads to Superior Results Oil Cash Adjusted Sales Realized Adjusted Debt Leverage SEC 1P Sales CapEx Operating Free Cash Boe $/Boe EBITDA1 Balance Ratio3 Reserves4 Bo Costs2 Flow1 2024 2024 2024 2024 2024 2024 2024 2024 2024 2024 13,
Slide 5: Proved Reserves and Inventory
Proved Reserves1 and Inventory SEC YE 2024 Reserves by Category (%) Reserves by PV-102 ($MM) Reserves by Product (%) Locations by Area 430+3 Total Proved Only Locations & Opportunities 23% 21% 19% 31% NWS ~134 $1,463 ~134 CBP-N MMBoe MM MMBoe Penwell 69% CBP-S 77% 60% PD ~93 PUD ~42 $1130 $333 Oil 6
Slide 6: FY 2025 Guidance Pro Forma Outlook
FY 2025 Guidance Pro Forma “PF” Outlook Assumes 3 Full Quarters of Lime Rock Asset1 Operations Q1 2025 Q2 2025 Q3 2025 Q4 2025 FY 2025 Sales Volumes FY 2025 CAPEX REI Only PF PF PF PF Guidance Total (Bo/d) 11,700 – 12,000 13,700 – 14,700 14,000 – 15,000 14,400 – 15,400 13,600 – 14,200 Allocation Mid
Slide 7: Positioned for Success in 2025 & Beyond
Positioned for Success in 2025 & Beyond PF Outlook – Building Scale and Improving Key Metrics from Accretive Acquisitions Pursue Operational Excellence & Maximizing Adj. Free Cash Flow1,2 Building Scale Total Sales Oil Sales $60 30% 20,000 to 22,000 Boe/d 13,500 to 14,300 Bo/d Mid-point 21,000 Boe/d
Slide 8: Distinguishing Attributes: High Operating Margins
Distinguishing Attributes: High Operating Margins Ring’s Conventional Assets with High Netbacks Drive Strong Cash Operating Margins vs. Peers1,2 3Q 2024 TTM Cash Operating Margin and Realized Pricing ($/Boe) Operational Excellence and Cost Control Drive $80 Profitability $71.33 • High oil weighting
Slide 9: Distinguishing Attributes: Low PDP Base Decline
Distinguishing Attributes: Low PDP Base Decline Ring’s Conventional Assets have Shallow Base Decline2 Versus Other Permian & Shale Players PDP ONLY Decline1: 2024E PDP BOE Base Decline % 40% 37% 36% 35% 35% 34% 34% 33% Median 33% 30% 30% 29% 25% 25% 22% 20% 20% 15% 10% 5% 0% Peer 1 Ring Peer 2 Peer
Slide 10: Enhanced Value for Stockholders
Enhanced Value for Stockholders Improved Metrics - Increased Production, Reduction in Costs, and Increased Proved Reserves on per Share Basis Production/Share Boe/Share All-in-Cash Operating Costs1 $/Boe SEC 1P Reserves/Share2 Boe/Share 0.040 $25 0.700 all-in cash operating costs decreased despite i
Slide 11: Competitive Value for Stockholders
Competitive Value for Stockholders Track Record of 3 Consecutive Years of Corporate Returns Above 15% Despite Drop in Commodity Prices Cash Return on Capital Employed1 Avg WTI $/Bbl & Avg Realized $/Boe (CROCE) % Strong CROCE % 25.0% $100.00 Avg Realized $94.90 $/Boe • Disciplined and successful cap
Slide 12: Consistent Value for Stockholders
Consistent Value for Stockholders Minimized the Effect of a 7% Reduction in Realized Prices ACFFO1 $MM Adjusted EBITDA1 $MM Adjusted Free Cash Flow1 $MM $250 $275 $55 $225 $250 $50 $236 $233 $45 $200 $197 $195 $225 $45 $44 $175 $200 $40 $150 $175 $35 2023 2024 2023 2024 2023 2024 1. Adjusted Cash Fl
Slide 13: Track Record of Strategic Consolidation
Track Record of Strategic Consolidation Three Acquisitions & One Pending Since 2019 Increases Net Production by >3.5x Legend Acquisition Track Record Ring Energy Legacy ~22,000 Lime Rock Resources Ring’s Value Focused Proven Founders Oil & Gas Strategy pursuing accretive, Stronghold Energy Operati
Slide 14: Impact of Founders Acquisition
Impact of Founders Acquisition Performance Exceeded Initial Expectations REI Pro Forma – Post Closing Performance Founders Acquisition $75MM REI Net Prod. (MBoe/d) 1 REI Net Debt $MM $100 21.0 $450 Cash Due @ Close 16% growth to PF Net Debt reduced Eff date (Post Adj Close) company 20.1 over 5 qtrs
Slide 15: Opportunity-Rich Basin
Opportunity-Rich Basin Why is Ring Focused on Consolidating Conventional Assets in the Central Basin Platform & Northwest Shelf? Publics NWS Acquire accretive, balance sheet enhancing CBP & NWS assets Privates CBP/NWS CBP & NWS remain the “shale era” underexplored Publics opportunity in the Permia
Slide 16: Compelling Value Proposition
Compelling Value Proposition Ring Trading at Discount to Peers1,2 EV/PV-103 YE23 1P Reserves & % Oil EV/2024 Adjusted EBITDA3 4.5x 1.4x 100% 90% 4.0x 1.2x 80% 3.5x 1.0x 70% 3.0x 60% EV/PV-10 0.8x 2.5x % Oil 50% 0.6x 2.0x 40% 30% 1.5x 0.4x 20% 1.0x 0.2x 10% 0.5x 0.0x 0% 0.0x Despite a Track Record of
Slide 17: Ring Trading at Discount Compared to Recent Transaction
Ring Trading at Discount Compared to Recent Transaction REI Suggested Valuation Using APA CBP & NWS Assets Divestiture Valuation Metrics Private Buyers Paying Higher Valuation Multiples for Conventional Permian Assets APA Permian Divestiture1 $1,000 $3.00 Asset Date Announced 9/10/2024 Metrics APA S
Slide 18: Value Proposition
Value Proposition 2025+ and Beyond Remaining focused on maximizing FCF generation in a volatile commodity price environment Continue delivering competitive returns through disciplined pursuit of value focused strategy Strong Cash Operating margins help deliver superior results & helps manage risk in
Slide 19: Financial Overview
FINANCIAL OVERVIEW www.ringenergy.com
Slide 20: Delivering Value in 2024
Delivering Value in 2024 Compelling Strategy and Portfolio Leads to Shareholder Value Creation • Recorded Net Income of $67.5 million, or $0.34 per diluted share Adding Size and Scale to the Portfolio • Reported Adjusted Net Income of $69.5 million, or $0.35 per diluted share • Generated Adjusted EB
Slide 21: Historical Metrics
Historical Metrics Quarterly Analysis of AFCF1 Leverage Ratio (LTM)2 1.62x 1.67x 1.59x 1.59x 1.66x Q4 2023 Q1 2024 Q2 2024 Q3 2024 Q4 2024 $70 $60 $65.4 $66.4 Adj. EBITDA/ CapEx / Int Exp $62.0 $50 $54.0 $50.9 $40 $30 $21.4 $16.3 $15.6 $20 $1.9 $4.7 $10 $0 -$10 -$20 -$38.8 -$36.3 -$35.4 -$42.7 -$37.
Slide 22: Reducing Debt & Increasing Liquidity
Reducing Debt & Increasing Liquidity Disciplined Capital Spending & Sustainably Generating AFCF RBL Balance & Adjusted Debt Paydown1,2 ($ Million) Liquidity3 ($ Million) RBL Balance ($MM) $450 $428 $240 $435 $400 $220 $217 $385 $200 $208 $350 $204 $194 $180 $188 $300 $179 $179 $160 $171 $175 $165 $2
Slide 23: Asset Overview
ASSET OVERVIEW www.ringenergy.com
Slide 24: Committed to ESG
Committed to ESG Critical to Sustainable Success 2024 Sustainability Report Progressing our ESG Journey A Target Zero Day is a Day that Results in: Download Report PDF • Created ESG Task Force and established Target Zero Zero Company or 365 (TZ-365) Safety & Environmental Initiative in 2021to monito
Slide 25: Assets Overview: New Drill Inventory Performance
Assets Overview New Drill Inventory Performance Consistent HZ Well Performance Enhanced Vertical Well Performance San Andres Horizontal Play EUR (MBoe) per 1000’ Lateral Feet CBP Vertical Multi-Stacked Play 2 100 20,000 Thousands Cum 90-Day/ well Avg - BOE 15,000 75 87-91% 10,000 73% ~79% 77-81% Oil
Slide 26: Assets Overview
Assets Overview Deep Inventory of High-Return Drilling and Re-Completion Locations Select Recent New Drill Horizontal Well Results Select Recent New Drill Vertical Well Results – Northwest Shelf – Central Basin Platform Peak IP Lateral Geological Peak IP Area Well Name 30 / 60 Oil (%) Length WI (%)
Slide 27: San Andres Horizontal Play Characteristics
San Andres Horizontal Play Characteristics Proven, Conventional, Top Tier Returns San Andres Hz Delaware Hz Midland Hz High ROR Oil Play • Permian Basin has produced >30 BBbl Low D&C Costs — San Andres accounts for ~40% Lower 1st Year Decline • Low D&C costs1 $2.3 - $3.4 MM per Hz well Low
Slide 28: Vertical Multi-Stacked Pay Characteristics
Vertical Multi-Stacked Pay Characteristics Proven, Conventional, Top Tier Returns CBP Vt Stack & Frac Delaware Hz Midland Hz High ROR Oil Play • Central Basin Platform has produced >15 BBboe Low D&C Costs — Vertical multi-stage fracs targeting legacy reservoirs that have been productive thro
Slide 29: Thank You
THANK YOU Ring Headquarters 1725 Hughes Landing Blvd Ste 900 The Woodlands, TX 77830 Phone: 281-397-3699 Company Contact Analyst Coverage Al Petrie Alliance Global Partners (A.G.P.) Truist Financial Water Tower Research (281) 975-2146 Jeff Grampp (949) 296 4171 Neal Dingmann (713) 247-9000 Jeff Robe
Slide 30: Appendix
APPENDIX www.ringenergy.com
Slide 31: REI Historical Price Performance
REI Historical Price Performance1 Price Performance Since January 1, 2022 5.5 6.5 MM warrants 140.00 exercised 5.0 Stronghold Announcement 120.00 4.5 3.0 MM warrants exercised 4.5 MM warrants 100.00 Founders 4.0 exercised Announcement 3.5 68.37 80.00 Warburg Pincus sell 3.0 14.5 MM warrants down 12.
Slide 32: Financial Overview: Derivative Summary
Financial Overview Derivative Summary as of December 31, 2024 Oil Hedges (WTI) Gas Hedges (Henry Hub) Q1 2025 Q2 2025 Q3 2025 Q4 2025 Q1 2026 Q2 2026 Q3 2026 Q4 2026 Q1 2025 Q2 2025 Q3 2025 Q4 2025 Q1 2026 Q2 2026 Q3 2026 Q4 2026 Swaps: NYMEX Swaps: Hedged volume (Bbl) 193,397 151,763 351,917 141,75
Slide 33: Income Statement and Operational Stats
Income Statement and Operational Stats Income Statement Operational Stats (Unaudited) (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, Decem
Slide 34: Balance Sheet and Statements of Cash Flows
(Unaudited) Balance Sheet Statements of Cash Flows Three Months Ended Twelve Months Ended December 31, 2024 December 31, 2023 December 31, September 30, December 31, December 31, December 31, ASSETS 2024 2024 2023 2024 2023 Current Assets Cash Flows From Operating Activities Cash and cash equivalent
Slide 35: 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,” “Adjusted Fr
Slide 36: Non-GAAP Reconciliations
Non-GAAP Reconciliations Adjusted Net Income Adjusted EBITDA (Unaudited for All Periods) (Unaudited for All Periods) Three Months Ended Twelve Months Ended Three Months Ended Twelve Months Ended December 31, September 30, December 31, December 31, December 31, September 2024 2024 2023 2024 2023 Dece
Slide 37: Non-GAAP Reconciliations (cont.)
Non-GAAP Reconciliations (cont.) Leverage Ratio Adjusted Free Cash Flow (Unaudited for All Periods) Three Months Ended Three Months Ended Twelve Months Ended March 31, June 30, September 30, December 31, Last Four December 31, September 30, December 31, December 31, December 31, 2024 2024 2024 2024
Slide 38: Non-GAAP Reconciliations (cont.)
Non-GAAP Reconciliations (cont.) Leverage Ratio (Prior Year End) Three Months Ended March 31, June 30, September 30, December 31, Last Four 2023 2023 2023 2023 Quarters Consolidated EBITDAX Calculation: Net Income (Loss) $ 32,715,779 $ 28,791,605 $ (7,539,222) $ 50,896,479 $ 104,864,641 Plus: Consol
Slide 39: Non-GAAP Reconciliations (cont.)
Non-GAAP Reconciliations (cont.) Adjusted Cash Flow from Operations (ACFFO) Cash Return on Capital Employed (CROCE) As of and for the twelve months ended (Unaudited for All Periods) Three Months Ended Twelve Months Ended December 31, December 31, December 31, December September December December Dec
Slide 40: Non-GAAP Reconciliations (cont.)
Non-GAAP Reconciliations (cont.) All-In Cash Operating Costs Current Ratio (Unaudited for All Periods) Three Months Ended Twelve Months Ended As of December 31, September 30, December 31, December 31, December 31, 2024 2024 2023 2024 2023 December 31, All-In Cash Operating Costs: 2024 Lease operatin