Ring Energy (REI) Q2 Results - Aug 8

[dan_s]

Comments below are from John White at Roth Capital on 8-8-2019. John follows a lot of the same small-caps that I follow and a few of our Sweet 16. He includes me in all of the updates going to his clients because I let him attend all of our Houston luncheons.

I still have four more Sweet 16 forecast/valuation models to update (CRZO, PDCE, PXD and SWN). Then my attention will turn to the Small-Caps.
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From John White:
Ring Energy (REI): Our valuation is based on a net asset value (NAV) analysis which produced $11.81 per share which we adjusted higher to $12.00 per share, which is our target price.

REI: Strong Quarter: Beats on EPS/CFPS/EBITDA: Positive

REI reported 2Q 2019 EPS/CFPS/EBITDA of $0.17/$0.43/$33.3 million, beating our estimates of $0.14/$0.38/$30.3 million and beating the consensus estimates of $0.14/$0.40/$31.0 million. Revenues and LOE were in line with our figures with lower than expected DD&A and sharply lower G&A accounting for the strong results. < My Q2 operating cash flow per share (CFPS) forecast was $0.40. Ring is on-track to generate approximately $1.65 operating cash flow per share. - Dan.

Production that had been previously announced of 10,750 BOE per day, which was higher than consensus, has been revised higher to 10,859 BOE per day.

In April 2019, REI amended and restated its senior credit facility. The amended and restated senior credit facility increases the borrowing base to $425 million and extends the maturity date through April 2024. As of June 30, 2019, $360.5 million was outstanding on the credit facility.

After the earnings conference call and further analysis we will revise our estimates accordingly.