Aug 6, 2026, 4:38 PM ETEnergy

Ring Energy — Second Quarter 2026 Earnings Summary

REIRING ENERGY INC

Financial Performance

Reported net income of $64.8 million ($0.27 per diluted share) for Q2 2026, including a $42.2 million unrealized mark-to-market gain on commodity derivatives; Adjusted Net Income was $24.0 million ($0.10 per diluted share).
Revenues totaled $104.7 million in Q2 2026, a 27% increase year-over-year from $82.6 million in Q2 2025 and a 42% increase quarter-over-quarter from $73.7 million in Q1 2026.
Adjusted EBITDA increased 42% to $54.5 million in Q2 2026 from $38.3 million in Q1 2026; year-to-date Adjusted EBITDA was $92.8 million, down 5% from $97.9 million in the prior year period.
Generated net cash provided by operating activities of $40.8 million in Q2 2026; Adjusted Free Cash Flow was $4.4 million.
Lease operating expenses (LOE) were $10.12 per Boe in Q2 2026, down 3% from $10.41 per Boe in Q1 2026 and 3% from $10.45 per Boe in Q2 2025.
All-in cash costs decreased 5% in the first half of 2026 to $21.68 per Boe compared to the first half of 2025.
Total liquidity was approximately $226.1 million at June 30, 2026, consisting of $225.0 million in availability under the revolving credit facility and $1.1 million in cash.
Borrowings under the revolving credit facility were reduced by $66 million during the quarter to $360 million outstanding as of June 30, 2026 (from $426 million at March 31, 2026).
The Leverage Ratio was 2.02x as of June 30, 2026, based on Consolidated Total Debt of $362.7 million and Pro Forma Consolidated EBITDAX of $179.2 million over the last four quarters.

Updated second half 2026 oil production guidance to 13,000–13,950 Bopd (midpoint approx. 2% above prior guidance).
Updated second half 2026 LOE guidance to $10.00–$10.60 per Boe (midpoint approx. 2% below prior guidance).
Provided initial 2027 guidance targeting:
- Production growth of approximately 10% over full-year 2026.
- LOE per Boe approximately 1% lower than full-year 2026.
- Capital expenditures approximately 10% lower than full-year 2026.
2027 sales volume guidance is 13,550–14,650 Bopd for total oil and 21,500–23,500 Boe/d for total equivalent volumes.
2027 capital spending guidance is $135–$165 million, with plans to drill 20–30 new wells exceeding 1.5 miles in length.
Management expects the expanded 2026 drilling program to be funded primarily through operating cash flow going forward.

Produced 12,683 barrels of oil per day and 19,990 Boe per day in Q2 2026, both within guidance.
Realized price for all products was $57.55 per Boe in Q2 2026, up 35% year-over-year from $42.63 per Boe.
Realized crude oil price was $95.45 per Bbl in Q2 2026, up 52% year-over-year from $62.69 per Bbl.
Capital expenditures were $43.2 million in Q2 2026, including three ~2-mile horizontal wells, one saltwater disposal well, and a frac pond.
Drilling activity in Q2 2026 included 2 horizontal wells in the Northwest Shelf and 5 horizontal wells in the Central Basin Platform (Crane and Andrews counties).
Wells exceeding 1.5 miles in length are expected to represent approximately 70% of planned 2026 drilling activity.
Capital allocation for the remainder of 2026 is estimated at 57% for new drilling/completions, 23% for workovers/recompletions, 14% for infrastructure, and 6% for land/compliance.

The company is transitioning to a more capital-efficient development program focused on longer lateral wells and co-horizontal development of stacked-pay opportunities.
Management cites improving commodity prices and an improved hedge position as factors supporting increased capital investment.
The company continues to evaluate select non-core assets for divestiture, with proceeds directed toward debt reduction.
The company has hedged approximately 1.7 million barrels of oil (70% of 2H 2026 guidance midpoint) at an average upside protection price of $71.47 for the remainder of 2026.
The company has hedged approximately 2.4 billion cubic feet of natural gas (62% of 2H 2026 guidance midpoint) at an average downside protection price of $3.78 for the remainder of 2026.

Forward-looking statements are subject to risks including declines in oil, natural gas, and NGL prices.
Risks include the level of success in exploration and development activities, adverse weather conditions, and inaccuracies in reserve estimates.
Financial results are impacted by the level of indebtedness, periodic redeterminations of the borrowing base, and interest rates under the credit facility.
Risks related to hedging impacts on results of operations and the ability to generate sufficient cash flows to meet the internally funded portion of the capital expenditures budget.
Potential impacts from worldwide political, military, and armed conflict, including the ongoing conflict with Iran and closure of the Strait of Hormuz.
Risks associated with changes in U.S. energy, environmental, monetary, tax, and trade policies, including tariffs and trade tensions.

CEO Paul D. McKinney described the quarter as a period of "efficient and effective execution," noting the delivery of production within guidance, reduced per-Boe costs, and significantly increased Adjusted EBITDA.
Management highlighted the successful completion of an equity offering during the quarter, which provided balance sheet capacity to fund the acceleration of the development transition while decreasing the leverage ratio.
The tone is confident regarding the transition to longer lateral wells, citing encouraging early well results and improved operational execution.
Management expects to maintain financial discipline, free cash flow generation, and balance sheet strength while targeting a leverage ratio of 1.25x as the investment cycle completes.

The company generated positive Adjusted Free Cash Flow for the 27th straight quarter.
Net cash provided by operating activities remained positive for over 6 consecutive years.
The company completed an equity offering during the quarter to strengthen the balance sheet.
As of August 4, 2026, the company held derivative assets of $6.3 million and derivative liabilities of $11.4 million (current) plus $12.0 million (non-current).
The company has 260,520,291 shares of common stock issued and outstanding as of June 30, 2026.
A conference call to discuss results was held on August 6, 2026.