Ring Energy (REI) 7 Aug 242024 Q2 Earnings call transcript

Good morning, and welcome to the Ring Energy Second Quarter 2024 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded.

I would now like to turn the conference over to Al Petrie, Investor Relations for Ring Energy. Please go ahead.

Thank you, operator, and good morning, everyone. in interest your appreciate Ring Energy. We who quarter our Chairman Executive and of begin an outlook; of the who Officer, call our turn Chief well who to with our McKinney, overview Travis second our for financial matters call Paul will from key XXXX the updated VP review results. will provide as as comments will We'll of the Board over then CEO, and Ring's Thomas, Financial some closing for with before we Paul call return will comments open the questions. then

Also the joining Corporate of Dyes, of us available on VP the call and Q&A Executive today and Engineering Strategy; for Young, Alex and Shawn session are Operations. VP

you During questions limit your and the we to Q&A ask to a session, one follow-up.

later note presentation would You additional with are website. welcome that have corporate updated questions. also to on an our posted queue the we I reenter

conference are those of within Investors company During the may statements forward-looking the this from of results differ those or materially forward-looking of developments in actual be statements are federal meaning the call, securities laws. future performance, not making that forward-looking statements. and projected the course guarantees cautioned will

reliance These press Investors located place forward-looking These risks www.ringenergy.com. documents statements. undue Finally, the forward-looking the correct. found not will or new of such or on in with Energy be in Accordingly, our and assurance company events no otherwise. be section forward-looking release yesterday's you intention our website the or described can to should obligation as give disclaims any update revise in at a result that Ring and to other prove of filings are SEC. any statements whether can statements information, future

non-GAAP results yesterday's This materialize GAAP more incorrect, financial are in of to measures. underlying earnings these vary contained financial directly of certain includes measures these measure the conference materially. one may should non-GAAP comparable references prove or release. to most under also or Reconciliations Should risks assumptions call actual

and conference the this now Paul CEO. would like call is being Chairman reminder, to as turn to over our call Finally, a recorded. I McKinney,

you, in Ring Energy. joining and today Al, for and thank us Thanks, everyone, your interest

Before to welcome executives, new Phillip I I and Feiner. Shawn begin quarter results, ring discuss second to wanted our X Young

in And lead announced Shawn promoted yesterday, to As Phillip as here. was we and last efforts team. lead week the operations joined our June, late us announced human resources legal to

benefit to All and with pleased look of Ring here to stockholders. growing are be properly the us them Ring of at forward Energy together working our for

our subject second hand, attention now Let's the at to our turn performance. quarter

volumes used both the sales record material intend and $XX the subject, cash We pay and year-to-date. additional down of for record from quarter quarter are record quarters, prices. to cash of more generation in debt to at reducing pleased million recent course, second the debt and range We remain post our excess range coming to or all over and/or of current to progress make and the this

quarter. quarter volumes of basis, first X% was XXXX the for production. On Similar reported above positioned well which second than the of success below was X% was a per operating next. The The to our both program of the of barrels barrels quarter second strong guidance, our XX,XXX ranges. improved year into sales expenses are our second we the higher initial we oil volumes ongoing was record of maintain and per day, sale for performance quarter. equivalent drilling team of continued from of total period sales our spending high guidance XXXX, the of driver in returns the half outstanding the Combined XX,XXX the of operational and end sales our capital and day, exceeded quarter, operating oil came a first the first the while with in product quarter second result our the volumes existing for for outlook, our remainder primary which

Another point product our to of XX%. of is high percentage mix oil a make

opportunities natural percentage, on to spending continue with high capital pricing oil relative to gas. our especially will of during focus We undeveloped favorable these realized times

to team during supported growth reducing and Lease sales operating by BOE, performance, LOE, $XX.X these the as our of well Higher-than-anticipated operating lease of were to into or work the their Founders' operations. to first adjusted $XX.XX range. year-to-date the downtime end the LOE per pricing our costs. quarter operating for like for over the solid and and as XX%. focus reflect continuing second below per integration low and LOE quarter guidance backdrop of resulted Similar expenses, which Turning their dedication second our completing of BOE, quarter is on record a you, everyone. results second in oil assets to I'd our thank of efforts. million our Thank volumes hard lower-than-expected EBITDA costs quarter

were our guidance, with an efficiencies We CapEx. the key environment drilled were enhanced guidance. wells producing factors number pleased to were our spending was the drilling with end low of at at costs. associated our improved capital our completion and the Looking lower-than-expected macro The our drilling related while services high post of levels than contributing and less and completions, associated well completed costs once end of to increased logistics again that and

in and spending flow and upgrades X in higher cash year-to-date record cash quarter, expenditures, that $XX company. X second the infrastructure wells flow the free drilling year. positive with success and of County. in of completion a which also first than million we CBP for we free Ector represents quarter horizontal for EBITDA quarter a capital was ago which included and X year of in million million wells drilling and of free vertical is than Total quarter, invested and XXXX, CBP workovers, lower-than-expected the same in capital completion the the included the consecutive $XX.X in our second in Crane resulted CapEx leasing. Record $XX.X During XX% XXth quarter the of County adjusted flow the adjusted adjusted capital Combined of posted higher XX% cash and South, X record adjusted last

cash used $XX million We the our of flow in portion adjusted second last down free Turning balance the quarter Founders a closing since pay to acquisition sheet. million of debt August. to $XX and the

quarter liquidity lower result, the we a million the X.XXx, of $XXX.X X% beginning a leverage ended at with second period. than was and As ratio of of the which

solid X the quarter, react our prices of the to for guidance with reflect are plan year flexibility manage second quarterly our conditions and as our the for approach to changing provides and wells consistent full of well an remainder year. This view cash XXXX horizontal per to what to we market in Regarding year, half the vertical updating commodity and our we which first a is average X performance still outlook we quarter. as flow. drill did

we maintain As organically or discussed designed production. have in grow to past, our oil the drilling program slightly our is

we year, day to success an guidance day. year assuming XX,XXX in XX,XXX efforts, are X%, oil and XX,XXX and barrels the barrels our our respectively, increasing of Given seeing X% of we full the guidance to per represents initial increase this are from which oil development per midpoints. earlier our of to XX,XXX XXXX production equivalent

mix of per and an sales anticipate equivalent production between volumes of per third quarter, range oil our approximately oil oil importantly, the XX,XXX oil more barrels we of day XX,XXX to to day or Regarding XX%. barrels of XX,XXX XX,XXX and

this the provide Travis and over details return comments will open before I to that, With to on turn for questions. more to we'll Travis? quarter, closing the we call

Paul, and Thanks, good morning, everyone.

guidance that exceeded performance discussed, post be remain sales balance the quarter improvement a used of detail. the that materially company. With top are priority and our overview, initial per look financial more LOE CapEx operational will and the to has generation second pleased with and record down As quarter combination adjusted free below debt. cash of flow contributed To that record let's along BOE to we expectations. The Paul sheet we in at clear, to volumes pay for

the prepared our on will in focused past, sequential As results. my comments quarterly key be

quarter, increase and, X% BOE day. day second respectively, of and quarter barrels was XX,XXX and the represents our first of we per oil top sold again, end the guidance. the an X%, from initial of XX,XXX above per This During

the drilling quarter discussed, program. second our As our primary sales the of outsized the in of Paul volumes was driver impact positive record

per average from differential $X.XX versus quarter the barrel $X.XX pricing Argus first This quarter. WTI mostly was per barrel average the that a the negative quarter. increased CMA NYMEX oil second per decreased negative futures from was barrel to by barrel, for on Argus Our due WTS $X.XX crude per first the price a WTI that offset role $X.XX

gas quarter. Mcf second for pricing futures per a for to a differential was natural average first compared Our negative from quarter NYMEX $X.XX negative $X.XX per price Mcf the the

for which XX% due second Our quarter million, increase realized quarter price of The a the for XX% the was quarter. variance $XX.X $X.X WTI was a to the revenue result volume for second the from averaged first NGL million variance. and first a million quarter, $X of X% compared to price

are higher positive our offset quite our was net resulting the not it That NGL fully XX% negative noted, of production. our oil loss. sales, while As in a were revenue, gas targeting for XXX% mix opportunities minor oil we since accounted able means of total sales to

to I gas. natural quarter, in realized noted, As see we negative continue the second for pricing

pricing quarter the Texas online for -- were $XX.XX we lower-than-expected see alleviate of is have low gas by LOE $X.X the chemical the the While million pipeline some excludes quarter the $XX.XX we our the flat increased range Matterhorn quarter. to for million for BOE the BOE offset from Express in seen our the comments, continued BOE second news with West XXXX higher in costs takeaway in GTP second to of basin. reflects $XX.XX pressure. LOE quarter. good come on electricity to end to share-based which LOE essentially third-party versus as lower around was Echoing constraints to Paul's sales the $XX.XX than G&A, impact capacity compensation, takeaway quarter. Cash per guidance reduction costs. per first first due second end the per in of price, expected expected BOE the $XX.X product partially $XX.X are reflected and slightly a to is first in workover we pleased from with per was our $X.X million hope quarter, million the below costs larger majority of that natural the the The realized will pricing of come additional the

Our loss $XX on compared million which of of first second loss loss, contracts the realized unrealized a was offset million a an quarter, derivative $XXX,XXX $X.X $X.X for to million gain. quarter results included of a by

gain loss is the period. values difference As to the just the reminder, period a mark-to-market from unrealized between

share. million income $X.X QX, per or the improvement per compared significant a reported was first million $X.XX for This income net Finally, or of $X.XX share. we diluted of to net $XX.X diluted quarter

items, million adjusted pretax million per quarter EBITDA our million second quarter, income net and losses of impact $XX.X a share. We versus share-based second million adjusted and after-tax increase. diluted quarter the hedges including noncash compensation first estimated $X.XX record quarter expense share, first per while posted $XX.X unrealized of of or or the $X.XX X% Excluding was $XX XXXX gains on $XX.X net which income diluted adjusted for was

As $XX high million of at guidance Paul end $XX XX expenditures. in invested mentioned, guidance. the the our and capital $XX.X we This was during completed, second total, wells number drilled million. the million of quarter, and producing to actual of was in below

record CapEx for driver of drove of quarter. the adjusted record for second The flow lower-than-expected the was million quarter $XX.X first drilling for completion cash million flow and lower versus combined efficiencies. result $XX.X and cash free reduced operating The CapEx well costs primary

excess In that flow period second quarter adjusted closing $X.X including to since free August. Founders our the same down XXXX. We pay was pay our flow quarter-to-quarter. the a The cash decrease in and late acquisition difference borrowings cash due down cash higher to debt million working the adjusted of used and in flow million XX% $XX in between was $XX million addition, payable changes, in million of capital the the free than generated record record we year-to-date on revolver our $XX of accounts

further comments, company. the debt balance remains I priority in for improvement pay through beginning additional a top the sheet As my mentioned of down

our to Moving hedge position.

our X estimated last X.X oil our approximately the For on of sales hedged revised XXXX, million barrels XX% based of the we or midpoint months guidance. have oil currently of approximately of

on gas of approximately X.X Bcf sales natural our also or have based estimated hedged gas We XX% natural the midpoint. of

our breakout of For earnings price quarterly QX positions and which each average and includes for our QX presentation, please of for see a type. hedge the XXXX, contract release

credit Now facility. million in let's the turn At our sheet some we detail. to June balance more on had drawn XX, $XXX

$XXX.X ratio had million $XXX With base net current million, had available liquidity leverage the $XXX.X of cash, with credit. of a of X.XXx. of of with million borrowing Combined we letters we

and Looking at our guidance. outlook

will changing half adjust as continue XXXX, second we that our utilize as a quarter-to-quarter. our of drilling the maintains market as to to well For conditions, cash levels flows to appropriate react manage flexibility program spending

is on while sales. oil levels or production per day grow focus BOE Our crude maintaining slightly continuing growing to

Our for and XX% barrels oil year for sales average to have full volumes of daily sales oil sales BOE including volume increased per XX,XXX the crude day XX,XXX XX,XXX to previous, XX,XXX and XXXX per guidance day volumes of of or BOE oil. been

mirror XX,XXX providing a oil third BOE of and outlook day other noticed is sales per of day to XX,XXX similar that per sales For have guidance Those full oil. XX,XXX oil first reflect that volumes and crude the who ended third to and midpoint half a are the BOEs XXXX. volumes quarter, XX,XXX production XX% probably of still where we each are paying our year at of attention sales quarter to of we barrels

For expect million now our year CapEx, million previous our on X% midpoint to development we plan, is the full full which spend at to to lower year $XXX guidance. $XXX

full estimate third of we to million $XX $XX anticipate $XX.XX quarter per per providing to of addition, million year and $XX.XX providing the of quarter. BOE We to for $XX.XX are are guidance In the of BOE third $XX.XX XXXX an XXXX. for LOE between now

of and to Finally, $X prices I note Hub to prices Mcf. assumed all that barrel WTI per on $XX are estimates projects $X Henry and per oil $XX would of based

So turn back Paul? to closing with his comments. I that, it for will Paul

balance believe of you, Similar is my want flow we during closing cash to and further our in individual operational success hear that to I merits sustainable view our we Travis. our plan several best a regarding questions and to we business a the the the provide designed capital free value of interest executing paying the proven second to quarter continue we related In return from short, our ultimately Thank the debt. most stockholders. that grow to maximize reflection of the strategy appears in address to properly that, generation, be quarter, our disciplined a strategy first and and financial improve are the direct as institutional our generate common of stockholders. and stockholders. Having sheet commitment said Perhaps comments, down sustainable to key to question

we in As goal and focused regard to so. to are affect I stated previously, reducing ability on oil do levels that on absolute depending other our debt this the have and is our make prices factors progress future, material our in

have accretive opportunities material through are that and in our opportunities grow growth increases levels there to stockholders. to that absolute I may the for referring strategic am However, can a acquisitions. require debt to benefit

our Regarding balance acquisition, sheet accretive enhancing. past to could in heard the potential being acquisitions, to stockholders, we debt in associated the addition with me say that incur that a intend any future you we to have be

we have neutral debt regard being acquisition incurred. Two Founders the balance in that with our panned to as in can this examples of the attempt are the acquisition. enhancing, have the are last during years, the the Stronghold how intentions said acquisitions if as balance the to the sheet X of we will and sight close past closed out as sheet also we deal keep We paydown not they clear

specifically balance Let's sheet our look regarding at ratio. those our their details leverage and of transactions the impact on

balance and our hedge structured extremely of that went leverage with cash X.Xx innovation our a greatly Founders accretive that enhancing those had Result the Stronghold ratio the position. deal our and impact XX assets of mixture we was purchase drew sheet. When facility. debt, a you considering deferred credit the months to If from sheet, that trailing EBITDA recall, on we acquisition balance the necessary acquisition X.Xx, our their of our equity, finances deal payment to down funds of from

debt. our So increased the absolute deal

of ratio and was that several deal the leverage neutral the to it of structured perspective. sheet assets advantage from essentially balance so the transaction we However, took position attributes a

Let explain. me

draw August effective XXXX, payment the million, the cash closing until facility the assets took at of a X, million of of $XX even in assets reducing We from cash deferred the amount credit from flow help the the XXXX. to from at in form for flow of we $XX draw date the reduced the reduce we down closing closing. the to of XX, date facility high for amount the credit advantage deferred owed to million. $XX had the assets an obligation April with on flow Part cash was against First, more. months closing effective the The paid the

not the from recent was we Since deal balance when payment. The we paid sheet $XX.X post-closed included in neutral the deferred you credit of cash including flow down quarter leverage a EBITDA and incurred XX by company's hopefully, $XX.X to million. Instead recall, ratio $XX the have the this including ability from deal we sufficient not the quarter debt. After if planned, pay to deferred the months we draw assets, And closing, entire pay the paid very the $XX have end track the the was during acquired down paying payment the did million prices the the to the trailing amount on essentially perspective that next of was million originally levels. of million oil against adjustments payment. if soon, and cover to are return thing apply debt to off as deferred the facility because to

debt We of had the very to additional sight line have is the the The leverage barrels of we from stockholder debt benefits rapid repayment We to Founders was and the from of the sheet it paydown an accelerate additional remaining balance oil approximately off, day or after paid still but will incurred. incurred equivalent a per perspective. bottom this. is essentially X,XXX the clear a of the is more have deal, production that So ratio debt a debt. of neutral

identified operational is and we have stock question disconnect financial stock performance. price a between what our our and often many Another get regarding as our performance price

you largest know, with the investors are stock price factors they performance having and punters that are numerous issues have the there industry shared affect As impact. and believe us

them or I is in doing stock do the will most stock try most regard help important this the which I are But force speculate of share or price. don't rank we our plan truly the to what some things affecting to whether are our improve to are price performance. are

believe large enough the First, community we don't of investment about a cross-section Energy. Ring knows

We educated about assets the and also the Midland Basins. the Shelf know Northwest are they the what Central don't believe in and them assets Delaware Basin the Platform typically makes our from and many in different about

believe Ring all from gas and opportunities. in and investment we our our is there the strategy community also communication tell strategy up make can do public of and us that more conferences educate help and the To of by advance to stepping We are oil we more educate this, to aspects about participating investment industry differ other story. with our

with We cross-section virtually the and long-term both investors. and banking are lenders potential banking also all hopes a shows, investment institutional of broader and investors person institutional scheduling with non-deal road more of attracting communities, in investors,

Another to are related do more thing we attract analyst is trying coverage.

initiated us. not one analysts, continue reason meet yet have for or and coverage another, with to have on that We

position company have those meet the date to efforts and requirements to focused on requirements. their been to Our understanding

certainly not is least, but debt. our Last

We our and on impact value absolute are can have levels. balance debt a the believe creation. positive regard progress this improving in material making We focused sheet on

ratio is in Xx getting manage of necessary industry the up, our the sustainable and return it prepares our uncertainties, achievable and to supports competitive business the that results better sustainably risks size and stockholders. value-focused to to efforts comfortably believe returns scale Ring and generation strategy to sum our and a capital achieve to are position realistic proven we company believe targeting below We leverage goal. To and

today. growth in thank to believe industry. I in for questions. And Energy for Ring their also ultimately to deliver returns operator the this we We competitive will you and and turn also call our want strategy to support over all staying volatility participating our continuing of the want I our with the our will for trust. and despite that, stockholders for interest your course continued in call thank with we Operator? endure

Dingmann The Truist. with comes Instructions] [Operator first question from Neal

team, is Paul question inventory. my and your on first

that all activity. the some recompletion at Slide up doubt you to and in looking no continue guys, the in horizontal even days wells Specifically, as platform put vertical the as XX, and well shelf

horizontal So it's talk the you where the is, I wondering year allocated going all even of majority Because you this about you're next as about into as remainder the to year, can of and maybe potential me depth? potential. refrac sort I'm guess well remind what inventory forward here me just thinking capital the on interesting vertical

flow Those good. in questions. of thing planning of the all electrical of all water where allocate with we cash saltwater other first past, really in these frac constraints whether capital with But the associated managing we constraints of about this things. we there's whether that. jobs, X water capacity, one, generation use of talked good enough terms are types currently very Yes, constraints, the are mix like issues We And result allocation go can have. are how have infrastructure fresh Number or they into strategy basically the consideration. we that is the based we've allocation on our disposal the is

all flow of to cash And that generation. works together maximize

the of payback mix generate present tend the verticals, have in horizontals value. and volumes so with higher the verticals, oil net very horizontals many rapid the the areas allocation producing and And between percentages. have the larger vertical higher also to they But

So we're on focused that. also

the depth for the again, to years. we and medium-term handsome inventory, said, now I'll of next keep it the us short, really several so a And have going to say I've back getting inventory

of have, to luxury we especially Midland a Basin other of the and that big have companies However, a many inventory. in those XX-year Delaware don't XX- the

focused so we're why reason the on acquisitions. that's So

fill the plenty the in there's continue believe, deliver that can that so continue to area to that of though, hopper the types opportunity returns. we're And we of to so focused, we

talk other organically that the think about generate talked really we're our point additional much Now you'll opportunities. future hear the that's about, could on ideas going us on that we're testing more we as the we haven't go into drilling to thing acreage now this existing and I is that

of will these these of some verticals, be horizontal. Some be would

And do so could That's for of a but little these there inventory, is improve acquisitions. a and that sprinkle towards can test, benefit the acquire that risk we going higher organically. and out opportunities capital to is we significantly allocation our lot better than undeveloped

So we move of see hope for in future. answered on what I that's question, kind that the can your us Neal.

second did. certainly right the sounds into on tied opportunities. to really It That hit heard just package you is of It conventional said there. like I've -- sort some market. interesting that is packages, already out more And upcoming even there seems question. there's me several the may what of M&A are conventional my It

kind what it, what see maybe you do restrictions heard the of And you're at are of if looking guys -- these some deals? again you've wondering just your same? where So when

Yes.

in consider selling non-core pay a down allocated deals pay leverage those assets they off or they our historically have and with help not past Delaware what by consolidate that the assets, we lot Midland where the capital our would And the want industry organizations that so believe us say that heard as they they you activity larger in and of reduce of to. to the associated

proven And true. to out it's so be

there number several I'm not hear, name over more packages the will out that past, but them street these, there street. We these and time. of are take at there said the We've you do to this the believe years. all going that know, ability looking exceed on hit we've quite are been the you any we next several hit to and of mapping like packages to going are that will street As have our of for some that heard, believe couple opportunities the we the and in of down,

initiate to a to actually these Some deal. of try we've negotiated approached

that yes, regard successful been time. But all in interested. very haven't We the we're

and capture area because we are in we an that area currently operating Currently, very more we concentrating with be that is again, areas the that associated wells focused and the can it's we over our we'll spreading on. This well, production. synergies an team very know operate, more

have been people's undeveloped mapping, Our other geoscience teams identifying acreage. that under opportunities reside

seeing opportunities of bit And hoping excited we're acquisition actually so in will we're some capturing chance we're very market better of out. the that more hit little have these so we the out And play kind spread a about maybe a what regards, that it.

fast, simply because take So some of right? are two and one just we all go them coming we let have will to it or them can't of in, so

investment If I Alex. And XX. the it's may, and this our slide just analysts Slide for strategy community, this covered. some backs a the question, this is Paul just We specifically give acquisition created should of and up everything

Yes.

And at you'll the focused, we're that per all of it the go opportunities there equivalent plus area potential true you that slide, us. know oil back of that's target that take very huge before for XXX,XXX you you does observation, but by just a if self-explanatory That's we all day reside that represent look notice acquisition of opportunity there the -- size. of production. it's our a barrels it's that that can't company that down, out If in just represents out to

Our John from next with White ROTH question comes Capital.

strong quarter increased and a production on on guidance. your Congratulations

not announced CapEx, you increase clear, right? have to an So in be

enjoying slight in just No, consider we that a year, capital the does guidance the little represent, bit. has our if actually has we rest midpoint, for reduction holding the have the a a not we period Again, macro in been flat increase where drilling or are environment Permian slightly Basin time activity the have provided our not. spending. of CapEx you in the for down The

oilfield to And that services has operate industry designed -- so we are. higher currently the at they're a in activity level my opinion, really

not pressures, Actually, cost. slightly they're we're And inflationary down. coming as the seeing in increase on a so result, pressures

And taking that. advantage of so we're

And so we enjoy savings. bit the year can see believe changes, that we we'll a that, the quite rest of of unless something

and money them that number essentially targeting them still online we're less them just drill for saying same estimated. We're now complete of originally we Now wells. we than the and bring can

there's X, that slide, compared about. original the guidance, John, talking exactly X% what midpoint actually describes of Paul guidance the updated the the the Slide And beginning provided comparing to year at that of we reduction. is a And the

detail. and Well, the thanks that's favorable, for

The next with Global Alliance from Grampp comes Partners. question Jeff

year. the the Obviously, far for first capital nice the in side Questions half thus on performance really you. of

I to some year, think going $XX be the the CapEx range. in similar the quarter. a you $XX to more quarter will the a but probably is levels like in half averaged million the probably neighborhood be of million back first Activity something of like half,

So just general there is little why consistency Or any in might I levels? in that higher activity part? half just if wondering, half creep capital the reasons the a first conservatism your your there's versus back specific the perhaps on given was bit

It's a Yes. combination a of things. couple actually of

risky high of White. a because John seeing, kind same are are significant bit organically. probably potentially success half estimates Our budgeted and success the the a year, for the investments because we're we've allocating with little and going the back we ongoing the the of sharing capital But of prove versus towards up -- just in the mind of this additional to the could reserves more don't had of we've I question that little inflationary first programs we pressures also time, at

what add I don't you And so represents that? know Shawn, got higher more, end. if can -- to you've really the that's a

fourth we've Slide do little to And do #X more mentioned, activity. provided there have there, an we you do in plan if few and increase is wells drill we that in guidance again, quarter. Yes, bit Paul as the a look a the of at

of that CapEx And so the incremental majority that seeing. you're that's

of spending we're step upgrades, emissions thing. -- on capturing some kind our doing up facility that some our of to putting in think I going of also

costs throw there's we've that capital additional a So few to decided in.

So is about guidance of it believe improve. will to in will that right. we to continue macro our range inflation, just it. if it below I'd does, environment be because But love the come industry

softness believe. near the kind kind those the Ring-specific a kind Understood. permanent, reductions in guys market? slide bit reduction to will? of And we of overall back related maybe deck, cost internal a my those cost noting if of mostly of I you Or end captures of of the you follow-up, efficiencies as term well there OFS more being have the where and maybe more are towards little some some transitory Should about think more bit a

what going of to to drilling our That's because Shawn completing this to But to my assume and hats to we it's I efficiency hard have drilling beyond ask. department level same their they to I'm off we're hard turn And continue wells. to my to assumption. when really improve of kind predict. over efficiencies turn because the predict the

got you Shawn, to more there? So say

Yes.

a Just there. to add color little

more We completion on some side are and our drilling where driving the improvements efficiencies in faster are being just overall efficient. seeing costs side, by we and out the

completion is prices industry. drilling relaxation team. to overall be team so yes, just there that, able in -- But and of is And of performance a definitely our the realize we the forward of the going just component some that going from service that the there's to are our

Water next Our Tower from will Robertson question with come Research. Jeff

lot a existing or base, of Paul, like on have things; production disposal production that. to run deal from is operations? level increase you the lot one field further with either has times operations Or things Founders lifting the that done? seems steps to by respect year large drilled, field the opportunity been on and performance the field-level see or Is but Ring with of do also to wells taken benefited this to you the heavy X asset better just enhance the acquisition has

is improvement. Shawn. to it see not lift Yes, seeing really in some time have our that for think we'll in other do in an take continue well, continue assets the the our assemblies hole and have we've bottom just I'll designs that Yes. things incorporated properties, and we designs This as some always just to to that are newly expect with rod and I we And saddle acquired we improvement. the of But started make impact. stab more these artificial room acquisitions, one. at there's as a with

so you're numbers now. to able in see And that the

you one inventory study Founders decline being the on corporate base with about acquisition, slides -- the curve of in pretty that Paul, types out, of because asset, case points of low heavy who talked does lot peers a those are a the unconventional And a your your include of for PDP less the does type than up relatively nature? the you of are cost probably assets. on at more some focused pick to conventional deals, able

the conventional It's actually for those opportunities. Yes. competition nature tends reduce to the

And so I will say this.

on If developed, quite undeveloped acreage very there's more pick there of to few our we opportunities you of a company. in a some them almost be out to the consider, that are not is based up look the acquisition or mapping marketplace analysis. many one these there's opportunities targets buy. Each acquisition today with a in at that it'd PDP mix what's closely There to opportunities virtues maybe are sale, beneficial out bring them also considered there bring that more different of as so fully for fully

at of things. So we all look those

hard you acquisition predict. to low chance And of you a it's at so have of for always these same time, any opportunities. consider the And got one capture kind to of

the do compete and can. And you you best you so can best you the

You overpay virtues of but that things different shareholders. want the these actually don't value enhance various have all for our could to

so that. of all at look And we

technology risk could been risk the Paul, talked program. in -- or opportunities you If Is drilling applying or the not have more new that in. some high reservoirs I known new about in that slip past? technology to higher reservoirs commercial one may

yes. is answer The

work But and development works, learn of to doesn't the so your geologists continuing the kind you that. and one have what as you of have. don't even area through you that acreage done explain to all march what have you of and And acreage that you hard we've position is, it's what work,

the look look even that. you you the tried, us. logs, and at hasn't say the at it that And been opportunity, work look -- uncovered here, though this so evidence over and questions, at you You before won't do you you was all start why asking

when you lot the that A compare we rocks, it just logs information the So and risk. tried. times, you in call of oil these, and look the But some at you fact them slightly higher that's hasn't the of that have it's been about the rocks the

them not end. we they may And the so in of be risk, higher call higher them, some although risk

doing doing acreage areas about good we're these other yet. thing so at of on and is also that in opportunities, the it we're we not at horizontal we're the back hasn't it, looking that applied apply doing drilling where our side been on type on But can only where And offsetting of immediately what we're looking opportunities the fence.

existing really that that. we we're about can be yes, opportunities so very And our acreage, underlie The believe, excited significant.

is kind our on expanding And bit and say proud so that point, our and keep new acquisition But our to of we've drill the now acreage, team finished so we're our gotten our not horizontals I'm we're can just out just doing that to team. grow we We're and in organically still line more than steering geoscience to the ideas own but the that evaluating wells stuff outside generating of front. now. building

any Paul conference no Seeing closing over to will back our I further remarks. Instructions] like [Operator for would Q&A the McKinney session. conclude this turn to questions,

management participating team to again, today's Thank call. and and thank you, Board On behalf want listening you, Directors, Nick. in everyone, of of for I once the

posted and financial have we We of year, strong. believe to operational date the remainder XXXX results to remains forward and are looking which for pleased are to record the

of We Ring in a for Energy. day. Have interest again, everyone our will continue to keep And I'd like progress. your you apprised to thank great

today's now Thank has concluded. presentation. conference for The you attending

now disconnect. may You