Ring Energy, Inc. · AMEX:REI
Ring Energy — Q3 2022 Earnings Presentation
33 slides from Ring Energy's earnings presentation, Nov 9, 2022
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: Ring Energy – Independent Oil & Gas Company
Ring Energy – Independent Oil & Gas Company Focused on Conventional Permian Assets in Texas & New Mexico Deliver competitive and sustainable returns by developing, acquiring, exploring for, and commercializing oil and natural gas resources VITAL TO THE WORLD’S HEALTH AND WELFARE Consistently Generat
Slide 4: Q3 2022 Highlights
Q3 2022 Highlights Executing our Strategy Successfully closed accretive transaction Q3 2022 Highlights Record quarterly sales revenue of $94.4 MM – highest in Company history Increased sales volumes2 42% to 13,278 Boe/d (76% oil, 13% natural gas, 11% NGLs) $75.1 MM $9.71 MM Net Income Free Cas
Slide 5: Committed to ESG
Committed to ESG Critical to Sustainable Success 5 www.ringenergy.com NYSE American: REI
Slide 6: 2022 Value Focused Proposition
2022 Value Focused Proposition Proven Strategy Leads to Shareholder Value YTD ~$139 MM Adj. EBITDA1 Pursue Operational (134% Increase over 2021 for same time period) Excellence with a Sense of Urgency YTD Average 10,512 Boepd (81% Oil) (27% Increase over 2021 for same time period) YTD Drill 23 & Com
Slide 7: Financials
Financials OEING
Slide 8: Sustainable Value Focused Results
Sustainable Value Focused Results Executing Disciplined Strategy Net Sales Adjusted Net Income1 14,000 $35.0 12,000 $30.0 ~76% Oil 10,000 3-Stream2 $25.0 ~86% Oil 8,000 ~85% Oil ~85% Oil Boe/d ~87% Oil $20.0 $MM 13,278 6,000 $31.3 $32.5 $15.0 9,153 8,870 9,341 4,000 8,243 $22.3 $10.0 2,000 $5.0 $9.9
Slide 9: Adj. EBITDA / Capital / Int Exp
Historical Metrics1 Quarterly Analysis of FCF $MM Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Disciplined & efficient capital spending Adj EBITDA1 $19.7 $24.0 $35.6 $47.4 $56.0 Capital -$13.7 -$11.3 -$19.7 -$41.8 -$40.3 Focused on sustainably generating FCF Interest Exp.2 -$3.4 -$3.4 -$3.2 -$3.1 -$5
Slide 10: Reducing Debt & Increasing Liquidity
Reducing Debt & Increasing Liquidity Disciplined Capital Spending & Sustainably Generating FCF is the Key Debt Paydown $MM Stronghold Liquidity $MM $18 Acquisition $50 $180 $17 $16 $45 $160 $165.0 $40 $14 $140 $35 $12 $120 $30 $10 $100 $10 $10 $25 $313 MM $8 $80 outstanding debt $81.5 $20 with $36 M
Slide 11: Asset Areas
Asset Areas OEING
Slide 12: Ring + Stronghold Pro-Forma Overview
Ring + Stronghold Pro-Forma Overview Successfully closed the acquisition on August 31, 2022 $172.4MM cash at close after certain purchase price adjustments and funded from new credit facility Key Transaction borrowings Structure & $15MM deferred cash payment due 6 months after close Terms St
Slide 13: Northwest Shelf Asset Area
Northwest Shelf Asset Area Providing Significant Organic Growth 3Q22 Avg Sales Gross / Net Acres1 7,669 Boe/d (77% Oil) 35,810 / 26,655 3Q22 D&C 3Q22 CTR’s Completed 6 Hz wells2 (~93.75% WI) 5 Conversions Basin Northwest Shelf Meaningful inventory of horizontal drilling locations Delaware CBP Ac
Slide 14: 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 $2.8 - $3.8 MM per well Lower 1st Year Decline Vertical depth of ~5,000’ Low
Slide 15: NWS HZ Well Performance & Costs
NWS HZ Well Performance & Costs Significant Improvements Driving Top Tier Returns NWS HZ Performance Average – Cum BOE vs Time Days (1 Mile Lateral)2,3 D&C Cost Range per Year (1 Mile Lateral)1 $3.5 M 100,000 BOE (85-90% Oil) $3.0 M $2.5 M 10,000 $2.0 M 2015 2016 & 2017 2018 $1.5 M ~530 Avg 2019 -20
Slide 16: Central Basin Platform Asset Areas
Central Basin Platform Asset Areas Technical Focus Reinvigorates Legacy Area 3Q22 Avg Sales1 Gross / Net Acres2 5,376 Boe/d (76% Oil) 29,065 / 20,288 3Q22 D&C 3Q22 CTR’s Completed 3 Hz wells (100% WI) 1 Conversion Northern CBP 3 Recompletions Basin Horizonal Development San Andres Play Northwest She
Slide 17: Northern Central Basin Platform HZ Well Performance & Costs
Northern Central Basin Platform HZ Well Performance & Costs Technical Improvements to Completion and Landing Zone Annual D&C per HZ Cost Range (1.0 & 1.5 Mile)1 CBP 1.0 & 1.5 Mile HZ Performance – Cum BO vs Time (2021 & 2022 vs Historic)2,3 $4.0 M 2021 & 2022 CBP HZ Program Average Historical CBP HZ
Slide 18: Southern Central Basin Platform Vertical Well Performance & Costs
Southern Central Basin Platform Vertical Well Performance & Costs Stacked Pay Zones Modern Completion Methods Crane Co. – Vertical Recompletion “RC” – Cum BOE vs Time (Days) 100,000 CBP South Type Log 10,000 Cum Production, BOE 1,000 Legacy Simple Single Modern Multi-Stage Stage Completion Completio
Slide 19: CTRs Significantly Reduce Operating Costs
CTRs Significantly 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% redu
Slide 20: Delaware Basin Asset
Delaware Basin Asset Turnkey Asset with Predictable Cash Flow and Upside Potential Non-Core asset that can be catalyst to pay down debt and/or provide funds for potential accretive acquisition Sales process for Delaware Assets underway Truist Securities running a marketed process Asset infrast
Slide 21: Value Proposition
Value Proposition 2022 and Beyond Positioned for Substantial Increase in Revenue and FCF Achieving High-Return Organic Growth Pursuing Acquisition Opportunities to Further Increase Scale and Lower Break-Even Costs 21 www.ringenergy.com NYSE American: REI
Slide 22: Appendix
Appendix ORING
Slide 23: Financial Overview: Derivative Summary
Financial Overview Derivative Summary Summary of Hedges Oil Hedges (WTI) Gas Hedges (Henry Hub) 2022 2023 2024 2022 2023 2024 Swaps: NYMEX Swaps: Hedged volume (MMBtu) 46,313 175,421 - Hedged volume (BBL) 379,250 389,250 526,000 Weighted average swap price $ 2.51 $ 2.40 $ - Weighted average swap pri
Slide 24: Income Statement and Operational Stats
Income Statement and Operational Stats Income Statement Operational Stats (Unaudited) (Unaudited) Three Months Ended Nine Months Ended Three Months Ended Nine Months Ended September 30, June 30, September 30, September 30, 2022 2022 2021 2022 2021 September 30, June 30, September 30, September 30, 2
Slide 25: Balance Sheet and Cash Flow Statement
Balance Sheet and Cash Flow Statement Balance Sheet (Unaudited) September 30, December 31, Cash Flow (Unaudited) September 30, Three Months Ended June 30, September 30, Nine Months Ended September 30, 2022 2021 2022 2022 2021 2022 2021 Cash Flows From Operating Activities ASSETS Current Assets Net i
Slide 26: Non-GAAP Disclosure
Non-GAAP Disclosure Certain financial information included in Ring’s financial results are not measures of financial performance recognized by accounting principles generally accepted in the United States, or GAAP. These non-GAAP financial measures are “Adjusted Net Income”, “Adjusted EBITDA”, “Free
Slide 27: Non-GAAP Reconciliations
Non-GAAP Reconciliations Adjusted Net Income Free Cash Flow Three Months Ended Nine Months Ended Three Months Ended Nine Months Ended September 30, June 30, September 30, September 30, September 30, June 30, September 30, September 30, 2022 2022 2021 2022 2021 2022 2022 2021 2022 2021 (Unaudited for
Slide 28: Q4 2022 Guidance
Q4 2022 Guidance Grow Production, Generate FCF, Pay Down Debt Sales Volumes Total (Boe/d) 18,000 – 19,000 Oil (Bo/d) ~70% 12,600 – 13,300 CAPEX Allocation Gas (Mcf/d) ~17% 18,400 – 19,400 9% NGLs (Bbls/d) ~ 13% 2,300 – 2,500 Capital Spending Capital spending1 (millions) $42 – $46 Mid Point $44 milli
Slide 29: 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 30: 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 31: 1P Summary
SEC Proved Reserves1 Year-End 2021 Net 2021 SEC Pricing Net Oil, Net Gas, Net 2 PV-103, Reserve Category Capex , 1P Summary MBbl MMcf MBOE $MM $MM Oil/$Bbl Gas $/Mmbtu PD 36,821 39,749 43,446 $55 $794 $63.04 $3.598 PUD 29,018 32,025 34,355 $293 $538 TOTAL 65,839 71,774 77,801 $348 $1,332 Reserves by
Slide 32: Corporate Strategy
Corporate Strategy Value Focused for Sustainable Success Attract and Retain Highly Qualified People Pursue Operational Excellence with a Sense of Urgency Invest in High-Margin, High RoR Projects Focus on FCF and Strengthen Balance Sheet Pursue Strategic A&D to Lower Breakeven Costs 32 www.ringenergy
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 Campbell (203) 577-5427 jcampbell@allianceg.com Tuohy Brothers Investment Noel Parks (215) 913-7320 nparks@tuohybrothers.com RO