Ring Energy, Inc. Releases Third Quarter 2020 Operations Update
October 27 2020 - 3:34PM
Business Wire
Ring Energy, Inc. (NYSE American: REI) (“Ring”) (“Company”)
today released its operations update for the 3rd quarter of 2020
and additional information with respect to cash flow and reducing
the outstanding amount of its senior credit facility.
Q3’20 highlights:
- Restored production to 9,219 Barrels of oil equivalent per day
(“Boepd”), 88% oil, in the third quarter within the Company’s
guidance range;
- Increased third quarter net daily production approximately 70%
compared to the second quarter of 2020 (Q2’20 production volumes
were negatively impacted by the Company’s response to the pandemic
induced oil price collapse in late April resulting in well shut-ins
from late April through early June 2020);
- Performed eight conversions from electrical submersible pumps
(“ESP”) to rod pumps (6 Northwest Shelf (“NWS”) and 2 Central Basin
Platform (“CBP”) to reduce overall operating costs and less costly
workovers;
- Remained cash flow positive for the 4th consecutive
quarter.
- Paid an additional $9 million on its senior credit facility
reducing the current outstanding balance to $360 million;
Mr. Danny Wilson, Executive Vice President and Chief Operating
Officer, commented, “We began placing wells back on production at
the end of the 2nd quarter and early in the 3rd quarter which, when
combined with our ESP-to-rod pump conversion program, led to our
70% increase in net production compared to the 2nd quarter and was
within 15% of our 1st quarter 2020 net production, which included
the drilling of four new horizontal wells in the Northwest Shelf.
Although we are currently not drilling any new wells, we continue
to look for the commodity marketplace to stabilize and stand ready
to begin drilling once oil prices recover to higher levels. In the
meantime, we will continue with our rod conversion program and
other efficient capital investments that increase our overall run
times, reduce our operating costs, and help maintain our production
levels.”
Estimated production for the third quarter of 2020 was
approximately 848,152 Barrels of Oil Equivalent (“Boe”), or an
average of 9,219 Boepd, 88% oil. For the nine months ended
September 30, 2020, net estimated production was approximately
2,334,924 Boe, or 8,522 Boepd, as compared to net production of
3,041,000 Boe, or 11,139 Boepd for the nine months ended September
30, 2019.
•
Q3 2020 / Q3 2019 (Net Boe):
848,152 / 1,015,000
-16.4%
•
Q3 2020 / Q3 2019 (Net Boepd):
9,219 /
11,033
-16.4%
•
Q3 2020 / Q2 2020 (Net Boe):
848,152 / 495,000
+71.3%
•
Q3 2020 / Q2 2020 (Net Boepd):
9,219 /
5,440
+69.5%
•
Q3 2020 / Q1 2020 (Net
Boe):
848,152 / 991,772
-14.5%
•
9 Months 2020 / 9 Months 2019 (Net
Boepd):
8,522 / 11,139
-24.4%
The estimated net price received for oil was approximately
$38.15 per barrel in the third quarter 2020 and the estimated net
price received for natural gas was approximately $1.95 per mcf.
This resulted in an estimated net received price of approximately
$35.40 per Boe. The September 2020 price differential the Company
experienced from NYMEX WTI pricing was approximately $2.00. These
net received commodity prices do not reflect any realized gain on
derivatives (“hedges”).
Mr. Randy Broaddrick, Ring’s Chief Financial Officer, stated,
“Management continues to be very diligent in maintaining a strict
budget, focusing on increasing operating efficiencies whenever
possible and strengthening the balance sheet by reducing our debt.
With the commodity hedges we have in place and the dramatic
increase in production over the 2nd quarter, the Company was able
to continue to generate free cash flow in the 3rd quarter, enabling
it to pay down an additional $9 million on its senior credit
facility, reducing the current outstanding balance to $360
million.”
Mr. Paul McKinney, Chief Executive Officer (“CEO”) and Chairman
of the Board, commented, “For the past four weeks I have been
examining all aspects of our Company’s operations, taking into
account reserves, production, production profiles which include
both historic and current decline curves and production costs and
operating efficiencies. The results of these efforts have
reinforced my enthusiasm and belief that Ring Energy has the
potential to excel and become a major factor as a conventional
operator and consolidator in the areas in which we operate. As I
have said before, the Company’s greatest strengths lie in its low
decline-long life assets located on the Central Basin Platform and
Northwest Shelf of the Permian Basin. They represent solid base
production which provides stable cash flow and liquidity. In
addition, they have years of low-cost undeveloped inventory which
provides high rates of return and will deliver long-term value and
growth to its shareholders. The challenges we face are, 1) the
uncertainty of low and unstable commodity prices caused by the
pandemic induced economic downturn, and 2) the Company’s current
debt and liquidity. We can’t control the marketplace but remain
optimistic that stability and improved pricing will return and we
are prepared to immediately resume our drilling and development
program. The Company with its strong hedging component, has,
beginning with the 4th quarter 2019, been cash flow positive. The
result has been a reduction in the outstanding senior credit
facility balance from $388 million to $360 million and an increase
in the cash balance from $7.6 million at the end of Q3 2019 to
approximately $17.6 million currently. The decision to raise
additional capital at this time was based on responses I have
received when investigating accretive opportunities in the
marketplace. Ring’s balance sheet has stood between us and the
ability to have serious discussions. The funds from this offering
improves our liquidity and ability to expand our current
operations. It will also help alleviate some of the leverage issues
that have hindered us when pursing accretive ideas that have a
strong potential to increase shareholder value. As has been
management’s policy from the beginning, it is my intent to be very
clear and transparent with our shareholders as we move forward in
the continued growth and development of our Company.”
About Ring Energy, Inc.
Ring Energy, Inc. is an oil and gas exploration, development and
production company with current operations in Texas and New Mexico.
www.ringenergy.com
Safe Harbor Statement
This release contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section
21E of the Securities Exchange Act of 1934. Forward-looking
statements involve a wide variety of risks and uncertainties, and
include, without limitations, statements with respect to the
Company’s strategy and prospects. Such statements are subject to
certain risks and uncertainties which are disclosed in the
Company’s reports filed with the SEC, including its Form 10-K for
the fiscal year ended December 31, 2019, its Form 10Q for the
quarter ended June 30, 2020 and its other filings with the SEC.
Readers and investors are cautioned that the Company’s actual
results may differ materially from those described in the
forward-looking statements due to a number of factors, including,
but not limited to, the Company’s ability to acquire productive oil
and/or gas properties or to successfully drill and complete oil
and/or gas wells on such properties, general economic conditions
both domestically and abroad, and the conduct of business by the
Company, and other factors that may be more fully described in
additional documents set forth by the Company.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20201027006205/en/
Bill Parsons K M Financial, Inc. (702) 489-4447
Ring Energy (AMEX:REI)
Historical Stock Chart
From Apr 2024 to May 2024
Ring Energy (AMEX:REI)
Historical Stock Chart
From May 2023 to May 2024