Ring Energy Announces Third Quarter 2024 Results, Provides Guidance For Fourth Quarter and Updates Full Year 2024 Outlook
Q3 2024 Highlighted by Record Sales, Strategic Divestiture and Meaningful Debt Reduction
THE WOODLANDS, Texas, Nov. 06, 2024 (GLOBE NEWSWIRE) -- Ring Energy, Inc. (NYSE American: REI) ("Ring" or the "Company") today reported operational and financial results for third quarter 2024 and provided an outlook for the fourth quarter and updated guidance for the full year.
Third Quarter 2024 Highlights
-- Produced record sales of 20,108 barrels of oil equivalent per day
("Boe/d") (66% oil) exceeding the high end of guidance;
-- Oil sales were 13,204 Bo/d which were within guidance;
-- Reported net income of $33.9 million, or $0.17 per diluted share, and
Adjusted Net Income1 of $13.4 million, or $0.07 per diluted share;
-- Incurred Lease Operating Expense ("LOE") of $10.98 per Boe, near the
midpoint of guidance;
-- Recorded Adjusted EBITDA1 of $54.0 million;
-- Divested non-core vertical wells and associated facilities in the Central
Basin Platform for $5.5 million with a valuation of approximately 5.6
times estimated next twelve months cash flow2;
-- Guidance updated to reflect the impact of the divestiture;
-- Successful development campaign resulted in capital spending of $42.7
million (guidance was $35 million to $45 million) with 13 wells drilled
and 11 wells completed and placed on production during the quarter;
-- Generated third quarter Adjusted Free Cash Flow1 of $1.9 million;
-- Remained cash flow positive for the 20th consecutive quarter;
-- Ended the period with $392.0 million in outstanding borrowings on the
Company's credit facility, reflecting a paydown of $15.0 million during
the third quarter, $33.0 million YTD; and
-- Increased liquidity to a record $208.0 million and Leverage Ratio3
remained at 1.59x as of September 30, 2024.
Mr. Paul D. McKinney, Chairman of the Board and Chief Executive Officer, commented, "Our strong performance during the third quarter is a direct reflection of the Company's commitment to its stockholders and -- more specifically -- the successful execution of our drilling and completion program and continued focus on reducing our all-in cash operating costs by our team of experienced professionals. Complementing this performance was the divestiture of non-core vertical assets in the Central Basin Platform (CBP). When combined with the cash flow from operations, we were able to reduce debt by another $15 million during the period, reducing our debt to $392 million. We believe it is important to point out that our debt at the end of the third quarter was $5 million less than debt we had at the end of the quarter prior to closing the Founders acquisition last year, yet our production is higher by over 2,800 Boe/d, enhancing our ability to accelerate further debt reduction in the future."
Mr. McKinney concluded, "As we look to the remainder of the fourth quarter and into 2025, we believe we are well positioned for continued success and further debt reduction as we remain squarely focused on our strategy of maximizing cash flow generation. As you know, further debt reduction over the coming quarters will be subject to commodity prices. If future oil prices are consistently lower than recent averages, we will pull back capital to maintain production in favor of our ongoing focus on debt reduction. Regarding our guidance, we have updated our full year 2024 guidance to reflect only the recent divestiture of non-core vertical assets. Our existing assets continue to meet or exceed expectations. Regarding our capital spending program during the fourth quarter, we look forward to the results of testing new opportunities designed to unlock new producing zones on our existing acreage. These investments represent a new phase of potential inventory growth for our Company through seeking to identify and develop new hydrocarbon resources organically. Although we are adding organic inventory growth as another strategy to create value, we will continue to pursue strategic, accretive and balance sheet enhancing acquisitions as our primary source of production and reserves growth. As in the past, we will maintain the discipline associated with enhancing our balance sheet and profitably achieving the size and scale designed to drive long-term value for our stockholders. Thank you for your continued support."
Summary Results
Quarter Year to Date
------------------------------------------------------- ------------------------------
Q3 2024 to Q2 Q3 2024 to Q3
2024 % 2023 % YTD YTD
Q3 2024 Q2 2024 Change Q3 2023 Change 2024 2023 YTD % Change
------- ------------- ------- ------------- ------------
Average Daily
Sales
Volumes
(Boe/d) 20,108 19,786 2% 17,509 15% 19,644 17,688 11%
Crude Oil
(Bo/d) 13,204 13,623 (3)% 12,028 10% 13,406 12,181 10%
Net Sales
(MBoe) 1,849.9 1,800.6 3% 1,610.9 15% 5,382.6 4,828.8 11%
Realized
Price - All
Products
($/Boe) $48.24 $55.06 (12)% $58.16 (17)% $52.56 $54.07 (3)%
Realized
Price -
Crude
Oil
($/Bo) $74.43 $80.09 (7)% $81.69 (9)% $76.77 $75.79 1%
Revenues
($MM) $89.2 $99.1 (10)% $93.7 (5)% $282.9 $261.1 8%
Net Income
($MM) $33.9 $22.4 51% $(7.5) 549% $61.8 $54.0 15%
Adjusted Net
Income(1)
($MM) $13.4 $23.4 (43)% $26.3 (49)% $57.2 $79.3 (28)%
Adjusted
EBITDA(1)
($MM) $54.0 $66.4 (19)% $58.6 (8)% $182.4 $170.6 7%
Capital
Expenditures
($MM) $42.7 $35.4 21% $42.4 1% $114.3 $113.2 1%
Adjusted Free
Cash Flow(1)
($MM) $1.9 $21.4 (91)% $6.1 (68)% $38.9 $29.1 34%
------------- ------- ------- ------------- ------- ------------- ------- ------- ------------
Adjusted Net Income, Adjusted EBITDA, and Adjusted Free Cash Flow 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 third quarter of 2024 were a record 20,108 Boe/d (66% oil, 15% natural gas and 19% NGLs), or 1,849,934 Boe. Positively impacting third quarter 2024 sales volumes was the Founders Acquisition that closed in August 2023 and incremental production brought online during the period associated with the Company's ongoing development program. Second quarter 2024 sales volumes were 19,786 Boe/d (69% oil, 14% natural gas and 17% NGLs), or 1,800,570 Boe, and third quarter of 2023 sales volumes were 17,509 Boe/d (69% oil, 16% natural gas and 15% NGLs), or 1,610,857 Boe. Third quarter 2024 sales volumes were comprised of 1,214,788 barrels ("Bbls") of oil, 1,705,027 thousand cubic feet ("Mcf") of natural gas and 350,975 Bbls of NGLs.
For the third quarter of 2024, the Company realized an average sales price of $74.43 per barrel of crude oil, $(2.26) per Mcf of natural gas, and $7.66 per barrel of NGLs. The realized natural gas and NGL prices were impacted by a fee reduction to the value received. For the third quarter of 2024, the weighted average natural gas price per Mcf was $(0.50) and the weighted average fee per Mcf was $(1.76); the weighted average NGL price per barrel was $18.45 offset by a weighted average fee per barrel of $(10.79). The weighted average natural gas price for third quarter 2024 reflects continued natural gas product takeaway constraints, which could be alleviated through additional third-party pipeline capacity. The combined average realized sales price for the period was $48.24 per Boe versus $55.06 per Boe for the second quarter of 2024 and $58.16 per Boe in the third quarter of 2023. The average oil price differential the Company experienced from NYMEX WTI futures pricing in the third quarter of 2024 was a negative $0.56 per barrel of crude oil, while the average natural gas price differential from NYMEX futures pricing was a negative $4.43 per Mcf.
Revenues were $89.2 million for the third quarter of 2024 compared to $99.1 million for the second quarter of 2024 and $93.7 million for the third quarter of 2023. The decrease in third quarter 2024 revenues from the second quarter of 2024 was driven by a decrease in overall realized pricing, partially offset by increased sales volumes.
Lease Operating Expense ("LOE"): LOE, which includes expensed workovers and facilities maintenance, was $20.3 million, or $10.98 per Boe, in the third quarter of 2024, which was near the midpoint of the Company's guidance of $10.50 to $11.25 per Boe. LOE was $19.3 million, or $10.72 per Boe in the second quarter of 2024 and $18.0 million, or $11.18 per Boe, for the third quarter of 2023.
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