Ring Energy (REI) 7 Nov 242024 Q3 Earnings call transcript

Good day, and welcome to the Ring Energy Third Quarter 2024 Earnings Conference Call. [Operator Instructions] Please note today's 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. We appreciate your interest in Ring Energy. We'll begin our call with comments from Paul McKinney, our Chairman of the Board and CEO, who will provide an overview of key matters for the third quarter of 2024 as well as our updated outlook. I will then turn the call over to Travis Thomas, Ring's Executive VP and Chief Financial Officer, who will review our financial results. with for comments questions. return the we then up call will some before closing open Paul Executive and Also and VP Q&A Dyes, available us of for of joining on the session the Operations. are Shawn Strategy; and Corporate call today VP Young, Engineering Alex

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

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

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

measures most also to the in non-GAAP of can certain place financial statements, earnings contained call you such information, to Finally, Investors documents these as one new described to any future section SEC. in actual give of non-GAAP will prove not Energy financial that forward-looking www.ringenergy.com. correct. our obligation may should GAAP risks incorrect, press other intention These release. or references no in result on conference any includes results filings otherwise. statements whether assurance yesterday's materialize our Reconciliations are found materially. This be can comparable release events revise forward-looking Accordingly, forward-looking underlying Ring at These or the or to website and located yesterday's disclaims measure a and statements. should undue with or are vary the update or reliance company be risks of these of directly the Should more under assumptions prove measures.

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

us today interest everyone appreciate in and Energy. Thanks, Al. your We joining Ring

half a take year-to-date I relation quarter begin accomplishments first like our performance overall third well of consider year Before quarter would specific as to to high-level as our to the view XXXX. third this discuss in first results, compared and I as to our

closed cash than low-risk, purchase Similar maximize high so a most and CBP Basin August further and Stronghold inventory immediately able drilling basis. Central return As rate XXXX, acreage of in a our was debt core year. to us of and stand-alone and a our flow faster at rate Founders operating in free the of to area, and we Founders down our of operating capital locations last cost Platform accretive strategically our acquisition allocation importantly, to capture all-cash acquisition to reminder, allowed synergies improved pay of increase ability expand adjusted on do flexibility, assets generate were G&A we the

its including X% has was shown growth XX%. over adjusted acquisition. XXXX third our on in results benefited have less of metrics, the Ring we combined yet the volume BOE of closing that that equivalent key our performance Again, value Energy -- balance X,XXX our additional production. period Our clearly X% debt partially our growth XXXX last $X Stronghold XX% down per focus our year-to-date free we acquisition to is total Founders which in proven working. the with strengthened said with to the in we for Founders clearly our accelerating adjusted continued prices increased acquisition, quarter, over million have At result year, and This discipline, sheet Having quarter third flow year-to-date. realized strategy the year-to-date commodity end XXXX prior consistent cash that, EBITDA reduction had and year-to-date, day oil When year-to-date is from demonstrates across same capital debt. considering the value-focused debt, by that and ability was quarter When have increase day efforts X% in achieved barrels per offset important and decrease an average the per the $XXX year-to-date, in the costs stockholders with pay operating our is the all-cash XXXX. multiple are had sales total million than creating in we of of

turning third quarter attention our Now specifically to performance. our

the volume We strong to pleased in for record well We sales the report line year-to-date. with was period are for posted performance period, expectations. our as which as

BOE, oil the sales sale the the also the was was the Similar remain The in team well operating midpoint remainder positioned quarter. for of barrels exceeded or to third quarter were primary of and believe buyer. volumes expenses, and of debt $XX.XX sold we oil volume sale unaffiliated third while of from to completion operating utilized both drilling pay a during strong the our the of XX,XXX vertical quarter, and our per our and existing We the our We maintaining from during drilling quarter per high the proceeds midpoints to of sales production. LOE, record third barrels high program successfully guidance, down cost During was our our per returns a operating an certain non-core the the of at sales and record success help were guidance essentially program the XXXX. driver continued of third we our assets our executed the and second of XX,XXX operating wells which year million were expenses oil of Result near related guidance capital $XX quarter day. Lease end day, ranges. our equivalent performance for spending quarter, of ongoing into for period range. which the outstanding

than the and second result $XX.X less of our was and was reflected were expected million X% a quarter the LOE higher pricing decrease realized per adjusted respectively. results generated in partially expense million, record costs. levels sales quarter by to primarily oil third workover Higher-than-anticipated $XX in expectations, third of offset LOE compared BOE As BOE and BOE which XX%, per volumes EBITDA sales quarter. The

However, EBITDA as was year-to-date mentioned I X%. earlier, growth adjusted

second versus $XX.X the million wells midpoint at the the which October. X wells, in completed were in and million, in X quarter third in online Looking came and other Central near guidance invested we early CapEx, the Shelf quarter. In we quarter, horizontal Platform. Basin was $XX.X X third Northwest drilled X the X the of the the

of adjusted In Also addition, previously quarter, the Crane the in of which upgrades the work-overs, included completed from flow wells in that vertical timing CBP cash also and including represented in in and infrastructure company. discuss we Travis quarter leasing. adjusted spending more free for projects adjusted Impacting cash cash flow XXth the for X in cash increase was Adjusted Ector drilled detail capital free later. million third working Total and changes second will quarter. County capital capital capital X balances a for flow X million County. free was $X.X was flow third positive quarter South, the free impacting CapEx the $X.X in in mentioned resulted that certain consecutive

balance to Turning sheet. the

year-to-date valuation XX a price million that sold for $X.X debt the $XX stockholders. this As the million view closing point this The an attractive and quarter, debt million reminder, make Founders used pay estimated we of as acquisition X.Xx which were important of We non-core assets third the help down sale $XX sales to in proceeds cash our $XX flow. August. last to reduction months next An in led to since represents for is cash. million of

we X.XXx. ended $XXX a liquidity million result, with leverage ratio As quarter the of third of and a

We the full year updating guidance our for are performance wells the quarter year, quarter fourth and and quarter plan the to X third our XXXX account completed X of assets. X we horizontal X for to the sale and our X to non-core to impact Regarding vertical well X wells reflect drill to-date. to outlook with of vertical in and fourth horizontal drilled

October, during drilled completed X third we also part quarter. the As production in a wells and the on placed of latter reminder,

As and cash as in conditions changing the as our we market flexibility to manage to past, well prices the commodity quarterly flow. retain react

or program drilling on maintaining Our oil focused production. organically slightly our growing remains

to barrels day. is XXXX guidance XX,XXX of year equivalent per production oil of barrels oil Our per updated XX,XXX and day XX,XXX full to XX,XXX

to Regarding oil to per and oil in production of more details of oil specifically, oil the of provide Travis a mix. With sales barrels barrels for then fourth total XX,XXX and questions. XX,XXX XX% XX,XXX this quarter per and over resulting that, we to day volumes comments with between range day, to I before Travis? closing will the equivalent return turn call expect open we XX,XXX

Paul, good everyone. morning, Thanks, and

This was team volumes our operating a we discussed, that flow and or met in realized the by Paul quarter core second initial assets in in-line our execution a Outstanding from Cash by $XX resulted generated sale by contributed exceeded from third in most debt across pricing non-core recent total the the spending financial record performance posted proceeds and XX% capital of than the levels. board and As offset combined quarter. to decrease sales and assets, more our expectations. paydown of operational quarter. million guidance our total partially with the the third

said This third and record and that our BOE top of the X% will the overall gas sheet the remain volumes detail. sold volumes X% from positive per realizations. of in takeaway quarter in top-end quarter and day. for growth barrels The look exceeding quarter, as quarter oil program improvement As drilling priority the BOE the our sales sales Paul's a driver and of has I was with past decrease the guidance. impact a improved and day more overview, a respectively, NGL our primary company. With as in have well the per let's XX,XXX of our increase, second third We echoing the at balance XX,XXX viewpoint, represents

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

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

XX% primarily realized the realized of revenue price for for NGL third quarter, third of a driven from quarter. The the million, $XX.X the Our lower second was second result XX% pricing. for averaged XX% compared overall WTI by quarter quarter decrease the to

We continue In negative NGL as positive only of in sales, production. opportunities it $X.X of resulting not short, higher gas were offset a net for XXX% million. quite oil to to negative XX% total fully revenue, target sales while was our mix of total accounted our oil able

see we As pricing negative third realized in gas. quarter, noted, continued natural the to for

the reflects are we continued product our reduction the on the as alleviate costs news reflected realized the October flowing gas in The is of is GTP impact a price, third-party the of larger additional in majority pricing the constraints Pipeline in capacity our seen is takeaway While have natural pressure forward. gas basin. Matterhorn which and good expected West in to takeaway pricing Express now line started sales Texas, going with

regulations for compensation, quarter, with the BOE fees to LOE regulatory newly excludes per the of due LOE due midpoint per quarter. see reorganization or come comments, requirements for expenses. in for Cash with an accrual. $XX.XX $XX.X was $X.X emissions our of plan second pleased primarily per BOE. Paul's to to are reporting payments versus severance $X.X share-based incentive higher or increase to guidance was $XX.XX to associated $XX.X G&A, annual implemented Echoing consulting now compared adjustment of leadership, the at to to million second Moving the field million which and million the million $XX.XX we the $XX.XX BOE substantially

derivative million second of loss. Our third $X.X million quarter results a for which loss million was the a on an gain, versus of offset realized of million of gain $XX.X contracts unrealized $XX.X $X.X include a by quarter,

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

Finally, for per second of compared income reported or million share $X.XX QX, per diluted $XX.X $X.XX quarter $XX.X we to share. or net net diluted million of income

was quarter diluted third second items, income versus lower pretax associated of with per We realized diluted $XX.X third gains on share, in unrealized estimated and share. net of second the million with of million income quarter, quarter million including the share-based while per losses adjusted million or XXXX $X $X.XX $XX.X and posted net the million or compensation expense, after-tax hedges adjusted of impact approximately quarter our $XX sequential pricing. adjusted $XX.X Excluding non-cash decline $X.XX EBITDA

that guidance. Note quarter we for Adjusted online. guidance completed quarter, and had and of This capital the the cash were million the third the range our flow we $X.X within now DUCs expenditures. During versus million, with million and X $XX in end invested within $XX.X was of the second that to million completed are each million online $XX.X $XX wells third was coming in of at quarter. early October free drilled

third adjusted million million the million of quarter, XX, drawn in credit on impacting mentioned, $XX.X down in $XX cash free EBITDA our Paul million quarter million less the spending capital we to third As compared the borrowing and paid $X.X September flow $XX and Founders was second higher revolver since in million our $XX the acquisition At on facility. late August. $XXX closing had year-to-date quarter. We

With reduction change base with million in proceeds in the and free on X.XXx. cash capital liquidity previously debt due of a the the hand. of the assets, our cash a million a The ratio was flow of non-core cash and between and sale million discussed million mostly difference current $X.X $X.X our working $X.X from paydown to in borrowing $XXX million, leverage $XXX availability adjusted was

Moving now our positions. hedge to

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

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

contract positions, breakout presentation, and our each For release please earnings type. our which include price average a of detailed the hedge see for

Looking balance impact reflects the costs production the associated of assets operating with at of the our guidance. year sold. and The non-core the

per have to full of average and of per oil sales XX,XXX BOE of day our such, crude XX,XXX oil. volumes guidance As updated year daily sales to BOE volumes for to XX% XX,XXX volume barrels the oil XXXX XX,XXX sales or been day

volumes for addition, XX,XXX sales oil we XX,XXX volumes XX,XXX to the of sales In of a of providing outlook barrels per of fourth sales oil per are XX,XXX quarter, and at crude BOE XX% to day day oil. BOE

with full between program, and midpoint our previous to of we CapEx, on the year $XXX which million For line XXXX full year is expect development $XXX million now our spend in guidance.

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

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

Thank you, Travis.

disciplined cash flow follow maximize enhance quarter debt of as in designed first to solid Our performance sheet view XXXX, strong reduction. direct the we merits results balance our of for proven further of third the our half a which the and the and strategy reflection through free generation

are a profitably sustainable execution We this business to doing opportunities and the organic providing capital of growing return goal by external the the through of combination of a of ultimate targeted stockholders. with

potential organically. I new on designed mentioned the through to acreage. unlock and for we look hydrocarbon resources a new zones existing phase our represent new These of producing our investments earnings results identify forward opportunities in new to As growth to testing of inventory release, seeking our develop company

to I institutional the We individual the our our more will related and strategy tried have from we closing address calls, share future. In in this on comments questions my heard to have on stockholders. the past key

practice, I will today. do Following same that the

we've The in our relates quarter debt, heard the and this first example provides third a down paying point of regard. good commitment to

ratio levels, our sustainably a are our reduce focus we continue reduction we oil discussed paid prices Debt reduce on to lower levels, As with below Clearly, said at a debt. million X. meet $XX debt prices Having debt pay leverage earlier, be maintain than huge another to that, reduction in capital until if have coming reduction ability key year-to-date impact so to will production spending $XX down current we we down will million. goals. debt our oil in can

our low valuation and of marketplace. like Another would thing recent to heard in the current discuss is we've stock the and

has We high-profile other by in appears the us a activity of XX,XXX reflecting to price the you deal the of approximately part for Apache XX% to That until know, the long activity on production CBP many and had our website. As operators. the and included been has changing CBP in the important updated flowing Northwest operating Apache's be in recent with areas, of been dominated equates of M&A net our occurred summer, which deck has disposition its $XX,XXX Up our posted the and day, barrels of of CBP in per handful of oil assets The Slide million. conventional that metrics upside oil. September assets $XXX on equivalent southern summarized was per daily shelf areas smaller drilling The overlooked. Shelf in XX estimated sales BOE.

margins using lower We believe because When have metric costs involve assuming Ring's generally comparison also higher those for assets. recovery that assets the assets and and using than of some this APA enhanced production price day average LOE barrels approximately XX,XXX Apache's for Ring stock of quarter flowing Ring's per per approximately BOE, of share. transaction indicative equivalent $X.XX of be daily and should per valuation third oil $XX,XXX Energy COX,

point production APA lower, When mix our the suggest considerably too probably is that that higher of is Ring's the LOE higher, considered indicative price. regarding could leaving price XX% $X.XX Another considering is a this that can be indicative that metric share oil conservative. margins, per which made is suggests be could higher most

is acquire year Ring's Clearly, analyst assets. price comparison is to willing $X.XX valuation consensus should using trading levels be a months to that comparison flow Another the for as in common is first we cash been per estimates industry Xx be multiple our observed we industry approximately of next of have than at suggests reasonable considered significantly full assume similar XX approximately estimated months marketplace flow. flow. XXXX estimated flow, next the to has indicative a Xx a current reasonable cash multiple A X.Xx the valuation metric, Ring's cash share stock value range. the pay to in past XX less If cash as metric

is on at a trading based XX comparison trading an and is large very sincerely stock. months opportunity discount acquire I Ring common that them a second incredible valuation reasonable to a stock. In way to metrics before stock believe value Ring suggests our The Energy short, have investors currently

Rocco questions. will this over that, So the for call [ ]? with operator turn we to

[Operator Instructions] Today's at first Truist. question Neal comes from Dingmann

little Paul, out start now, you you get but just my you wondering, inventory. idea really the an us years, right And question is on when give earlier, think on you because have? bit drilling a you extended it's And when look has I'm to about at maybe just I'm just there wells. were trying of -- what again, changed vertical that touching again, and of what in of of at both opportunities, inventory? that again, sense looking has type maybe horizontal both how these runway a

good. estimate corporate deck. question, around that our you opportunities we our a XXX very very Yes, And inventory good if in deck, That's Neal. at look we're

don't that to -- or And have that so Delaware XX companies be of quite room we and Midland Basin many the of years don't we just XX running have. in the large frank, have

why And the I we new phase shared on part are so of also that -- so we're a that's in on of both release entering but acquisitions. today call this the reason and concentrated And development.

actually We organically into have believe our we built that of can this and I could up that spending opportunities start stack we're our team some the capital that. to to engineering quarter geoscience contribute inventory. identifying

and and A&D you're And X of win, through also expanding so so organic terms see to and to means. speak, basically going think through inventory building in inventory I that ways to

care very term, And that of, so have. but have people don't we XX-year the and taken horizon right well that now, short we other have medium

in so regard. Did to so that focused Neal? expanding question, the your why And on our answer part ways I win that's we're reason of

the different all in you've now now different added or you between the hear how M&A, mean existing, are or for just to the different exactly. you I'd looking Yes, platform, different do different there? or you then opportunities How just you're And interesting the how when of same, how either love again, relatively and are economics -- -- how Alex on or some you're the I lastly, for the shelf. -- sort both opportunities, team, how viewing is and existing shelf? platform it potential

Yes.

on let everybody that. I'll So in of kind chime

think this the kind year high and for a economics cost improved the are because I goods -- seen have services. actually capital think the we've pullback from of watermark I on

come wells cost our the to and our So drill wells slightly. complete down has

if our we puts seen oil economics oil the lot into also the is can actually speculation a what But are those know, as back improved So that same. to help prices of price the we've the pay you depend have on investments. volatility

that from a levels subject standpoint, and in do be there I time are economics going I prices. activity So they -- believe the will they're will think when that to be to the are, oil Basin Permian increase. but what

ourselves out some wave activity I was seeing continue I there dispositions larger And the think hit street of opportunity inventory what there, down. companies. that the And future the respect on hitting we some believe evaporate may to see of And think pursuing. that strategy we're the I depending to that these I we're first think the from to dispositions going with take that we're savings so the will of is. But that and be this fit summer marketplace can opportunities the more

drill what do terms know these them And we return to in really that? optimistic want very of wells am clearly how chime like very looks the so We've strong generate for to a complete efficiently the stockholders. Alex, on and our economics. future inventory, I in building future you that demonstrated about and

proves I down. that point on Neal, really we a that Paul. talking XX is Thanks, IR has Yes. Page about. have structure our In deck that cost gone the think Paul D&C, slide in

it places, so in the in a we are our cost robust. vertical the more the question the always is those horizontals. lowered -- get both versus we've structure looks lot investments And of And our as what

lot forward the acreage offset try bolt-ons, add-ons continue with via but to continue moving tackling operators. add landscape blocking and a other and And do we'll we to see negotiate deals we to or trying to of that so one-off inventory

So did for we Neal? question answer you, that

Partners. Alliance comes from question our And Grampp Global Jeff with next

to guys organic program? about the talked of hit a the inventory. on chunk of What's growth proxy is maybe that decent be example, as level QX wanted know kind the prospects or new with you good don't if finding exploration having of taking I comfort so testing guys development to going if wells of QX, like those type bucket, kind wells? of Or in of versus around you you in are delineation work how or any wells are can parameters capital the to many you will? how put in dozen I that is much a kind a would drill kind Paul, you capital going that say

Yes.

very always Okay. And walk question, good we run. got can That's a Jeff. we I've before said to that

challenges strengthen If Energy, you keep #X issue look believe facing the our reduce to balance And is pointing at and our issue. all to Ring of we we sheet. #X the is debt what

And capital projects maximize generation. allocate and laser-focused that we the I've sure to making cash flow so been really on actually -- that free

So everything focused capital is here. on efficiency

we so afford opportunities. We to really investments cannot And can't put do that. into just capital high-risk investment

our forecast we year, our goals. well versus this performed and very have However,

other several our we and inventory geoscience expand these opportunities they and our Central again, have opportunities, also some Platform. had And to of done what saw seen team, And so outstanding in thanks up to Basin down operators organically. the we've identified

of leases. we on so decided our some these ideas to own And try

a believe, what, we're quarter, number. actually wells drilling quarter, our bit and I more, good XX% little a represents, that pretty about this this So or maybe of that -- capital X

on an risks PUD risk believe these and benefit But taking eventual of And right the how now up goes. bit hitting take books. locations number we enormous we'll so little some that these opportunity for wells, could have of end we could that the see lead more to our that to a

And the balance company, about again, I rules things mean, so so than balance is more to need important on sheet that. future, now laser-focused reduction to on I we're balance X focused grow I And sheet, gas the trying going you industry, going debt off and thing. right? am in remember there's in most balance am so oil be okay? to is the And sheet, sheet, the the X

those see continue and with inventory you and production we XXXX, on But to production, for set And and of that so we sprinkling have maintaining replace going ourselves our will these be off that the need our reduction, will opportunities also goals we're balance higher-risk the some into debt goals and to going in growing slightly for to opportunities. inventory. build higher-risk

walk a so And it's we we tight I to rope. run. before say And got

do X, answer little -- question, healthier, depending then see scale shareholders necessary Jeff? we of those as you'll inventory a to in kind or that But a that growth. our the start size leverage our of return and more your to company see then whether that, allocate prices more towards kind that all capital grow get capital bit generate spending growth. Does you'll dollars into of things play. kind the see that come on we'll and we'll you'll building towards As our for and paying and below down real of And and product some ratio inventory or we're gets health the some

you fairly and given Really to anything, incremental to would have your your it. helpful. wells And that on side it facility kind Got investments that, within areas or are existing modest, fair conclusion? fair generally existing fairways. you're Yes. that on if test fair development infrastructure the the fairly some extent find of Is of success is the within is that proximal, new following assume, a -- it since say I these up footprint be

infrastructure. in most, because knowledgeable over our all, I'm is It to intimately that turn going and about involved in to he's so but very Shawn Young And okay? not

that. into So Shawn, jump

Yes.

to water the we the will accurate some the supply cost, have be advantage invest dollars to infrastructure production there is able I quote the rates. on stuff take of keep of For water both water some disposal are that and on up we're with side that is to some your these side facilities that. think expected wells, the also part, and most we'll in proximal But there drilling and where

And question Capital. John comes from our ROTH next White at

My questions operator. to have the been answered. I'll turn it back

And with Tower Water our Research. Jeff from question comes next Robertson

quarter oil of Paul XX% Alex, about was production. third or

the second fourth? than Oil, gas issues quarter. or mix that So production the also the you quarter think, constraints and are I in in lower the growth. slightly Are third good had there infrastructure production impacting was

No. I opinion, don't know different if you a Alex. have

I plant is major go our why and of mix was you're did 'XX, think the -- second And there No. we of expansion fields. oil one it's our half alluding what down, that to in in a more

And the pressure back the pipeline. they've the on lowered all so expanded plant,

more is. on little a get to And there to input you the CBP. I'd so bit that that, we're able to to defer some as sales but more Shawn as well in like what gas that's give

kind X -- of In the run-time plant there's increased alluded to things did that due entity there's we one pressures. driving that lower the line there. CBP area, that. Yes, Alex really had a to expansion also our was The midstream

And different basically the us we is to ability third gas. then been improved some upgrades gas. And the sell facility some so in have of deliver our areas have thing the doing to allowed that also that

So of gas combined third of all those sales overall and the increased takeaway our kind have for quarter.

sorry, Is have benefit oil is a when gas natural I'm -- is you comes with that, been production gas prices think ability -- I to there since increase there that an -- there quarter third negative, since takeaway? -- do or, oil the

the of are plant that, on is, reduced. In line pressures actual there expansion some especially where

reducing incremental And little our by we bit seeing obviously, benefit, as a are pressures some there, getting well. so yes, of operating a we're oil

the negative forget, as all our not don't And gas across is of board. Yes. as

product. our a price. we we price So to South, worse for In to get the tend North, in tend a get better the

production changes highest would generate Paul, on most 'XX? much suggest the it think allocate you're do oil the to allocate from where base, second concentration half free of gotten flow oil you of the amount to where the you've goal in capital preferentially to going in to mix XXXX the is asset if the of cash

No, I don't actually.

because to in Now it oil back there could highest say have portfolio. example, let's occur wells weightings been we've just I drilling our of that one -- County, that will the really go the Ector for

a the for and our County year, we're And part. are going so be inventory and opportunities playing currently is next we at on working budget to Ector large and looking

our will mix. oil again, But a focusing So it's of to all increasing be going be allocation the function on mix. we

that's what those the kind everything do allocating the this the right that the those generation. But -- -- so focused now, from how continuous assets that some look it to come from on flow wells new we oil doing. we quarter depends impacts investments existing mix we at in is Everything And operating how is to what's and thing free maximizing the wells cash thing. that yes, capital we on of everything test of a here and we're are and drill,

hierarchy on balance you slide the showed, but the of terms share dividend, talked the share about repurchase uses When fit get you you would valuation free just leverage of ratio, your to you've or where past repurchase want of point in based in the sheet in plan a a cash?

to all when -- opportunity a When that, mean, function value to at returns going of In buyback? I and going capital for our a do be think what's best be all I'm we I it better to better would a to shareholders, investment at our Well, intrinsic stock And shareholders to opportunity shareholders. to be versus to function to I dividend price that's is so stock be our -- where look the or it's our refer me, alternatives. to of to it look a that. those is other Is referring the we words, return what of that.

back of always we ever now you course, really again, of if can't of put tell if certain we dividend. put We go, never it that that be will where deliver I the dividend, that something because, part want like it and it do a So able so be in being of that can always kind but size choose will we -- we the and have conversation not down to to and sustainably is in confidence goes exactly place to to and know that choose deliver scale road. a sometime

answers that question. think I so your And

It scaling in acquisition strategy. company does. lastly, through talked And past we've about the growth the the and

the a have get heavier go right the balance to sheet -- Given preference flow? assets collateral value production you with side still to the of where PDP-type and do today, on for because the you cash to fit are to along you

oil how this are about acquire certain what for so also we we've function the past, higher decline like oil it, generally And liquids, acquire predominantly of and right? because up talked about fact We Jeff. long-life, shallow margins, having the higher talked these you We do. in a again, margins. it's wells, you that types But looking much And we operating you of assets. and end

that's pretty grow And that with supplement to opportunities priced economic PDP a high kind at it's through undeveloped a just competitive so so with buy better all that that We'd to similar that achieve discount what are or of of have, of Everything for. already if rate. it like but comes an the that already these we well, looking with have undeveloped inventory actually balance as inventory you if have. that But buy we in comes that opportunities both. to it PDP, to are we with lot And going economics a also things we're holy the a then buys, together. is of come competitively grail it well, we're and can with try PDP

[Operator Noel next Brothers. from Our question comes Parks Tuohy at Instructions]

Just geoscience are to on be on drilling you're back touching going folks with your doing. what the working

do? of looking of precise as highly realization you is And Just, that been long they're has more there's variable you're at the Or the I explore? regular productive? sort I'm guess I've work can just they're are to that are trying where that had to was targets that's been is that San beyond location other targeted there other wondering, more Andres. -- and maybe that My formations a wondering, the impression as are looking impression those far of what be your targets, sort I also

Yes.

out of been kind technology and we technology. the Platform, or past that either I'll opportunity speak, here, Basin and that let in to verticals in bag there's now, to believe drilling Central horizontal right been stack apply frac the several these in the areas the so drilling that So cat haven't that areas we've we of in where these

And so with these multiple stacked pays depending on the thickness, the place. resources in

these taking we've in so that downspaced to areas, proven we more has area that we vertical allows cost-effective found areas technologies XX them okay? past, -- inexpensive to complete in them. us haven't applying an so And apply it's technologies in new really that in much some to to And we've drill done expand inventory, that and spacing, that XX-acre or modern these been wells, the

some drill So also economic. hole, seeing you out -- zones also per these frac economics. of very it bring and you plug and out your that effective, it on. horizontals pay individual very But you thicker That's and efficient large we're all been have and very all of in EURs recover the way great

trying so And we're all that expand to out.

is and is the pay when But the Joel So more question, XX then I bottom mature. tried Central industry X, areas, the the X, think that as line now, in X, Basin people weren't Platform, stacked whereas X, in ]. learning answers years the your technology, technologies [ more back same ago the

drill technologies of ago. today, able as make have becoming how other people and the economic we and associated economic of So we're with actually becoming these the now They to a more ideas that some tried years are result wells. complete

when unconventional us just how price speaking awareness again, they on development, say, just with plays? RORs considerably can are look of catch breakevens like because, oil of returns, the don't a we're you generous sort that realized actually, up are your is And sort what talking, it. even more know much looking at $XX than like Got there bread-and-butter I of more

Yes.

and generate because a companies benefit. the of That's can do look that is are the low. part Ring we breakeven of do lot we costs like that So types Energy returns other why us

you If right $XX our period. when But of we've time ago, a remember, costs years considerable mark. were here also came that X seen that inflation since then around I amount first breakeven

that $XX still $XX when So you you full current value. also But carry our the oil got of G&A breakeven lot. but -- costs consider remember, that's on company. And to the drilling a our to price, wells is really around we

paying We interest expense, have down our debt.

different these all other have things. We

we'll why And while, our oil still that's been although the so are been they've prices oil lower at current in to than preference If and pull we our that last back where pay spending here so levels growing debt, slightly will so in down maintenance we've saying the to fall paying then production little is or down appreciably prices. that -- and capital preference capital we growth, for debt. of pull spending down on levels

at how I that's future. the so out And of look look That's I here. economics how the at kind

acquire operations, returns. organically own the this undeveloped and so By opportunities. to to these team more win. ways the part proven beyond continue where sustainably strategy how into increase get have generating types And effectively taking locations to integrate of our inventory a build returns. able Ring deliver and and win to identifying to the this And us to so will We've generate profit, on properties we've of next development we're inventory the to been just management that of looking also give point at we our for this can is another that of of -- them acreage continue step in we way and to and know point we

those one long Just portfolio? of or just vintage that those And acquisition done, I what just assets were Terrific. how with of the non-core other been leasing thing had sales was about, those? you've the curious wondering in

in first acquired, Platform. very before Central was these the wells Basin horizontal part were were some -- they they back northern what the are they we XXXX, started of formed our and when Well, developments. that there in of call they first They vertical Ring portion were were assets of

very older of inventory. are a they steady per-barrel were so And vintage operating their the declines. on higher our basis, costs But among wells, end

and favorable on negotiated what and an costs, And very there operating among we out the higher that deal expressed operator were we interest, is that. they think so was there a

operating interest the it per-barrel a also time, down them. best additional the costs in a to one, our reduces on our transaction. result really debt do it's couple that so same we're able shareholders. We At as and improve of Number basis, things. pay of of helps And it a

more really Basin think deal of they good in it's And us It's a our Platform. a Central in I non-strategic the and part yes, overall. mature were non-core. just to area northern So

Research. question And of next is Water our Robertson Tower from a follow-up Jeff

selling? are you just there of sale. you non-core asset other the non-core came question around if would -- Do that assets along, you'd You it, the was my many structure consider right part that consider addressed but

tight for getting operating rocking we've a But to to facilities not numbers wouldn't most now. market anything I and have with with the don't -- all that associated the the of right in We're these, it everything failure things really very scouring We've building frequencies, the our We're I'm is We're doing now. cost cleaned and mindful the a Yes. of pretty are job field. operating right like yes, what doing capturing of part, every last good lot portfolio. making sell. done of And mean, costs first-class saying costs. the up of in headway out I reduce that our now molecule we up we our tightening to we're operating the terms methane and kinds in reducing office. team

and in the Our cost best Ring something so... on, total Energy, and we is just we're here interest we the at focus on it's know shareholders, operating to incentivized focus and of

turn like call closing And question-and-answer this session. I'd McKinney our over back concludes any for the to remarks. Paul to

once the thank for and call. Well, Directors, the of team you listening again in today's behalf entire want and Board participating I thank of on to And you, Rocco.

strong. pleased results quarter our to to for operational year posted for date next financial the remains solid have And outlook and are and the remainder XXXX. of We fourth into

for Ring We continue thank great has everybody you keep day. our Energy. a interest and everyone appraised your hope again, of progress, will I to you, and in

call. Thank you. We today's This thank conference today's attending for concludes you, all, presentation.

lines, You a may day. your have now and wonderful disconnect