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  Title	RING ENERGY, INC. Ring Energy : FY 2024 Earnings Release
  ID	7481520
  External ID	7603343064
  Author	Unknown
  Published Date	March 5, 2025, 4:29 p.m.
  Summary	Ring Energy Announces Fourth Quarter and Full Year 2024 Results, Year-End 2024 Proved Reserves, and 2025 Guidance THE WOODLANDS, Texas, March 05, 2025 (GLOBE NEWSWIRE) -- Ring Energy, Inc. (NYSE Amer
  Tags	press-release
  URL	https://www.marketscreener.com/quote/stock/ring-energy-inc-14141374/news/ring-energy-fy-2024-earnings-release-49249815/
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  Content ID	4786766
  Key	271bf591-7c6d-4bb4-9317-62c29d2d538f
  Content	Ring Energy Announces Fourth Quarter and Full Year 2024 Results, Year-End 2024 Proved Reserves, and 2025 Guidance THE WOODLANDS, Texas, March 05, 2025 (GLOBE NEWSWIRE) -- Ring Energy, Inc. (NYSE American: REI) ("Ring" or the "Company") today reported operational and financial results for the fourth quarter and full year 2024, year-end 2024 proved reserves and provided 2025 operational and financial guidance. Fourth Quarter 2024 Highlights Recorded net income of $5.7 million, or $0.03 per diluted share; Reported Adjusted Net Income of $12.3 million, or $0.06 per diluted share; Sold 19,658 barrels of oil equivalent per day ("Boe/d"), exceeding midpoint of guidance and 12,916 barrels of oil per day ("Bo/d"); Held all-in cash operating costs (on a Boe basis) substantially flat with Q3 2024; Reduced total capital expenditures by 12% to $37.6 million as compared to Q3 2024; Recorded Adjusted Cash Flow from Operations of $42.2 million and delivered Adjusted Free Cash Flow of $4.7 million, remaining cash flow positive for 21 consecutive quarters; and Strengthened balance sheet by an additional $7.0 million in debt reduction. Full Year 2024 Highlights Recorded net income of $67.5 million, or $0.34 per diluted share; Reported Adjusted Net Income of $69.5 million, or $0.35 per diluted share; Grew sales volumes year-over-year ("Y-O-Y") by 8% to a record 19,648 Boe/d and oil sales by 6% to a record 13,283 Bo/d; Reduced Y-O-Y all-in cash operating costs (on a Boe basis) by 2%; Generated Adjusted EBITDA of $233.3 million despite a 7% reduction in realized prices; Maintained capital spending essentially flat at $151.9 million while improving capital efficiency on horizontal ("Hz") wells by 11% to ~$492 per foot and vertical wells by ~3% on a per completed interval basis; Generated a Cash Return on Capital Employed ("CROCE") of 15.9% despite lower commodity pricing, which is the third consecutive year that Ring has achieved a CROCE in excess of 15%; Recorded Adjusted Cash Flow from Operations of $195.3 million and delivered Adjusted Free Cash Flow of $43.6 million, remaining cash flow positive for over 5 years; Divested non-core vertical wells with high operating cost for $5.5 million; Paid down $40.0 million in debt and $70.0 million since closing the Founders acquisition in August 2023; Reaffirmed the borrowing base at $600 million, exited 2024 with ~$217 million of liquidity, borrowings of $385 million, and a Leverage Ratio of 1.66x; and Organically grew proved reserves by 4.4 MMBoe, or 3%, to 134.2 MMBoe. 2025 Outlook Average annual sales midpoint of 21,000 Boe/d and 13,900 Bo/d, a 7% and 5% increase, respectively; Annual capital spending midpoint of $154 million, essentially flat with the prior year; Total wells drilled, completed and online (midpoint) of ~49 wells; and Assumes nine months of Lime Rock asset operations without the benefit of anticipated synergies and cost reductions. Mr. Paul D. McKinney, Chairman of the Board and Chief Executive Officer, commented, "We finished 2024 delivering on our promises during the fourth quarter, in a year in which the Ring Team enhanced nearly every controllable metric. We grew our sales by 8% over the prior year to a record 19,648 Boe/d and our oil sales by 6% to a record 13,283 Bo/d. We reduced our all-in cash operating costs per Boe by 2% and drilled 13 more wells for slightly less capital than the previous year representing a substantial increase in capital efficiency for both our horizontal and vertical wells. We paid down debt by $40 million and exited the year with $385 million borrowings and approximately $217 million of liquidity. During the fourth quarter of 2024, we reduced our capital expenditures in anticipation of seeking and completing a meaningful acquisition of producing properties, while achieving the midpoint of our guidance on a Boe basis. As we have previously stated, we intend to maintain or slightly grow our production through our organic drilling program and grow through accretive, balance sheet enhancing acquisitions of assets that meet specific criteria. Our strategy retains the flexibility to respond to changing conditions to ensure we continue to make progress profitably growing the Company, achieving the size and scale to earn more attractive market metrics, and build long term shareholder value. Looking forward to 2025, we intend to continue a reduced capital spending program in the first quarter to help us achieve a satisfactory leverage ratio upon closing the Lime Rock transaction. The rest of the year will be consistent with our past. We will continue our focus on maximizing cash flow generation and intend to allocate a portion of our cash flow from operations to maintain production and liquidity and allocate the balance to paying down debt. With the potential added benefit of the proposed Lime Rock production beginning in the second quarter and our historically successful capital spending program, we anticipate ending 2025 stronger than ever." Mr. McKinney concluded, "I would like to thank the Ring Team for the hard work and dedication it took to deliver our 2024 results. I also want to express our gratitude for the continued support of our shareholders. Despite an environment of lower realized commodity prices, being a member of a market segment where investor interest has waned, and other market conditions beyond our control, our shareholders continued to support us as we pursue our value focused proven strategy to build long-term value." Summary Results Average Daily Sales Volumes (Boe/d) Crude Oil (Bo/d) Net Sales (MBoe) Realized Price - All Products ($/Boe) Realized Price - Crude Oil ($/Bo) Revenues ($MM) Net Income/Loss ($MM) Adjusted Net Income ($MM) Adjusted EBITDA ($MM) Capital Expenditures ($MM) Adjusted Free Cash Flow ($MM) Adjusted Net Income, Adjusted EBITDA, Adjusted Free Cash Flow, Adjusted Cash Flow from Operations, Cash Return on Capital Employed and PV-10 are non-GAAP financial measures, which are described in more detail and reconciled to the most comparable GAAP measures, in the tables shown later in this release under "Non-GAAP Financial Information." Sales Volumes, Prices and Revenues: Sales volumes for the fourth quarter of 2024 are shown in the table above. For the fourth quarter of 2024, realized average sales prices were $68.98 per barrel of crude oil, $(0.96) per Mcf of natural gas and $9.08 per barrel of NGLs. The realized natural gas and NGL prices are impacted by a fee reduction to the value received. For the fourth quarter of 2024, the weighted average natural gas price per Mcf was $0.87 offset by a weighted average fee value per Mcf of $(1.83), and the weighted average NGL price per barrel was $20.96 partially offset by a weighted average fee of $(11.88) per barrel. The combined average realized sales price for the period was $46.14 per Boe, down 4% versus $48.24 per Boe for the third quarter of 2024, and down 18% from $56.01 per Boe in the fourth quarter of 2023. The average oil price differential the Company experienced from WTI NYMEX futures pricing in the fourth quarter of 2024 was a negative $1.42 per barrel of crude oil, while the average natural gas price differential from NYMEX futures pricing was a negative $3.83 per Mcf. Revenues were $83.4 million for the fourth quarter of 2024 compared to $89.2 million for the third quarter of 2024 and $99.9 million for the fourth quarter of 2023. The 7% decrease in fourth quarter 2024 revenues from the third quarter was driven by a ($3.8MM) price variance and a ($2.0MM) volume variance. Lease Operating Expense ("LOE"): LOE, which includes expensed workovers and facilities maintenance, was $20.3 million, or $11.24 per Boe, in the fourth quarter of 2024 versus $20.3 million, or $10.98 per Boe, in the third quarter of 2024 and $18.7 million, or $10.50 per Boe, for the fourth quarter of 2023. Fourth quarter 2024 LOE per Boe was within the Company's guidance range, and the Company remains focused on further improving the efficiencies of its operations. Gathering, Transportation and Processing ("GTP") Costs: As previously disclosed, due to a contractual change effective May 1, 2022, the Company no longer maintains ownership and control of the majority of its natural gas through processing. As a result, GTP costs are now substantially reflected as a reduction to the natural gas sales price and not as an expense item. There remains only one contract in place with a natural gas processing entity where the point of control of gas dictates requiring the fees to be recorded as an expense. Ad Valorem Taxes: Ad valorem taxes, inclusive of an accrual for methane taxes of $527,687, were $1.34 per Boe for the fourth quarter of 2024, compared to $1.17 per Boe in the third quarter of 2024 and $0.92 per Boe for the fourth quarter of 2023. Production Taxes: Production taxes were $2.13 per Boe in the fourth quarter of 2024 compared to $2.27 per Boe in the third quarter of 2024 and $2.78 per Boe in fourth quarter of 2023. Production taxes ranged between 4.6% to 5.0% of revenue for all three periods. Depreciation, Depletion and Amortization ("DD&A") and Asset Retirement Obligation Accretion: DD&A was $13.57 per Boe in the fourth quarter of 2024 versus $13.87 per Boe for the third quarter of 2024 and $13.76 per Boe in the fourth quarter of 2023. Asset retirement obligation accretion was $0.18 per Boe in the fourth quarter of 2024 compared to $0.19 per Boe for the third quarter of 2024 and $0.20 per Boe in the fourth quarter of 2023. General and Administrative Expenses ("G&A"): G&A was $8.0 million ($4.44 per Boe) for the fourth quarter of 2024 versus $6.4 million ($3.47 per Boe) for the third quarter of 2024 and $8.2 million ($4.58 per Boe) in the fourth quarter of 2023. G&A, excluding share-based compensation , was $6.4 million for the fourth quarter of 2024 ($3.52 per Boe) versus $6.4 million for the third quarter of 2024 ($3.45 per Boe) and $5.7 million in the fourth quarter of 2023 ($3.20 per Boe). The fourth quarter of 2024 included $21,017 of Transaction Costs. Excluding these costs and share-based compensation, G&A was $3.51 per Boe for the period. Interest Expense: Interest expense was $10.1 million in the fourth quarter of 2024 versus $10.8 million for the third quarter of 2024 and $11.6 million for the fourth quarter of 2023. Derivative (Loss) Gain: In the fourth quarter of 2024, Ring recorded a net loss of $6.3 million on its commodity derivative contracts, including a realized $0.7 million cash commodity derivative gain and an unrealized $7.0 million non-cash commodity derivative loss. This compared to a net gain of $24.7 million in the third quarter of 2024, including a realized $1.9 million cash commodity derivative loss and an unrealized $26.6 million non- cash commodity derivative gain, and a net gain of $29.3 million in the fourth quarter of 2023, including a realized $3.3 million cash commodity derivative loss and an unrealized $32.5 million non-cash commodity derivative gain. A summary listing of the Company's outstanding derivative positions at December 31, 2024 is included in the tables shown later in this release. A quarterly breakout is provided in the Company's investor presentation. For full year 2025, the Company currently has approximately 2.4 million barrels of oil (48% of oil sales guidance midpoint) hedged and 2.4 billion cubic feet of natural gas (33% of natural gas sales guidance midpoint) hedged. Income Tax : The Company recorded a non-cash income tax provision of $1.8 million in the fourth quarter of 2024, $10.1 million in the third quarter of 2024, and $7.9 million for fourth quarter 2023. Balance Sheet and Liquidity: Total liquidity at December 31, 2024 was $216.8 million, a 4% increase from September 30, 2024 and a 24% increase from December 31, 2023. Liquidity at December 31, 2024 consisted of cash and cash equivalents of $1.9 million and $215.0 million of availability under Ring's revolving credit facility, which includes a reduction of $35 thousand for letters of credit. On December 31, 2024, the Company had $385.0 million in borrowings outstanding on its revolving credit facility that has a current borrowing base of $600.0 million. Ring paid down $7 million of debt during the fourth quarter of 2024 and $70.0 million since the closing of the Founders Transaction in August 2023. The Company is targeting further debt pay down during 2025 dependent on market conditions, the timing of capital spending, and other considerations. During the fourth quarter of 2024, the Company's borrowing base of $600 million under its revolving credit facility was reaffirmed. The next regularly scheduled bank redetermination is scheduled to occur during May 2025. Ring is currently in compliance with all applicable covenants under its revolving credit facility. Capital Expenditures : During the fourth quarter of 2024, capital expenditures on an accrual basis were $37.6 million, which was near the midpoint of Ring's guidance of $33 million to $41 million. The Company drilled five Hz and four vertical wells, and completed ten wells - with all drilling and completion activity occurring in the Central Basin Platform ("CBP"). Also included in fourth quarter 2024 capital spending were costs for capital workovers, infrastructure upgrades, recompletions, leasing costs, and ESG improvements. For the year ended December 31, 2024, capital expenditures on an accrual basis were $151.9 million - substantially flat with full year 2023 despite more than a 40% increase in drilling and completion activity in 2024. Capital spending in 2024 included costs to drill, complete and place on production 21 Hz wells (five in the NWS and 16 in the CBP) and 22 vertical wells in the CBP, as well as costs for capital workovers, infrastructure upgrades, recompletions, leasing costs, and ESG improvements. The table below sets forth Ring's drilling and completions activities by quarter for 2024: First quarter total and full year total do not include one salt water disposal ("SWD") well completed in the Central Basin Platform Note that the DUC wells represent period-end counts rather than period-to-date totals. Full Year 2024 Summary Financial Review The Company reported net income for full year 2024 of $67.5 million, or $0.34 per diluted share, and Adjusted Net Income of $69.5 million, or $0.35 per diluted share. For full year 2023, Ring reported net income of $104.9 million, or $0.54 per diluted share, and Adjusted Net Income of $100.5 million, or $0.51 per diluted share. In full year 2024, the Company generated Adjusted EBITDA of $233.3 million, Adjusted Free Cash Flow of $43.6 million, and Adjusted Cash Flow from Operations of $195.3 million - representing a four percent or less decline in all three metrics from full year 2023, despite an almost seven percent decrease in overall realized commodity pricing. Revenues totaled $366.3 million for 2024 compared to $361.1 million in 2023, with the increase driven by higher sales volumes partially offset by lower overall realized commodity prices. Net sales for full year 2024 were a record 19,648 Boe/d, or 7,191,054 Boe, comprised of 4,861,628 Bbls of oil, 6,423,674 Mcf of natural gas, and 1,258,814 Bbls of NGLs. Full year 2023 net sales averaged 18,119 Boe/d, or 6,613,321 Boe, which included 4,579,942 Bbls of oil, 6,339,158 Mcf of natural gas, and 976,852 Bbls of NGLs. The increase in sales volumes was primarily associated with a full year of production from the Founders Acquisition that closed in August 2023, as well as strong organic growth from the Company's targeted capital spending program. For full year 2024, the Company's realized crude oil sales price was $74.87 per barrel, the natural gas sales price was $(1.44) per Mcf, and the NGLs sales price was $9.23 per barrel. The combined average sales price for full year 2024 was $50.94 per Boe compared to $54.60 per Boe for full year 2023. For the full year 2024, LOE was $78.3 million, or $10.89 per Boe (substantially at the midpoint of guidance of $10.70 to $11.00 per Boe). The increase in LOE on an absolute basis from full year 2023 was primarily due to the full year of expenses from the assets acquired with the Founders Acquisition (closed in August 2023) which contributed to the previously discussed 9% increase in production. Also affecting absolute LOE were higher activity levels, partially offset by the Company's ongoing cost reduction and increased efficiency initiatives. For the full year 2024, G&A was $29.6 million, or $4.12 per Boe, compared to $29.2 million, or $4.41 per Boe for full year 2023. G&A, excluding share-based compensation, was $24.1 million, or $3.36 per Boe, compared to $20.4 million, or $3.08 per Boe for full year 2023. Excluding Transaction Costs, full year 2024 G&A, net of share-based compensation, was $3.35 per Boe. The increase from full year 2023 was primarily associated with higher total compensation levels driven by higher activity levels in 2024 and a non-recurring employee retention tax credit in 2023, with the overall net increase partially offset by a $3.3 million year-over-year reduction in share-based compensation. Recently Announced Proposed Accretive Bolt-On Acquisition On February 25, 2025, the Company entered into an agreement to acquire Lime Rock's CBP assets for $90 million in cash with $80 million due at closing and $10 million due on the nine month anniversary of closing, and approximately 7.4 million shares of our common stock. The purchase price is subject to customary purchase price adjustments. The transaction has an effective date of October 1, 2024, and is expected to close by the end of the first quarter of 2025. Lime Rock's CBP acreage is in Andrews County, Texas, where the majority of the acreage directly offsets Ring's core Shafter Lake operations, and the remaining acreage is prospective for multiple horizontal targets and exposes the Company to new active plays. The transaction represents another opportunity for the Company to seamlessly integrate strategic, high-quality assets with Ring's existing operations and create shareholder value through improved operations and synergy capture. The Lime Rock position has been a key target for Ring as the Company has historically sought to consolidate producing assets in core counties in the CBP defined by shallow declines, high margin production and undeveloped inventory that immediately competes for capital. Additionally, these assets add significant near-term opportunities for field level optimization and cost savings that are core competencies of Ring's operating team. 2025 Capital Investment, Sales Volumes, and Operating Expense Guidance In January, the Company commenced its 2025 development program with one rig drilling horizontal wells followed by another rig drilling vertical wells. During the first quarter, this disciplined capital program is intended to achieve a satisfactory leverage ratio upon the closing of the Lime Rock transaction. The Company intends to utilize a phased (versus continuous) capital drilling program to maximize free cash flow and retain the flexibility to respond to changes in commodity prices and other market conditions. For full year 2025, Ring expects total capital spending of $138 million to $170 million that includes a balanced and capital efficient combination of drilling, completing and placing on production 27 to 32 Hz and 15 to 22 vertical wells across the Company's asset portfolio. Additionally, the full year capital spending program includes funds for the drilling of targeted well recompletions, capital workovers, infrastructure upgrades, reactivations, leasing costs, ESG improvements, and the drilling of approximately three SWD wells, in addition to the Company's pro-rata capital spending for non-operated drilling, completion, and capital workover activities. All projects and estimates are based on assumed WTI oil prices of $65 to $75 per barrel and Henry Hub prices of $2.00 to $4.00 per Mcf. Based on the $154 million midpoint of spending guidance, the Company expects the following estimated allocation of capital investment: 73% for drilling, completion, and related infrastructure; 19% for recompletions and capital workovers; 5% for environmental and emission reducing facility upgrades; and 3% for land and non-operated capital. The Company remains focused on continuing to generate Adjusted Free Cash Flow. All 2025 planned capital expenditures will be fully funded by cash on hand and cash from operations, and excess Adjusted Free Cash Flow is currently targeted for further debt reduction. The Company currently forecasts full year 2025 oil sales volumes of 13,600 to 14,200 Bo/d compared with full year 2024 oil sales volumes of 13,283 Bo/d, with the midpoint of guidance reflecting almost a 5% increase from last year. The guidance in the table below represents the Company's current good faith estimate of the range of likely future results for the first quarter and full year of 2025 and assumes the closing of the Lime Rock transaction at the end of the first quarter of 2025. Guidance could be affected by the factors discussed below in the "Safe Harbor Statement" section. LOE per Boe assumes the full operating costs of the Lime Rock assets before anticipated synergies and cost reductions after the assets are integrated. In addition to Company-directed drilling and completion activities, the capital spending outlook includes funds for targeted well recompletions, capital workovers, infrastructure upgrades and well reactivations. Also included is anticipated spending for leasing acreage and non-operated drilling, completion, capital workovers, and ESG improvements. Year-End 2024 Proved Reserves The Company's year-end 2024 SEC proved reserves were 134.2 MMBoe, up 3% compared to 129.8 MMBoe at year-end 2023. During 2024, Ring recorded reserve additions of 16.0 MMBoe for extensions, discoveries and improved recovery. Offsetting these additions were 1.2 MMBoe related to the sale of non-core assets, 7.2 MMBoe of production, and 3.2 MMBoe of revisions related to changes in pricing and performance. The SEC twelve-month first day of the month average prices used for year-end 2024 were $71.96 per barrel of crude oil and $2.130 per MMBtu of natural gas, both before adjustment for quality, transportation, fees, energy content, and regional price differentials, while for year-end 2023 they were $74.70 per barrel of crude oil and $2.637 per MMBtu of natural gas - a decrease of four percent and two percent, respectively. Year-end 2024 SEC proved reserves were comprised of approximately 60% crude oil, 19% natural gas, and 21% natural gas liquids. At year end, approximately 69% of 2024 proved reserves were classified as proved developed and 31% as proved undeveloped. This is compared to year-end 2023 when approximately 68% of proved reserves were classified as proved developed and 32% were classified as proved undeveloped. The Company's year- end 2024 proved reserves were prepared by Cawley, Gillespie & Associates, Inc., and independent petroleum engineering firm. The PV-10 value at year-end 2024 was $1,462.8 million versus $1,647.0 million at the end of 2023. Attachments Original document Permalink Disclaimer Ring Energy Inc. published this content on March 05, 2025 , and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on March 05, 2025 at
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