Drilling & Completions | Debt | Capital Markets | Drilling Activity

Ring Energy Details Preliminary Q1 Results; Pays Down Debt, Talks Drilling

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Ring Energy, Inc. detailed its preliminary Q1 2021 results.

Paid Down $7.5 Million of Debt During 1Q21

• Reduced debt balance to $305.5 million on $350 million borrowing base; and
• Increased liquidity to $46.2 million as of March 31, 2021, including $1.7 million cash on hand.

Consistent with its strategy of strengthening the balance sheet by steadily paying down debt, during the first quarter of 2021 Ring used a portion of its free cash flow to further reduce the level of borrowings on its revolving credit facility by $7.5 million. As a result, on March 31, 2021 the Company had a $305.5 million outstanding balance on its revolving credit facility, which has a current borrowing base of $350 million.

NWS Drilling Program

• Completed and placed on production all four wells of the NWS Phase I drilling program during the first quarter 2021;
• All four wells collectively produced 37,550 gross barrels of oil equivalent during March 2021;
• Finished drilling operations on all three wells of the NWS Phase II drilling program before the end of April 2021; and
• All three Phase II wells are expected to be producing by the end of May 2021.

The second phase of the Company's NWS drilling program includes three wells, with all three wells now successfully drilled and expected to be completed on schedule and within budget. The Bevo 664 C #2H has now been completed and was placed on production in early May. Completion operations on the Bevo 664 A #4H and the Bevo 664 A #3H will commence in mid-May, with both wells targeted to come online by the end of May.

First Quarter 2021 Sales Volumes

• First quarter 2021 net sales averaged 7,960 barrels of oil equivalent per day ("Boepd"), which was significantly impacted by the severe winter storm in February;
• Net sales for first quarter 2021 were also impacted by downtime associated with the temporary production shut-in of offset wells during the completion operations of the four NWS Phase I wells and the conversion of electrical submersible pumps to rod pumps ("CTRs") on nine wells;
• Average net sales of 9,094 Boepd during March 2021 were down by approximately 200 Boepd due to storm-related third-party gas processing capacity still to be restored; and
• Reaffirmed full year 2021 net sales guidance of 9,000 to 9,500 Boepd.

Sales volumes for the first quarter of 2021 were negatively impacted by the severe winter storm in February that resulted in the shut-in and deferral of more than 60% of Ring's production for the majority of the storm with restoration of most of the production taking more than two weeks to complete. Temporary downtime associated with completion activity and CTRs also contributed to lower production numbers. Approximately 200 Boepd remains temporarily shut-in awaiting the full restoration of third-party gas processing facilities damaged during the winter storm. As a result, first quarter net sales volumes were 7,960 Boepd (85% oil) with net sales recovering to an average of 9,094 Boepd (87% oil) for March 2021. Despite the impact of the winter storm on first quarter production, Ring reaffirmed its full year 2021 net sales guidance of 9,000 to 9,500 Boepd.