On August 7, 2024, Ring Energy Inc (REI, Financial) released its 8-K filing detailing the company's financial and operational results for the second quarter of 2024. Ring Energy Inc is an independent exploration and production company based in The Woodlands, Texas, focusing on oil and natural gas development in the Permian Basin.
Performance Overview
Ring Energy Inc (REI, Financial) reported net income of $22.4 million, or $0.11 per diluted share, for Q2 2024. Adjusted Net Income was $23.4 million, or $0.12 per diluted share, aligning with analyst estimates. The company achieved record production and cash flow generation, with sales volumes reaching 19,786 barrels of oil equivalent per day (Boe/d), a 4% increase from Q1 2024.
Financial Achievements
Ring Energy Inc (REI, Financial) reported revenues of $99.1 million, a 5% increase from the previous quarter and a 25% increase year-over-year. The company’s Adjusted EBITDA reached a record $66.4 million, up 7% from Q1 2024 and 24% from Q2 2023. Adjusted Free Cash Flow also hit a record $21.4 million, marking a 38% increase from the previous quarter and a 70% increase year-over-year.
Key Metrics
| Metric | Q2 2024 | Q1 2024 | Q2 2023 |
|---|---|---|---|
| Average Daily Sales Volumes (Boe/d) | 19,786 | 19,034 | 17,271 |
| Revenues ($MM) | $99.1 | $94.5 | $79.3 |
| Net Income ($MM) | $22.4 | $5.5 | $28.8 |
| Adjusted EBITDA ($MM) | $66.4 | $62.0 | $53.5 |
| Adjusted Free Cash Flow ($MM) | $21.4 | $15.6 | $12.6 |
Operational Highlights
Ring Energy Inc (REI, Financial) produced 13,623 barrels of oil per day (Bo/d), a 2% increase from Q1 2024. The company successfully drilled and completed 11 producing wells, exceeding its guidance of 9 to 11 wells. Lease Operating Expense (LOE) was $10.72 per Boe, below the low end of guidance, contributing to a higher Cash Operating Margin of $32.97 per Boe.
Challenges and Outlook
Despite the positive results, Ring Energy Inc (REI, Financial) faces challenges such as natural gas product takeaway constraints, which impacted realized natural gas prices. However, the company expects these constraints to be alleviated by additional third-party pipeline capacity by year-end 2024.
"The second quarter marked another successful period for the Company reaching a number of key milestones as part of our proven strategy focused on maximizing cash flow generation," said Mr. Paul D. McKinney, Chairman of the Board and Chief Executive Officer.
Balance Sheet and Liquidity
As of June 30, 2024, Ring Energy Inc (REI, Financial) had $407 million in outstanding borrowings on its credit facility, reflecting a paydown of $15 million during the quarter. The company increased its liquidity to $194.1 million and lowered its Leverage Ratio to 1.59x.
Guidance
For Q3 2024, Ring Energy Inc (REI, Financial) expects sales volumes of 19,000 to 19,800 Boe/d and capital expenditures of $35 million to $45 million. The company has also increased its full-year 2024 oil sales volumes guidance to 13,200 to 13,800 Bo/d and expects total capital spending of $141 million to $161 million.
For more detailed information, please refer to the full 8-K filing.
Explore the complete 8-K earnings release (here) from Ring Energy Inc for further details.
