Ring Energy Swings to a Loss as Derivatives Reverse

The Tip Desk · November 6, 2026 · 3 min read

Adjusted EBITDA rose to $57.1 million as the company spent $64.0 million on drilling and infrastructure.

Ring Energy, Inc. (REI), an oil and gas exploration, development and production company focused on Permian Basin assets, reported a net loss of $16.6 million, or $0.06 a share, for the third quarter of 2026, after net income of $64.8 million, or $0.27 a share, in the second quarter. The swing included a $41.0 million unrealized loss on commodity derivative contracts.

Revenue was $102.3 million, down about 2% from $104.7 million, which the company attributed primarily to lower realized oil prices. The realized oil price fell to $83.72 a barrel from $95.45. Adjusted net income rose about 14% to $27.3 million, or $0.10 a share, from $24.0 million. Adjusted EBITDA increased about 5% to $57.1 million from $54.5 million.

Average daily sales volumes rose to 20,635 Boe/d from 19,990, up approximately 3%. Crude oil sales were 12,818 Bo/d. Net cash provided by operating activities was $63.1 million.

The company said it deliberately accelerated drilling and infrastructure spending. Capital expenditures were $64.0 million, up 48% from $43.2 million. Adjusted free cash flow turned negative at $(13.8) million from $4.4 million of positive adjusted free cash flow in the prior quarter. Chairman and Chief Executive Officer Paul D. McKinney said the company chose to outspend adjusted free cash flow this quarter to accelerate the program and intends to be cash flow positive during the fourth quarter and for the full year.

In the third quarter Ring drilled eight and completed seven horizontal producing wells, all in the Central Basin Platform, including five 2-mile laterals in Crane County, versus seven drilled and four completed in the second quarter. It brought online first 2-mile horizontal wells and drilled nine year to date. Drilling, completion, equipment and facility connection costs were about $475 per lateral foot year to date, excluding shorter lateral test wells.

Lease operating expense was $10.20 a Boe, below the mid-point of guidance. Total interest expense was $7.7 million, down about 24% year over year. All-in-cash costs were reduced 3% to $21.03 a Boe.

The company completed about $30.5 million of non-core asset sales covering about 130 Boe/d (63% oil) and about 9.8 thousand net acres, and acquired about $18.8 million of Central Basin Platform leasehold interests covering about 16.5 thousand net acres, expanding the core Crane and Ector Counties footprint by more than 25%. Revolving credit borrowings were reduced by $10.0 million to $350.0 million at September 30, 2026, and the LQA leverage ratio improved to 1.5x from 1.7x. Total liquidity was about $236.4 million.

Subsequent to the quarter, on October 30, Ring closed another non-core divestiture in Gaines and Andrews Counties for about $13.4 million representing about 470 Boe/d (77% oil).

Fourth-quarter 2026 oil production guidance is 12,900 to 13,500 Bopd and total sales 20,400 to 21,200 Boepd, with LOE guidance of $9.80 to $10.30 a Boe. Full-year 2027 guidance is being updated pro forma for divestitures. As of November 5, 2026, the company had about 1.0 million barrels of oil hedged for the remainder of 2026 at an average upside protection price of $74.10.