Stock in Concentration: Ring Energy, Inc. (NYSE: REI)

On 15 Jan 2020, Ring Energy, Inc. (NYSE: REI) changed -4.03% to recent value of $2.62. The stock transacted 628887 shares during most recent day however it has an average volume of 1175.57K shares. It spotted trading -60.27% off 52-week high price. On the other end, the stock has been noted 113.01% away from the low price over the last 52-weeks.

Ring Energy, Inc. (REI) reported recently financial results for the three months and nine months ended September 30, 2019. For the three-month period ended September 30, 2019, the Company stated oil and gas revenues of $50,339,105 contrast to revenues of $32,687,179 for the quarter ended September 30, 2018. For the nine months ended September 30, 2019, the Company stated oil and gas revenues of $143,471,645, contrast to $92,503,453 for the nine months ended September 30, 2018.

For the three months ended September 30, 2019, Ring stated net income of $9,888,356, or $0.15 per diluted share, contrast to net income of $5,693,628, or $0.09 per fully diluted share for the three months ended September 30, 2018. For the nine months ended September 30, 2019, the Company stated net income of $33,353,053, or $0.50 per diluted share, contrast to net income of $16,079,068, or $0.27 per fully diluted share for the nine-month period ended September 30, 2018.

For the three months ended September 30, 2019, the net income included a pre-tax unrealized gain on derivatives of $1,877,368 and a non-cash charge for stock-based compensation of $792,836. Not Including these items, the net income per diluted share would have been $0.12. For the nine months ended September 30, 2019, the net income included a pre-tax unrealized gain on derivatives of $3,066,913 and a non-cash charge for stock-based compensation of $2,436,035. Not Including these items, the net income per diluted share would have been $0.42. The Company believes results not including these items are more comparable to estimates provided by security analysts and, therefore, are useful in evaluating operational trends of the Company and its performance, contrast to other similarly situated oil and gas producing companies.

The average commodity prices received by the Company were $54.59 per barrel of oil and $1.14 per MCF of natural gas for the quarter ended September 30, 2019, contrast to $57.00 per barrel of oil and $3.76 per MCF of natural gas for the quarter ended September 30, 2018. On a BOE basis for the three-month period ended September 30, 2019, the average price received was $48.93, contrast to $54.32 per BOE for the three months ended September 30, 2018. The average prices received for the nine months ended September 30, 2019 were $54.03 per barrel of oil and $1.35 per MCF of natural gas, contrast to $59.65 per barrel of oil and $3.42 per MCF of natural gas for the nine-month period ended September 30, 2018. On a BOE basis for the nine-month period ended September 30, 2019, the average price received was $49.55, contrast to $56.43 per BOE for the nine months ended September 30, 2018.

The average price differential the Company experienced from WTI pricing in the third quarter 2019 was less than $3.00.

As of September 30, 2019, the Company had entered into derivative contracts in the form of costless collars of NYMEX WTI Crude Oil prices in order to protect the Company’s cash flow from price fluctuation and maintain its capital programs. “Costless collars” are the combination of two options, a put option (floor) and call option (ceiling) with the options structured so that the premium paid for the put option will be offset by the premium received from selling the call option. The trades were for a total of 5,500 barrels of oil per day for the period of April 2019 through December 2019 and 2,000 barrels of oil per day for the period of January 2020 through December 2020. The average prices for the 5,500 BOPD under contract for 2019 are: Floor = $50.00 / Ceiling = $68.19. The average prices for the 2,000 BOPD under contract for 2020 are: Floor = $50.00 / Ceiling = $65.61. The “Costless Collar” pricing does not take into account any pricing differentials between NYMEX WTI pricing and the price received by the Company.

REI has a gross margin of 69.20% and an operating margin of 18.80% while its profit margin remained 15.40% for the last 12 months. Its earnings per share (EPS) expected to touch remained -10.30% for this year while earning per share for the next 5-years is expected to reach at 37.00%.  The company has 70.42M of outstanding shares and 53.93M shares were floated in the market. According to the most recent quarter its current ratio was 0.6 that represents company’s ability to meet its current financial obligations. The price moved ahead of -3.84% from the mean of 20 days, 13.63% from mean of 50 days SMA and performed -7.94% from mean of 200 days price. Company’s performance for the week was -14.10%, 14.91% for month and YTD performance remained -0.76%.

 

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