Ring Energy (REI) Update - Mar 14

Post Reply
dan_s
Posts: 34279
Joined: Fri Apr 23, 2010 8:22 am

Ring Energy (REI) Update - Mar 14

Post by dan_s »

I just posted my updated forecast and profile for Ring Energy to the EPG website.

The Stronghold Acquisition that closed 8-31-2022 was a truly "transformative" deal for Ring. Size does matter in this business.

With production now at ~18,000 Boepd and more importantly operating cash flow at approximately $50 million per quarter, Ring can fund a continuous drilling program. This year's modest goal is to increase production slowly from a Q4 2022 rate of 17,856 Boepd (68.3% crude oil) to a 2023 exit rate of ~18,800 Boepd. Only if oil prices move higher will they add a few more development well to this year's drilling program.

Paul Mckinney, Ring's CEO is committed to keeping D&C spending well below operating cash flow and use all free cash flow to pay down debt. This is the best way to frighten off the shorts and increase the share price.

Higher oil prices and solid well results should give REI a good shot at reaching my updated valuation of $5.10.
Dan Steffens
Energy Prospectus Group
Post Reply