Ring Energy (REI) Q2 2024 earnings summary

Executive summary

• Achieved record Q2 2024 production, sales, Adjusted EBITDA, and free cash flow, with net income of $22.4 million ($0.11/diluted share) and a 2% sequential increase in oil sales volumes.

• Year-to-date free cash flow rose 60% year-over-year, marking 19 consecutive quarters of positive free cash flow.

• Reduced debt by $15 million in Q2 and $48 million since August 2023, ending with $407 million outstanding and $194 million in liquidity.

• Maintained high operating margins, low capital intensity, and outperformed peers in cash flow and stock performance.

• Integration of Founders' assets and operational efficiencies contributed to strong results.

Financial highlights

• Q2 2024 revenue was $99.1 million, up 5% sequentially and 25% year-over-year; net income was $22.4 million, up from $5.5 million in Q1 2024 but down from $28.8 million in Q2 2023.

• Adjusted EBITDA reached a record $66.4 million (67% margin), up 7% sequentially and 24% year-over-year.

• Adjusted Free Cash Flow for Q2 was $21.4 million, up 70% year-over-year and 38% from Q1 2024.

• Lease operating expense per Boe was $10.72 in Q2 2024, up from $10.14 in Q2 2023.

• Q2 2024 sales volumes: 13,623 barrels of oil/day (up 2% sequentially), 19,786 BOE/day (up 4% sequentially, 15% year-over-year).

Outlook and guidance

• Full-year 2024 production guidance raised to 13,200–13,800 barrels of oil/day and 19,000–19,800 BOE/day, up 4–5% from initial guidance.

• Full-year CapEx guidance set at $141–$161 million, a 3% reduction at midpoint from prior guidance, with all spending funded by cash and operations.

• Q3 2024 guidance mirrors full-year targets, with oil mix at 70% and capital spending expected at $35–$45 million.

• LOE guidance for 2024 and Q3 set at $10.50–$11.25/BOE.

• Focus remains on maximizing free cash flow, further debt reduction, and flexibility to adjust spending based on commodity prices.