~ Crude Oil and Boe Sales Volumes Exceed High End of Q1 Guidance ~~ LOE per Boe and Capital Spending Below Low End of Q1 Guidance ~ THE WOODLANDS, Texas, May 06, 2024 (GLOBE NEWSWIRE) -- Ring Energy, Inc. (NYSE:REI) ("Ring" or the "Company") today reported operational and financial results for the first quarter of 2024. Also, the Company provided an outlook for the second quarter of 2024 and reiterated its operational and financial guidance for the full year of 2024. First Quarter 2024 Highlights Sales of 13,394 barrels of oil per day ("Bo/d"), exceeding high end of the Company's guidance by 5%; Total sales volumes of 19,034 barrels of oil equivalent per day ("Boe/d") (70% oil), exceeding high end of guidance by 3%; Reported net income of $5.5 million, or $0.03 per diluted share, which included a before-tax loss on derivative contracts of $19.0 million; Achieved Adjusted Net Income1 of $20.3 million, or $0.10 per diluted share, which excludes the unrealized portion of the derivative loss, share-based compensation and the related tax impact; Lease Operating Expense ("LOE") of $10.60 per Boe was below the low end of guidance; Generated Adjusted EBITDA1 of $62.0 million and Net Cash Provided by Operating Activities of $45.2 million; Capital expenditures of $36.3 million were below the low end of Ring's guidance range; Successfully drilled and completed 11 producing wells during the first quarter, of which five wells came online late in the period; Achieved Adjusted Free Cash Flow1 of $15.6 million, remaining cash flow positive for the 18th consecutive quarter; Ended the first quarter of 2024 with $422.0 million in outstanding borrowings on the Company's credit facility, reflecting a pay-down of $3.0 million during the quarter and $33.0 million since closing the Founders Acquisition in August 2023; Liquidity as of March 31, 2024 was $179.3 million and the Leverage Ratio2 was 1.67x; Provided guidance for sales volumes, operating expenses and capital spending for the second quarter of 2024 and reiterated Ring's full year 2024 outlook. Mr. Paul D. McKinney, Chairman of the Board and Chief Executive Officer, commented, "Our first quarter 2024 operational and financial results exceeded our expectations on many fronts, helped position the Company to take advantage of the opportunities we believe 2024 may present, and further underscore the benefits of our strategy to maximize cash flow generation. Our Adjusted Free Cash Flow this quarter is up over 48 percent over the same period last year. The robust results of our capital spending program together with our continuing focus on reducing overall costs and downtime led to higher sales volumes than expected despite the impact of an early winter storm, lower capital costs associated with our drilling and completion program, and lower per-Boe lifting costs in many of our field operating areas. These efficiencies and cost savings associated with our first quarter activities have positioned the Company well for the rest of the year and on behalf of our Board of Directors and management team, we thank our office and field employees for the outstanding execution that lead to these results." Mr. McKinney concluded, "As we look to the remainder of 2024, our focus remains unchanged on further improving our balance sheet. We will continue our disciplined capital spending program designed to organically maintain or slightly grow our oil production and we will seek further opportunities to reduce costs. Finally, we will continue to look for opportunities to grow through the pursuit of strategic, accretive and balance sheet enhancing acquisitions." Summary Results   Q1 2024 Q4 2023 Q1 2024 toQ4 2023 %Change Q1 2023 Q1 2024 toQ1 2023 %Change Net Sales (Boe/d) 19,034 19,397 (2)% 18,292 4% Crude Oil (Bo/d) 13,394 13,637 (2)% 12,660 6% Net Sales (MBoe) 1,732.1 1,784.5 (3)% 1,646.3 5% Realized Price - All Products ($/Boe) $54.56 $56.01 (3)% $53.50 2% Revenues ($MM) $94.5 $99.9 (5)% $88.1 7% Net Income ($MM) $5.5 $50.9 (89)% $32.7 (83)% Adjusted Net Income ($MM) $20.3 $21.2 (4)% $25.0 (19)% Adjusted EBITDA ($MM) $62.0 $65.4 (5)% $58.6 6% Capital Expenditures ($MM) $36.3 $38.8 (7)% $38.9 (7)% Adjusted Free Cash Flow ($MM) $15.6 $16.3 (4)% $10.5 48%             Financial Overview: For the first quarter of 2024, the Company reported net income of $5.5 million, or $0.03 per diluted share, which included a $17.6 million before-tax non-cash unrealized commodity derivative loss and $1.7 million in before-tax share-based compensation. The Company's Adjusted Net Income was $20.3 million, or $0.10 per diluted share. In the fourth quarter of 2023, the Company reported net income of $50.9 million, or $0.26 per diluted share, which included a $32.5 million before-tax non-cash unrealized commodity derivative gain, $2.5 million for before-tax share-based compensation, and $0.4 million in before-tax transaction related costs. The Company's Adjusted Net Income for the fourth quarter of 2023 was $21.2 million, or $0.11 per diluted share. For the first quarter of 2023, Ring reported net income of $32.7 million, or $0.17 per diluted share, which included a $10.1 million before-tax non-cash unrealized commodity derivative gain and $1.9 million in before-tax share-based compensation. Adjusted Net Income in the first quarter of 2023 was $25.0 million, or $0.13 per diluted share. Adjusted EBITDA was $62.0 million for the first quarter of 2024 compared to $65.4 million for the fourth quarter of 2023 and $58.6 million for the first quarter of 2023 — a 6% year-over-year increase. Adjusted Free Cash Flow for the first quarter of 2024 was $15.6 million versus $16.3 million for the fourth quarter of 2023 and $10.5 million for the first quarter of 2023. Included was capital spending of $36.3 million in the first quarter of 2024 versus $38.8 million in the fourth quarter of 2023 and $38.9 million in the first quarter of 2023. Adjusted Cash Flow from Operations was $51.9 million for the first quarter of 2024 compared to $55.1 million for the fourth quarter of 2023, and $49.4 million for the first quarter of 2023. Adjusted Net Income, Adjusted EBITDA, Adjusted Free Cash Flow, and Adjusted Cash Flow from Operations are non-GAAP financial measures, which are described in more detail and reconciled to the most comparable GAAP measures, in the tables shown later in this release under "Non-GAAP Financial Information." Sales Volumes, Prices and Revenues: Sales volumes for the first quarter of 2024 were 19,034 Boe/d (70% oil, 15% natural gas and 15% NGLs), or 1,732,057 Boe. The Company's guidance for first quarter 2024 was 18,000 to 18,500 Boe/d, including 12,420 to 12,765 Bo/d, with actual results 3% and 5% above the top end of guidance, respectively. Positively impacting first quarter 2024 sales volumes was the Founders Acquisition that closed in August 2023, incremental production brought online during the period associated with the Company's ongoing development program, and less than expected downtime during the months of February and March. Fourth quarter 2023 sales volumes were 19,397 Boe/d (70% oil, 15% natural gas and 15% NGLs), or 1,784,490 Boe, and first quarter of 2023 sales volumes were 18,292 Boe/d (69% oil, 16% natural gas and 15% NGLs), or 1,646,306 Boe. First quarter 2024 sales volumes were comprised of 1,218,837 barrels ("Bbls") of oil, 1,496,507 thousand cubic feet ("Mcf") of natural gas and 263,802 Bbls of NGLs. For the first quarter of 2024, the Company realized an average sales price of $75.72 per barrel of crude oil, $(0.55) per Mcf of natural gas and $11.47 per barrel of NGLs. The realized natural gas and NGL prices were impacted by a fee reduction to the value received. For the first quarter of 2024, the weighted average natural gas price per Mcf was $1.19 offset by a weighted average fee value per Mcf of ($1.74), and the weighted average NGL price per barrel was $21.40 offset by a weighted average fee per barrel of ($9.93). The combined average realized sales price for the period was $54.56 per Boe, down 3% versus $56.01 per Boe for the fourth quarter of 2023, and up 2% from $53.50 per Boe in the first quarter of 2023. The average oil price differential the Company experienced from NYMEX WTI futures pricing in the first quarter of 2024 was a negative $1.34 per barrel of crude oil, while the average natural gas price differential from NYMEX futures pricing was a negative $2.57 per Mcf. Revenues were $94.5 million for the first quarter of 2024 compared to $99.9 million for the fourth quarter of 2023 and $88.1 million for the first quarter of 2023. The 5% decrease in first quarter 2024 revenues from the fourth quarter of 2023 was driven by lower realized pricing and slightly lower overall sales volumes. Lease Operating Expense ("LOE"): LOE, which includes expensed workovers and facilities maintenance, was $18.4 million, or $10.60 per Boe, in the first quarter of 2024, which was below the low end of the Company's guidance of $10.75 to $11.25 per Boe. LOE per Boe was below expectations due to lower expense workover costs and higher production. LOE was $18.7 million, or $10.50 per Boe in the fourth quarter of 2023 and $17.5 million, or $10.61 per Boe, for the first quarter of 2023. Gathering, Transportation and Processing ("GTP") Costs: As previously disclosed, due to a contractual change effective May 1, 2022, the Company no longer maintains ownership and control of natural gas through processing. As a result, GTP costs are now reflected as a reduction to the natural gas sales price and not as an expense item. There remains only one contract in place with a natural gas processing entity where the point of control of gas dictates requiring the fees to be recorded as an expense. Ad Valorem Taxes: Ad valorem taxes were $1.24 per Boe for the first quarter of 2024 compared to $0.92 per Boe in the fourth quarter of 2023 and $1.01 per Boe for the first quarter of 2023. Production Taxes: Production taxes were $2.56 per Boe in the first quarter of 2024 compared to $2.78 per Boe in the fourth quarter of 2023 and $2.68 per Boe in first quarter of 2023. Production taxes ranged between 4.7% to 5.0% of revenue for all three periods. Depreciation, Depletion and Amortization ("DD&A") and Asset Retirement Obligation Accretion: DD&A was $13.74 per Boe in the first quarter of 2024 versus $13.76 per Boe for the fourth quarter of 2023 and $12.92 per Boe in the first quarter of 2023. Asset retirement obligation accretion was $0.20 per Boe in the first quarter of 2024 compared to $0.20 per Boe for the fourth quarter of 2023 and $0.22 per Boe in the first quarter of 2023. General and Administrative Expenses ("G&A"): G&A was $7.5 million ($4.31 per Boe) for the first quarter of 2024 versus $8.2 million ($4.58 per Boe) for the fourth quarter of 2023 and $7.1 million ($4.33 per Boe) for the first quarter of 2023. G&A, excluding non-cash share-based compensation, was $5.7 million ($3.32 per Boe) for the first quarter of 2024 versus $5.7 million ($3.20 per Boe) for the fourth quarter of 2023 and $5.2 million ($3.15 per Boe) for the first quarter of 2023. G&A, excluding non-cash share-based compensation and transaction costs, was $5.7 million ($3.32 per Boe) for the first quarter versus $5.4 million ($3.00 per Boe) for the fourth quarter of 2023 and $5.2 million ($3.15 per Boe) for the first quarter of 2023. Interest Expense: Interest expense was $11.5 million in the first quarter of 2024 versus $11.6 million for the fourth quarter of 2023 and $10.4 million for the first quarter of 2023. Derivative (Loss) Gain: In the first quarter of 2024, Ring recorded a net loss of $19.0 million on its commodity derivative contracts, including a realized $1.5 million cash commodity derivative loss and an unrealized $17.6 million non-cash commodity derivative loss. This compares to a net gain of $29.3 million in the fourth quarter of 2023, including a realized $3.3 million cash commodity derivative loss and an unrealized $32.5 million non-cash commodity derivative gain. In the first quarter of 2023, the Company recorded a net gain on commodity derivative contracts of $9.5 million, including a realized $0.6 million cash commodity derivative loss and an unrealized $10.1 million non-cash commodity derivative gain. A summary listing of the Company's outstanding derivative positions at March 31, 2024 is included in the tables shown later in this release. For the remainder (April through December) of 2024, the Company has approximately 1.5 million barrels of oil (approximately 43% of oil sales guidance midpoint) hedged and approximately 1.9 billion cubic feet of natural gas (approximately 41% of natural gas sales guidance midpoint) hedged. Income Tax: The Company recorded a non-cash income tax provision of $1.7 million in the first quarter of 2024 versus $7.9 million in the fourth quarter of 2023 and $2.0 million for the first quarter of 2023. Balance Sheet and Liquidity: Total liquidity (defined as cash and cash equivalents plus borrowing base availability under the Company's credit facility) at March 31, 2024 was $179.3 million, a 3% increase from December 31, 2023. Liquidity at March 31, 2024 consisted of cash and cash equivalents of $1.4 million and $178.0 million of availability under Ring's revolving credit facility, which included a reduction of $35.0 thousand for letters of credit. On March 31, 2024, the Company had $422.0 million in borrowings outstanding on its credit facility that has a current borrowing base of $600.0 million. Consistent with the past, the Company is targeting further future debt reduction dependent on market conditions, the timing and level of capital spending, and other considerations. Capital Expenditures: During the first quarter of 2024, capital expenditures were $36.3 million, which was below the Company's guidance of $37 million to $42 million, while the number of producing wells drilled and completed — 11 in total — was at the high end of the Ring's guidance. In the first quarter of 2024, in the Northwest Shelf, the Company drilled and completed two 1-mile horizontal wells (one with a working interest of 99.5% and the other with a working interest of 100%). In the Central Basin Platform, Ring drilled and completed nine wells, all with a working interest of 100%. Specifically, in its Andrews County acreage the Company drilled and completed three 1-mile horizontal wells, in its Ector County acreage Ring drilled three vertical wells, and in its Crane County acreage the Company drilled and completed three vertical wells. Additionally, within the Central Basin Platform, Ring drilled and completed one salt water disposal ("SWD") well in Ector County which was originally planned for the second quarter. Quarter   Area   Wells Drilled   Wells Completed               1Q 2024   Northwest Shelf (Horizontal)   2   2     Central Basin Platform (Horizontal)   3   3     Central Basin Platform (Vertical)   6   6     Total(1)   11   11 (1) First quarter total does not include the SWD well drilled and completed in the Central Basin Platform. Full Year and Second Quarter 2024 Sales Volumes, Capital Investment and Operating Expense Guidance In January, the Company commenced its 2024 development program that includes two rigs (one horizontal and one vertical) and is focused on slightly growing oil volumes while maintaining year-over-year overall production levels. The Company is utilizing a phased (versus continuous) capital drilling program seeking to maximize free cash flow on a quarterly basis. For full year 2024, Ring continues to expect total capital spending of $135 million to $175 million that includes a balanced and capital efficient combination of drilling, completing and placing on production 18 to 24 Hz and 20 to 30 vertical wells across the Company's asset portfolio. Additionally, the full year capital spending program includes funds for targeted well recompletions, capital workovers, infrastructure upgrades, reactivations, and leasing costs, as well as non-operated drilling, completion, and capital workovers. All projects and estimates are based on assumed WTI oil prices of $70 to $90 per barrel and Henry Hub prices of $2.00 to $3.00 per Mcf. As in the past, Ring has designed its spending program with flexibility to respond to changes in commodity prices and other market conditions as appropriate. Based on the $155 million mid-point of spending guidance, the Company continues to expect the following estimated allocation of capital investment, including: 73% for drilling, completion, and related infrastructure; 24% for recompletions and capital workovers; and 3% for land, environmental and emission reducing upgrades, and non-operated capital. The Company forecasts full year 2024 oil sales volumes of 12,600 to 13,300 Bo/d compared with full year 2023 oil sales volumes of 12,548 Bo/d, with the mid-point of guidance reflecting a 3% increase. The Company remains focused on continuing to generate Adjusted Free Cash Flow. All 2024 planned capital expenditures will be fully funded by cash on hand and cash from operations, and excess Adjusted Free Cash Flow is currently targeted for further debt reduction. For the second quarter of 2024, Ring is providing guidance for sales volumes, capital spending and operating expense. Benefiting the second quarter is the expectation of a continued positive pricing environment, the success of the first quarter capital spending program that included five wells coming on late in the first quarter, and further development of the Company's high rate-of-return inventory. Ring expects second quarter 2024 sales volumes of 13,000 to 13,400 Bo/d and 18,500 to 19,100 Boe/d (70% oil, 15% natural gas, and 15% NGLs). The Company is targeting total capital expenditures in the second quarter of 2024 of $37 million to $42 million, primarily for drilling and completion activity. Additionally, the capital spending program includes funds for targeted capital workovers, infrastructure upgrades, leasing costs; and non-operated drilling, completion, and capital workovers. The guidance in the table below represents the Company's current good faith estimate of the range of likely future results. Guidance could be affected by the factors discussed below in the "Safe Harbor Statement" section.     Q2 FY     2024 2024 Sales Volumes:       Total Oil (Bo/d)   13,000 - 13,400 12,600 - 13,300 Mid Point (Bo/d)   13,200 12,950 Total (Boe/d)   18,500 - 19,100 18,000 - 19,000 Mid Point (Boe/d)   18,800 18,500 Oil (%)   70% 70% NGLs (%)   15% 15% Gas (%)   15% 15%         Capital Program:       Capital spending(1)(millions)   $37 - $42 $135 - $175 Mid Point (millions)   $39.5 $155.0 New Hz wells drilled   4 - 5 18 - 24 New Vertical wells drilled   5 - 6 20 - 30 Wells completed and online   9 - 11 38 - 54         Operating Expenses:       LOE (per Boe)   $10.75 - $11.25 $10.50 - $11.50 (1) In addition to Company-directed drilling and completion activities, the capital spending outlook includes funds for targeted well recompletions, capital workovers, infrastructure upgrades, and well reactivations. Also included is anticipated spending for leasing costs; and non-operated drilling, completion, and capital workovers. Conference Call Information Ring will hold a conference call on Tuesday, May 7, 2024 at 11:00 a.m. ET to discuss its first quarter 2024 operational and financial results. An updated investor presentation will be posted to the Company's website prior to the conference call. To participate in the conference call, interested parties should dial 833-953-2433 at least five minutes before the call is to begin. Please reference the "Ring Energy First Quarter 2024 Earnings Conference Call". International callers may participate by dialing 412-317-5762. The call will also be webcast and available on Ring's website at www.ringenergy.com under "Investors" on the "News & Events" page. An audio replay will also be available on the Company's website following the call. About Ring Energy, Inc. Ring Energy, Inc. is an oil and gas exploration, development, and production company with current operations focused on the development of its Permian Basin assets. For additional information, please visit www.ringenergy.com. Safe Harbor Statement This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements involve a wide variety of risks and uncertainties, and include, without limitation, statements with respect to the Company's strategy and prospects. The forward-looking statements include statements about the expected future reserves, production, financial position, business strategy, revenues, earnings, costs, capital expenditures and debt levels of the Company, and plans and objectives of management for future operations. Forward-looking statements are based on current expectations and assumptions and analyses made by Ring and its management in light of their experience and perception of historical trends, current conditions and expected future developments, as well as other factors appropriate under the circumstances. However, whether actual results and developments will conform to expectations is subject to a number of material risks and uncertainties, including but not limited to: declines in oil, natural gas liquids or natural gas prices; the level of success in exploration, development and production activities; adverse weather conditions that may negatively impact development or production activities particularly in the winter; the timing of exploration and development expenditures; inaccuracies of reserve estimates or assumptions underlying them; revisions to reserve estimates as a result of changes in commodity prices; impacts to financial statements as a result of impairment write-downs; risks related to level of indebtedness and periodic redeterminations of the borrowing base and interest rates under the Company's credit facility; Ring's ability to generate sufficient cash flows from operations to meet the internally funded portion of its capital expenditures budget; the impacts of hedging on results of operations; and Ring's ability to replace oil and natural gas reserves. Such statements are subject to certain risks and uncertainties which are disclosed in the Company's reports filed with the Securities and Exchange Commission, including its Form 10-K for the fiscal year ended December 31, 2023, and its other filings. Ring undertakes no obligation to revise or update publicly any forward-looking statements, except as required by law. Contact InformationAl Petrie AdvisorsAl Petrie, Senior PartnerPhone: 281-975-2146 Email:   RING ENERGY, INC.Condensed Statements of Operations(Unaudited)       Three Months Ended   March 31,   December 31,   March 31,   2024   2023   2023             Oil, Natural Gas, and Natural Gas Liquids Revenues $ 94,503,136     $ 99,942,718     $ 88,082,912               Costs and Operating Expenses           Lease operating expenses   18,360,434       18,732,082       17,472,691   Gathering, transportation and processing costs   166,054       464,558       (823 ) Ad valorem taxes   2,145,631       1,637,722       1,670,613   Oil and natural gas production taxes   4,428,303       4,961,768       4,408,140   Depreciation, depletion and amortization   23,792,450       24,556,654       21,271,671   Asset retirement obligation accretion   350,834       351,786       365,847   Operating lease expense   175,091       175,090       113,138   General and administrative expense   7,469,222       8,164,799       7,130,139               Total Costs and Operating Expenses   56,888,019       59,044,459       52,431,416               Income from Operations   37,615,117       40,898,259       35,651,496               Other Income (Expense)           Interest income   78,544       96,984       —   Interest (expense)   (11,498,944 )     (11,603,892 )     (10,390,279 ) Gain (loss) on derivative contracts   (19,014,495 )     29,250,352       9,474,905   Gain (loss) on disposal of assets   38,355       44,981       —   Other income   25,686       72,725       9,600   Net Other Income (Expense)   (30,370,854 )     17,861,150       (905,774 )             Income Before Benefit from (Provision for) Income Taxes   7,244,263       58,759,409       34,745,722               Benefit from (Provision for) Income Taxes   (1,728,886 )     (7,862,930 )     (2,029,943 )             Net Income $ 5,515,377     $ 50,896,479     $ 32,715,779               Basic Earnings per Share $ 0.03     $ 0.26     $ 0.18   Diluted Earnings per Share $ 0.03     $ 0.26     $ 0.17               Basic Weighted-Average Shares Outstanding   197,389,782       195,687,725       177,984,323   Diluted Weighted-Average Shares Outstanding   199,305,150       197,848,812       190,138,969                             RING ENERGY, INC.Condensed Operating Data(Unaudited)       Three Months Ended   March 31,   December 31,   March 31,   2024   2023   2023             Net sales volumes:           Oil (Bbls)   1,218,837       1,254,619       1,139,413   Natural gas (Mcf)   1,496,507       1,613,102       1,601,407   Natural gas liquids (Bbls)   263,802       261,020       239,992   Total oil, natural gas and natural gas liquids (Boe)(1)   1,732,057       1,784,490       1,646,306   % Oil   70 %     70 %     69 % % Natural Gas   15 %     15 %     16 % % Natural Gas Liquids   15 %     15 %     15 %             Average daily sales volumes:           Oil (Bbls/d)   13,394       13,637       12,660   Natural gas (Mcf/d)   16,445       17,534       17,793   Natural gas liquids (Bbls/d)   2,899       2,837       2,667   Average daily equivalent sales (Boe/d)   19,034       19,397       18,292               Average realized sales prices:           Oil ($/Bbl) $ 75.72     $ 77.33     $ 73.36   Natural gas ($/Mcf)   (0.55 )     (0.12 )     0.66   Natural gas liquids ($/Bbls)   11.47       11.92       14.30   Barrel of oil equivalent ($/Boe) $ 54.56     $ 56.01     $ 53.50               Average costs and expenses per Boe ($/Boe):           Lease operating expenses $ 10.60     $ 10.50     $ 10.61   Gathering, transportation and processing costs   0.10       0.26       —   Ad valorem taxes   1.24       0.92       1.01   Oil and natural gas production taxes   2.56       2.78       2.68   Depreciation, depletion and amortization   13.74       13.76       12.92   Asset retirement obligation accretion   0.20       0.20       0.22   Operating lease expense   0.10       0.10       0.07   General and administrative expense (including share-based compensation)   4.31       4.58       4.33   G&A (excluding share-based compensation)   3.32       3.20       3.15   G&A (excluding share-based compensation and transaction costs)   3.32       3.00       3.15                           (1) Boe is determined using the ratio of six Mcf of natural gas to one Bbl of oil (totals may not compute due to rounding.) The conversion ratio does not assume price equivalency and the price on an equivalent basis for oil, natural gas, and natural gas liquids may differ significantly.   RING ENERGY, INC.Condensed Balance Sheets(Unaudited)               March 31, 2024   December 31, 2023 ASSETS         Current Assets         Cash and cash equivalents   $ 1,376,075     $ 296,384   Accounts receivable     44,392,621       38,965,002   Joint interest billing receivables, net     1,857,241       2,422,274   Derivative assets     3,704,446       6,215,374   Inventory     5,965,519       6,136,935   Prepaid expenses and other assets     1,371,146       1,874,850   Total Current Assets