Ring Energy, Inc. · AMEX:REI
Ring Energy — Adam-Permian Energy Network Luncheon (June 2023)
34 slides from Ring Energy's conference presentation, Jun 7, 2023
Slide 1: Value Focused Proven Strategy
VALUE FOCUSED PROVEN STRATEGY 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 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 Section 2
Slide 3: Independent Oil & Gas Company Focused on Conventional Permian Assets in Texas
Independent Oil & Gas Company Focused on Conventional Permian Assets in Texas Record Q1 2023 Net NWS Sales 18,292 Boe/d Highly oil weighted 69% oil 16% gas 15% NGL 2022 SEC Proved Reserves1,2 138.1 MMBoe/PV10 $2.77 Billion DB Proved Developed 65% Gross / Net Acres3 Permian Basin CBP 124,217 / 102,17
Slide 4: Committed to ESG
Committed to ESG Critical to Sustainable Success Progressing our ESG Journey Created ESG Task Force in 2021 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 in 20
Slide 5: Value Focused Proven Strategy
Value Focused Proven Strategy Sustainably Deliver Competitive Returns Attract and Retain Highly Qualified People Pursue Strategic A&D to Pursue Operational Lower Breakeven Costs Excellence with a Sense & Build Inventory of Urgency Focus on Maximizing Invest in High-Margin, AFCF1 and Strengthening Hi
Slide 6: Value Focused Proven Strategy: Delivering Peer-leading Returns
Value Focused Proven Strategy Delivering Peer-leading Returns KEY TAKEAWAYS Added Size & Scale – accretive acquisition of Stronghold assets 3Q2022 • Record net sales of over 18,000 Boepd • Increased Proved Reserves3 78% over prior year to 138.1 MMBOE Delivering Record Results1 – cash flow from opera
Slide 7: Q1 2023 Highlights
Q1 2023 Highlights Proven Strategy Leads to Record Results BOE Oil Adjusted Cash Adjusted Free Cash Leverage Liquidity3 Production Production Flow From Ops1 EBITDA1 Flow1 Ratio2 Q1 18,292 12,660 $49.4 $58.6 $10.5 1.65x $179 2023 Boe/d BOPD Million Million Million Million Q1 2023 sales at high end of
Slide 8: Enhancing Value for Shareholders
Enhancing Value for Shareholders Executing Strategy Improves Annual Key Metrics1 Production/Share ACFFO1 ($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-101/Share FCF Yield2 $25.00 $22.88 14% $20.00 12% Up 12% 10% Up $15.00 $13.40 70% 9
Slide 9: Enhancing Value for Shareholders
Enhancing Value for Shareholders Executing Strategy Improves Annual Key Metrics CROCE1 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% $- 2020 2021 2022 20
Slide 10: 2023 Outlook
2023 Outlook Proven Strategy Leads to Shareholder Value Sales Boe/d Oil Sales Bo/d 20,000 15,000 Net Sales Pursue Operational 18,300 17,800 to 18,800 Boe/d 15,000 12,450 Excellence with a 10,000 Mid-point 18,300 Boe/d 10,000 12,364 9,479 Sense of Urgency (68% Oil, 15% NGLs, 17% Gas) Up ~50% 5,000 Up
Slide 11: Compelling Value Proposition
Compelling Value Proposition Proven Strategy Leads to Shareholder Value1,2 EV/2023E Adjusted EBITDA3 EV/PV-103 YE22 1P Reserves 2023E Adjusted FCF3 Yield 6.0x 0.8x 30% 25% 0.7x 5.0x 20% 0.6x 15% 4.0x 0.5x 10% 5% 3.0x 0.4x 0% 0.3x -5% 2.0x -10% 0.2x 1.0x -15% 0.1x -20% 0.0x 0.0x -25% Despite Strong R
Slide 12: Value Proposition
Value Proposition 2023 and Beyond Trading at a discount to peer average Delivering higher returns than peer average Value focused strategy is proven by record 2022 & Q1 2023 results Disciplined and capital efficient budget is focused on maintaining production levels, FCF generation and debt
Slide 13: Asset Overview
Asset Overview www.ringenergy.com NYSE American: REI
Slide 14: Company Overview
Company Overview Core Assets Operating Statistics Q1 2023 Net Production (MBoe/d) 18.3 Oil (Bo/d) ~ 69% 12.7 Gas (Mcf/d) ~ 16% 17.8 NGLs (Bbls/d) ~ 15% 2.7 LOE ($ 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 15: 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 7% Net Sales Boe/d 5% 8,000 80,000 31%
Slide 16: Assets Overview
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 17: 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 18: 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 - $4.4 MM per well Lower 1st Year Decline Vertical depth of ~5,000’ Low L
Slide 19: Proved Reserves and Inventory
Proved Reserves and Inventory 1 SEC YE 2022 Reserves by Category (%) Reserves by PV-102 ($MM) Reserves by Product (%) Locations Gaines 35% $867 17% 19% Lea Yoakum 138 138 400+ 3 $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 20: Financial Overview
Financial Overview www.ringenergy.com NYSE American: REI
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
Historical Metrics Quarterly Analysis of FCF1 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 $50 $47.4 Adj. EBITDA/ Capital / Int Exp $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 $20 $20 Acquisition final $179 deferred $160 $165 $17 cash $15 payment $140 $15MM + $3.5mm post close $120 $10 adjustment $ Million $ Millio
Slide 24: Appendix
Appendix www.ringenergy.com NYSE American: REI
Slide 25: 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,” “Adjusted Fr
Slide 29: Non-GAAP Reconciliations
Non-GAAP Reconciliations Adjusted Net Income Adjusted EBITDA (Unaudited) (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 Per Per Per Per Per Per Total share - Total share - Total share - Total share - T
Slide 30: Non-GAAP Reconciliations (cont.)
Non-GAAP Reconciliations (cont.) Leverage Ratio Adjusted Free Cash Flow (Unaudited) (Unaudited) Three Months Ended EBITDAX Calculation: Q3 2022 Q4 2022 Q1 2023 Annualized LQA March 31, December 31, March 31, 2023 2022 2022 Consolidated Net Income (Loss) $ 75,085,891 $14,492,669 $32,715,779 $ 163,059
Slide 31: Non-GAAP Reconciliations (cont.)
Non-GAAP Reconciliations (cont.) Adjusted Cash Flow from Operations (ACFFO) PV-10 (in thousands) (Unaudited) As of Three Months Ended December 31, March 31, December 31, March 31, 2022 2023 2022 2022 Present value of estimated future net revenues (PV-10) $ 2,773,657 Net Cash Provided by Operating Ac
Slide 32: 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 33: 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 34: 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
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