Ring Energy, Inc.

What they do

Ring Energy develops, produces, and acquires oil and natural gas properties in the Permian Basin, targeting oil-rich formations in the Northwest Shelf and Central Basin Platform. As of December 31, 2025, the company held 111,714 gross (96,234 net) acres and interests in 919 gross (758 net) producing wells, with proved reserves of approximately 153.3 million Boe (59% oil).

Revenue drivers

• Oil production — Primary revenue driver; production of 12,683 barrels of oil per day in Q2 2026, with oil constituting approximately 65% of total production.
• Natural gas and NGL production — Secondary revenue streams; NGLs represent 22% and natural gas 19% of proved reserves.
• Acquisitions — The Lime Rock Acquisition (closed March 31, 2025) added acreage and production in Andrews County, Texas, contributing to reserve and production growth.

Recent performance

For Q2 2026, Ring reported net income of $64.8 million (including a $42.2 million unrealized mark-to-market gain on derivatives) on revenue of $104.7 million, and generated $40.8 million in net cash from operations. The company produced 19,990 Boe per day, within guidance, and reduced lease operating expense to $10.12 per Boe. Adjusted EBITDA increased 42% to $54.5 million from Q1 2026, and borrowings under the revolving credit facility were reduced by $66 million during the quarter, with liquidity of approximately $226.1 million at June 30, 2026. For full-year 2025, the company reported a net loss of $34.7 million on revenue of $307.2 million, reflecting lower commodity prices.

Strategy

Ring's stated strategy is to balance debt reduction with disciplined development of its oil-rich resource base using conventional and horizontal drilling. The company plans to operate within cash flow, pursue strategic accretive acquisitions, and use excess cash flow to reduce long-term debt. Management aims to achieve production and reserve growth while improving capital efficiency and reducing per-Boe costs.

Risks

• Commodity price volatility — Lower oil and gas prices in 2025 contributed to a net loss and the company's 2026 results are sensitive to price fluctuations.
• Horizontal drilling risks — The company uses longer laterals (including 2-mile wells) which involve risks such as wellbore placement, casing integrity, and completion challenges.
• Acquisition risks — Assessments of acquired properties may be inaccurate, potentially impacting future operations and earnings.
• Balance sheet and liquidity — Though cash and equivalents were only $1.1 million at June 30, 2026, the company maintains a revolving credit facility with a $585 million borrowing base and has been reducing draws.

Outlook

Management provided initial 2027 guidance targeting production growth of approximately 10% over full-year 2026, LOE per Boe approximately 1% lower, and capital expenditures approximately 10% lower. For second half 2026, they guided oil production of 13,000 to 13,950 Bopd and LOE per Boe of $10.00 to $10.60. The company plans to expand its drilling program with longer lateral wells and co-development of stacked-pay opportunities, funded primarily by operating cash flow, with leverage trending toward a 1.25x target.