Ring Energy (REI) Q1 2026 earnings summary

Executive summary

• Achieved Q1 2026 production and sales in line with guidance at 12,276 barrels of oil per day and 19,351 Boe per day, maintaining cost reductions and operational discipline despite market volatility and commodity price swings.

• Reported a net loss of $220.6 million, primarily due to a $162.1 million non-cash ceiling test impairment and $77.0 million unrealized derivative losses, while adjusted net income was $7.4 million and adjusted EBITDA was $38.3 million.

• Maintained positive cash flow for the 26th consecutive quarter, with $25.9 million net cash from operations and continued capital efficiency.

• Accelerated infrastructure investments and capital spending to support transition to horizontal drilling and capture upside before anticipated oil price increases.

• Outperformed most SMID CAP peers in stock price performance since July 2025, with 130% appreciation.

Financial highlights

• Revenues were $73.7 million, up 10% sequentially but down 7% year-over-year, with oil sales at $76.2 million and lease operating expenses at $10.41 per Boe, below guidance for the fourth consecutive quarter.

• Adjusted net income was $7.4 million ($0.04 per diluted share), adjusted EBITDA was $38.3 million, and adjusted free cash flow was $236,809.

• All-in cash operating costs were $21.77 per Boe, down 11% year-over-year, with a cash operating margin of $20.53 per Boe.

• Net cash provided by operating activities was $25.9 million, down from $28.4 million in Q1 2025.

• Reported net income was impacted by significant non-cash items, including a $162.1 million ceiling test impairment and $77 million unrealized derivative loss.

Outlook and guidance

• Reaffirmed 2026 guidance, with Q2–Q4 sales volumes expected to rise to a midpoint of 13,300 Boe/d by Q4 and capital program midpoint set at $115 million.

• LOE guidance for 2026 remains at $10.50 per Boe midpoint, with capital spending guidance of $17–36 million per quarter.

• Management expects to resume debt reduction in 2026, targeting leverage of approximately 1.25x as cash flow strengthens.

• Anticipate increased capital efficiency and organic production growth in late 2026 and into 2027.

• Hedged 72% of 2026 oil sales at $73.27/bbl and 73% of gas sales at $3.78/mcf.