Ring Energy, Inc. (REI) has experienced an increase of 5.66% in the aftermarket following the announcement of an increase in the Fourth Quarter 2021 Sales Guidance. However, the last trading session closed at $2.12 with a decrease of 1.4%.
Fourth Quarter 2021 Sales Guidance – All About it
REI announced an increase in the Fourth Quarter 2021 Sales Guidance on 16th December 2021. Late last year, in response to rising oil prices, the company began the first part of the drilling program for 2021. REI dug 11 wells and finished 13 wells in 2021 that were aimed at the greatest rate-of-return inventory. Moreover, the company generated more than $11 million in free cash flow and paid down $18 million in debt during the first nine months.
This is done by executing a methodical and phased drilling program while maintaining a low-cost structure and a disciplined capital strategy. REI expects continued free cash generation and debt reduction during the fourth quarter of 2021. The key reason for the rise in the fourth quarter of 2021 sales projection of 9,000 to 9,300 Boepd is the favorable results from the Phase III and Phase IV drilling operations.
As REI goes into 2022, the performance of the Phase III and Phase IV drilling plans increases the position to profit from continuing high oil prices. The majority of low-priced hedges will expire at the end of 2021, and the company expects much stronger revenue and cash flow in 2022. In 2021, the key objective was to keep production going while also generating free cash flow to pay down long-term debt.
Furthermore, REI will strive to continuously improve leverage metrics in 2022, but they will also place a greater emphasis on increasing total production by maintaining a one-rig continuous development drilling program for the majority of the year, focusing on the great chances in high rate-of-return drilling inventory.