Ring Energy Inc (REI) 2021 Q3 法說會逐字稿

Good day, and welcome to the Ring Energy Third Quarter 2021 Earnings Conference Call. (Operator Instructions) Please note, this event is being recorded.

I would now like to turn the conference over to Mr. Al Petrie of Investor Relations. Please go ahead, sir.

Thank you, Chuck, and good morning, everyone. We appreciate your interest in Ring Energy. We'll begin our call with comments from Paul McKinney, our Chairman and CEO, who will provide an overview of key matters for the third quarter. We will then turn the call over to Travis Thomas, Ring's Chief Financial Officer, who will review our financial results. Paul will then return to discuss our future plans and outlook before we open the call for questions. Also joining us on the call today, and available for Q&A during our Q&A session, are Alex Dyes, Executive Vice President of Engineering and Corporate Strategy; Marinos Baghdati, Executive VP of Operations; and Steve Brooks, Executive VP of Land, Legal, Human Resources and Marketing.

During the Q&A session, we ask you to limit your questions to 1 and a follow-up. You're welcome to re-enter the queue later with additional questions. I would also note that we posted a Q3 2021 earnings presentation to our website this morning. During the course of this conference call, the Company will be making forward-looking statements within the meaning of Federal Securities Laws. Investors are cautioned that forward-looking statements are not guarantees of future performance, and those actual results or developments may differ materially from those projected in the forward-looking statements, and the Company can give no assurance that such forward-looking statements will prove to be correct.

Ring Energy disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Accordingly, you should not place undue reliance on forward-looking statements. These and other risks are described in yesterday's press release and in our filings with the SEC. These documents can be found in the Investors section of our website at www.ringenergy.com. Should 1 or more of these risks materialize or should underlying assumptions prove incorrect, actual results may differ materially.

This conference call also includes references to certain non-GAAP financial measures. Reconciliations of these non-GAAP financial measures to the most directly comparable measure under GAAP are contained in our earnings announcement released yesterday. Finally, as a reminder, this conference is being recorded.

I would now like to turn the call over to Paul McKinney, our Chairman and CEO.

Thank you, Al. We appreciate everyone joining us today. As you know, our top priority coming into 2021 was to strengthen our balance sheet through debt reduction. Our strategy has been to capitalize on the organic opportunities within our portfolio to maintain our production and liquidity and focus on generating strong cash flows to further pay down debt. We are pleased with our third quarter results as we once again generated free cash flow and strengthened our financial position by paying down debt, which in turn, increased our liquidity.

Looking at our results in more detail, we generated adjusted EBITDA of 19.7 and $2.6 million of free cash flow during the third quarter, while paying down $5.5 million of bank debt. We ended the third quarter with approximately $56 million of liquidity, a 9% increase from the end of the second quarter. During the third quarter of 2021, we sold 758,387 barrels of oil equivalent or 8,243 barrels of oil equivalent per day, which was 4% lower than this year's second quarter sales of 792,551 barrels of oil equivalent or 8,709 barrels of oil equivalent per day. Impacting third quarter sales volumes were certain events, including new well completion activities of the company and an offset operator that temporarily reduced the production from a number of our higher producing wells. I am happy to report that the production from these wells have since recovered to normal levels.

Additionally, the company continued to experience lower than anticipated natural gas sales due to certain third-party processing facilities' capacity constraints in both the Central Basin Platform and the Northwest Shelf areas. In the Northwest Shelf, the plant restrictions also reduced oil sales due to higher pressures. Finally, many of the CTRs completed during the third quarter resulted in longer than anticipated downtime while the horizontal sections of the wells were being cleaned out.

We performed 10 CTRs, including 7 in the Northwest Shelf and 3 in the Central Basin Platform. Year-to-date through September 30, we have performed a total of 24 CTRs, including 18 in Northwest Shelf and 6 in the Central Basin Platform. Offsetting the impact of lower sales volumes was higher third quarter prices for both crude oil and natural gas that contributed to an overall 3% increase in revenues over the second quarter.

A key highlight of this year's third quarter was a continued success of our 2021 drilling programs. As shared in the past, we have aimed in 2021 to invest in only our highest rate of return drilling opportunities. Our programs have been designed to not only mitigate our production declines but to maximize cash flow as well. During the third quarter, the production from our Phase III drilling program contributed very little to third quarter production volumes, but should allow us to capitalize on the currently strong commodity prices during the fourth quarter. Perhaps more importantly though, and assuming these strong commodity prices continue, the production from our Phase III and Phase IV drilling programs should significantly increase revenue and earnings early next year as the majority of our lower-priced hedges roll off.

With respect to what we accomplished, during the third quarter we utilized 2 rigs to successfully execute our Phase III drilling program of 4 wells, including 2 1-mile lateral wells in Northwest Shelf and 2 1.5-mile lateral wells in the Central Basin Platform, with all 4 wells at 100% working interest. Consistent with the success of our Phase I and Phase II programs in the first half of this year, all of the Phase III wells were drilled and completed on schedule and within budget. As I indicated earlier, the wells were placed online late in the third quarter between September 9 and September 18. So the production from these wells had a very minor impact on our third quarter sales volumes. However, we have been very pleased with the production results from these wells to-date since they are meeting or exceeding our pre-drill expectations.

Success of our 2021 drilling programs and the continued improvement in crude oil prices encouraged us to commence our Phase IV drilling program of 2 wells, including 1 1-mile lateral in the Northwest Shelf area with approximately a 75% working interest and a 1.5-mile lateral well in the Central Basin Platform with 100% working interest. The Northwest Shelf, 1-mile lateral was placed on production at the end of October and is currently exceeding expectations. The Central Basin Platform 1.5-mile lateral well was successfully drilled in October and is awaiting completion and is expected to be placed on production before year-end. While the production from these wells have not -- will not have a big impact on our 2021 production, it should provide a nice increase as we enter 2022.

With that, I will turn the call over to Travis Thomas to discuss our financials in more detail. I will then come back and make a few closing comments. Travis?

Thanks, Paul. For the third quarter of 2021, we generated revenue of $49.4 million and net income of $14.2 million or $0.12 per diluted share. Excluding the estimated after-tax impact of pre-tax items, including $8.2 million non-cash unrealized gain on hedges and approximately $800,000 for share-based compensation expense our adjusted net income was $6.8 million or $0.07 per share. During the third quarter of 2021, we had approximately $16.3 million in cash flow from operations and $13.7 million in capital expenditures. The combined result was positive free cash flow of $2.6 million.

For the 3 months ended September 30, 2021, we had oil sales of 659,247 barrels and natural gas sales of 594,841 Mcf for a total of 758,387 Boe. Our third quarter of 2021 realized pricing was $69.61 per barrel of oil and $5.86 per Mcf of natural gas for an average of $65.11 per Boe. The differential between our average oil price received in the NYMEX WTI was a negative $1.05 per barrel for the third quarter of 2021 versus our second quarter average differential of negative $0.99 per barrel.

Our average natural gas differential from Henry Hub was a positive $1.43 per Mcf for the third quarter versus a second quarter positive difference of $1.07 per Mcf. For more detailed discussions of our financials and other income statement line items, please refer to our earnings release and 10-Q that was filed with the SEC yesterday. Of course, I will be happy to answer any questions you may have during today's Q&A session.

As Paul discussed, during the third quarter, we were pleased to report another period in which we generated free cash flow, further paid down debt and increased our liquidity position. We will continue to use much of our free cash flow to reduce our debt position with the level of free cash flow and cadence of debt pay-down, primarily driven by the timing of capital spending and market conditions.

As of September 30, 2021, we had $295 million drawn on our revolving line of credit and liquidity of $56.2 million, including $2 million in cash and $54.2 million available on the revolver, which included a reduction of $800,000 for letters of credit. We paid down our revolver by $5.5 million in the third quarter and a total of $18 million in the first 9 months of 2021.

Turning to our outlook for the remainder of the year, we expect fourth quarter sales of 8,800 to 9,200 Boes per day, including 7,500 to 7,900 barrels of oils per day. Mentioned in the release, our estimated company net production in October averaged over 9,000 Boe per day. With the addition of 2 Phase IV wells coming online in the fourth quarter, we are positioning ourselves to capitalize on what we expect to be continued strong oil price environment in 2022. Keep in mind that we have been essentially fully hedged at lower prices for most of 2021. However, based on our current contracts in place, starting January 1, 2022, our hedge volumes will drop to 3,129 barrels per day. We anticipate an average lifting cost for the fourth quarter of 2021 of $10.50 to $11.50 per Boe. Lifting costs include lease operating expenses and gathering, transportation and processing costs.

Turning to our fourth quarter 2021 capital investment program. We expect total capital spending between $11 million to $15 million, with all expenditures funded by cash on hand and cash from operations. In addition to company directed drilling completion activities for the 2 well Phase IV program, our capital spending outlook includes targeted well re-activations, workovers, infrastructure upgrades and continuing our successful CTR program in the Northwest Shelf and Central Basin Platform areas. Also included as anticipated spending for lease costs, contractual drilling obligations and non-operated drilling, completion and capital workovers. In the updated investor presentation, we will provide a breakout of capital spending. Our third and fourth quarter 2021 capital program was designed to place us in a stronger position as we enter 2022.

Regarding our future hedging activities, we believe it is important to protect our future cash flows, capital spending programs and ability to pay down debt. However, we also want to participate in what we believe will be a rising price environment to the fullest extent possible. We look forward to sharing the details as we execute our opportunistic hedging strategy.

So with that, I will turn it back to Paul.

Thank you, Travis. In 2021, we executed on a number of initiatives that put in place new processes designed to improve how we evaluate the technical, operational, financial and administrative aspects of our business. We hope that you are as pleased as we are with the progress we have made and look forward to further improvements in 2022 and beyond. A clear example of our success has been our targeted drilling program for 2021 and our ongoing efforts to drive increased operational efficiencies in our pursuit of reducing costs and meaningfully strengthening our financial and market position. We are doing this by remaining squarely focused on generating free cash flow, and improving our debt-to-EBITDA metrics. We can do this through continued debt reduction as well as growing our EBITDA.

Another key focus for our company is a pursuit of strategic acquisitions, and we are active in the marketplace, screening opportunities that we believe could make long-term sense for our stockholders. As we have discussed in the past, any potential acquisition using equity must bring in sufficient production, revenue and cash flow to improve our leverage ratio, and the transaction metrics will need to be accretive to our existing stockholders.

As you recall, we launched a sales process during the second quarter of 2021 to sell our Delaware assets. I had hoped by now, we would have been able to share with you the terms of the sale of those assets, but that sales process is still underway. We continue to be in discussions with several interested parties and will provide further updates as definitive information is known.

Before I wrap up this call and turn it over for questions, I'd like to share what we are doing with respect to ESG. We are putting the final touches on our initial sustainability report, which we look forward to publishing before year-end. With respect to 2022, we are actively working on our capital budget for next year. And although our Board of Directors has not approved these plans, we intend to maintain a single rig working for most of the year. The opportunities we have in the Northwest Shelf and Central Basin Platform should lead to meaningful production growth in allowing us to take advantage of the stronger commodity prices, increased revenue and earnings and improve our balance sheet.

In closing, we believe these are very exciting times for Ring. The steps we have taken over the last 12 months position us very well for 2022, and we look forward to sharing our drilling plans for the next year and the coming months. We appreciate the continued support from our stockholders and look forward to keep enabling appraise of our ongoing progress.

And with that, I will turn it back over to Chuck for questions.

(Operator Instructions) And the first question will come from Jeffrey Campbell with Alliance Global Partners.

The press release indicated that there was upside based upon positive results from your 2 Phase II -- Phase III, excuse me, Central Basin Platform wells. And these were the first new wells that were drilled in the area in 2 years. Can you qualify the elements contributing to this upside? I think some color here would be interesting.

I'm going to turn that over to Marinos Baghdati to answer that question. But I got to tell you, we are very pleased with the results of all 4 of our wells. They're all doing very well. So Marinos, do you want to answer the question specifically about the Central Basin Platform?

Sure. We have not drilled a well there in 2019, as you mentioned, Jeff, and -- since 2019. And with these 2 wells and the results we're seeing, we've made a few changes to the completion practices, a few tweaks to the completion of the wells. And based on the results and current oil pricing, we're encouraged that we'll be able to continue drilling in the CBP area in the coming years.

I think it does. I mean I'll just add that when we first evaluated what had been done in the past, we quickly came to realize that a lot of the drilling in the Central Basin Platform is very geologically based. And so we put a lot of time into evaluating the geology of the locations that we picked. And then at the same time, we did a complete review of all the completion technology like Marinos stated. And we decided to make some tweaks, and the results of that have been very positive. And so what you're going to find going into next year is that we have a handful of wells, we're going to continue drilling down in there, applying what we've learned this year and hopefully, continuing to improve the results. But right now, we're very happy with the results, and they're very, very strong economically.

This is Alex. I'd like to add 1 more thing. The other thing that's contributing to the success of the CBP well so far is we've gone back and geosteered all the wells prior, and we're really focused on the landing zone. So it's another key contributor to our success so far in the CBP. So we're very optimistic of what the future holds there.

Okay. That was very helpful. It sounds like when we kind of pull all that together, it's better targeting, better drilling, better completion. You noted that 2 rigs were released after the Phase III program. Was there 1 rig involved in Phase IV? Has it been released? And if so, when do you anticipate resumption of drilling?

Yes. We actually drilled each of the wells with a different rig. Both rigs have been released. And that was due to several issues, I guess, not -- issues may not be the right way of saying that. But I think it was a top drive issue, wasn't it? We were originally going to do it with 1 rig, but we decided to pick up another rig because of the challenges we had with the top drive on the first well drilled.

Okay. And if you have any idea when you're going to -- I assume you're not actively drilling now. Do you have any sense of when you're going to resume drilling?

Correct, Jeff. We finished drilling the CBP well on October 17. That's when we released the rig. And we're -- we have actually 2 rigs that we're evaluating now for our 2022 program. And if we need to decide to drill any more wells towards the end of this year, we'll be able to pick that rig up -- 1 of those 2 rigs up. They're available, and we feel comfortable with the rig situation as it stands today.

One of the things that is impacting our plans, just to let you know, this is a little bit more color than perhaps you asked for, but sourcing all the materials to drill our wells is an issue. We're seeing supply chain issues affect our drilling program. And so before we pick up a rig, we're trying to ensure that we will not have delays associated with those type of problems. And so we're securing everything we can prior to picking up the rig. And once we get it going, we hope to keep it going for the rest of the year, or most of the rest of the year.

The next question will come from Neal Dingmann with Truist Securities.

Paul, my question is when -- you guys have been efficient on both, obviously, the rig side and the completion side. I'm wondering when you look -- I know you don't have full guide out for next year, but fair to say, I mean, I guess, is the plan potentially still to run more of a maintenance capital program? Or I guess, what I'm asking is that, I know you guys are highly free cash flow focused, doing a good job paying down debt, and I'm just wondering around that, do you think the best way to do that when you and your team look at it, is purely just a maintenance capital life activity program like some others are doing? Or given the returns in your well, do you step things up a little bit? So again, I'm not looking for specific guide for next year, but more of just overall plan, if you can.

No, Neal, that's a really good question. And this brings us back to questions that we've received in past calls, and I've stated, we're going to still continue with this strategy. As we improve our leverage metrics, we are going to slowly change the allocation of that capital more towards growth. And so I think what you can see -- the big issue for us, I mean, if you look beyond this quarter, next year, at the end of -- at the beginning of next year, the majority of our lower price hedges roll off.

We're positioning ourselves not only with the capital spending in the last part of this year to increase our production. So we kind of springboard into the next year, really ramp up the revenue and cash flow. And so -- and because our metrics are improving with that additional EBITDA, we will allocate more money towards growth. And so next year, it's not going to be an abrupt change. It's going to be a gradual change, but we're going to gradually start putting our foot down on the pedal, so to speak, to increase growth.

Got you. And then the thoughts, I know you've already pretty well hedged into next year, your thoughts on just kind of play the hedges for next -- I know some guys have redone hedges a little bit, take advantage of upside. I don't know if you can do any -- thoughts about doing that or just thoughts about more point hedging further out.

Well, like Travis mentioned in his portion of the call, we're going to have a little over 3,100 barrels a day of lower-priced hedges that we'll carry into next year. Right now, it's our belief anyway that our shareholders are investing those because they really do believe in the upside in energy prices. And so we are going to try to structure our defensive position so that we can take advantage, full advantage of the prices as we go forward into next year. And so our hedging strategy right now is clearly focused. We will always have a hedging strategy that puts in the protections necessary so we can continue to pay down debt, so we can protect our capital program, but we're going to structure it such that we can take full advantage of the prices as they continue to remain strong.

The next question will come from Noel Parks with Tuohy Brothers.

I just -- apologize if you touched on this, I think you could -- but could you just go over, again, a bit about the G&A trend in the quarter? Is it up sequentially. I think it has been, last couple -- and I know that's also about the aggregate -- our re-trend is also dipped over the last 3 quarters. Can you just go down a bit on that?

Yes, sure. I sure will. Yes, G&A trend -- one of the things that I've done when I came on board, we came in with a pretty steaming staff. We are doing our best to keep G&A low. But we have started filling out our engineering, our land, our operations and financial groups with the appropriate headcount, so to speak, to manage the business. And so here, this last -- in the recent past, we've hired a few more people. So you're going to see a slight increase in the G&A. But with respect to LOE, we still have several initiatives. The benefit of our CTR program doesn't occur all at once but collectively, we're seeing really good progress in lowering our LOE. Now that is in the face of rising costs and prices that we're seeing as a result of the supply chain issues and as we're seeing with respect to inflation.

I've been kind of surprised when I read non-oilfield-related information associated with the inflation rates that we're incurring. I think the reason we saw something that's more indicative of what we were actually realizing in the field because prices are really up. I mean, especially with respect to steel. Now these price increases have affected cementing and all the other services that we utilize as we repair our wells and maintain our wells. And so operating costs are just going up. And so -- but we'll see how that goes because we still believe we have additional initiatives to continue to reduce costs. Those cost reductions, though, are going to be offset by -- and whether it's partially or fully, we'll have to wait and see, but we're seeing some significant increases out in the field right now associated with inflation and supply chain issues.

Great. And 1 thing to just talk on the M&A, the fuel front. I was curious to hear about maybe what the potential buyers of the Delaware Basin are taking. I'm just wondering if sort of like the prior process, if their access to financing was among the things sort of slowing that process down. And then if you could expand that out, probably just maybe talk on the seller side of M&A in the region. So what is the psychology these days, bid-ask spread, is that the issue? We were seeing higher but somewhat more stable trading range of increased prices for instance?

So with respect to the Delaware, we continue to have strong interest. The size and the -- if we owned the deep prices, this stuff would have been sold a lot quicker. But what we're finding is that the real challenge from our perspective appears to be the interested parties with buying our property appear to have challenges securing or getting the financing necessary to actually get this thing across the finish line. If you remember what happened to us last year, we just didn't want to enter into another transaction, sign a purchase and sale agreement with someone who can't do the financing. So we spent quite a bit of time working with the potential buyers here and trying to flush out with -- a much higher level of certainty, their financing positions.

And what we're finding is that they're getting -- they're having difficulty in getting their financing across the table. So the banks or the financers of assets in this size, I guess, a smaller size, they appear to be a little bit more challenging to get something over the finish line than the larger banks dealing with larger transactions. That's our observation right now. And so we're still working with folks. But the 1 thing we don't want to do is repeat the -- what we encountered last year.

Now with respect to the spread and the difference between what we're seeing out there in terms of what buyers and sellers, there's always a gap there, but I believe you're seeing transactions occur. Some of the deals that we have participated in, but were unsuccessful, we know that we were in the right ZIP code. The big challenge, and I've said this in the past, our challenge has been our balance sheet. And I haven't made any qualms about it. I mean, the balance sheet is sitting away. And so we've said that we wanted to transact with an acquisition in a way that also improves our balance sheet, so improves our leverage ratio. And to do that, we would need to use equity.

And so the other part of our strategy and my commitment to my shareholders was to make sure that if we did something, a transaction, then on the tail end of that transaction, my existing shareholders would have an accretive benefit associated with cash flow or barrels and barrels of production per share and all that. And so if we had the cash, we would have been successful probably already this year. And so most people look at equity, and they want a disproportionate amount of equity. And I'm not going to lose sight of the strategy that I've laid out from our shareholders because I think my shareholders support that.

But I'm not going to forget the fact that I promised my existing shareholders that the deal we do will be accretive. Otherwise, we won't do one, because we have the organic ability to continue to pay down debt and strengthen our balance sheet with the assets that we have. I'd like to accelerate that, but I'm not going to do it in a way that causes us to compromise on the strategy we've laid out for our shareholders.

The next question will come from John White with ROTH Capital.

Paul, thanks for that detailed commentary on the Delaware asset sale. You were very frank, and I appreciate it. Switching to the topic of you making an acquisition, I think everybody is aware there's probably more private companies in the Horizontal San Andres than there are public companies. So I would guess that gives you a lot of targets to work on. And I'm wondering, are you looking at opportunities outside of the Horizontal San Andres Play in other parts of the Permian Basin.

Yes, we are. We do like the San Andres Horizontal Oil Play, and we're also looking at opportunities to acquire more interest in that play. But as you know, that play also extends down into the Central Basin Platform, where we've drilled a couple of wells already this year and are very successful. But we really like the Central Basin Platform area in the southern part of the Northwest Shelf, primarily because we operate there.

We've got a really strong operating team, and I'd love to be able to spread the cost of that team over more wells and more barrels of production just to capture those synergies. But we have also seen some other opportunities outside of that area that are very appealing. And so my primary pursuit is finding opportunity to generate the returns that I know that are competitive and comparable to the ones that I have in-house. I just don't want to dilute my existing portfolio of properties by buying properties that have super high operating costs or don't have the same type of economics because I want to allocate capital to them. And so I'm trying to keep a really good and attractive portfolio of high margin, low decline and profitable assets.

We like where we are. We're going to continue to focus there. But there are other assets that are just slightly outside of that Central Basin Platform and the southern shelf that are appealing as well. I can't promise you one way or another, but we are focusing primarily in the Permian Basin. We haven't really evaluated anything outside of the Permian Basin right now, but there are some opportunities even outside of there. But I think we're going to continue to focus on the Permian Basin just simply because we know it, we're working there, we're very effective and cost-effective there. Does that answer your question, John?

Yes.

Our next question will come from Jeffrey Campbell with Alliance Global Partners.

I got 2 more. My first one is, does your fourth quarter '21 guidance anticipate contingent struggles with the third-party processing to recover nameplate capacity and what's your full and view on this issue going into 2022.

Yes, I'm going to partially answer that, but I'm going to turn it over to Marinos as well. Yes, we struggle with what's going on, primarily in the Central Basin platform. The operator of those facilities continues to tell us that they're going to have things up and running. We'll be up and running for a few days or maybe 5 days or a week and then all of a sudden, we're down again. And so we're really struggling with. And I don't think we're the only operator.

I think most of the operators out there in the Central Basin Platform that sell our gas for this particular gathering system, have struggled with the same issues. And so I'm tired of making promises as to when that's going to come online. And we began this year -- in the original guidance we had, we assumed that after the winter storm that all of that would be restored. And it turned out that a lot of that equipment was older, rotating equipment that was challenging to repair and is proven to still be that way to this day. Marinos, is there any more color you want to add to that?

No, sir. Well, actually, yes, there's a couple of things. We are working, discussing with other parties, alternatives for taking our gas in certain areas. And in addition to that, we are making efforts, we've been installing compressors in certain areas that have allowed us to increase our gas sales quite a bit, and we're going to continue to do that to kind of mitigate the problem while we navigate through this.

Okay. That was helpful. Let me just repeat 1 part of it again. Do you -- is the anticipation of continued struggles there already anticipated in the guidance you provided for the fourth quarter?

Yes, they are.

Okay. Great. And my last question was, do you have any particular expectations regarding your ongoing next bank redetermination?

Well, we're in the final phases of that. We're pleased with how that is turning out. I don't really -- I hate to go online before the banks actually hold their boat and make their final decisions. But right now, things look very favorable. I think part of what you saw -- if you go back to the spring redetermination, the banks did not have any further requirements for hedging. It appears that that's the direction we're going here again. And so liquidity is strong, and we anticipate that it will at least stay the same that it is.

I'd like to add 1 thing. This is Alex Dyes. On the RBL, the price decks have come out, and they are higher than the spring.

That's right.

We're working with our banks to fully finish the redetermination, and it should be out hopefully in the next month or so.

Yes, I think that was helpful. And again, congratulations on the quarter.

Hey, thank you very much. We're really excited about the quarter. I know the production was lower than we had anticipated. But if you look at how we position this company for next year, we're looking at a really strong first quarter as we springboard out of the fourth quarter of this year.

As there are no further questions, this concludes our question-and-answer session. I would like to turn the conference back over to Mr. Paul McKinney, Chairman and CEO, for any closing remarks. Please go ahead.

Yes, thank you, everybody, for joining us today. I'd like to remind you that we have a special stockholders meeting coming up next week. And so we look forward to everybody voting. So with that, I'll end this meeting, and thank you again for your interest and support in Ring Energy.

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