Ring Energy (REI) Update - May 15

Ring Energy (REI) Update - May 15

Postby dan_s » Wed May 15, 2019 5:14 pm

David Fowler, Ring's President, gave us an excellent presentation at our Hess Club luncheon on Houston on May 15

Their recent Wishbone Acquisition that closed in April gives this company a lot more running room in areas that have well-level IRR's over 100% (fully-loaded with leasehold costs) on over 1,000 potential horizontal drilling locations.
> Current production is ~10,600 Boepd (90% crude oil), which compares to Q1 production of 9,762 Boepd.
> Ring's 2019 D&C Capex Budget is $154 million, which should be fully funded by operating cash flow by Q4 2019.
> Ring's goal is 20% annual production growth, fully funded by operating cash flows after 2019.
> MOST IMPRESSIVE to me was slide 23. Ring's Net Asset Value using proforma PV10 value of just their proved reserves (less 100% of their debt) is $11.53/share. Double today's closing price.

The slides that David spoke from can be found on Ring's website here: https://investor.ringenergy.com/events-presentations
Dan Steffens
Energy Prospectus Group
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Re: Ring Energy (REI) Update - May 15

Postby ChuckGeb » Wed May 15, 2019 5:41 pm

Very impressive presentation from a quality operation. Great job in getting them to present to us Dan.
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Re: Ring Energy (REI) Update - May 15

Postby dan_s » Thu May 16, 2019 10:15 am

I have been bugging Ring to host a luncheon for us for over two years. I think they did it just because they got tied of me calling them month after month.

I've know Ring's management team for over ten years. Many of our Founding Members made a killing on Arena Resources, which this team sold in 2010 for $1.6 Billion. I firmly believe that Ring, which has a market-cap of $319 million today, will sell for more in just a few years. REI has a ton of upside for us, but it may take awhile for the Wall Street gang to figure it out.

John White at Roth Capital sat at my table yesterday. His valuation of REI is $12/share. Jordan Levy, an analysts at SunTrust Robinson was also at our luncheon.

On my To Do List is to get Ring up to Dallas for a luncheon. Maybe after they release Q2 results.
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Energy Prospectus Group
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Re: Ring Energy (REI) Update - May 15

Postby dan_s » Thu May 16, 2019 3:55 pm

The updated profile and detailed forecast/valuation model for REI have been posted to the EPG website.

Two analysts have updated their reports on file with Reuters / First Call:
> Roth Capital (John White) rates it a BUY with a $12.00 price target
> Northland Securities rates it a BUY with a $9.00 price target
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