RING ENERGY INC

For the period ended Sep 30, 2024. Filed Nov 6, 2024.

About this filing

A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.

Sep 30, 2024 · Filed Nov 6, 2024

REI$1.14+2.7%Stored close · as of Nov 9, 2026

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Contents

Item 1. : Condensed Financial Statements

The following (a) condensed balance sheet as of December 31, 2023 which has been derived from our audited financial statements, and (b) the unaudited condensed financial statements included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). Accordingly, certain disclosures by accounting principles generally accepted in the United States ("GAAP") and normally included in Annual Reports on Form 10-K have been omitted. Although management believes that our disclosures are adequate to make the information presented not misleading, these unaudited interim condensed financial statements should be read in conjunction with the Company's audited financial statements and related notes included in its most recent Annual Report on Form 10-K.

CONDENSED BALANCE SHEETS

	September 30, 2024	December 31, 2023
ASSETS
Current Assets
Cash and cash equivalents	$—	$296,384
Accounts receivable	36,394,451	38,965,002
Joint interest billing receivables, net	1,343,801	2,422,274
Derivative assets	8,375,984	6,215,374
Inventory	4,627,980	6,136,935
Prepaid expenses and other assets	2,076,896	1,874,850
Total Current Assets	52,819,112	55,910,819
Properties and Equipment
Oil and natural gas properties, full cost method	1,770,078,718	1,663,548,249
Financing lease asset subject to depreciation	4,192,099	3,896,316
Fixed assets subject to depreciation	3,389,907	3,228,793
Total Properties and Equipment	1,777,660,724	1,670,673,358
Accumulated depreciation, depletion and amortization	(450,913,685)	(377,252,572)
Net Properties and Equipment	1,326,747,039	1,293,420,786
Operating lease asset	2,057,096	2,499,592
Derivative assets	8,735,674	11,634,714
Deferred financing costs	9,406,089	13,030,481
Total Assets	$1,399,765,010	$1,376,496,392
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Accounts payable	$90,143,131	$104,064,124
Income tax liability	257,704	—
Financing lease liability	879,598	956,254
Operating lease liability	633,132	568,176
Derivative liabilities	3,929,188	7,520,336
Notes payable	912,819	533,734
Asset retirement obligations	836,421	165,642
Total Current Liabilities	97,591,993	113,808,266
Non-current Liabilities
Deferred income taxes	26,859,453	8,552,045
Revolving line of credit	392,000,000	425,000,000
Financing lease liability, less current portion	496,954	906,330
Operating lease liability, less current portion	1,574,117	2,054,041
Derivative liabilities	4,535,777	11,510,368
Asset retirement obligations	25,396,573	28,082,442
Total Liabilities	548,454,867	589,913,492
Commitments and contingencies (See Note 12)
Stockholders' Equity
Preferred stock - $0.001 par value; 50,000,000 shares authorized; no shares issued or outstanding	—	—
Common stock - $0.001 par value; 450,000,000 shares authorized; 198,196,034 shares and 196,837,001 shares issued and outstanding, respectively	198,196	196,837
Additional paid-in capital	798,747,764	795,834,675
Retained earnings (Accumulated deficit)	52,364,183	(9,448,612)
Total Stockholders’ Equity	851,310,143	786,582,900
Total Liabilities and Stockholders' Equity	$1,399,765,010	$1,376,496,392

CONDENSED STATEMENTS OF OPERATIONS

	For the Three Months Ended		For the Nine Months Ended
	September 30, 2024	September 30, 2023	September 30, 2024	September 30, 2023
Oil, Natural Gas, and Natural Gas Liquids Revenues	$89,244,383	$93,681,798	$282,886,868	$261,113,283
Costs and Operating Expenses
Lease operating expenses	20,315,282	18,015,348	57,984,733	51,426,145
Gathering, transportation and processing costs	102,420	(4,530)	376,103	(6,985)
Ad valorem taxes	2,164,562	1,779,163	5,647,469	5,120,119
Oil and natural gas production taxes	4,203,851	4,753,289	12,259,418	13,173,568
Depreciation, depletion and amortization	25,662,123	21,989,034	74,153,994	64,053,637
Asset retirement obligation accretion	354,195	354,175	1,057,213	1,073,900
Operating lease expense	175,091	138,220	525,272	366,711
General and administrative expense	6,421,567	7,083,574	21,604,323	21,023,956
Total Costs and Operating Expenses	59,399,091	54,108,273	173,608,525	156,231,051
Income from Operations	29,845,292	39,573,525	109,278,343	104,882,232
Other Income (Expense)
Interest income	143,704	80,426	367,181	160,171
Interest (expense)	(10,754,243)	(11,381,754)	(33,199,314)	(32,322,840)
Gain (loss) on derivative contracts	24,731,625	(39,222,755)	3,888,531	(26,483,190)
Gain (loss) on disposal of assets	—	—	89,693	(132,109)
Other income	—	—	25,686	126,210
Net Other Income (Expense)	14,121,086	(50,524,083)	(28,828,223)	(58,651,758)
Income (Loss) Before Benefit from (Provision for) Income Taxes	43,966,378	(10,950,558)	80,450,120	46,230,474
Benefit from (Provision for) Income Taxes	(10,087,954)	3,411,336	(18,637,325)	7,737,688
Net Income (Loss)	$33,878,424	$(7,539,222)	$61,812,795	$53,968,162
Basic Earnings (Loss) per Share	$0.17	$(0.04)	$0.31	$0.29
Diluted Earnings (Loss) per Share	$0.17	$(0.04)	$0.31	$0.28

CONDENSED STATEMENTS OF STOCKHOLDERS’ EQUITY

Common Stock · AdditionalPaid-inCapital · Retained Earnings(Accumulated Deficit) · TotalStockholders'Equity
For the Nine Months Ended September 30, 2024 · Shares · Amount
Balance, December 31, 2023	196,837,001	$196,837			$795,834,675			$(9,448,612)			$786,582,900
Restricted stock vested	1,342,112	1,342			(1,342)			—			—
Shares to cover tax withholdings for restricted stock vested	(244,911)		(245)			245			—			—
Payments to cover tax withholdings for restricted stock vested, net	—	—			(814,985)			—			(814,985)
Share-based compensation	—	—			1,723,832			—			1,723,832
Net income	—	—			—			5,515,377			5,515,377
Balance, March 31, 2024	197,934,202		$197,934			$796,742,425			$(3,933,235)			$793,007,124
Restricted stock vested	303,797	304			(304)			—			—
Shares to cover tax withholdings for restricted stock vested	(71,702)		(72)			72			—			—
Payments to cover tax withholdings for restricted stock vested, net	—	—			(86,991)			—			(86,991)
Share-based compensation	—	—			2,077,778			—			2,077,778
Net income	—	—			—			22,418,994			22,418,994
Balance, June 30, 2024	198,166,297		$198,166			$798,732,980			$18,485,759			$817,416,905
Restricted stock vested	39,442	39			(39)			—			—
Shares to cover tax withholdings for restricted stock vested	(9,705)		(9)			9			—			—
Payments to cover tax withholdings for restricted stock vested, net	—	—			(17,273)			—			(17,273)
Share-based compensation	—	—			32,087			—			32,087
Net income	—	—			—			33,878,424			33,878,424
Balance, September 30, 2024	198,196,034		$198,196			$798,747,764			$52,364,183			$851,310,143
Balance, December 31, 2022	175,530,212	$175,530			$775,241,114			$(114,313,253)			$661,103,391
Exercise of common warrants issued in offering	4,517,427	4,517		3,609,424			—			3,613,941
Restricted stock vested	659,479	659			(659)			—			—
Shares to cover tax withholdings for restricted stock vested	(79,634)		(79)			79			—			—
Payments to cover tax withholdings for restricted stock vested, net	—	—			(134,381)			—			(134,381)
Share-based compensation	—	—			1,943,696			—			1,943,696
Net income	—	—			—			32,715,779			32,715,779
Balance, March 31, 2023	180,627,484	$180,627			$780,659,273			$(81,597,474)			$699,242,426
Induced exercise of common warrants issued in offering	14,512,166		14,512			8,673,143			—			8,687,655
Restricted stock vested	288,709		289			(289)			—			—
Shares to cover tax withholdings for restricted stock vested	(77,687)		(78)			78			—			—
Payments to cover tax withholdings for restricted stock vested, net	—		—			(141,682)			—			(141,682)
Share-based compensation	—		—			2,260,312			—			2,260,312
Net income	—		—			—			28,791,605			28,791,605
Balance, June 30, 2023	195,350,672		$195,350			$791,450,835			$(52,805,869)			$738,840,316
Restricted stock vested	39,443		39			(39)			—			—
Shares to cover tax withholdings for restricted stock vested	(9,588)		(9)			9			—			—
Payments to cover tax withholdings for restricted stock vested, net	—		—			(18,302)			—			(18,302)
Share-based compensation	—		—			2,170,735			—			2,170,735
Net loss	—		—			—			(7,539,222)			(7,539,222)
Balance, September 30, 2023	195,380,527		$195,380			$793,603,238			$(60,345,091)			$733,453,527

CONDENSED STATEMENTS OF CASH FLOWS

	For the Nine Months Ended
	September 30, 2024	September 30, 2023
Cash Flows From Operating Activities
Net income	$61,812,795	$53,968,162
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, depletion and amortization	74,153,994	64,053,637
Asset retirement obligation accretion	1,057,213	1,073,900
Amortization of deferred financing costs	3,670,096	3,699,235
Share-based compensation	3,833,697	6,374,743
Bad debt expense	187,594	41,865
(Gain) loss on disposal of assets	(89,693)	—
Deferred income tax expense (benefit)	18,212,075	(8,160,712)
Excess tax expense (benefit) related to share-based compensation	95,333	158,763
(Gain) loss on derivative contracts	(3,888,531)	26,483,190
Cash received (paid) for derivative settlements, net	(5,938,777)	(5,829,728)
Changes in operating assets and liabilities:
Accounts receivable	3,245,030	(5,671,516)
Inventory	1,508,955	3,701,882
Prepaid expenses and other assets	(202,046)	68,525
Accounts payable	(9,538,827)	3,500,913
Settlement of asset retirement obligation	(974,877)	(1,025,607)
Net Cash Provided by Operating Activities	147,144,031	142,437,252
Cash Flows From Investing Activities
Payments for the Stronghold Acquisition	—	(18,511,170)
Payments for the Founders Acquisition	—	(49,902,757)
Payments to purchase oil and natural gas properties	(787,343)	(1,605,262)
Payments to develop oil and natural gas properties	(117,559,401)	(112,996,032)
Payments to acquire or improve fixed assets subject to depreciation	(185,524)	(209,798)
Proceeds from sale of fixed assets subject to depreciation	10,605	332,230
Proceeds from divestiture of equipment for oil and natural gas properties	—	54,558
Proceeds from sale of Delaware properties	—	7,608,692
Proceeds from sale of New Mexico properties	(144,398)	4,312,502
Proceeds from sale of CBP vertical wells	5,500,000	—
Net Cash Used in Investing Activities	(113,166,061)	(170,917,037)
Cash Flows From Financing Activities
Proceeds from revolving line of credit	108,000,000	179,000,000
Payments on revolving line of credit	(141,000,000)	(166,000,000)
Proceeds from issuance of common stock from warrant exercises	—	12,301,596
Payments for taxes withheld on vested restricted shares, net	(919,249)	(294,365)
Proceeds from notes payable	1,501,507	1,565,071
Payments on notes payable	(1,122,422)	(1,114,883)
Payment of deferred financing costs	(45,704)	—
Reduction of financing lease liabilities	(688,486)	(551,579)
Net Cash Used in Financing Activities	(34,274,354)	24,905,840
Net Increase (Decrease) in Cash	(296,384)	(3,573,945)
Cash at Beginning of Period	296,384	3,712,526
Cash at End of Period	$—	$138,581

CONDENSED STATEMENTS OF CASH FLOWS (CONTINUED)

	For the Nine Months Ended
	September 30, 2024	September 30, 2023
Supplemental Cash Flow Information
Cash paid for interest	$30,208,974	$27,804,707
Cash paid for income taxes	72,213	—
Noncash Investing and Financing Activities
Asset retirement obligation incurred during development	$505,721	$261,786
Asset retirement obligation acquired	—	2,090,777
Asset retirement obligation revision of estimate	133,794	53,824
Asset retirement obligation sold	(3,219,651)	(4,717,507)
Operating lease assets obtained in exchange for new operating lease liability	—	1,713,677
Financing lease assets obtained in exchange for new financing lease liability	341,218	305,052
Change in capitalized expenditures attributable to drilling projects financed through current liabilities	(4,034,975)	(1,394,081)
Supplemental Schedule for Founders Acquisition
Investing Activities - Cash Paid
Escrow deposit released at closing	$—	$7,500,000
Closing amount paid to Founders	—	42,502,799
Interest from escrow deposit	—	1,747
Direct transaction costs	—	1,361,843
Post-close adjustments	—	(1,463,632)
Payments for the Founders Acquisition	$—	$49,902,757
Investing Activities - Noncash
Assumption of suspense liability	$—	$677,116
Assumption of asset retirement obligation	—	2,090,777
Assumption of ad valorem tax liability	—	234,051
Deferred cash payment at fair value	—	14,657,383
Supplemental Schedule for Stronghold Acquisition
Investing Activities - Cash Paid
Payment of deferred cash payment	—	15,000,000
Payment of post-close settlement	—	3,511,170
Payments for the Stronghold Acquisition	$—	$18,511,170

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