Ring Energy, Inc. · AMEX:REI
Ring Energy — Q1 2023 Earnings Presentation
33 slides from Ring Energy's earnings presentation, May 4, 2023
Slide 1: Value Focused Proven Strategy
VALUE FOCUSED PROVEN STRATEGY 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: Value Focused Proven Strategy
Value Focused Proven Strategy Supporting Sustainable Returns KEY TAKEAWAYS Added Size & Scale - accretive acquisition of Stronghold assets Two full quarters with new assets under management which have led to record Net sales production of over 18,000 Boepd Continue to Deliver Record Results1 - cash
Slide 4: Independent Oil & Gas Company
Independent Oil & Gas Company Focused on Conventional Permian Assets in Texas Generated Free Cash Flow for 14 Consecutive Quarters NWS Record Q1 2023 Net Sales 18,292 Boe/d Highly oil weighted 69% oil 16% gas 15% NGL 2022 SEC Proved Reserves1,2 DB 138.1 MMBoe/PV10 $2.77 Billion Proved Developed 65%
Slide 5: Q1 2023 Highlights
Q1 2023 Highlights Proven Strategy Leads to Record Results BOE Oil Cash Flow Adjusted Free Cash Leverage Liquidity3 Production Production From Ops1 EBITDA1 Flow1 Ratio2 Q1 18,292 12,660 $49.4 $58.6 $10.5 1.65x $179 2023 Boe/d BOPD Million Million Million Million Q1 2023 sales at high end of guidance
Slide 6: Enhancing Value for Shareholders
Enhancing Value for Shareholders Executing Strategy Improves Annual Key Metrics1 Production/Share CFFO ($million) 0.04 $200 0.04 $173 Up Up $150 Up 0.03 33% 33% 149% 0.03 $100 $70 $50 0.02 $- 2021 2022 2021 2022 PV-10/Share1 FCF Yield2 $25.00 $22.88 14% $20.00 12% 12% Up 10% 9% Up $15.00 $13.40 70%
Slide 7: Enhancing Value for Shareholders
Enhancing Value for Shareholders Executing Strategy Improves Annual 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 202
Slide 8: 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 9: Simplifying and Enhancing the Capital Structure
Simplifying and Enhancing the Capital Structure Preparing to Pursue Balance Sheet Enhancing & Accretive Acquisitions Accelerated Exercise of Warrants ▪ Common warrants were issued in October 2020 as part of a public offering that raised $20.8 million in gross proceeds to restart a capital drilling p
Slide 10: Committed to ESG
Committed to ESG Critical to Sustainable Success Progressing our ESG Journey ▪ Created ESG Task Force to monitor Company’s adherence to ESG standards and formally communicate to CEO and the Board on ongoing basis. ▪ Established Target Zero 365 (TZ-365) Safety & Environmental Initiative to further bu
Slide 11: Proved Reserves and Inventory
1 Proved Reserves and Inventory SEC YE 2022 Reserves by Category (%) Reserves by PV-102 ($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% $1,907 64% PD PUD PD PUD Oil Gas NGL 200+ PU
Slide 12: Compelling Value Proposition
Compelling Value Proposition Proven Strategy Leads to Shareholder Value1,2 EV/2023E Adjusted EBITDA3 EV/PV-103 YE22 1P Reserves 2023E FCF3 Yield 6.0x 0.8x 30% 25% 0.7x 5.0x 20% 0.6x 15% 4.0x 0.5x 10% 5% 3.0x 0.4x 0% 0.3x -5% 2.0x -10% 0.2x 1.0x -15% 0.1x -20% 0.0x 0.0x -25% Despite Strong Returns, S
Slide 13: Value Proposition 2023 and Beyond
Value Proposition 2023 and Beyond ❖ Trading at a discount to peer average ❖ Delivering higher returns than peer average ❖ Value focused strategy is proven by record 2022 & Q1 2023 results ❖ Disciplined and capital efficient budget is focused on maintaining production levels, FCF generation and debt
Slide 14: Asset Overview
Asset Overview ENERGY
Slide 15: Company Overview
Company Overview Core Assets Operating Statistics Q1 2023 Net Production (MBoe/d) 18.3 Oil (Bo/d) ~ 69% 12.7 Gas (Mcf/d) ~ 16% 17.8 NGLs (Bbls/d) ~ 15% 2.7 LOE ($ per Boe) $10.61 YE22 PD Reserves1 PV10 ($MM) $1,907 YE22 PD Reserves1 (MMBoe) 90 Net Acreage (thousand) ~102 Capex ($MM) $38.9 Shares Out
Slide 16: 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 17: Assets Overview: 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 18: Asset Overview
Asset Overview Deep Inventory of High-Return Drilling and Re-Completion Locations Select Recent New Drill Horizontal Well Results – Northwest Shelf Select Recent New Drill Vertical Well Results – Peak IP Lateral Geological Central Basin Platform Region Area Well Name 60 (Boepd) Oil (%) Length WI (%)
Slide 19: 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 20: Financial Overview
Financial Overview ENERGY
Slide 21: 2023 Guidance
2023 Guidance Grow Production, Generate FCF, Pay Down Debt Sales Volumes Q2 2023 FY 2023 Total (Boe/d) 17,900 – 18,400 17,800 – 18,800 Oil (%) 69% 66-70% CAPEX Allocation NGLs (%) 15% 14-16% 8% Gas (%) 16% 16-18% Capital Program 22% Mid Point Capital spending1 (millions) $34 – $38 $135 – $170 $152.5
Slide 22: Historical Metrics: Quarterly Analysis of FCF
Historical Metrics1 Quarterly Analysis of FCF Leverage Ratio 2.80x 2.13x 1.41x2 1.56x2 1.65x2 (LTM)2 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 $70 $58.6 $60 $56.0 $56.3 $47.4 Adj. EBITDA/ Capital / Int Exp $50 $40 $35.6 $30 $20 $12.6 $9.7 $10.5 $10 $5.5 $2.5 $0 -$10 -$19.7 -$20 -$3.2 -$41.8 -$40.3 -$4
Slide 23: Reducing Debt & Increasing Liquidity
Reducing Debt & Increasing Liquidity Disciplined Capital Spending & Sustainably Generating FCF is the Key Debt Paydown Liquidity1 $25 $200 Stronghold $180 $188 Acquisition $20 $20 final $179 deferred $160 $165 $17 cash $15 payment $140 $15MM + $3.5mm post close $120 $10 $ Million adjustment $ Millio
Slide 24: Appendix
Appendix
Slide 25: Financial Overview: Derivative Summary
Financial Overview Derivative Summary Oil Hedges (WTI) Gas Hedges (Henry Hub) Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 Q4 2024 Q1 2025 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 Q4 2024 Q1 2025 Swaps: NYMEX Swaps: Hedged volume (Bbl) 68,250 138,000 138,000 170,625 156,975 282,900 368,000
Slide 26: Income Statement and Operational Stats
Income Statement and Operational Stats Income Statement Operational Stats (Unaudited) Three Months Ended Three Months Ended March 31, December 31, March 31, March 31, December 31, March 31, 2023 2022 2022 2023 2022 2022 Net sales volumes: Oil, Natural Gas, and Natural Gas Liquids Revenues $ 88,082,9
Slide 27: Balance Sheet and Cash Flow Statement
Balance Sheet and Cash Flow Statement Balance Sheet (Unaudited) March 31, 2023 December 31, 2022 Cash Flow (Unaudited) Three Months Ended March 31, December 31, March 31, ASSETS 2023 2022 2022 Current Assets Cash and cash equivalents $ 1,725,700 $ 3,712,526 Cash Flows From Operating Activities Accou
Slide 28: 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 29: Non-GAAP Reconciliations
Non-GAAP Reconciliations (Unaudited) (Unaudited for All Periods) Adjusted Net Income Three Months Ended Free Cash Flow Three Months Ended March 31, December 31, March 31, March 31, December 31, March 31, 2023 2022 2022 2023 2022 2022 Net Income $ 32,715,779 $ 14,492,669 $ 7,112,043 Adjusted EBITDA $
Slide 30: Corporate Strategy Summary 2022
Corporate Strategy Summary 2022 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 incre
Slide 31: Experienced Management Team
Experienced Management Team Shared Vision with a Track Record of Success Add Add Add Photo Photo Photo Paul D. McKinney Stephen D. Brooks Alexander Dyes Travis Thomas Hollie Lamb Marinos Baghdati Chairman & Chief EVP of Land, Legal, HR & EVP of Engineering & EVP & Chief VP of NonOP Reservoir EVP of
Slide 32: 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 33: Company Contact and 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 (949) 296-4171 jgrampp@allianceg.com ROTH Capital Partners John M. White (949) 720-7115 jwhite@roth.com Truist Financial