Ring Energy (REI) Update - Jan 7

[dan_s]

David Fowler, Ring's President made an impressive presentation at our luncheon in Houston today. We had 60 attendees and I'm sure several of them purchased the stock this afternoon. Some were buying during the luncheons. The slides that he spoke from will be posted to the EPG website this afternoon.

Here is what impressed me the most:
> Slide 24: the next asset value based only on Proved Reserves is $11.16. Based on Total 3P reserves PV10 NAV is $18.47 per share.
> Slide 23: Just using PDP reserves, the NAV discounted at 10% is $4.33. < A profitable company that is a going concern with over a decade of low-risk high-return drilling inventory should NEVER trade be the NAV of its PDP reserves.
> Slide 15: They might monetize their Delaware Basin assets. My SWAG is that it would bring bids of more than $50 million.
> Slide 14: They have significant upside in the Northwest Shelf area. Where IRR's are 121% at $50/bbl realized oil price; 198% at $60/bbl oil (fully loaded, includeing leasehold costs).
> Slide 17: They have 172 Tier One development horizontal drilling locations that at a $50/Boe realized oil price should generate over 80% IRR.

[wilmawatts]

Slide 23: Just using PDP reserves, the NAV discounted at 10% is $4.33. < A profitable company that is a going concern with over a decade of low-risk high-return drilling inventory should NEVER trade be the NAV of its PDP reserves

Buy the company and pay for it with PDP reserves

Get everything else for free

Sweet

[dan_s]

Most of the companies in our Small-Cap Growth Portfolio are trading below the "break-up" value when you assume $60/bbl WTI is the "new normal". Year-end reserve reports should confirm high net asset values for lots of upstream oil & gas companies.

My SWAG is that Ring's December 31, 2019 reserve report will show NAV using 2P reserves of close to $10/share.

[dan_s]

News about Ring Energy is spreading: https://www.linkedin.com/posts/joe-danc ... 2080-NI8i/