Ring Energy Provides Operational and Financial Update
February 22 2022 - 6:45AM
Ring Energy, Inc. (NYSE American: REI) (“Ring” or the “Company”)
today provided an update concerning the Company’s fourth quarter
and full year 2021 sales volumes, further paydown of debt,
commencement of the 2022 drilling program, and recently enhanced
hedging position.
Key Highlights
- Grew
fourth quarter 2021 sales volumes to 9,154 barrels of oil
equivalent per day (“BOEPD”) (85% oil), an 11% increase from the
third quarter 2021, and resulting in full year 2021 sales volumes
of 8,519 BOEPD (86% oil);
- Reduced
borrowings by $5 million in the fourth quarter 2021 driven by
further free cash flow generation, primarily due to the success of
its 2021 development program and a continued improvement in crude
oil and natural gas prices;
- Remained
cash flow positive for the ninth consecutive quarter, marking over
two years in a row of generating free cash flow;
- Performed
11 conversions from electrical submersible pumps to rod pumps
(“CTR”) in the second half of 2021, resulting in 25 CTRs for the
full year 2021 (19 Northwest Shelf (“NWS”) and six Central Basin
Platform (“CBP”)) and reducing long-term operating costs;
- Commenced
Ring’s 2022 drilling program in late January, successfully drilled
its first two CBP wells and initiated completion operations;
and
- Enhanced
its hedge position to capitalize on the continued strong price
environment and support the 2022 development program through the
addition of 1,000 barrels of oil per day (“BOPD”) at an average
swap price of $84.61 per barrel for February through December
2022.
Paul D. McKinney, Chairman of the Board and
Chief Executive Officer, commented, “We remain steadfastly focused
on pursuing operational excellence, investing in high return
projects, driving cash flow growth and strengthening our balance
sheet. In the fourth quarter of 2021, we achieved sales volumes of
more than 9,150 BOEPD, which was a material increase from the third
quarter of 2021. During the fourth quarter, we further paid down
debt by $5 million, which brings the total debt reduction by the
Company to $85 million since the second quarter 2020. While we were
reducing our debt, we also prudently invested our cash flow in 2021
into successfully drilling 11 wells and completing 13 wells to help
maintain production. This disciplined capital spending approach has
kept the Company generating free cash flow for over two years. The
success of our 2021 drilling program supports our plans of running
a continuous one-rig drilling program for the foreseeable future in
2022. We picked up a rig in late January, sooner than previously
expected, to begin drilling in the CBP and expect to begin seeing
production uplift from the new wells in the second quarter of 2022.
The three horizontal 1.5 mile lateral wells we drilled in the CBP
in 2021 have provided better-than-expected results and our 2022
drilling program will include additional wells there as well as in
our premier NWS area.”
McKinney continued, “Beginning January 1, 2022,
nearly 60% of our low-priced hedges rolled off allowing for
substantially higher revenue in 2022 assuming the current oil price
environment continues. As we look to the future and our desire to
lock in the cash flow to fund our capital program and debt
repayment plans, we recently added 1,000 BOPD at an average swap
price of $84.61 per barrel of oil for February through December
2022 to our existing hedge position. We are truly excited about
2022 and beyond. The current strong energy pricing environment,
together with continued drilling success should allow us to
increase operational cash flow significantly in 2022. In short, we
continue to execute on our targeted strategy to further drive
financial stability, improve the balance sheet and increase
shareholder value.”
On December 31, 2021, the Company had $290.0
million in borrowings on its revolving credit facility that has a
current borrowing base of $350.0 million. Ring paid down $5.0
million of debt during the fourth quarter of 2021 and $23.0 million
in the full year of 2021. Ring finished the year with approximately
$2.4 million cash on hand, improving its liquidity to nearly $62
million. This marks the 6th consecutive quarter the Company has
increased its liquidity.
About Ring Energy, Inc.
Ring Energy, Inc. is an oil and gas exploration,
development, and production company with current operations focused
on the conventional development of its Permian Basin assets in West
Texas and New Mexico. For additional information, please visit
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, 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.
Contact Information
Al Petrie AdvisorsAl Petrie, Senior PartnerPhone:
281-975-2146Email: apetrie@ringenergy.com
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