Ring Energy (REI) Valuation Update - May 7

[dan_s]

I have updated my forecast/valuation model for REI. My valuation increases by $0.40 to $4.40/share. < based on 4X operating CFPS.

> Q1 production exceeded the Company's guidance and my forecast is that full-year production will be near the top of the guidance range (18,000 to 19,000 Boepd).
> Their hedges do remove a lot of the commodity price risk in 2024.
> Ring is free cash flow positive, which should continue. It has a lot of low-risk development drilling inventory and their well-level economics are good. My operating CFPS forecast are just slightly higher than TipRanks' CFPS forecasts of $1.04 for 2024 and $1.11 for 2025.
> Even if WTI drops to $70/bbl, Ring would still be FCF positive.

My forecast model has been posted to the EPG website.

Ring will be hosting a Houston luncheon for us on June 13.