Ring Energy (REI) Status Update summary

Strategic rationale and acquisition overview

• Acquired Central Basin Platform assets from Lime Rock Resources for $100 million, closing March 31, 2025, adding 17,700 net acres mostly contiguous to existing operations.

• Assets produce 2,300 BOE/day (>80% oil) from ~101 wells, expected to generate $34 million in 2025E Adjusted EBITDA.

• Transaction valued at less than 85% of Proved Developed PV-10, with $120 million in oil-weighted PD PV-10 reserves.

• PV-10 of acquired reserves exceeds purchase price, making undeveloped drilling opportunities effectively free.

• Production decline rate of acquired assets is 13%, improving the company’s already low corporate decline rate.

Operational and financial impact

• Q4 2024 production averaged 19,700 BOE/day; year-end reserves were 134 million BOE.

• Acquisition adds 2,300 BOE/day, increasing production by nearly 12%.

• Pro forma 2025 production guidance is 21,000 BOE/day, with 66-68% oil.

• Cost synergies include shared infrastructure, reduced personnel, and best practice adoption.

• Shallow decline and reduced reinvestment rate expected to accelerate debt reduction and free cash flow generation.

Balance sheet and leverage outlook

• Deal structured with $68.6 million cash, $7.4 million equity, and $10 million deferred payment; cash funded through existing resources and borrowings.

• Leverage ratio will rise slightly but remains manageable; rapid debt paydown expected.

• PV-10 of acquired assets at recent strip prices is $116 million, well above purchase price.

• Assets will be included in the next borrowing base redetermination, strengthening collateral.

• Liquidity has grown significantly, enabling bite-sized, balance sheet-friendly acquisitions.