Core Insights - Ring Energy, Inc. reported strong operational and financial performance for Q2 2025, achieving record oil sales and adjusted free cash flow despite a challenging pricing environment [3][5][8] - The company successfully reduced capital expenditures by 48% compared to Q1 2025, while maintaining a 2% year-over-year production growth [3][5] - Management emphasized a value-focused strategy that allows for adaptability in fluctuating market conditions, prioritizing debt reduction in the current low-price landscape [3][5] Financial Performance - Average daily sales volumes reached 21,295 Boe/d, a 16% increase from Q1 2025 and an 8% increase year-over-year [5][24] - Net income for Q2 2025 was $20.6 million, a 126% increase from Q1 2025, while adjusted net income was $11.0 million [5][21] - Adjusted EBITDA for the quarter was reported at $51.5 million, an 11% increase from Q1 2025 [5][21] Capital Expenditures and Cash Flow - Capital expenditures for Q2 2025 were $16.8 million, down 48% from the previous quarter and 53% year-over-year [5][21] - The company generated a record adjusted free cash flow of $24.8 million, a 328% increase from Q1 2025 [5][21] - Total liquidity as of June 30, 2025, was approximately $137.0 million, with $448 million in borrowings outstanding on its credit facility [8][27] Production and Sales - The company sold a record 14,511 barrels of oil per day, exceeding guidance, and total sales on a Boe basis were near the mid-point of guidance [5][24] - Realized prices for crude oil decreased by 11% to $62.69 per barrel compared to Q1 2025, reflecting a broader decline in commodity prices [5][24] - The company reaffirmed production and capital expenditure guidance for the second half of 2025, with a focus on maximizing cash flow and controlling costs [11][12] Operational Efficiency - Lease operating expenses (LOE) were reported at $10.45 per Boe, which is 9% below the low end of guidance due to cost reduction efforts [5][24] - The company successfully drilled and completed two new wells in Q2 2025, contributing to its production growth [9][10] - The operational strategy focuses on oil-rich assets with low operating costs, ensuring resilience against price volatility [3][5]

Core Points - Ring Energy, Inc. announced the timing of its second quarter 2025 earnings release and conference call [1] - The earnings release will be issued after the close of trading on August 6, 2025, with a conference call scheduled for August 7, 2025, at 11:00 a.m. ET [2] - The company focuses on oil and gas exploration, development, and production, particularly in the Permian Basin [3] Earnings Release Details - The second quarter 2025 earnings release will be available after market close on August 6, 2025 [2] - A conference call to discuss the results will take place on August 7, 2025, at 11:00 a.m. ET [2] - Participants can join the call by dialing 833-953-2433 or 412-317-5762 for international callers [2] Company Overview - Ring Energy, Inc. specializes in oil and gas exploration, development, and production [3] - The company's current operations are primarily focused on its assets in the Permian Basin [3]

Summary of Ring Energy Fireside Chat - July 15, 2025 Company Overview - **Company**: Ring Energy (REI) - **Industry**: Oil and Gas Exploration and Production - **Key Assets**: Concentrated in the Permian Basin, specifically the Central Basin Platform Key Points and Arguments 1. **Acquisition Details**: Ring Energy completed a $100 million acquisition of assets from Lime Rock Resources on March 31, 2025, enhancing its position in the Central Basin Platform [3] 2. **Production Metrics**: - Q1 2025 total production averaged 18,400 BOEs per day, with 12,100 barrels per day of oil - Projected Q2 2025 production is about 21,500 BOEs per day, and for the second half of 2025, it is expected to be around 20,000 BOEs per day [3] 3. **Operational Synergies**: The acquisition allows for operational efficiencies due to the proximity and similarity of the new assets to existing ones, leading to lower operating costs [4][5] 4. **Production Profile**: The acquired assets have a lower decline rate (13.5%) compared to Ring's overall decline rate (22%), which is beneficial for maintaining production levels and reducing capital expenditures [6][40] 5. **Development Locations**: The acquisition added approximately 40 gross development locations, which are competitive within Ring's existing portfolio [9][10] 6. **Cost Synergies**: Integration of operations has led to immediate cost savings, including the reduction of lease operators and workover rigs, and improved marketing agreements resulting in an additional $0.80 per barrel [12][14][15] 7. **Water Handling Capabilities**: The acquisition enhances water handling capabilities, crucial for drilling and produced water management in the Permian Basin [17][20] 8. **Debt Reduction Strategy**: Ring Energy is prioritizing debt reduction, with plans to pay off the Lime Rock acquisition within three to four quarters, even in a lower oil price environment [35][51] 9. **Market Conditions**: The current acquisition market is characterized by uncertainty, with sellers reluctant to sell at lower oil prices, impacting potential acquisition opportunities [64][65] 10. **Future Outlook**: The company is focused on maintaining flexibility in its operations to adapt to market volatility, with a long-term goal of reducing leverage and potentially introducing dividends in the future [73][74] Additional Important Insights - **Credit Facility**: Ring reaffirmed a credit facility borrowing base of $585 million, extended to June 2029, with a reduced pricing margin, indicating improved financial terms [53][56] - **Organic Growth**: While the focus has shifted towards debt reduction, the company remains interested in organic growth opportunities that offer high rates of return [68][70] - **Market Positioning**: The management emphasizes the importance of a strong balance sheet to withstand price volatility and maintain operational flexibility [49][51] This summary encapsulates the key discussions and insights from the Ring Energy fireside chat, highlighting the company's strategic focus on operational efficiency, debt reduction, and adaptability in a volatile market environment.

Core Viewpoint - Ring Energy, Inc. is actively engaging in discussions regarding its recent asset acquisition and strategies for maximizing synergies, which are crucial for its growth and operational efficiency [2][6]. Group 1: Event Participation - Ring Energy will participate in a fireside chat with Water Tower Research on July 15, 2025, at 10:00 AM Central Time [1]. - The discussion will be led by Jeff Robertson, Managing Director at WTR, and will feature Paul McKinney, Ring's Chairman and CEO [2]. Group 2: Discussion Topics - Key topics will include the integration of Central Basin Platform assets acquired from Lime Rock Resources IV, LP at the end of Q1 2025 [2]. - The conversation will also cover strategies to maximize cost synergies and adapt the capital program during market turbulence [6]. Group 3: Company Overview - Ring Energy, Inc. focuses on oil and gas exploration, development, and production, with current operations centered on its Permian Basin assets [4].

Group 1 - The Conservative Income Portfolio targets value stocks with high margins of safety and aims to reduce volatility using well-priced options [1] - The Enhanced Equity Income Solutions Portfolio is designed to generate yields of 7-9% while minimizing volatility [1] - Trapping Value offers Covered Calls and focuses on capital preservation through lower volatility income investing [2][3] Group 2 - The team at Trapping Value has over 40 years of combined experience in generating options income while emphasizing capital preservation [3] - The investing group includes two income-generating portfolios and a bond ladder, indicating a diversified approach to income generation [3]

Group 1 - The core thesis is that Ring Energy (NYSE: REI) is currently undervalued in the small-cap upstream oil sector in the US market [1] - The analysis expands on previous evaluations of REI, indicating a more event-driven approach to understanding its market position [1] Group 2 - The article emphasizes the potential for investment opportunities in REI due to its mispricing compared to market peers [1] - The author holds a beneficial long position in REI, suggesting confidence in the company's future performance [1]

Core Insights - Veriforce has been selected by Ring Energy Inc. as its exclusive contractor management provider to enhance safety and compliance amid the company's growth [1][2][3] - The partnership aims to streamline contractor oversight processes and improve safety training for contractors, including courses on SafeLand and Hydrogen Sulfide (H2S) awareness [2][3] - Ring Energy's expansion has led to a more complex contractor network, necessitating a centralized solution for efficient management [2][3] Company Overview - Ring Energy, Inc. focuses on oil and gas exploration, development, and production, particularly in the Permian Basin [4] - Veriforce is a global leader in contractor management, providing integrated solutions for contractor qualification, training, evaluation, and compliance tracking [5][6] - Veriforce operates with a network of over 3,200 hiring companies across 140+ countries, supporting more than 130,000 contractors and millions of workers [6][7]

Core Insights - Ring Energy, Inc. has affirmed its borrowing base at $585 million under its $1.0 billion senior secured credit facility, with the term extended to June 2029 and Bank of America appointed as the new Administrative Agent [1][2]. Financial Highlights - The company has focused on strengthening its balance sheet and improving asset quality, maintaining a sufficient borrowing base despite slight reductions from the previous year due to oil and gas price volatility in 2025 [2]. - The company aims to generate free cash flow through cost reductions, divestitures of non-core assets, and acquisitions of high-margin, low-break-even assets, using excess cash to reduce debt and enhance shareholder value [2]. Banking Relationships - Ring Energy has expanded its banking relationships by adding Citibank, N.A. to its syndicate, which now includes a total of 11 banks, including Bank of America, N.A. and Goldman Sachs Lending Partners, LLC [2][5]. Credit Facility Details - The company entered into a Third Amended and Restated Credit Agreement with a borrowing base of $585 million, reflecting a 25 basis point reduction in the Applicable Margin pricing grid [5]. - The next regularly scheduled bank redetermination is set to occur in the fall of 2025 [5]. Company Overview - Ring Energy, Inc. is engaged in oil and gas exploration, development, and production, with a focus on developing its assets in the Permian Basin [3].

Group 1 - Ring Energy (REI) reported solid Q1 2025 results but is expected to generate minimal free cash flow for the remainder of 2025 at current strip prices with its original development plans [2] - The company has significantly reduced its capital expenditure (capex) budget in response to the anticipated cash flow challenges [2] Group 2 - The article highlights the expertise of Aaron Chow, also known as Elephant Analytics, who has over 15 years of analytical experience and is a top-rated analyst on TipRanks [2] - Aaron Chow co-founded a mobile gaming company that was acquired by PENN Entertainment and has a strong background in designing economic models for mobile apps [2]

Financial Performance - Ring Energy reported average daily sales volumes of 18,392 Boe/d, exceeding the midpoint of guidance, with 12,074 Bo/d of crude oil sold[4] - The company achieved a net income of $9.1 million, representing a 60% increase from Q4 2024, and an Adjusted EBITDA of $46.4 million[4] - Average realized price for crude oil was $70.40 per barrel, a 2% increase from Q4 2024, while total revenues decreased by 5% to $79.1 million[4] - Net income for Q1 2025 was $9,110,738, compared to $5,657,519 in Q4 2024, representing a 61% increase[30] - For Q1 2025, the company reported a net income of $9,110,738, translating to a diluted earnings per share of $0.05, compared to $5,657,519 and $0.03 in Q4 2024[44] - Adjusted Net Income for Q1 2025 was $10,678,022, or $0.05 per diluted share, down from $12,341,668 and $0.06 in Q4 2024[44] - Adjusted EBITDA for Q1 2025 was $46,437,553, with an Adjusted EBITDA margin of 59%, compared to $50,932,732 and 61% in Q4 2024[47] - The company reported a net interest expense of $9,408,728 for Q1 2025, down from $9,987,731 in Q4 2024[47] - The company reported a net income of $9,110,738 for Q1 2025, compared to $5,657,519 in Q4 2024, reflecting a positive trend in profitability[59] Capital Expenditures and Guidance - Capital expenditures for Q1 2025 were $32.5 million, which is 14% lower than Q4 2024, and within the company's guidance[4] - Updated full-year guidance indicates a 36% reduction in capital spending, now expected to be between $85 million and $113 million[20] - Capital spending for Q2 2025 is estimated to be between $14 million and $22 million, with a midpoint of $18 million[22] - The company plans to drill 2 to 3 new horizontal and vertical wells in Q2 2025, and 11 to 13 wells in 2H 2025[22] - The company anticipates spending on infrastructure upgrades and well reactivations as part of its capital program[22] Liquidity and Financial Position - The company maintained liquidity of $141.1 million at the end of Q1 2025, with $460 million in borrowings outstanding on its credit facility[18] - As of March 31, 2025, total assets increased to $1,505,610,274 from $1,408,099,474 as of December 31, 2024, representing a growth of approximately 6.9%[34] - Total liabilities increased to $629,644,216 as of March 31, 2025, from $549,459,492 as of December 31, 2024, reflecting an increase of approximately 14.6%[34] - The company’s additional paid-in capital rose to $808,627,109 as of March 31, 2025, compared to $800,419,719 as of December 31, 2024, an increase of approximately 1.0%[34] - The company’s retained earnings increased to $67,132,440 as of March 31, 2025, from $58,021,702 as of December 31, 2024, representing an increase of approximately 15.5%[34] - The company’s cash and cash equivalents decreased to $1,100,851 as of March 31, 2025, from $1,866,395 as of December 31, 2024, a decline of approximately 41.0%[36] Production and Sales Volumes - Sales volumes for Q1 2025 included 66% oil, 18% natural gas liquids, and 16% natural gas, reflecting a shift in product mix compared to previous quarters[6] - Total oil sales volumes for Q2 2025 are projected to be between 13,700 and 14,700 Bo/d, with a midpoint of 14,200 Bo/d[22] - Total sales volumes (Boe/d) for 2H 2025 are expected to range from 19,000 to 21,000, with a midpoint of 20,500 Bo/d[22] - Average daily sales volumes for oil in Q1 2025 were 12,074 Bbls/d, down from 12,916 Bbls/d in Q4 2024[32] - The oil mix as a percentage of total sales remained stable at 66% for both Q1 2025 and Q4 2024[32] Operating Expenses - Lease operating expenses were reported at $11.89 per Boe, which was within the company's guidance range[9] - Operating expenses per Boe for lease operating expenses were $11.89 in Q1 2025, up from $11.24 in Q4 2024[32] - All-in cash operating costs for Q1 2025 totaled $40,272,071, a decrease of 4.0% from $41,962,588 in Q4 2024[65] - All-in cash operating costs per Boe increased to $24.33 in Q1 2025 from $23.20 in Q4 2024, reflecting a 4.9% rise[65] - General and Administrative Expense (G&A) for Q1 2025 was $8,619,976, an increase of 7% from $8,035,977 in Q4 2024[53] Cash Flow and Investments - Cash provided by operating activities for the three months ended March 31, 2025, was $28,371,008, down from $47,279,681 in the previous quarter, a decrease of approximately 40.0%[36] - The company reported a net cash used in investing activities of $102,607,297 for the three months ended March 31, 2025, compared to $37,688,306 in the previous quarter, indicating a significant increase in investment outflows[36] - Adjusted Cash Flow from Operations for Q1 2025 was $38,156,007, compared to $42,206,005 in Q4 2024, indicating a decline of 10%[51] - Adjusted Free Cash Flow for Q1 2025 increased to $5,815,786, up 23% from $4,732,143 in Q4 2024[49] Hedging and Risk Management - The company has approximately 1.7 million barrels of oil hedged at an average downside protection price of $64.44 for the remainder of 2025[11] - The company has hedged 151,763 barrels of oil for Q2 2025 at a weighted average swap price of $68.53 per barrel[38] - The total hedged volume for natural gas in Q2 2025 is 513,900 MMBtu, with a weighted average swap price of $3.60[38] - The company has a hedged volume of 464,100 barrels of oil for Q2 2025 under two-way collars, with a weighted average put price of $60.00 and call price of $69.85[38] Other Financial Metrics - Consolidated EBITDAX for the last four quarters ending March 31, 2025, was $247,797,658, with a Leverage Ratio of 1.90, well below the maximum allowed of 3.00[60] - The company’s leverage ratio covenant remains strong at 1.90, indicating effective debt management and financial stability[60] - Changes in operating assets and liabilities resulted in a positive adjustment of $9,784,999 in Q1 2025, contrasting with a negative adjustment of $(5,073,676) in Q4 2024[51] - Unrealized losses on changes in the fair value of derivatives amounted to $375,196 in Q1 2025, compared to a loss of $6,999,552 in Q4 2024[47]