Ring Energy Q2 Earnings Call Highlights

Ring Energy NYSEAMERICAN: REI reported higher second-quarter production, improved unit operating costs and stronger realized pricing, while outlining a larger capital program intended to support longer lateral wells, multi-zone development and infrastructure expansion. The company said total sales volumes averaged 19,990 barrels of oil equivalent per day during the second quarter of 2026, up 3% from 19,351 BOE per day in the first quarter. Oil sales averaged 12,683 barrels per day. Revenue totaled approximately $104.7 million, supported by an average realized oil price of about $95.45 per barrel. Overall realized pricing rose 36% sequentially to $57.55 per BOE, while realized oil pricing increased 38%, according to Executive Vice President, Chief Financial Officer and Treasurer Sonu Johl. Lease operating expense totaled $18.4 million during the quarter, compared with $18.1 million in the first quarter. On a per-unit basis, LOE declined 3% sequentially to $10.12 per BOE from $10.41 per BOE. All-in cash costs fell 1% from the prior quarter to $21.59 per BOE. Cash general and administrative expense, excluding share-based compensation and transaction-related costs, was $3.19 per BOE, down from $3.40 per BOE in the first quarter. Johl said natural-gas prices remained pressured by Permian Basin takeaway and processing constraints, with Ring’s average natural-gas differential to NYMEX at negative $8.14 per Mcf. He said the company had seen modest improvement following the Gulf Coast Connector expansion startup and expects further relief as additional capacity becomes available later in the year. During the quarter, Ring completed an underwritten public equity offering that generated approximately $65 million of net proceeds. The company used all proceeds to reduce borrowings under its revolving credit facility. As a result, liquidity increased to about $226 million, while outstanding borrowings declined to roughly $360 million. Ring said its leverage ratio improved to approximately 1.7 times on a last-quarter annualized basis and that it remained compliant with its financial covenants. The company continues to target long-term leverage below 1.25 times. Chairman and Chief Executive Officer Paul McKinney said potential proceeds from dispositions of non-core assets, which Ring continues to evaluate, would also be directed toward debt reduction. He did not provide an expected value or timing for any potential asset sales during the question-and-answer session. Ring spent approximately $43.2 million on capital expenditures in the second quarter as it expanded investments.