COMMITMENTS AND CONTINGENCIES |
9 Months Ended |
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Sep. 30, 2026 | |
| Commitments and Contingencies Disclosure [Abstract] | |
| COMMITMENTS AND CONTINGENCIES |
NOTE 12 — COMMITMENTS AND CONTINGENCIES
Surety Bonds – As of September 30, 2026, the Company had $3,682,614 in total surety bonds. As of December 31, 2025, the Company had $2,275,000 in total surety bonds. A Texas Railroad Commission ("RRC") required blanket performance bond to operate 100 or more wells in the State of Texas in the amount of $250,000 and another RRC required blanket plugging extension bond in the amount of $2,000,000. Both RRC bonds have zero collateral requirements. A surety bond in the amount of $25,000 to operate wells in the State of New Mexico was also in place as of September 30, 2026 and December 31, 2025; however, that bond will likely be released as the Company no longer operates wells in New Mexico. In February 2026, the Company added an RRC required bond in the amount of $99,740 covering a produced water recycling pit. In April 2026, the Company obtained an RRC required bond in the amount of $1,207,874 covering another produced water recycling pit. In September 2026, the Company added an RRC required bond in the amount of $100,000 for another produced water recycling pit. Total expenses related to the surety bonds were $47,229 and $26,250 for the nine months ended September 30, 2026 and 2025, respectively. The New Mexico bond is supported by a $25,000 standby letter of credit collateralized by the Credit Facility.
Standby Letters of Credit – As of September 30, 2026 and December 31, 2025, the Company had total standby letters of credit outstanding of $35,000, consisting of a $10,000 standby letter of credit in favor of a federal agency and a $25,000 standby letter of credit issued to support bonding requirements related to the Company's former operations in the State of New Mexico. The Company no longer conducts operations in New Mexico and expects the standby letter of credit related to the New Mexico bonding requirements to be released, subject to regulatory approval. No amounts had been drawn under either standby letter of credit as of September 30, 2026 and December 31, 2025, and no liability has been recorded in the accompanying Condensed Balance Sheets related to these arrangements.
Legal Proceedings – In July 2021, a lawsuit was filed in Harris County District Court, Houston, Texas, styled EPUS Permian Assets, LLC, v. Ring Energy, Inc. The plaintiff asserted breach of contract, money had and received by fraudulent inducement, unjust enrichment and constructive trust and requested its forfeited deposit of $5.5 million plus related damages, and attorneys’ fees and costs. On September 23, 2026, following a jury trial, the court returned a verdict in favor of the Company on all of the plaintiff’s claims. The plaintiff may appeal and the matter will not be final until any appeal is resolved.
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