Ring Energy, Inc. (NYSEAMERICAN:REI) is one of the High-Flying Penny Stocks to Buy. On March 4, Ring Energy, Inc. (NYSEAMERICAN:REI) released its fiscal Q4 2025 earnings. The company posted a 19.84% year-over-year decline in revenue to $66.88 million. The quarterly revenue fell short of expectations by $4.47 million. The EPS of $0.02 stayed in-line with the consensus. The company sold 13,124 barrels of oil per day in Q4, close to the mid-point of management’s guidance, and 20,508 barrels of oil equivalen ...

Group 1 - The article focuses on Ring Energy (REI) as a company that is gradually improving its financial situation, particularly through an increase in free cash flow [2] - The author emphasizes the cyclical nature of the oil and gas industry, highlighting the need for patience and experience in investing within this sector [2] - The investing group, Oil & Gas Value Research, seeks undervalued and under-followed oil companies, as well as midstream companies that present attractive investment opportunities [2] Group 2 - The article indicates that the author has a beneficial long position in REI shares, suggesting confidence in the company's future performance [3] - The author expresses personal opinions in the article and clarifies that there is no compensation received for the content, aside from Seeking Alpha [3]

Core Insights - Ring Energy (REI) is projected to generate $48 million in free cash flow in 2026 at current strip prices while maintaining production levels [2] Group 1: Company Overview - Ring Energy is benefiting from a recent spike in oil prices, which positively impacts its financial outlook [2] Group 2: Analyst Background - Aaron Chow, known as Elephant Analytics, has over 15 years of analytical experience and is a top-rated analyst on TipRanks [2] - He co-founded a mobile gaming company that was acquired by PENN Entertainment and has designed economic models for mobile apps with over 30 million combined installs [2] - Chow is the author of the investing group Distressed Value Investing, focusing on value opportunities and distressed plays, particularly in the energy sector [2]

Financial Performance - The company reported a net loss of $12.8 million, or $(0.06) per diluted share, including a $35.9 million non-cash ceiling test impairment, while Adjusted Net Income was $3.6 million, or $0.02 per diluted share[4]. - Net income for Q4 2025 was a loss of $12.85 million, compared to a loss of $51.63 million in Q3 2025 and a profit of $5.66 million in Q4 2024[36]. - Net income for the twelve months ended December 31, 2025, was a loss of $34,731,199, a significant decline from a profit of $67,470,314 in 2024[43]. - Adjusted EBITDA for the twelve months ended December 31, 2025, was $38.38 million, compared to $69.54 million for the same period in 2024[54]. - Adjusted EBITDA for the twelve months ended December 31, 2025, was $184,007,466, down from $233,320,741 in 2024, reflecting a margin decrease from 64% to 60%[57]. - The company reported a significant unrealized loss on derivative assets of $(13,970,211) in Q2 2025[72]. Production and Sales - In Q4 2025, the company sold 13,124 barrels of oil per day (Bo/d) and 20,508 barrels of oil equivalent per day (Boe/d), exceeding guidance[4]. - Average daily oil sales volumes for Q4 2025 were 13,124 Bbls/d, slightly down from 13,332 Bbls/d in Q3 2025 and up from 12,916 Bbls/d in Q4 2024[38]. - The guidance for FY 2026 projects total oil sales volumes between 12,500 and 13,400 Bo/d, with a midpoint of 12,950 Bo/d, and total sales volumes of 19,500 to 20,800 Boe/d, with a midpoint of 20,150 Boe/d[18]. - Oil, natural gas, and natural gas liquids revenues for Q4 2025 were $66.88 million, down 15% from $78.60 million in Q3 2025 and down 20% from $83.44 million in Q4 2024[36]. Reserves and Capital Expenditures - Proved reserves increased by 14% year-over-year to 153.3 million barrels of oil equivalent (MMBoe), with organic production replacement at 169%[6]. - Capital expenditures for FY 2025 were reduced by 35% year-over-year to $98.2 million, with a disciplined capital spending program planned for 2026[4]. - Capital spending guidance for FY 2026 is projected between $100 million and $130 million, with a midpoint of $115 million[18]. - The allocation of capital investment includes 68% for drilling and completion, 26% for recompletions, and 5% for land and non-operated capital[21]. Operational Efficiency - Lease Operating Expenses (LOE) were reduced to $10.02 per Boe, 7% below the low end of guidance, contributing to improved operational efficiency[4]. - The average realized price for all products in Q4 2025 was $35.45 per Boe, a decrease of 23% year-over-year[10]. - Average realized sales price for oil in Q4 2025 was $57.47 per Bbl, down from $64.32 in Q3 2025 and down from $68.98 in Q4 2024[38]. - Cash operating margin per Boe for Q4 2025 was $14.44, a decrease from $18.75 in Q3 2025, with an annual margin of $19.32 compared to $27.90 in 2024[86]. Debt and Liabilities - The company paid down $40 million of debt since the acquisition of Central Basin Platform assets, with total borrowings of $420 million against a borrowing base of $585 million[11]. - The company reported a total current liabilities of $100,961,894 as of December 31, 2025, a decrease from $105,037,187 in 2024, representing a reduction of approximately 3.3%[41]. - Total long-term debt as of December 31, 2025, was $420,000,000, compared to $385,000,000 in 2024[80]. Future Plans - The company plans to drill approximately 28 wells in 2026, focusing on capital efficiency and longer lateral wells[4]. - The company plans to drill 18 to 25 new horizontal wells and 4 to 6 new vertical wells in FY 2026[18]. Cash Flow - The company generated Adjusted Free Cash Flow (AFCF) of $5.7 million in Q4 2025, marking the 25th consecutive quarter of positive cash flow[4]. - Cash provided by operating activities for the twelve months ended December 31, 2025, was $150,849,407, down from $194,423,712 in 2024, indicating a decrease of about 22.4%[43]. - Adjusted Free Cash Flow for the twelve months ended December 31, 2025, was $50,115,509, an increase from $43,645,112 in 2024[60]. Impairments - The company reported a ceiling test impairment of $35.91 million in Q4 2025, significantly lower than $72.91 million in Q3 2025[36]. - The company incurred a ceiling test impairment of $108,825,446 during the twelve months ended December 31, 2025, compared to no impairment in 2024[43].

Core Insights - The company is focused on the development of transcript-related projects, indicating a commitment to enhancing its offerings in this area [1] Group 1 - The company publishes thousands of quarterly earnings calls each quarter, showcasing its extensive coverage and growth in the transcript publishing sector [1]

Financial Data and Key Metrics Changes - In 2025, the company increased adjusted free cash flow by 15% year-over-year, setting a new record despite an 18% decrease in realized commodity prices [10] - Total sales volumes increased by 3% year-over-year, with total proved reserves rising by 14% and approved undeveloped inventory by 17% [10] - The company reduced capital spending by 35% year-over-year, improving drilling capital efficiency by 19% since 2023 [11] Business Line Data and Key Metrics Changes - In Q4 2025, the company sold 20,508 Boe per day, a slight decrease of 1% from the previous quarter, attributed to a third-party gas plant shut-in [15] - The overall realized price in Q4 2025 declined by 14% to $35.45 per Boe from $41.10 per Boe in Q3 2025 [16] - Oil revenue decreased by $9.5 million due to negative price and production variances, while gas and NGL revenues increased by $2.2 million quarter-over-quarter [18] Market Data and Key Metrics Changes - The average crude oil price differential from NYMEX WTI futures pricing was a negative $1.66 per barrel in Q4 2025, compared to a negative $0.61 per barrel in Q3 2025 [17] - The average natural gas price differential from NYMEX futures pricing for Q4 was a negative $6.47 per Mcf, compared to a negative $4.22 per Mcf in Q3 [17] Company Strategy and Development Direction - The company intends to maintain or slightly grow production while allocating cash from operations to reduce debt [24] - The 2026 budget is based on $60 per barrel WTI and $3.50 per Mcf Henry Hub, with expected average annual sales ranging between 19,500 to 20,800 Boe per day [25] - The company is focused on capital efficiency through longer laterals and optimized completions, aiming for a lower LOE midpoint than in 2025 [27] Management's Comments on Operating Environment and Future Outlook - Management highlighted the strength and resilience of the company's strategy in the face of challenging oil prices in 2025 [9] - The new CFO emphasized the importance of protecting the balance sheet and enhancing free cash flow durability while positioning the company for growth [32] - Management expressed confidence in the company's ability to generate organic growth and maintain a disciplined approach to capital allocation [29] Other Important Information - The company reduced its debt by $40 million since the Lime Rock acquisition, representing almost 60% of the debt incurred at closing [12] - The company has approximately 2.3 million barrels of oil hedged for 2026, covering about 48% of established oil sales [22] Q&A Session Summary Question: Are you testing any new zones in the 2026 program? - Management confirmed they are testing new zones and have identified commercial zones for horizontal drilling, with encouraging results from initial tests [44][46] Question: Can you quantify the sale of non-op properties? - The company sold 200 barrels a day of non-operated production for $4.5 million, approximately 4.5 times next 12 months cash flow [57] Question: Are there other opportunities to sell non-core production? - Management indicated they are always looking for ways to accelerate value and pay down debt, but noted that the inventory for sale is currently limited [59]

Financial Data and Key Metrics Changes - In 2025, the company increased adjusted free cash flow by 15% year-over-year, setting a new record despite an 18% decrease in realized commodity prices [10] - Total sales volumes increased by 3% year-over-year, with total proved reserves rising by 14% and approved undeveloped inventory by 17% [10] - The company reduced capital spending by 35% year-over-year, lowering the reinvestment rate to 53% of 2025 EBITDA [11] - The company reported a net loss of $12.8 million for Q4 2025, compared to a net loss of $51.6 million in Q3 2025 [19] Business Line Data and Key Metrics Changes - In Q4 2025, the company sold 20,508 Boe per day, a slight decrease of 1% from Q3 2025 [15] - The overall realized price in Q4 2025 declined by 14% to $35.45 per Boe from $41.10 per Boe in Q3 2025 [16] - Oil revenue decreased by $9.5 million due to negative price and production variances, while gas and NGL revenues increased by $2.2 million [18] Market Data and Key Metrics Changes - The average crude oil price differential from NYMEX WTI futures pricing was a negative $1.66 per barrel in Q4 2025, compared to a negative $0.61 per barrel in Q3 2025 [17] - The average natural gas price differential from NYMEX futures pricing for Q4 was a negative $6.47 per Mcf, compared to a negative $4.22 per Mcf in Q3 [17] Company Strategy and Development Direction - The company plans to maintain or slightly grow production while allocating cash from operations to reduce debt [24] - The 2026 budget is based on $60 per barrel WTI and $3.50 per Mcf Henry Hub, with expected average annual sales ranging between 19,500 to 20,800 Boe per day [25] - The company aims to drill approximately 23-32 wells during the year, focusing on capital efficiency and reducing operating costs [26][27] Management's Comments on Operating Environment and Future Outlook - Management highlighted the importance of the Iranian crisis and its impact on the oil market, emphasizing the company's strategic advantage in a volatile environment [29] - The new CFO expressed a commitment to protect the balance sheet and enhance free cash flow durability while positioning the company for growth [32] - Management noted that the stock price has nearly doubled since the exit of a former major shareholder, reflecting renewed investor confidence [38] Other Important Information - The company reduced its debt by $40 million since the Lime Rock acquisition, representing almost 60% of the debt incurred at closing [12] - The company has approximately 2.3 million barrels of oil hedged for 2026, covering about 48% of established oil sales [22] Q&A Session All Questions and Answers Question: Are you testing any new zones in the 2026 program? - Management confirmed they are testing new zones and have identified commercial targets for horizontal drilling, with encouraging results from initial tests [44][46] Question: Can you quantify the sale of non-operated properties? - The company sold 200 barrels a day of non-operated production for $4.5 million, approximately 4.5 times the next 12 months cash flow [57] Question: Are there other opportunities to sell non-core production? - Management indicated they are always looking for ways to accelerate value and pay down debt, but currently, there are limited non-core assets available for sale [59]

Financial Data and Key Metrics Changes - In 2025, the company increased adjusted free cash flow by 15% year-over-year, setting a new record despite an 18% decrease in realized commodity prices [9] - Total sales volumes increased by 3% year-over-year, with total proved reserves rising by 14% and approved undeveloped inventory by 17% [9] - Capital spending was reduced by 35% year-over-year, leading to a reinvestment rate decrease of 18% to 53% of 2025 EBITDA [10] - The company reported a net loss of $12.8 million for Q4 2025, compared to a net loss of $51.6 million in Q3 2025 [17] Business Line Data and Key Metrics Changes - In Q4 2025, production sold was 20,508 Boe per day, a slight decrease of 1% from Q3 2025 [13] - The overall realized price in Q4 2025 declined by 14% to $35.45 per Boe from $41.10 per Boe in Q3 2025 [14] - Oil revenue decreased by $9.5 million due to price and production variances, while gas and NGL revenues increased by $2.2 million quarter-over-quarter [16] Market Data and Key Metrics Changes - The average crude oil price differential from NYMEX WTI futures pricing was a negative $1.66 per barrel in Q4 2025, compared to a negative $0.61 per barrel in Q3 2025 [15] - The average natural gas price differential from NYMEX futures pricing for Q4 was a negative $6.47 per Mcf, compared to a negative $4.22 per Mcf in Q3 [15] Company Strategy and Development Direction - The company plans to maintain or slightly grow production while allocating cash from operations to reduce debt [22] - The 2026 budget is based on $60 per barrel WTI and $3.50 per Mcf Henry Hub, with expected average annual sales ranging between 19,500 to 20,800 Boe per day [23] - The company aims to drill approximately 23-32 wells during the year, focusing on capital efficiency and reducing costs [24][25] Management's Comments on Operating Environment and Future Outlook - Management highlighted the importance of the Iranian crisis and its impact on the oil market, emphasizing the company's strategic advantages [27] - The company is well-positioned for future growth due to its durable asset base and consistent execution, with a focus on protecting the balance sheet and enhancing free cash flow durability [29] - Management expressed confidence in the company's ability to generate sustainable returns of capital and maintain optionality for growth [28] Other Important Information - The company reduced its debt by $40 million since the Lime Rock acquisition, representing almost 60% of the debt incurred at closing [11] - The company has a liquidity of $166 million and a leverage ratio of 2.2 times at year-end 2025 [20] Q&A Session Summary Question: Are you testing any new zones in the 2026 program? - The company is testing new zones and has identified commercial zones for horizontal drilling, with encouraging results from initial tests [40][41] Question: Can you quantify the sale of non-op properties? - The company sold non-operated assets representing about 200 barrels a day for $4.5 million, approximately 4.5 times next 12 months cash flow [53][55]

Q4 & FY 2025 EARNINGS 2026 GUIDANCE NYSE American: REI www.ringenergy.com www.ringenergy.com Forward-Looking Statements and Supplemental Non-GAAP Financial Measures Forward – Looking Statements 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 Exchange Act of 1934, as amended. All statements, other than statements of historical fact included in this Presentation, regarding our strategy, future ...

Financial Risks and Volatility - The company faces risks related to oil and natural gas price volatility, which can significantly impact revenue and operational viability [8]. - The company faces risks related to oil and natural gas price volatility, which could significantly impact revenue generation and financial stability [8]. - Future production rates and associated costs are subject to uncertainties, which could affect the company's financial forecasts [8]. - The ability to raise additional capital for future expenditures is crucial for the company's growth and operational capabilities [8]. Operational Strategy and Compliance - The company emphasizes the importance of forward-looking statements regarding its strategy, future operations, and financial position, highlighting that actual results may differ due to various factors [8]. - The company is committed to maintaining compliance with environmental regulations, which may affect its operational capabilities and costs [10]. - Environmental regulations and compliance with ESG standards are critical factors that could influence the company's operational strategies and capital raising efforts [10]. - The management team is committed to executing plans that align with the company's optimal goals, despite potential challenges [10]. Resource Management and Sustainability - The ability to generate sufficient net cash from operating activities is crucial for funding future capital expenditures and developing oil and gas properties [8]. - The company is focused on acquiring, discovering, and producing oil and natural gas reserves, with a strong emphasis on managing drilling risks and costs [10]. - The company is actively seeking to replace its oil and natural gas reserves to ensure long-term sustainability and growth [10]. - The company is focused on acquiring and developing oil and natural gas reserves, with a particular emphasis on the timing and extent of these activities [10]. Human Resources and Management - The company is focused on retaining skilled personnel and key management to execute its strategic plans effectively [10]. Cybersecurity and Geopolitical Risks - The company acknowledges the potential impact of cybersecurity incidents on its operations and is taking measures to mitigate these risks [10]. - Cybersecurity risks are acknowledged as a significant concern that could affect the company's information technology systems and overall operations [10]. - The company is aware of geopolitical risks that could affect its operations in major oil and gas producing regions [10].