Ring Energy, Inc. is an independent oil and natural gas exploration and production company, which is primarily focused on developing energy reserves in Texas and New Mexico. Founded in 2004 and based in The Woodlands, Texas, the company had interests in 54,959 net developed acres and 2,337 net undeveloped acres in Andrews, Gaines, Crane, Winkler, and Ward counties, Texas; and 13,930 net developed acres and 12,512 net undeveloped acres in Yoakum, Runnels, and Coke Counties, Texas and Lea County, New Mexico.
At its core, Ring Energy, Inc.’s business consists of the acquisition, exploration, development and production of oil and natural gas, primarily in Texas and New Mexico, and secondarily in other formations in the United States and Canada. Its business model provides investors and shareholders direct exposure to the energy-focused production and income potential as well as the potential upside in reserves growth and exploration activities. The company sells its oil and natural gas production to end users, marketers and other purchasers.
Ring Energy Inc. is currently headed by CEO and President Joseph D. Mills, who is also responsible for overseeing all of the company’s operations. Its executive team also includes CFO Erland E. Schuster, who works with Mills on overseeing the company’s financial management and strategy. The company has a total of 98 full-time employees, as of 2020.
Ring Energy, Inc. has shown strong financial performance across a variety of metrics. The company’s operating margins stand at 58.70%, with profit margins of 47.08% and EBITDA Margins of 78.30%. These show a strong commitment to keeping costs controlled while still being able to generate a healthy profit.
The company’s current stock price of $1.87 is well below its target mean price of $5.75 – indicative of a potential value play. In the last year, Ring Energy’s earnings growth was 183.30%, with revenue growth of 28.80%, suggesting good potential in the short term. Their total revenue of $348.84M is quite substantial when compared to its market cap of $730 million – a good indicator of additional upside potential.
Ring Energy has a healthy current ratio of 0.53 and a debt to equity ratio of 60.84, indicating that the company is in good financial health. Additionally, the company has a total cash of $1.73M, total cash/share of $0.01, and total debt of $425.44M.
The company has also seen impressive returns on equity (32.57%) and return on assets (12.89%), indicating that its shareholders are being rewarded for their investments.
In addition, Ring Energy has received two analyst recommendations of “Hold” in the last year, with an average recommendation mean of 2.7, suggesting a neutral outlook.
Overall, Ring Energy appears to be in a good financial position, able to generate strong profits and expand its revenue base. The potential for further growth appears to be quite positive, and investors may want to consider adding the company to their portfolios.
During a recession, profits tend to fall for most companies. However, Ring Energy, Inc. was able to remain stable during the recession due to their well-planned business strategies and cost-saving measures. They were able to get ahead of the oil price decline by reducing some costs and working with vendors to renegotiate existing contracts. They also focused on renewing expiring leases, thereby increasing their overall production and income during a time of decreased revenue.
In addition, they used well-planned marketing strategies to continue to generate revenue. Their diversification strategy helped them to maintain production and secure additional customers. They shifted their focus from oil to natural gas production and developed their own processing and transportation infrastructure. This allowed them to capture more revenue and reduce their operating expenditures.
Ring Energy, Inc. also utilized technology to increase efficiency and save costs. They adopted modern drilling techniques such as horizontal drilling that reduced capital requirements, improved drilling success, and increased production. They also employed digital analytics to optimize operations and transform data into actionable insights.
Overall, Ring Energy, Inc. effectively used smart strategies during the recession to minimize their losses and maintain profits. Their innovative approach enabled them to remain resilient even when market conditions were not favorable.
In today’s economy, high inflation is certainly seen as a threat to the success of most companies. But how does Ring Energy, Inc. handle such economic headwinds? It is well-known that cutting costs and managing expenses is essential when facing inflation, and Ring Energy, Inc. does just that. By keeping tight control of its cash flow, monitoring budget changes, and analyzing production performance, the company is able to adjust its plans and adapt to the difficulties presented by high inflation.
The company also works to mitigate potential losses through strategies such as hedging, which ensures they receive a set price for future oil and natural gas production regardless of the rate of inflation. Additionally, the company invests in more cost-effective methods of production and explores new technologies to maintain a competitive edge and lower operational costs.
Finally, Ring Energy, Inc. remains up to date and aware of its competitors and the market, allowing it to promptly identify and take advantage of opportunities presented as a result of inflationary forces. This comprehensive approach allows the company to not only survive, but land on top when faced with inflationary pressures.
However, when investing in this stock, it is important to consider the risks. These risks include:
• Volatility in oil and natural gas prices, which could reduce profits for Ring Energy Inc.
• Reduction in planned production levels due to technical or economic reasons.
• Changes in governmental regulations that could reduce Ring Energy’s revenue from the sale of oil and gas production.
• Exposure to operational risks, such as technical difficulties, accidents or natural disasters.
• Changes in interest rates, which may cause refinancing and restructuring costs to increase.
• Intense competition from other exploration and production companies.
