Ring Energy Inc. Water Tower Research Virtual Insights Conference

Hey, Jeff, it is a pleasure, and thank you for inviting us.

Well, the first thing that comes to my mind is a disciplined management team, committed to the pursuit of excellence and really basically focused on the basic fundamentals of what really drives value for shareholders. The second thing that I would think of, and jump in here, Sonu, anytime you would like. The second thing is basically the assets under management. Assets with high margin to low operating costs, that basically allows you to withstand low oil prices. Assets with shallow declines and low operating costs allow the company to withstand all kinds of things, but essentially, shallow declines and long lives basically reduces your maintenance costs, provides resilience to oil price volatility. It does a lot of things for you.

Third thing I also think about is an adequate inventory of opportunities necessary to sustain the organization, maintain your production, maintain your liquidity with the banks, and also have an inventory enough to grow. Growing organically, in our opinion, is really one of the most effective ways of generating value. Sonu, you have anything you want to add?

No, I think that summarized it perfectly, Paul. Just where we are in the phase of a life cycle of our business, Paul and team has done a great job of creating the runway of opportunities that we have today, and we have the capital and discipline to go after it now.

Yeah. Those things combined basically lead to what the shareholder's interested in. They want to see EBITDA growth. If you have an asset base that is, like I said, high operating margins, low operating costs, shallow declines, and long lives, you have the staying power to do what you need to do with an inventory of high return opportunities to drill. All of that leads to sustainably delivering EBITDA and growing EBITDA for the shareholders.

Yeah. I'll take the first part of that. The assets when we bought them at the time, and the technology that was available at the time, and we're talking about a very short period of time ago. We anticipated that with the Stronghold acquisition, the Founders acquisition, and the Lime Rock acquisition. Lime Rock was predominantly in an area where we had already gone horizontal in the San Andres. But those other two were primarily considered to be opportunities to drill inexpensive vertical wells and apply the modern multi-stage frack technologies that's been developed for horizontal wells to these vertical wells, these inexpensive vertical wells, and generate really high returns.

But since that time, we've learned that many of these stacked pay zones, although they're not as thick as many of the shales in the Delaware and Midland basins, these longer laterals have demonstrated that they too can be economic. Especially when you develop them all at the same time on a location. That's what we call co-development. That is something that we did not think of early on. Then because the technology just wasn't there, we have proven now that that is developing a significantly higher undeveloped inventory of drilling locations. It's really huge in terms of improving the capital efficiency, delivering more barrels a day of production, and more barrels of reserves per dollar spent. Yeah, it's really impactful. From a financial standpoint, it also will be impactful. I'll turn that over to you, Sonu.

Yeah, and just to add to Paul's point, if your listeners go to our Q2 earnings presentation and go to page 7, it really highlights the point that Paul describes. All the acquisitions that were done to date were essentially done for the vertical drilling program and all the horizontal development that we're prosecuting today. What you'll notice on the page is where all the horizontal development is occurring in the Central Basin Platform, we're in all those hotspots.

Got it. It has given us an opportunity set, which then leads to your second question, Jeff, about just the additional scale.

Ring as a company right now has more optionality than it has ever had in its past. We are this year going to pay down debt. We get to accelerate our development program, go into 2027 stronger than we ever had, and just with more optionality of what we want to do with our capital.