2:20. We keep making our way through and we are on schedule. Thank you to all of you who are helping making that happen. Our next presenting company is Ring Energy. Ring is growth-oriented. They are an independent oil and gas exploration and production company. They are focused on their assets and their development in the Permian Basin in Texas and New Mexico. Paul McKinney will be presenting today. Paul is the Chairman and Chief Executive Officer of Ring Energy. Paul?
Thank you, Jim. Thank you very much. Thanks to all of you for being here. I also want to take a little bit of time to talk about Jim, Kevin, the rest of the EnerCom crew. This is a great event, and I do not know if you guys can see it, but from my perspective, since I have been here multiple times in the past, it has just gotten better and better. More and more investors are coming here to meet the companies that are presenting, and it is a great venue. Thank you for the time. Let us get started here. See how this works. There we go. I joined Ring in October of 2020. At the time, our balance sheet was pretty heavily levered, and our production was less than 9,000 bpd .
We are going to talk about the growth of this company, but more importantly, we are going to talk to you about this latest chapter. Where are we today? What is different about what we are doing in 2026, and what does that mean for shareholders in 2027 and 2028? My general counsel will be upset with me if I did not remind you to read our forward-looking statements and our supplemental non-GAAP financial measures. Those are important, so please do that. Before I talk about Ring, I want to put forward our thesis, so to speak. We believe that we are in the heart of the Permian. The Central Basin Platform and the Northwest Shelf and the rest of the shelf area was the Permian Basin before the advent of horizontal drilling, multi-stage fracs.
The Delaware Basin to the west and the Midland Basin to the east, on either side of the Central Basin Platform you see, those were the source rocks that sourced all of those formations, the conventional rock in the Central Basin Platform and also those shelf areas. That is really, really significant. If you look at the amount of production the Central Basin Platform and the shelf areas have produced, it is close to 20 Bbbl , which is considerably more than what the Delaware Basin and the Midland Basin did. The Midland Basin has produced about 12.5 Bbbl , and the Delaware Basin is just short of 10 Bbbl.
We believe the reason why we are so focused on the Central Basin Platform and the southern part of the shelf, number one, you have really, really low entry costs because everybody's still focused on those shales. There's a huge amount of recoverable resource that's still left to be recovered. There's, in our estimation, over 15 Bbbl left to be recovered in the conventional reservoirs in the Central Basin Platform. That's more than what either the Delaware or the Midland Basins have produced up to now. We believe that we are a significant operator. We're going to go through that. We are positioned to benefit from all of this.
When you look at conventional reservoirs, the thing that's unique about conventional reservoirs versus the shales is that the porosities and permeabilities of the conventional reservoirs is considerably higher than the shale. So we have shallower declines, longer lives that really feed into and really substantiate any company that's pursuing those. To us, all of that upside is we're not yet seeing any real competition for it. So I'm not going to tell you that we have infinite growth, but we do have a significant opportunity out here. So let's talk about Ring Energy. Again, I started in 2020, the fourth quarter of 2020. We were producing less than 9,000 bbl back then. Today, we're over 20,000 bbl. At the bottom of the chart, you can see the progression. Up to now, most people know us as a San Andres horizontal oil driller.
That's where we got our start. We've concentrated on developing the San Andres Formation in Yoakum County, Gaines County, and Andrews County. Since that time, through the acquisition that we made in 2022, the Stronghold Energy acquisition, we gained a big position in Crane County. That is an area that has seen explosive growth, and we'll talk about that. If you look at the progression of our company, we went from a company that was really burdened and challenged with our balance sheet, to now a company where our balance sheet is continuing to get stronger and will get even stronger at a more accelerated rate because of where we are. At the same time, we've demonstrated the ability to evaluate assets out here and make strategic acquisitions that delivered real value to the shareholder. I'm talking about accretive per share that adjusted per share value.
We've been able to do that over 2022 and 2023, and then in 2025, we landed the Lime Rock acquisition. So we've demonstrated a tremendous amount of growth. The company is stronger today than it has ever been. Matter of fact, almost in every regard stronger than we were as early as just January of this year. So we'll talk about that. Our core acreage is in the center of all the horizontal activity. The map that you see is a heat map of the Central Basin Platform, the southern part of the shelf, where all of the horizontal wells have been drilled. It's not an accident that our acreage is there as well. We've been focused on this strategy now for a long period of time.
If you look at what happened since 2020, you've seen the greater Permian horizontal percentage of total wells drilled increase from 29% to over 73% by 2025. The Central Basin Platform is awakening to this technology. If you look at the horizontal turn in lines by county, the counties that we're in have the most of those. If you look at our program itself, just as late as 2024, 50% of the wells we drilled were vertical. Today, over 70% are vertical. There's even a better story as we continue from there. We believe our acreage, due to the stacked pays of the Central Basin Platform, presents an incredible runway of high return opportunities to pursue.
If you look at what's happened in the two basins on either side, the Midland Basin and the Delaware Basin, those companies that pursued those unconventional resources developed new technologies that allowed them to put in manufacturing processes that really significantly improved the capital efficiency. They were able to bring on more barrels a day of production and more barrels of reserves per dollar spent. It's only been recently that that technology development has been something we can apply to what we do on the Central Basin Platform. Many of our reservoirs were considerably shallower, so we didn't have the weight of the drill string to push out to those longer laterals. We were drilling 1 mi and 1.5 mi laterals when they were drilling 3 mi laterals in these basins.
Today, we can drill 2 mi, and we believe that we can even go beyond 2 mi as a result of the advances in drilling technology. But when you compare that to this opportunity set, and you can look at all of the benches that we've shown there in that geological type log there, you can see all of the zones that have historically been produced vertically. A lot of those are being produced horizontally, and we believe that with co-development, where you get on a location and you drill multiple horizontals in all of these different pays, co-development brings a whole new set of economics to allow us to recover resource that otherwise may not ever have been able to be recovered unless you did that.
I know some of you may be thinking, "Well, prove it. Show us what you've done." It's not only what we've done, it's what other people have done. Here we have a map that shows how repeatable and how scalable this is. On your far left side there in the dark blue, that's Yoakum County. We're comparing pre-2015 horizontal drilling activity to where we are today. Before 2015, there were 32 horizontal wells. Today, there's over 576, and you can see where that activity laid. That was all west and northwest of the Wasson field. The geological reservoirs are the same, but Wasson was historically defined by the economics of the vertical wells that were drilled at the time that they defined the edges of the reservoir. When horizontal drilling came along and multi-stage frac technology came along, we opened up a whole new avenue of areas.
On the production plot to the lower right, in the dark blue, you can see what happened over those years. We were up over 50,000 bpd in a development that was historically considered uneconomic, and that's what this technology unlocked. As you can see in the blue section there for Andrews County, there's been a steady number of wells drilled there over this time period, and so horizontal technology was proven in Andrews County as well and continues to this day. We are one of those. Then if you really look at what's going on in Crane County, in the green boxes, if you look at pre-2015, 257 horizontal wells were drilled, and now over 658. Look at the activity. The yellow acreage is our acreage, and if you look at pre-2015, the horizontal wells were on our acreage.
That acreage came to us through our Stronghold Energy acquisition, and those wells were drilled by the prior operator of Stronghold Energy, Devon Energy. They tried it in 2010, 2011, and the technology just didn't allow them to generate the economics that met their thresholds, and so they sold it. Those assets ended up being in our hands. But look at what's happened since. In 2026, now you've got over 658 horizontal wells. Look at the activity between our yellow acreage. That is one private operator that has pioneered this same very technology. If you look at the growth in production on there, that green production, almost exclusively attributable to that operator. They're incredibly good at what they do. They pioneered a lot of this, and I don't mind saying who that is. That's Blackbeard Operating, a private company, and they've really killed it out there.
Their acreage immediately offsets ours. We've been out there testing. We started testing our zones a year and a half ago, and we continue to test these zones. This year, we've gone to, and I'll show you a little bit more here on another slide. We're going to multi-stage developments. Multi benches are being co-developed. We're going to laterals where we were doing verticals, and we're going to longer laterals that are more capital efficient. To zoom in to show you what that is, if you just look at that Crane County area, we've got over 200 high-return horizontal wells that we unlocked just this last year in our program. You can see the benches that we believe are perspective. If you look at where we were at year-end 2025, we had 14 horizontal wells booked as PUDs.
Now when you look at what our total location count is, we've increased that to over 70% of our inventory and well over 200 wells in the same area. We have a long future of future development. If you look at the economics, we increased our PV-10s from verticals to horizontals by 65%, we increased the oil recovery by 180% by using this technology. It's not new technology. It's proven technology that was first developed in the basins, the Midland and Delaware basins. It was substantiated by other operators that got out here just a couple of years before we did. You can see the explosive growth on the slide that I showed you just a little bit before. Let's talk about the future.
When I start looking at the future, and when you as an investor look at the future, you want to know what are our guiding principles? How are these guys going to allocate capital? What are they going to do and how are they going to take my investment and reinvest that? It starts with financial strength. I do not mind saying balance sheet first. We have been working on our balance sheet since we came on board here in 2020. In higher price environments, we were able to grow and also reduce our debt and strengthen our balance sheet. When prices after Labor Day fell to the low levels that they did, and if you remember, when we entered 2026, we truly believed that we would be looking at perhaps even sub-$50 oil.
But with the conflict in the Persian Gulf, that brought on a whole new set of economics, and it put us back into a price environment where we believe we could do both. But financial strength is a core of what we are working on, and we will talk a little bit more about what that does for us a little bit later in this presentation. But getting our leverage ratio down below 1.25x is very significant when you consider the terms of our credit facility and what it frees this company up to do and how that exposes the investor to these higher oil prices. The next principle that we live by is we focus all of our capital on the highest return opportunities in the portfolio. We are constantly turning that. When we do make an acquisition, we evaluate how well do they fit.
If they do not fit, we spin them off in some kind of a small disposition or whatever. But all of our capital is focused on these highest rate of returns projects because it is all about maximizing adjusted free cash flow, and that is the bottom line. The other thing is retaining strategic optionality. You do that in many ways, by having more asset areas to invest in, having higher and better quality assets. We are always looking for that strategic acquisition that fits our strict requirements. But it is all about pacing your development, being able to respond like we did after Labor Day by changing your capital program, moving your capital to where it makes sense, and if you have to cut back, you cut back.
But when you have the opportunity to move forward, depending on where you are with your balance sheet, you do that as well. Everything is focused on long-term value creation for the stockholders. Increase our NAV per share, expand our drilling inventory, grow the reserves organically, and lower our costs. This is something that we have been able to do over the last several quarters. Any of you that has been watching us have seen that our operating costs have continued to fall in or at the low end of our guidance ranges every single quarter, sometimes falling even below our guidance range because we even surprise ourselves. But we have done a great job in all of those things. Let us talk about guidance. This is a slide that demonstrates not only where we think the numbers are going this year.
We revised our guidance that we are spending more capital, but we also believe we are going to have higher production as a result of that and lower operating costs because we think that there is still more to do in that regard. We also gave, for the first time, a little bit of a glimpse on what we think we can achieve in 2027. On the right-hand side of the plot, we have shown you there some key statistics that demonstrate what changed in our guidance and where we are focusing the money, and then what do we get for that. In 2026, we have switched from 42% of our wells being shorter laterals to now we are going to 70% lateral. Initially, when we began this year, we thought we were going to drill a lot more vertical wells.
We are switching to a larger percentage of horizontals because of the capital efficiency. As you can see, when you look at the number of wells that were planned to be 1 mi, there are fewer of those now, and that is because we are going to the longer laterals. Then a much lower percentage on our vertical wells. We were saying about 20% was going to be verticals. Now we are saying it is going to be about 4%. When you look at the 2026 capital program, you have to remember, these are percentages on capital programs. The original program was approximately $115 million. Now we are shooting for about $160 million-$165 million. Even though these percentages may not look very different, the amount of money we are spending is significant.
Even though our drilling and completion costs are only going to be 57% of our 2026 program, it is very similar, but the shift to longer laterals and a few more wells on the larger capital budget will play out, and I am going to show you that in the next slide. Our capital workovers and recompletion program is going to decrease, but the big increase is associated with going from 10% to 14% of the infrastructure. It does not sound like much as a percentage, but when you take it as a total Capital amount is a very significant amount of capital. What does this mean? Let us take a look at how we have done. First quarter, second quarter, you can see where we were in terms of where we landed, our actuals versus our guidance.
The upper left-hand quadrant is associated with our oil sales, and then the lower left-hand quadrant is our total BOE sales. If you look at just that plot alone, even though we are saying our production next year in 2027 is going to be 10% higher than our production was for 2026, it represents about a 16% increase over what we did in the first quarter of 2026. We are going to do that with a lot less capital. Our LOE, we still believe that we can continue making progress lowering our LOE. We believe that we are going to be 1% or 2% lower in 2027 than we ended up with or will end up with in 2026. The capital is kind of the story. We believe that we will deliver 10% production growth for 10% less capital in 2027.
Marking or identifying, just kind of pointing out the increase in the capital efficiency associated with what we're doing. All this means meaningful upside in adjusted free cash flow. It means a significant increase in earnings. So what are we doing about, how do we try to protect that for the shareholders? On this plot, we have several things. We're showing you our realized prices, before and after hedges associated with the first and second quarters of 2026. The quadrant below that on the left-hand side, we kind of show where our adjusted free cash flow was on the two prior years. And we compare that to full-year 2026 and 2027 based on different price assumptions, depending on where things fall out.
But the significant thing is on this plot is that even at $75, which is pretty similar to what we're realizing today, we're going to spin off considerably more adjusted free cash flow than we would have done in the past. And how are we going to protect that? Part of that is through our hedging strategy. So let me back up a little bit. When we started 2026, we really did believe that we needed to brace ourselves for a much lower oil price. And so we had a capital program that we knew would lead to significant production growth in 2027 and 2028 and beyond. And so we needed to protect that. So we put in hedges as we exited last year, 2025, and as we went into 2026.
We were layering in hedges to see to it that we would capture $60 at the wellhead no matter what happened to oil prices. And we expected them to fall to $55 or $50 or maybe even below. And so we were very successful in doing that. But to do that, you also gave up the upside. And so when we got the surprise of the Iranian war and the resulting higher prices, we immediately pivoted, and we started putting in place these really wide collars to meet the requirements of our bank syndicate and our credit facility. And then we've also left a considerable portion of our production for 2027 and the latter part of 2026. So in 2026, we're roughly about 30% unhedged. We have collars. Some of these collars are much wider collars, so we will capture a much higher price.
Since we put those in after the conflict occurred. But going into 2027, as you can see, first half, we're talking about 61% unhedged and 64% as we stand here today. And so our hedging strategy going forward, we will continue to meet the requirements of our credit facility, basically 50% of our production out for the first 24 months. But our strategy right now is to seek and put in place some of these wide collars that this current marketplace is allowing us to do. So those wide collars, you protect the floors, you give the banks the comfort that they need, but at the same time, it gives you much more of the upside to capture for your shareholders. And so we'll see how that turns out. Last but not least, I love this plot.
For those of you that have seen it in previous presentations, you will understand. We are looking at the greater Permian area. The Midland Basin there on the east or the right side and the Delaware Basin on the west side, those areas have been pretty much locked up by the publics, the big publics. There is just not very much opportunity for the independents, the smaller guys like us to work our way in there. If you look at the entry cost just five years ago, they were astronomical. The entry cost to get into these areas was just high. That is why we designed our strategy focusing on the conventionals because the entry costs were so low. At the same time, the opportunity is still there because a much larger portion of the Central Basin Platform, the southern part of the shelf, is operated by private companies.
Even those acreage positions that are held by the larger publics, the publics are not investing there. They have demonstrated a willingness to either farm out or sell outright their interests. We believe there is a ton of opportunity. We believe there is over 400,000 bpd of opportunity in the Central Basin Platform, the southern part of the shelf. Right now, we have not encountered a lot of competition for that. Because we are of a size and scale on the Central Basin Platform, the third largest producer out there, now of course, this is all as of year-end last year, we believe that we are very well positioned to take advantage of this. Because we are experts in applying these technologies to conventional rocks, we believe the prize is massive. The opportunity is there for us as a natural consolidator.
This is my last slide, and I have only got 33 seconds to cover it. We believe that we have a strategic advantage. We are the only public company that we are aware of that has this stated strategy. We are the leader in redefining, in our opinion, the conventional assets through the unconventional thinking and modern technology that was developed, and then that will lead to sustainable returns in the future. We have over six years of consecutive positive adjusted free cash flow. I do not know of another company that can say that. Shallow declines, high margins, and long lives is the characteristic that we seek in all the acquisitions that we make, and then what we retain in our portfolio as we move forward.
Over the last three years, we have grown organically, and we have built a very handsome inventory of 10 years- plus at our current development rates. That is really a point that I really did not spend as much time emphasizing. This company has the ability to grow organically. If you take all of the acquisitions out of our portfolio for the last three years, we have grown our production organically by going out and leasing and drilling wells and on acreage and replacing our production organically. We have the ability to do that. We believe that the Central Basin Platform in the southern part of the shelf still has a lot of opportunity, and we believe that that opportunity is there for us. As the third largest operator out there, when we call somebody and ask for some services, they show up.
The whole area, all of the Central Basin Platform is defined by existing infrastructure, existing roads, existing pipelines, existing plants that will take your gas. Now, you got to upgrade the electricity in some areas by bringing in larger facilities or whatever. By and large, all of the infrastructure is already there. This older area also brings with it higher net revenue interest because these leases were taken years ago where we enjoy these higher nets. There are still opportunity out there to be had, and we are really looking forward to it.
2027, and I have told several people that came to visit us in our morning sessions this morning, when you compare our 2027 performance, just take second quarter or third quarter of 2027, and if you compare that back to what we did in 2025, you are going to see that we have entered into this new chapter where we are delivering significantly higher capital efficiencies. We will be bringing on more barrels a day of production, more barrels of reserves for fewer dollars spent, and it is going to be remarkable. We have laid the foundation so that we have years and years of that inventory to go. That is really the end of my presentation. I would like to thank all of you for your time and interest in Ring Energy. Thank you for all you sitting on the front here that didn't—