RING ENERGY, INC.

Previous wording

During the second quarter of 2026, the Company drilled a total of seven wells and completed a total of four wells. Specifically, in the Northwest Shelf the Company drilled and completed one 1.5-mile horizontal well and one 1-mile horizontal well in Yoakum County, with a working interest of approximately 98% and 100%, respectively. In the Central Basin Platform, the Company drilled and completed one 1.5-mile horizontal well in Andrews County with a working interest of approximately 99%, and one 1.5-mile horizontal well in Crane County with a working interest of of approximately 96%. The latter of these two wells, while completed, was not put on pump until the third quarter of 2026 and did not contribute significant volumes in the second quarter of 2026. Also in Crane County, the Company drilled three 2-mile horizontal wells, each with a working interest of 100%, and was in the process of drilling one SWD well. The three 2-mile horizontal wells represent the first laterals of this length drilled by the Company in an area that has been historically developed with vertical wells. All four of these wells are to be completed during the third quarter of 2026.

Current wording

During the second quarter of 2026, the Company drilled a total of seven wells and completed a total of four wells. Specifically, in the Northwest Shelf the Company drilled and completed one 1.5-mile horizontal well and one 1-mile horizontal well in Yoakum County, with a working interest of approximately 98% and 100%, respectively. In the Central Basin Platform, the Company drilled and completed one 1.5-mile horizontal well in Andrews County with a working interest of approximately 99%, and one 1.5-mile horizontal well in Crane County with a working interest of approximately 96%. The latter of these two wells, while completed, was not put on pump until the third quarter of 2026 and did not contribute significant volumes in the second quarter of 2026. Also in Crane County, the Company drilled three 2-mile horizontal wells, each with a working interest of 100%, and was in the process of drilling one SWD well. The three 2-mile horizontal wells represent the first laterals of this length drilled by the Company in an area that has been historically developed with vertical wells. All four of these wells are to be completed during the third quarter of 2026.

Previous wording

(1) The horizontal well completed in the Central Basin Platform in the first quarter of 2026 is the completion of a previously drilled but uncompleted (“DUC”) well.(1)Total does not include the SWD well(s) drilled and completed in the [ ].

Current wording

(1) The horizontal well completed in the Central Basin Platform in the first quarter of 2026 is the completion of a previously drilled but uncompleted (“DUC”) well.

Previous wording

During the second quarter of 2026, crude oil prices remained elevated through much of the quarter before declining toward quarter-end. In addition, natural gas prices in the Permian Basin continued to be adversely affected by regional takeaway constraints and elevated processing and transportation costs. These conditions adversely affected realized natural gas prices during the quarter. The Company continues to monitor market conditions and evaluate available alternatives with respect to the marketing of its production and commodity price risk management activities.

Current wording

Market Conditions and Commodity Price Risk Management

Previous wording

Our financial results are significantly affected by crude oil and natural gas prices. Commodity prices are influenced by numerous factors beyond our control, including changes in domestic and global supply and demand, geopolitical events, macroeconomic conditions, transportation and processing constraints, and other market factors. As a result, commodity prices have been volatile and are expected to remain volatile.

Current wording

Our financial results are significantly affected by crude oil and natural gas prices, which are influenced by factors beyond our control, including domestic and global supply and demand, geopolitical and macroeconomic conditions, and regional transportation and processing constraints. Commodity prices have historically been volatile and may continue to fluctuate significantly.

Previous wording

No impairment was recorded for the three months ended June 30, 2026. For the six months ended June 30, 2026, the Company recorded a non-cash impairment charge of $162.1 million as a result of lower oil prices impacting the present value of estimated future net revenues.

Current wording

No impairment was recorded for the three months ended September 30, 2026. For the nine months ended September 30, 2026, the Company recorded a non-cash impairment charge of $162.1 million, primarily as a result of lower oil prices reducing the present value of estimated future net revenues.

Previous wording

Estimating potential future non-cash impairments is complex due to numerous factors affecting the ceiling test calculation, including but not limited to future prices, operating costs, upward or downward reserve revisions, reserve additions, and tax attributes. The amount of any additional non-cash impairment, if any, is not estimable at this time given the uncertainty of these factors.

Current wording

Estimating potential future non-cash impairments is complex due to numerous factors affecting the ceiling test calculation, including but not limited to future prices, operating costs, upward or downward reserve revisions, reserve additions, and tax attributes. The amount of any additional non-cash impairment, if any, cannot be reasonably estimated at this time.

Previous wording

Oil sales. Oil sales increased approximately $27.4 million from $82.8 million to $110.2 million, driven by a price variance of $37.8 million from an increase in the average realized price per barrel from $62.69 to $95.45 as a result of higher oil commodity prices. This was offset by a volume variance of $(10.4) million from a decrease in sales volume from 1,320,508 barrels to 1,154,147 barrels. The decrease in volume of (166,361) barrels was attributed to natural production declines from our legacy assets.

Current wording

Oil sales. Oil sales increased approximately $19.8 million from $78.9 million to $98.7 million, driven by a price variance of approximately $22.9 million from an increase in the average realized price per barrel from $64.32 to $83.72 as a result of higher oil commodity prices. This was offset by a volume variance of approximately $(3.0) million from a decrease in sales volume from 1,226,537 barrels to 1,179,247 barrels. The decrease in volume of (47,290) barrels was attributed to natural production declines from our assets.

Previous wording

Natural gas sales. Natural gas sales decreased approximately $10.9 million from a negative $2.5 million to a negative $13.5 million. The natural gas sales volume increased from 3,319,004 Mcf to 3,454,171 Mcf, and the average realized price per Mcf decreased from $(0.77) to $(3.90). Of the increase in volume of 135,167 Mcf, an increase of 176,790 was due to wells acquired and drilled in the Lime Rock acquisition area, offset by a decrease of 41,623 for our legacy assets. The price decrease was driven by lower market conditions. The realized revenue pricing includes the impact of gas plant processing fees that were netted from revenue. For the six months ended June 30, 2026, gross revenues were $(1.77) per Mcf and fees were $(2.13) per Mcf, compared to gross revenues of $1.35 per Mcf and fees of $(2.12) per Mcf for the six months ended June 30, 2025. This resulted in a net realized price of $(3.90) for the six months ended June 30, 2026 compared to $(0.77) per Mcf for the six months ended June 30, 2025.

Current wording

Natural gas sales. Natural gas sales increased approximately $1.7 million from a negative $2.3 million to a negative $0.6 million. Our natural gas sales volumes increased from 1,853,599 Mcf to 1,896,728 Mcf, and the average realized price per Mcf increased from $(1.22) to $(0.30). The price increase was driven by improved market conditions. The realized revenue pricing included the impact of gas plant processing fees that were netted from revenue. For the three months ended September 30, 2026, gross revenues were $1.70 per Mcf and fees were $(2.00) per Mcf, compared to gross revenues of $0.84 per Mcf and fees of $(2.06) per Mcf for the three months ended September 30, 2025. This resulted in a net realized price of $(0.30) per Mcf for the three months ended September 30, 2026 compared to $(1.22) per Mcf for the three months ended September 30, 2025.

Previous wording

Natural gas liquids sales. NGL sales increased approximately $1.6 million from $2.1 million to $3.7 million. NGL sales volumes for the three months ended June 30, 2026 were 370,819 barrels compared to 333,374 barrels for the comparable period in 2025. Of the increase in volume of 37,445 barrels, 17,360 barrels were attributable to wells acquired and drilled in the Lime Rock acquisition area, and an increase of 20,085 barrels was attributable to our legacy assets in correlation with gas sales. The average realized price per barrel of NGLs was $9.96 for the three months ended June 30, 2026 compared to $6.19 for the three months ended June 30, 2025, due to stronger market conditions. Specifically, the gross realized price per NGL barrel was $22.38 and the average fees per barrel were $(12.42), resulting in a net realized price of $9.96 for the three months ended June 30, 2026, while the gross realized price per NGL barrel was $19.02 and the average fees per barrel were $(12.83), resulting in a net realized price of $6.19 for the same period in 2025.

Current wording

Natural gas liquids sales. NGL sales increased approximately $2.2 million from $2.0 million to $4.2 million. NGL sales volumes for the three months ended September 30, 2026 were 403,060 barrels compared to 377,141 barrels for the comparable period in 2025. The average realized price per barrel of NGLs was $10.38 for the three months ended September 30, 2026 compared to $5.22 for the three months ended September 30, 2025, due to stronger market conditions. Specifically, the gross realized price per NGL barrel was $22.82 and the average fees per barrel were $(12.44), resulting in a net realized price of $10.38 for the three months ended September 30, 2026, while the gross realized price per NGL barrel was $17.52 and the average fees per barrel were $(12.30), resulting in a net realized price of $5.22 for the same period in 2025.

Previous wording

Oil, Natural Gas, and Natural Gas Liquids Revenues for the Six Months Ended June 30, 2026 and 2025

Current wording

Oil, Natural Gas, and Natural Gas Liquids Revenues for the Nine Months Ended September 30, 2026 and 2025

Previous wording

Oil sales. Oil sales increased approximately $27.1 million from $159.3 million to $186.4 million, with a price variance of $36.9 million from an increase in the average realized price per barrel from $66.17 to $82.50 as a result of higher oil commodity prices. This was offset by a volume variance of $(9.8) million due to a decrease in sales volume from 2,407,202 barrels to 2,258,970 barrels. The decrease in volume of 148,232 barrels was impacted by a decrease of 274,977 attributable to natural production declines in the legacy assets, offset by an increase in volumes of 126,745 from wells acquired and drilled in the Lime Rock acquisition area.

Current wording

Oil sales. Oil sales increased approximately $46.9 million from $238.2 million to $285.1 million, with a price variance of $59.7 million from an increase in the average realized price per barrel from $65.54 to $82.92 as a result of higher oil commodity prices. This was offset by a volume variance of $(12.8) million due to a decrease in sales volume from 3,633,739 barrels to 3,438,217 barrels. The decrease in volume of 195,522 barrels was attributable to natural production declines in our assets.

Previous wording

Natural gas sales. Natural gas sales decreased approximately $6.9 million from a negative $2.2 million to a negative $9.2 million. Our natural gas sales volumes increased from 1,703,808 Mcf to 1,764,659 Mcf, and the average realized price per Mcf decreased from $(1.31) to $(5.20). Of the increase in volume of 60,851 Mcf, an increase of 30,268 Mcf was from the wells acquired and drilled in the Lime Rock acquisition area and an increase of 30,583 Mcf was attributable to legacy assets. The price decrease was driven by depressed market conditions. The realized revenue pricing included the impact of gas plant processing fees that were netted from revenue. For the three months ended June 30, 2026, gross revenues were $(3.01) per Mcf and fees were $(2.19) per Mcf, compared to gross revenues of $0.87 per Mcf and fees of $(2.18) per Mcf for the three months ended June 30, 2025. This resulted in a net realized price of $(5.20) per Mcf for the three months ended June 30, 2026 compared to $(1.31) per Mcf for the three months ended June 30, 2025.

Current wording

Natural gas sales. Natural gas sales decreased approximately $9.2 million from a negative $4.8 million to a negative $14.0 million. The natural gas sales volume increased from 5,172,603 Mcf to 5,350,899 Mcf, and the average realized price per Mcf decreased from $(0.93) to $(2.62). Of the increase in volume of 178,296 Mcf, an increase of 133,316 was due to wells acquired and drilled in the Lime Rock acquisition area, and an increase of 44,980 was from our legacy assets. The price decrease was driven by lower market conditions. The realized revenue pricing includes the impact of gas plant processing fees that were netted from revenue. For the nine months ended September 30, 2026, gross revenues were $(0.54) per Mcf and fees were $(2.08) per Mcf, compared to gross revenues of $1.17 per Mcf and fees of $(2.10) per Mcf for the nine months ended September 30, 2025. This resulted in a net realized price of $(2.62) for the nine months ended September 30, 2026 compared to $(0.93) per Mcf for the nine months ended September 30, 2025.

Previous wording

Natural gas liquids sales. NGL sales increased approximately $0.5 million from $5.0 million to $5.5 million. NGL sales volumes for the six months ended June 30, 2026 were 725,992 barrels compared to 632,740 barrels for the comparable period in 2025. Of the increase in volume of 93,252 barrels, an increase of 57,810 was due to wells acquired and drilled in the Lime Rock acquisition area, and an increase of 35,442 was from legacy assets. The average realized price per barrel decreased by $0.31 to $7.52 for the six months ended June 30, 2026 compared to $7.83 for the six months ended June 30, 2025, due to lower prices. Specifically, the gross realized price per NGL barrel was $19.95 and the average fees per barrel was $(12.43), resulting in a net realized price of $7.52 for the six months ended June 30, 2026, while the gross realized price per barrel was $20.74 and the average fees per barrel was $(12.91), resulting in a net realized price of $7.83 for the same period in 2025.

Current wording

Natural gas liquids sales. NGL sales increased approximately $2.7 million from $6.9 million to $9.6 million. NGL sales volumes for the nine months ended September 30, 2026 were 1,129,052 barrels compared to 1,009,881 barrels for the comparable period in 2025. Of the increase in volume of 119,171 barrels, an increase of 52,748 was due to wells acquired and drilled in the Lime Rock acquisition area, and an increase of 66,423 was from legacy assets. The average realized price per barrel increased by $1.69 to $8.54 for the nine months ended September 30, 2026 compared to $6.85 for the nine months ended September 30, 2025, due to higher commodity prices. Specifically, the gross realized price per NGL barrel was $20.98 and the average fees per barrel was $(12.44), resulting in a net realized price of $8.54 for the nine months ended September 30, 2026, while the gross realized price per barrel was $19.53 and the average fees per barrel was $(12.68), resulting in a net realized price of $6.85 for the same period in 2025.

Previous wording

Lease operating expenses. Our total lease operating expenses (“LOE”) decreased from $20.2 million to $18.4 million and decreased on a per Boe basis from $10.45 to $10.12. These per Boe amounts are calculated by dividing our total lease operating expenses by our total volume sold, in Boe. Total LOE decreased primarily due to a 6% decrease in production of 118,774 Boe as well as targeted cost reductions. The primary cost drivers for the period were decreases of $0.9 million in electricity costs, $0.6 million in chemicals, $0.5 million in equipment rentals, and $0.3 million in pressure, vacuum, and hot oil truck costs, offset by increases of $0.3 million in workovers and $0.2 million in contract and lease services.

Current wording

Lease operating expenses. Our total lease operating expenses (“LOE”) decreased from $20.5 million to $19.4 million and decreased on a per Boe basis from $10.73 to $10.20. These per Boe amounts are calculated by dividing our total lease operating expenses by our total volume sold, in Boe. Total LOE decreased from targeted cost reductions as well as a 1% decrease in production of 14,183 Boe. The primary cost drivers for the period were decreases of $0.5 million in location repairs and environmental sustainability, $0.5 million in equipment rentals, $0.4 million in contract and lease services, and $0.3 million in electricity costs, $0.3 million in non-operated costs and $0.2 million in supplies, tools and materials, and $0.1 million in pumping unit repairs, offset by increases of $0.6 million in chemicals and $0.5 million in workovers.

Previous wording

Oil and natural gas production taxes. Oil and natural gas production taxes as a percentage of oil and natural gas sales were 4.64% for the three months ended June 30, 2025 and increased to 4.82% for the three months ended June 30, 2026. Both percentages are in line with historical rates.

Current wording

Oil and natural gas production taxes. Oil and natural gas production taxes as a percentage of oil and natural gas sales were 4.67% for the three months ended September 30, 2025 and decreased to 4.48% for the three months ended September 30, 2026. Both percentages are in line with historical rates.

Previous wording

Production Costs for the Six Months Ended June 30, 2026 and 2025

Current wording

Production Costs for the Nine Months Ended September 30, 2026 and 2025

Previous wording

Lease operating expenses. Our total LOE decreased from $39.9 million to $36.5 million and LOE per Boe decreased from $11.11 to $10.26. Total LOE decreased from targeted reductions in costs as well as a 1% decrease in production of 32,452 Boe. The primary cost drivers for the period were decreases in chemicals of $1.5 million, equipment rentals of $1.0 million, electricity costs of $0.9 million, contract and lease services of $0.8 million, pressure, vacuum, and hot oil truck costs of $0.5 million, non-operated costs of $0.4 million, and location repairs and environmental sustainability of $0.3 million. This was offset by increases in LOE costs from workovers of $0.7 million, salt water disposal of $0.7 million, salaries of $0.5 million, and compressor rentals of $0.1 million.

Current wording

Lease operating expenses. Our total LOE decreased from $60.4 million to $55.9 million and LOE per Boe decreased from $10.98 to $10.24. Total LOE decreased from targeted reductions in costs as well as a 1% decrease in production of 46,635 Boe. The primary cost drivers for the period included decreases in equipment rentals of $1.4 million, electricity costs of $1.3 million, contract and lease services of $1.2 million, chemicals of $0.9 million, location repairs and environmental sustainability of $0.8 million, non-operated costs of $0.6 million, and other employee expenses of $0.2 million. This was offset by increases in LOE costs from workovers of $1.2 million and salt water disposal of $0.7 million.

Previous wording

Gathering, transportation and processing costs. Our total gathering, transportation and processing costs (“GTP”) decreased from $133,809 to $101,902 and decreased slightly on a per Boe basis from $0.07 to $0.06. The decrease in GTP costs was due to a reduction of $40,353 in gas processing costs offset by an increase of $8,446 in NGL processing costs.

Current wording

Gathering, transportation and processing costs. Our total GTP decreased $64,252 from $463,990 to $399,738 and decreased on a per Boe basis from $0.08 to $0.07. The decrease in GTP costs was due to a reduction of $83,474 in gas processing costs offset by an increase of $19,222 in NGL processing costs.

Previous wording

Ad valorem taxes. Our total ad valorem taxes increased $1.2 million from $3.2 million to $4.4 million and increased on a per Boe basis from $0.89 to $1.24. An increase in ad valorem taxes of $0.5 million was from the reversal made in the first quarter of 2025 for the 2024 methane tax accrual for the waste emissions charge ("WEC"), which was repealed by Congress on March 14, 2025, with no similar reversal made in 2026. There was also an increase of $0.6 million in Andrews County due primarily to the Lime Rock acquisition as well as a $0.1 million increase from Crane County tax estimates. Offsetting these increases was a decrease in the Yoakum County tax estimates of approximately $0.1 million.

Current wording

Ad valorem taxes. Our total ad valorem taxes increased $1.0 million from $5.6 million to $6.6 million and increased on a per Boe basis from $1.02 to $1.21. An increase in ad valorem taxes of $0.5 million was from the reversal made in the first quarter of 2025 for the 2024 methane tax accrual for the waste emissions charge ("WEC"), which was repealed by Congress on March 14, 2025, with no similar reversal made in 2026. There was also an increase of $0.4 million in Andrews County due primarily to the Lime Rock acquisition as well as a $0.1 million increase from Crane County tax estimates. Offsetting these increases was a decrease in the Yoakum County tax estimates of approximately $0.1 million.

Previous wording

Oil and natural gas production taxes. Oil and natural gas production taxes as a percentage of oil and natural gas sales were 4.59% for the six months ended June 30, 2025 and increased to 4.82% for the six months ended June 30, 2026. The overall average percentage of production taxes to oil and gas sales was consistent period over period.

Current wording

Oil and natural gas production taxes. Oil and natural gas production taxes as a percentage of oil and natural gas sales were 4.61% for the nine months ended September 30, 2025 and increased to 4.70% for the nine months ended September 30, 2026. The overall average percentage of production taxes to oil and gas sales was consistent period over period.

Previous wording

Depreciation, depletion and amortization. Our depreciation, depletion and amortization decreased from $25.6 million to $20.1 million, with $5.4 million of the reduction from lower depletion. The decrease in depletion was the result of a price variance of $(3.8) million, due to a lower depletion rate per Boe, driven by a decrease in the total estimated costs of property from the impairment recognized in the last two quarters of 2025 and the first quarter of 2026, coupled with an increase in the amortization base (total Boe). Also impacting the lower depletion was a volume variance of $(1.6) million from a decrease of 118,774 in Boe produced. Our average depreciation, depletion and amortization per Boe decreased from $13.19 per Boe to $11.06 per Boe.

Current wording

Depreciation, depletion and amortization. Our depreciation, depletion and amortization decreased from $25.2 million to $20.9 million, with $4.3 million of the reduction from lower depletion. The decrease in depletion was the result of a price variance of $(4.1) million, due to a lower depletion rate per Boe, driven by a decrease in the total estimated costs of property from the impairment recognized in the last quarter of 2025 and the first quarter of 2026, coupled with an increase in the amortization base (total Boe). Also impacting the lower depletion was a volume variance of $(0.2) million from a decrease of 14,183 in Boe produced. Our average depreciation, depletion and amortization per Boe decreased from $13.19 per Boe to $11.01 per Boe.

Previous wording

Ceiling test impairment. As a result of the lower oil prices impacting the present value of estimated future net revenues, the Company incurred a ceiling test impairment on its oil and natural gas properties of $162.1 million during the six months ended June 30, 2026.

Current wording

Ceiling test impairment. As a result of the lower oil prices impacting the present value of estimated future net revenues, the Company incurred a ceiling test impairment on its oil and natural gas properties during the three months ended September 30, 2025 of $72.9 million.

Previous wording

Asset retirement obligation accretion. Our asset retirement obligation (“ARO”) accretion increased from $382,251 to $401,944 as a result of result of newly acquired and drilled wells, offset by those plugged and abandoned and sold.

Current wording

Asset retirement obligation accretion. Our asset retirement obligation (“ARO”) accretion increased from $390,563 to $405,729 as a result of newly acquired and drilled wells, offset by those plugged and abandoned and sold.

Previous wording

Operating lease expense. Our operating lease expense costs were the same period over period.

Current wording

Operating lease expense. Our operating lease expense costs decreased $50,904 from $175,091 to $124,187 due to the Woodlands expansion space lease being combined with the total Woodlands office lease.

Previous wording

General and administrative expense. General and administrative ("G&A") expense increased from $7.1 million to approximately $8.0 million. The approximate $0.8 million cost increase was primarily driven by an increase of $0.8 million in stock compensation, $0.2 million in other professional fees, and $0.1 million in meals and entertainment. These costs were offset by reductions of $0.3 million in salaries and bonuses.

Current wording

General and administrative expense. General and administrative ("G&A") expense increased from $8.1 million to approximately $9.0 million. The approximate $0.9 million cost increase was primarily driven by an increase of $0.9 million in stock compensation, $0.6 million in other professional fees, $0.2 million in legal-attorney fees, and $0.2 million in employee health insurance offset by a decrease of $1.0 million in salaries and bonuses, which was impacted by the separation of a former executive in the third quarter of 2025.

Previous wording

Other Costs and Operating Expenses for the Six Months Ended June 30, 2026 and 2025

Current wording

Other Costs and Operating Expenses for the Nine Months Ended September 30, 2026 and 2025

Previous wording

Depreciation, depletion and amortization. Our depreciation, depletion and amortization decreased approximately $6.7 million from $48.2 million to $41.5 million, with substantially all of the reduction from lower depletion. The decrease in depletion was primarily due to a price variance of $(6.1) million, from a lower depletion expense per Boe, due to reduction in the total estimated costs of property from the impairment recognized in the last two quarters of 2025 and the first quarter of 2026, coupled with an increase in the amortization base (total Boe). Adding to this was a volume variance of approximately $(0.4) million from a decrease of 32,452 in Boe produced. Our average depreciation, depletion and amortization per Boe decreased from $13.41 per Boe to $11.66 per Boe.

Current wording

Depreciation, depletion and amortization. Our depreciation, depletion and amortization decreased approximately $11.0 million from $73.4 million to $62.4 million, with $10.8 million of the reduction from lower depletion. The decrease in depletion was primarily due to a price variance of $(10.2) million, from a lower depletion expense per Boe, due to reduction in the total estimated costs of property from the impairment recognized in the last quarter of 2025 and the first quarter of 2026, coupled with an increase in the amortization base (total Boe). Adding to this was a volume variance of approximately $(0.6) million from a decrease of 46,635 in Boe produced. Our average depreciation, depletion and amortization per Boe decreased from $13.33 per Boe to $11.43 per Boe.

Previous wording

Ceiling test impairment. As a result of the higher oil prices impacting the present value of estimated future net revenues, the Company did not incur a ceiling test impairment on its oil and natural gas properties during each of the three month periods presented.

Current wording

Ceiling test impairment. As a result of the lower oil prices impacting the present value of estimated future net revenues, the Company incurred a ceiling test impairment on its oil and natural gas properties of $162.1 million during the nine months ended September 30, 2026 and $72.9 million during the nine months ended September 30, 2025.

Previous wording

Asset retirement obligation accretion. Our ARO accretion increased by $88,640 from $708,800 to $797,440 primarily due to additional ARO accretion associated with properties acquired in the Lime Rock Acquisition, as well as newly drilled wells, offset by those plugged and abandoned and sold.

Current wording

Asset retirement obligation accretion. Our ARO accretion increased by $103,806 from $1,099,363 to $1,203,169 due to additional ARO accretion associated with properties acquired, as well as newly drilled wells, offset by those plugged and abandoned and sold.

Previous wording

General and administrative expense. G&A expense decreased approximately $0.4 million from $15.8 million to $15.4 million, with the $0.4 million cost decrease primarily due to a decrease of $0.9 million in salaries and bonuses, $0.5 million in additional costs capitalized, offset by an increase of $0.6 million in stock compensation, $0.3 million in other professional fees, and $0.1 million in allowance for credit losses.

Current wording

General and administrative expense. G&A expense increased approximately $0.5 million from $23.9 million to $24.4 million, with the $0.5 million cost increase impacted by an increase of $1.5 million in stock compensation, $0.8 million in other professional fees, and $0.1 million in allowance for credit losses, offset by a decrease of $1.9 million in salaries and bonuses, which was impacted by the separation of a former executive in the third quarter of 2025.

Previous wording

Interest income. Interest income increased from $69,658 to $148,540 as a result of $78,882 in higher earnings on excess cash balances in bank sweep accounts.

Current wording

Interest income. Interest income increased from $74,253 to $108,728 as a result of $46,394 in increased interest on severance tax refund receipts, offset by $11,919 in lower earnings on excess cash balances in bank sweep accounts.

Previous wording

Interest expense. Interest expense decreased from $11.8 million to $8.4 million primarily due to lower amounts outstanding on the Credit Facility, with a weighted average daily debt of approximately $415.0 million during the second quarter of 2026 compared to approximately $456.3 million during the second quarter of 2025, coupled with a reduction in interest rates, with a weighted average annual interest rate of 7.4% in the second quarter of 2026 compared to 8.5% in the second quarter of 2025. Also impacting the decrease in interest expense was a reduction in deferred financing costs recognized from the credit agreement modification which was completed in June 2025.

Current wording

Interest expense. Interest expense decreased from $10.1 million to $7.7 million primarily due to lower amounts outstanding on the Credit Facility, with a weighted average daily debt of approximately $372.2 million during the third quarter of 2026 compared to approximately $445.1 million during the third quarter of 2025, coupled with a reduction in interest rates, with a weighted average annual interest rate of 7.5% in the third quarter of 2026 compared to 8.2% in the third quarter of 2025. Also impacting the decrease in interest expense was a reduction in deferred cash payment accretion related to the Lime Rock acquisition which was closed in March 2025.

Previous wording

Gain (loss) on derivative contracts. We recorded a gain on derivative contracts of $23.7 million for the three months ended June 30, 2026 compared to a gain on derivative contracts of $14.6 million for the three months ended June 30, 2025. For the derivative contract settlements, we recorded a realized loss of $18.5 million for the three months ended June 30, 2026 and a realized gain of $0.7 million for the three months ended June 30, 2025. The change of $19.1 million in the realized gain (loss) was primarily a result of less favorable settlements of crude oil derivative contracts during the current year. For the marked-to-market contracts, we recorded an unrealized gain of $42.2 million for the three months ended June 30, 2026 and an unrealized gain of $14.0 million for the three months ended June 30, 2025. The change in position was primarily due to the changes in crude oil futures prices.

Current wording

Gain (loss) on derivative contracts. We recorded a loss on derivative contracts of $53.2 million for the three months ended September 30, 2026 compared to a gain on derivative contracts of $0.4 million for the three months ended September 30, 2025. For the derivative contract settlements, we recorded a realized loss of $12.2 million for the three months ended September 30, 2026 and a realized gain of $2.6 million for the three months ended September 30, 2025. The change of $14.8 million in the realized gain (loss) was primarily a result of less favorable settlements of crude oil derivative contracts during the current year. For the marked-to-market contracts, we recorded an unrealized loss of $41.0 million for the three months ended September 30, 2026 and an unrealized loss of $2.1 million for the three months ended September 30, 2025. The change in position was primarily due to the changes in crude oil futures prices.

Previous wording

Gain (loss) on disposal of assets. The Company's gain on disposal of assets decreased by $51,143 from $155,293 during the three months ended June 30, 2025 to $104,150 during the three months ended June 30, 2026, with a reduction of $74,285 from the sale of leased vehicles, offset by an increase of $23,142 from selling owned vehicles.

Current wording

Gain (loss) on disposal of assets. The Company's gain on disposal of assets decreased by $53,311 from $105,642 during the three months ended September 30, 2025 to $52,331 during the three months ended September 30, 2026, with the reduction of $53,311 from the sale of leased vehicles.

Previous wording

Other Income (Expense) for the Six Months Ended June 30, 2026 and 2025

Current wording

Other Income (Expense) for the Nine Months Ended September 30, 2026 and 2025

Previous wording

Interest income. Interest income increased $59,353 from $159,716 to $219,069, as a result of $37,135 in higher earnings on excess cash balances in bank sweep accounts, as well as an increase of $22,218 in severance tax interest receipts.

Current wording

Interest income. Interest income increased $93,828 from $233,969 to $327,797, as a result of increase of $68,612 in interest on severance tax refund receipts as well as $25,216 in higher earnings on excess cash balances in bank sweep accounts.

Previous wording

Interest expense. Interest expense decreased by approximately $4.3 million from $21.3 million to $17.0 million, primarily due to lower interest rates, with a weighted average annual interest rate of 7.3% during the six months ended June 30, 2026 compared to 8.4% during the six months ended June 30, 2025, as well as lower amounts outstanding on our Credit Facility, with a weighted average daily debt of approximately $422.7 million during the six months ended June 30, 2026 compared to approximately $425.0 million during the six months ended June 30, 2025. Also impacting the reduction in interest expense was a decrease in the amortization of deferred financing costs as a result of the amendment and restatement of the credit agreement in the second quarter of 2025.

Current wording

Interest expense. Interest expense decreased by approximately $6.6 million from $31.3 million to $24.7 million, due to lower interest rates, with a weighted average annual interest rate of 7.4% during the nine months ended September 30, 2026 compared to 8.3% during the nine months ended September 30, 2025, as well as lower amounts outstanding on our Credit Facility, with a weighted average daily debt of approximately $405.6 million during the nine months ended September 30, 2026 compared to approximately $431.8 million during the nine months ended September 30, 2025. Also impacting the reduction in interest expense was a decrease in the amortization of deferred financing costs as a result of the amendment and restatement of the credit agreement in the second quarter of 2025.

Previous wording

Gain (loss) on derivative contracts. We recorded a loss on derivative contracts of $58.5 million for the six months ended June 30, 2026 and a gain on derivative contracts of $13.7 million for the six months ended June 30, 2025. For the derivative contract settlements, we recorded a realized loss of $23.7 million for the six months ended June 30, 2026 compared with a realized gain of $0.1 million for the six months ended June 30, 2025. The change of $23.9 million in the realized derivative gain (loss) was primarily a result of less favorable settlements of crude oil derivative contracts during the current year. For the marked-to-market contracts, we recorded an unrealized loss of $34.8 million for the six months ended June 30, 2026 and an unrealized gain of $13.6 million for the six months ended June 30, 2025. This negative change in unrealized derivatives primarily reflects changes in the crude oil forward pricing curve during the quarter.

Current wording

Gain (loss) on derivative contracts. We recorded a loss on derivative contracts of $111.7 million for the nine months ended September 30, 2026 and a gain on derivative contracts of $14.2 million for the nine months ended September 30, 2025. For the derivative contract settlements, we recorded a realized loss of $35.9 million for the nine months ended September 30, 2026 compared with a realized gain of $2.7 million for the nine months ended September 30, 2025. The change of $38.6 million in the realized derivative gain (loss) was primarily a result of less favorable settlements of crude oil derivative contracts during the current year. For the marked-to-market contracts, we recorded an unrealized loss of $75.8 million for the nine months ended September 30, 2026 and an unrealized gain of $11.5 million for the nine months ended September 30, 2025. This negative change in unrealized derivatives primarily reflects changes in the crude oil forward pricing curve.

Previous wording

Gain (loss) on disposal of assets. The Company's gain on disposal of assets decreased by $175,753 from $279,903 to $104,150 with $205,869 of the decrease from the sale of leased vehicles offset by a positive $30,116 from selling owned vehicles.

Current wording

Gain (loss) on disposal of assets. The Company's gain on disposal of assets decreased by $229,064 from $385,545 to $156,481 with $259,180 of the decrease from the sale of leased vehicles offset by a positive $30,116 from selling owned vehicles.

Previous wording

Provision for income taxes. The provision for income taxes changed from a provision of $6.1 million for the three months ended June 30, 2025 to a provision of $1.1 million for the three months ended June 30, 2026, due to the decrease in pre-tax book income for the three months ended June 30, 2026, netted against the recording of the valuation allowance. The provision for income taxes was calculated using the annual effective tax rate method based on our estimated earnings and estimated state and federal income taxes due for 2026, taking into account all applicable tax rates and laws.

Current wording

Provision for income taxes. The provision for income taxes changed from a benefit of $12.8 million for the three months ended September 30, 2025 to a provision of $1.4 million for the three months ended September 30, 2026, due to the decrease in pre-tax book loss for the three months ended September 30, 2026, netted against the recording of the valuation allowance. The provision for income taxes was calculated using the annual effective tax rate method based on our estimated earnings and estimated state and federal income taxes due for 2026, taking into account all applicable tax rates and laws.