REI - Earnings call transcript Q2 2019

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Operator

Greetings, and welcome to the Ring Energy, Inc. Conference Call to discuss the 2019 Second Quarter Financial and Operating Results. At this time all participants are in a listen-only mode. The question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. to conference like host to now Mr. would turn over the our I of Directors. Board Rochford, the Tim Chairman of Thank you, sir.

You may begin.

Tim Rochford

our joining Thank like you, operations today conference for Ring financial to would quarter on us thank and call six operator, welcome all and and months XXXX second I Energy. and for listeners

our the Chief in of Broaddrick, from addition on and Investor will Relations. be Financial Executive who Board; President; Parsons, the David Chief Kelly myself our again joins me of course, of Wilson, President Joining our Danny to call today Hoffman, Officer; Fowler, us Bill Lamb, Engineering; Chairman Executive Tim Operations; of Officer; Rochford, Vice Randy Vice President Hollie

quarter months and XX, XXXX. Today, June six the we will cover second financials ended the and the operations of

provide of our quarter may will the review, in up some as review have. thus current to that going conclusion it third turn for the operator call will over results any open the you relates the progress, questions At insight to to We the back and far we’re the we of XXXX. and

I’m to Now, to the financials. Randy give Randy? going Broaddrick review a us ask on

Randy Broaddrick

Thank Tim. you,

XXXX. be reference are safe Before would I like which to of the this within provisions harbor Reform during any we of forward-looking Litigation statements make may Act the meaning begin, the made call that of Securities Private

X, XXXX. I complete explanation, would refer Wednesday, you a August release For our to issued

on have a company do not the www.ringenergy.com. one be If of the you release, will website at copy posted

million of and in of of and net million and the income XXXX, as company $XX.X oil million revenues June $X.X second gas of XX, ended months of revenues net $XX.X quarter $XX.X compared to three XXXX. the the For million income has

revenues ended $XX.X and to For June and million $XX.X revenues income of company income gas XXXX, million of million. oil $XX.X as net net of million compared $XX.X of and XX, the the at had months six

income deferred and net gain XXXX, $X.X months of related $XXX,XXX adjustment the hedges of benefit three acquisition of includes million, a on unrealized tax a approximately For the period $XXX,XXX. pre-tax of costs

items, hedges $XX.X month income items, income these million. $X.X on net period pre-tax loss of net approximately Without would have The have been these income $X.X million. includes of unrealized net million. Without been three would a XXXX approximately

months includes approximately For $X.X the XXXX, of gain Without pre-tax income million, hedges of adjustment six million. $X.X net net acquisition approximately benefit costs $XX.X related of and million. period million the income these on $X.X deferred items, been have a tax of would a unrealized

of on million. $XX.X would items, a net period six these million of unrealized $X.X provision Without net included month income pre-tax $X.X million. loss have been and income XXXX additional The hedges an of tax approximately

of gas the barrel, $XX.XX decrease from a was XX% X% decrease our was three XXXX received from quarter of months XXXX. XX, price received XXXX, received was a For from our and per a the decrease per $X.XX basis, price $XX.XX, the XXXX, XXXX per price BOE of ended second oil June price. X% a On Mcf,

oil our as cost per Production XXXX. compared the a June in a XX, per for X%, months $XX.XX $XX.XX ended of from XX% costs as of received months gas the $XX.XX three decrease for to price apologize. I Production was BOE six XXXX XX, months ended a double to decreased XXXX decrease XXXX. the six but On per $XX.XX, check of in compared received ended BOE from June to BOE $XX.XX XXXX MCF, our XX, the months a decreased the to June that. I'll XX, $XX.XX received per XXXX XXXX, decrease For price ended per $X.XX XXXX. June six basis, for barrel, XX% was and price was

on have We cost ongoing expect our are still production will it average. to our Wishbone acquisition below at per evaluating historical be the ultimate or but impact we BOE, the

gas values commodity taxes oil production the on of our correlated expense based are and so sold, production taxes received. directly prices Most is to

a as continue should remained relatively of and production be. to percentage revenues Our flat taxes

depreciation, accretion in the of ended BOE BOE depletion to asset decreased including XX, for total for amortization, retirement Our per BOE the $XX.XX and $XX.XX to June months same obligations per compared as XXXX, three period per XXXX.

for $XX.XX DD&A six XXXX. calculated period in per the XXXX the amounts. BOE bulk to $XX.XX oil BOE XX, of per amortization for subject decreased compared gas and per Our our Depletion months constitutes on these BOE June ended the to as properties to total same

total XX% for XX% period to period three months comparable XXXX ended the in versus XXXX. DD&A approximately period amounts, increased by XX, the six months approximately the from As our and June

Our period $X.X six overall for ended compared for and increased three months million expense and XXXX. the same in administrative $X.X months million the XXXX ended XX, general to June the as

approximately However, $X.X three acquisition-related million we the additional period increases $XXX,XXX which months XXXX the for approximately incurred was these are million during the period. Without $X.X approximately months during $X.X million the three and months period from the months six cost, of costs for six in period.

and related Excluding in $X.XX an to in six the a equates reduction per on basis, BOE increase this from XXXX in from to for $X.XX $X.XX three period. months XXXX to the for costs, the XXXX a $X.XX XXXX months period in acquisition

XX, $X.XX months or retirement a exclude XXXX assumption ended share encouragement basis, per reported. $XX CapEx acquisition diluted XXXX. On at amounts CapEx was costs These the with from $XX and approximately obligation. development the the million the income months approximately as quarter related puts $XX This of Second approximately the development was million June million. first along the asset six XXXX of for three quarter

compensation, the been deferred gain $XXX,XXX of and unrealized on the Excluding benefit, share-based acquisition income pre-tax charge for $XXX,XXX the hedges would $XXX,XXX million, G&A $X.X tax costs have related $X.XX. in included non-cash the the

million per pre-tax XXXX. in excluding charge $X $X.X to share-based a realized or reported the as and This $X.X non-cash per for on on $X.XX share is loss unrealized hedges loss compared compensation of hedges, $X.XX million income million share

the six as the months June XX, ended XXXX, diluted reported. share income was per For $X.XX

related $X.X the million, $X.X on the the non-cash for million benefit, in Excluding unrealized of deferred and $X.X acquisition costs million G&A million pre-tax tax $X.X compensation. the share-based charge included hedges gain

was $X.X compared excluding non-cash in The is $X.XX per unrealized share hedges, share loss million on compensation loss to million and the or $X.XX $X.XX. a per share-based million reported income This on XXXX. the of as $X.X income realized charge for derivatives, $X.X

million XX, XXXX, on borrowing of $XXX.X of hand the credit drawn of As June and base had $XXX facility had our on $XX.X million. we million cash

compared per had XXXX. share XX, $X.XX the months approximately For June adjusted million, diluted approximately million of diluted or to the $XX.X same ended share, we period XXXX, for $XX.X per EBITDA or three $X.XX in

million XX, For ended same period in or XXXX. six EBITDA the June to or $X.XX months we per compared $XX.X of share diluted $X.XX per for million, approximately had $XX.X approximately adjusted diluted the XXXX, share

turn Tim. back With it that, to I'll

Tim Rochford

you. I that. operations. Randy, to ask thank the Kelly a right, quarter us All overview appreciate Kelly? going and to give on I'm second recap

Kelly Hoffman

everyone Thanks, In the company months joining for the the call. San three new wells. us Tim. ended drilled horizontal Andres on And thanks XX June XX,

horizontal wells wells, drilled seven Platform and Our X.X five horizontal one-mile horizontal wells. we asset Central two mile new Basin

wells, Shelf; testing six Central Off Northwest newly the were on was Basin one-mile were wells the completed completion four we're horizontal Shelf two initial in new the are the at two stages the and drilled wells, wells quarter. end and and two process the on waiting two of five as Northwest Northwest had more our of property, and on completed, and X.X Andres drilled drilled potentials Shelf. Central And Basin finished XX of horizontal seven in filed. were on two horizontal Platform Platform we and Shelf Well mile testing; various acquired drilled, the drilling two on Northwest four San that

thousand calculates barrel thousand XXX Gentry and per first XXX an XXX to of A of E was XH per of IP per per had one foot. well, JR and is an the XXX The oil A The equivalents XX day, day XH BOE second equivalents Bruce barrel BOE oil which Sooner with IP XXX foot, at of that

forecasts seeing and BOE the foot we're of average Shelf exceed continues on our the foot. with Basic curve all wells preliminary horizontal IPs pleased seeing all thousand per Central and type our Northwest our based thousand average XX very to the on on Platform IP are assets, results continued We’re XXX BOE the per we're of results on plus

production BOPD, time the operations result, XX,XXX update net acquired day This BOEs XXX,XXX of both As the that's on Northwest second about quarterly for the properties. XXXX is approximately combines a per the first was Shelf the equates newly and Ring to quarter basis. a that

at a remember net looking like had of and know to average July into $X, also looking the listeners I however want BOEs in XXXX came pretty previously for We're side day. approximately note this to per XX,XXX was that. today, strong the up we $X and that approximately the August snapshot call if on three barrel feeling reported, we're going is A you point, everyone of less about it production when forward June slightly here. per maybe around daily differential

more going So Thank operations I’m a you. going moving to update give our detail to it Danny to with on over current little and to – that I'm and some forward. you turn Hollie on plan

Danny Wilson

They Canyon a in few horizontal for Thanks, million wells. everyone of the by right. production of of wells northeast are the XX% X.X out the Hugin of the of year production start part two combined which on giving in being located these of and our call. you update All have our wells barrels oil. continue over Basin to feet existing at to of BOE Kelly our is impressive particularly XH, XXX want produce Delaware combined and thanks XXX,XXX XH on of day to Out gas. rate oil Since Brushy the I and which and an per have beginning cubic continue acreage. our

be our combined for on those our San activity, the XH up currently acreage. quarter. XH Ellen our acreage, drilled Shelf have produce newly to rate wells B. Peters we month. oil per the by are acquired two To this our sixth and this QX you grilling been Gaines All On of drilled middle and We well the final a Andres the XXX planned well quarter on as should quarter Northwest it of of as finishing number next North day. our continue at barrels wells, update of horizontal

area We’re two drilling this for reasons.

fulfilled due we being the on that for the results our to Basin the are year; Shelf. obligations second reason Platform the the on and drilling Northwest have first we Central The early seeing is

BOE depth of our are two conventional exactly has and area. X,XXX for not Results checks Kelly XXX of in importantly As reservoir It’s high shale; Shelf, IP a and at looking yields feet. first running every XXX had The room. and day. that's acreage. a per shallow It approximately and dolomite, like we dolomite costs the returns project mentioned Northwest a bought we acquisition the plenty over Wishbone this why a wells are on development a has it’s low most it box the

we Northwest Shelf, the the As we this we’re with bulk properties over even pleased the and to that our we as our area CBP early the plan are drilling next do more results encouraged why of on in by seeing are is year.

on year we're Northwest Just obligations on expectations results are we the our the drilling for because the to CBP. and the our exceeding have be fulfilled Shelf clear,

process XXXX budget, announced Also through thought made to we the want to behind our July. you which we've changes late the in spending capital walk

key was through as budget. revised focus points main on Our we three worked the

as cash obtaining possible. on flow neutrality concentrated were quickly as we First,

Secondly, managing our maintaining we growth. modest And were debt. third, year-over-year

released a Wishbone preliminary an the higher. the the few preliminary breath, in In that for had closing a we for would and properties drilling which XX budget of the updated a budget we budget, would that we likely $XXX operate included was early release year. chance same million, which once wells the a this horizontal to we months, reiterated be April, After acquisition of

internal that $XXX our likely would would estimates increase $XXX which to Our around million. have of spending to were raise million we for XX% an year the

to This by while addressed. property, we that spending closing sale. marketing they from needed work evaluated October that work be until realized was Wishbone greater Once largely This the opportunities April the most lack backlog fell lack due of the even we of capital subsequently of period we that the needed of main realized XXXX control spending the to six physical were categories. an property close this was and of Once be there in occurred over into month of of performed, to four the year. we the early took a

sand The accumulation to was on to first workovers and shut-in, need reduced were wells, in the or wellbore. perform which iron the production scale, had due

needed which ESPs be had sized. we Second, with to wells properly

systems Third, infrastructure allow reliability pump. to to we increase ESP activity. the wastewater handling be for had wells which of converted projects from forth the needed drilling and streamlining rod electrical an to And future a to

see beyond were we As the we identified further was and back we original going to the could looked our can with we increase program budget the completed drilling budget time forward we took and if project original that had anticipated evaluation, increase and that to our with additional the that perform our move work, substantially at We the move program over drilling forward well a XX%. At step options. anticipated XX%. the XX

is year-over-year and growth, jeopardized debt of cash of or the can we That goals. of converting back to ensure two chose meet flow to our goals. second working all in However, with order that could of three equipment three where through reaching managing we this scale get rod option our getting our our enough the overwhelmed, possible. have and pumps the downsizing drilling production We the go modest rightsizing or our ESP option could maintain latter house stated neutrality by

now she's workovers. to going I'm Lamb, go turn through our behind going over the to Holly performing and reasons Engineering, Vice to economics of these President and the discussion

Hollie Lamb

I like the on focus of to optimization. Danny. and the economics Thanks, workovers

sand wellbore. be the with not some don't on start scheduled in profile. and identified every scale of obstruction the of that associated portion workovers They well. sulfate. their iron type based Let's and be These downhole frac be combination can can means a predictable. workovers. the happen either are and The cannot in lateral They are of various They including obstructions downhole scale or calcium consist with can they of by production changing

with pressure lower event scale a obstructions be Based in involving wellbore the on associated maximum wellbore from to a chemically occurrence are be then the wellbore. the the are occurrences at with our a excess out formation single generally mechanically higher and wellbore our after exceeds In treated. to areas, profile. return payouts experience, in the These and In year. normal life XXX% These our drilled wells pressure drop these well's less history. early some events many place, than production seen can with favorably can we in the the pressure production happen materials rates cases taken actually has metrics drill cases, of have the both have wells. these in These very of but previous new one profile intervention on return the compare

Let's switch and optimization. now talk about gears

we Specifically which barrels move the ESP, Early optimizations of electric install our or pumping X,XXX equipment. X,XXX fluid an in day. pump size to life of a a to is well, submersible of

with well the smaller and ESP sense makes to to draw, these electrical pump reduces extending where pump. decline the makes will horsepower, a wear reducing a it the since it to Eventually size it ESPs to naturally a the also replace change of the rod runtime and declined, ESPs, sense tear right wells point As on these out pump. the demand,

typical A these to runs repair equipped by on translates and on typical into ESP time much we pulling maintenance we XX% electrical occurs, now work that Since $XX,XXX pumping of see reduction a usage, rod XX% around to continued $XXX,XXX substantial every being pulling wealth The also is the as between to tremendous on this an repair $XXX,XXX. opposed equipment the benefit. costs surface for as is due reduction in downhole. A LOE as on well. we in an The pump going but well. aforementioned as located are the job reduction reduced $XX,XXX benefits forward. equipment this have Once on most job

LOE of conversion first cost wells economic forward. The to we month doubt there return LOE savings initial The extension is and rods lower the on well. years have lowered a a going the for and translates servicing reserves. optimization, costs out the to every This an many out $XXX,XXX. benefits by pays and This workovers life tomorrow $XXX,XXX that no between the conversion pull extends and decision time as will on these dividends well for right the come. Based is and and we both to laid this economic

the At point Danny update. like it to I hand this back operational wrap-up to to would

Danny Wilson

budget three key To our Holly. you, discussions Thank recap started goals. with we

cash as still and maintaining modest third, flow as year-over-year second, First, neutrality reaching debt; growth. our possible; managing quickly

We we the physical In property. and key started drilling took properties, property early in April over opportunities Wishbone budget. immediately four of the We on control areas. the analyze the preliminary the issued identified

over working the being First wells. of underperforming

existing costs. of lower ESPs sizing right Second,

streamline rod reduces pumps costs, four, projects thereby future which to possible water And three a late future CapEx and July, which and performing lifting of reducing increased drastically budget ultimately facilitate EURs importantly to And meet finally key our all could the costs, in Third, pulling LOE. most increase converting greatly certainty we CapEx drilling. we revise reduces and which our future and were that goals. handling infrastructure issued future lowered yields

to it to and that, with leasing And discussion. David going over acquisition cover our merger and I'm to turn

David Fowler

Thank you, Danny.

an are active was Ring, the the quarter and for doubled size we've all acquisition you As of had exciting the it second the of aware as assets that transitionary company. truly Wishbone with

Ring or for of market In essentially was for The the on a value. come. value oil and our and great going a shareholders me. lot being assets refer to our asset years were we and a are assets were PDP able what established assets fit these during provide acquisition as we as growth for perfect and the buyer's base a to shelf. consolidator short, a that a core distressed Ring, buy Excuse now market on Besides to the platform price for Ring to

mostly department of our acres stay grossing the and program. into system, focused on target somewhat and and both limited concentrated offsetting acres, positions, an on net our land while XXX,XXX upper to have on of assimilating job now Wishbone more the net shelf our a platform the locations. is has the and leasing shelf The Regarding rig done is areas that our in few or leasing, position ahead drilling acres since leases almost activity the up we diligently excellent an worked tier they operations platform

significant across A&D. had indicating still Now and to retracted and assets have market. sales beginning taken regarding their the numerous Permian of to in conditions be and market a the enough M&A sellers difficult see bid finish market to have Hopefully that from A&D line. the more continues ask the we're improve elsewhere year activity. we'll failed the buyers Since to to companies deals see door soon it The make across and we'll get open the

I Permian With of the MDRs Permian our refer of hope shadow you the to ongoing attending non-conventional We're differentiate several the the there. in year the ourselves from what conferences to now and and I'll between operations being in or that effort a of lot in shale. our to operators the story. shale see I the tell is end

closing I'll to And with back that, it turn Tim comments. for

Tim Rochford

right. Kelly Randy. All David and and you, everything. guys job Holly Good and and reviewing Thank Danny

do will the this to think over officially now operator, and So quarter six-month because what I XXXX is now review. it just turn we'll conclude second the

turn and let's you to operator they it have. up that it for So questions may back I'll open

Operator

first with question. state [Operator you, Thank Our your from White question sir. Instructions] John Capital. Roth Please comes

John White

and morning quarter. a congratulations very Good on solid

Kelly Hoffman

Thank John. you,

John White

information. Really a was workovers Holly and the new the pump that great appreciate on – it, great optimization detail the

existing and how and one-rig that So Shelf each on program properties? refurbs on the a those you you to – both of lot Central split you're of many wells, say Do a have now the on a you're Northwest rework going how and of Basin. on do

Kelly Hoffman

workover correct? rod the this is the John, of terms In and conversions?

John White

Central Yes, Basis? course between the Shelf the workovers the of and

Kelly Hoffman

Danny Hollie. Yes, and

Danny Wilson

bet. You

question. Now, John great that’s a

sure are really Central the the area – split They've so on Platform properties. focus production, producing it’s two of the Up longer cleaning on almost is out conversion. Northwest what Now and the not be shining older in either size, those a a things things, main well on that ESPs XX/XX making then and three converted Again, been about as and diligently over. there's are those the a the more rod wellbores of it’s others we're little is really the rod as working getting the the the needs to far out returning conversion. right that Shelf the done. Those – Basin to those combination and

a done. So as as split, areas little is the of two that's the between money pretty difference being evenly the bit there's work far but

John White

Makes appreciate then I that. going production mostly rods due during Kelly, the to And on sense the mention you did to was month Basin Central July? age. of what the the

Kelly Hoffman

in not. was were No seeing John, the differential for the I what I best was think July that referenced we did July.

Danny Wilson

It was.

John White

Thanks turn you. I'll Okay. a lot. back to it

Kelly Hoffman

John. Thanks,

Operator

Wunderlich comes question with from question. your next Jason Securities. Please Our state Wangler

Jason Wangler

the you of program, prepared to Shelf the between Was how next maybe morning, a see two the Good year? talk could it's of you look program at about As the about guys. mentioned remarks properties? if rest activity in you one-rig the the year, this moving for Northwest you kind

Tim Rochford

Danny. Sure,

to grab guys You want that?

Danny Wilson

you Yes, bet.

focus Now, –most area Central we Platform. down before – the The with University on Basin acreage down start acquisition that drilling focused is lands acquisition. right Tessara purchased recently from We the the that in on did on there. Wishbone our out of to the

a drill. With have Land have we we that footage the to University minimum

area then the going we need will that's remainder something what the it's haven't the yet, year to And to that range, probably XX-ish wells CBP. of number probably in range. the That we're Shelf. on be be probably be up a we'll those the in the be that on wells. going includes rest to but that wells So the is looks up – nine Northwest will eight eight it to There final do and come about down of drill in it like so next there and with

Jason Wangler

appreciate Thank you. I it. Okay.

Operator

state question SunTrust Please next Neal comes your Dingmann with from Our Humphrey. Robinson question.

Neal Dingmann

I just answer, that the so about is, you sort magnitude for non-core high on give anything wondering second Kelly you're of list wondering, specific where guess maybe And you a levels, that debt. that you once can the too potential – are need you asset cognizant into, think if and all some you you're view to going if with of of general I obviously I'm as here. maybe said just play not give I'm of very Tim, all. might or going the sales? too I'm don't because morning, would sort you of Good sales, obviously, how rig we going or how

So could wondering part a or potential of what the on would potential just sometime based play timing other that these us, sales? next that second the you into tell be program non-core The how of magnitude question second rig for year?

Kelly Hoffman

there You for no if the to bet, do question certainly. Platform we Shelf come have multiple Well to the even Northwest you to now deploy between and is rigs. plenty the were with years –

back focus line the re-shifts Delaware fine place asset, but third is about items on priority. what second that taken Delaware? terms in or really a has it the The of So to,

cash So future would available balance think possibly move et add for is seem that cetera, to et one cetera. and – some improve sheet, acceleration, the an off is opportunity to

been But official the And there's yes. the SWD it answer the to profile. thought as that midstream to effort given is has at side. on There relates time marketing the no to – production some the likely, this

the cash right nothing forward. we second we and balance the in if that, with of that you fact, do we've something our sheet as yet go tidy-up two would had will. parties, mind you're cushion And but interested move. But official things one as a we've become is to provide an In conversations that's there's improve done keep

go rig as improves certainly commodity boost next accelerate space would In second into we into opportunity. that year, fact, a

Neal Dingmann

Danny And Pretty good. just then one probably or Hollie. last for one

you'll that. that the I as you'll of I you year more talk I more a so, that You often good Thank any you would like gave just you you on kind and of the John, wondering some starting reasons just I'm appreciate something wondering, than more you thought, it Is this not? item and for is sort when a could if think and explain for need help? case-by-case about, was that just this of if all that regular you. see just the go-forward think list mean, workovers, about just a I think for that, of I'm – Kelly basis? workovers next Maybe think on of

Danny Wilson

Yes, thing is good that we that's forget these question. wells. talk not It's people just to about. a We XXX – we continually tend one that operate Neal over few

There's our working So be of be certain going to well. that's going budget, amount always be on a there's always done. to allocated existing projects to to

And so be don't forward, know ever moving well's worked there's projects. down to when always be typically go going to to really need going and on. We

year. think I it's but not that still much with I we magnitude? Possibly, that with But �� the to probably this going it's had as be to moving Do have are forward. we not deal think because largely backlog big dealing did of by a and have handled the end

down bit slow should out into I little and more. even the think will a next Moving – things pace year

Neal Dingmann

of versus sneak that – a it’s down have you just think would broad you based for would either potentially and into when if you But I'm don't non to non-typical one – just Kelly bit? of think you certainly about the the going just to where – And CapEx, this any on be wondering out don't throw last just I spend think non-D&C and terms, D&C could is – have be got sort know it workovers Tim How I'll year? then from next guidance infrastructure. I I year future CapEx. one,

Kelly Hoffman

think there's question. I Our don’t on. bet is any right

number the is already by for activity out, a the pointed between said, the we next along of a with saying up platform, happen of good catch a I that job Danny as can't it came overwhelming, once build carefully this that year, no of backlog as we Wishbone the timing inheritance but on every and manageable did Hollie think bit think because listen doesn't as you it's predict started go the along of into to and always that, very I with Danny with backlog to months, just that the well.

out put terms our I next think think at I be where but to as to today of healthy There a of going it's line year CapEx. So be ratio – for as to don't type that activity, going completion. is near there's and in question drilling we item anywhere it's no versus

Neal Dingmann

Great, thank you.

Operator

your question Please next from John with Capital Lane Our Markets. comes state question. Lane

John Lane

how Tim, you? Hey, are

Tim Rochford

Good, John.

John Lane

that a here price nowhere to why the that to bad the little the build on that anyway? of assets you to company you the to everybody hurt I'm bit stock call in seem going or understand as sure on a is to is insider think built the and just with discuss and enough quarter. little the fantastic stock place continuing buying tremendous what's hit is been price on that's you've this getting internally smart of price some Congratulations here. regards doesn't relevant discussion taking about the a maybe Can

Tim Rochford

happy Yes, you to on be remark bet, I'd John. that.

think I that I'll address I'll up. follow by and Kelly letting start then off

John Lane

you. Thank

Kelly Hoffman

that there's sort aggressive we for even but be approaches things distraction us. of Now, Danny would had there an it our free level eye and all internally a note not the some the that John, taken to we about taking talking and on there's conversations about But and to of we've it cash talk that in are we I and course, people, a maintaining out any of and an that. can. on of point items with where, those those been are the outside and that it we've that question focus appreciate extent getting keep of to We're things do marketplace started it. to Look flow no was increased type in shorts we've to

things selling, at that, very that. that bit items can along neutrality we We're this we've a computer flow thoughtful revision to say much combination closely like protecting like still for I forward, careful been as this pay getting on and the our say concepts trying that, some growth. cost to, – would that – I as street be those approach to a would cash year, we've us of going and sheet, probably with again, I the victim and think our balance the we're to about the taken approaches to a listening aggressive of budget was aggressive to attention very management, and that some And showing of approach. us looking lot the

Tim Rochford

reference John, question. just with to follow-up a your And as

management own a won't you comments, and So, active in on a then we are there times his there ago insider you know the our weeks of out this but careful year on reference that, as know, just with personal course knows, We of case on and the same the time as all as really closed and blackout policies. and on at was life last that these. during our very I the number there a and the lockouts we're was up And shelf on have and we very the elaborate being year. year very kind that anytime number careful call some platform in opportunities to are stock. from discussion, Fowler own quickly. of a We're to pertaining as window the of of company when David from in everyone have it any considerable the that mentioned periods there is look of the buying of our us activities stock. did That took the internal amount at this prevents or

this follow So, pretty see XX-week lows. question trading right to trades different and probably I just there look is you'll XX%, probably at peers closely all companies XX XX, of absolutely now, think closer that I those are XX% and and versus no where stock companies our

of category, beat do figure can this And in metrics you that that – that our of number others question we're them no in fall that grossly the out. and a than opinion reasons. and is but stock into undervalued for Some up we there's more

want to you're the and doing going fine, the or whether on at So out this look can EBITDA valuation, what but just quarter a look imagine look NAV, throw projected multiples – it at out, throw multiples, the of based old forward. like style last

that, you production look of And the so at some profile. you doing multiples start

a would that the beating scream think debt I that your or John. even it's everyone factoring enough component of drum. but in and in that I buy, agree question, answers absence that the hope

John Lane

Yeah.

change stronger this effort and the going too. I will company focus appreciate, making your price you or and later really always know in you've going up, you. better. that got a never I I that's Kelly shareholder and You've constant fetch been Thank stock sooner and know just Thank which you, to know,

Kelly Hoffman

you, Thank John.

Operator

Our your Please state next question comes question. from [indiscernible].

Unidentified Analyst

of there Based appreciate the mitigating degree and holding third is an I general on a opportunity. have that Holdings slipped the Delaware debt generally? Delaware of sense you. Thank issue. the Basin valuation where conversation a the a Is or to priority second

Tim Rochford

that, we think all Danny, you our to Kelly reflect that or want can of kind saying by let start this, just have of opinions I – but off haven't might on me Mark. we

of formally haven't we what where kind started of in and terms think values. circles sitting We drawing down

Danny, where of overall we think discussion be. that field values And things. give don't might numbers, talk Maybe all at that. an I I you swipe take today we're about the have those kind to first going maybe in think ballpark but

Danny Wilson

Canyon. similar the there. we're – obviously, for we're the although returns, with The the When upside. for horizontal to for at hard love on – it's little they're still the dollars. it's that a very seeing the that compete Brushy Unfortunately, bit has progress Northwest we're We looking well, out Shelf, happy We different. the the area tremendous over think potential area

place. have Kelly value let obviously, on that, what internally, over I been the has we Hoffman. but that, it mean, feel that the be. really values reserve a as far As value all market have market know the might of With I we for don't I'll the

Kelly Hoffman

the people And job going tend just it system, gas Hollie to a job great of the into standpoint. private of substantial frankly, on was from to there, asset a a it's I north multiple out creating done past around $XX of a ago I do and and $XX into threw the came what we of value that have out times a and top longer that oil an of million that up upcharge, we system. turn and that I and is our know So don't when as speak think couldn't mean, decide, believe from tossing And and which and equity would idea. to Danny it of years there numbers, or called with around disposal the concept people couple someone we include of of office they maybe what at different saltwater was I Mark. at office add a over today, something numbers. frankly, we for number I oil really guess It than today. couldn't that about be it the of that talk us have asset million our we an south, million, something we've a it could that additive there's building. come from gas sale. lot did $XX an standpoint If to market people the done building a A were but had little would redundancies. be wonderful troops would actually two years, pass probably so

hopeful that that we'll going we're what So forward see capacity and maintains that happens.

Unidentified Analyst

know that I it's probably an generally and question other and average not fair… have not Fair only that's I enough. across be strata. decline it's and Is you. would appropriate curve considered there fair Thank The general all

Tim Rochford

company? the For

Unidentified Analyst

Yes.

Tim Rochford

Danny or Hollie?

Danny Wilson

on each type the curves – do for We the on our website out area. have out

you suggest look that So that. just at I would

Unidentified Analyst

Fair enough, fair enough.

Tim Rochford

We don't a company. really have combined

Unidentified Analyst

you. thank Okay,

Operator

question Our state from question. Richard Capital with Tullis Securites. One Please comes your next

Richard Tullis

Thank you.

production workovers Danny. XXXX you And production the of and continue what given do could look the the profile the the one look Danny? What with Just do then exit you and expect rig rate outlook next like two questions, one year? like, one could the What’s the quick rig or maybe into swapping expect pumps? growth XXXX, planned out more for

Danny Wilson

wells to could number as internally our a is a Yes, in of mentioned trying debt. lower I cash be think neutral on the than be we're I've – a growth, Obviously, is this still – fewer higher, little my for managing looking report for Richard, drilling I little exit into but at think, rate kind to modest that we're could quarter. XX,XXX, key going and from getting flow we're the the – going to go focus mid

X% next X% say could that's would indicating. And in to that. our that then what I year I from a think probably So, are something look kind anywhere range. – increase, at the would of models It's you

Richard Tullis

And that would on rig Danny? be based right, one

Danny Wilson

That's based rig. on one

Richard Tullis

year? Kelly, hold for flow helpful, lastly neutrality free Tim And as That's for then maybe next target year of Does you've the by year-end for the stated full that year. just Danny. cash or this well the

Tim Rochford

does. It

Richard Tullis

me. that's for right, Thanks much. so All well all Okay.

Tim Rochford

Thank you, Richard.

Operator

Please Instructions] with [indiscernible]. [Operator ahead comes question you. question. from Thank go Our next your

Unidentified Analyst

net stock follow-up you a me the asset is? of the the a price. As gentleman share that question to tell about per what Can company value asked the

Tim Rochford

asset The net value?

Unidentified Analyst

the that PVXX Are basing proved? on you total of

Tim Rochford

Yes, right.

Unidentified Analyst

Okay.

or Hollie do total Randy, have have proved handy, you that that combined So handy maybe you assets?

Tim Rochford

Randy...

Randy Broaddrick

just me Give a moment.

Tim Rochford

correct? you're certain, reference not to and be XP to just Ivan, Okay. XP, that making is

Unidentified Analyst

guess, I right, yes.

ridiculous the think myself. price I is stock pretty

Tim Rochford

that not like When if XX in We number mistaken look we think – X.X I billion slide and would you agree. I at it have basis. a we that on maybe I'm and range PV it's website, seems around our XX think a

Unidentified Analyst

that I [indiscernible] right, appreciate and Okay. All

Tim Rochford

want when consideration course, if that. I you price give of the was to to you do to to you – add going want stock

refers we calculation. page, you what there's there So want that used I'm a footnote on in sure to to – which that

Unidentified Analyst

a have you'd fine thought I And Okay. quarter.

Tim Rochford

to Ivan. Good Thanks, hear.

Operator

Thank closing no this there I'll and you. time. back further are Thank questions remarks. it for you. to gentlemen, Ladies at turn management

Tim Rochford

We with of busy well. their thank operator. time. Okay, again, and a of a you, it reports, other you thank the for as of calls We know, year a appreciate companies lot taking everyone having it's the lot time

along forward So Investor you. open talking to hear from to happy of Parsons, course, the way. thank doors Relations, is you we'll Bill and our you Thank and you. to always And look as

Operator

you. Thank

Tim Rochford

Thank you.

Operator

call day. concludes conference. at This have a today’s great Parties this

Ring Energy (REI) 8 Aug 192019 Q2 Earnings call transcript