Ring Energy, Inc. (REI) Stock Analysis

Ring Energy’s principal competitive advantage lies in its focus on conventional oil assets in the Permian Basin, particularly the San Andres formation. This asset base is characterized by low production decline rates—REI’s proved developed producing (PDP) base declines at 22% annually, compared to a peer median of 33%. Lower decline rates reduce the capital intensity required to maintain production, supporting more stable cash flows and higher returns on invested capital.

REI’s operating model emphasizes cost discipline. All-in cash operating costs were $21.51 per barrel of oil equivalent (Boe) in Q2 2025, among the lowest in its peer group. This cost structure, combined with a high oil weighting (68% of production), enables robust cash operating margins—$21.12 per Boe in Q2 2025—despite commodity price volatility.

The company’s scale is modest relative to larger Permian players, but REI’s operational flexibility is a differentiator. Management can quickly adjust drilling activity in response to market conditions, a contrast to larger rivals with multi-well pad commitments. REI’s high working interest (~96%) and operational control further support rapid decision-making.

Compared to peers such as APA and Permian Resources, REI trades at a lower enterprise value per flowing barrel ($28,410 vs. $45,347), suggesting the market undervalues its margin profile and asset longevity. However, REI’s higher leverage (2.05x net debt/EBITDA) is a relative weakness and a focus for ongoing improvement.