Ring Energy, Inc. · AMEX:REI
Ring Energy — Q3 2022 Earnings Presentation
33 slides from Ring Energy's earnings presentation, Nov 14, 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 Forward – Looking Statements This Presentation includes "forward - looking statements" within the meaning of the Private Securities Litigation Reform Act of 19 95, Section 27A of
Slide 3: Ring Energy – Independent Oil & Gas Company Focused on Conventional Permian Assets
www.ringenergy.com NYSE American: REI Ring Energy – Independent Oil & Gas Company Focused on Conventional Permian Assets in Texas & New Mexico 2021 SEC Proved Reserves 2,3 77.8 MMBoe/PV10 $1,332MM 85% Oil Gross / Net Acres 2 83,604 / 64,380 1. Based on Q3’22 financials 2. As of December 31, 2021 (2
Slide 4: Q3 2022 Highlights Executing our Strategy
www.ringenergy.com NYSE American: REI Q3 2022 Highlights Executing our Strategy ▪ Successfully closed accretive transaction ▪ Record quarterly sales revenue of $94.4 MM – highest in Company history ▪ Increased sales volumes 2 42% to 13,278 Boe /d (76% oil, 13% natural gas, 11% NGLs) ▪ Grew net incom
Slide 5: Committed to ESG Critical to Sustainable Success
www.ringenergy.com NYSE American: REI Committed to ESG Critical to Sustainable Success 5
Slide 6: Focus on FCF and Strengthening Balance Sheet
www.ringenergy.com NYSE American: REI Focus on FCF and Strengthening Balance Sheet Pursue Operational Excellence with a Sense of Urgency Invest in High - Margin, High ROR Projects YTD Drill 23 & Complete 20 Successful Hz Wells 2 (FY 2021 13 Hz wells) YTD Average 10,512 Boepd (81% Oil) (27% Increase
Slide 7: Financials
Financials
Slide 8: Sustainable Value Focused Results
www.ringenergy.com NYSE American: REI Sustainable Value Focused Results 8,243 9,153 8,870 9,341 13,278 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Boe /d Net Sales $6.8 $9.9 $22.3 $31.3 $32.5 $0.0 $5.0 $10.0 $15.0 $20.0 $25.0 $30.0 $35.0 Q3 2021 Q4 2021 Q1
Slide 9: Historical Metrics Quarterly Analysis of FCF
www.ringenergy.com NYSE American: REI Historical Metrics Quarterly Analysis of FCF 1 $MM Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Adj EBITDA 1 $19.7 $24.0 $35.6 $47.4 $56.0 Capital - $13.7 - $11.3 - $19.7 - $41.8 - $40.3 Interest Exp. 2 - $3.4 - $3.4 - $3.2 - $3.1 - $5.9 Free Cash Flow 1 $2.6 $9.3 $1
Slide 10: Reducing Debt & Increasing Liquidity
www.ringenergy.com NYSE American: REI $8 $5 $6 $5 $10 $10 $17 $0 $5 $10 $15 $20 $25 $30 $35 $40 $45 $50 $0 $2 $4 $6 $8 $10 $12 $14 $16 $18 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Debt Paydown $MM $313 MM outstanding debt with $36 MM in Surplus Cash Reducing Debt & Increasing Liquidit
Slide 11: Asset Areas
Asset Areas
Slide 12: Ring + Stronghold Pro-Forma Overview
www.ringenergy.com NYSE American: REI Ring + Stronghold Pro - Forma Overview 1. Proved reserves for REI are management estimates as of June 1, 2022 and Stronghold management estimates as of June 1, 2022 we re prepared by CGA, both used June 21, 2022 NYMEX Strip prices June 21, 2022 NYMEX Strip Prici
Slide 13: 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 14: 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 15: NWS HZ Well Performance & Costs
www.ringenergy.com NYSE American: REI NWS HZ Performance Average – Cum BOE vs Time Days ( 1.5 Mile Lateral ) 2 1,000 10,000 100,000 0 180 360 2016 & 2017 2018 & 2019 2020, 2021 & 2022 NWS HZ Well Performance & Costs Significant Improvements Driving Top Tier Returns D&C Cost Range per Year ( 1 Mile L
Slide 16: Central Basin Platform Asset Areas
www.ringenergy.com NYSE American: REI 3Q22 Avg Sales 1 5,376 Boe /d (76% Oil) 3Q 22 CTR’s 1 Conversion 3 Recompletions 3Q22 D&C Completed 3 Hz wells (100% WI) Gross / Net Acres 2 29,065 / 20,288 Technical Focus Reinvigorates Legacy Area Central Basin Platform Asset Areas 1. Includes Stronghold acqui
Slide 17: Northern Central Basin Platform HZ Well Performance & Costs
www.ringenergy.com NYSE American: REI Northern Central Basin Platform HZ Well Performance & Costs Annual D&C per HZ Cost Range ( 1.0 & 1.5 Mile ) 1 ~530 Avg ~410 Avg ~420 Avg CBP 1.0 & 1.5 Mile HZ Performance – Cum BO vs Time (2021 & 2022 vs Historic) 2,3 1) Wells categorized by spud year; capex tie
Slide 18: Southern Central Basin Platform Vertical Well Performance & Costs
www.ringenergy.com NYSE American: REI 1 10 100 1,000 10,000 100,000 0 100 200 300 Cum Production, BOE Days Online 2022 Target Area 1 Vertical R/C Avg Historical 2019 - 2021 well RC performance Southern Central Basin Platform Vertical Well Performance & Costs ~530 Avg ~410 Avg ~420 Avg Modern Complet
Slide 19: Maintains Solid PDP Reserve Base that Generates Consistent FCF
www.ringenergy.com NYSE American: REI 0 50 100 150 200 2018 2019 2020 2021 YTD 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 i
Slide 20: Turnkey Asset with Predictable Cash Flow and Upside Potential
www.ringenergy.com NYSE American: REI Turnkey Asset with Predictable Cash Flow and Upside Potential Delaware Basin Asset ▪ Sales process for Delaware Assets underway ▪ Truist Securities running a marketed process ▪ Asset infrastructure in - place to enable efficient development ▪ Produced water, gas
Slide 21: Value Proposition 2022 and Beyond
www.ringenergy.com NYSE American: REI 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
Slide 22: Appendix
Appendix
Slide 23: Financial Overview Derivative Summary
www.ringenergy.com NYSE American: REI Gas Hedges (basis differential) 2022 2023 2024 Waha basis swaps: Hedged volume (MMBtu) 505,024 1,339,685 - Weighted average swap price (2) (3) $ - Financial Overview Derivative Summary Summary of Hedges Oil Hedges (WTI) 2022 2023 2024 Swaps: Hedged volume (BBL)
Slide 24: Income Statement and Operational Stats
www.ringenergy.com NYSE American: REI Income Statement and Operational Stats Income Statement Operational Stats (Unaudited) Three Months Ended Nine Months Ended September 30, June 30, September 30, September 30, 2022 2022 2021 2022 2021 Oil, Natural Gas, and Natural Gas Liquids Revenues $ 94,408,948
Slide 25: Cash Flow Statement
www.ringenergy.com NYSE American: REI (Unaudited) Three Months Ended Nine Months Ended September 30, June 30, September 30, September 30, 2022 2022 2021 2022 2021 Cash Flows From Operating Activities Net income (loss) $ 75,085,891 $ 41,944,422 $ 14,163,934 $ 124,142,356 $ (20,789,318) Adjustments to
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 Adjusted Net Income Three Months Ended Nine Months Ended September 30, June 30, September 30, September 30, 2022 2022 2021 2022 2021 (Unaudited for All Periods) Net Income (Loss) $ 75,085,891 $ 41,944,422 $ 14,163,934 $ 124,142,356 $ (
Slide 28: Q4 2022 Guidance
www.ringenergy.com NYSE American: REI 50% 41% 9% D,C&E Recomp/CTRs/Cap Workovers Land/Non-op CAPEX Allocation Mid Point $44 million 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 Gas (Mcf/d) ~17% 18,400 – 19,4
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 39+ years of domestic & international oil & gas industry experience Executive & board roles include CEO, President, COO, Region VP and public & private board di
Slide 30: Refreshed Board of Directors
www.ringenergy.com NYSE American: REI 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 Independent D
Slide 31: 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 2 , $MM PV - 10 3 , $MM PD 36,821 39,749 43,446 $55 $794 PUD 29,018 32,025 34,355 $293 $538 TOTAL 65,839 71,774 77,801 $348 $1,332 SEC Proved Reserves 1 Year - End 2021 202
Slide 32: Corporate Strategy Value Focused for Sustainable Success
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 33: 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