ALTA, WYOMING - 12/06/2018 (PRDistribution.com)
Following a loss of confidence in the board of directors of Ring Energy, Inc. (“REI”), Cannell Capital LLC has voted against all incumbent directors. Cannell encourages other shareholders to do the same by December 10 before REI’s annual meeting which meeting is scheduled to occur in Midland, Texas at 10 AM on December 11th.
Factors contributing loss of confidence by Cannell include:
I. Lack of scale – it is hard to grow a dairy with only two cows (or rigs) – REI needs to merge up or into another company or companies. There are several private companies in or around the Permian Basin with better assets, a more modern and iterative approach to completion and superior well-by-well estimated ultimate recoveries and resulting net present values;
II. Lack of understanding of what being a public company means today. Low knowledge of capital structure return on assets, equity and the deployment of debt. Recent mismatch between the expectations set by management and her results suggest more naiveté; and
III. An unwillingness by REI to buy back shares paired with nonsensical answer as to why not. We prefer management and directors who eat what they bake. REI’s good to great internal rates of return are also not consistent with insider selling. Were things as rosy as management professes, then one would expect buying not selling – the sundry excuses of management and the board of directors notwithstanding.
Cannell Capital LLC believes that REI has value – perhaps great value. It does not believe, however, that shareholders’ current stewards are necessarily the best management for this stage in the company’s development.
Informed REI shareholders should vote “no” at next week’s annual meeting.
Contact:Stephen W. Wagstaff