Table of Contents United States Securities and Exchange Commission Washington, D.C. 20549 Form 10-Q x Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended March 31, 2024 o Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from ______ to ______ Commission file number 001-36057 Ring Energy, Inc. (Exact name of registrant as specified in its charter) (State or other jurisdiction of ...

Ring Energy, Inc. (NYSE:REI) Q4 2023 Earnings Conference Call March 8, 2024 11:00 AM ET Company Participants Al Petrie - Investor Relations Paul McKinney - Chairman & CEO Travis Thomas - EVP & CFO Marinos Baghdati - EVP, Operations Conference Call Participants Jeff Grampp - Alliance Global Partners Neal Dingmann - Truist Noel Parks - Tuohy Brothers Jeff Robertson - Water Tower Research Operator Good morning, and welcome to the Ring Energy Fourth Quarter and Full Year 2023 Earnings Conference Call. [Operator ...

[Ring Energy Q4 and Full Year 2023 Results](index=1&type=section&id=Ring%20Energy%20Q4%20and%20Full%20Year%202023%20Results) [2023 Q4 and Full Year Highlights](index=1&type=section&id=2023%20Q4%20and%20Full%20Year%20Highlights) Ring Energy achieved record Q4 and full-year 2023 results, with significant growth in sales, Adjusted EBITDA, and Free Cash Flow, alongside debt reduction and strong reserves Q4 and Full Year 2023 Performance Highlights | Metric | Q4 2023 | Full Year 2023 | YoY Change (Full Year) | | :--- | :--- | :--- | :--- | | Total Sales Volumes (Boe/d) | 19,397 (Record) | 18,119 (Record) | +47% | | Oil Sales Volumes (Bo/d) | 13,637 (Record) | 12,548 (Record) | +32% | | Net Income ($ million) | $50.9 | $104.9 | -24% | | Adjusted Net Income ($ million) | $21.2 | $100.5 | -7% | | Adjusted EBITDA ($ million) | $65.4 (Record) | $236.0 (Record) | +21% | | Adjusted Free Cash Flow ($ million) | $16.3 (Record) | $45.3 | +30% | - The company paid down **$3.0 million** of debt in Q4 2023 and a total of **$30.0 million** since the Founders Acquisition in August 2023, exiting the year with a Leverage Ratio of **1.62x**[4](index=4&type=chunk) - Year-end 2023 proved reserves were **129.8 million barrels of oil equivalent (MMBoe)** with a **PV-10 value of $1.6 billion**, based on SEC pricing[4](index=4&type=chunk) [Management Commentary](index=2&type=section&id=Management%20Commentary) Management credits 2023 record results to successful acquisitions and drilling, with 2024 focused on disciplined capital, debt reduction, and accretive acquisitions - Management credits the **47% increase in sales volumes** and **21% increase in Adjusted EBITDA** to the successful execution and integration of two acquisitions made over the past 18 months[4](index=4&type=chunk)[5](index=5&type=chunk) - The strategic focus for 2024 includes: disciplined capital spending for oil production, allocating excess cash for debt reduction, and seeking accretive acquisitions[5](index=5&type=chunk) [Financial and Operational Performance](index=3&type=section&id=Financial%20and%20Operational%20Performance) Record Q4 2023 sales volumes boosted revenue to **$99.9 million**, with **$50.9 million** net income and **$174.5 million** year-end liquidity [Summary Results](index=3&type=section&id=Summary%20Results) This section provides a concise overview of key quarterly and full-year financial and operational metrics Quarterly and Full-Year Financial Summary | Metric | Q4 2023 | Q3 2023 | FY 2023 | FY 2022 | | :--- | :--- | :--- | :--- | :--- | | Net Sales (Boe/d) | 19,397 | 17,509 | 18,119 | 12,364 | | Revenues ($MM) | $99.9 | $93.7 | $361.1 | $347.2 | | Net Income/Loss ($MM) | $50.9 | $(7.5) | $104.9 | $138.6 | | Adjusted EBITDA ($MM) | $65.4 | $58.6 | $236.0 | $195.2 | | Capital Expenditures ($MM) | $38.8 | $42.4 | $152.0 | $140.1 | | Adjusted Free Cash Flow ($MM) | $16.3 | $6.1 | $45.3 | $34.8 | [Financial Overview](index=4&type=section&id=Financial%20Overview) This section details Q4 2023 financial performance, highlighting net income, Adjusted Net Income, Adjusted EBITDA, and Adjusted Free Cash Flow - Q4 2023 net income was **$50.9 million**, or **$0.26 per diluted share**, which included a **$32.5 million** pre-tax non-cash unrealized gain on commodity derivatives[7](index=7&type=chunk) - Adjusted Net Income for Q4 2023 was **$21.2 million**, or **$0.11 per diluted share**, after excluding items like unrealized derivative gains and share-based compensation[7](index=7&type=chunk) - Adjusted EBITDA reached a record **$65.4 million** in Q4 2023, a **12% increase** from Q3 2023 and a **16% increase** from Q4 2022[10](index=10&type=chunk) - Adjusted Free Cash Flow was a record **$16.3 million** in Q4 2023, a **165% increase** from Q3 2023, primarily due to higher revenues and lower capital spending[11](index=11&type=chunk) [Sales Volumes, Prices and Revenues](index=5&type=section&id=Sales%20Volumes%2C%20Prices%20and%20Revenues) This section analyzes Q4 2023 sales volumes, average realized prices, and total revenues across product types - Q4 2023 sales volumes were **19,397 Boe/d**, comprised of **70% oil**, **15% natural gas**, and **15% NGLs**[14](index=14&type=chunk) Q4 2023 Average Realized Sales Prices | Product | Realized Price | | :--- | :--- | | Crude Oil | $77.33 per barrel | | Natural Gas | $(0.12) per Mcf | | NGLs | $11.92 per barrel | | **Combined** | **$56.01 per Boe** | - Total revenues for Q4 2023 were **$99.9 million**, a **7% increase** from Q3 2023, driven by higher sales volumes that were partially offset by lower overall realized prices[16](index=16&type=chunk) [Operating Expenses](index=5&type=section&id=Operating%20Expenses) This section details operating expenses, including Lease Operating Expense, production taxes, and General and Administrative expenses - Lease Operating Expense (LOE) was **$10.50 per Boe** in Q4 2023, down from **$11.18 per Boe** in Q3 2023[17](index=17&type=chunk) - Production taxes were **$2.78 per Boe** in Q4 2023, representing approximately **5.0% to 5.2% of revenue**[20](index=20&type=chunk) - Adjusting for transaction costs, G&A (excluding share-based compensation) decreased **5% sequentially** to **$3.00 per Boe** in Q4 2023[22](index=22&type=chunk) [Derivative Instruments](index=6&type=section&id=Derivative%20Instruments) This section outlines commodity derivative activities, including net gains/losses and future hedging positions - In Q4 2023, the company recorded a net gain of **$29.3 million** on commodity derivatives, which included a **$3.3 million** realized cash loss and a **$32.5 million** unrealized non-cash gain[23](index=23&type=chunk) - For full-year 2024, the company has hedged approximately **2.1 million barrels of oil (45% of guidance midpoint)** and **2.6 billion cubic feet of natural gas (43% of guidance midpoint)**[25](index=25&type=chunk) [Balance Sheet and Liquidity](index=7&type=section&id=Balance%20Sheet%20and%20Liquidity) This section reviews the balance sheet and liquidity, including total liquidity, outstanding borrowings, and borrowing base reaffirmation - Total liquidity at the end of Q4 2023 was **$174.5 million**, consisting of **$0.3 million** in cash and **$174.2 million** available under the revolving credit facility[26](index=26&type=chunk) - The company had **$425.0 million** in borrowings outstanding on its revolving credit facility, which has a borrowing base of **$600.0 million**[26](index=26&type=chunk) - The borrowing base of **$600 million** was successfully reaffirmed during Q4 2023, with the next redetermination scheduled for May 2024[27](index=27&type=chunk) [Capital Expenditures](index=7&type=section&id=Capital%20Expenditures) Q4 2023 capital expenditures were **$38.8 million**, with full-year capex of **$152.0 million** funding 31 wells and infrastructure - Q4 2023 capital expenditures were **$38.8 million**, used to drill four horizontal wells and three vertical wells, and complete ten wells[28](index=28&type=chunk) - Full-year 2023 capital expenditures totaled **$152.0 million**[29](index=29&type=chunk) 2023 Drilling and Completions Activity | Period | Wells Drilled | Wells Completed | Recompletions | | :--- | :--- | :--- | :--- | | **Q1 2023** | 7 | 7 | 6 | | **Q2 2023** | 6 | 6 | 3 | | **Q3 2023** | 11 | 8 | 0 | | **Q4 2023** | 7 | 10 | 0 | | **FY 2023 Total** | **31** | **31** | **9** | [Full Year 2023 Summary Financial Review](index=8&type=section&id=Full%20Year%202023%20Summary%20Financial%20Review) Full-year 2023 achieved **$104.9 million** net income, record **$236.0 million** Adjusted EBITDA (up **21%**), and **$361.1 million** revenues (up **4%**) Full Year 2023 vs. 2022 Financial Comparison | Metric | FY 2023 | FY 2022 | % Change | | :--- | :--- | :--- | :--- | | Net Income ($M) | $104.9 | $138.6 | (24)% | | Adjusted Net Income ($M) | $100.5 | $107.5 | (7)% | | Adjusted EBITDA ($M) | $236.0 | $195.2 | +21% | | Adjusted Free Cash Flow ($M) | $45.3 | $34.8 | +30% | | Adjusted Cash Flow from Ops ($M) | $197.0 | $172.9 | +14% | - Full-year 2023 revenues increased **4% to $361.1 million**, driven by a **47% increase in sales volumes**, which was a direct result of acquisitions and the company's capital spending program[33](index=33&type=chunk)[34](index=34&type=chunk) - The average realized sales price for full-year 2023 was **$54.60 per Boe**, a significant decrease from **$76.95 per Boe** in 2022[35](index=35&type=chunk) [2024 Guidance](index=10&type=section&id=2024%20Capital%20Investment%2C%20Sales%20Volumes%2C%20and%20Operating%20Expense%20Guidance) 2024 guidance sets capital spending at **$135-175 million** for maintaining or slightly growing oil volumes, with total production forecast at **18,000-19,000 Boe/d** - The full-year 2024 capital spending budget is set at **$135 million to $175 million**, which includes drilling **18-24 horizontal wells** and **20-30 vertical wells**[39](index=39&type=chunk) - Capital allocation for 2024 is planned as follows: **73% for drilling and completion**, **24% for recompletions and workovers**, and **3% for land and other costs**[40](index=40&type=chunk)[41](index=41&type=chunk) 2024 Full Year and Q1 Guidance | Metric | Q1 2024 Guidance | FY 2024 Guidance | | :--- | :--- | :--- | | Total Sales (Boe/d) | 18,000 - 18,500 | 18,000 - 19,000 | | Oil Sales (Bo/d) | 12,420 - 12,765 | 12,600 - 13,300 | | Capital Spending ($M) | $37 - $42 | $135 - $175 | | LOE (per Boe) | $10.75 - $11.25 | $10.50 - $11.50 | [Year-End 2023 Proved Reserves](index=11&type=section&id=Year-End%202023%20Proved%20Reserves) Year-end 2023 proved reserves decreased to **129.8 MMBoe**, with PV-10 value at **$1.6 billion**, primarily due to lower SEC commodity prices [Proved Reserves Overview](index=11&type=section&id=Proved%20Reserves%20Overview) This section overviews year-end 2023 SEC proved reserves, including total volume, PV-10 value, and reserve mix - Year-end 2023 SEC proved reserves were **129.8 MMBoe**, down from **138.1 MMBoe** at year-end 2022, primarily due to lower SEC pricing, asset sales, and production[43](index=43&type=chunk) - The PV-10 value of proved reserves at year-end 2023 was **$1.6 billion**, compared to **$2.8 billion** at the end of 2022, reflecting lower SEC average prices (**$74.70/bbl oil in 2023 vs. $90.15/bbl in 2022**)[44](index=44&type=chunk)[47](index=47&type=chunk) - The reserve mix at year-end 2023 was approximately **63% crude oil**, **19% natural gas**, and **18% NGLs**, with proved developed reserves accounting for **68% of the total**[45](index=45&type=chunk) [Standardized Measure of Discounted Future Net Cash Flows](index=12&type=section&id=Standardized%20Measure%20of%20Discounted%20Future%20Net%20Cash%20Flows) This section presents the standardized measure of discounted future net cash flows and its reconciliation to PV-10 Standardized Measure of Discounted Future Net Cash Flows | Component | As of Dec 31, 2023 | As of Dec 31, 2022 | | :--- | :--- | :--- | | Future cash inflows | $6,622,410,752 | $9,871,961,000 | | Future production costs | $(2,413,303,488) | $(2,751,896,250) | | Future development costs | $(562,063,424) | $(647,196,750) | | Future income taxes | $(548,664,988) | $(1,142,147,641) | | **Standardized Measure** | **$1,399,185,191** | **$2,272,113,518** | Reconciliation of PV-10 to Standardized Measure (Dec 31, 2023) | Item | Amount | | :--- | :--- | | PV-10 | $1,647,031,127 | | Future Income Taxes, Discounted at 10% | $247,845,936 | | **Standardized Measure** | **$1,399,185,191** | [Financial Statements](index=16&type=section&id=Financial%20Statements) This section presents unaudited Q4 and full-year 2023 financial statements, including operations, balance sheet, and cash flows [Condensed Statements of Operations](index=16&type=section&id=Condensed%20Statements%20of%20Operations) This section summarizes condensed statements of operations for Q4 and full-year 2023 and 2022 Condensed Statements of Operations Summary | (In millions) | Q4 2023 | Q4 2022 | FY 2023 | FY 2022 | | :--- | :--- | :--- | :--- | :--- | | Revenues | $99.9 | $99.7 | $361.1 | $347.2 | | Total Costs & OpEx | $59.0 | $53.9 | $215.3 | $155.5 | | Income from Operations | $40.9 | $45.8 | $145.8 | $191.7 | | Net Income (Loss) | $50.9 | $14.5 | $104.9 | $138.6 | [Condensed Operating Data](index=17&type=section&id=Condensed%20Operating%20Data) This section presents key condensed operating data, including average daily sales, realized prices, and per-Boe expenses Condensed Operating Data Summary | Metric | Q4 2023 | Q4 2022 | FY 2023 | FY 2022 | | :--- | :--- | :--- | :--- | :--- | | Avg Daily Sales (Boe/d) | 19,397 | 17,856 | 18,119 | 12,364 | | Avg Realized Price ($/Boe) | $56.01 | $60.69 | $54.60 | $76.95 | | LOE ($/Boe) | $10.50 | $10.60 | $10.61 | $10.57 | | G&A (excl. SBC) ($/Boe) | $3.20 | $3.74 | $3.08 | $4.42 | [Condensed Balance Sheets](index=18&type=section&id=Condensed%20Balance%20Sheets) This section summarizes condensed balance sheets as of December 31, 2023, and 2022 Condensed Balance Sheet Summary | (In millions) | Dec 31, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | Total Current Assets | $55.9 | $63.2 | | Net Properties & Equipment | $1,293.4 | $1,180.1 | | **Total Assets** | **$1,376.5** | **$1,269.0** | | Total Current Liabilities | $113.8 | $141.8 | | Revolving Line of Credit | $425.0 | $415.0 | | **Total Liabilities** | **$589.9** | **$607.9** | | **Total Stockholders' Equity** | **$786.6** | **$661.1** | [Condensed Statements of Cash Flows](index=19&type=section&id=Condensed%20Statements%20of%20Cash%20Flows) This section summarizes condensed statements of cash flows for full-year 2023 and 2022 Condensed Statement of Cash Flows Summary (Full Year) | (In millions) | FY 2023 | FY 2022 | | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | $198.2 | $197.0 | | Net Cash Used in Investing Activities | $(222.6) | $(308.9) | | Net Cash Provided by Financing Activities | $21.0 | $113.2 | | **Net (Decrease) in Cash** | **$(3.4)** | **$1.3** | [Financial Commodity Derivative Positions](index=20&type=section&id=Financial%20Commodity%20Derivative%20Positions) As of December 31, 2023, the company holds commodity derivative contracts, including swaps and collars for WTI crude oil and Henry Hub natural gas, extending into 2025 Summary of Hedged Volumes for 2024 | Quarter | Oil Hedges (Bbl) | Gas Hedges (MMBtu) | | :--- | :--- | :--- | | Q1 2024 | 587,578 | 518,615 | | Q2 2024 | 537,422 | 743,203 | | Q3 2024 | 512,900 | 705,787 | | Q4 2024 | 496,800 | 672,546 | [Non-GAAP Information](index=21&type=section&id=Non-GAAP%20Information) This section provides definitions and reconciliations for key non-GAAP financial measures like Adjusted Net Income, EBITDA, and Free Cash Flow [Reconciliation of Net Income to Adjusted Net Income](index=21&type=section&id=Reconciliation%20of%20Net%20Income%20to%20Adjusted%20Net%20Income) This section reconciles net income to adjusted net income, detailing adjustments for non-recurring and non-cash items Adjusted Net Income Reconciliation | (In millions) | Q4 2023 | Q4 2022 | FY 2023 | FY 2022 | | :--- | :--- | :--- | :--- | :--- | | Net Income (Loss) | $50.9 | $14.5 | $104.9 | $138.6 | | Adjustments (Unrealized derivative gain/loss, SBC, etc.) | $(29.7) | $7.3 | $(5.6) | $(31.2) | | **Adjusted Net Income** | **$21.2** | **$21.8** | **$100.5** | **$107.5** | [Reconciliation of Net Income to Adjusted EBITDA](index=22&type=section&id=Reconciliation%20of%20Net%20Income%20to%20Adjusted%20EBITDA) This section presents the reconciliation of net income to Adjusted EBITDA, highlighting key adjustments for non-operating expenses Adjusted EBITDA Reconciliation | (In millions) | Q4 2023 | Q4 2022 | FY 2023 | FY 2022 | | :--- | :--- | :--- | :--- | :--- | | Net Income (Loss) | $50.9 | $14.5 | $104.9 | $138.6 | | Adjustments (Interest, Taxes, DD&A, etc.) | $14.5 | $41.8 | $131.1 | $56.6 | | **Adjusted EBITDA** | **$65.4** | **$56.3** | **$236.0** | **$195.2** | [Reconciliation to Adjusted Free Cash Flow](index=22&type=section&id=Reconciliation%20to%20Adjusted%20Free%20Cash%20Flow) This section details the reconciliation of net cash provided by operating activities to Adjusted Free Cash Flow Adjusted Free Cash Flow Reconciliation | (In millions) | Q4 2023 | Q4 2022 | FY 2023 | FY 2022 | | :--- | :--- | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | $55.7 | $63.6 | $198.2 | $197.0 | | Less: Capital Expenditures | $(38.8) | $(42.6) | $(152.0) | $(140.1) | | Other Adjustments | $(0.6) | $(15.5) | $(0.9) | $(22.1) | | **Adjusted Free Cash Flow** | **$16.3** | **$5.5** | **$45.3** | **$34.8** | [Reconciliation to Adjusted Cash Flow from Operations](index=23&type=section&id=Reconciliation%20to%20Adjusted%20Cash%20Flow%20from%20Operations) This section provides the reconciliation of net cash provided by operating activities to Adjusted Cash Flow from Operations Adjusted Cash Flow from Operations Reconciliation | (In millions) | Q4 2023 | Q4 2022 | FY 2023 | FY 2022 | | :--- | :--- | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | $55.7 | $63.6 | $198.2 | $197.0 | | Changes in operating assets and liabilities | $(0.6) | $(16.3) | $(1.2) | $(24.1) | | **Adjusted Cash Flow from Operations** | **$55.1** | **$47.4** | **$197.0** | **$172.9** | [Reconciliation of General and Administrative Expense](index=24&type=section&id=Reconciliation%20of%20General%20and%20Administrative%20Expense) This section reconciles General and Administrative expense, excluding share-based compensation and transaction costs G&A Reconciliation | (In millions) | Q4 2023 | Q4 2022 | FY 2023 | FY 2022 | | :--- | :--- | :--- | :--- | :--- | | General and administrative expense (G&A) | $8.2 | $8.3 | $29.2 | $27.1 | | Less: Share-based compensation | $(2.5) | $(2.2) | $(8.8) | $(7.2) | | Less: Transaction costs | $(0.4) | $(1.0) | $(0.4) | $(2.1) | | **G&A excluding SBC and transaction costs** | **$5.4** | **$5.2** | **$19.9** | **$17.8** | [Calculation of Leverage Ratio](index=24&type=section&id=Calculation%20of%20Leverage%20Ratio) This section presents the calculation of the company's leverage ratio as of December 31, 2023 Leverage Ratio Calculation (as of Dec 31, 2023) | Metric | Value | | :--- | :--- | | Revolving line of credit | $425,000,000 | | Pro Forma Consolidated EBITDAX (LTM) | $262,972,020 | | **Leverage Ratio** | **1.62x** | | Maximum Allowed | ≤ 3.00x | [Calculation of Current Ratio](index=25&type=section&id=Calculation%20of%20Current%20Ratio) This section details the calculation of the company's current ratio as of December 31, 2023 Current Ratio Calculation (as of Dec 31, 2023) | Metric | Value | | :--- | :--- | | Current Assets per Covenant | $223,935,007 | | Current Liabilities per Covenant | $104,763,500 | | **Current Ratio** | **2.14x** | | Minimum Allowed | ≥ 1.00x | [Calculation of Cash Return on Capital Employed (CROCE)](index=26&type=section&id=Calculation%20of%20Cash%20Return%20on%20Capital%20Employed%20(CROCE)) This section outlines the calculation of Cash Return on Capital Employed (CROCE) for 2023 and 2022 CROCE Calculation | Metric | 2023 | 2022 | | :--- | :--- | :--- | | Adjusted Cash Flows From Operations (ACFFO) | $196,989,711 | $172,885,152 | | Average debt and stockholders' equity | $1,143,843,146 | $833,363,799 | | **CROCE** | **17.2%** | **20.7%** | [All-In Cash Operating Costs](index=27&type=section&id=All-In%20Cash%20Operating%20Costs) This section presents the all-in cash operating costs per Boe for recent quarters and full years All-In Cash Operating Costs per Boe | Period | Q4 2023 | Q3 2023 | FY 2023 | FY 2022 | | :--- | :--- | :--- | :--- | :--- | | All-in cash operating costs per Boe | $23.52 | $24.61 | $23.46 | $24.84 |

Value Focused Proven Strategy | March 7, 2024 | NYSE American: REI Acquired Proved Reserves (MMBoe)234.3 66.6 9.2 110.1 Acquisition Price4 ($MM) $300 $465 $75 $840 • Since 2018, Ring has successfully grown production by a ~26% CAGR1 through 4Q 2023 1 CAGR is compounded annualized growth rate. 2 Acquired proved reserves for each of the transactions listed are based on the price forecasts reported as of the time the acquisition was announced. 3 Arithmetic sum, or average, as the case may be, of the three acqu ...

For the fiscal year ended December 31, 2023 Or o Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Table of Contents United States Securities and Exchange Commission Washington, D.C. 20549 Form 10-K (Mark One) x Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from ______ to ______ Commission file number 001-36057 Ring Energy, Inc. (Exact name of registrant as specified in its charter) (State or other jurisd ...

Ring Energy, Inc. (NYSE:REI) Q3 2023 Results Conference Call November 3, 2023 11:00 AM ET Company Participants Al Petrie - IR Paul McKinney - Chairman & CEO Travis Thomas - EVP & CFO Alex Dyes - EVP, Engineering & Corporate Strategy Marinos Baghdati - EVP, Operations Steve Brooks - EVP, Land, Legal, Human Resources & Marketing Conference Call Participants Jeff Grampp - Alliance Global Partners Neal Dingmann - Truist Noel Parks - Tuohy Operator Good morning, and welcome to the Ring Energy Third Quarter 2023 ...

Table of Contents United States Securities and Exchange Commission Washington, D.C. 20549 Form 10-Q x Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended September 30, 2023 o Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from ______ to ______ 1725 Hughes Landing Blvd., Suite 900 The Woodlands, TX 77380 (Address of principal executive offices) (Zip Code) (281) 397-3699 (Regi ...

Ring Energy, Inc. (NYSE:REI) Q2 2023 Earnings Conference Call August 4, 2023 11:00 AM ET Company Participants Al Petrie - IR Paul McKinney - Chairman & CEO Travis Thomas - EVP & CFO Alex Dyes - EVP, Engineering & Corporate Strategy Marinos Baghdati - EVP, Operations Steve Brooks - EVP, Land, Legal, Human Resources & Marketing Conference Call Participants Neal Dingmann - Truist John White - Roth Capital Noel Parks - Tuohy Brothers Operator Good morning, and welcome to the Ring Energy Second Quarter 2023 Earn ...

[PART I — FINANCIAL INFORMATION](index=7&type=section&id=PART%20I%20%E2%80%94%20FINANCIAL%20INFORMATION) This section provides the company's financial statements, management's discussion, market risk disclosures, and controls and procedures for the period [Financial Statements](index=7&type=section&id=Item%201%3A%20Financial%20Statements) This section presents Ring Energy, Inc.'s unaudited condensed financial statements as of June 30, 2023, including balance sheets, statements of operations, stockholders' equity, and cash flows Condensed Balance Sheet Highlights (Unaudited) | Account | June 30, 2023 ($) | December 31, 2022 ($) | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $1,749,975 | $3,712,526 | | Total Current Assets | $55,107,997 | $63,166,464 | | Net Properties and Equipment | $1,199,264,082 | $1,180,069,937 | | **Total Assets** | **$1,282,015,052** | **$1,268,999,797** | | **Liabilities & Equity** | | | | Accounts payable | $90,021,106 | $111,398,268 | | Revolving line of credit | $397,000,000 | $415,000,000 | | **Total Liabilities** | **$543,174,736** | **$607,896,406** | | **Total Stockholders' Equity** | **$738,840,316** | **$661,103,391** | Condensed Statements of Operations Highlights (Unaudited) | Metric | Three Months Ended June 30, 2023 ($) | Three Months Ended June 30, 2022 ($) | Six Months Ended June 30, 2023 ($) | Six Months Ended June 30, 2022 ($) | | :--- | :--- | :--- | :--- | :--- | | **Revenues** | $79,348,573 | $84,961,875 | $167,431,485 | $153,142,907 | | **Income from Operations** | $29,657,211 | $54,152,948 | $65,308,707 | $92,338,245 | | **Net Income** | $28,791,605 | $41,944,422 | $61,507,384 | $49,056,465 | | **Diluted EPS** | $0.15 | $0.32 | $0.32 | $0.39 | Condensed Statements of Cash Flows Highlights (Unaudited) | Cash Flow Activity | For the Six Months Ended June 30, 2023 ($) | For the Six Months Ended June 30, 2022 ($) | | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | $87,046,277 | $65,162,415 | | Net Cash (Used in) Investing Activities | ($83,587,324) | ($50,330,117) | | Net Cash Provided by (Used in) Financing Activities | ($5,421,504) | ($15,017,325) | | **Net (Decrease) in Cash** | **($1,962,551)** | **($185,027)** | - On May 11, 2023, the Company completed the divestiture of its Delaware Basin assets for approximately **$8.0 million** in cash and was relieved of a **$2.3 million** asset retirement obligation[93](index=93&type=chunk) - On July 10, 2023, the Company entered into an agreement to acquire oil and gas assets in Ector County, Texas, from Founders Oil & Gas IV, LLC for a purchase price of **$75 million** in cash[135](index=135&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=Item%202%3A%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's operational strategy, focusing on debt reduction and oil and gas property development, with Q2 2023 revenues decreasing 7% year-over-year despite an 85% production volume increase - The company's primary operational focus is on balancing debt reduction with the development of its oil and gas properties in the Permian Basin, aiming to operate within its generated cash flow[140](index=140&type=chunk) 2023 Drilling and Recompletion Activity (H1 2023) | Quarter | Area | Wells Drilled | Wells Completed | Re-completions | | :--- | :--- | :--- | :--- | :--- | | 1Q 2023 | Northwest Shelf | 4 | 4 | — | | | Central Basin Platform | 3 | 3 | 6 | | 2Q 2023 | Northwest Shelf | 4 | 4 | — | | | Central Basin Platform | 2 | 2 | 3 | | **Total** | | **13** | **13** | **9** | Revenue Analysis - Q2 2023 vs Q2 2022 | Metric | Q2 2023 ($) | Q2 2022 ($) | % Change | | :--- | :--- | :--- | :--- | | Total Sales | $79.3M | $85.0M | (7)% | | Total Production (Boe) | 1,571,668 | 850,017 | 85% | | Avg. Sales Price (per Boe) | $50.49 | $99.95 | (49)% | - The decrease in Q2 2023 revenue was driven by a **34% drop** in realized oil prices and a **110% drop** in realized natural gas prices, which offset a significant **85% increase** in total production volume primarily from the Stronghold Acquisition[150](index=150&type=chunk)[151](index=151&type=chunk) - As of June 30, 2023, the company had **$397 million** outstanding on its Credit Facility, which has a borrowing base of **$600 million** and matures in August 2026, with the company in compliance with all covenants[194](index=194&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=42&type=section&id=Item%203%3A%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risks include commodity price volatility, customer credit risk, and interest rate fluctuations, which are partially mitigated through hedging arrangements - The company's main market risk is the volatile pricing of its oil and natural gas production, which it partially mitigates through derivative hedging arrangements[205](index=205&type=chunk)[206](index=206&type=chunk) - Significant customer credit risk exists, with three customers (Phillips 66, Enterprise Crude Oil LLC, and NGL Crude Partners) accounting for **68%**, **13%**, and **11%** of revenues, respectively, for the first six months of 2023[207](index=207&type=chunk)[208](index=208&type=chunk) - The company is exposed to interest rate risk on its **$397.0 million** of outstanding variable-rate debt, where a **1% change** would result in an estimated **$4.0 million** change in annual interest expense[209](index=209&type=chunk)[210](index=210&type=chunk) [Controls and Procedures](index=43&type=section&id=Item%204%3A%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of June 30, 2023, with no material changes to internal control over financial reporting during the quarter - The Principal Executive Officer and Principal Financial Officer concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by this report[215](index=215&type=chunk) - There were no changes in internal control over financial reporting during the quarter ended June 30, 2023, that have materially affected, or are reasonably likely to materially affect, internal controls[218](index=218&type=chunk) [PART II — OTHER INFORMATION](index=44&type=section&id=PART%20II%20%E2%80%94%20OTHER%20INFORMATION) This section covers legal proceedings, risk factors, equity security sales, defaults, mine safety disclosures, and other information for the reporting period [Legal Proceedings](index=44&type=section&id=Item%201%3A%20Legal%20Proceedings) The company is defending a lawsuit seeking the return of a **$5.5 million** deposit from a terminated property sale agreement, believing the claims are without merit - The Company is a defendant in a lawsuit filed by EPUS Permian Assets, LLC, concerning a forfeited deposit of **$5.5 million** related to a proposed property sale that did not close[220](index=220&type=chunk) - Management believes the plaintiff's claims are without merit and is pursuing a vigorous defense and a counterclaim for breach of contract[220](index=220&type=chunk) [Risk Factors](index=44&type=section&id=Item%201A%3A%20Risk%20Factors) No material changes to previously disclosed risk factors are reported, with a comprehensive discussion available in the company's 2022 Annual Report on Form 10-K - There are no new risk factors reported in this quarter, with the company referring to the discussion of risks in its 2022 Form 10-K[221](index=221&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=44&type=section&id=Item%202%3A%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities during the period - None[222](index=222&type=chunk) [Defaults Upon Senior Securities](index=44&type=section&id=Item%203%3A%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities during the period - None[223](index=223&type=chunk) [Mine Safety Disclosures](index=44&type=section&id=Item%204%3A%20Mine%20Safety%20Disclosures) The company reported no mine safety disclosures - None[224](index=224&type=chunk) [Other Information](index=44&type=section&id=Item%205%3A%20Other%20Information) No directors or officers adopted, terminated, or modified Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the quarter - No directors or officers adopted, terminated, or modified a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement during the quarter ended June 30, 2023[225](index=225&type=chunk) [Exhibits](index=45&type=section&id=Item%206%3A%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including CEO and CFO certifications and Inline XBRL financial data files - The report includes CEO and CFO certifications under Rule 13a-14(a) and Section 1350, as well as Inline XBRL taxonomy documents[226](index=226&type=chunk)

Ring Energy (NYSE:REI) Q1 2023 Earnings Conference Call May 4, 2023 11:00 AM ET Company Participants Al Petrie - Investor Relations Paul McKinney - Chairman and Chief Executive Officer Travis Thomas - Chief Financial Officer Alex Dyes - Executive Vice President, Engineering and Corporate Strategy Marinos Baghdati - Executive Vice President, Operations Steve Brooks - Executive Vice President, Land, Legal, Human Resources and Marketing Conference Call Participants Jeff Grampp - Alliance Global Partners Noel P ...