RING ENERGY INC

The following are abbreviations and definitions of terms commonly used in the oil and natural gas industry and within this report.

Bbl– One barrel or 42 U.S. gallons liquid volume of oil or other liquid hydrocarbons.

Boe– Barrel of oil equivalent, determined using a ratio of six Mcf of natural gas equal to one barrel of oil equivalent. The ratio does not assume price equivalency and, given price differentials, the price for a barrel of oil equivalent for natural gas differs significantly from the price for a barrel of oil. A barrel of natural gas liquids also differs significantly in price from a barrel of oil.

Boepd– Boe per day.

Btu –British thermal unit, the quantity of heat required to raise the temperature of one pound of water by one-degree Fahrenheit.

Completion– The process of treating and hydraulically fracturing a drilled well followed by the installation of permanent equipment for the production of oil and natural gas, or in the case of a dry hole, the reporting of abandonment to the appropriate regulatory agency.

Developed acreage– The number of acres which are allotted or assignable to producing wells or wells capable of production.

Development activities– Activities following exploration including the drilling and completion of additional wells and the installation of production facilities.

Dry holeor well – A well found to be incapable of producing hydrocarbons economically.

ESG– Environmental, Social and Governance.

Exploitation– A development or other project which may target proven or unproven reserves (such as probable or possible reserves), but which generally has a lower risk than that associated with exploration projects.

Exploration –encompasses the processes and methods involved in locating potential sites for oil and natural gas drilling and extraction.

Field– An area consisting of a single reservoir or multiple reservoirs all grouped on or related to the same individual geological structural feature and/or stratigraphic condition.

Gross acresor gross wells – The total acres or wells, as the case may be, in which a working interest is owned.

Held by Production or HBP – A provision in an oil and gas property lease that extends a company's right to operate a property as long as the property produces a minimum amount of oil and/or gas.

Horizontal drilling– A drilling technique that permits the operator to drill horizontally within a specified targeted reservoir and thus exposes a larger portion of the producing horizon to a wellbore than would otherwise be exposed through conventional vertical drilling techniques.

Hydraulic fracturingor Fracking – A well stimulation method by which fluid, comprised largely of water and proppant (purposely sized particles used to hold open an induced fracture) is injected downhole and into the producing formation at high pressures and rates in order to exceed the rock strength and create a fracture such that the proppant material can be placed into the fracture to enhance the productive capability of the formation.

Injection well– A well which is used to inject gas, water, or liquefied petroleum gas under high pressure into a producing formation to maintain sufficient pressure to produce the recoverable reserves.

Joint Operating Agreementor JOA– Any agreement between working interest owners concerning the duties and responsibilities of the operator and rights and obligations of the non-operators.

MBoe– One thousand barrels of oil equivalent, determined using a ratio of six Mcf of natural gas equal to one barrel of oil equivalent.

MMBoe– One million barrels of oil equivalent, determined using a ratio of six Mcf of natural gas equal to one barrel of oil equivalent.

MMBtu– One million Btu.

Mcf– One thousand cubic feet.

Natural gas liquids or NGL– Natural gas liquids measured in barrels. Natural gas liquids are made up of ethane, propane, isobutane, normal butane and natural gasoline, each of which have different uses and different pricing characteristics.

Net acresor net wells – The sum of the fractional working interests owned in gross acres or gross wells.

NYMEX– The New York Mercantile Exchange.

Overriding royalty interest or ORRI– An undivided interest in an oil, natural gas and mineral lease entitling the owner to a share of oil or natural gas production. The ORRI is carved out of the working interest or lease and cannot be fractionalized. It is an undivided, non-possessory right to a share of the production, excluding the mineral lease's drilling, production and operation costs.

Plugging and abandonmentor P&A – Refers to the sealing off of fluids in the strata penetrated by a well so that the fluids from one stratum will not escape into another stratum or to the surface.

PV-10– The present value of estimated future revenues, discounted at 10% annually, to be generated from the production of proved reserves determined in accordance with the SEC guidelines, net of estimated production and future development costs, using prices and costs as of the date of estimation without future escalation, without giving effect to (i) non-property related expenses such as general and administrative expenses, debt service, and future income tax expense, and (ii) depreciation, depletion and amortization.

Productive well– A well that is found to be capable of producing hydrocarbons in sufficient quantities such that proceeds from the sale of such production exceeds production expenses and taxes.

Proppant– A solid material, typically treated sand or man-made ceramic materials, designed to keep an induced hydraulic fracture open, during or following a fracturing treatment.

Proved developed nonproducing reservesor PDNP – Hydrocarbons in a potentially producing horizon penetrated by a wellbore, the production of which has been postponed pending completion activities and the installation of surface equipment or gathering facilities or pending the production of hydrocarbons from another formation penetrated by the wellbore. The hydrocarbons are classified as proved developed but nonproducing reserves.

Proved developed producing reservesor PDP – Reserves that can be expected to be recovered from existing wells and completions with existing equipment and operating methods.

Proved developed reservesor PD – The estimated quantities of oil, natural gas and natural gas liquids that geological and engineering data demonstrate with reasonable certainty to be commercially recoverable in future years from known reservoirs under existing economic and operating conditions.

Proved reserves– Those quantities of oil and natural gas, which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible—from a given date forward, from known reservoirs, and under existing economic conditions, operating methods, and government regulations—prior to the time at which contracts providing the right to operate expire, unless evidence indicates that renewal is reasonably certain.

Proved undeveloped reservesor PUD – Proved reserves that are expected to be recovered from new wells on undrilled acreage or from existing wells where a relatively major expenditure is required for recompletion.

Recompletion– The completion for production of an existing well bore in another formation from that in which the well has been previously completed.

Reservoir– A permeable underground formation containing a natural accumulation of producible oil and/or natural gas that is confined by impermeable rock or water barriers and is individual and separate from other reservoirs.

Royalty interest– An interest in an oil and natural gas property entitling the royalty owner to a share of oil and/or natural gas production free of costs of production.

RRC– Texas Railroad Commission.

Shut-in reserves– Those reserves expected to be recovered from completion intervals that were open at the time the reserve was estimated but were not producing due to market conditions, mechanical difficulties, or because production equipment or pipelines were not yet installed. These reserves are included in the PDNP category in our reserve report.

SOFR –Secured Overnight Financing Rate.

Standardized Measure– The present value of estimated future net revenue to be generated from the production of proved reserves, determined in accordance with the rules and regulations of the SEC (using prices and costs in effect as of the date of estimation), less future development, production and income tax expenses, and discounted at 10% per annum to reflect the timing of future net revenue.

SWD well- Salt water disposal well.

Undeveloped acreage– Lease acreage on which wells have not been drilled or completed to a point that would permit the production of commercial quantities of oil and natural gas regardless of whether such acreage contains proved reserves.

Working interestor WI – The ownership interest, generally defined in a JOA, that gives the owner the right to drill, produce, and/or conduct operating activities on the leased property and share in the sale of production therefrom, subject to all royalties, overriding royalties, and other lease burdens. In addition, the owner of the working interest must share in all costs of exploration, development operations and all risks in connection therewith.

Workover– Operations on a producing well to restore or increase production.

WTI– West Texas Intermediate light sweet crude oil, a benchmark in crude oil pricing.