Ring Energy, Inc.

Second-quarter total BOE sales averaged 19,990 BOE/day, up from 19,351 BOE/day in Q1, a 3% sequential increase; oil sales averaged 12,683 BOPD. Revenue was approximately $104.7 million, supported by average realized oil prices of approximately $95.45 per barrel. Overall realized price increased 36% to $57.55 per BOE, realized oil pricing increased 38%, LOE was $18.4 million versus $18.1 million in Q1, LOE per BOE improved 3% to $10.12, all-in cash costs declined 1% to $21.59 per BOE, and cash G&A improved 6% to $3.19 per BOE. The company completed an underwritten public equity offering that generated approximately $65 million of net proceeds, which were used to reduce revolver borrowings; liquidity rose to approximately $226 million, borrowings fell to approximately $360 million, and leverage improved to approximately 1.7x on a last-quarter annualized basis. Guidance: for the second half of 2026, oil sales are expected to be 13,000 to 13,950 BOPD, LOE is expected at $10.00 to $10.60 per BOE, and capital spending is expected to be $80 million to $100 million, bringing full-year 2026 capex to $158 million to $178 million. For 2027, oil sales are guided to 13,550 to 14,650 BOPD, BOE sales to 21,500 to 23,500 BOE/day, LOE to $9.80 to $10.60 per BOE, and capex to $135 million to $165 million. Management said the 2027 program was stress-tested even at $60 oil and still marginally generates free cash flow.

Paul McKinney framed the quarter around a multi-year transition from proving resources to optimizing development, emphasizing longer laterals, co-development of stacked pay, and ongoing land leasing to expand inventory. He repeatedly stressed disciplined capital allocation, balance sheet improvement, and using the higher-price environment to accelerate infrastructure and development investments while still targeting debt reduction. His tone was constructive and confident, with an especially bullish view that global oil fundamentals remain tighter than the forward strip implies.

Sundip Johl focused on the financial upside from stronger prices, better operating costs, and the equity raise. He highlighted 3% sequential BOE growth, $104.7 million of revenue, LOE of $10.12 per BOE, all-in cash costs of $21.59 per BOE, and cash G&A of $3.19 per BOE, then noted the company used the approximately $65 million of equity proceeds entirely to pay down revolver debt. He said liquidity increased to about $226 million, borrowings fell to about $360 million, leverage improved to about 1.7x, and the company remains compliant with covenants and targeting leverage below 1.25x. He also said the ongoing infrastructure program could reduce future drilling and completion costs by at least $7.5 million, assuming $50 to $100 per lateral foot of savings.

Analysts focused on three areas: organic growth potential, the 2027 oil-price deck, and whether the equity raise would reduce hedging constraints. Management said the asset base still has significant room to grow, with land and geoscience teams identifying new drilling and leasing opportunities and inventory now said to exceed 10 years, with the potential to expand further by year-end. On pricing, Paul said the company has been stress-tested down to $60 oil in 2027 and still sees the program working, while Sundip added they are running $75 near term for the next quarter. On hedging, management said the credit facility currently requires 50% hedging under certain leverage/draw conditions, but as leverage trends below 1.25x, the longer-term hedge burden should fall; they expect the company could qualify for the lighter hedging requirements as early as Q1 next year, depending on prices.