Ring Energy (REI) investor relations material

Strategic rationale for equity offering and deleveraging

• Raised $60 million through a secondary equity offering to accelerate debt reduction and strengthen the balance sheet, reducing leverage from 2.4x to potentially 1.5x by year-end 2026.

• Proceeds are dedicated to paying down credit facility borrowings, lowering annual interest expense by about $5 million, and increasing financial flexibility.

• The move was made from a position of strength, not necessity, to capitalize on a constructive market window and prepare for future opportunities.

• Near-term dilution is expected to be offset by long-term value creation, lower risk, and improved optionality for both organic growth and acquisitions.

• No change in strategy; the transaction accelerates existing priorities of debt reduction and capital discipline.

Operational efficiency and organic growth

• Focus on conventional oil-weighted assets in the Permian Basin for durable margins, lower breakevens, and sustainable free cash flow.

• Horizontal drilling and technology improvements have reduced drilling costs and increased efficiency, with a 15% reduction in drilling time and lower cost per lateral foot.

• Infrastructure investments and leasing have enabled higher production per capital dollar, especially as development shifts from vertical to horizontal wells.

• Horizontal wells are expected to provide more sustainable cash flow and higher PV10, with fewer wells needed to maintain or grow production.

• Structural cost reductions, including lower LOE and automation, have resulted in $1.4–$1.7 million monthly savings and a $2/BOE reduction.

Portfolio management and growth opportunities

• Acquisitions have historically focused on negotiated deals, often securing upside potential in deeper zones not factored into initial valuations.

• The asset base offers multi-bench opportunities, with ongoing testing of deeper formations like Glorieta, Clear Fork, and Wolfcamp.

• Capital allocation prioritizes highest-return projects, leveraging infrastructure and a broad portfolio to maximize returns.

• The company maintains a 10+ year inventory of drilling opportunities with superior economics and reserve lives over 20 years.

• Organic growth is supported by both operational improvements and the ability to bolt on acreage and exploit new zones.