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Ring Energy (REI)
:REI

Ring Energy (REI) AI Stock Analysis

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Ring Energy

(NYSE MKT:REI)

Rating:69Neutral
Price Target:
$1.00
▲(28.21%Upside)
Ring Energy's overall score is driven by strong valuation metrics and positive earnings call sentiment. However, challenges in financial performance and a bearish technical trend moderate the overall score. The company's strategic initiatives in response to market volatility are commendable, but profitability and cash flow challenges remain significant.

Ring Energy (REI) vs. SPDR S&P 500 ETF (SPY)

Ring Energy Business Overview & Revenue Model

Company DescriptionRing Energy, Inc., an exploration and production company, engages in the acquisition, exploration, development, and production of oil and natural gas in Texas and New Mexico. As of December 31, 2021, the company's proved reserves consisted of approximately 77.8 million barrel of oil equivalent. It also had interests in 18,882 net developed acres and 1,406 net undeveloped acres in Andrews and Gaines counties, Texas; 18,437 net developed acres in Culberson and Reeves counties, Texas; and 13,662 net developed acres and 11,993 net undeveloped acres in Yoakum, Runnels, and Coke Counties, Texas and Lea County, New Mexico. Ring Energy, Inc. primarily sells its oil and natural gas production to end users, marketers, and other purchasers. The company was formerly known as Transglobal Mining Corp. and changed its name to Ring Energy, Inc. in March 2008. Ring Energy, Inc. was incorporated in 2004 and is headquartered in The Woodlands, Texas.
How the Company Makes MoneyRing Energy makes money through the exploration, development, and production of crude oil and natural gas. The company's primary revenue streams are derived from the sale of these hydrocarbons extracted from its properties in the Permian Basin. Ring Energy generates income by selling its produced oil and gas to various buyers, including refineries and marketers, at prevailing market prices. The company's financial performance is influenced by factors such as commodity prices, production volumes, and operational efficiency. Additionally, Ring Energy may engage in strategic partnerships or joint ventures to optimize resource development and enhance its revenue potential.

Ring Energy Earnings Call Summary

Earnings Call Date:May 07, 2025
(Q1-2025)
|
% Change Since: -8.24%|
Next Earnings Date:Aug 12, 2025
Earnings Call Sentiment Positive
The call reflected a generally positive outlook with significant achievements such as exceeding guidance targets, successful well completions, and a highly accretive acquisition. However, challenges like a revenue decline and increased expenses were also noted. The company's strategic adjustments to the capital spending plan and focus on debt reduction highlight a cautious but optimistic approach to navigating the current price environment.
Q1-2025 Updates
Positive Updates
Exceeding Guidance Targets
Ring Energy exceeded all guidance targets for the first quarter of 2025 with exceptional oil sales volumes. Sold 18,392 barrels of oil equivalent per day, topping the midpoint of the guidance range.
Successful Well Drilling and Capital Efficiency
Drilled, completed, and placed on production seven wells, with average well costs coming in 7% less than budget. New wells exceeded initial pre-drill production estimates.
Accretive Lime Rock Acquisition
Closed acquisition of Lime Rock's CBP assets, adding over 40 gross drilling locations. Production from these assets exceeded estimates by 9%.
Improved Financial Position
Reported net income of $9.1 million, up from $5.7 million in the previous quarter. Adjusted free cash flow increased to $5.8 million, compared to $4.7 million in the fourth quarter of 2024.
Guidance and Strategic Adjustments
Guided to a 2% annual production growth over 2024 while reducing capital spending by more than 47% for the final three quarters of 2025.
Negative Updates
Revenue Decline
Sequential revenue decreased by 5% from the fourth quarter of 2024, driven by a negative $7.3 million volume variance.
Weakened Price Environment
Adjusted capital spending in response to a weakened price environment, with a reduction in total capital spending for 2025.
Higher Cash G&A Expenses
Cash G&A expenses increased to $6.9 million from $6.4 million in the fourth quarter, driven by annual costs associated with the audit, 10-K, and proxy.
Derivative Contract Losses
Reported a loss on derivative contracts of $900,000 for the first quarter.
Company Guidance
During Ring Energy's First Quarter 2025 Earnings Conference Call, the company provided several key metrics and guidance updates. Ring Energy reported an impressive oil sales volume, selling 18,392 barrels of oil equivalent per day, exceeding previous guidance targets. Specifically, they sold 12,074 barrels of oil per day, surpassing the high end of their guidance range despite weather-related challenges. The company highlighted capital efficiency improvements, as average well costs were approximately 7% below budget. Ring Energy closed a significant acquisition of Lime Rock's CBP assets, which have exceeded initial production forecasts, contributing to a 9% increase over estimated production. For the remainder of 2025, the company plans to reduce capital spending by 47% over the final three quarters, translating to a 36% reduction for the full year, while still expecting a modest 2% annual production growth over 2024. Adjusted free cash flow levels are projected to increase, supported by $120 million in oil-weighted proved developed reserves. The update reflects a strategic focus on maintaining financial health and reducing debt, while benefiting from production outperformance and newly acquired assets.

Ring Energy Financial Statement Overview

Summary
Ring Energy's financial performance is challenged by significant issues such as the abrupt cessation of revenue and cash flows in 2024, despite some historical growth and stability. The lack of equity and liabilities in 2024 raises concerns about financial transparency and stability.
Income Statement
40
Negative
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.
Balance Sheet
50
Neutral
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.
Cash Flow
45
Neutral
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.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue350.92M366.33M361.06M347.25M196.31M113.03M
Gross Profit221.97M-140.01M176.94M220.19M112.57M26.62M
EBITDA233.49M229.93M238.95M226.94M55.82M-197.88M
Net Income71.07M67.47M104.86M138.64M3.32M-253.41M
Balance Sheet
Total Assets1.51B1.50B1.38B1.27B684.16M663.46M
Cash, Cash Equivalents and Short-Term Investments1.10M1.87M296.38K3.71M2.41M3.58M
Total Debt463.45M389.10M430.02M419.13M292.68M314.92M
Total Liabilities629.64M549.46M589.91M607.90M383.53M368.69M
Stockholders Equity875.97M858.64M786.58M661.10M300.62M294.77M
Cash Flow
Free Cash Flow60.62M38.08M42.96M65.76M19.49M28.33M
Operating Cash Flow177.61M194.42M198.17M196.98M72.73M72.16M
Investing Cash Flow-213.96M-150.85M-222.57M-308.88M-51.24M-43.83M
Financing Cash Flow36.08M-42.00M20.99M113.21M-22.66M-34.75M

Ring Energy Technical Analysis

Technical Analysis Sentiment
Negative
Last Price0.78
Price Trends
50DMA
0.81
Negative
100DMA
0.96
Negative
200DMA
1.22
Negative
Market Momentum
MACD
>-0.01
Negative
RSI
46.50
Neutral
STOCH
33.93
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 0.78 is below the 20-day moving average (MA) of 0.80, below the 50-day MA of 0.81, and below the 200-day MA of 1.22, indicating a bearish trend. The MACD of >-0.01 indicates Negative momentum. The RSI at 46.50 is Neutral, neither overbought nor oversold. The STOCH value of 33.93 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 (52)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
FTFTK
72
Outperform
$432.86M31.1212.80%11.97%188.31%
BRBRY
70
Neutral
$258.40M9.56-5.66%3.60%-31.28%-1265.13%
REREI
69
Neutral
$161.17M2.218.52%-4.51%-10.09%
FEFET
58
Neutral
$251.60M-32.34%7.31%-326.94%
WTWTI
54
Neutral
$253.96M203.83%2.16%-5.05%-383.38%
52
Neutral
C$2.92B-1.03-3.46%6.02%3.01%-47.13%
TBTBN
39
Underperform
$246.67M-10.70%57.82%
* Energy Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
REI
Ring Energy
0.78
-1.10
-58.51%
FTK
Flotek
14.21
9.22
184.77%
FET
Forum Energy Tech
20.53
4.46
27.75%
WTI
W&T Offshore
1.80
-0.51
-22.08%
BRY
Berry Petroleum
3.25
-3.16
-49.30%
TBN
Tamboran Resources Corporation
18.69
-4.94
-20.91%

Ring Energy Corporate Events

Private Placements and FinancingBusiness Operations and Strategy
Ring Energy Updates Credit Agreement Amid Market Volatility
Positive
Jun 23, 2025

On June 18, 2025, Ring Energy, Inc. announced the entry into a Third Amended and Restated Credit Agreement, which reduces the borrowing base to $585 million and extends the maturity date to June 2029. The agreement also names Bank of America as the new administrative agent, reflecting a strategic move to strengthen the company’s financial position amidst volatile oil and gas prices. The company aims to generate free cash flow through cost reductions and strategic asset management, maintaining a stable borrowing base and creating value for stakeholders.

The most recent analyst rating on (REI) stock is a Hold with a $3.00 price target. To see the full list of analyst forecasts on Ring Energy stock, see the REI Stock Forecast page.

Executive/Board ChangesShareholder Meetings
Ring Energy Stockholder Meeting Approves Key Proposals
Neutral
May 22, 2025

On May 22, 2025, Ring Energy held a stockholder meeting where several key proposals were voted on. The stockholders elected seven directors, approved executive compensation on an advisory basis, approved an amendment to the 2021 Omnibus Incentive Plan to increase available shares by 11.5 million, and ratified the appointment of Grant Thornton LLP as the independent registered public accounting firm for fiscal year 2025.

The most recent analyst rating on (REI) stock is a Hold with a $3.00 price target. To see the full list of analyst forecasts on Ring Energy stock, see the REI Stock Forecast page.

M&A TransactionsBusiness Operations and StrategyFinancial Disclosures
Ring Energy Reports Strong Q1 2025 Results
Positive
May 9, 2025

On May 7, 2025, Ring Energy announced its first quarter 2025 results, reporting a net income of $9.1 million and exceeding oil sales volume guidance. The company completed a significant acquisition of Central Basin Platform assets, which have outperformed initial forecasts, and updated its 2025 guidance to reflect a 47% reduction in capital spending for the remainder of the year. Despite a decrease in revenues compared to previous quarters, Ring Energy maintained positive cash flow and liquidity, showcasing its resilience amid fluctuating oil prices.

Business Operations and StrategyFinancial Disclosures
Ring Energy Cuts Capital Spending Amid Oil Price Drop
Negative
Apr 30, 2025

On April 24, 2025, Ring Energy updated its guidance for the second quarter of 2025, reaffirming its sales volume outlook while significantly reducing its capital spending guidance by over 50% to $18 million in response to declining oil prices. The company aims to emphasize debt reduction to manage potential risks associated with prolonged low oil prices, maintaining its sales volume guidance with midpoints of 14,200 barrels of oil per day and 21,500 barrels of oil equivalent per day.

M&A TransactionsBusiness Operations and Strategy
Ring Energy Exceeds Q1 Oil Sales Guidance
Positive
Apr 21, 2025

On April 18, 2025, Ring Energy announced an operational update revealing that its first quarter oil sales volumes exceeded the company’s guidance, driven by successful drilling operations. The company also completed the acquisition of Central Basin Platform assets from Lime Rock Resources, enhancing cash flow and operational synergies. These developments are expected to strengthen Ring Energy’s market position and operational success in the coming months.

Executive/Board ChangesBusiness Operations and Strategy
Ring Energy Appoints Carla Tharp to Board
Positive
Apr 11, 2025

On April 8, 2025, Regina Roesener announced her retirement from the Ring Energy board, effective April 14, 2025, with no disputes influencing her decision. Subsequently, on April 9, 2025, the board appointed Carla Tharp as a director, effective April 14, 2025, who will also serve on the Audit and NESG Committees. Tharp, with extensive experience in the oil and gas sector, is expected to contribute significantly to Ring Energy’s strategic direction and long-term success.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.Date of analysis: Jul 05, 2025