Ring Energy Inc. Announces Second Quarter and Six Month 2015 Financial and Operating Results

MIDLAND, Texas--(BUSINESS WIRE)-- Ring Energy, Inc. (NYSE MKT: REI) (“Ring”) (“Company”) announced today financial results for the three months and six months ended June 30, 2015. For the three month period ended June 30, 2015, Ring had oil and gas revenues of $8,976,790, compared to $11,204,238 for the quarter ended June 30, 2014, and net income of $534,167, or $0.02 per fully diluted share, compared to net income of $2,821,738, or $0.11 per fully diluted share, for the same period in 2014. For the six month period ended June 30, 2015, the Company reported oil and gas revenues of $15,022,491, compared to oil and gas revenues of $17,174,690 for the six month period ended June 30, 2014. The Company had a net loss for the six month period ended June 30, 2015 of $441,457, or $0.02 per fully diluted share, compared to net income of $3,985,427, or $0.16 per fully diluted share, for the same period in 2014. The revenue decrease was a result of lower oil and gas prices received.

For the three months ended June 30, 2015, oil sales volume increased to 165,759 barrels, compared to 118,533 barrels for the same period in 2014, a 40% increase, and gas sales volume increased to 94,517 MCF (thousand cubic feet), compared to 7,142 MCF for the same period in 2014, a 1,223% increase. For the six months ended June 30, 2015, oil sales volume increased to 302,848 barrels, compared to 182,477 barrels for the same period in 2014, a 66% increase, and gas sales volume increased to 114,364 MCF, compared to 15,759 MCF for the same period in 2014, a 626% increase.

The average commodity prices received by Ring were $52.52 per barrel of oil and $2.87 per MCF of natural gas for the quarter ended June 30, 2015, compared to $94.22 per barrel of oil and $4.98 per MCF of natural gas for the quarter ended June 30, 2014. The average prices received for the six months ended June 30, 2015 were $48.55 per barrel of oil and $2.78 per MCF of natural gas, compared to $93.69 per barrel of oil and $4.93 per MCF of natural gas for the six month period ended June 30, 2014.

Lease operating expenses, including production taxes, for the three months ended June 30, 2015 were $14.48 per barrel of oil equivalent (“BOE”). Depreciation, depletion and amortization costs were $17.66 per BOE, and general and administrative costs, which included a $656,486 charge for stock based compensation, were $11.26 per BOE. For the six months ended June 30, 2015, lease operating expenses, including production taxes, were $14.83 per BOE. Depreciation, depletion and amortization costs were $21.31 per BOE, and general and administrative costs, which included a $1,311,174 charge for stock based compensation, were $11.72 per BOE.

Net cash flow from operations for the three and six months ended June 30, 2015 was $4,960,605, or $0.18 per fully diluted share, and $7,787,181, or $0.30 per fully diluted share, compared to net cash flow of $8,614,602, or $0.34, and $12,633,000, or $0.51 per fully diluted share for the same periods in 2014 (1).

In June 2015, the Company received approximately $49 million in net proceeds from the public sale of 4,500,000 shares of the Company’s registered common stock. Also in June, the Company entered into a new five-year, $500 million senior credit facility, increased from $150 million, with an immediate borrowing base of $100 million, increased from $40 million. There was an outstanding balance of $40.9 million on the Company’s $500 million senior secured credit facility at June 30, 2015.

On June 30, 2015, the Company announced it had finalized the acquisition of Delaware Basin acreage located in Culberson and Reeves Counties, Texas for a purchase price of $75 million. The acquisition was financed with proceeds from the Company’s June 2015 public common stock offering and the Company’s new senior credit facility.

Internal estimates of net 3P reserves (Proved, Probable and Possible), including the recent Delaware Basin acquisition, as of June 30, 2015, were 24.677 million barrel of oil equivalents (BOE) Proved, 10.521 million BOE Probable and 8.152 million BOE Possible for a 3P total of 43.35 million BOE. Future net revenues before income taxes, discounted at 10% (“PV-10”), based on $55.00 per barrel of oil and $3.50 per MCF of gas, were $292.764 million Proved, $106.351 million Probable and $37.049 million Possible for a 3P total of $436.164 million.

Ring’s Chief Executive Officer, Mr. Kelly Hoffman, stated, “We have firmly believed that an extended environment of low commodity prices would offer acquisition opportunities for companies like ours, which have been diligent in reducing costs and maintaining a strong balance sheet. Our recent acquisition of 14,700 acres in the Delaware Basin is a prime example. This addition has significantly increased our net acreage in Texas, added over 400 potential drilling locations and substantially enhanced our daily production. Our field personnel are doing an excellent job in the renovation of the present infrastructure, resulting in cost reduction and additional production. We are ready to resume development activity once prices improve and continue to look for additional acquisition opportunities that complement our existing properties.”

Non-GAAP Financial Measures:

Earnings for the three months ended June 30, 2015 include a non-cash charge for stock based compensation of $656,486. Earnings for the six months ended June 30, 2015 include a non-cash charge for stock based compensation of $1,311,174. Excluding such items, the Company’s earnings would have been $0.03 per diluted share for the three months ended June 30, 2015, and $0.01 for the six months ended June 30, 2015. The Company believes results excluding these items are more comparable to estimates provided by security analysts and, therefore, are useful in evaluating operational trends of the Company and its performance, compared to other similarly situated oil and gas producing companies.

About Ring Energy, Inc.

Ring Energy, Inc. is an oil and gas exploration, development and production company with current operations in Texas and Kansas. www.ringenergy.com

Safe Harbor Statement

This release contains forward-looking statements within the meaning of the “safe-harbor” provisions of the Private Securities Litigation Reform Act of 1995 that involve a wide variety of risks and uncertainties, including, without limitations, statements with respect to the Company’s strategy and prospects. Such statements are subject to certain risks and uncertainties which are disclosed in the Company’s reports filed with the SEC, including its Form 10-K for the fiscal year ended December 31, 2014, its Form 10-Q for the quarter ended June 30, 2015 and its other filings with the SEC. Readers and investors are cautioned that the Company’s actual results may differ materially from those described in the forward-looking statements due to a number of factors, including, but not limited to, the Company’s ability to acquire productive oil and/or gas properties or to successfully drill and complete oil and/or gas wells on such properties, general economic conditions both domestically and abroad, and the conduct of business by the Company, and other factors that may be more fully described in additional documents set forth by the Company.

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K M Financial, Inc.
Bill Parsons, 702-489-4447

Source: Ring Energy, Inc.

Released August 10, 2015