Ring Energy Inc (REI)

[littlejohn]

REI should consider discounting their Delaware

Basin property of about 18,000

net acres to reduce debt...

https://www.ringenergy.com/our-operations/delaware-basin

REI has good operations in NWS

and CBP to support their higher debt

after acquisition in 2022 was done and

hold onto the Delaware Basin property...

Economics of reducing debt now with

higher interest cost favor selling it

more than holding it...

REI revolver debt went from about

$280 million at 03/31/2022 to about

$422 million at 03/31/2023...

Around $142 million higher due to

2022 acquisition...


Problem is higher interest rates have

increased the interest costs...

Interest cost of about $3.4 million at

end of 03/31/2022 grew to about

$10.4 million at end of 03/31/2023...

Economics now says there is greater

incentive to price the Delaware Basin

property to sell with the current higher

oil price market...

And that potential sale paid on the

revolver debt would reap compounding

benefits going forward with much lower

interest costs on the debt revolver...

03/31/2022 info...

https://d1io3yog0oux5.cloudfront.net/_35de2e812ee925b7646bd8a09f088625/ringenergy/db/856/7666/pdf/REI+Q12022+Earnings+2022+Investor+Deck+5.11.22+VFINAL.pdf

03/31/2023 info...

https://d1io3yog0oux5.cloudfront.net/_35de2e812ee925b7646bd8a09f088625/ringenergy/db/856/7714/pdf/REI+1Q2023+Earnings+2023+Investor+Deck+5-4-23+FINAL.pdf

And there are plenty of places for

REI to drill on their NWS and CBP

properties with more funds available...

Delaware Basin property isn't really

cheap either to be selling from...

https://www.reuters.com/business/energy/market-us-oil-acreage-booms-along-with-crude-price-recovery-2021-06-07/


So we watch...LJ