Ring Energy — Third Quarter 2026 Earnings Summary

Financial Performance:

• Revenue was $102.3 million for Q3 2026, a 2% decrease from $104.7 million in Q2 2026, driven by lower realized oil prices.
• Realized oil price was $83.72 per barrel, down 12% from Q2 2026 and up 30% from Q3 2025.
• Net loss was $16.6 million ($0.06 per diluted share), including a $41.0 million unrealized loss on commodity derivative contracts; net income in Q2 2026 was $64.8 million.
• 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.
• Capital expenditures were $64.0 million, up 48% from $43.2 million in Q2 2026.
• Adjusted Free Cash Flow was $(13.8) million, compared to $4.4 million in Q2 2026.
• Lease operating expenses (LOE) were $10.20 per Boe, below the mid-point of guidance.
• Interest expense was $7.7 million, down 23% year-over-year.
• All-in-cash costs were reduced by 3% to $21.03 per Boe.
• Total liquidity was approximately $236.4 million, 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 as of September 30, 2026, down $10.0 million from June 30, 2026.
• The LQA leverage ratio improved to 1.5x from 1.7x.

Guidance and Future Outlook:

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

Business Segments and Product Lines:

• Completed non-core asset divestitures of approximately 130 Boe/d (63% oil) and 9.8k net acres for $30.5 million.
• Acquired approximately 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 for approximately $13.4 million, representing approximately 470 Boe/d (77% oil).
• Sales volumes averaged 20,635 Boe/d, including 12,818 Bo/d, up 3% and 1% respectively from Q2 2026.
• Drilled nine horizontal wells year-to-date, including the first 2-mile horizontal wells.
• Reduced drilling and completion costs to approximately $475 per foot year-to-date.
• Drilled and completed two 1.5-mile horizontal wells in Andrews County and six 2-mile horizontal wells in Crane County during Q3 2026.

Market and Competitive Landscape:

• The Company focuses on the Permian Basin, specifically the Central Basin Platform.
• Management highlights the acquisition of acreage within an area where they already operate, citing attractive opportunities to generate strong returns.
• The strategy involves recycling capital from lower-priority non-core assets into higher-quality inventory to strengthen the portfolio.

Risks and Challenges:

• Financial results were impacted by a $41.0 million unrealized loss on commodity derivative contracts.
• Realized oil prices decreased 12% quarter-over-quarter.
• Adjusted Free Cash Flow was negative in Q3 2026 due to accelerated capital spending.
• The Safe Harbor statement notes risks including declines in oil and natural gas prices, political and military conflicts, adverse weather, reserve estimate inaccuracies, and changes in energy policies.

Management Commentary and Tone:

• Paul D. McKinney, Chairman and CEO, described the quarter as "exciting and highly productive," noting strong operational results and decisive steps to improve portfolio depth and quality.
• Management stated they deliberately chose to outspend adjusted free cash flow to accelerate the program, citing strong commodity prices and encouraging well performance.
• The tone emphasized confidence in the development program, the execution capability of the team, and the company's position to deliver durable per-share value.
• Management reiterated a focus on debt reduction and improving leverage ratio metrics.

Other Key Points:

• 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.
• 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.
• Derivative positions include WTI swaps and two-way collars for oil, and Henry Hub swaps and basis swaps for natural gas extending into 2030.
• The Company holds a borrowing base of $585 million under its credit facility.
• Net sales volumes for the nine months ended September 30, 2026, were 5,459.1 MBoe, a 1% decrease from 5,505.7 MBoe in the same period in 2025.
• Adjusted EBITDA for the nine months ended September 30, 2026, was $149.9 million, up 3% from $145.6 million in 2025.