Hi,
is there any news on Ring Energy about new shares offering?
How many?
What would this be for?
Regards
Ring Energy
Re: Ring Energy
THE WOODLANDS, Texas, April 12, 2023 (GLOBE NEWSWIRE) -- Ring Energy, Inc. (NYSE American: REI) (“Ring” or the “Company”) today announced that 14,512,166 of its outstanding warrants have been amended to lower their exercise price to $0.62 per share in exchange for early exercise of the warrants, resulting in gross proceeds to the Company of $8,997,543 and the issuance of 14,512,166 shares of common stock. After the full exercise of the above warrants, there remain outstanding warrants to purchase 78,200 shares of common stock.
Mr. Paul D. McKinney, Chairman of the Board and Chief Executive Officer, commented, “We are pleased with the early exercises resulting from the premium inducement. The accelerated receipt of approximately $9 million in warrant proceeds contributes to our relentless goal to strengthen our balance sheet. We believe that clearing out the warrants simplifies our capital structure, as well as should improve trading liquidity and increase our float.”
The warrants were issued as part of a registered direct offering in 2020 and were exercisable for shares of the Company’s common stock at an initial exercise price of $0.80 per share. The issuance of the common stock upon exercise of the warrants by the Company, and the resale of the common stock issuable upon exercise of the warrants are covered by a registration statement, as amended, previously filed with and declared effective by the Securities and Exchange Commission.
Truist Securities acted as exclusive financial advisor to the Company.
This news release shall not constitute an offer to sell or a solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful, prior to registration or qualification under the securities laws of any such state or jurisdiction.
https://finance.yahoo.com/news/ring-energy-inc-announces-exercise-204500234.html
Mr. Paul D. McKinney, Chairman of the Board and Chief Executive Officer, commented, “We are pleased with the early exercises resulting from the premium inducement. The accelerated receipt of approximately $9 million in warrant proceeds contributes to our relentless goal to strengthen our balance sheet. We believe that clearing out the warrants simplifies our capital structure, as well as should improve trading liquidity and increase our float.”
The warrants were issued as part of a registered direct offering in 2020 and were exercisable for shares of the Company’s common stock at an initial exercise price of $0.80 per share. The issuance of the common stock upon exercise of the warrants by the Company, and the resale of the common stock issuable upon exercise of the warrants are covered by a registration statement, as amended, previously filed with and declared effective by the Securities and Exchange Commission.
Truist Securities acted as exclusive financial advisor to the Company.
This news release shall not constitute an offer to sell or a solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful, prior to registration or qualification under the securities laws of any such state or jurisdiction.
https://finance.yahoo.com/news/ring-energy-inc-announces-exercise-204500234.html
Re: Ring Energy
They must be hard up for cash to cut the price from 80 cents to 62 cents 
Didn't they read Dan's fair target of $ 5.10. That's one helluva discount .62 to 5.10 wtf!!
Dan, do you have dilution from all these warrants in the model?
the other side of the trade for the warrant holders is to short the hell out of the stock and cover it with shares that they are buying for 62 cents!
Didn't they read Dan's fair target of $ 5.10. That's one helluva discount .62 to 5.10 wtf!!
Dan, do you have dilution from all these warrants in the model?
the other side of the trade for the warrant holders is to short the hell out of the stock and cover it with shares that they are buying for 62 cents!
Re: Ring Energy
The published report states that as of now there are about 180mm common shares outstanding + the 14.5mm common shares from the warrants conversion. So REI should now have 194.5mm common shares outstanding.
Management wants to increase authorized common shares by 225mm (current authorized common shares are 225mm, so there currently are only about 45mm common shares authorized and not outstanding), in order to have flexibility.
Management does not mention the intention to make use of these additional 225mm shares in order to pay down debt.
Dan or others, please correct me where I am wrong.
Regards
Management wants to increase authorized common shares by 225mm (current authorized common shares are 225mm, so there currently are only about 45mm common shares authorized and not outstanding), in order to have flexibility.
Management does not mention the intention to make use of these additional 225mm shares in order to pay down debt.
Dan or others, please correct me where I am wrong.
Regards
Re: Ring Energy
I think you have nailed it. That is my understanding.knusser58 wrote: ↑Thu Apr 13, 2023 12:00 pm The published report states that as of now there are about 180mm common shares outstanding + the 14.5mm common shares from the warrants conversion. So REI should now have 194.5mm common shares outstanding.
Management wants to increase authorized common shares by 225mm (current authorized common shares are 225mm, so there currently are only about 45mm common shares authorized and not outstanding), in order to have flexibility.
Management does not mention the intention to make use of these additional 225mm shares in order to pay down debt.
Dan or others, please correct me where I am wrong.
Regards
Re: Ring Energy
Money from the exercise of warrants is a GOOD THING. Ring is heavily weighted to oil and they are going to be fine.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Ring Energy
Dan, would appreciate some education on what makes the warrants a "good thing." This could increase the total outstanding shares by 7.7% +. I had never heard of "warrants" before this news release. Thanks!
Re: Ring Energy
Warrants are like Call options, but they are exercised by the "Warrant Holder" sending money to the company based on the warrants "strike price" and the company issues the shares directly to the warrant holders.
Warrants are normally given to an equity provider or lender as compensation for them taking the risk of putting money into the company. In this case the warrants with a 5-year term were issued as part of a registered direct equity offering in 2020 (a time of much higher risk for Ring) and were exercisable for shares of the Company’s common stock at an initial exercise price of $0.80 per share. Ring agreed to lower the strike price to $0.62 per share in order to get the warrants' holders to exercise them early.
As a result, Ring got $8,997,543 early, instead of having wait until the expiration date (October, 2025). < See page 55 of Ring's recent 10-K for details on why the warrants were issued in October, 2020.
It is common for warrants to be issued as part of an equity offering. Warrants that are "in the money" are included in a public companies "fully diluted share count", to they are not something that is hidden in anyway.
Getting this money now is very helpful to Ring's efforts to reduce their debt and improve their balance sheet ratios.
Warrants are normally given to an equity provider or lender as compensation for them taking the risk of putting money into the company. In this case the warrants with a 5-year term were issued as part of a registered direct equity offering in 2020 (a time of much higher risk for Ring) and were exercisable for shares of the Company’s common stock at an initial exercise price of $0.80 per share. Ring agreed to lower the strike price to $0.62 per share in order to get the warrants' holders to exercise them early.
As a result, Ring got $8,997,543 early, instead of having wait until the expiration date (October, 2025). < See page 55 of Ring's recent 10-K for details on why the warrants were issued in October, 2020.
It is common for warrants to be issued as part of an equity offering. Warrants that are "in the money" are included in a public companies "fully diluted share count", to they are not something that is hidden in anyway.
Getting this money now is very helpful to Ring's efforts to reduce their debt and improve their balance sheet ratios.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Ring Energy
Rok Resources also have warrants as well. I think the closing date to exercise the warrants are Q1 2025 and the exercise price is $0.25 CAD.
Re: Ring Energy
Go to slide 6 of ROK Resources Spring 2023 presentation slides, which they will be speaking from at Tuesday's luncheon in Houston.
Warrants and Options can be dilutive BUT THEY ALSO CAN BRING A LOT OF EQUITY CAPITAL INTO THE COMPANY.
If the warrants and options listed on slide 6 are all exercised it will bring $34.646Cdn million of cash into the Company, which can be used to accelerate their production growth. That equity infusion will also shore up the balance sheet, making it easier for ROK to get more capital if needed.
My point is that warrants are not a "Bad Thing". They are commonly used in this business to get start-up capital. The company and the shareholders want the warrants to be exercised because it means the company is being successful and growing.
ROK's current production is ~3,750 Boepd (~60% crude oil) and they have a clear path to a 2023 exit rate of 4,500 Boepd. Based on my forecast model, they should generate $45 to $50Cdn million of operating cash flow this year, more than enough to cover this year's drilling program AND END THE YEAR DEBT FREE.
Warrants and Options can be dilutive BUT THEY ALSO CAN BRING A LOT OF EQUITY CAPITAL INTO THE COMPANY.
If the warrants and options listed on slide 6 are all exercised it will bring $34.646Cdn million of cash into the Company, which can be used to accelerate their production growth. That equity infusion will also shore up the balance sheet, making it easier for ROK to get more capital if needed.
My point is that warrants are not a "Bad Thing". They are commonly used in this business to get start-up capital. The company and the shareholders want the warrants to be exercised because it means the company is being successful and growing.
ROK's current production is ~3,750 Boepd (~60% crude oil) and they have a clear path to a 2023 exit rate of 4,500 Boepd. Based on my forecast model, they should generate $45 to $50Cdn million of operating cash flow this year, more than enough to cover this year's drilling program AND END THE YEAR DEBT FREE.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Ring Energy
Thank you Dan.
How do you treat the number of shares in you spreadsheet models?
Do you account somehow for the amount of warrants and options outstanding in you valuations?
Regards, Klaus
How do you treat the number of shares in you spreadsheet models?
Do you account somehow for the amount of warrants and options outstanding in you valuations?
Regards, Klaus
Re: Ring Energy
Ring Energy posted on its website the presentation given at the Dallas event today.
On slide Nr. 11 there is a clear explanation of the shares and warrants as of now.
Ring wants to get approval to issue more common shares (225MM) in order to continue growth through acquisitions.
Ring currently has a lot of running room to grow.
Currently more than 20 yrs of current production in reserves.
Lots of potential.
Dan please, correct me where I should be wrong.
Regards
On slide Nr. 11 there is a clear explanation of the shares and warrants as of now.
Ring wants to get approval to issue more common shares (225MM) in order to continue growth through acquisitions.
Ring currently has a lot of running room to grow.
Currently more than 20 yrs of current production in reserves.
Lots of potential.
Dan please, correct me where I should be wrong.
Regards
Re: Ring Energy
If you include warrants in the fully diluted share count, you need to also include the impact of the money the company gets when the warrants are exercised.
Warrants being exercised is a GOOD THING because the company gets a big slug of cash.
Warrants being exercised is a GOOD THING because the company gets a big slug of cash.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group