Ring Energy, Inc. · AMEX:REI
Ring Energy — 2023 Sidoti Small Cap Investor Conference
33 slides from Ring Energy's conference presentation, Dec 7, 2023
Slide 1: Value Focused Proven Strategy
VALUE FOCUSED PROVEN STRATEGY SIDOTI SMALL CAP CONFERENCE 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 Supplemental Non-GAAP Financial This Presentation includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exc
Slide 3: Independent Oil & Gas Company Focused on Conventional Permian Assets in Texas
Independent Oil & Gas Company Focused on Conventional Permian Assets in Texas Exit rate Q3 2023 Net Production ~19,000 Boe/d NWS 84% liquids 16% gas Highly oil weighted 69% oil 2022 SEC Proved Reserves1,2 138.1 MMBoe/ PV10 $2.77 Billion Proved Developed 65% CBP Gross / Net Acres3 Permian Basin 102,3
Slide 4: Value Focused Proven Strategy
Value Focused Proven Strategy Delivering Peer-leading Returns Key Takeaways Adding Size Focused on Value Focused Delivering Maximizing Adjusted Delivering Peer– Proven Strategy & Scale Record Results1 Leading Returns Free Cash Flow1 Designed to create 2 accretive acquisitions in Improving Adjusted E
Slide 5: Q3 2023 Highlights
Q3 2023 Highlights Proven Strategy Leads to Record Results Adjusted Adjusted BOE Cash Adjusted Leverage CapEx Free Cash Liquidity3 Production Flow From EBITDA1 Ratio2 Operations1 Flow1 2023 Continuing to Q3 2023 Q3 2023 Q3 2023 Q3 2023 Q3 2023 Q3 2023 Q3 2023 produce outstanding 17,509 $48.5 $58.6 $
Slide 6: Enhancing Value for Stockholders
Enhancing Value for Stockholders Executing Strategy Improves YTD Key Metrics1,2 Total Operating Costs1 $/Boe ACFFO1 $million Adjusted EBITDA Margin2 % $30.00 $200 75% $29.00 65% $28.00 $142 56% $150 Up 16% $27.00 $126 50% $26.00 $25.58 Up 13% $25.00 $100 $24.00 $23.44 $23.00 25% $50 $22.00 $21.00 Do
Slide 7: Strong Cash Operating Margins vs. Peers
Strong Cash Operating Margins vs. Peers1,2 Operational Excellence and Cost Control Drive Profitability YTD 2023 Cash Operating Margin and Realized Pricing Top Quartile Cash Operating Margin $80 • High oil weighting of ~70% (85% mix of oil + liquids) $72.25 contributes to high realized pricing per Bo
Slide 8: Compelling Value Proposition
Compelling Value Proposition Proven Strategy Leads to Shareholder Value 1,2 EV/PV-104 YE22 1P Reserves EV/2023E Adjusted EBITDA4 2023E Adjusted FCF3,4 Yield 5.0x 40% 1.0x 4.5x 35% 0.9x 4.0x 30% 0.8x 25% 3.5x 0.7x 20% 3.0x 0.6x 15% 0.5x 2.5x 10% 0.4x 2.0x 5% 0.3x 1.5x 0% 1.0x -5% 0.2x -10% 0.1x 0.5x
Slide 9: Compelling Value Proposition Heading into 2024
Compelling Value Proposition Heading into 2024 Proven Strategy Leads to Shareholder Value 1,2 EV/2024E Adjusted EBITDA3 2024E Adjusted FCF3 Yield 4.0x 60% 3.5x 50% 3.0x 2.5x 40% 2.0x 30% 1.5x 20% 1.0x 10% 0.5x 0.0x 0% With Meaningful Growth in Production, Cash Flow and Adjusted EBITDA Forecasted int
Slide 10: Committed to ESG
Committed to ESG Critical to Sustainable Success 2022 Sustainability Report Progressing our ESG Journey A Target Zero Day is a Day that Results in: Download Report PDF • Created ESG Task Force in 2021 to monitor Zero Company or Company’s adherence to ESG standards and formally communicate to CEO and
Slide 11: Value Proposition
Value Proposition 2023 and Beyond Despite volatile energy markets, Ring has generated positive FCF for 16 quarters straight Trading at a discount yet delivering competitive returns Strong Cash Operating margins help deliver superior results & helps manage risk in market downturns Disciplined capital
Slide 12: Financial Overview
FINANCIAL OVERVIEW www.ringenergy.com 12
Slide 13: Q4 2023 Revised Guidance
2023 Q4 2023 Revised Guidance Grow Production, Generate FCF, Pay Down Debt Sales Volumes Q4 2023 Q4 2023 CAPEX Allocation Total (Boe/d) 18,900 – 19,500 Mid Point (Boe/d) 19,200 6% - Oil (%) 69% - NGLs (%) 15% - Gas (%) 16% 22% Capital Program Capital spending1 (millions) $37.5 $35 – $40 million - Ne
Slide 14: Historical Metrics: Quarterly Analysis of AFCF
Historical Metrics Quarterly Analysis of AFCF1 Leverage Ratio (LTM)2 1.41x2 1.56x2 1.65x2 1.64x2 1.69x2 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 $70 Adj. EBITDA/ CapEx / Int Exp $60 $50 $56.0 $56.3 $58.6 $58.6 $53.5 $40 $30 $20 $10.5 $12.6 $5.5 $6.1 $10 $0 $9.7 -$10 -$20 -$38.9 -$31.6 -$40.3 -$42.6 -
Slide 15: Reducing Debt & Increasing Liquidity
Reducing Debt & Increasing Liquidity Disciplined Capital Spending & Sustainably Generating FCF is the Key Adjusted Debt Paydown1,2 ($ Million) Liquidity3 ($ Million) $30 $220 $200 $25 $204 $25 $180 $188 $179 $20 $160 $171 $20 $165 $19 $140 $15 $17 Founders $120 Acquisition2 Stronghold Founders $10 $
Slide 16: Asset Overview
ASSET OVERVIEW www.ringenergy.com
Slide 17: Proved Reserves and Inventory
Proved Reserves1 and Inventory SEC YE 2022 (Does not include divestitures or acquisitions done in 2023) Reserves by Category (%) Reserves by PV-102 ($MM) Reserves by Product (%) Locations by County 17% 19% 400+3 Total Gross Locations & Opportunities 35% 31% SOLDGaines Lea 138 $2,774 138 MMBoe MMBoe
Slide 18: Company Overview
Company Overview Core Assets Q3 2023 Net Production (MBoe/d) 17.5 Oil (Bo/d) ~ 69% 12.0 NGLs (Bbls/d) ~ 15% 2.6 Gas (Mcf/d) ~ 16% 17.0 LOE ($ per Boe) $11.18 YE22 PD Reserves1 PV10 ($MM) $1,907 YE22 PD Reserves1 (MMBoe) 90 YE22 PUD Reserves1 PV10 ($MM) $867 Northern CBP YE22 PUD Reserves1 (MMBoe) 48
Slide 19: Ring Energy Expanding Core Areas in NWS & CBP
Ring Energy Expanding Core Areas in NWS & CBP Acquisition Track Record • Since 2018, Ring has 19,2004 successfully grown production by a ~27% CAGR1 through 4Q 2023 (midpoint of Q4 guidance) • Founders Acquisition added accretive near-term cash flows 6,100 New Management as of combined with 5+ years
Slide 20: High Quality Inventory Provides Attractive Economic Returns
High Quality Inventory Provides Attractive Economic Returns Undeveloped Drilling Locations • Inventory of 50+ low risk, high rate-of-return drilling locations lowers Ring’s break-even costs Central Basin • Recent Founders’ vertical wells demonstrate superior initial performance to Platform other rec
Slide 21: Assets Overview
Assets Overview Deep Inventory of High-Return Drilling and Re-Completion Locations Select Recent New Drill Horizontal Well Results Select Recent New Drill Vertical Well Results – Northwest Shelf – Central Basin Platform Peak IP Lateral Geological Peak IP Area Well Name 30 / 60 Oil (%) Length WI (%)
Slide 22: San Andres Reservoir
San Andres Reservoir Proven, Conventional, Top Tier Returns San Andres Hz Delaware Hz Midland Hz High ROR Oil Play • Permian Basin has produced >30 BBbl Low D&C Costs — San Andres accounts for ~40% Lower 1st Year Decline • Low D&C costs1 $3.0 - $4.4 MM per well Low Lease Acquisition Cost
Slide 23: Appendix
APPENDIX www.ringenergy.com
Slide 24: Financial Overview
Financial Overview Derivative Summary as of September 30, 2023 Oil Hedges (WTI) Gas Hedges (basis differential) Q4 2023 Q1 2024 Q2 2024 Q3 2024 Q4 2024 Q1 2025 Q2 2025 Q3 2025 Q4 2025 Q4 2023 Q1 2024 Q2 2024 Q3 2024 Q4 2024 Q1 2025 Q2 2025 Q3 2025 Q4 2025 Waha basis swaps: Swaps: Hedged volume (MMBt
Slide 25: Income Statement and Operational Stats
Income Statement and Operational Stats Income Statement Operational Stats Three Months Ended Nine Months Ended (Unaudited) (Unaudited) Three Months Ended Nine Months Ended September 30, June 30, September 30, September 30, September 30, September 30, June 30, September 30, September 30, September 30
Slide 26: Balance Sheet and Cash Flow Statement
Balance Sheet and Cash Flow Statement Balance Sheet Cash Flow (Unaudited) (Unaudited) Three Months Ended Nine Months Ended September 30, 2023 December 31, 2022 September 30, June 30, September 30, September 30, September 30, ASSETS 2023 2023 2022 2023 2022 Current Assets Cash and cash equivalents $
Slide 27: 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 28: Non-GAAP Reconciliations
Non-GAAP Reconciliations Adjusted Net Income Adjusted EBITDA (Unaudited for All Periods) (Unaudited for All Periods) Three Months Ended Nine Months Ended September 30, June 30, September 30, September 30, September 30, Three Months Ended Nine Months Ended 2023 2023 2022 2023 2022 Per Per Per Per Per
Slide 29: Non-GAAP Reconciliations (cont.)
Non-GAAP Reconciliations (cont.) Leverage Ratio Adjusted Free Cash Flow (Unaudited) (Unaudited for All Periods) Three Months Ended Three Months Ended Nine Months Ended December 31, March 31, June 30, September 30, Last Four 2022 2023 2023 2023 Quarters September 30, June 30, September 30, September
Slide 30: Non-GAAP Reconciliations (cont.)
Non-GAAP Reconciliations (cont.) Adjusted Cash Flow from Operations (ACFFO) Cash Return on Capital Employed (CROCE) (Unaudited) (Unaudited for All Periods) Year Ended Three Months Ended Nine Months Ended 12/31/2022 12/31/2021 12/31/2020 September 30, June 30, September 30, September 30, September 30
Slide 31: Experienced Management Team
Experienced Management Team Shared Vision with a Track Record of Success Hollie Lamb Paul D. McKinney Stephen D. Brooks Alexander Dyes Travis Thomas Marinos Baghdati VP of NonOP Reservoir Chairman & Chief EVP of Land, Legal, EVP of Engineering & EVP & Chief EVP of Operations Engineering / O&G Execut
Slide 32: Board of Directors
Board of Directors Accomplished and Diversified Experience • 35+ years of domestic & international • 43+ years of banking, capital • 14+ years of finance & capital markets oil & gas industry experience markets, governance & financial experience experience • Executive & board roles include CEO, • Ext
Slide 33: Thank You
THANK YOU Ring Headquarters 1725 Hughes Landing Blvd Ste 900 The Woodlands, TX 77830 Phone: 281-397-3699 Company Contact Analyst Coverage Al Petrie Alliance Global Partners (A.G.P.) Truist Financial Water Tower Research (281) 975-2146 Jeff Grampp (949) 296 4171 Neal Dingmann (713) 247-9000 Jeff Robe
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