Ring Energy: APA Transaction Points To Potential Upside

Nov. 20, 2024 10:53 PM ETRing Energy, Inc. (REI) Stock
(9min)

Summary

  • APA sold CBP and NW Shelf assets for $950 million.
  • The metrics for this deal suggest a valuation for Ring's shares that could be approximately 50% to 100% higher than its current share price.
  • Ring will likely need to reduce its leverage without significant dilution to achieve this potential upside, though.
  • Ring's 1.59x leverage is still relatively high for an upstream company, although much improved from several years ago.
  • Looking for more investing ideas like this one? Get them exclusively at Distressed Value Investing. Learn More »

Oil pumps and wind mill during sunset.

Torsten Asmus

Ring Energy's (NYSE:REI) Q3 2024 total sales volumes exceeded the high-end of its guidance. However, this was driven by its non-oil sales volumes as its oil sales volumes were below the midpoint of its guidance (although

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This article was written by

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Aaron Chow, aka Elephant Analytics has 15+ years of analytical experience and is a top rated analyst on TipRanks. Aaron previously co-founded a mobile gaming company (Absolute Games) that was acquired by PENN Entertainment. He used his analytical and modeling skills to design the in-game economic models for two mobile apps with over 30 million in combined installs. He is the author of the investing group Distressed Value Investing, which focuses on both value opportunities and distressed plays, with a significant focus on the energy sector. Learn more>>

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, but may initiate a beneficial Long position through a purchase of the stock, or the purchase of call options or similar derivatives in REI over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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