VALUE FOCUSED PROVEN STRATEGY
Q1 EARNINGS REVIEW
www.ringenergy.com | NYSE American: REI | |
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 operations, financial position, estimated revenues and losses, projected costs, prospects, guidance, plans and objectives of management are forward-looking statements. When used in this Presentation, the words "could," "may," "will," "believe," "anticipate," "intend," "estimate," "expect," "guidance," "project," "goal," "plan," "potential," "probably," "target" and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. These forward-looking statements are based on management's current expectations and assumptions about future events and are based on currently available information as to the outcome and timing of future events. However, whether actual results and developments will conform to expectations is subject to a number of material risks and uncertainties, including but not limited to: declines in oil, natural gas liquids or natural gas prices; the level of success in exploration, development and production activities; adverse weather conditions that may negatively impact development or production activities particularly in the winter; the timing of exploration and development expenditures; inaccuracies of reserve estimates or assumptions underlying them; revisions to reserve estimates as a result of changes in commodity prices; impacts to financial statements as a result of impairment write- downs; risks related to level of indebtedness and periodic redeterminations of the borrowing base and interest rates under the Company's credit facility; Ring's ability to generate sufficient cash flows from operations to meet the internally funded portion of its capital expenditures budget; the impacts of hedging on results of operations; and Ring's ability to replace oil and natural gas reserves. Such statements are subject to certain risks and uncertainties which are disclosed in the Company's reports filed with the Securities and Exchange Commission ("SEC"), including its Form 10-K for the fiscal year ended December 31, 2023, and its other filings with the SEC. All forward-looking statements in this Presentation are expressly qualified by the cautionary statements and by reference to the underlying assumptions that may prove to be incorrect.
The Company undertakes no obligation to revise these forward-looking statements to reflect events or circumstances that arise after the date hereof, except as required by applicable law. The financial and operating estimates contained in this Presentation represent our reasonable estimates as of the date of this Presentation. Neither our independent auditors nor any other third party has examined, reviewed or compiled the estimates and, accordingly, none of the foregoing expresses an opinion or other form of assurance with respect thereto. The assumptions upon which the estimates are based are described in more detail herein. Some of these assumptions inevitably will not materialize, and unanticipated events may occur that could affect our results. Therefore, our actual results achieved during the periods covered by the estimates will vary from the estimated results. Investors are not to place undue reliance on the estimates included herein.
Supplemental Non-GAAP Financial Measures
This Presentation includes financial measures that are not in accordance with accounting principles generally accepted in the United States ("GAAP"), such as "Adjusted Net Income," "Adjusted EBITDA," "PV-10," "Adjusted Free Cash Flow" or "AFCF," "Adjusted Cash Flow from Operations" or "ACFFO," "Cash Return on Capital Employed" or "CROCE," "Leverage Ratio" and "All-in Cash Operating Costs." While management believes that such measures are useful for investors, they should not be used as a replacement for financial measures that are in accordance with GAAP. For definitions of such non-GAAP financial measures and their reconciliations to GAAP measures, please see the Appendix.
2 Ring Energy, Inc. Value Focused Proven Strategy | May 7, 2024 | NYSE American: REI
Ring Energy - Independent Oil & Gas Company
Focused on Conventional Permian Assets in Texas
Q1 2024 Net Production
~19,034 Boe/d
(70% oil and 85% liquids)
2023 SEC Proved Reserves1,2
129.8 MMBoe/ PV10 ~$1.65 Billion
Proved Developed ~68%
Permian Basin
Gross / Net Acres3
96,127 / 80,535
450+ Proved Locations3
High Operational Ownership
~98% Operated WI
~81% Oil NRI
~85% Gas NRI
- SEC Proved Reserves as of 12/31/2023 utilizing SEC prices, YE 2023 SEC Pricing Oil $74.70 per bbl Gas $2.64 per Mc.f.
- PV-10is a Non-GAAP financial measure. See Appendix for reconciliation to GAAP measure.
- Includes all acreage and locations as of year-end 2023 operated and non-operated across "PDNP" and "PUD" reserve categories and project types.
Ring Energy Assets
Northwest Shelf Central Basin Platform
Includes operated & non-operated
Yoakum
Gaines
Andrews
Ector
Ward
Crane
Differentiated approach by applying unconventional technology and thinking to conventional Permian assets
Ring Assets Characteristics:
- Shallow Base Decline
- Long Life Wells (> 35 years)
- Highly Oil Weighted
- High Operating Margin
- High Netbacks (NRI> 80%)
- Low D&C Cost Inventory
- Low Breakevens
3 Ring Energy, Inc. Value Focused Proven Strategy | May 7, 2024 | NYSE American: REI
Delivering Value in Q1 2024
Key Takeaways - Upgraded Portfolio and Efficient Execution Drove Superior Results
Adding Size
and Scale
Upgraded portfolio helped drive Q1 performance; exceeded high end of guidance on oil sales volumes by 5% and total sales by 3%
Operational
Excellence
Reducing cost structure in Q1 by delivering operating expenses (LOE per Boe) and capex below low end of guidance safely & responsibly
Growing Adj
EBITDA and AFCF1
18 consecutive qtrs. generating
positive AFCF; increased Adj EBITDA
by 6% and AFCF by 48% as
compared to Q1'23
Enhancing the
Balance Sheet
3 Year Track record of improving
balance sheet & growing liquidity; Q1 liquidity is same level as Q1'23 despite $75 MM Founders acquisition (Q3'23)
Value Focused
Proven Strategy
Clear sight to reduce debt and
leverage ratio by executing
disciplined organic capital program
focused on maximizing FCF
Continued growth through balance
sheet enhancing accretive
acquisitions that help achieve the size and scale necessary to position the Company to return capital to stockholders
Positioning the Company to Return Capital to Stockholders
1. Adjusted EBITDA and Adjusted Free Cash Flow (AFCF) are Non-GAAP financial measures. See Appendix for reconciliation to GAAP measures.
4 Ring Energy, Inc. Value Focused Proven Strategy | May 7, 2024 | NYSE American: REI
2024 Q1 Highlights
Proven Strategy Leads to Superior Results
Oil | Sales | Operations | Adjusted | CapEx | Cash G&A | Adjusted | Debt | Leverage | Liquidity4 | |||||||||||||||||||
Sales | Free Cash | |||||||||||||||||||||||||||
Boe | Lifting Cost | EBITDA1 | Costs2 | Balance | Ratio3 | |||||||||||||||||||||||
Bo | Flow1 | |||||||||||||||||||||||||||
Q1 2024 Q1 2024 Q1 2024 Q1 2024 Q1 2024 Q1 2024 Q1 2024 Q1 2024 Q1 2024 Q1 2024
13,394 | 19,034 | $10.60 | $62.0 | $36.3 | $3.32 | $15.6 | $422 | 1.67x | $179 |
Bo/d | Boe/d | Per Boe | Million | Million | Per Boe | Million | Million | Ratio | Million |
70% Oil |
6%
4%
6%
7%
5%
48%
Q1 2023 Q1 2023 Q1 2023 Q1 2023 Q1 2023 Q1 2023 Q1 2023 Q1 2023 Q1 2023 Q1 2023
12,660 | 18,292 | $10.61 | $58.6 | $38.9 | $3.15 | $10.5 | $422 | 1.65x | $179 |
Bo/d | Boe/d | Per Boe | Million | Million | Per Boe | Million | Million | Ratio | Million |
69% Oil |
- Adjusted EBITDA, and Adjusted Free Cash Flow are Non-GAAP financial measures. See Appendix for reconciliation to GAAP measures.
- Cash G&A Costs are calculated as General and administrative expense excluding share-based compensation on per Boe basis
- Leverage Ratio is defined in Appendix.
- Liquidity is defined as cash and cash equivalents plus borrowing base availability under the Company's credit agreement.
5 Ring Energy, Inc. Value Focused Proven Strategy | May 7, 2024 | NYSE American: REI
Enhanced Value for Stockholders in 2023
Executing Strategy Improves YOY Production and Operating Cost per Boe Metrics
Production/Share | Boe/Share | Cash G&A Expense1 | $/Boe | All-in-Cash Operating Costs2 $/Boe | |||
0.040 | $5 | $4.42 | $30 | ||||
$4 | |||||||
0.035 | 0.034 | $3 | $3.08 | ||||
$24.84 | |||||||
Up 6% | $24.84 | ||||||
0.032 | $25 | ||||||
0.030 | $2 | $23.46 | |||||
$1 | |||||||
0.025 | $- | Down 30% | $20 | Down 6% | |||
2022 | 2023 | 2022 | 2023 | 2022 | 2023 |
- Cash G&A Costs are calculated as General and administrative expense excluding share-based compensation on per Boe basis.
- See Appendix A for calculation of All-in Cash Operating Costs.
6 Ring Energy, Inc. Value Focused Proven Strategy | May 7, 2024 | NYSE American: REI
Enhanced Value for Stockholders in 2023 Continued…
Track Record of Improving Corporate Returns
Cash Return on Capital Employed1 (CROCE) % | AVG WTI Pricing $/Bbl | ||||||||||
30% | $94.90 | $100 | |||||||||
$90 | |||||||||||
25% | $80 | ||||||||||
$77.58 | |||||||||||
20% | $68.13 | 20.7% | $70 | ||||||||
17.2% | $60 | ||||||||||
15% | 2020 - 2022 CROCE Avg of 13.9% | Up 24% vs | $50 | ||||||||
$39.16 | 11.6% | 2020-'22 AVG | $40 | ||||||||
10% | |||||||||||
9.3% | $30 | ||||||||||
5% | $20 | ||||||||||
$10 | |||||||||||
0% | $0 | ||||||||||
2020 | 2021 | 2022 | 2023 | ||||||||
Strong CROCE %
- Disciplined and successful capital program driving returns
- Shallower declining production base contributes to higher returns
- High quality inventory together with operating proficiency and efficient execution on capital program led to increased profitability
- Multiple asset core areas in NWS & CBP with existing infrastructure provide diverse inventory of high return, low cost horizontals and verticals providing flexibility to react to volatile market conditions and ability to maximize AFCF generation
1. The Company defines "CROCE" as Adjusted Cash Flow from Operations divided by average debt and shareholder equity for the period.
7 Ring Energy, Inc. Value Focused Proven Strategy | May 7, 2024 | NYSE American: REI
Year End 2023 Compelling Value Proposition1,2
Ring Traded at Discount to Peers in Late 2023
EV/PV-103 YE23 1P Reserves & % Oil | |||
2.0x | 100% | ||
1.8x | 90% | ||
1.6x | 80% | ||
1.4x | 70% | of 1P Reserves | |
EV/PV-10 | 1.2x | 60% | |
1.0x | 50% | ||
0.8x | 40% | ||
0.6x | 30% %Oil | ||
0.4x | 20% | ||
0.2x | 10% | ||
0.0x | 0% |
EV/2023 Adjusted EBITDA2,3
6.0x |
5.0x |
4.0x |
3.0x |
2.0x |
1.0x |
0.0x |
2023 Adjusted FCF3,4 Yield
40% |
30% |
20% |
10% |
0% |
-10% |
-20% |
Ring Traded at a Discount to its Peers in 2023, Despite a Track Record of Success Including Strong Returns,
Significant Cash Flow, Improved Balance Sheet and Meaningful Growth
- Peers include: Amplified Energy, Berry Corporation, Crescent Energy, HighPeak Energy, Permian Resources, Riley Permian, SilverBow Resources, Vital Energy and W&T Offshore.
- Source information for data is actuals obtained from Peer Reports and Capital IQ and Factset at year end 2023.
- Adjusted EBITDA, Adjusted FCF and PV-10 are Non-GAAP financial measures. See Appendix for reconciliation to GAAP measures.
- Adjusted free cash flow yield is defined as adjusted free cash flow divided by market cap for the period with market cap calculated by multiplying weighted average diluted share count by year-end share price.
8 | Ring Energy, Inc. | Value Focused Proven Strategy | May 7, 2024 | NYSE American: REI | |
Continue Enhancing Value for Stockholders Q1 2024
Executing Strategy Improves Key Cash Flow Metrics Versus a Year Ago
ACFFO1 | $MM | Adjusted EBITDA Margin1 % | Adjusted Free Cash Flow $ per Boe |
$55 | 75% | $10.00 | $8.99 | |||
66% | 66% | |||||
$52 | Stable | Up 40% | ||||
EBITDA | ||||||
50% | $6.40 | |||||
Margin | ||||||
Up 5% | ||||||
$50 | $49 | $5.00 | ||||
25% | ||||||
$45 | Q1'23 | Q1'24 | 0% | $0.00 | ||
Q1'23 | Q1'24 | Q1'23 | Q1'24 |
- Adjusted Free Cash Flow (ACFFO) and Adjusted EBITDA margin are Non-GAAP financial measures. See Appendix for reconciliation to GAAP measures.
- Adjusted Free Cash Flow ($/Boe) is Adjusted Free Cash Flow divided by total Boe in the period.
9 Ring Energy, Inc. Value Focused Proven Strategy | May 7, 2024 | NYSE American: REI
Distinguishing Attributes: Low PDP Base Decline
Ring's Conventional Assets have Shallow Base Decline Versus Other Shale & Permian Players
22%
PDP Decline: 2024E PDP Base Decline %
39% | 40% | ||||||
35% | 35% | 36% | 37% | ||||
34% | 34% | ||||||
31% | 32% | Median 34.5% | |||||
26%
Peer 1 | Peer 2 | Peer 3 | Peer 4 | Peer 5 | Peer 6 | Peer 7 | Peer 8 | Peer 9 | Peer 10 | Peer 11 |
Source: Enverus as of 4/30/2024, using ENVERUS base decline model function. The declines are all yearly declines using Oct/Nov 2023 as starting period for each company selected (by any size) includes: Civitas, Devon, Diamondback, Magnolia, Marathon (L48 only; excludes Canada and International), Matador Resources, Ovintiv, Permian Resources, Riley Permian, SM Energy (Midland) and Vital Energy
10 Ring Energy, Inc. Value Focused Proven Strategy | May 7, 2024 | NYSE American: REI
Attachments
- Original Link
- Original Document
- Permalink
Disclaimer
Ring Energy Inc. published this content on 07 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 07 May 2024 11:06:16 UTC.