Ring Energy Announces First Quarter 2025 Results and Provides Updated 2025 Outlook

THE WOODLANDS, Texas, May 07, 2025 (GLOBE NEWSWIRE) -- Ring Energy, Inc. (NYSE American: REI) (“Ring” or the “Company”) today reported operational and financial results for first quarter 2025 and provided updated guidance for the second half of the year.

First Quarter 2025 Highlights

  • Sold 12,074 barrels of oil per day (“Bo/d”) (> high end of guidance) and 18,392 barrels of oil equivalent per day (“Boe/d”) (> mid point of guidance);
  • Reported net income of $9.1 million, or $0.05 per diluted share, and Adjusted Net Income1 of $10.7 million, or $0.05 per diluted share;
  • Recorded Adjusted EBITDA1 of $46.4 million and Lease Operating Expense (“LOE”) of $11.89 per Boe (< mid point of guidance);
  • Invested $32.5 million in capital expenditures (within guidance, excluding acquisitions) that was 14% lower than 4Q 2024
  • Generated Adjusted Cash Flow from Operations1 of $38.2 million and Adjusted Free Cash Flow (“AFCF”)1 of $5.8 million;
  • Remained cash flow positive for the 22nd consecutive quarter and had liquidity of $141.1 million at the end of the period;
  • Completed highly-accretive acquisition of Central Basin Platform (“CBP”) assets from Lime Rock Resources IV, LP (“Lime Rock’) on March 31, 2025 with operations to date exceeding expectations; and
  • Provided updated guidance for the remainder of 2025, which reflects more than a 47% decrease in capital spending from original guidance for time period 2Q to 4Q 2025.

Management Commentary

Mr. Paul D. McKinney, Chairman of the Board and Chief Executive Officer, commented, “We’re excited to kick off 2025 with a strong first quarter, showcasing the flexibility, resilience, and strength of our proven, value-focused strategy amid fluctuating oil prices. Our performance met or surpassed all guidance targets, driven by exceptional oil sales volumes. As shared earlier, this success stemmed from the outperformance of our newly drilled wells and the tireless dedication of our operations team, who kept our PDP assets running at peak efficiency. On the final day of the quarter, we closed the highly accretive acquisition of Lime Rock’s CBP assets, which are outperforming the forecasts originally used to value them, adding more value to our portfolio. To set the stage for this synergistic transaction, we strategically adjusted the timing of our drilling program and capital spending initiatives, optimizing our financial position and reinforcing our balance sheet. With this strong foundation, we’re poised to continue delivering value to our stockholders despite the uncertainties currently facing our industry.”

Mr. McKinney concluded, “We have been looking forward to sharing more about our proactive approach to navigating the recent dip in oil prices, showcasing the strength of our value-focused strategy. As previously announced, we’ve strategically reduced our second quarter capital spending by over 50%, while maintaining our sales volume guidance. Looking ahead, our updated full-year guidance reflects a 36% reduction in capital spending with only a 5% reduction to sales volumes, made possible by the exceptional performance of both our existing and newly acquired assets so far this year. This represents a 2% increase of year-over-year total sales. Should oil prices rise later in the year, we’re positioned to accelerate our debt reduction efforts, channeling the benefits of higher prices into strengthening our balance sheet. This disciplined approach highlights our proven strategy. We’re committed to delivering value for our stockholders and are deeply grateful for your trust and investment in Ring Energy as we build a brighter, more resilient future together.”

Summary Results and Additional Key Items

  Q1 2025 Q4 2024 Q1 2025
to Q
4 2024
% Change
Q1 2024 Q1 2025
to Q
1 2024
% Change
Average Daily Sales Volumes (Boe/d) 18,392 19,658 (6)% 19,034 (3)%
Crude Oil (Bo/d) 12,074 12,916 (7)% 13,394 (10)%
Net Sales (MBoe) 1,655.3 1,808.5 (8)% 1,732.1 (4)%
Realized Price - All Products ($/Boe) $47.78 $46.14 4% $54.56 (12)%
Realized Price - Crude Oil ($/Bo) $70.40 $68.98 2% $75.72 (7)%
Revenues ($MM) $79.1 $83.4 (5)% $94.5 (16)%
Net Income ($MM) $9.1 $5.7 60% $5.5 65%
Adjusted Net Income1 ($MM) $10.7 $12.3 (13)% $20.3 (47)%
Adjusted EBITDA1 ($MM) $46.4 $50.9 (9)% $62.0 (25)%
Capital Expenditures ($MM) $32.5 $37.6 (14)% $36.3 (10)%
Adjusted Free Cash Flow1 ($MM) $5.8 $4.7 23% $15.6 (63)%


Adjusted Net Income, Adjusted EBITDA, and Adjusted Free Cash Flow
are non-GAAP financial measures, which are described in more detail and reconciled to the most comparable GAAP measures, in the tables shown later in this release under “Non-GAAP Financial Information.” In addition, see section titled “Condensed Operating Data” for additional details concerning costs and expenses discussed below.

Sales volumes for 1Q 2025 were 18,392 Boe/d (66% oil, 18% natural gas liquids (“NGLs”) and 16% natural gas) versus 4Q 2024 sales volumes of 19,658 Boe/d (66% oil, 19% NGLs and 15% natural gas) and 1Q 2024 sales volumes of 19,034 Boe/d (70% oil, 15% NGLs and 15% natural gas).

Average realized sales prices for 1Q 2025 were $70.40 per barrel of crude oil, $(0.19) per Mcf of natural gas, and $9.65 per barrel of NGLs. The realized natural gas and NGL prices were impacted by increased fees resulting in lower realized prices. The weighted average natural gas price per Mcf was $1.86 and the weighted average fee per Mcf was $(2.05); the weighted average NGL price per barrel was $22.64 offset by a weighted average fee per barrel of $(12.99). The weighted average natural gas price for 1Q 2025 reflects continued natural gas product takeaway constraints, which are being alleviated through additional third-party pipeline capacity. The average oil price differential the Company experienced from NYMEX WTI ("West Texas Intermediate") futures pricing in 1Q 2025 was a negative $0.89 per barrel of crude oil, while the average natural gas price differential from NYMEX futures pricing was a negative $3.81 per Mcf.

Revenues were $79.1 million for 1Q 2025 compared to $83.4 million for 4Q 2024 and $94.5 million for 1Q 2024. The 5% decrease in 1Q 2025 revenues from 4Q 2024 was driven by a negative $7.3 million volume variance offset by a positive $3.0 million price variance.

Select Expenses and Other Items

  Q1 2025 Q4 2024 Q1 2025
to Q
4 2024
% Change
Q1 2024 Q1 2025
to Q
1 2024
% Change
Lease operating expenses (“LOE”) ($MM) $19.7 $20.3 (3)% $18.4 7%
Lease operating expenses ($/BOE) (1) $11.89 $11.24 6% $10.60 12%
Depreciation, depletion and amortization ($MM) $22.6 $24.5 (8)% $23.8 (5)%
Depreciation, depletion and amortization ($/BOE) $13.66 $13.57 1% $13.74 (1)%
General and administrative expenses (“G&A”) ($MM) $8.6 $8.0 8% $7.5 15%
General and administrative expenses ($/BOE) $5.21 $4.44 17% $4.31 21%
G&A excluding share-based compensation ($MM) $6.9 $6.4 8% $5.7 (21)%
G&A excluding share-based compensation ($/BOE) $4.19 $3.52 19% $3.32 26%
G&A excluding share-based compensation & transaction costs ($MM) $6.9 $6.3 10% $5.7 21%
G&A excluding share-based compensation & transaction costs ($/BOE) $4.18 $3.51 19% $3.32 26%
Interest expense ($MM) (2) $9.5 $10.1 (6)% $11.5 (17)%
Interest expense ($/BOE) $5.74 $5.59 3% $6.64 (14)%
Gain (loss) on derivative contracts ($MM) (3) $(0.9) $(6.3) 85% $(19.0) 95%
Realized gain (loss) on derivative contracts ($MM) $(0.5) $0.7 (171)% $(1.4) 64%
Unrealized gain (loss) on derivative contracts ($MM) $(0.4) $(7.0) 94% $(17.6) 98%


(1) LOE was within the Company’s guidance of $11.75 to $12.25 per Boe for 1Q 2025.

(2) The decline in interest expense from prior quarters was due to lower interest rates and reduced borrowings on the credit facility.

(3) A summary listing of the Company’s outstanding derivative positions at March 31, 2025 is included in the tables shown later in this release. For the remainder (April through December) of 2025, the Company has approximately 1.7 million barrels of oil (approximately 47% of oil sales guidance midpoint) hedged at an average downside protection price of $64.44 and approximately 2.0 billion cubic feet of natural gas (approximately 37% of natural gas sales guidance midpoint) hedged at an average downside protection of $3.43.

Capital Investment

During 1Q 2025, capital expenditures for the Company’s drilling and development activities were $32.5 million, which was within the Company’s guidance of $26 million to $34 million. Ring also invested approximately $70.9 million for the Lime Rock Acquisition that closed on March 31, 2025 (including the $63.6 million cash payment at closing, the $5.0 million deposit payment made in February, and $2.3 million in direct transaction costs).

Drilling and Development

Ring drilled, completed, and placed on production seven wells. In the Northwest Shelf in Yoakum County, Ring drilled and completed three 1-mile horizontal wells and one 1.25-mile horizontal well, all with a working interest of 75%. In the CBP in Ector County, the Company drilled and completed three vertical wells, all with a working interest of 100%.

Quarter   Area   Wells Drilled   Wells Completed
             
1Q 2025   Northwest Shelf (Horizontal)   4   4
    Central Basin Platform (Horizontal)    
    Central Basin Platform (Vertical)   3   3
    Total   7   7


Acquisition - CBP Assets of Lime Rock

During 1Q 2025, Ring completed the acquisition of CBP assets from Lime Rock. Those properties are located in the Permian Basin in Andrews County, Texas, and are focused on the development of approximately 17,700 net acres where the majority are similar to Ring’s existing CBP assets in the Shafter Lake area, and the remaining acreage exposes the Company to new active plays.

The key transaction highlights include:

  • Highly Accretive: ~2,300 Boe/d (>75% oil) of low-decline net production from ~101 gross wells;
  • Increased Scale and Operational Synergies: ~17,700 net acres (100% HBP) mostly contiguous to Ring’s existing footprint;
  • Meaningful AFCF Generation: Supported by $121 million of oil-weighted reserves (based on NYMEX strip pricing as of February 19, 2025; and
  • Strengthens High-Return Inventory Portfolio: >40 gross locations that immediately compete for capital.

After taking into account preliminary purchase price adjustments, consideration for the acquisition consisted of:

  • A cash payment of approximately $63.6 million net of the $5.0 million deposit payment made in February;
  • $10.0 million deferred cash payment due on or about December 31, 2025; and
  • The issuance of approximately 6.5 million shares of common stock.

The cash payment at closing on March 31, 2025 was funded with cash on hand and borrowings under Ring’s senior revolving credit facility.

Balance Sheet and Liquidity

Total liquidity (defined as cash and cash equivalents plus borrowing base availability under the Company’s credit facility) at March 31, 2025 was approximately $141.1 million, consisting of $140.0 million of availability under Ring’s revolving credit facility, which included a reduction of $35 thousand for letters of credit, and $1.1 million in cash and cash equivalents. On March 31, 2025, the Company had $460 million in borrowings outstanding on its credit facility that has a current borrowing base of $600 million and reflects the draw on the revolving credit facility to fund the Lime Rock Acquisition. The Company is targeting continued debt reduction, dependent on market conditions, the timing and level of capital spending, and other considerations.

Second Half of 2025 Sales Volumes, Capital Investment and Operating Expense Guidance

Ring’s 2025 development program has been updated to reflect a reduction in capital spending in response to the weakened price environment. For full year 2025, Ring now expects total capital spending of $85 million to $113 million (versus $138 million to $170 million previously disclosed). In addition to wells that the Company plans to drill and complete, the full year capital spending program includes funds for targeted well recompletions, capital workovers, infrastructure upgrades, reactivations, and leasing costs, as well as non-operated drilling, completion, capital workovers, and facility improvements.

All projects and estimates are based on assumed WTI oil prices of $50 to $70 per barrel and Henry Hub prices of $3.00 to $4.00 per Mcf. As in the past, Ring has designed its spending program with flexibility to respond to changes in commodity prices and other market conditions as appropriate.

Based on the $99 million midpoint of spending guidance, the Company continues to expect the following estimated allocation of capital, including:

  • 61% for drilling, completion, and related infrastructure;
  • 33% for recompletions and capital workovers;
  • 4% for facility improvements (environmental and emission reducing upgrades); and
  • 2% for land, non-operated capital, and other.

The guidance in the table below represents the Company's current good faith estimate of the range of likely future results. Guidance could be affected by the factors discussed below in the "Safe Harbor Statement" section.

    Q2 2H
    2025 2025
Sales Volumes:      
Total Oil (Bo/d)   13,700 – 14,700 12,500 - 14,000
Midpoint (Bo/d)   14,200 13,250
Total (Boe/d)   20,500 – 22,500 19,000 - 21,000
Midpoint (Boe/d)   21,500 20,000
Oil (%)   66% 66%
NGLs (%)   18% 18%
Gas (%)   16% 16%
       
Capital Program:      
Capital spending(1) (millions)   $14 - $22 $38 - $58
Midpoint (millions)   $18 $48
New Hz and vertical wells (2)   2 - 3 11 - 13
Recompletions and CTRs   6 - 8 17 - 22
       
Operating Expenses:      
LOE (per Boe)   $11.50 - $12.50 $11.50 - $12.50
Midpoint (per Boe)   $12.00 $12.00


(1)
In addition to Company-directed drilling and completion activities, the capital spending outlook includes funds for targeted well recompletions, capital workovers, infrastructure upgrades, and well reactivations. Also included is anticipated spending for leasing acreage; and non-operated drilling, completion, capital workovers, and facility improvements.
(2) Includes wells drilled, completed, and placed online.

Conference Call Information

Ring will hold a conference call on Thursday, May 8, 2025 at 12:00 p.m. ET (11 a.m. CT) to discuss its 1Q 2025 operational and financial results. An updated investor presentation will be posted to the Company’s website prior to the conference call.

To participate in the conference call, interested parties should dial 833-953-2433 at least five minutes before the call is to begin. Please reference the “Ring Energy 1Q 2025 Earnings Conference Call”. International callers may participate by dialing 412-317-5762. The call will also be webcast and available on Ring’s website at www.ringenergy.com under “Investors” on the “News & Events” page. An audio replay will also be available on the Company’s website following the call.

About Ring Energy, Inc.

Ring Energy, Inc. is an oil and gas exploration, development, and production company with current operations focused on the development of its Permian Basin assets. For additional information, please visit www.ringenergy.com

Safe Harbor Statement

This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements involve a wide variety of risks and uncertainties, and include, without limitation, statements with respect to the Company’s strategy and prospects. The forward-looking statements include statements about the expected future reserves, production, financial position, business strategy, revenues, earnings, costs, capital expenditures and debt levels of the Company, expected benefits to the Company and its stockholders from the Lime Rock Acquisition, and plans and objectives of management for future operations. Forward-looking statements also include assumptions and projections for second quarter and full year 2025 guidance for sales volumes, oil mix as a percentage of total sales, capital expenditures, operating expenses and the projected impacts thereon, and the number of wells expected to be drilled and completed. Forward-looking statements are based on current expectations and assumptions and analyses made by Ring and its management in light of their experience and perception of historical trends, current conditions and expected future developments, as well as other factors appropriate under the circumstances. However, whether actual results and developments will conform to expectations is subject to a number of material risks and uncertainties, including but not limited to: declines in oil, natural gas liquids or natural gas prices; the level of success in exploration, development and production activities; adverse weather conditions that may negatively impact development or production activities particularly in the winter; the timing of exploration and development expenditures; inaccuracies of reserve estimates or assumptions underlying them; revisions to reserve estimates as a result of changes in commodity prices; impacts to financial statements as a result of impairment write-downs; risks related to level of indebtedness and periodic redeterminations of the borrowing base and interest rates under the Company’s credit facility; Ring’s ability to generate sufficient cash flows from operations to meet the internally funded portion of its capital expenditures budget; the impacts of hedging on results of operations; changes in U.S. energy, environmental, monetary and trade policies, including with respect to tariffs or other trade barriers, and any resulting trade tensions; cost and availability of transportation and storage capacity as a result of oversupply, government regulation or other factors; and Ring’s ability to replace oil and natural gas reserves. Such statements are subject to certain risks and uncertainties which are disclosed in the Company’s reports filed with the Securities and Exchange Commission (“SEC”), including its Form 10-K for the fiscal year ended December 31, 2024, and its other SEC filings. Ring undertakes no obligation to revise or update publicly any forward-looking statements, except as required by law.

Contact Information

Al Petrie Advisors
Al Petrie, Senior Partner
Phone: 281-975-2146
Email: apetrie@ringenergy.com

 
RING ENERGY, INC. 
Condensed Statements of Operations 
(Unaudited)

 
    Three Months Ended
    March 31,   December 31,   March 31,
      2025       2024       2024  
             
Oil, Natural Gas, and Natural Gas Liquids Revenues   $ 79,091,207     $ 83,440,546     $ 94,503,136  
             
Costs and Operating Expenses            
Lease operating expenses     19,677,552       20,326,216       18,360,434  
Gathering, transportation and processing costs     203,612       130,230       166,054  
Ad valorem taxes     1,532,108       2,421,595       2,145,631  
Oil and natural gas production taxes     3,584,455       3,857,147       4,428,303  
Depreciation, depletion and amortization     22,615,983       24,548,849       23,792,450  
Asset retirement obligation accretion     326,549       323,085       350,834  
Operating lease expense     175,091       175,090       175,091  
General and administrative expense     8,619,976       8,035,977       7,469,222  
             
Total Costs and Operating Expenses     56,735,326       59,818,189       56,888,019  
             
Income from Operations     22,355,881       23,622,357       37,615,117  
             
Other Income (Expense)            
Interest income     90,058       124,765       78,544  
Interest (expense)     (9,498,786 )     (10,112,496 )     (11,498,944 )
Gain (loss) on derivative contracts     (928,790 )     (6,254,448 )     (19,014,495 )
Gain (loss) on disposal of assets     124,610             38,355  
Other income     8,942       80,970       25,686  
Net Other Income (Expense)     (10,203,966 )     (16,161,209 )     (30,370,854 )
             
Income Before Benefit from (Provision for) Income Taxes     12,151,915       7,461,148       7,244,263  
             
Benefit from (Provision for) Income Taxes     (3,041,177 )     (1,803,629 )     (1,728,886 )
             
Net Income (Loss)   $ 9,110,738     $ 5,657,519     $ 5,515,377  
             
Basic Earnings (Loss) per Share   $ 0.05     $ 0.03     $ 0.03  
Diluted Earnings (Loss) per Share   $ 0.05     $ 0.03     $ 0.03  
             
Basic Weighted-Average Shares Outstanding     199,314,182       198,166,543       197,389,782  
Diluted Weighted-Average Shares Outstanding     201,072,594       200,886,010       199,305,150  
                         


RING ENERGY, INC.
Condensed Operating Data
(Unaudited)
 
    Three Months Ended
    March 31,   December 31,   March 31,
      2025       2024       2024  
             
Net sales volumes:            
Oil (Bbls)     1,086,694       1,188,272       1,218,837  
Natural gas (Mcf)     1,615,196       1,683,793       1,496,507  
Natural gas liquids (Bbls)     299,366       339,589       263,802  
Total oil, natural gas and natural gas liquids (Boe)(1)     1,655,259       1,808,493       1,732,057  
             
% Oil     66 %     66 %     70 %
% Natural Gas     16 %     15 %     15 %
% Natural Gas Liquids     18 %     19 %     15 %
             
Average daily sales volumes:            
Oil (Bbls/d)     12,074       12,916       13,394  
Natural gas (Mcf/d)     17,947       18,302       16,445  
Natural gas liquids (Bbls/d)     3,326       3,691       2,899  
Average daily equivalent sales (Boe/d)     18,392       19,658       19,034  
             
Average realized sales prices:            
Oil ($/Bbl)   $ 70.40     $ 68.98     $ 75.72  
Natural gas ($/Mcf)     (0.19 )     (0.96 )     (0.55 )
Natural gas liquids ($/Bbls)     9.65       9.08       11.47  
Barrel of oil equivalent ($/Boe)   $ 47.78     $ 46.14     $ 54.56  
             
Average costs and expenses per Boe ($/Boe):            
Lease operating expenses   $ 11.89     $ 11.24     $ 10.60  
Gathering, transportation and processing costs     0.12       0.07       0.10  
Ad valorem taxes     0.93       1.34       1.24  
Oil and natural gas production taxes     2.17       2.13       2.56  
Depreciation, depletion and amortization     13.66       13.57       13.74  
Asset retirement obligation accretion     0.20       0.18       0.20  
Operating lease expense     0.11       0.10       0.10  
G&A (including share-based compensation)     5.21       4.44       4.31  
G&A (excluding share-based compensation)     4.19       3.52       3.32  
G&A (excluding share-based compensation and transaction costs)     4.18       3.51       3.32  
                         

(1) Boe is determined using the ratio of six Mcf of natural gas to one Bbl of oil (totals may not compute due to rounding.) The conversion ratio does not assume price equivalency and the price on an equivalent basis for oil, natural gas, and natural gas liquids may differ significantly.

 
RING ENERGY, INC.
Condensed Balance Sheet 
(Unaudited)
    As of
    March 31, 2025   December 31, 2024
ASSETS        
Current Assets        
Cash and cash equivalents   $ 1,100,851     $ 1,866,395  
Accounts receivable     35,680,686       36,172,316  
Joint interest billing receivables, net     2,121,035       1,083,164  
Derivative assets     5,309,892       5,497,057  
Inventory     3,300,755       4,047,819  
Prepaid expenses and other assets     1,156,529       1,781,341  
Total Current Assets     48,669,748       50,448,092  
Properties and Equipment        
Oil and natural gas properties, full cost method     1,932,616,777       1,809,309,848  
Financing lease asset subject to depreciation     4,272,259       4,634,556  
Fixed assets subject to depreciation     3,359,292       3,389,907  
Total Properties and Equipment     1,940,248,328       1,817,334,311  
Accumulated depreciation, depletion and amortization     (496,993,139 )     (475,212,325 )
Net Properties and Equipment     1,443,255,189       1,342,121,986  
Operating lease asset     1,753,693       1,906,264  
Derivative assets     5,020,380       5,473,375  
Deferred financing costs     6,911,264       8,149,757  
Total Assets   $ 1,505,610,274     $ 1,408,099,474  
         
LIABILITIES AND STOCKHOLDERS’ EQUITY        
Current Liabilities        
Accounts payable   $ 86,417,436     $ 95,729,261  
Income tax liability     537,591       328,985  
Financing lease liability     846,380       906,119  
Operating lease liability     661,487       648,204  
Derivative liabilities     5,426,195       6,410,547  
Notes payable           496,397  
Deferred cash payment     9,415,066        
Asset retirement obligations     441,611       517,674  
Total Current Liabilities     103,745,766       105,037,187  
         
Non-current Liabilities        
Deferred income taxes     31,496,585       28,591,802  
Revolving line of credit     460,000,000       385,000,000  
Financing lease liability, less current portion     708,304       647,078  
Operating lease liability, less current portion     1,234,690       1,405,837  
Derivative liabilities     3,632,133       2,912,745  
Asset retirement obligations     28,826,738       25,864,843  
Total Liabilities     629,644,216       549,459,492  
Commitments and contingencies        
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; 206,509,126 shares and 198,561,378 shares issued and outstanding, respectively     206,509       198,561  
Additional paid-in capital     808,627,109       800,419,719  
Retained earnings (Accumulated deficit)     67,132,440       58,021,702  
Total Stockholders’ Equity     875,966,058       858,639,982  
Total Liabilities and Stockholders' Equity   $ 1,505,610,274     $ 1,408,099,474  


 
RING ENERGY, INC.
Condensed Statements of Cash Flows 
(Unaudited)
 
    Three Months Ended
    March 31,   December 31,   March 31,
      2025       2024       2024  
Cash Flows From Operating Activities            
Net income   $ 9,110,738     $ 5,657,519     $ 5,515,377  
Adjustments to reconcile net income to net cash provided by operating activities:            
Depreciation, depletion and amortization     22,615,983       24,548,849       23,792,450  
Asset retirement obligation accretion     326,549       323,085       350,834  
Amortization of deferred financing costs     1,238,493       1,299,078       1,221,607  
Share-based compensation     1,690,958       1,672,320       1,723,832  
Credit loss expense     17,917       (26,747 )     163,840  
(Gain) loss on disposal of assets     (124,610 )            
Deferred income tax expense (benefit)     2,805,346       1,723,338       1,585,445  
Excess tax expense (benefit) related to share-based compensation     99,437       9,011       40,808  
(Gain) loss on derivative contracts     928,790       6,254,448       19,014,495  
Cash received (paid) for derivative settlements, net     (553,594 )     745,104       (1,461,515 )
Changes in operating assets and liabilities:            
Accounts receivable     (564,158 )     349,474       (5,240,487 )
Inventory     747,064       580,161       171,416  
Prepaid expenses and other assets     624,812       295,555       503,704  
Accounts payable     (10,385,137 )     4,462,089       (1,601,276 )
Settlement of asset retirement obligation     (207,580 )     (613,603 )     (591,361 )
Net Cash Provided by Operating Activities     28,371,008       47,279,681       45,189,169  
             
Cash Flows From Investing Activities            
Payments for the Lime Rock Acquisition     (70,859,769 )            
Payments to purchase oil and natural gas properties     (647,106 )     (1,423,483 )     (475,858 )
Payments to develop oil and natural gas properties     (31,083,507 )     (36,386,055 )     (38,904,808 )
Payments to acquire or improve fixed assets subject to depreciation     (34,275 )           (124,937 )
Proceeds from sale of fixed assets subject to depreciation     17,360              
Proceeds from divestiture of equipment for oil and natural gas properties           121,232        
Net Cash Used in Investing Activities     (102,607,297 )     (37,688,306 )     (39,505,603 )
             
Cash Flows From Financing Activities            
Proceeds from revolving line of credit     114,000,000       22,000,000       51,500,000  
Payments on revolving line of credit     (39,000,000 )     (29,000,000 )     (54,500,000 )
Payments for taxes withheld on vested restricted shares, net     (896,431 )           (814,985 )
Proceeds from notes payable           58,774        
Payments on notes payable     (496,397 )     (475,196 )     (533,734 )
Payment of deferred financing costs           (42,746 )      
Reduction of financing lease liabilities     (136,427 )     (265,812 )     (255,156 )
Net Cash Provided by (Used in) Financing Activities     73,470,745       (7,724,980 )     (4,603,875 )
             
Net Increase (Decrease) in Cash     (765,544 )     1,866,395       1,079,691  
Cash at Beginning of Period     1,866,395             296,384  
Cash at End of Period   $ 1,100,851     $ 1,866,395     $ 1,376,075  


 
RING ENERGY, INC.
Financial Commodity Derivative Positions 
As of March 31, 2025
 
The following tables reflect the details of current derivative contracts as of March 31, 2025 (quantities are in barrels (Bbl) for the oil derivative contracts and in million British thermal units (MMBtu) for the natural gas derivative contracts):
 
    Oil Hedges (WTI)
    Q2 2025   Q3 2025   Q4 2025   Q1 2026   Q2 2026   Q3 2026   Q4 2026   Q1 2027
                                 
Swaps:                                
Hedged volume (Bbl)     151,763     351,917     141,755     477,350     457,101     59,400     423,000     381,500
Weighted average swap price   $ 68.53   $ 71.41   $ 69.13   $ 70.16   $ 69.38   $ 66.70   $ 66.70   $ 63.80
                                 
Two-way collars:                                
Hedged volume (Bbl)     464,100     225,400     404,800             379,685        
Weighted average put price   $ 60.00   $ 65.00   $ 60.00   $   $   $ 60.00   $   $
Weighted average call price   $ 69.85   $ 78.91   $ 75.68   $   $   $ 72.50   $   $


    Gas Hedges (Henry Hub)
    Q2 2025   Q3 2025   Q4 2025   Q1 2026   Q2 2026   Q3 2026   Q4 2026   Q1 2027
                                 
NYMEX Swaps:                                
Hedged volume (MMBtu)     513,900     455,250     128,400     140,600     662,300     121,400     613,300    
Weighted average swap price   $ 3.60   $ 3.88   $ 4.25   $ 4.20   $ 3.54   $ 4.22   $ 3.83   $
                                 
Two-way collars:                                
Hedged volume (MMBtu)     18,300     308,200     598,000     553,500         515,728         700,000
Weighted average put price   $ 3.00   $ 3.00   $ 3.00   $ 3.50   $   $ 3.00   $   $ 4.00
Weighted average call price   $ 4.15   $ 4.75   $ 4.15   $ 5.03   $   $ 3.93   $   $ 5.20


    Oil Hedges (basis differential)
    Q2 2025   Q3 2025   Q4 2025   Q1 2026   Q2 2026   Q3 2026   Q4 2026   Q1 2027
                                 
Argus basis swaps:                                
Hedged volume (Bbl)     183,000     276,000     276,000                    
Weighted average spread price (1)   $ 1.00   $ 1.00   $ 1.00   $   $   $   $   $


                                 
    Gas Hedges (basis differential)
    Q2 2025   Q3 2025   Q4 2025   Q1 2026   Q2 2026   Q3 2026   Q4 2026   Q1 2027
                                 
El Paso Permian Basin basis swaps:                                
Hedged volume (MMBtu)                                 700,000
Weighted average spread price (2)   $   $   $   $   $   $   $   $ 0.74
                                                 

(1) The oil basis swap hedges are calculated as the fixed price (weighted average spread price above) less the difference between WTI Midland and WTI Cushing, in the issue of Argus Americas Crude.

(2) The gas basis swap hedges are calculated as the Henry Hub natural gas price less the fixed amount specified as the weighted average spread price above.

RING ENERGY, INC.
Non-GAAP Financial Information

Certain financial information included in this release are not measures of financial performance recognized by accounting principles generally accepted in the United States (“GAAP”). These non-GAAP financial measures are “Adjusted Net Income,” “Adjusted EBITDA,” “Adjusted Free Cash Flow” or “AFCF,” “Adjusted Cash Flow from Operations” or “ACFFO,” “G&A Excluding Share-Based Compensation,” “G&A Excluding Share-Based Compensation and Transaction Costs,” “Leverage Ratio,” “All-In Cash Operating Costs,” and “Cash Operating Margin.” Management uses these non-GAAP financial measures in its analysis of performance. These disclosures may not be viewed as a substitute for results determined in accordance with GAAP and are not necessarily comparable to non-GAAP performance measures which may be reported by other companies.

Reconciliation of Net income to Adjusted Net Income

“Adjusted Net Income” is calculated as net income minus the estimated after-tax impact of share-based compensation, ceiling test impairment, unrealized gains and losses on changes in the fair value of derivatives, and transaction costs for executed acquisitions and divestitures (“A&D”). Adjusted Net Income is presented because the timing and amount of these items cannot be reasonably estimated and affect the comparability of operating results from period to period, and current period to prior periods. The Company believes that the presentation of Adjusted Net Income provides useful information to investors as it is one of the metrics management uses to assess the Company’s ongoing operating and financial performance, and also is a useful metric for investors to compare Ring’s results with its peers.

     
    (Unaudited for All Periods)
    Three Months Ended
    March 31,   December 31,   March 31,
      2025       2024       2024  
    Total   Per
share -
diluted
  Total   Per
share -
diluted
  Total   Per
share -
diluted
Net income   $ 9,110,738     $ 0.05     $ 5,657,519     $ 0.03     $ 5,515,377     $ 0.03  
                         
Share-based compensation     1,690,958       0.01       1,672,320       0.01       1,723,832       0.01  
Unrealized loss (gain) on change in fair value of derivatives     375,196             6,999,552       0.03       17,552,980       0.08  
Transaction costs - executed A&D     1,776             21,017             3,539        
Tax impact on adjusted items     (500,646 )     (0.01 )     (2,008,740 )     (0.01 )     (4,447,977 )     (0.02 )
                         
Adjusted Net Income   $ 10,678,022     $ 0.05     $ 12,341,668     $ 0.06     $ 20,347,751     $ 0.10  
                         
Diluted Weighted-Average Shares Outstanding     201,072,594           200,886,010           199,305,150      
                         
Adjusted Net Income per Diluted Share   $ 0.05         $ 0.06         $ 0.10      


Reconciliation of
Net income to Adjusted EBITDA

The Company defines “Adjusted EBITDA” as net income plus net interest expense (including interest income and expense), unrealized loss (gain) on change in fair value of derivatives, ceiling test impairment, income tax (benefit) expense, depreciation, depletion and amortization, asset retirement obligation accretion, transaction costs for executed acquisitions and divestitures (A&D), share-based compensation, loss (gain) on disposal of assets, and backing out the effect of other income. Company management believes Adjusted EBITDA is relevant and useful because it helps investors understand Ring’s operating performance and makes it easier to compare its results with those of other companies that have different financing, capital and tax structures. Adjusted EBITDA should not be considered in isolation from or as a substitute for net income, as an indication of operating performance or cash flows from operating activities or as a measure of liquidity. Adjusted EBITDA, as Ring calculates it, may not be comparable to Adjusted EBITDA measures reported by other companies. In addition, Adjusted EBITDA does not represent funds available for discretionary use.

    (Unaudited for All Periods)
    Three Months Ended
    March 31,   December 31,   March 31,
      2025       2024       2024  
Net income   $ 9,110,738     $ 5,657,519     $ 5,515,377  
             
Interest expense, net     9,408,728       9,987,731       11,420,400  
Unrealized loss (gain) on change in fair value of derivatives     375,196       6,999,552       17,552,980  
Income tax (benefit) expense     3,041,177       1,803,629       1,728,886  
Depreciation, depletion and amortization     22,615,983       24,548,849       23,792,450  
Asset retirement obligation accretion     326,549       323,085       350,834  
Transaction costs - executed A&D     1,776       21,017       3,539  
Share-based compensation     1,690,958       1,672,320       1,723,832  
Loss (gain) on disposal of assets     (124,610 )           (38,355 )
Other income     (8,942 )     (80,970 )     (25,686 )
             
Adjusted EBITDA   $ 46,437,553     $ 50,932,732     $ 62,024,257  
             
Adjusted EBITDA Margin     59 %     61 %     66 %
                         

Reconciliations of Net Cash Provided by Operating Activities to Adjusted Free Cash Flow and Adjusted EBITDA to Adjusted Free Cash Flow

The Company defines “Adjusted Free Cash Flow” or “AFCF” as Net Cash Provided by Operating Activities less changes in operating assets and liabilities (as reflected on Ring’s Condensed Statements of Cash Flows), plus transaction costs for executed acquisitions and divestitures (A&D), current income tax expense (benefit), proceeds from divestitures of equipment for oil and natural gas properties, loss (gain) on disposal of assets, and less capital expenditures, credit loss expense, and other income. For this purpose, the Company’s definition of capital expenditures includes costs incurred related to oil and natural gas properties (such as drilling and infrastructure costs and lease maintenance costs) but excludes acquisition costs of oil and gas properties from third parties that are not included in Ring’s capital expenditures guidance provided to investors. Management believes that Adjusted Free Cash Flow is an important financial performance measure for use in evaluating the performance and efficiency of the Company’s current operating activities after the impact of capital expenditures and net interest expense (including interest income and expense, excluding amortization of deferred financing costs) and without being impacted by items such as changes associated with working capital, which can vary substantially from one period to another. Other companies may use different definitions of Adjusted Free Cash Flow.

     
    (Unaudited for All Periods)
    Three Months Ended
    March 31,   December 31,   March 31,
      2025       2024       2024  
             
Net Cash Provided by Operating Activities   $ 28,371,008     $ 47,279,681     $ 45,189,169  
Adjustments - Condensed Statements of Cash Flows            
Changes in operating assets and liabilities     9,784,999       (5,073,676 )     6,758,004  
Transaction costs - executed A&D     1,776       21,017       3,539  
Income tax expense (benefit) - current     136,393       71,280       102,633  
Capital expenditures     (32,451,531 )     (37,633,168 )     (36,261,008 )
Proceeds from divestiture of equipment for oil and natural gas properties           121,232        
Credit loss expense     (17,917 )     26,747       (163,840 )
Loss (gain) on disposal of assets                 (38,355 )
Other income     (8,942 )     (80,970 )     (25,686 )
             
Adjusted Free Cash Flow   $ 5,815,786     $ 4,732,143     $ 15,564,456  


    (Unaudited for All Periods)
    Three Months Ended
    March 31,   December 31,   March 31,
      2025       2024       2024  
             
Adjusted EBITDA   $ 46,437,553     $ 50,932,732     $ 62,024,257  
             
Net interest expense (excluding amortization of deferred financing costs)     (8,170,235 )     (8,688,653 )     (10,198,793 )
Capital expenditures     (32,451,531 )     (37,633,168 )     (36,261,008 )
Proceeds from divestiture of equipment for oil and natural gas properties           121,232        
             
Adjusted Free Cash Flow   $ 5,815,787     $ 4,732,143     $ 15,564,456  


Reconciliation of Net Cash Provided by Operating Activities to Adjusted Cash Flow from Operations

The Company defines “Adjusted Cash Flow from Operations” or “ACFFO” as Net Cash Provided by Operating Activities, as reflected in Ring’s Condensed Statements of Cash Flows, less the changes in operating assets and liabilities, which includes accounts receivable, inventory, prepaid expenses and other assets, accounts payable, and settlement of asset retirement obligations, which are subject to variation due to the nature of the Company’s operations. Accordingly, the Company believes this non-GAAP measure is useful to investors because it is used often in its industry and allows investors to compare this metric to other companies in its peer group as well as the E&P sector.

     
    (Unaudited for All Periods)
    Three Months Ended
    March 31,   December 31,   March 31,
      2025     2024       2024
             
Net Cash Provided by Operating Activities   $ 28,371,008   $ 47,279,681     $ 45,189,169
             
Changes in operating assets and liabilities     9,784,999     (5,073,676 )     6,758,004
             
Adjusted Cash Flow from Operations   $ 38,156,007   $ 42,206,005     $ 51,947,173


Reconciliation of General and Administrative Expense (G&A) to G&A Excluding Share-Based Compensation and Transaction Costs

The following table presents a reconciliation of General and Administrative Expense (“G&A”), a GAAP measure, to G&A excluding share-based compensation, and G&A excluding share-based compensation and transaction costs for executed acquisitions and divestitures (A&D).

     
    (Unaudited for All Periods)
    Three Months Ended
    March 31,   December 31,   March 31,
      2025     2024     2024
             
General and administrative expense (G&A)   $ 8,619,976   $ 8,035,977   $ 7,469,222
Shared-based compensation     1,690,958     1,672,320     1,723,832
G&A excluding share-based compensation     6,929,018     6,363,657     5,745,390
Transaction costs - executed A&D     1,776     21,017     3,539
G&A excluding share-based compensation and transaction costs   $ 6,927,242   $ 6,342,640   $ 5,741,851


Calculation of Leverage Ratio

“Leverage” or the “Leverage Ratio” is calculated under the Company’s existing senior revolving credit facility and means as of any date, the ratio of (i) Consolidated total debt as of such date to (ii) Consolidated EBITDAX for the four consecutive fiscal quarters ending on or immediately prior to such date for which financial statements are required to have been delivered under the Company’s existing senior revolving credit facility.

The Company defines “Consolidated EBITDAX” in accordance with its existing senior revolving credit facility that means for any period an amount equal to the sum of (i) consolidated net income (loss) for such period plus (ii) to the extent deducted in determining consolidated net income for such period, and without duplication, (A) consolidated interest expense, (B) income tax expense determined on a consolidated basis in accordance with GAAP, (C) depreciation, depletion and amortization determined on a consolidated basis in accordance with GAAP, (D) exploration expenses determined on a consolidated basis in accordance with GAAP, and (E) all other non-cash charges acceptable to Ring’s senior revolving credit facility administrative agent determined on a consolidated basis in accordance with GAAP, in each case for such period minus (iii) all noncash income added to consolidated net income (loss) for such period; provided that, for purposes of calculating compliance with the financial covenants, to the extent that during such period the Company shall have consummated an acquisition permitted by the credit facility or any sale, transfer or other disposition of any property or assets permitted by the senior revolving credit facility, Consolidated EBITDAX will be calculated on a pro forma basis with respect to the property or assets so acquired or disposed of.

Also set forth in Ring’s existing senior revolving credit facility is the maximum permitted Leverage Ratio of 3.00. The following tables show the leverage ratio calculations for the quarters ended March 31, 2025 and March 31, 2024.

 
    (Unaudited)
    Three Months Ended    
    June 30,   September 30,   December 31,   March 31,   Last Four
Quarters


      2024       2024       2024     2025  
Consolidated EBITDAX Calculation:                    
Net Income (Loss)   $ 22,418,994     $ 33,878,424     $ 5,657,519   $ 9,110,738   $ 71,065,675  
Plus: Consolidated interest expense     10,801,194       10,610,539       9,987,731     9,408,728     40,808,192  
Plus: Income tax provision (benefit)     6,820,485       10,087,954       1,803,629     3,041,177     21,753,245  
Plus: Depreciation, depletion and amortization     24,699,421       25,662,123       24,548,849     22,615,983     97,526,376  
Plus: non-cash charges acceptable to Administrative Agent     1,664,064       (26,228,108 )     8,994,957     2,392,703     (13,176,384 )
Consolidated EBITDAX   $ 66,404,158     $ 54,010,932     $ 50,992,685   $ 46,569,329   $ 217,977,104  
Plus: Pro Forma Acquired Consolidated EBITDAX     10,329,116       7,838,163       5,244,078     7,392,359     30,803,716  
Less: Pro Forma Divested Consolidated EBITDAX     (469,376 )     (600,460 )     77,819     8,855     (983,162 )
Pro Forma Consolidated EBITDAX   $ 76,263,898     $ 61,248,635     $ 56,314,582   $ 53,970,543   $ 247,797,658  
                     
Non-cash charges acceptable to Administrative Agent:                    
Asset retirement obligation accretion   $ 352,184     $ 354,195     $ 323,085   $ 326,549    
Unrealized loss (gain) on derivative assets     (765,898 )     (26,614,390 )     6,999,552     375,196    
Share-based compensation     2,077,778       32,087       1,672,320     1,690,958    
Total non-cash charges acceptable to Administrative Agent   $ 1,664,064     $ (26,228,108 )   $ 8,994,957   $ 2,392,703    
                     
    As of                
    March 31,   Corresponding            
      2025     Leverage Ratio            
Leverage Ratio Covenant:                    
Revolving line of credit   $ 460,000,000       1.86              
Lime Rock deferred payment     10,000,000       0.04              
Consolidated Total Debt   $ 470,000,000       1.90              
Pro Forma Consolidated EBITDAX     247,797,658                  
Leverage Ratio     1.90                  
Maximum Allowed     ≤ 3.00x                  
                         


    (Unaudited)
    Three Months Ended    
    June 30,   September 30,   December 31,   March 31,   Last Four
Quarters


      2023       2023       2023       2024  
Consolidated EBITDAX Calculation:                    
Net Income (Loss)   $ 28,791,605     $ (7,539,222 )   $ 50,896,479     $ 5,515,377   $ 77,664,239  
Plus: Consolidated interest expense     10,471,062       11,301,328       11,506,908       11,420,400     44,699,698  
Plus: Income tax provision (benefit)     (6,356,295 )     (3,411,336 )     7,862,930       1,728,886     (175,815 )
Plus: Depreciation, depletion and amortization     20,792,932       21,989,034       24,556,654       23,792,450     91,131,070  
Plus: non-cash charges acceptable to Administrative Agent     (470,875 )     36,396,867       (29,695,076 )     19,627,646     25,858,562  
Consolidated EBITDAX   $ 53,228,429     $ 58,736,671     $ 65,127,895     $ 62,084,759   $ 239,177,754  
Plus: Pro Forma Acquired Consolidated EBITDAX     9,542,529       4,810,123                 14,352,652  
Less: Pro Forma Divested Consolidated EBITDAX     (357,122 )     (672,113 )     (66,463 )     40,474     (1,055,224 )
Pro Forma Consolidated EBITDAX   $ 62,413,836     $ 62,874,681     $ 65,061,432     $ 62,125,233   $ 252,475,182  
                     
Non-cash charges acceptable to Administrative Agent:                    
Asset retirement obligation accretion   $ 353,878     $ 354,175     $ 351,786     $ 350,834    
Unrealized loss (gain) on derivative assets     (3,085,065 )     33,871,957       (32,505,544 )     17,552,980    
Share-based compensation     2,260,312       2,170,735       2,458,682       1,723,832    
Total non-cash charges acceptable to Administrative Agent   $ (470,875 )   $ 36,396,867     $ (29,695,076 )   $ 19,627,646    
                     
    As of                
    March 31,                
      2024                  
Leverage Ratio Covenant:                    
Revolving line of credit   $ 422,000,000                  
Pro Forma Consolidated EBITDAX     252,475,182                  
Leverage Ratio     1.67                  
Maximum Allowed     ≤ 3.00x                  
                         

All-In Cash Operating Costs

The Company defines All-In Cash Operating Costs, a non-GAAP financial measure, as “all in cash” costs which includes lease operating expenses, G&A costs excluding share-based compensation, net interest expense (including interest income and expense, excluding amortization of deferred financing costs), workovers and other operating expenses, production taxes, ad valorem taxes, and gathering/transportation costs. Management believes that this metric provides useful additional information to investors to assess the Company’s operating costs in comparison to its peers, which may vary from company to company.

     
    (Unaudited for All Periods)
    Three Months Ended
    March 31,   December 31,   March 31,
      2025     2024     2024
All-In Cash Operating Costs:            
Lease operating expenses (including workovers)   $ 19,677,552   $ 20,326,216   $ 18,360,434
G&A excluding share-based compensation     6,929,018     6,363,657     5,745,390
Net interest expense (excluding amortization of deferred financing costs)     8,170,235     8,688,653     10,198,793
Operating lease expense     175,091     175,090     175,091
Oil and natural gas production taxes     3,584,455     3,857,147     4,428,303
Ad valorem taxes     1,532,108     2,421,595     2,145,631
Gathering, transportation and processing costs     203,612     130,230     166,054
All-in cash operating costs   $ 40,272,071   $ 41,962,588   $ 41,219,696
             
Boe     1,655,259     1,808,493     1,732,057
             
All-in cash operating costs per Boe   $ 24.33   $ 23.20   $ 23.80


Cash Operating Margin

The Company defines Cash Operating Margin, a non-GAAP financial measure, as realized revenues per Boe less all-in cash operating costs per Boe. Management believes that this metric provides useful additional information to investors to assess the Company’s operating margins in comparison to its peers, which may vary from company to company.

     
    (Unaudited for All Periods)
    Three Months Ended
    March 31,   December 31,   March 31,
     2025    2024    2024
Cash Operating Margin            
Realized revenues per Boe   $ 47.78   $ 46.14   $ 54.56
All-in cash operating costs per Boe     24.33     23.20     23.80
Cash Operating Margin per Boe   $ 23.45   $ 22.94   $ 30.76
 

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1
A non-GAAP financial measure; see the “Non-GAAP Financial Information” section in this release for more information including reconciliations to the most comparable GAAP measures.


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Source: Ring Energy, Inc.