Ring Energy — Third Quarter 2026 Earnings Summary

Financial Performance

• Generated $102.3 million in revenue for Q3 2026, a 2% decrease from $104.7 million in Q2 2026 and a 30% increase from $78.6 million in Q3 2025.
• Reported a net loss of $16.6 million ($0.06 per diluted share) for Q3 2026, compared to a net income of $64.8 million ($0.28 per diluted share) in Q2 2026 and a net loss of $51.6 million ($0.25 per diluted share) in Q3 2025; the Q3 2026 loss included a $41.0 million unrealized loss on commodity derivative contracts.
• Adjusted Net Income was $27.3 million ($0.10 per diluted share), up 14% from $24.0 million in Q2 2026 and up 108% from $13.1 million in Q3 2025.
• Adjusted EBITDA was $57.1 million, up 5% from $54.5 million in Q2 2026 and up 20% from $47.7 million in Q3 2025.
• Net cash provided by operating activities was $63.1 million for Q3 2026, compared to $40.8 million in Q2 2026 and $44.5 million in Q3 2025.
• Adjusted Free Cash Flow was $(13.8) million for Q3 2026, compared to $4.4 million in Q2 2026 and $13.9 million in Q3 2025.
• Lease operating expenses (LOE) were $10.20 per Boe in Q3 2026, down 5% from $10.73 per Boe in Q3 2025.
• Interest expense was $7.7 million in Q3 2026, down 23% year-over-year from $10.1 million in Q3 2025.
• All-in-cash costs were $21.03 per Boe in Q3 2026, down 3% from $21.59 per Boe in Q2 2026 and down 6% from $22.35 per Boe in Q3 2025.
• Total liquidity was approximately $236.4 million at September 30, 2026, consisting of $235.0 million in availability under the revolving credit facility and $1.5 million in cash and cash equivalents.
• Borrowings under the revolving credit facility were $350.0 million at September 30, 2026, down $10.0 million from June 30, 2026.
• The LQA leverage ratio improved to 1.5x at September 30, 2026, down from 1.7x in the prior period.

Guidance and Future Outlook

• Q4 2026 oil production guidance is 12,900 to 13,500 Bopd, and total sales guidance is 20,400 to 21,200 Boepd.
• Q4 2026 LOE per Boe guidance is $9.80 to $10.30.
• FY 2027 total oil production guidance is 13,200 to 14,300 Bopd, and total sales guidance is 21,000 to 23,000 Boepd.
• FY 2027 capital spending guidance is $135 to $165 million.
• FY 2027 LOE per Boe guidance is $9.70 to $10.50.
• Management intends to be cash flow positive during the fourth quarter and for the full year 2026.
• The company is updating 2027 guidance pro forma for divestitures.

Business Segments and Product Lines

• Completed non-core asset divestitures in Q3 2026 representing ~130 Boe/d (63% oil) and ~9.8k net acres for ~$30.5 million.
• Acquired ~16.5k net acres for $18.8 million in the Central Basin Platform (CBP), expanding the core development footprint by over 25% in Crane and Ector Counties.
• Subsequent to the quarter, closed a divestiture of non-core assets in Gaines and Andrews Counties on October 30th for ~$13.4 million, representing ~470 Boe/d (77% oil).
• Sales volumes averaged ~20,635 Boe/d in Q3 2026, up 3% from Q2 2026, including ~12,818 Bo/d, up 1% from Q2 2026.
• Drilled eight horizontal wells and completed seven in Q3 2026; brought online the first 2-mile horizontal wells and drilled nine YTD.
• Reduced drilling and completion costs to ~$475 per foot YTD 2026.
• Invested ~$64.0 million in capital expenditures in Q3 2026.

Market and Competitive Landscape

• Realized oil price was $83.72 per barrel in Q3 2026, down 12% from Q2 2026 but up 30% from Q3 2025.
• Realized natural gas price was $(0.30) per Mcf in Q3 2026, compared to $(5.20) in Q2 2026 and $(1.22) in Q3 2025.
• As of November 5, 2026, the company has approximately 1.0 million barrels of oil hedged for the remainder of 2026 at an average upside protection price of $74.10.
• As of November 5, 2026, the company has approximately 1.2 billion cubic feet of natural gas hedged for the remainder of 2026 at an average downside protection price of $3.93.

Risks and Challenges

• Forward-looking statements involve risks including declines in oil, natural gas liquids, or natural gas prices.
• Risks include the level of success in exploration, development, and production activities.
• Potential impacts from worldwide political, military, and armed conflict, including the ongoing conflict with Iran and the closure of the Strait of Hormuz.
• Adverse weather conditions may negatively impact development or production activities.
• Risks related to the level of indebtedness, periodic redeterminations of the borrowing base, and interest rates under the credit facility.
• Risks associated with the impacts of hedging on results of operations.
• Risks related to changes in U.S. energy, environmental, monetary, tax, and trade policies, including tariffs or trade barriers.
• Risks regarding cost and availability of transportation and storage capacity.

Management Commentary and Tone

• Paul D. McKinney, Chairman and CEO, described the quarter as "exciting and highly productive," citing strong operational results and decisive steps to improve portfolio depth and quality.
• Management noted a deliberate decision to outspend adjusted free cash flow to accelerate the development program, driven by strong commodity prices, encouraging well performance, and cash surpluses from asset dispositions.
• Management emphasized maintaining capital discipline with the intent to be cash flow positive in Q4 and for the full year.
• The tone reflected confidence in the development program, the execution capability of the team, and the company's positioning to deliver durable, per-share value.
• Management highlighted the strategy of recycling capital from lower-priority assets into higher-quality inventory to strengthen the balance sheet.

Other Key Points

• The company reduced borrowings under its revolving credit facility by $10.0 million during Q3 2026.
• The acquired leasehold interests in the CBP are positioned within Ring's existing operating footprint to support higher-return development inventory.
• The company drilled and completed two 1.5-mile horizontal wells in Andrews County and six 2-mile horizontal wells in Crane County in Q3 2026.
• The company's borrowing base is $585 million as of September 30, 2026.
• The company plans to hold a conference call on November 6, 2026, to discuss results.