REI Earnings Prediction
The chart below shows how REI performed 10 days before and after its earnings report, based on data from the past quarters. Typically, REI sees a +2.90% change in stock price 10 days leading up to the earnings, and a +1.80% change 10 days following the report. On the earnings day itself, the stock moves by -0.07%. This data can give you a slight idea of what to expect for the next quarter's release.
REI Key Earning Data
2024/Q4
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REI Earnings Analysis
Ring Energy Inc Corporation (REI.A) Earnings Conference Call
Positive
Sales Growth Highlights: Total sales grew 8% over 2023 to a record 19,648 barrels of oil equivalent per day, and oil sales grew 6% to a record 13,283 barrels of oil per day.
Cash Operating Cost Reduction: Reduced year-over-year all-in cash operating costs on a per Boe basis by 2%.
Increased Capital Efficiency: Drilled 13 more wells in 2024 than the prior year for slightly less capital, representing a substantial increase in capital efficiency.
Debt Reduction Achievements: Paid down debt by $40 million and $70 million since the closing of the Founders acquisition in August of 2023.
Adjusted EBITDA Performance: Generated adjusted EBITDA of $233.3 million despite a 7% reduction in realized prices.
Consistent Positive Cash Flow: Delivered adjusted free cash flow of $43.6 million, remaining cash flow positive for over five years.
Proved Reserves Increase: Grew proved reserves by 4.4 million barrels of oil equivalent or 3% to 134.2 million barrels of oil equivalent, with organic additions of 16 million barrels of oil equivalent.
Acquisitions Boost Inventory Growth: The Stronghold and Founders acquisitions exceeded expectations and significantly increased undeveloped inventory of highly economic drilling locations.
Strategic Transaction Benefits: Proposed Lime Rock transaction expected to enhance strategic foothold and provide near-term opportunities for cost savings.
Sales Growth Projection: 2025 guidance includes an average annual sales midpoint of 21,000 barrels of oil equivalent per day and 13,900 barrels of oil per day, indicating growth.
Capital Spending Discipline: Maintained a disciplined capital spending program while focusing on maximizing free cash flow generation.
Negative
Production Decline Due to Shutdown: Production decreased by 2% in Q4 2024 compared to Q3 2024, attributed to a third-party gas plant shutdown due to a fire.
Oil Price Decline Impact: Realized prices for oil decreased by 7% in Q4 2024, contributing to a 7% decline in overall revenue from $89.2 million in Q3 to $83.4 million in Q4.
Crude Oil Price Differential Decline: The average crude oil price differential from NYMEX WTI futures pricing worsened to negative $1.42 per barrel in Q4 from negative $0.56 per barrel in Q3.
Derivative Contract Losses: The company reported a significant loss on derivative contracts of $6.3 million in Q4 2024, compared to a gain of $24.7 million in Q3 2024.
Net Income Decline: Net income dropped to $5.7 million in Q4 2024 from $33.9 million in Q3 2024, with adjusted net income also declining from $13.4 million to $12.3 million.
Capital Spending Concerns: The company anticipates needing to cut back on capital spending if WTI oil prices remain at or below $65 per barrel, which could negatively impact production revenue and EBITDA levels.
Stock Price Decline Concerns: The stock price is at its lowest since 2021, despite improvements in reserves and production per share, indicating potential market concerns about the company's valuation.
REI FAQs
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REI Earning Call Sentiment
Ring Energy, Inc. (REI) Q4 2024 Earnings Call Transcript
REI.A
0.86%Positive
The earnings call presents mixed signals. While there are positive aspects such as debt reduction, increased production, and free cash flow, there are also concerns like operational risks, market competition, and decreased net income. The Q&A session highlights management's cautious approach to future growth and acquisition, adding uncertainty. The absence of a market cap suggests limited stock movement. Overall, the positive and negative factors balance each other out, resulting in a neutral sentiment.
