Drilling & Completions | Quarterly / Earnings Reports | Third Quarter (3Q) Update | Initial Production Rates | Drilling Activity

Ring Talks 3Q Drilling Activity, Output Increase; Central, Delaware Basins

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Ring Energy reported its operations updates for the third quarter and first nine months of 2018.

Mr. Kelly Hoffman, Ring's Chief Executive Officer, stated, "The Company is back on track as shown by our third quarter results. We continue to update and improve our infrastructure in preparation for our on-going drilling and development in the CBP, North Gaines and Delaware Basin. We continue to vary our selection of drill sites to include both core and non-core sites for the sole purpose of proving out and delineating for future development and possible acquisition opportunities. We have no plans currently, or in the near future to return to the capital markets as we believe we have ample funds by way of our current cash flow and senior credit facility to accomplish our goals for 2018."

Production Up 60% YOY / 13% from 2Q18

Net production for the third quarter of 2018 was approximately 600,000 BOEs, as compared to net production of 376,000 BOEs for the third quarter of 2017, an approximate 59.5% increase, and net production of 532,000 for the second quarter of 2018, an approximate 12.8% increase.

Drilling Summary

In Q3, Ring finished testing and filed Initial Potentials (IPs) on 15 new horizontal San Andres wells - four wells which were drilled in the first quarter of 2018, five which were drilled in the second quarter of 2018 and six which were drilled in the third quarter of 2018.

• The average IP on the 15 wells tested in the third quarter 2018 was approximately 435 BOEPD, or 103 BOE per 1,000 feet.

• This compares to 18 new horizontal wells which the Company finished testing in the second quarter of 2018, and had average IPs of 440 BOE per day, or 103 BOE per 1,000 feet.

North Gaines Property

The Company drilled and completed two new horizontal wells, the Ellen B Peters 4H ("Ellen") and Loki 2H ("Loki"), on its North Gaines Property in the third quarter. The Company completed testing on the Ellen early in the third quarter and filed an IP of 431 BOE per day. After initial production, the Ellen has stabilized and has been producing approximately 150 barrels of oil per day ("BOPD") and 60,000 cubic feet of natural gas per day for the past month. The Loki is still being tested but preliminary production results are showing approximately 100 BOPD and 50,000 cubic feet of natural gas per day. The well still has a high fluid level and management is hopeful that as that level drops the oil production will improve.

Mr. Wilson commented, "We continue to be encouraged with the results we are seeing in North Gaines. We continue to learn as we gather more information from each well we drill. We will be drilling two more new horizontal wells in the fourth quarter."

Delaware Basin Property

Management stated in the Company's second quarter 2018 operations update that it had drilled and completed its first horizontal well, the Phoenix State #1H ("Phoenix"), on its Delaware Basin Property in the Brushy Canyon formation. At that time preliminary production results were approximately 130 barrels of oil per day and over 2,800,000 cubic feet of natural gas per day. The well is still undergoing testing as the fluid levels and pressure levels are still high and management believes it is possible to see higher oil rates as the fluid level drops. Currently, the Phoenix is producing approximately 80 BOPD and 1,800,000 cubic feet of natural gas per day.

Mr. Danny Wilson, commented, "The Phoenix was drilled on the high end of structure and as such is gassier than we anticipated. We will be drilling two more horizontal wells in the Brushy Canyon formation in the fourth quarter. Both wells are planned to be drilled lower in the structure, where the structure has shown to be thicker, and existing producing vertical wells have shown higher oil cuts and less gas. In preparation for further development we have completed our gas transmission system and have begun selling our gas production.