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Ring Energy (REI) investor relations material
Ring Energy Water Tower Research Fireside Chat Series summary
Complete event summary combining all related documents: earnings call transcript, report, and slide presentation.Operational performance and asset integration
Production from acquired Lime Rock assets exceeded forecasts by nearly 15% in the first month and has continued to meet or surpass expectations since.
Lime Rock assets are fully integrated, with ongoing initiatives to further reduce costs and improve efficiency.
Lease operating expenses dropped to $10.73 per BOE, below guidance, due to cost-saving measures like optimized chemical programs and reduced failure rates.
Initiatives such as rebidding goods/services and reducing operators have been implemented across operating areas.
Enhanced chemical treatments have extended well run times, reducing repair costs and supporting higher production rates.
Production mix, capital allocation, and efficiency
Oil comprised 64% of Q3 production, with future mix expected to remain consistent, driven by capital allocation to oil-weighted, capital-efficient projects.
Gas gathering system downtime affected production mix, but guidance accounts for infrastructure performance.
2026 capital will focus on the most capital-efficient projects, with a continued emphasis on oil-weighted opportunities.
Fourth quarter drilling is expected to deliver more production per dollar spent, impacting Q1 2026 output.
Horizontal drilling with longer laterals and testing new zones are planned to improve capital efficiency and expand inventory.
Financial strategy and debt management
Adjusted Free Cash Flow for Q3 was $13.9 million, with $32 million in long-term debt repaid since the Lime Rock acquisition.
CapEx for 2025 was reduced from an initial $154 million to a midpoint of $97 million, reflecting flexibility amid softer oil prices.
Fourth quarter 2025 targets include an $18 million reduction in liabilities, including a $10 million deferred payment.
Lower natural decline rates reduce maintenance capital needs, supporting debt reduction and liquidity.
At $60 WTI, priority is debt reduction over growth; higher prices would accelerate debt repayment.
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