Ring Energy (REI) Update - Jan 14

Ring Energy (REI) Update - Jan 14

Postby dan_s » Thu Jan 14, 2021 11:35 am

Over the next few days I will be updating all of the forecast/valuation models for the companies in our Small-Cap Growth Portfolio.
For modeling purposes I am using 2021 commodity prices of $52.50/bbl for WTI oil and $2.75/mcf for HH natural gas. For 2022, I assume prices of $60.00/bbl for WTI and $3.00/mcfe for HH.
Forecast commodity prices are adjusted for regional price differentials (my best guess) and each company's hedges.

So far I have updated the models for SM Energy (SM) and Ring Energy (REI). You can find them on the EPG home page.

Ring is in good shape heading into 2021.
> The generated solid FCF from operations in 2020, primarily because they shut down all D&C spending in Q2.
> Production declined by ~19.5% YOY in 2020, to an exit rate of ~9,000 BOE per day (~87% oil).
> Good News: Their credit facility has been approved at a lower level, but but they have ample liquidity and operating cash flow to fund a modest drilling program this year.
> I expect their production to ramp up in 2H 2021 to an exit rate over 12,000 BOE per day.
> My valuation increases to $2.20/share.
Dan Steffens
Energy Prospectus Group
dan_s
 
Posts: 24706
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Re: Ring Energy (REI) Update - Jan 14

Postby dan_s » Thu Jan 14, 2021 1:49 pm

Ring is going to complete three new wells in Q1 2021.

I just confirmed that they will host a webinar for us late in January. Still need to nail down the day and time.
Dan Steffens
Energy Prospectus Group
dan_s
 
Posts: 24706
Joined: Fri Apr 23, 2010 8:22 am


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