Ring Energy, Inc. · AMEX:REI
Ring Energy — Investor Presentation (October 2019)
31 slides from Ring Energy's investor presentation, Oct 21, 2019
Slide 1: Corporate Presentation October 2019
www.ringenergy.com NYSE American: REI www.ringenergy.com OTCQX:RNGE www.ringenergy.com Corporate Presentation October 2019
Slide 2: Forward-Looking Statements and Cautionary Note Regarding Hydrocarbon Disclosures
www.ringenergy.com 2 NYSE American: REI 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 , the Securitie
Slide 3: Ring Energy Team
www.ringenergy.com 3 NYSE American: REI Kelly Hoffman Chief Executive Officer and Director ▪ Co - Founded AOCO and pioneered Fuhrman Mascho field down - spacing beginning in 1996 David A. Fowler President and Director ▪ Co - Founder and former President of Simplex Energy Solutions, the leading Permi
Slide 4: Investment Highlights
www.ringenergy.com 4 NYSE American: REI Investment Highlights • The management team has extensive experience in the Central Basin Platform and has successfully operated through multiple cycles • Ring’s co - founders were formerly co - founders and senior managers of Arena Resources Proven Management
Slide 5: Ring Co-Founders' Prior Success
www.ringenergy.com 5 NYSE American: REI 0.0 0.2 0.4 0.6 1.4 2.9 4.3 6.4 6.5 8.2 - 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 2001 2002 2003 2004 2005 2006 2007 2008 2009 Q1 2010 (MBoe/d) Ring Co - Founders ’ Prior Success ▪ Proven and simple strategy ▪ Arena Resources was formed in 2001 by Tim Rochford and
Slide 6: Company Strategy
www.ringenergy.com 6 NYSE American: REI Company Strategy Acquire ▪ Look for “ upside opportunity ” ▪ Focus on the Permian Basin ▪ Low Risk Multipay Reserves ▪ Credit facility in place ▪ Access to capital markets Exploit ▪ Apply new horizontal technologies ▪ Add Additional Pay Zones ▪ Potential down
Slide 7: Why REI Is Different
www.ringenergy.com 7 NYSE American: REI Lea Gaines Andrews Yoakum TX NM Why REI Is Different (1) Percentage based on production volume Existing San Andres fields Ring acreage ▪ “Conventional” producer, NOT an unconventional “shale” producer ▪ San Andres – oil saturated dolomite reservoir with natura
Slide 8: Executive Summary
www.ringenergy.com 8 NYSE American: REI Gross Acres Net Acres Central Basin Platform 103,484 72,391 Northwest Shelf 50,481 38,241 Delaware Basin 20,218 19,917 Total Acreage 174,183 130,549 Executive Summary (1) Ring reserves as of 12/31/2018 based on SEC pricing ($62.04/Bbl of oil and $3.10/Mcf of g
Slide 9: San Andres Overview
www.ringenergy.com 9 NYSE American: REI Proven Conventional Reservoir Source: US Department of Energy & DrillingInfo San Andres Overview Permian Basin Geology Denotes Ring acreage San Andres Hz Delaware Basin Hz Midland Basin Hz High ROR Oil Play x x x IPs >750 Bo/d x x Low 1 st Year Decline x Low T
Slide 10: San Andres Cross Section
www.ringenergy.com 10 NYSE American: REI San Andres Cross Section
Slide 11: Central Basin Platform Asset
www.ringenergy.com 11 NYSE American: REI Central Basin Platform Asset (1) Based on 12/31/2018 CGA reserve report using SEC pricing ($62.04/Bbl of oil and $3.10/Mcf of gas) (2) Based on 12/31/2018 Ring internal reserve report using SEC pricing ($62.04/Bbl of oil and $3.10/Mcf of gas) Asset Descriptio
Slide 12: Central Basin Drilling Inventory
www.ringenergy.com 12 NYSE American: REI $71 $13 $288 17 78 769 PUD Probable & Possible Prospective San Andres Horizontal Spacing Assumptions: Central Basin Drilling Inventory Note: Locations reflect gross locations on this page (1) As of 12/31/2018 (2) Number of locations per SEC report (3) Number
Slide 13: Central Basin Well Economics & Type Curve
www.ringenergy.com 13 NYSE American: REI $50.00 $55.00 $60.00 IRR (%) 99% 129% 165% Years to Payout 1.4 1.2 1.0 ROI Disc 2.8x 3.1x 3.5x ROI Undisc 5.7x 6.4x 7.1x PV-10 (000s) $3,801 $4,492 $5,183 Net EUR (MBOE) 332 333 334 Net Realized Price Received ($/Boe) Oil Gas Peak Rate 305 BOPD 95 MCFPD Initi
Slide 14: Northwest Shelf Asset
www.ringenergy.com 14 NYSE American: REI Northwest Shelf Asset (1) September production includes 325 Boe/d from non - operated wells (2) Based on 12/31/2018 Ring internal reserve report using SEC pricing ($62.04/Bbl of oil and $3.10/Mcf of gas) Asset Description ▪ 50 , 481 gross / 38 , 241 net total
Slide 15: Northwest Shelf Accretive Drilling Inventory
www.ringenergy.com 15 NYSE American: REI $288 $4 $290 98 37 363 PUD Probable & Possible Prospective San Andres Horizontal (1) (1) (1) Northwest Shelf Accretive Drilling Inventory Note: Locations reflect gross locations on this page ( 1) Based on 12/31/2018 Ring internal reserve report using SEC pric
Slide 16: Northwest Shelf Well Economics & Type Curve
www.ringenergy.com 16 NYSE American: REI $50.00 $55.00 $60.00 IRR (%) 131% 163% 198% Years to Payout 1.0 0.9 0.8 ROI Disc 3.5x 4.0x 4.4x ROI Undisc 7.3x 8.2x 9.1x PV-10 (000s) $6,538 $7,592 $8,646 Net EUR (MBOE) 461 462 462 Net Realized Price Received ($/Boe) 1 10 100 1000 0 5 10 15 20 25 30 BOPD /
Slide 17: Delaware Basin Assets
www.ringenergy.com 17 NYSE American: REI Delaware Basin Assets (1) Based on 12/31/2018 CGA reserve report using SEC pricing ($62.04/Bbl of oil and $3.10/Mcf of gas) (2) Based on 12/31/2018 Ring internal reserve report using SEC pricing ($62.04/Bbl of oil and $3.10/Mcf of gas) Asset Description Culbe
Slide 18: Delaware Basin Drilling Inventory
www.ringenergy.com 18 NYSE American: REI 39 169 191 468 109 43 179 577 PUD Probable & Possible Prospective Delaware Mountain Group Horizontal Additional Prospective Locations Behind pipe zones of interest Vertical Cherry Canyon (1) (2) (2) (2) Vertical 169 Horizontal 10 Vertical 39 Horizontal 4 $66
Slide 19: Recent Developments & 2019 Capex
www.ringenergy.com 19 NYSE American: REI Recent Developments & 2019 Capex Recent Developments ▪ During Q3 Ring drilled six one - mile horizontal San Andres wells on its Northwest Shelf assets acquired in April 2019. All six wells were completed below projected costs. Three reported IP’s and the othe
Slide 20: 2019 Amended Capex Objectives
www.ringenergy.com 20 NYSE American: REI 2019 Amended Capex Objectives 2019 Amended Capex ▪ Objectives : ▪ Cash flow neutrality by year - end 2019 ▪ Modest year - over - year production growth ▪ Manage debt ▪ Reduced capex from preliminary $154 MM to amended $152 MM ▪ Maintain one rig in H2’19. Dril
Slide 21: Growth in Reserves & Production
www.ringenergy.com 21 NYSE American: REI 59 317 1,270 1,401 1,222 1,824 2,739 3,180 3,636 4,652 4,688 5,563 5,845 5,080 4,604 4,112 625 1,224 1,132 975 907 951 981 1,158 959 935 1,267 1,172 1,132 5,320 4,949 5,789 0 2,000 4,000 6,000 8,000 10,000 12,000 3.9 7.3 10.4 8.7 4.9 17.9 22.0 8.0 10.1 8.4 14
Slide 22: Potential Locations by Tier and Area
www.ringenergy.com 22 NYSE American: REI Potential Locations by Tier and Area Location Tiers (All Areas) ▪ Tier 1 : Highest confidence wells . These wells would represent “type curve” production . At $ 50 /Boe realized price received , they reflect an IRR over 80 % , a net reserve of greater than 32
Slide 23: Net Asset Value
www.ringenergy.com 23 NYSE American: REI $1,123 $336 $160 Proved Probable Possible $160 $336 $1,123 Net Asset Value (1) NAV/share calculated as YE2018 PV - 10 based on SEC pricing ($62.04/Bbl of oil and $3.10/Mcf of gas) less Q2 debt of $360.5 MM (includes Wishbone acquisition) divided by current sh
Slide 24: Appendix
www.ringenergy.com NYSE American: REI Appendix
Slide 25: Management Team
www.ringenergy.com 25 NYSE American: REI Management Team Lloyd T. (Tim) Rochford Co - Founder and Chairman of the Board Mr. Rochford, 73, has been active as an individual consultant and entrepreneur in the oil and gas industry since 1973. During that time, he has be en an operator of wells in the mi
Slide 26: Management Team (cont'd)
www.ringenergy.com 26 NYSE American: REI Management Team (cont'd) David A. Fowler President and Director Mr. Fowler, 61, has served in several management positions for various companies in the insurance and financial services industries. In 1994, he joined Petroleum Listing Service as Vice President
Slide 27: Oil and Gas Reserves as of 12/31/2018
www.ringenergy.com 27 NYSE American: REI Oil and Gas Reserves as of 12/31/2018 (1) Cawley Gillespie YE2018 SEC report with prices of $62.04/bbl and $ 3.10/Mcf (2) Ring Internal engineering report using SEC pricing of $62.04/bbl and $ 3.10/Mcf (3) Wishbone reserves per Ring internal estimates as of 1
Slide 28: Income Statement
www.ringenergy.com 28 NYSE American: REI Income Statement (1) Per Fully Diluted Share (2) Cash flow from operations before working capital changes 3 Months Ended June 30, 6 Months Ended June 30, 2019 2018 2019 2018 Revenue $51,334,225 $29,924,883 $93,132,540 $59,816,274 Pre - Tax Income $14,907,999
Slide 29: Balance Sheet
www.ringenergy.com 29 NYSE American: REI Balance Sheet (1) Includes Deferred Income Taxes and Deferred Financing Costs As of As of ($ thousands) 6/30/2019 12/31/2018 Assets: Cash and Cash Equivalents $10,579 $3,364 Other Current Assets 28,032 13,480 Total Current Assets $38,611 $16,844 PP&E, net 911
Slide 30: Analyst Coverage
www.ringenergy.com 30 NYSE American: REI Analyst Coverage Ring Energy, Inc. Analyst Coverage FIRM ANALYST(S) Alliance Global Partners Joel Musante, CFA (800) 727 - 7922 ext: 4782 Capital One Securities, Inc. Richard Tullis (504) 593 - 6118 richard.tullis@capitalone.com Coker Palmer Institutional Noe
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