Ring Energy Announces Fourth Quarter and Full Year 2020 Results Including Year-End 2020 Proved Reserves and Affirms 2021 Guidance
Ring Energy, Inc. (NYSE American: REI) reported its fourth quarter and full year 2020 operational and financial results on March 16, 2021. Despite challenges from the pandemic, the company achieved 9,307 Boe/d sales volumes, exceeding guidance, and generated Free Cash Flow of $12.7 million in Q4, marking its fifth consecutive quarter of positive cash flow. However, it faced a net loss of $160.3 million in Q4 and $253.4 million for the year. The company utilized cash flow to pay down $75 million of debt and initiated a drilling program in response to rising oil prices.
- Generated Free Cash Flow of $39.7 million for FY 2020, including $12.7 million in Q4 2020.
- Sales volumes of 9,307 Boe/d exceeded guidance in Q4 2020.
- Achieved Adjusted Net Income of $6.5 million in Q4 2020 despite overall net loss.
- Reported a net loss of $160.3 million in Q4 2020 and $253.4 million for the full year.
- Year-end 2020 proved reserves fell to 76.5 MMBoe from 81.1 MMBoe in 2019 due to revisions and production.
--- Generates Free Cash Flow for Fifth Consecutive Quarter ---
THE WOODLANDS, Texas, March 16, 2021 (GLOBE NEWSWIRE) -- Ring Energy, Inc. (NYSE American: REI) (“Ring” or the “Company”) today reported operational and financial results for the fourth quarter and full year 2020 including Ring’s year-end 2020 reserves and affirmed 2021 guidance.
Highlights and Recent Key Items
- Exceeded high end of guidance and sold 9,307 barrels of oil equivalent per day (“Boe/d”), or 856,271 barrels of oil equivalent (“Boe”) (
86% oil), in the fourth quarter of 2020, despite no new wells coming online during the quarter; - Reported a net loss for full year 2020 of
$253.4 million , or$3.48 per diluted share, and a net loss of$160.3 million , or$1.83 per diluted share, in the fourth quarter of 2020;- Reported Adjusted Net Income1 of
$20.7 million , or$0.28 per diluted share, for full year 2020 and Adjusted Net Income of$6.5 million , or$0.07 per diluted share, in the fourth quarter of 2020;
- Reported Adjusted Net Income1 of
- Generated Adjusted EBITDA1 of
$86.1 million for full year 2020 and$24.5 million in the fourth quarter of 2020; - Produced significant Free Cash Flow1 of
$39.7 million for full year 2020, including$12.7 million in the fourth quarter;- Remained cash flow positive for the fifth consecutive quarter even with the recent resumption of development drilling in Q4 2020;
- Utilized Free Cash Flow and cash on hand to pay down
$75 million of debt from the maximum amount drawn during full year 2020, including$47 million in the fourth quarter; - Performed eight conversions from electrical submersible pumps to rod pumps (“CTR”) in Q4 2020, and 29 CTR conversions in 2020, reducing future overall operating costs and diminishing costly workovers;
- Decreased lifting cost2 by
8% to$10.52 per Boe for full year 2020 compared to$11.42 per Boe for full year 2019; - Reported year-end 2020 proved reserves3 of 76.5 million barrels of oil equivalent (“MMBoe”), compared with 81.1 MMBoe at year-end 2019;
- Additions, improved well performance and technical revisions led to net upward revisions of 1.3 MMBoe in 2020;
- Reduced SEC pricing led to downward revisions of 2.7 MMBoe and production for 2020 was 3.2 MMBoe;
- Completed public and registered direct offerings aggregating
$20.8 million of gross proceeds with net proceeds of$19.4 million that provided the necessary liquidity to resume drilling operations; - In early December 2020, initiated a targeted Northwest Shelf drilling program of eight to ten wells that focuses on the Company’s most attractive drilling inventory in Yoakum County, Texas, in response to a rising oil price environment;
- Appointed Paul D. McKinney as Chairman and Chief Executive Officer and welcomed new executive team and three new Board members during the fourth quarter of 2020; and
- Affirmed full year 2021 sales volumes, operating expense and capital spending guidance.
Mr. Paul D. McKinney, Chairman of the Board and Chief Executive Officer, commented, “We ended 2020 with strong fourth quarter operational and financial results, including sales volumes of 9,307 Boe/d that exceeded our guidance. The continued execution of our targeted CTR program and other high rate of return workover projects significantly contributed to our performance during the period. These projects reduce our operating costs and help stabilize our production levels. As a result of these actions and other strategic initiatives to enhance our operational performance and control costs, we generated
“Looking back at full year 2020, I am pleased with our overall results given the unprecedented challenges Ring and our industry faced due to the pandemic and its impact on the global oil demand and supply environment. I want to thank all our employees for their hard work and tireless efforts. Our focus and dedication to executing our updated strategic vision has developed renewed enthusiasm within the Company. We are building a culture focused on operational excellence, sustainability and profitability with a clear mandate that every employee has a responsibility to ensure we operate safely and with the highest regards toward the environment. We are excited about the progress we’ve made and believe Ring is well positioned for success in 2021 and beyond.”
“As I have said in the past, we remain committed to operational excellence to steady production levels and control costs while pursuing rigorous capital discipline by investing in our highest risk-adjusted return opportunities. A clear example is our recently initiated Northwest Shelf drilling program. The first well we drilled, the Badger 709 B 6XH, was brought online January 29th and has averaged so far this month 363 BOPD, continuing to increase and currently producing over 400 BOPD. The other three wells are in early stages of cleaning up as well and are coming in equal to or ahead of our expectations. When compared to unconventional shale producers, we benefit from long life, low-decline reserves, which further support our ability to generate free cash flow even during lower oil price environments. We will continue to leverage our unique position in the marketplace to further pay down debt and potentially capitalize on accretive acquisitions that add value for our shareholders.”
For the fourth quarter of 2020, the Company reported a net loss of
Adjusted EBITDA totaled
Free Cash Flow for the fourth quarter of 2020 totaled
Adjusted Net Income, Adjusted EBITDA and Free Cash Flow are non-GAAP financial measures, which are described in more detail and reconciled to the most comparable GAAP measures, in the tables shown later in this release under “Non-GAAP Information.”
Sales Volumes, Prices and Revenues: Sales volumes for the fourth quarter of 2020 were 9,307 Boe/d (
For the fourth quarter of 2020, the Company realized an average sales price of
Revenues of
Oil and Natural Gas Production Costs: Lease Operating Expense (“LOE”), which includes base lease operating expenses, expense workovers, and facilities maintenance, was
Production Taxes: Production taxes were
Depreciation, Depletion and Amortization (“DD&A”) and Asset Retirement Obligation Accretion: DD&A was
General and Administrative Expenses (“G&A”): G&A, excluding share-based compensation, was
Operating Lease Expense: Operating lease expense was
Derivative (Gain) Loss: In the fourth quarter of 2020, Ring recorded a net loss of
In the fourth quarter of 2020 and through March 16, 2021, Ring added the following derivative positions:
| Average | Weighted Avg. | ||||||||
| Date Entered Into | Production Period | Instrument | Daily Volumes | Swap Price | |||||
| Crude Oil - WTI | (Bbls) | (per Bbl) | |||||||
| 11/25/2020 | Calendar year 2021 | Swaps | 2,000 | ||||||
| 12/02/2020 | Calendar year 2021 | Swaps | 500 | ||||||
| 12/03/2020 | Calendar year 2021 | Swaps | 500 | ||||||
| 12/04/2020 | Calendar year 2021 | Swaps | 500 | ||||||
| 12/04/2020 | Calendar year 2021 | Swaps | 500 | ||||||
| 12/07/2020 | Calendar year 2021 | Swaps | 500 | ||||||
| 12/04/2020 | Calendar year 2022 | Swaps | 500 | ||||||
| 12/07/2020 | Calendar year 2022 | Swaps | 500 | ||||||
| 12/10/2020 | Calendar year 2022 |
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FAQ
What were Ring Energy's Q4 2020 sales volumes and how do they compare to previous quarters?
Ring Energy reported sales volumes of 9,307 Boe/d in Q4 2020, which is a slight decrease from 9,549 Boe/d in Q3 2020 and 11,448 Boe/d in Q4 2019.
What was Ring Energy's net loss in Q4 2020?
Ring Energy reported a net loss of $160.3 million in Q4 2020, which translates to $1.83 per diluted share.
Did Ring Energy generate free cash flow in 2020?
Yes, Ring Energy generated Free Cash Flow of $39.7 million for the full year 2020, including $12.7 million in Q4 2020.
What is the current status of Ring Energy's proved reserves?
As of year-end 2020, Ring Energy's proved reserves were reported at 76.5 million barrels of oil equivalent (MMBoe), down from 81.1 MMBoe at year-end 2019.
How did Ring Energy's 2020 financial performance compare to 2019?
Ring Energy faced a net loss of $253.4 million in 2020 compared to a net income of $5.0 million in 2019.
Ring Energy Inc.
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