Ring Energy, Inc. · AMEX:REI
Ring Energy — Q1 2022 Earnings Presentation
31 slides from Ring Energy's earnings presentation, May 12, 2022
Slide 1: Value Focused Proven Strategy
www. ringenergy.com NYSE American: REI VALUE FOCUSED PROVEN STRATEGY
Slide 2: Forward-Looking Statements and Cautionary Note Regarding Hydrocarbon Disclosures
www.ringenergy.com NYSE American: REI Forward - Looking Statements and Cautionary Note Regarding Hydrocarbon Disclosures 2 Forward – Looking Statements This Presentation includes "forward - looking statements" within the meaning of the Private Securities Litigation Reform Act of 19 95, Section 27A o
Slide 3: Currently Focused on Conventional Permian Assets in Texas & New Mexico
www.ringenergy.com NYSE American: REI Currently Focused on Conventional Permian Assets in Texas & New Mexico 2021 SEC Proved Reserves 1,2 77.8 MMBoe /PV10 $1,332MM 85% Oil Q1 2022 Net Sales 8,870 Boe /d (85% Oil) Gross / Net Acres 1 83,604 / 64,380 Ring Energy – Independent Oil & Gas Company Deliver
Slide 4: Q1 2022 Highlights: Executing our Strategy
www.ringenergy.com NYSE American: REI Q1 2022 Highlights Executing our Strategy 4 ▪ Sales volumes exceeded the high end of Ring’s guidance range of 8,500 to 8,700 Boe /d ▪ Adjusted EBITDA grew 48% over Q4 ▪ Paid down debt by $10.0 million utilizing a portion of Free Cash Flow ▪ Reduced LTM debt rati
Slide 5: Committed to ESG
www.ringenergy.com NYSE American: REI Committed to ESG Issued Inaugural ESG Report in Q4 2021 5
Slide 6: Focus on FCF and Strengthening the Balance Sheet
www.ringenergy.com NYSE American: REI Focus on FCF and Strengthening the Balance Sheet Invest in High ROR Projects 1 Rig Continuous to Drill 25 - 33 Wells Focus on Highest ROR & Quick Payout Strategic Increase in Adjusted EBITDA Safe, Efficient & Disciplined Execution Target Growth 9,000 - 9,600 Boe
Slide 7: Asset Areas
Asset Areas
Slide 8: Proven, Conventional, Top Tier Returns
www.ringenergy.com NYSE American: REI Proven, Conventional, Top Tier Returns San Andres Hz Delaware Hz Midland Hz High ROR Oil Play x x x Low D&C Costs x Lower 1 st Year Decline x Low Lease Acquisition Cost x Long life wells x Oil IPs >750 Bbl /d x x Multiple Benches x x > 85% Oil x $25 - 30/ Bbl D&
Slide 9: Northwest Shelf Asset Area
www.ringenergy.com NYSE American: REI ▪ Meaningful inventory of horizontal drilling locations ▪ Actively developing asset ▪ Low D&C and LOE costs drive strong economics ▪ Improving drilling efficiencies: ▪ 1 mile HZ well drill time spud to rig release and move to next location 7 - 9 days ▪ 1.5 mile
Slide 10: NWS HZ Well Performance & Costs
www.ringenergy.com NYSE American: REI 1,000 10,000 100,000 0 180 360 2016 & 2017 2018 2019,2020 & 2021 Months 6 12 BOE (85 - 90% Oil) 1,000 10,000 100,000 0 180 360 2015 2016 & 2017 2018 2019, 2020 & 2021 $2.0 M $2.5 M $3.0 M $3.5 M 2019 2020 2021 NWS HZ Well Performance & Costs Significant Improvem
Slide 11: Central Basin Platform Asset Area
www.ringenergy.com NYSE American: REI 1Q22 Avg Sales 2,850 Boe /d (94% Oil) 1Q 22 CTR’s 0 Conversions 1Q22 D&C Drilled and Completed 4 wells (100% WI) Gross / Net Acres 1 29,065 / 20,288 Technical Focus Reinvigorates Legacy Area Central Basin Platform Asset Area 11 Ring Acreage Central Basin Platfor
Slide 12: CBP HZ Well Performance & Costs
www.ringenergy.com NYSE American: REI CBP HZ Well Performance & Costs Unlocking Value - Technical Improvements to Completion and Landing Zone 12 Annual D&C per HZ Cost Range ( 1.5 Mile ) 1 ~530 Avg ~410 Avg ~420 Avg 2021 New Drills 1 Mile Wells 1.5 Mile Wells 2021 CBP New Drill (1.5 mile) HZ wells a
Slide 13: Maintains Solid PDP Reserve Base that Generates Consistent FCF
www.ringenergy.com NYSE American: REI 0 50 100 150 200 2018 2019 2020 2021 Q1 2022 NWS CBP Maintains Solid PDP Reserve Base that Generates Consistent FCF Increases reserves by reducing operating & well repair costs and extending well life ▪ ~50% long - term reduction in LOE ▪ Up to 75% reduction in
Slide 14: Delaware Basin Asset
www.ringenergy.com NYSE American: REI Turnkey Asset with Predictable Cash Flow and Upside Potential Delaware Basin Asset 14 ▪ Sales process for Delaware Assets underway ▪ Truist Securities running a marketed process ▪ Asset infrastructure in - place to enable efficient development ▪ Produced water,
Slide 15: Financials
Financials
Slide 16: Sustainable Value Focused Results
www.ringenergy.com NYSE American: REI Sustainable Value Focused Results 7,960 8,709 8,243 9,153 8,870 0 2,000 4,000 6,000 8,000 10,000 12,000 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Boe /d Net Sales $7.0 $7.3 $6.8 $9.9 $22.3 $0.0 $5.0 $10.0 $15.0 $20.0 $25.0 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 $
Slide 17: Historical Metrics: Quarterly Analysis of FCF
www.ringenergy.com NYSE American: REI Historical Metrics Quarterly Analysis of FCF 1 $MM Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Adj EBITDA 1 $19.0 $20.6 $19.7 $24.0 $35.6 Capital - $14.5 - $11.5 - $13.7 - $11.3 - $19.7 Interest Exp. 2 - $3.6 - $3.5 - $3.4 - $3.4 - $3.2 Proceeds from Divestiture $2.
Slide 18: Reducing Debt & Increasing Liquidity
www.ringenergy.com NYSE American: REI $375.0 $360.0 $313.0 $305.5 $300.5 $295.0 $290.0 $280.0 $0.0 $100.0 $200.0 $300.0 $400.0 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 RBL Balance $313 MM outstanding debt with $36 MM in Surplus Cash Reducing Debt & Increasing Liquidity Discipl
Slide 19: Value Proposition 2022 and Beyond
www.ringenergy.com NYSE American: REI Value Proposition 2022 and Beyond Positioned for Substantial Increase in Revenue and FCF Pivoting to Continuous, High - Return Organic Growth Pursuing Acquisition Opportunities to Increase Scale and Lower Break - Even Costs 19
Slide 20: Appendix
Appendix
Slide 21: 2022 Guidance
www.ringenergy.com NYSE American: REI 82% 12% 6% D,C&E CTRs/Recomp/Cap Workovers Land/Other CAPEX Allocation Mid Point $130 million 2022 Guidance Grow Production, Generate FCF, Pay Down Debt 21 Sales Volumes Q2 2022 FY 2022 Total ( Boe /d) 9,000 – 9,400 9,000 – 9,600 Oil (Bo/d) 7,700 – 8,100 7,800 –
Slide 22: SEC Proved Reserves Year-End 2021
www.ringenergy.com NYSE American: REI PD 60% PUD 40% 1P Summary Reserve Category Net Oil, MBbl Net Gas, MMcf Net MBOE Net Capex, $MM PV - 10 2 , $MM PD 36,821 39,749 43,446 $31 $794 PUD 29,018 32,025 34,355 $289 $538 TOTAL 65,839 71,774 77,801 $320 $1,332 SEC Proved Reserves 1 Year - End 2021 2021 S
Slide 23: Financial Overview: 2022 Oil Hedge Summary
www.ringenergy.com NYSE American: REI Financial Overview 2022 Oil Hedge Summary Summary of Crude Oil Hedges CONFIDENTIAL 1,135,475 $55.53 $30.00 $34.00 $38.00 $42.00 $46.00 $50.00 $54.00 $58.00 $62.00 $66.00 $70.00 - 200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000 1,600,000 Bal'22 Swap
Slide 24: Income Statement and Operational Stats
www.ringenergy.com NYSE American: REI Income Statement and Operational Stats Income Statement Operational Stats 24
Slide 25: Balance Sheet and Cash Flow Statement
www.ringenergy.com NYSE American: REI Balance Sheet and Cash Flow Statement Balance Sheet Cash Flow Statement 25
Slide 26: Non-GAAP Disclosure
www.ringenergy.com NYSE American: REI Non - GAAP Disclosure Certain financial information included in Ring’s financial results are not measures of financial performance recognized by ac cou nting principles generally accepted in the United States, or GAAP. These non - GAAP financial measures are “Ad
Slide 27: Non-GAAP Reconciliations
www.ringenergy.com NYSE American: REI Non - GAAP Reconciliations 27 Net Income (Loss) $ 24,112,210 $ 14,163,934 $ (160,254,277) $ 3,322,892 $ (253,411,828) Share-based compensation 933,593 777,461 2,807,006 2,418,323 5,364,162 Ceiling test impairment - - 129,564,000 - 277,501,943 Unrealized loss (ga
Slide 28: Corporate Strategy
www.ringenergy.com NYSE American: REI 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
Slide 29: Management Team
www.ringenergy.com NYSE American: REI Add Photo Add Photo Add Photo Add Photo Add Photo Paul D. McKinney Chairman & Chief Executive Officer 35+ years of domestic & international oil & gas industry experience Executive & board roles include CEO, President, COO, Region VP and public & private board di
Slide 30: Board of Directors
www.ringenergy.com NYSE American: REI 30 Add Photo Paul D. McKinney Chairman & Chief Executive Officer 35+ years of domestic & international oil & gas industry experience Executive & board roles include CEO, President, COO, Region VP and public & private board directorships Anthony D. Petrelli Lead
Slide 31: Analyst Coverage and Company Contact
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 ROTH Capital Partners John M. White (949) 720 - 7115 jwhite@roth.com Truist Financial Neal Dingmann (713) 247 - 900