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Ring Energy Inc (REI)
:REI
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Ring Energy
(NYSE MKT:REI)
52Neutral
Ring Energy (REI) vs. S&P 500 (SPY)
Market Cap
$231.95M
Dividend YieldN/A
Average Volume (3M)1.87M
Price to Earnings (P/E)3.4
Beta (1Y)0.81
Revenue Growth1.46%
EPS Growth-38.55%
CountryUS
Employees115
SectorEnergy
Sector Strength86
IndustryOil & Gas Exploration & Production
Share Statistics
EPS (TTM)0.34
Shares Outstanding199,955,540
10 Day Avg. Volume1,299,524
30 Day Avg. Volume1,870,890
Financial Highlights & Ratios
PEG Ratio0.04
Price to Book (P/B)N/A
Price to Sales (P/S)0.65
Price to Cash Flow (P/CF)1.30
P/FCF Ratio1.10
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$3.00Price Target Upside158.62% Upside
Rating ConsensusHold
Number of Analyst Covering2
Ring Energy Business Overview & Revenue Model
Company DescriptionRing Energy, Inc. is an independent exploration and production company engaged in the acquisition, development, and production of oil and natural gas properties. The company primarily operates in the Permian Basin of Texas and New Mexico, which is one of the most prolific oil-producing regions in North America. Ring Energy focuses on conventional oil and gas projects with a strategy aimed at maximizing shareholder value through efficient operations, strategic acquisitions, and the development of its existing asset base.
How the Company Makes MoneyRing Energy generates revenue primarily through the sale of crude oil and natural gas that it extracts from its operated properties. The company's primary revenue streams include the sale of produced oil and natural gas to third-party purchasers, which include oil refineries and natural gas processing companies. The price of these commodities is influenced by market conditions, including supply and demand dynamics, geopolitical factors, and global economic trends. Additionally, the company may engage in hedging activities to manage price risks associated with fluctuations in oil and gas prices. Significant partnerships with service providers, suppliers, and joint venture partners can also contribute to operational efficiency and cost management, further impacting the company's profitability.
Ring Energy Financial Statement Overview
Summary
Ring Energy's financial performance indicates significant challenges, notably the cessation of revenue and cash flows in 2024. Despite previous growth, this points to operational and financial distress.Income Statement
The income statement exhibits volatility in revenue with a growth of 4% from 2022 to 2023, followed by a significant drop to zero in 2024. Gross profit margins and net income have been inconsistent, showing substantial fluctuations. Despite a positive EBIT and EBITDA margin in 2023, the zero revenue in 2024 significantly impacts the overall income performance.40
Negative
Balance Sheet
The balance sheet highlights a concerning lack of equity in 2024, with a previous debt-to-equity ratio of 0.55 in 2023. The growth in total assets over the years suggests expansion, yet the absence of liabilities or equity in 2024 raises red flags about financial stability and transparency. Previous equity ratios indicated a moderately leveraged position.50
Neutral
Cash Flow
Cash flow analysis reveals inconsistencies with operating cash flow and free cash flow being positive in prior years but nonexistent in 2024. Historical free cash flow to net income ratios were positive, indicating efficient cash conversion, but the sudden absence of cash flows in 2024 suggests operational challenges.45
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 366.33M | 361.06M | 347.25M | 196.31M | 113.03M | Gross Profit |
| -140.01M | 176.94M | 220.19M | 112.57M | 26.62M | EBIT |
| 132.90M | 145.78M | 191.74M | 95.76M | 8.84M | EBITDA |
| 229.93M | 238.95M | 226.94M | 55.82M | -197.88M | Net Income Common Stockholders |
| 67.47M | 104.86M | 138.64M | 3.32M | -253.41M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 1.87M | 296.38K | 3.71M | 2.41M | 3.58M | Total Assets |
| 1.41T | 1.38B | 1.27B | 684.16M | 663.46M | Total Debt |
| 389.10M | 430.02M | 419.13M | 292.68M | 314.92M | Net Debt |
| 387.24M | 429.72M | 415.42M | 290.27M | 311.34M | Total Liabilities |
| 549.46M | 589.91M | 607.90M | 383.53M | 368.69M | Stockholders Equity |
| 858.64M | 786.58M | 661.10M | 300.62M | 294.77M |
| Cash Flow | Free Cash Flow | |||
| 38.08M | 42.96M | 65.76M | 19.49M | 28.33M | Operating Cash Flow |
| 194.42M | 198.17M | 196.98M | 72.73M | 72.16M | Investing Cash Flow |
| -150.85M | -222.57M | -308.88M | -51.24M | -43.83M | Financing Cash Flow |
| -42.00M | 20.99M | 113.21M | -22.66M | -34.75M |
Ring Energy Technical Analysis
Negative
1.16
Price Trends
1.28
Negative
1.37
Negative
1.54
Negative
Market Momentum
-0.02
Negative
43.24
Neutral
40.40
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For REI, the sentiment is Negative. The current price of 1.16 is below the 20-day moving average (MA) of 1.18, below the 50-day MA of 1.28, and below the 200-day MA of 1.54, indicating a bearish trend. The MACD of -0.02 indicates Negative momentum. The RSI at 43.24 is Neutral, neither overbought nor oversold. The STOCH value of 40.40 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for REI.
Ring Energy Peers Comparison
Overall Rating
UnderperformOutperform
Sector (58)
Financial Indicators
Performance Comparison
REI
Ring Energy
1.16
-0.82
-41.41%
SM
SM Energy
29.40
-20.32
-40.87%
Ring Energy Earnings Call Summary
Earnings Call Date: Mar 5, 2025 | % Change Since: -3.33% | Next Earnings Date: May 12, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mix of positive achievements, such as record sales growth, debt reduction, and successful acquisitions, alongside challenges like decreased realized prices, a decline in fourth quarter revenue, and losses on derivative contracts. The overall sentiment is balanced between these aspects.Highlights
Record Sales Growth
Total sales grew 8% over 2023 to a record 19,648 barrels of oil equivalent per day, and oil sales grew 6% to a record 13,283 barrels of oil per day.
Debt Reduction and Financial Strength
Ring Energy paid down debt by $40 million for the year, resulting in a total debt reduction of $70 million since the Founders acquisition, with $385 million of debt on the balance sheet and approximately $217 million of liquidity.
Proved Reserves and PV-10 Increase
Proved reserves grew by 4.4 million barrels of oil equivalent, or 3%, to 134.2 million barrels of oil equivalent, with a year-end PV-10 of approximately $1.5 billion.
Successful Acquisitions
The Stronghold and Founders acquisitions exceeded expectations, establishing a strategic foothold in the Central Basin Platform and increasing the undeveloped inventory of highly economic drilling locations.
Lowlights
Decrease in Realized Prices
Realized prices decreased by 7% for oil, impacting revenues despite production growth.
Fourth Quarter Revenue Decline
Fourth quarter revenue was $83.4 million, a 7% decrease from the third quarter due to a combination of lower realized pricing and slight production variances.
Derivative Contracts Loss
A loss on derivative contracts of $6.3 million was recorded in the fourth quarter, compared to a gain of $24.7 million in the third quarter.
Impact of Commodity Price Volatility
Volatility in commodity prices presents challenges, with potential impacts on capital spending and debt repayment strategies.
Company Guidance
During the Ring Energy earnings call for the fourth quarter and full year 2024, the company provided guidance for 2025, projecting an average annual sales midpoint of 21,000 barrels of oil equivalent per day (boe/d) and 13,900 barrels of oil per day (bopd), reflecting a 7% and 5% increase, respectively. The annual capital spending is estimated at $154 million, consistent with the prior year, with plans to drill approximately 49 wells. The company emphasized maintaining capital discipline to maximize free cash flow, which in 2024 was $43.6 million. This strategy supports ongoing debt reduction, with $70 million paid down since the Founders acquisition in 2023, leaving $385 million in debt at year-end 2024. Additionally, Ring Energy highlighted its 2024 achievements, including an 8% increase in total sales to 19,648 boe/d, and a record oil sales growth of 6% to 13,283 bopd, while reducing cash operating costs by 2% per Boe. The company also increased its proved reserves by 3% to 134.2 million barrels of oil equivalent.Ring Energy Corporate Events
M&A TransactionsBusiness Operations and Strategy
Ring Energy Expands with $100M Acquisition Deal
Positive
Feb 28, 2025
On February 25, 2025, Ring Energy announced a Purchase and Sale Agreement to acquire oil and gas interests from Lime Rock Resources for $100 million, with the transaction expected to close by the end of the first quarter of 2025. This acquisition aims to expand Ring’s Central Basin Platform operations in Andrews County, Texas, enhancing operational synergies and shareholder value by integrating high-quality assets, increasing free cash flow, and strengthening the company’s inventory of drilling locations.
Business Operations and Strategy
Ring Energy Unveils 2024 Sustainability Initiatives
Positive
Jan 7, 2025
Ring Energy has released its 2024 Sustainability Report, detailing significant ESG initiatives that include a notable 59% reduction in Scope 1 GHG emissions due to reduced flaring and casing gas venting. The report highlights the benefits of recent strategic acquisitions and asset dispositions, allowing further investment in technology to minimize environmental impact and enhance community and employee programs.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.