Hello and welcome to the Ring Energy’s First Quarter 2023 Earnings Conference Call. Please note this event is being recorded. I would now like to turn the conference over to Al Petrie, Investor Relations. Please go ahead.

Thank you, operator and good morning everyone. We appreciate your interest in Ring Energy. We’ll begin our call with comments from Paul McKinney, our Chairman of the Board and CEO, who will provide an overview of key matters for the first 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 the Q&A session are Alex Dyes, Executive VP 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 one and a follow-up. You are welcome to re-enter the queue later with additional questions. I would also note that we have posted our first quarter 2023 earnings corporate presentation on our website. 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. Should one 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 yesterday’s earnings release. Finally, as a reminder, this conference call is being recorded. I would now like to turn the call over to Paul McKinney, our Chairman and CEO.

Thanks, Al. Welcome, everyone, and thank you for your interest in Ring Energy and for joining us today on our earnings call. The first quarter marked a positive start to the year, where we once again posted record sales volumes, adjusted EBITDA and cash flow from operations. Contributing to our results was a full quarter of production from wells brought online in December, new wells drilled and placed on production during the first quarter, and increased production from our recompletion activities. During the first quarter, we grew sales volumes 2% from the fourth quarter of 2022 to a record 18,292 barrels of oil per day. This was at the high end of our guidance range. Looking at year-over-year metrics, we grew sales volumes 106%, which primarily reflects the contribution of our Stronghold acquisition. With respect to our capital spending activity during the first quarter, we drilled and completed two 1-mile horizontal wells in the Northwest Shelf, each with a 100% working interest, and drilled and completed two 1.5-mile horizontal wells in the Northwest Shelf, one with a working interest of 99.8% and the other with a working interest of 75.4%. Additionally, we drilled and completed three vertical wells and performed six recompletions in the CBP South, all with a working interest of 100%. We produced record adjusted EBITDA of $58.6 million during the first quarter, which was 4% higher than the fourth quarter of 2022 and 65% higher than the same quarter for the previous year. We spent $38.9 million on capital projects, which was within our guidance range of $36 million to $40 million. The result was $10.5 million of free cash flow that was 92% higher than the fourth quarter and marked our 14th consecutive quarter of free cash flow generation. We ended the first quarter with $179 million of liquidity, which was 151% higher year-over-year, although 5% lower than at year-end of 2022. As previously planned, during the first quarter, we made the final deferred payment of $15 million for the Stronghold acquisition. We also made a payment of $3.5 million for post-closing adjustments, which contributed to a temporary net increase in borrowings of $7 million on our revolving credit facility during the first quarter. We look forward to accelerating debt reduction for the remainder of the year based on our current outlook. Turning to our capital spending outlook, we reiterate our plans to spend between $135 million and $170 million during 2023 that includes a capital efficient combination of drilling horizontal wells on our legacy acreage and vertical wells on our CBP South acreage. This amount also includes planned spending for recompletions, capital workovers, infrastructure upgrades, leasing costs, and ESG-related projects. As you may recall, our budget plans for 2023 are based on WTI oil prices of between $70 and $90 per barrel of oil and Henry Hub prices of between $2 and $4 per Mcf. As in the past, we have designed our spending program with flexibility to respond to changes in commodity prices and other market conditions. With respect to our second quarter, we expect to spend $34 million to $38 million to drill, complete and place on production six to seven wells, perform targeted recompletions and execute other capital projects. Regarding our 2023 production guidance, we are reiterating full-year sales volumes of between 17,800 and 18,800 barrels of oil equivalent per day. Looking at the midpoint of our full-year guidance, we anticipate a year-over-year increase of approximately 48% and a 2.5% increase over fourth quarter 2022. For the second quarter of 2023, we expect sales volumes to come in between 17,900 barrels of oil equivalent per day and 18,400 barrels of oil equivalent per day. So with that, I will turn this call over to Travis to discuss our financial results and guidance in more detail.

Thank you, Paul, and good morning, everyone. During the first quarter of 2023, we sold approximately 1.1 million barrels of oil, 1.6 Bcf of natural gas, and 240,000 barrels of NGLs for a total of 1.6 million BOE or a record 18,292 BOE per day. First quarter 2023 realized pricing was $73.36 per barrel of crude oil, $0.66 per Mcf of natural gas, and $14.30 per barrel of NGLs or $53.50 per BOE. This was 12% lower than our realized pricing for the fourth quarter of 2022 of $60.69 per BOE. Our first quarter average oil price differential from the NYMEX WTI futures price was a negative $2.67 per barrel versus a negative $1.07 per barrel for the fourth quarter of 2022. This difference was mostly due to the Argus CMA role that declined $1.27 per barrel on average for the period and the Argus WTI, WTS, which declined $0.56 per barrel for the fourth quarter. Our average natural gas price differential from NYMEX futures for the first quarter was a negative $2.08 per Mcf compared to a negative $3.79 per Mcf for the fourth quarter. Our realized NGL price for the first quarter averaged 19% of WTI compared to 21% for the fourth quarter. The combined result was revenue for the first quarter 2023 of $88.1 million compared to fourth quarter 2022 revenue of $99.7 million. Looking at the more significant expense line items on the income statement, LOE was $17.5 million or $10.61 per BOE, which was essentially flat from the fourth quarter of 2022. Production taxes were $4.4 million or $2.68 per BOE versus $5.2 million or $3.16 per BOE for the fourth quarter with the tax rate remaining steady at approximately 5%. DD&A was $21.3 million compared to $20.9 million for the fourth quarter of 2022. On a per BOE basis, DD&A increased from $12.92 from $12.71 in the fourth quarter. Cash G&A, which excludes share-based compensation, was $5.2 million versus $6.1 million for the fourth quarter. I would like to note that the fourth quarter included $1 million of transaction costs for the Stronghold acquisition. Adjusting for the transaction costs, fourth quarter 2022 cash G&A was $3.14 per BOE versus $3.15 per BOE for this year’s first quarter. Compared to last year’s first quarter of $5.01 per BOE, we saw a 37% year-over-year decrease in cash G&A on a BOE basis, which is a direct reflection of the synergies afforded by the Stronghold transaction. Interest expense of $10.4 million versus $9.5 million for the fourth quarter, with the increase substantially due to higher interest rates and a greater number of days in the period. During the first quarter, we posted net income of $32.7 million, or $0.17 per diluted share. Excluding the after-tax impact of pre-tax items, including $10.1 million for non-cash unrealized gain on hedges and $1.9 million for share-based compensation expense. Our first quarter 2023 adjusted net income was $25 million or $0.14 per share. This is compared to fourth quarter 2022 net income of $14.5 million, or $0.08 per diluted share. Looking at adjusted EBITDA, we were pleased to generate a record of $58.6 million in the first quarter compared to our previous record of $56.3 million for the fourth quarter of 2022. I would note that the first quarter of 2023 adjusted EBITDA was 65% higher than the $35.6 million reported in the same period in 2022, again, a direct result of the Stronghold acquisition, our legacy field development campaign, and our targeted efforts to drive further efficiencies in the business. We are also pleased to report record cash flow from operations of $49.4 million for the first quarter, a 4% and 53% increase from last year’s fourth and first quarters, respectively. Free cash flow for the first quarter of 2023 was $10.5 million compared to $5.5 million in last year’s fourth quarter. The increase was primarily due to lower capital spending, higher sales volumes and lower realized hedge settlements, which was partially offset by lower realized pricing and higher interest expense. As of March 31, we had $422 million drawn on our revolving credit facility, with a current borrowing base of $600 million. At the end of the first quarter, we had $177.2 million available on the revolver, net of letters of credit. Combined with the $1.7 million of cash, we had liquidity of approximately $179 million as we entered this year’s second quarter. As Paul discussed, our debt position increased $7 million in the first quarter, primarily due to the $15 million final deferred payment associated with the Stronghold acquisition, along with a payment of $3.5 million for the post-closing adjustments. As we look to the remainder of 2023, we are focused on further debt reduction in realized commodity prices and the timing of capital spending impacting the cadence of quarterly debt pay-down. Looking at our share count. During the first quarter, we had approximately 4.5 million common warrants exercised at $0.80 per warrant. Accordingly, our first quarter financials reflected the issuance of the 4.5 million shares of common stock and the receipt of approximately $3.6 million in cash. Additionally, last month, we executed agreements with certain holders of nearly all our remaining outstanding warrants that resulted in the early exercise of an aggregate of 14.5 million warrants. We received gross proceeds of approximately $9 million, which will be used to accelerate debt reduction. If you recall, these warrants were associated with the equity raise completed in October of 2020 and have been reflected in our fully diluted share count since that time. Following the early exercise of the warrants in April, we had approximately 78,000 warrants outstanding. Turning to our 2023 outlook for the full year and second quarter, as Paul discussed, our full-year 2023 capital spending plans of $135 million to $170 million have not changed. For details associated with our capital spending plans, see our press release and presentation. Looking at our sales volume guidance, we continue to expect full-year 2023 to average 17,800 to 18,800 BOE per day, of which approximately 68% is oil, 17% is natural gas, and 15% is NGLs. Looking at this year’s second quarter, for the full second quarter, we expect to spend $34 million to $38 million to drill, complete and place on production six to seven wells perform targeted recompletions and execute other capital projects. Accordingly, the second quarter 2023 sales are expected to be in the range of 17,900 to 18,400 BOEs per day, of which we expect 69% to be oil, 15% natural gas, and 16% NGLs. For the full year 2023, we reiterate our LOE guidance of $11 to $11.60 per BOE. For the second quarter of 2023, we currently expect LOE to range between $11 and $11.40 per BOE. I would note that all of our 2023 guidance is included in yesterday’s release and in the presentation on our website. Turning to our hedge position. For the remainder of 2023, we currently have 1.4 million barrels of oil hedged, which equates to approximately 41% of our estimated oil sales based on the midpoint of our guidance. We also have 1.9 Bcf of natural gas, which equates to approximately 38% of our estimated natural gas sales based on the midpoint of guidance. For a quarterly breakout of our hedge position, please see our presentation on our website, which includes the average price for each contract type.

Thank you, Travis. Over the past year, we made substantial progress increasing our size and scale, improving our per share metrics, and strengthening our financial position through the Stronghold acquisition. We continued investing in high rate of return projects through our targeted capital spending program and continued initiatives to drive further efficiencies in our business. I want to thank our entire workforce for their continued hard work and dedication as we remain squarely focused on executing our value-focused proven strategy. Looking to the future, our immediate focus is on the efficient execution of our 2023 capital spending program and maximizing our free cash flow to pay down debt. We intend to remain focused and disciplined by prioritizing our capital spending on high rate of return drilling and recompletion projects, which should allow us to maintain or slightly grow our production over fourth quarter levels. We believe targeting excess free cash flow to pay down debt will drive long-term value for our shareholders. As we have shared in the past, we are committed to positioning the company to return capital to stockholders and our efforts both short-term and long-term are planned with this in mind. We believe our stock will be more appealing to a wider cross-section of the investment community if we achieve greater size and scale. We also believe that our absolute debt levels justify our continued focus on improving the balance sheet. These two beliefs drive our strategic focus on pursuing accretive balance sheet-enhancing acquisitions and maximizing free cash flow from our organic capital spending plans. As you know, the Stronghold acquisition is an example of the transformational impact a strategic transaction can have on improving per share metrics in the balance sheet. Another transaction supporting our strategy was the accelerated exercise of the outstanding warrants last month. By simplifying and enhancing our capital structure, we increased the company’s public float, accelerated debt repayment, and we believe trading liquidity on our stock should improve. So to pull all of this together, we believe staying the course with our sense of urgency, our resolve, and our commitment to our value-focused, proven strategy better prepares the company to manage the risks and uncertainties associated with the volatility our industry is experiencing and will generate sustainable and competitive returns to our stockholders. With that, we will turn the call over to our operator for questions.

Today’s first question comes from Jeff Grampp with Alliance Global Partners. Please proceed.

Hi guys. Thanks for the time. I am curious, first off, Paul, maybe you can just kind of give us your latest thinking on the CapEx side of things, understanding you guys are reiterating the full year, but obviously, there is some variability in there. With prices acting the way they are, is kind of the midpoint still a fair point to think about, or how are you guys kind of thinking about managing the business given the volatility?

Yes. Managing the business associated with the volatility is the name of the game this year for us. So, I mean I think we have said this more than once and not just me, others here in other venues. So, we have designed our budget to be between WTI prices of $70 and $90. If we are closer to the $70 average for the year, we are going to be on the lower end. If we are at $90 or closer to $90, we will be on the higher end. We are being responsive. Again, we are looking at it from a standpoint of essentially two goals. We want to at least maintain flat production for the year on our fourth quarter levels. And so we will spend the capital to do that. But we want to allocate every available dollar, excess cash from operations to paying down debt. And that’s what we are focused on this year. And so – but we will be responsible in our future capital spending. So, at this stage right now, I think that midpoint is probably a good place to be, but don’t be surprised if you see us change if markets continue volatility or it goes either steeply downward or upward in terms of price.

Got it. Okay. That’s helpful. And kind of a related point, I think in the slides, you guys had directionally assumed some well cost inflation relative to ‘22. I assume maybe that was the case in the first part of the year, but are you guys seeing any softness on the service side, or how are you guys kind of seeing things trend on the oilfield service pricing side and how we should be thinking about well costs moving forward?

Jeff, we are actually seeing some softening, especially on the completion side. We think costs are going to come down. We haven’t seen that yet. But as we have said in the past, for every well, we go through a bidding process, we rebid everything and we are staying current on the pricing, but I haven’t seen anything yet. We expect to start seeing it though towards the end of the year or here in the near future.

The next question comes from Patrick Enright with Truist. Please go ahead.

Hi Paul, Travis, Alex, congrats on a great quarter there to kick-off the year. My first question is, I guess looking at your operating metrics and your LOE, I guess over like the last four quarters, you have come in sub-$11 per BOE. And at the same time and looking at your ‘23 guidance with that range of $11 to $11.60. Is there anything – is there a potential spike that we should anticipate, I guess in front of us here, whether it’s with facilities maintenance or a work-over?

Right. We will let Marinos handle that initially, and we will all chime in a little bit on that.

Good morning, Patrick. One of our total LOE was in line with what we expected. I think it’s lower than guidance mostly because we were on the higher end of production. It’s a numerator, denominator type thing. And that’s one of the reasons. The other thing is, we are not sure on cost. We were very – how do I – so far we have had the elevated cost, but our team has been doing an excellent job of keeping track of things and making sure job costs don’t increase, even though we have put some increases, anticipated increases in kind of the numbers when we were coming up with guidance. So, we may revise those down in the future where right now, we just wanted to remain steady with what we are – just so we watch the rest of the year and maybe towards the next half, make adjustments.

Yes, we are good. So, just to kind of add on to that, when you bring on some of these newer wells and they do perform on the high side of things, you end up getting more production. So, that affects that equation, right, in terms of your lifting costs. And so, because we are a little higher on the production side than we were anticipating, it affected the operating costs as well on a lifting basis.

Good stuff there. As a follow-up here, I would like to get your thoughts and get a better understanding around your financing. As it relates to, I guess I mean really the regional like really the regional bank death spiral that we are seeing right now. And talking in – what’s your overall outlook on financing and like are you hearing anything in particular around further constraints?

Okay. Very good. That’s not a question I was planning to hear, but I will take it. But it’s actually a very good one because as we have been talking about this, the ongoing dialogue with our stockholders, we have been talking about the volatility that our industry has been in, okay. So, now we are seeing volatility in the banking industry that affects all industries, okay. And so, this is part of the reason why our Board of Directors decided even last year that our focus on reducing the balance sheet, the leverage on our balance sheet is really a number one goal. A fortress balance sheet, as several of our Board members remind us, is just something that we need to achieve because of the volatility that we are seeing in our own industry and now with the banking industry being what it is, it just makes a lot of sense. And so how does it affect our financing of things and some of our ambitions for this year, we believe that our syndicate is strong. The individual banks in there have not expressed and shown any issues that we should be concerned about. I do believe that there is a tightening going on. Anytime you have volatility like this, even with just the oil industry, you see a little tightening in the financing arena. But because we believe that we can structure future potential transactions with a combination of equity and cash or debt, that we should find that 2023, I am not going to say it’s going to be easy, but I believe that we can still be successful in this environment despite the volatility and despite the tightening that we are seeing in both industries.

That’s great. Really, really appreciate to get your outlook on that.

The next question comes from Noel Parks with Tuohy Brothers. Please go ahead.

Hi. Good morning.

Hi. Good morning Noel.

I just have a few things. I was wondering, you had mentioned that you are just now starting to get a sense of a little bit of softening on the cost side. And it seems like the pace of that has really varied basin-to-basin. And I am just curious how those hints of softening kind of manifest themselves, just a matter of tone, or as you talk to vendors? Are you getting inbound e-mails that you hadn’t seen for a while? Just curious what you are seeing so far.

Well, oftentimes and you guys are on a lot of calls, and there is a lot of other operators out there. But if you go back to our strategy and what we are doing and what we are doing different from many of the companies that are in the Permian Basin, our focus is on the conventional reservoirs. And so, we are applying the technologies developed for horizontal drilling and multi-frac technologies for shales, and we are applying that to conventional reservoirs that are typically shallower depths and so many of the rigs and the services that we are seeking are not in nearly as much competition as it has been in some of these shale plays and so some of the shales especially outside of the Permian Basin have much higher breakeven costs. And so, the volatility we are seeing in prices, those are the areas where you will see the reduction in drilling activity. And so, those are the areas that – some of these other operators may have already experienced reductions in prices, well, it’s because there has been a lot of competition for those sizes of rigs and those types of services. And in our area, although we are seeing signs of softening, you got to remember, our area wasn’t as competitive as the shale areas. And so, that has an impact. And so, no, we are not getting e-mails, but we are talking. We talk to a lot of people in the industry. The industry is a very, very close-knit group of folks, and we are all sharing information. And so, we are seeing the signs – but as Marinos indicated, we haven’t directly seen that in any direct communications or in any of the bids, but we are seeing the signs that it’s going to affect going forward because everybody else appears to be as well.

Got it. Makes sense. And one thing I just wanted to check on is with the Stronghold acquisition, did you pick up any lease obligations and anything that you need to drill to HBP that is on the table?

Yes. This is Steve Brooks. Now, actually, we did not pick up any real obligations with the Stronghold acquisition, so that gives us a little bit of flexibility, obviously, in our capital spending down there. So yes, that was a plus.

And we are beyond our capital – our commitments in our legacy stuff, too, right?

Yes, we are. We had a commitment with UO, and we have drilled that all up, so that’s all behind us as well.

Great. And I just wanted to ask you, when we are – let’s pull back a bit just very recently, but the 70-plus the street we have been on for quite a while now. I am thinking about your rates of return and if indeed, we do finally see services come back meaningfully. I am just wondering what sort of delta you might see in rates of return in the different areas, if I don’t know we get 10% or even better correction, say, by a year from now?

Well. Those are good questions, Noel. But I will go back to some of the real core benefits of investing in Ring Energy is the fact that we have some really, really strong solid assets. And so the undeveloped opportunities that we have been investing in since – well, since I have been here, have all had excessively very, very competitively low breakeven costs. And so, our rates of return are compelling compared to many, many of the shales, especially outside of the Permian, but even compared to many of them in the Permian. And so our program for any foreseeable prices generates in excess of 100% rates of return at surprisingly lower prices much lower than we have experienced since the downturn that occurred in COVID. And so, I don’t look at our variability in terms of capital spending being associated with – being a pullback associated with some kind of a spike coming down or anything like that. I think our focus, again though is because of the volatility we are seeing in our industry, the volatility we are seeing now in the banking industry, we just believe the best thing we can do for our shareholders to develop a fortress balance sheet and pay down our absolute debt levels and be in a position to where we can withstand the risks associated with that kind of volatility.

Great. Thanks. That’s all for me.

The next question is from Jeff Robertson with Water Tower Research. Please go ahead.

Thank you. Good morning.

Hi. Good morning.

Paul or maybe for Alex or somebody else on the team, you all show on Slide 17 of the investor deck some improved performance on wells you have build in 2023, both horizontal and vertical. Is there – are you doing something different with these wells and how you are drilling or completing them than you were doing last year, or is it just better site selections?

Yes. So, I will answer that initially, but then I will turn it over to both Marinos and Alex. And so, yes, we are doing a few things differently. When we acquired these assets from Stronghold, they had done a great job introducing the same type of strategy that we have been doing elsewhere and flying the newer latest, greatest completion technologies. But since we have taken over and integrated these assets into our operations, we have spent quite a bit of time looking at how they frac their wells, how they completed their wells, how they brought those wells back on and then at the same time, newer different ideas. And so, we are still testing and trying a few things. We are learning how and trying to figure out ways to optimize. And this is an ongoing thing that we do here, and I am really proud of the results we have had. And so, I am going to turn it over to Marinos to hit on that, or touch on it and then Alex will follow-up with him afterwards.

Thank you, Paul. So, if – two different answers for the two different assets that we have on the legacy horizontal assets, we are actually seeing over time the more wells we drill in a specific section, the opposite of the child – parent-child effect that you see in other plays. We actually see that our child wells are performing better than the parent wells over time as we deplete the reservoir and as we dewater it. And also see that increase in performance on the parent wells when we bring a child well online. So, that’s part of the reason that we have been able to maintain and slightly increase the performance on the horizontal wells. And then on the vertical stuff, like Paul was saying, we are actually seeing a reduction in well failures. We are trying to bring the wells on slower, decreasing the amount of sand that we get back and the failures and costs associated with that. So, that’s kind of the performance increase there that we are seeing on the South. And still a little early, but we are very excited about how much more is available for us to optimize on and increase efficiencies on them.

And Jeff, let me add a few more things here. We on purpose, created Slide 17 to give investors and just a general community out there an insight to what our well performance is like. So, I think the main message was, hey, we have consistent well performance for both horizontals and verticals. To add to what Marinos had said, from 2020 and 2021 to actually 2022, more efficient completions, as he mentioned, but landing zones are critical there and how we flow those back. And so just the overall learnings and also, if you recall, we started CBP drilling in 2021, and that – we drilled a lot more in 2022, and that had a lot of effect there, too. So, we have just really good horizontal well performance in both our Northwest shales and CBP assets. As far as the verticals, the vertical well performance increased from 2020 and 2021 and inclusive in 2022, real reasons there are just applying learnings from the past, more stages, improved completions, optimizing lift. But the other real big thing that affected 2022 is there is an area that we call PJ Lea, which you can actually see the well performance in one of the slides, I believe it’s Slide 18, there was no real drilling in 2020 or 2021 in PJ Lea. It was mostly done in 2022. And so those wells are just really strong and really compete for capital. So, that’s why you have seen us in 2023 drill a lot of PJ Lea wells.

Thank you. And Paul, in the – under your credit agreement, I believe after June 30, you all could pay dividends based on certain conditions under the credit agreement? Do you have a balance sheet leverage metrics in mind before you would be comfortable paying dividends?

Yes. There is a lot of things that we need to consider when we think about paying dividends. And I have said this in the past I believe that our company and our stock is more appealing to a broader cross-section of the investment community. If we were to gain larger size of scale, larger size of scale also contributes considerably to the sustainability. We – the last thing we want to do is introduce a dividend and then not be able to follow-on and continue paying that dividend. And so, it’s going to be a balance of things. And then also, what’s the really best investment opportunity at the time when we are eligible to make that decision. Now, I will go back and refer to Travis about the timing of when we are actually eligible to pay dividends.

So, yes, Jeff, you are actually right. It’s the second quarter financials. Once we have actually published them or at least given them to the bank and done all the analysis from there. So, our leverage ratio for the credit agreement has to be less than 2:1, which won’t be a problem. And the utilization rate has to be less than 80%. So then, it will come back to how do we as a company, where do we need that leverage ratio to be to feel comfortable doing it.

Thank you.

The next question is a follow-up from Patrick Enright with Truist. Please go ahead.

Thanks very much for taking my additional question here. Questions with respect to gas price realizations and, I guess from the results being soft this quarter, was it really like a one-off, or is there something else to it? And I guess along with that, I am curious to know how you are mitigating any of your price realizations, any downside on that?

Yes. Well, we are subject to WAHA pricing, right?

Yes, across the Permian.

Yes. And so, the issues that are affecting us are not unique. I think they are pretty well widely shared by other operators that are producing into these same systems. And so yes, I think those things are going to take their natural course.

Understood there. Thank you.

At this time, there are no more questions in the queue. This concludes our question-and-answer session. I would now like to turn the call back over to Chairman and CEO, Paul McKinney for any closing remarks.

Thank you, operator. Well, hey, in closing, I would like to inform our shareholders that we will be issuing additional information soon concerning an amendment to our articles of incorporation to increase authorized shares. The second item listed in our proxy up for vote on May 25th, so that will be coming out soon. And finally, it is my hope that all of you on the call today and all of our stockholders share our enthusiasm for what we believe 2023 can bring to Ring Energy and its stockholders. Thank you again for your interest in Ring, and I hope you guys all enjoy the rest of your day.

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