- Ring Energy (REI, Financial) has reduced its second quarter 2025 capital spending guidance by over 50%, setting a new midpoint of $18 million.
- Despite the cut in spending, sales volume guidance remains strong with expected production of 14,200 barrels of oil per day (Bo/d) and 21,500 barrels of oil equivalent per day (Boe/d).
- The company's strategy focuses on maximizing cash flow and strengthening the balance sheet amidst declining oil prices.
Ring Energy, Inc. (REI) has announced significant adjustments to its capital spending plan for the second quarter of 2025, reducing the guidance by more than 50% to a midpoint of $18 million, in response to recent declines in oil prices. Despite this reduction, the company maintains its production guidance, expecting average daily outputs of 14,200 barrels of oil and 21,500 barrels of oil equivalent.
The production mix for REI is projected to be 66% oil, 18% natural gas liquids (NGLs), and 16% gas. The company also reaffirmed its Lease Operating Expense (LOE) guidance, with a midpoint of $12.00 per Boe, demonstrating operational efficiency despite budget cuts.
Paul D. McKinney, Chairman of the Board and CEO, emphasized the company's focus on maximizing cash flow and fortifying its financial position to navigate commodity price volatility. The decision to curtail capital spending is attributed to strong first quarter drilling results and recently acquired Lime Rock assets. Moreover, the company's breakeven costs are reported to be well below current oil prices, further supporting its fiscal strategy.
Updated guidance for the remainder of the year will be disclosed with the first-quarter results, expected in early May 2025. This strategic realignment positions Ring Energy to effectively manage potential risks associated with extended periods of low oil prices while ensuring shareholder value.
