Ring Energy (REI) Q1 2026 earnings summary

Executive summary

• Achieved Q1 2026 production and sales in line with guidance at 12,276 barrels of oil per day and 19,351 Boe per day, with a 5% year-over-year production increase driven by new wells and the Lime Rock acquisition.

• Reported a net loss of $220.6 million, primarily due to a $162.1 million non-cash ceiling test impairment and $77.0 million unrealized derivative losses, despite solid underlying operating performance and liquidity.

• Generated adjusted net income of $7.4 million ($0.04 per diluted share) and adjusted EBITDA of $38.3 million, with 26 consecutive quarters of positive free cash flow.

• Accelerated infrastructure investments and capital spending to support transition to horizontal drilling and prepare for higher anticipated oil prices.

• Outperformed most SMID CAP peers in stock price performance since July 2025, with 130% appreciation.

Financial highlights

• Q1 2026 oil sales averaged 12,276 barrels per day; total sales were 19,351 Boe per day, both at the midpoint of guidance.

• Revenues were $73.7 million, down 7% year-over-year, with oil sales nearly flat and natural gas sales negative due to processing fees.

• Lease operating expenses were $10.41 per Boe, below guidance for the fourth consecutive quarter.

• Adjusted net income was $7.4 million; adjusted EBITDA totaled $38.3 million; adjusted free cash flow was $236,809.

• All-in cash operating costs were $21.77 per Boe, down 11% year-over-year; cash operating margin was $20.53 per Boe.

Outlook and guidance

• Reaffirmed 2026 guidance, with Q2–Q4 sales volumes expected to rise to a midpoint of 13,300 Boe/d by Q4.

• Capital spending guidance for 2026 is $17–36 million per quarter, with 5–7 new horizontal wells and 1–2 vertical wells per quarter.

• LOE guidance for 2026 remains at $10.00–$11.05 per Boe.

• Management expects to resume debt reduction in 2026, targeting leverage at 1.25x as cash flow strengthens.

• Disciplined hedging strategy in place, with 72% of 2026 oil sales hedged at $73.27/bbl and 73% of gas sales at $3.78/mcf.