Market Overview

Ring Energy, Inc. Releases Second Quarter 2018 Operations Update


Ring Energy, Inc. (NYSE:REI) ("Ring") ("Company") today
released its operations update for the second quarter of 2018. In the
three months ended June 30, 2018, the Company, on its Central Basin
Platform ("CBP") asset, drilled 14 new horizontal San Andres wells, and
were in the process of drilling number 15 on its CBP and one on its
North Gaines Property at the end of the quarter. All of the wells
drilled in the second quarter were one mile long. In the second quarter,
the Company finished testing and filed Initial Potentials ("IPs") on 18
new horizontal San Andres wells – two wells which were drilled in the
third quarter of 2017, three which were drilled in the fourth quarter of
2017, seven which were drilled in the first quarter of 2018 and six
which were drilled in the second quarter of 2018. The average IP on the
18 wells tested in the second quarter 2018 was approximately 440 Barrel
of Oil Equivalents ("BOE") per day, or 103 BOE per 1,000 feet. This
compares to 12 new horizontal wells which the Company finished testing
in the first quarter of 2018, and had average IPs of 436 BOE per day, or
102 BOE per 1,000 feet. In addition, the Company had 14 new horizontal
San Andres wells which were in varying stages of completion and testing
on June 30, 2018.

For the six months ended June 30, 2018, the Company has drilled 24 new
horizontal San Andres wells on its CBP asset. In addition, the Company
drilled one new horizontal well on its North Gaines Property, one new
horizontal Brushy Canyon well on its Delaware Basin Property and three
saltwater disposal wells. In the first six months of 2018, the Company
tested and filed IPs on 30 new horizontal wells. The average IP on the
30 wells was 438 BOE per day, or 103 BOE per 1,000 feet.

North Gaines Property –

In the Company's first quarter 2018 operations update release and
subsequent financial and operations conference call, Management
commented that the first horizontal well on the North Gaines Property
had been drilled and that the Company would use the first horizontal
well as a "test" well with the intended purpose of determining the best
completion technique(s) for future development. Mr. Danny Wilson, Ring's
Executive Vice President and Chief Operating Officer, commented, "We are
very pleased with the results we are currently seeing from the first
North Gaines well. We knew that even though we were still drilling the
San Andres formation, the geology was different in Northern Gaines
County, and we needed to test and examine several completion techniques
to avoid costly mistakes and maximize our returns on future wells. The
first well had a horizontal leg of approximately 3,000 feet. We divided
the well into three 1,000 foot sections, using different fracing and
stimulation techniques in each section. Collectively, the treated
interval had a total effective length of approximately 1,000 feet and we
are seeing consistent preliminary results exceeding 130 BOE per day with
above average oil cuts. Based on these results, we are currently in the
process of drilling and completing the second and third horizontal wells
on our North Gaines Property."

Delaware Basin Property –

Management also stated in the Company's first quarter 2018 operations
update that it had finished drilling its first horizontal well on its
Delaware Basin Property in the Brushy Canyon formation and was awaiting
completion. The well has been completed, tested and is currently showing
preliminary results exceeding 130 barrels of oil per day and over
2,800,000 cubic feet of natural gas per day. Mr. Danny Wilson, stated,
"We are very encouraged with the initial results we are seeing, and are
currently building out and improving our infrastructure in order to
transport the gas to market. We anticipate gas sales to commence early
in the fourth quarter of 2018 and are currently evaluating future
development opportunities over the Company leasehold."

As a result, net production for the second quarter of 2018 was
approximately 532,000 BOEs, as compared to net production of 338,000
BOEs for the same quarter in 2017, an approximate 57.4% increase, and
net production of 507,000 for the first quarter of 2018, an approximate
5% increase. Estimated net sales for the second quarter of 2018 were
approximately 522,500 BOEs. The difference between the second quarter
2018 production and sales amounts, which was not sold in the second
quarter 2018, is inventory and will be included in the sales amount for
the third quarter of 2018. June 2018 average net daily production was
approximately 6,605 BOEs, as compared to net daily production of 2,725
BOEs in June 2017, an approximate 142.4% increase, and net daily
production of 6,005 in March 2018, an approximate 10% increase. The
average estimated price received per BOE in the second quarter 2018 was
$56.90. For the six months ended June 30, 2018, net production was
approximately 1,039,000 BOE, as compared to 604,000 for the six months
ended June 30, 2017, an approximate 72% increase.

Mr. Kelly Hoffman, Ring's Chief Executive Officer, stated, "Our second
quarter has continued to grow and build on the success of prior quarters
despite some temporary delays that have been resolved. The continued
results we are seeing from the development of our CBP, and the initial
results from both North Gaines and Delaware Properties, are exceeding
all our expectations. We have been seeing and evaluating acquisition
opportunities in both the CBP and Delaware Basin. In June, we increased
the borrowing base of our senior secured credit facility to $175
million. By doing so, we have positioned the Company to take advantage
of those opportunities. Our goals remain the same – develop our current
assets, look for complementary assets that will be accretive for the
Company and its shareholders, and maintaining our focus on being cash
flow positive by year end."

About Ring Energy, Inc.

Ring Energy, Inc. is an oil and gas exploration, development and
production company with current operations in Texas.

Safe Harbor Statement

This release contains forward-looking statements within the meaning of
the "safe-harbor" provisions of the Private Securities Litigation Reform
Act of 1995 that involve a wide variety of risks and uncertainties,
including, without limitations, statements with respect to the Company's
strategy and prospects. Such statements are subject to certain risks and
uncertainties which are disclosed in the Company's reports filed with
the SEC, including its Form 10-K for the fiscal year ended December 31,
2017, its Form 10-Q for the quarter ended March 31, 2018 and its other
filings with the SEC. Readers and investors are cautioned that the
Company's actual results may differ materially from those described in
the forward-looking statements due to a number of factors, including,
but not limited to, the Company's ability to acquire productive oil
and/or gas properties or to successfully drill and complete oil and/or
gas wells on such properties, general economic conditions both
domestically and abroad, and the conduct of business by the Company, and
other factors that may be more fully described in additional documents
set forth by the Company.

View Comments and Join the Discussion!