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1. Company Snapshot

1.a. Company Description

Ring Energy, Inc., an exploration and production company, engages in the acquisition, exploration, development, and production of oil and natural gas in Texas and New Mexico.As of December 31, 2021, the company's proved reserves consisted of approximately 77.8 million barrel of oil equivalent.It also had interests in 18,882 net developed acres and 1,406 net undeveloped acres in Andrews and Gaines counties, Texas; 18,437 net developed acres in Culberson and Reeves counties, Texas; and 13,662 net developed acres and 11,993 net undeveloped acres in Yoakum, Runnels, and Coke Counties, Texas and Lea County, New Mexico.


Ring Energy, Inc.primarily sells its oil and natural gas production to end users, marketers, and other purchasers.The company was formerly known as Transglobal Mining Corp.


and changed its name to Ring Energy, Inc.in March 2008.Ring Energy, Inc.


was incorporated in 2004 and is headquartered in The Woodlands, Texas.

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1.b. Last Insights on REI

The recent performance of Ring Energy, Inc. was negatively impacted by several factors. The company's Q4 2024 earnings and revenues missed estimates, with a quarterly earnings of $0.06 per share, missing the Zacks Consensus Estimate of $0.08 per share. This was partly due to escalating costs and a decline in oil prices. Additionally, the company's acquisition strategy, which aimed to boost free cash flow, has increased its leverage to near 2.0x at the end of 2025, a step back from its previous debt reduction efforts.

1.c. Company Highlights

2. Ring Energy's Q3 2025 Earnings: Operational Excellence Amidst Challenging Commodity Prices

Ring Energy reported a strong third quarter in 2025, with oil sales reaching 13,332 barrels per day, slightly below the midpoint of their guidance. The company's adjusted free cash flow was $13.9 million, enabling them to reduce debt by $20 million. Adjusted EBITDA was $47.7 million, down from $51.5 million in the second quarter, primarily due to lower oil revenue and higher cash G&A expenses. Earnings per share (EPS) came in at $0.06, beating estimates of $0.05. Revenue was not directly stated, but the company's ability to generate adjusted free cash flow and reduce debt is a positive indicator of their financial performance.

Publication Date: Nov -12

📋 Highlights
  • Adjusted Free Cash Flow: Generated $13.9 million in Q3 2025, enabling $20 million debt reduction despite lower oil prices.
  • Capital Efficiency: Spent $24.6 million on capital, near the low end of guidance, with lifting costs at $10.73/BOE (below guidance range).
  • Debt Reduction Guidance: Anticipated $8–14 million debt paydown in Q4 2025, including potential $3–5 million from non-core asset sales.
  • Operational Execution: Oil sales averaged 13,332 barrels/day, slightly below guidance midpoint, while maintaining disciplined cost control.
  • 2026 Outlook: Projected debt reduction of ~$10 million in Q4 2025, with organic growth prioritized through inventory drilling and asset optimization.

Operational Highlights

The company's operational performance was notable, with lifting costs of $10.73 per BOE, below the low end of their guidance range for the second consecutive quarter. This was driven by cost-cutting efforts in the field, demonstrating Ring Energy's ability to manage costs effectively. Capital spending during the quarter was $24.6 million, near the low end of their guidance range.

Debt Reduction and Balance Sheet

Ring Energy's focus on debt reduction is evident, with a $20 million reduction in debt during the quarter. The company's leverage ratio is expected to improve further, with management anticipating additional debt reduction in the fourth quarter. The current working guidance for 2026 is hypothetical, but the company is focused on maintaining its capital discipline and flexibility.

Valuation and Growth Prospects

With a P/E Ratio of -13.03 and a P/S Ratio of 0.89, the market is pricing in challenging prospects for Ring Energy. However, analysts estimate revenue growth of 7.0% for next year, indicating potential for improvement. The company's EV/EBITDA ratio is 5.17, suggesting a relatively reasonable valuation. As Ring Energy continues to focus on debt reduction, cost management, and organic growth opportunities, their prospects may improve, potentially leading to a revaluation of the stock.

Organic Growth Opportunities

Ring Energy is identifying opportunities for organic growth, particularly in the Central Basin Platform and Northwest Shelf. The company is building its undeveloped inventory to deliver growth through organic means when oil prices return and its balance sheet is stronger. As Paul McKinney noted, organic developed opportunities are typically more economic than acquisitions, which is why the company is prioritizing this strategy.

3. NewsRoom

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Outside Inc. Announces Festival Headliners for Third Annual ‘Outside Days' Presented by Capital One and REI Co-op

Dec -03

Source: businesswire.com

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Ring Energy to Participate in Water Tower Research Fireside Chat on December 9, 2025

Dec -03

Source: globenewswire.com

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RioCan Real Estate Investment Trust (REI.UN:CA) Analyst/Investor Day Transcript

Nov -19

Source: seekingalpha.com

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Ring Energy: The Game Continues

Nov -14

Source: seekingalpha.com

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Yale University's Strategic Investment in Vera Therapeutics Inc: A 32.26% Portfolio Stake

Nov -14

Source: gurufocus.com

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Ring Energy, Inc. (REI) Q3 2025 Earnings Call Transcript

Nov -07

Source: seekingalpha.com

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RioCan Real Estate Investment Trust (REI.UN:CA) Q3 2025 Earnings Call Transcript

Nov -07

Source: seekingalpha.com

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Ring Energy (REI) Beats Q3 Earnings and Revenue Estimates

Nov -07

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (7.51%)

6. Segments

Oil

Expected Growth: 7.5%

Ring Energy's 7.5% growth is driven by increased production from its North Permian Basin assets, improved operational efficiencies, and a favorable crude oil price environment. Additionally, the company's strategic acquisitions and focus on low-cost operations have contributed to its growth momentum.

Natural Gas Liquids

Expected Growth: 7.8%

Ring Energy's 7.8% growth in Natural Gas Liquids is driven by increased production from its North Texas assets, improved operational efficiencies, and a favorable pricing environment. Additionally, the company's strategic acquisitions and divestitures have optimized its asset portfolio, leading to higher margins and increased cash flow.

Natural Gas

Expected Growth: 8.2%

Ring Energy's 8.2% natural gas growth is driven by increased production from its North Texas and Kansas properties, coupled with higher realized prices due to improved market conditions. Additionally, the company's focus on cost reduction and operational efficiencies has enabled it to maintain a low cost structure, further supporting growth.

7. Detailed Products

Crude Oil

Ring Energy, Inc. is an independent oil and gas company that explores, develops, and produces crude oil from its properties in Texas and New Mexico.

Natural Gas

The company also produces natural gas from its properties, which is used as a clean-burning fuel for power generation, industrial processes, and heating.

Natural Gas Liquids (NGLs)

Ring Energy, Inc. also produces NGLs, which are used as a feedstock for the production of plastics, fertilizers, and other petrochemicals.

8. Ring Energy, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Ring Energy, Inc. operates in the oil and gas industry, which has a moderate threat of substitutes. While there are alternative energy sources, the demand for oil and gas is still high, and the company's products are widely used.

Bargaining Power Of Customers

Ring Energy, Inc. has a diverse customer base, which reduces the bargaining power of individual customers. Additionally, the company's products are essential to its customers' operations, giving it an upper hand in negotiations.

Bargaining Power Of Suppliers

Ring Energy, Inc. relies on a few key suppliers for its operations, which gives them some bargaining power. However, the company's size and scale of operations also give it some negotiating power.

Threat Of New Entrants

The oil and gas industry has high barriers to entry, including significant capital requirements and regulatory hurdles. This makes it difficult for new entrants to join the market, reducing the threat of new competition.

Intensity Of Rivalry

The oil and gas industry is highly competitive, with many established players competing for market share. Ring Energy, Inc. must continually innovate and improve its operations to remain competitive.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 35.19%
Debt Cost 10.23%
Equity Weight 64.81%
Equity Cost 12.84%
WACC 11.92%
Leverage 54.29%

11. Quality Control: Ring Energy, Inc. passed 1 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Mexco Energy

A-Score: 4.2/10

Value: 7.1

Growth: 7.2

Quality: 7.5

Yield: 1.0

Momentum: 1.0

Volatility: 1.3

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Calumet Specialty Products Partners

A-Score: 4.0/10

Value: 9.8

Growth: 2.6

Quality: 5.6

Yield: 0.0

Momentum: 3.0

Volatility: 3.0

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Barnwell Industries

A-Score: 3.9/10

Value: 8.6

Growth: 4.2

Quality: 3.0

Yield: 0.0

Momentum: 5.5

Volatility: 2.0

1-Year Total Return ->

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Ring Energy

A-Score: 3.9/10

Value: 9.1

Growth: 3.7

Quality: 6.4

Yield: 0.0

Momentum: 1.0

Volatility: 3.0

1-Year Total Return ->

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Amplify Energy

A-Score: 3.2/10

Value: 8.0

Growth: 3.0

Quality: 5.3

Yield: 0.0

Momentum: 1.0

Volatility: 2.0

1-Year Total Return ->

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Vital Energy

A-Score: 2.9/10

Value: 9.1

Growth: 2.1

Quality: 2.4

Yield: 0.0

Momentum: 1.5

Volatility: 2.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

0.94$

Current Price

0.94$

Potential

-0.00%

Expected Cash-Flows