Ring Energy (REI) Q3 2026: Revenue Surges 21% Above Estimates
As seen on the 24/7 Wall St. homepage on November 6, 2026.
A $41 million unrealized derivative loss flipped GAAP to a net loss, masking adjusted EBITDA of $57.15 million at this $289 million Permian independent, which beat on both lines. It recycled non-core asset sales into an $18.8 million Central Basin Platform leasehold that expands its Crane and Ector County footprint by more than 25%, plus a $10 million debt paydown. Management is guiding to positive free cash flow in the fourth quarter.
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Ring Energy reported adjusted earnings per share of $0.10 for Q3 2026, clearing the $0.075 consensus by 33%, while revenue of $102.3 million landed 21% above the $84.5 million estimate. Production volumes rose 3% sequentially to 20,635 Boe/d, helping drive a 30% year-over-year jump in revenue at this roughly $289 million Permian Basin independent.
The headline GAAP result looked far worse: a $41 million unrealized derivative loss pushed the company to a net loss, obscuring adjusted EBITDA of $57.15 million. Investors should treat the GAAP figure with caution, since the derivative loss reflects mark-to-market accounting on commodity hedges rather than cash leaving the business.
The quarter's most consequential move was a deliberate portfolio reshape. Ring sold approximately $30.5 million of non-core assets and immediately redeployed the proceeds, using $18.8 million to acquire Central Basin Platform leasehold that expands its Crane and Ector County footprint by more than 25%, while putting $10 million toward debt reduction. CEO Paul McKinney called it 'a compelling example of how disciplined capital allocation can strengthen Ring and create stockholder value,' and signaled the strategy will continue.
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Capital spending reached $64 million in the quarter as Ring front-loaded drilling and infrastructure investment, including its first five two-mile co-developed horizontal laterals in Crane County. That intentional acceleration pushed adjusted free cash flow into negative territory for the period, though McKinney guided explicitly to positive free cash flow in Q4 and for the full year.
Looking into 2027, management projected oil sales of 13,200 to 14,300 barrels per day on a pro forma basis, backed by a plan to drill 20 to 30 wells longer than 1.5 miles. The company is also targeting infrastructure savings of roughly $50 to $100 per lateral foot and aims to push leverage below 1.25 times. The EPS history over the past several quarters shows an accelerating beat streak, with Q3 2026's $0.10 result the strongest in that run.
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Mentioned: REI