Group 1 - The article discusses the analysis of oil and gas companies, specifically focusing on Ring Energy and its acquisition of Lime Rock, which was completed at the end of the first quarter [2] - The author emphasizes the cyclical nature of the oil and gas industry, highlighting the need for patience and experience in navigating this sector [2] - The analysis includes a breakdown of key factors such as balance sheets, competitive positions, and development prospects of the companies involved [1] Group 2 - The article indicates that the author holds a beneficial long position in Ring Energy shares, either through stock ownership or derivatives [3] - It is noted that the insights provided in the article are based on the author's own opinions and experiences, without any external compensation [3] - The article serves as an example of the type of analysis available to members of the Oil & Gas Value Research service, which includes exclusive insights not published on free platforms [1]

Group 1 - Ring Energy reported quarterly earnings of $0.05 per share, missing the Zacks Consensus Estimate of $0.06 per share, and down from $0.10 per share a year ago, representing an earnings surprise of -16.67% [1] - The company posted revenues of $79.09 million for the quarter ended March 2025, missing the Zacks Consensus Estimate by 1.28%, and down from $94.5 million year-over-year [2] - Ring Energy shares have declined approximately 36.8% since the beginning of the year, compared to a decline of -4.7% for the S&P 500 [3] Group 2 - The current consensus EPS estimate for the coming quarter is $0.02 on revenues of $80.95 million, and for the current fiscal year, it is $0.16 on revenues of $336.04 million [7] - The Zacks Industry Rank for Oil and Gas - Exploration and Production - United States is currently in the bottom 25% of over 250 Zacks industries, indicating potential underperformance compared to higher-ranked industries [8]

Financial Performance - For the three months ended March 31, 2025, Ring Energy, Inc. reported revenues of $79,091,207, a decrease of 16.3% compared to $94,503,136 for the same period in 2024[17]. - The company’s net income for the first quarter of 2025 was $9,110,738, representing a 65.5% increase from $5,515,377 in the first quarter of 2024[17]. - The company incurred total costs and operating expenses of $56,735,326 for the first quarter of 2025, slightly down from $56,888,019 in the same quarter of 2024[17]. - For the three months ended March 31, 2025, total oil, natural gas, and natural gas liquids revenues were $79,091,207, a decrease from $94,503,136 in the same period of 2024, reflecting a negative total gas revenue due to lower realized sales prices[89]. - The Exploration and Production segment profit for Q1 2025 was $54,093,480, down 22.1% from $69,402,714 in Q1 2024[143]. - Net cash provided by operating activities for the first quarter of 2025 was $28,371,008, a decrease from $45,189,169 in the first quarter of 2024[23]. - The company reported a net loss on derivative contracts of $928,790 for the three months ended March 31, 2025, compared to a loss of $19,014,495 for the same period in 2024[107]. Assets and Liabilities - Total current assets decreased to $48,669,748 as of March 31, 2025, down from $50,448,092 at the end of 2024, reflecting a decline of 3.5%[15]. - Total assets increased to $1,505,610,274 as of March 31, 2025, compared to $1,408,099,474 at the end of 2024, marking a growth of 6.9%[15]. - The company’s total liabilities rose to $629,644,216 as of March 31, 2025, up from $549,459,492 at the end of 2024, an increase of 14.6%[15]. - Cash and cash equivalents decreased to $1,100,851 as of March 31, 2025, down from $1,866,395 at the end of 2024, a decline of 41%[15]. - The company had cash in excess of federally insured limits amounting to $850,851 as of March 31, 2025, down from $1,616,395 as of December 31, 2024[42]. - The company recorded an asset retirement obligation of $29,268,349 as of March 31, 2025, up from $26,382,517 at the end of 2024[127][128]. Acquisitions and Investments - Ring Energy, Inc. completed the Lime Rock Acquisition, resulting in an increase in common stock by 6,452,879 shares[20]. - Cash paid for the Lime Rock Acquisition totaled $70,859,769, which included $63,599,939 paid at closing and $5,000,000 released from escrow[25]. - The company completed the acquisition of Lime Rock Resources for a total consideration of $87,729,921, which includes $78,015,005 in cash and 6,452,879 shares of common stock[99][101]. - The fair value of oil and natural gas properties acquired in the Lime Rock Acquisition was recorded at $90,844,802[101]. - The company has a deferred cash payment of $10 million related to the Lime Rock Acquisition, due by December 31, 2025[99]. Revenue and Sales - Oil revenues decreased by approximately $15.8 million from $92.3 million to $76.5 million, with a volume variance of $(10.0) million and a price variance of $(5.8) million[162]. - Natural gas sales increased from a negative $0.8 million to a negative $0.3 million, with a volume increase of 118,689 Mcf, primarily driven by production increases in the Northwest Shelf[163]. - NGL sales slightly decreased by $0.1 million from $3.0 million to $2.9 million, with sales volumes increasing from 263,802 barrels to 299,366 barrels, a 13.5% increase[164]. - Average realized price per barrel of NGLs decreased by $1.82 to $9.65, down from $11.47, due to weaker market conditions[165]. Expenses and Costs - Lease operating expenses for the same period were $19,677,552, an increase of 7.2% from $18,360,434 in the prior year[143]. - Total lease operating expenses (LOE) increased from $18.4 million to $19.7 million, a 7% increase, with LOE per Boe rising from $10.60 to $11.89, a 12% increase[166]. - Gathering, transportation, and processing costs (GTP) increased from $166,054 to $203,612, a 23% increase, with GTP per Boe rising from $0.10 to $0.12, a 20% increase[167]. - General and administrative expenses increased from $7.5 million to $8.6 million, a 15% increase, with G&A per Boe rising from $4.31 to $5.21, a 21% increase[175]. - Interest expense decreased by $2.0 million from $11.5 million to $9.5 million, attributed to lower interest rates and reduced outstanding amounts on the Credit Facility[177]. Taxation - The Company recorded a deferred federal income tax provision of $(2,816,078) for the three months ended March 31, 2025, compared to $(1,551,759) in 2024, resulting in an effective tax rate of 25.03%[65]. - The company’s overall effective tax rate was higher than the federal statutory corporate tax rate, primarily due to state income taxes[65]. - The benefit from (provision for) income taxes changed from a provision of $1.7 million in 2024 to a provision of $3.0 million in 2025, reflecting an increase of 76%[181]. Derivative Instruments and Hedging - The company has hedged oil volumes totaling 1,000,000 barrels across various contracts with weighted average swap prices ranging from $63.80 to $71.41 for the upcoming quarters[185]. - The company has hedged natural gas volumes totaling 1,000,000 MMBtu with weighted average swap prices between $3.54 and $4.25 for the upcoming quarters[186]. - The company utilized derivative strategies to manage cash flow variability, including costless collars and swaps, to mitigate risks associated with crude oil and natural gas price fluctuations[102][103]. - As of March 31, 2025, the company reported commodity derivatives assets valued at $10,330,272 and liabilities of $(9,058,328), resulting in a total fair value of $1,271,944[118]. Operational Highlights - The company drilled and completed a total of 7 wells in the first quarter of 2025, including 4 horizontal wells in the Northwest Shelf and 3 vertical wells in the Central Basin Platform[154]. - The company aims to maximize cash flow in 2025 through cost monitoring and prudent capital allocation, focusing on high-return projects and acquisitions[183]. - The company is currently assessing the impact of ASU 2024-02, which is effective for fiscal years beginning after December 15, 2024, but is not expected to have a material impact on financial statements[81]. Internal Controls and Compliance - Management concluded that disclosure controls and procedures were effective as of the end of the reporting period[206]. - The company is committed to ongoing evaluation and enhancement of disclosure controls and internal financial reporting controls as funds allow[207]. - Regular reviews of internal control systems are conducted to improve efficiency and maintain an effective control environment[208]. - No changes in internal control over financial reporting materially affected the company during the three months ended March 31, 2025[209].

Core Insights - Ring Energy, Inc. reported strong operational and financial results for Q1 2025, exceeding guidance targets due to exceptional oil sales volumes and the successful acquisition of Lime Rock's CBP assets [1][3][5]. Financial Performance - Average daily sales volumes for Q1 2025 were 18,392 Boe/d, a decrease of 6% from Q4 2024 and 3% from Q1 2024 [6][7]. - The company sold 12,074 barrels of oil per day, exceeding the high end of guidance [5]. - Net income for Q1 2025 was $9.1 million, or $0.05 per diluted share, representing a 60% increase from Q4 2024 [6][9]. - Adjusted EBITDA was reported at $46.4 million, a 9% decrease from Q4 2024 [6][9]. - Revenues for Q1 2025 totaled $79.1 million, down 5% from Q4 2024, primarily due to a negative volume variance [9]. Operational Highlights - The company completed the acquisition of CBP assets from Lime Rock, which added approximately 2,300 Boe/d of low-decline net production and increased operational synergies [16][17]. - Capital expenditures for Q1 2025 were $32.5 million, 14% lower than Q4 2024, and within guidance [5][13]. - The company drilled and completed seven wells during Q1 2025, enhancing production capabilities [14][15]. Guidance and Strategy - For the remainder of 2025, Ring Energy has updated its guidance to reflect a 36% reduction in capital spending while maintaining sales volume guidance [3][20]. - The company expects total capital spending for 2025 to be between $85 million and $113 million, down from previous estimates [20][21]. - The updated guidance includes a focus on drilling, recompletions, and infrastructure upgrades, with flexibility to adapt to market conditions [20][21]. Balance Sheet and Liquidity - As of March 31, 2025, total liquidity was approximately $141.1 million, with $460 million in borrowings outstanding on its credit facility [19]. - The company is targeting continued debt reduction, contingent on market conditions and capital spending [19].

Core Viewpoint - Ring Energy, Inc. has reaffirmed its sales volume guidance for Q2 2025 while significantly reducing its capital spending guidance due to declining oil prices [1][2]. Sales Volumes - Total sales volumes are projected to be between 13,700 and 14,700 barrels of oil per day (Bo/d), with a midpoint of 14,200 Bo/d [2][7]. - Total production is expected to range from 20,500 to 22,500 barrels of oil equivalent per day (Boe/d), with a midpoint of 21,500 Boe/d [2][7]. - The composition of total production is anticipated to be 66% oil, 18% natural gas liquids (NGLs), and 16% gas [2]. Capital Program - The capital spending guidance has been reduced to a range of $14 million to $22 million, with a midpoint of $18 million, representing a decrease of over 50% [2][7]. - The capital spending outlook includes funds for well recompletions, capital workovers, infrastructure upgrades, well reactivations, and leasing acreage [4]. Operating Expenses - Lease Operating Expense (LOE) is projected to be between $11.50 and $12.50 per Boe, with a midpoint of $12.00 per Boe [2][7]. Strategic Focus - The company emphasizes a value-focused strategy aimed at maximizing cash flow and managing commodity price volatility, which is crucial for strengthening the balance sheet during periods of low oil prices [2]. - The decision to reduce capital spending is seen as a proactive measure to enhance debt reduction and better position the company for potential risks associated with prolonged low oil prices [2].

Core Insights - Ring Energy, Inc. reported strong operational performance in Q1 2025, with oil sales volumes exceeding guidance and a successful asset acquisition [2][4][7] - The company emphasizes a value-focused strategy aimed at generating free cash flow and maintaining disciplined capital spending [4][7] Operational Performance - Oil production reached over 12,000 barrels per day (Bo/d), surpassing the high end of guidance [7] - Total sales volumes exceeded the midpoint of guidance, with over 18,300 barrels of oil equivalent per day (Boe/d) [7] - The success of the drilling program, which included 7 new wells, contributed to the outperformance [7] Asset Acquisition - The acquisition of Lime Rock's Central Basin Platform assets was completed on March 31, 2025, enhancing cash flow from long-life, oil-weighted assets [4][7] - Initial operational synergies were realized, reducing lease operating expenses (LOE) by over 5% [7] Future Outlook - The company plans to release its Q1 2025 earnings on May 7, 2025, followed by a conference call on May 8, 2025 [5] - Management expressed confidence in the company's ability to navigate commodity price volatility through flexible contracting and hedging strategies [4][7]

~ Announces Timing of First Quarter Earnings Conference Call ~ THE WOODLANDS, Texas, April 17, 2025 (GLOBE NEWSWIRE) -- Ring Energy, Inc. (NYSE American: REI) (“Ring” or the “Company”) today provided an operational update, including first quarter 2025 oil sales volumes above the high end of the Company’s guidance range and total sales volumes above the midpoint of guidance. The Company also announced the timing of Ring’s quarterly results conference call. KEY HIGHLIGHTS Produced over 12,000 barrels of oil p ...

THE WOODLANDS, Texas, April 11, 2025 (GLOBE NEWSWIRE) -- Ring Energy, Inc. (NYSE American: REI) (“Ring” or the “Company”) today provided an update concerning its Board of Directors (the “Board”), including the retirement of Ms. Regina Roesener effective April 14, 2025 and the appointment of Ms. Carla Tharp to the Board effective April 14, 2025 who will serve as an independent Director. Mr. Paul D. McKinney, Chairman of the Board and Chief Executive Officer, commented, “It has been a pleasure to work closely ...

Core Insights - Ring Energy, Inc. has successfully completed the acquisition of Lime Rock Resources IV, LP's Central Basin Platform assets in the Permian Basin, enhancing its operational footprint and production capabilities [1][3]. Transaction Details - The acquisition includes approximately 17,700 net acres, primarily contiguous to Ring's existing operations, which will facilitate quick integration and operational synergies [1][3][7]. - The total cash payment for the transaction was approximately $63.6 million, with a deferred cash payment of $10 million due by December 31, 2025, and the issuance of about 6.5 million shares of common stock [8]. Financial Impact - The acquired assets are expected to generate approximately 2,300 barrels of oil equivalent per day, contributing an estimated $34 million to the 2025 Adjusted EBITDA [7]. - The acquisition is projected to be accretive to Ring's key financial metrics, valued at less than 85% of Proved Developed PV-10 reserves, which are estimated at $120 million [7][8]. Strategic Benefits - The transaction strengthens Ring's position as a leading conventional Permian consolidator, providing a robust inventory of over 40 gross drilling locations that are economically viable and ready for capital allocation [7]. - The integration of these assets is anticipated to yield cost reduction opportunities and enhance the company's operational efficiency [3][7].

Group 1 - Ring Energy, Inc. (NYSE: REI) has received generally unfavorable updates, leading to an expectation that its share price will continue to underperform relative to its estimated asset value [2] - The company is under scrutiny due to its performance in the energy sector, which is a focus area for distressed value investing [2] Group 2 - The article emphasizes the importance of analytical skills in evaluating investment opportunities, particularly in the context of the energy sector [2] - The author, Aaron Chow, has over 15 years of analytical experience and has previously co-founded a mobile gaming company, indicating a diverse background that may influence his investment insights [2]