Ring Energy (REI) Q3 2024 earnings summary

Executive summary

• Achieved record Q3 2024 sales/production of 20,108 Boe/d (66% oil), up 15% year-over-year and exceeding guidance, with strong operational execution and capital discipline.

• Net income for Q3 2024 was $33.9 million ($0.17/share), reversing a prior year loss, driven by higher oil output and derivative gains.

• Adjusted EBITDA was $54 million, with a 61% margin; adjusted free cash flow was $1.9 million, positive for the 20th consecutive quarter.

• Debt reduced by $15 million in Q3 and $33 million year-to-date, with leverage ratio at 1.59x and liquidity of $208 million.

• Completed sale of non-core vertical wells for $5.5 million, supporting debt reduction and improving cost structure.

Financial highlights

• Q3 2024 revenue was $89.2 million, down 5% year-over-year and 10% sequentially due to lower realized prices despite higher volumes.

• Net income for Q3 2024 was $33.9 million ($0.17/diluted share), up from a loss in Q3 2023; adjusted net income was $13.4 million ($0.07/share).

• Adjusted EBITDA was $54 million, down from $66.4 million in Q2, with a margin of 61%.

• Adjusted free cash flow for Q3 2024 was $1.9 million, down from $6.1 million in Q3 2023.

• Lease operating expense was $10.98/Boe in Q3 2024, near guidance midpoint.

Outlook and guidance

• Full-year 2024 capital spending expected at $147–$155 million, with 43–47 wells to be completed.

• Full-year oil sales guidance updated to 13,250–13,450 Bo/d, with Q4 2024 sales volumes guided at 12,950–13,550 Bo/d and 19,200–20,000 Boe/d.

• LOE guidance for 2024 is $10.70–$11.00/Boe; Q4 LOE expected at $10.75–$11.25/Boe.

• All planned 2024 capex to be funded by cash and operations; excess free cash flow targeted for further debt reduction.

• Flexibility retained to adjust capital spending based on commodity prices and market conditions.