Ring Energy, Inc. (NYSE American: REI) (“Ring” or the “Company”)
today reported operational and financial results for second quarter
2024 and provided an improved outlook for the third quarter and
full year.
Second Quarter 2024
Highlights
- Produced sales of 13,623 barrels of oil per day (“Bo/d”),
representing a 2% increase over the first quarter of 2024;
- Sold record total volumes of 19,786 barrels of oil equivalent
per day (“Boe/d”) (69% oil), which was 4% higher than the first
quarter;
- Reported net income of $22.4 million, or $0.11 per diluted
share, and Adjusted Net Income1 of $23.4 million, or $0.12 per
diluted share;
- Recorded Lease Operating Expense (“LOE”) of $10.72 per Boe,
which was below the low end of guidance;
- Increased Cash Operating Margin1 to $32.97 per Boe, reflecting
a 7% increase over the first quarter and contributing to 9% growth
year-to-date from 2023;
- Achieved record Adjusted EBITDA1 of $66.4 million — up 7% from
the first quarter and 15% year-to-date;
- Incurred capital expenditures of $35.4 million, which was
below the low end of guidance;
- Successfully drilled and completed 11 producing wells (guidance
was 9 to 11 wells) during the second quarter of which five wells
came online late in the period;
- Generated record Adjusted Free Cash Flow of $21.4 million
during the quarter and $37.0 million year-to-date — representing a
60% increase for the first six months. The Company has remained
cash flow positive for 19 consecutive quarters;
- Ended the period with $407.0 million in outstanding borrowings
on the Company’s credit facility, reflecting a paydown of $15.0
million during the quarter and $48.0 million since closing the
Founders Acquisition in August 2023;
- Increased liquidity to $194.1 million and lowered the Leverage
Ratio2 to 1.59x as of June 30, 2024; and
- Provided guidance for higher sales volumes, lower operating
expenses and lower capital spending for the third quarter and full
year.
Mr. Paul D. McKinney, Chairman of the Board and
Chief Executive Officer, commented, “The second quarter marked
another successful period for the Company reaching a number of key
milestones as part of our proven strategy focused on maximizing
cash flow generation. This included record production, Adjusted
EBITDA and Adjusted Free Cash Flow that led to a $15 million
reduction of debt. Driving the 60% increase in year-to-date
Adjusted Free Cash Flow over 2023 was the impact of the Founders
Acquisition that closed in August 2023 and the outstanding
performance of our ongoing capital spending program. In addition,
our year-to-date results reflect the benefits from our continued
focus on reducing overall costs and downtime. We believe these
factors place us in a good position for ongoing success. We look
forward to additional material debt reduction over the coming
quarters, subject to oil prices remaining at recent levels.”
Mr. McKinney concluded, “For second half 2024,
we remain focused on maximizing cash flow to further improve our
balance sheet. The success of our disciplined capital spending
program in the first half bodes well for the remainder of 2024, and
we will continue to execute our plan to organically maintain or
slightly grow oil production. Our updated full year guidance
reflects a 4% increase in daily oil production and a 3% decrease in
capital spending — both assuming the midpoint. While our focus
remains on reducing debt, we continue to evaluate growth
opportunities through strategic, accretive and balance sheet
enhancing acquisitions.”
_______________1 A non-GAAP financial measure; see the “Non-GAAP
Information” section in this release for more information including
reconciliations to the most comparable GAAP measures.2 Refer to the
“Non-GAAP Information” section in this release for calculation of
the Leverage Ratio.
Summary Results
|
|
Quarter to Date |
Year to Date |
|
|
Q2 2024 |
Q1 2024 |
Q2 2024 to Q1 2024% Change |
Q2 2023 |
Q2 2024 to Q2 2023% Change |
YTD 2024 |
YTD 2023 |
YTD % Change |
|
Average Daily Sales Volumes (Boe/d) |
|
19,786 |
|
19,034 |
4 |
% |
|
17,271 |
15 |
% |
|
19,410 |
|
17,779 |
9 |
% |
|
Crude Oil (Bo/d) |
|
13,623 |
|
13,394 |
2 |
% |
|
11,861 |
15 |
% |
|
13,509 |
|
12,259 |
10 |
% |
| Net Sales
(MBoe) |
|
1,800.6 |
|
1,732.1 |
4 |
% |
|
1,571.7 |
15 |
% |
|
3,532.6 |
|
3,218.0 |
10 |
% |
| Realized
Price - All Products ($/Boe) |
$ |
55.06 |
$ |
54.56 |
1 |
% |
$ |
50.49 |
9 |
% |
$ |
54.82 |
$ |
52.03 |
5 |
% |
|
Realized Price - Crude Oil ($/Bo) |
$ |
80.09 |
$ |
75.72 |
6 |
% |
$ |
72.30 |
11 |
% |
$ |
77.93 |
$ |
72.85 |
7 |
% |
| Revenues
($MM) |
$ |
99.1 |
$ |
94.5 |
5 |
% |
$ |
79.3 |
25 |
% |
$ |
193.6 |
$ |
167.4 |
16 |
% |
| Net
Income ($MM) |
$ |
22.4 |
$ |
5.5 |
306 |
% |
$ |
28.8 |
(22 |
)% |
$ |
27.9 |
$ |
61.5 |
(55 |
)% |
| Adjusted
Net Income ($MM) |
$ |
23.4 |
$ |
20.3 |
15 |
% |
$ |
28.0 |
(16 |
)% |
$ |
43.8 |
$ |
53.0 |
(17 |
)% |
| Adjusted
EBITDA ($MM) |
$ |
66.4 |
$ |
62.0 |
7 |
% |
$ |
53.5 |
24 |
% |
$ |
128.4 |
$ |
112.0 |
15 |
% |
| Capital
Expenditures ($MM) |
$ |
35.4 |
$ |
36.3 |
(2 |
)% |
$ |
31.6 |
12 |
% |
$ |
71.6 |
$ |
70.5 |
2 |
% |
|
Adjusted Free Cash Flow ($MM) |
$ |
21.4 |
$ |
15.6 |
38 |
% |
$ |
12.6 |
70 |
% |
$ |
37.0 |
$ |
23.1 |
60 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Overview: For the
second quarter of 2024, the Company reported net income of $22.4
million, or $0.11 per diluted share, which included a $0.8 million
before-tax non-cash unrealized commodity derivative gain and $2.1
million in before-tax share-based compensation. The Company’s
Adjusted Net Income was $23.4 million, or $0.12 per diluted share.
In the first quarter of 2024, the Company reported net income of
$5.5 million, or $0.03 per diluted share, which included a $17.6
million before-tax non-cash unrealized commodity derivative loss
and $1.7 million for before-tax share-based compensation costs. The
Company’s Adjusted Net Income for the first quarter of 2024 was
$20.3 million, or $0.10 per diluted share. For the second quarter
of 2023, Ring reported net income of $28.8 million, or $0.15 per
diluted share, which included a $3.1 million before-tax non-cash
unrealized commodity derivative gain, $2.3 million in before-tax
share-based compensation and $0.2 million in before-tax transaction
costs. Adjusted Net Income in the second quarter of 2023 was $28.0
million, or $0.14 per diluted share.
Adjusted EBITDA was a record $66.4 million for
the second quarter of 2024 compared to $62.0 million for the first
quarter of 2024 and $53.5 million for the second quarter of 2023 —
a 7% and 24% increase, respectively.
Adjusted Free Cash Flow for the second quarter
of 2024 was a record $21.4 million versus $15.6 million for the
first quarter of 2024 (38% increase) and $12.6 million for the
second quarter of 2023 (70% increase). Included was capital
spending of $35.4 million in the second quarter of 2024 versus
$36.3 million in the first quarter of 2024 and
$31.6 million in the second quarter of 2023.
Adjusted Cash Flow from Operations was a record
$56.6 million for the second quarter of 2024 compared to $51.9
million for the first quarter of 2024 (a 9% increase), and $44.0
million for the second quarter of 2023 (a 29% increase).
Adjusted Net Income, Adjusted EBITDA, Adjusted
Free Cash Flow, Adjusted Cash Flow from Operations, and Cash
Operating Margin 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.”
Sales Volumes, Prices and
Revenues: Sales volumes for the second quarter of 2024
were 19,786 Boe/d (69% oil, 14% natural gas and 17% NGLs), or
1,800,570 Boe. Positively impacting second quarter 2024 sales
volumes was the Founders Acquisition that closed in August 2023 and
incremental production brought online during the period associated
with the Company’s ongoing development program. First quarter 2024
sales volumes were 19,034 Boe/d (70% oil, 15% natural gas and 15%
NGLs), or 1,732,057 Boe, and second quarter of 2023 sales volumes
were 17,271 Boe/d (69% oil, 16% natural gas and 15% NGLs), or
1,571,668 Boe. Second quarter 2024 sales volumes were comprised of
1,239,731 barrels (“Bbls”) of oil, 1,538,347 thousand cubic feet
(“Mcf”) of natural gas and 304,448 Bbls of NGLs.
For the second quarter of 2024, the Company
realized an average sales price of $80.09 per barrel of crude oil,
$(1.93) per Mcf of natural gas, and $9.27 per barrel of NGLs. The
realized natural gas and NGL prices were impacted by a fee
reduction to the value received. For the second quarter of 2024,
the weighted average natural gas price per Mcf was $(0.34) and the
weighted average fee value per Mcf was $(1.59); the weighted
average NGL price per barrel was $19.49 offset by a weighted
average fee per barrel of $(10.22). The weighted average natural
gas price for second quarter 2024 reflects continued natural gas
product takeaway constraints, which could be alleviated through
additional third-party pipeline capacity targeted to come online by
year end 2024. The combined average realized sales price for the
period was $55.06 per Boe, up 1% versus $54.56 per Boe for the
first quarter of 2024, and up 9% from $50.49 per Boe in the second
quarter of 2023. The average oil price differential the Company
experienced from NYMEX WTI futures pricing in the second quarter of
2024 was a negative $0.61 per barrel of crude oil, while the
average natural gas price differential from NYMEX futures pricing
was a negative $4.31 per Mcf.
Revenues were $99.1 million for the second
quarter of 2024 compared to $94.5 million for the first quarter of
2024 and $79.3 million for the second quarter of 2023. The 5%
increase in second quarter 2024 revenues from the first quarter of
2024 was driven by higher overall realized pricing and sales
volumes.
Lease Operating Expense
(“LOE”): LOE, which includes expensed workovers and
facilities maintenance, was $19.3 million, or $10.72 per Boe, in
the second quarter of 2024, which was below the low end of the
Company’s guidance of $10.75 to $11.25 per Boe. LOE per Boe was
below expectations due to lower expense workover costs and higher
production. LOE was $18.4 million, or $10.60 per Boe in the first
quarter of 2024 and $15.9 million, or $10.14 per Boe, for the
second quarter of 2023.
Gathering, Transportation and Processing
(“GTP”) Costs: As previously disclosed, due to a
contractual change effective May 1, 2022, the Company no longer
maintains ownership and control of natural gas through processing
for the majority of gas produced. As a result, the majority of GTP
costs are now reflected as a reduction to the natural gas sales
price and not as an expense item. There does remain one contract in
place with a natural gas processing entity where the point of
control of gas dictates requiring the fees to be recorded as an
expense.
Ad Valorem Taxes: Ad valorem
taxes were $0.74 per Boe for the second quarter of 2024 compared to
$1.24 per Boe in the first quarter of 2024 and $1.06 per Boe for
the second quarter of 2023.
Production Taxes: Production
taxes were $2.01 per Boe in the second quarter of 2024 compared to
$2.56 per Boe in the first quarter of 2024 and $2.55 per Boe in
second quarter of 2023. Production taxes ranged between 3.7% to
5.1% of revenue for all three periods.
Depreciation, Depletion and Amortization
(“DD&A”) and Asset Retirement Obligation
Accretion: DD&A was $13.72 per Boe in the second
quarter of 2024 versus $13.74 per Boe for the first quarter of 2024
and $13.23 per Boe in the second quarter of 2023. Asset retirement
obligation accretion was $0.20 per Boe in the second quarter of
2024 and for the first quarter of 2024, compared to $0.23 per Boe
in the second quarter of 2023.
General and Administrative Expenses
(“G&A”): G&A was $7.7 million ($4.28 per
Boe) for the second quarter of 2024 versus $7.5 million ($4.31 per
Boe) for the first quarter of 2024 and $6.8 million ($4.33 per Boe)
for the second quarter of 2023. G&A, excluding non-cash
share-based compensation, was $5.6 million ($3.13 per Boe) for the
second quarter of 2024 versus $5.7 million ($3.32 per Boe) for the
first quarter of 2024 and $4.5 million ($2.89 per Boe) for the
second quarter of 2023. G&A, excluding non-cash share-based
compensation and transaction costs, was $5.6 million ($3.13 per
Boe) for the second quarter of 2024 versus $5.7 million ($3.32 per
Boe) for the first quarter of 2024 and $4.3 million ($2.75 per Boe)
for the second quarter of 2023.
Interest Expense: Interest
expense was $10.9 million in the second quarter of 2024 versus
$11.5 million for the first quarter of 2024 and $10.6 million for
the second quarter of 2023.
Derivative (Loss) Gain:
In the second quarter of 2024, Ring recorded a net loss of $1.8
million on its commodity derivative contracts, including a realized
$2.6 million cash commodity derivative loss and an unrealized $0.8
million non-cash commodity derivative gain. This compares to a net
loss of $19.0 million in the first quarter of 2024, including a
realized $1.5 million cash commodity derivative loss and an
unrealized $17.6 million non-cash commodity derivative loss. In the
second quarter of 2023, the Company recorded a net gain on
commodity derivative contracts of $3.3 million, including a
realized $0.2 million cash commodity derivative gain and an
unrealized $3.1 million non-cash commodity derivative
gain.
A summary listing of the Company’s outstanding
derivative positions at June 30, 2024 is included in the
tables shown later in this release.
For the remainder (July through December) of
2024, the Company has approximately 1.2 million barrels of oil
(approximately 49% of oil sales guidance midpoint) hedged and
approximately 1.2 billion cubic feet of natural gas (approximately
38% of natural gas sales guidance midpoint) hedged.
Income Tax: The Company
recorded a non-cash income tax provision of $6.8 million in the
second quarter of 2024 versus $1.7 million in the first quarter of
2024, and a non-cash benefit of $6.4 million for the second quarter
of 2023.
Balance Sheet and Liquidity:
Total liquidity (defined as cash and cash equivalents plus
borrowing base availability under the Company’s credit facility) at
June 30, 2024 was $194.1 million, an 8% increase from March
31, 2024. Liquidity at June 30, 2024 consisted of cash and
cash equivalents of $1.2 million and $192.9 million of availability
under Ring’s revolving credit facility, which included a reduction
of $35 thousand for letters of credit. On June 30, 2024, the
Company had $407 million in borrowings outstanding on its credit
facility that has a current borrowing base of $600 million. During
the second quarter, Ring paid down $15 million in borrowings.
Consistent with the past, the Company is targeting additional debt
reduction in 2024, dependent on market conditions, the timing and
level of capital spending, and other considerations.
Capital Expenditures: During
the second quarter of 2024, capital expenditures were $35.4
million, which was below the Company’s guidance of $37 million to
$42 million, while the number of producing wells drilled and
completed — 11 in total — was at the high end of the Company’s
guidance range. All 11 wells are in the Central Basin Platform and
have a working interest of 100%. Specifically, in its Andrews
County acreage the Company drilled and completed five 1-mile
horizontal (“Hz”) wells, in the Ector County acreage Ring drilled
and completed three vertical wells, and in the Crane County acreage
the Company drilled and completed three vertical wells.
Contributing to lower than expected actual
capital spending levels for the first half of 2024 was increased
well completion efficiencies, improved logistics for certain
drilling activities, and lower costs due to an improved macro
environment for drilling and completion services for Ring’s wells.
The impact of these factors is reflected in the Company’s updated
full year 2024 guidance, including Ring’s outlook for the second
half of 2024.
|
Quarter |
|
Area |
|
Wells Drilled |
|
Wells Completed |
| |
|
|
|
|
|
|
| 1Q 2024 |
|
Northwest Shelf
(Horizontal) |
|
2 |
|
2 |
| |
|
Central Basin Platform
(Horizontal) |
|
3 |
|
3 |
| |
|
Central
Basin Platform (Vertical) |
|
6 |
|
6 |
| |
|
Total
(1) |
|
11 |
|
11 |
| |
|
|
|
|
|
|
| 2Q 2024 |
|
Northwest Shelf
(Horizontal) |
|
— |
|
— |
| |
|
Central Basin Platform
(Horizontal) |
|
5 |
|
5 |
| |
|
Central
Basin Platform (Vertical) |
|
6 |
|
6 |
| |
|
Total |
|
11 |
|
11 |
(1) First quarter total does not include the SWD
well drilled and completed in the Central Basin Platform.
Full Year and Third Quarter
2024 Sales Volumes, Capital Investment and
Operating Expense Guidance
The Company commenced its 2024 development
program with two rigs (one Hz and one vertical) focused on slightly
growing oil sales volumes and maintaining year-over-year Boe sales.
Ring’s year-to-date performance has led to greater year-over-year
Boe and oil sales volumes growth than originally planned.
For full year 2024, Ring now expects total
capital spending of $141 million to $161 million (versus $135
million to $175 million previously), a 3% reduction at the
midpoint. The updated program includes a balanced and capital
efficient combination of drilling, completing and placing on
production 19 to 23 Hz and 22 to 25 vertical wells across the
Company’s asset portfolio. Additionally, 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, and
capital workovers.
All projects and estimates are based on assumed
WTI oil prices of $70 to $90 per barrel and Henry Hub prices of
$2.00 to $3.00 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 $151 million midpoint of spending
guidance, the Company continues to expect the following estimated
allocation of capital, including:
- 75% for drilling, completion, and related infrastructure;
- 17% for recompletions and capital workovers;
- 5% for ESG improvements (environmental and emission reducing
upgrades); and
- 3% for land, non-operated capital, and other.
The Company is increasing its full year 2024 oil
sales volumes guidance to between 13,200 and 13,800 Bo/d versus
12,600 to 13,300 Bo/d previously, which reflects a 4% increase at
the midpoint.
The Company remains focused on maximizing
Adjusted Free Cash Flow. All 2024 planned capital expenditures will
be fully funded by cash on hand and cash from operations, and
excess Adjusted Free Cash Flow is targeted for further debt
reduction.
For the third quarter of 2024, Ring is providing
guidance for increased sales volumes, and lower capital spending
and operating expense. Ring expects third quarter 2024 sales
volumes of 13,200 to 13,800 Bo/d and 19,000 to 19,800 Boe/d (70%
oil, 14% natural gas, and 16% NGLs).
The Company is targeting total capital
expenditures in third quarter 2024 of $35 million to $45 million,
primarily for drilling and completion activity. Additionally, the
capital spending program includes funds for targeted capital
workovers, infrastructure upgrades, well reactivations, leasing
acreage; and non-operated drilling, completion, and capital
workovers.
Ring now expects LOE of $10.50 to $11.25 per Boe
for both the third quarter and full year. The Company’s previous
guidance for full year 2024 was $10.50 to $11.50 per Boe.
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.
|
|
Q3 |
FY |
| |
2024 |
2024 |
| Sales
Volumes: |
|
|
|
Total Oil (Bo/d) |
13,200 - 13,800 |
13,200 - 13,800 |
|
Mid Point (Bo/d) |
13,500 |
13,500 |
|
Total (Boe/d) |
19,000 - 19,800 |
19,000 - 19,800 |
|
Mid Point (Boe/d) |
19,400 |
19,400 |
|
Oil (%) |
70% |
70% |
|
NGLs (%) |
16% |
16% |
|
Gas (%) |
14% |
14% |
| |
|
|
| Capital
Program: |
|
|
|
Capital spending(1) (millions) |
$35 - $45 |
$141 - $161 |
|
Mid Point (millions) |
$40 |
$151 |
|
New Hz wells drilled |
7 - 8 |
19 - 23 |
|
New Vertical wells drilled |
6 - 7 |
22 - 25 |
|
Wells completed and online |
11 - 12 |
41 - 48 |
| |
|
|
| Operating
Expenses: |
|
|
|
LOE (per Boe) |
$10.50 - $11.25 |
$10.50 - $11.25 |
|
Mid Point (per Boe) |
$10.88 |
$10.88 |
(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, and capital workovers.
Conference Call Information
Ring will hold a conference call on Wednesday,
August 7, 2024 at 12:00 p.m. ET (11 a.m. CT) to discuss its second
quarter 2024 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
Second Quarter 2024 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, and plans and objectives of management for future
operations. 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; 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, including its Form
10-K for the fiscal year ended December 31, 2023, and its other
filings. Ring undertakes no obligation to revise or update publicly
any forward-looking statements, except as required by law.
Contact Information
Al Petrie AdvisorsAl Petrie, Senior PartnerPhone:
281-975-2146 Email: apetrie@ringenergy.com
|
RING ENERGY, INC.Condensed Statements of
Operations(Unaudited) |
| |
| |
Three Months Ended |
|
Six Months Ended |
| |
June 30, |
|
March 31, |
|
June 30, |
|
June 30, |
|
June 30, |
|
|
|
2024 |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
| |
|
|
|
|
|
|
|
|
|
| Oil, Natural Gas, and
Natural Gas Liquids Revenues |
$ |
99,139,349 |
|
|
$ |
94,503,136 |
|
|
$ |
79,348,573 |
|
|
$ |
193,642,485 |
|
|
$ |
167,431,485 |
|
| |
|
|
|
|
|
|
|
|
|
| Costs and Operating
Expenses |
|
|
|
|
|
|
|
|
|
|
Lease operating expenses |
|
19,309,017 |
|
|
|
18,360,434 |
|
|
|
15,938,106 |
|
|
|
37,669,451 |
|
|
|
33,410,797 |
|
|
Gathering, transportation and processing costs |
|
107,629 |
|
|
|
166,054 |
|
|
|
(1,632 |
) |
|
|
273,683 |
|
|
|
(2,455 |
) |
|
Ad valorem taxes |
|
1,337,276 |
|
|
|
2,145,631 |
|
|
|
1,670,343 |
|
|
|
3,482,907 |
|
|
|
3,340,956 |
|
|
Oil and natural gas production taxes |
|
3,627,264 |
|
|
|
4,428,303 |
|
|
|
4,012,139 |
|
|
|
8,055,567 |
|
|
|
8,420,279 |
|
|
Depreciation, depletion and amortization |
|
24,699,421 |
|
|
|
23,792,450 |
|
|
|
20,792,932 |
|
|
|
48,491,871 |
|
|
|
42,064,603 |
|
|
Asset retirement obligation accretion |
|
352,184 |
|
|
|
350,834 |
|
|
|
353,878 |
|
|
|
703,018 |
|
|
|
719,725 |
|
|
Operating lease expense |
|
175,090 |
|
|
|
175,091 |
|
|
|
115,353 |
|
|
|
350,181 |
|
|
|
228,491 |
|
|
General and administrative expense |
|
7,713,534 |
|
|
|
7,469,222 |
|
|
|
6,810,243 |
|
|
|
15,182,756 |
|
|
|
13,940,382 |
|
| |
|
|
|
|
|
|
|
|
|
|
Total Costs and Operating Expenses |
|
57,321,415 |
|
|
|
56,888,019 |
|
|
|
49,691,362 |
|
|
|
114,209,434 |
|
|
|
102,122,778 |
|
| |
|
|
|
|
|
|
|
|
|
| Income from
Operations |
|
41,817,934 |
|
|
|
37,615,117 |
|
|
|
29,657,211 |
|
|
|
79,433,051 |
|
|
|
65,308,707 |
|
| |
|
|
|
|
|
|
|
|
|
| Other Income
(Expense) |
|
|
|
|
|
|
|
|
|
|
Interest income |
|
144,933 |
|
|
|
78,544 |
|
|
|
79,745 |
|
|
|
223,477 |
|
|
|
79,745 |
|
|
Interest (expense) |
|
(10,946,127 |
) |
|
|
(11,498,944 |
) |
|
|
(10,550,807 |
) |
|
|
(22,445,071 |
) |
|
|
(20,941,086 |
) |
|
Gain (loss) on derivative contracts |
|
(1,828,599 |
) |
|
|
(19,014,495 |
) |
|
|
3,264,660 |
|
|
|
(20,843,094 |
) |
|
|
12,739,565 |
|
|
Gain (loss) on disposal of assets |
|
51,338 |
|
|
|
38,355 |
|
|
|
(132,109 |
) |
|
|
89,693 |
|
|
|
(132,109 |
) |
|
Other income |
|
— |
|
|
|
25,686 |
|
|
|
116,610 |
|
|
|
25,686 |
|
|
|
126,210 |
|
|
Net Other Income (Expense) |
|
(12,578,455 |
) |
|
|
(30,370,854 |
) |
|
|
(7,221,901 |
) |
|
|
(42,949,309 |
) |
|
|
(8,127,675 |
) |
| |
|
|
|
|
|
|
|
|
|
| Income Before Benefit
from (Provision for) Income Taxes |
|
29,239,479 |
|
|
|
7,244,263 |
|
|
|
22,435,310 |
|
|
|
36,483,742 |
|
|
|
57,181,032 |
|
| |
|
|
|
|
|
|
|
|
|
| Benefit from
(Provision for) Income Taxes |
|
(6,820,485 |
) |
|
|
(1,728,886 |
) |
|
|
6,356,295 |
|
|
|
(8,549,371 |
) |
|
|
4,326,352 |
|
| |
|
|
|
|
|
|
|
|
|
| Net
Income |
$ |
22,418,994 |
|
|
$ |
5,515,377 |
|
|
$ |
28,791,605 |
|
|
$ |
27,934,371 |
|
|
$ |
61,507,384 |
|
| |
|
|
|
|
|
|
|
|
|
| Basic Earnings per
Share |
$ |
0.11 |
|
|
$ |
0.03 |
|
|
$ |
0.15 |
|
|
$ |
0.14 |
|
|
$ |
0.33 |
|
| Diluted Earnings per
Share |
$ |
0.11 |
|
|
$ |
0.03 |
|
|
$ |
0.15 |
|
|
$ |
0.14 |
|
|
$ |
0.32 |
|
| |
|
|
|
|
|
|
|
|
|
| Basic Weighted-Average Shares
Outstanding |
|
197,976,721 |
|
|
|
197,389,782 |
|
|
|
193,077,859 |
|
|
|
197,684,638 |
|
|
|
185,545,775 |
|
| Diluted Weighted-Average
Shares Outstanding |
|
200,428,813 |
|
|
|
199,305,150 |
|
|
|
195,866,533 |
|
|
|
199,845,512 |
|
|
|
193,023,966 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RING ENERGY, INC.Condensed Operating
Data(Unaudited) |
| |
| |
Three Months Ended |
|
Six Months Ended |
| |
June 30, |
|
March 31, |
|
June 30, |
|
June 30, |
|
June 30, |
|
|
|
2024 |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
| |
|
|
|
|
|
|
|
|
|
| Net sales
volumes: |
|
|
|
|
|
|
|
|
|
|
Oil (Bbls) |
|
1,239,731 |
|
|
|
1,218,837 |
|
|
|
1,079,379 |
|
|
|
2,458,568 |
|
|
|
2,218,792 |
|
|
Natural gas (Mcf) |
|
1,538,347 |
|
|
|
1,496,507 |
|
|
|
1,557,545 |
|
|
|
3,034,854 |
|
|
|
3,158,952 |
|
|
Natural gas liquids (Bbls) |
|
304,448 |
|
|
|
263,802 |
|
|
|
232,698 |
|
|
|
568,250 |
|
|
|
472,690 |
|
|
Total oil, natural gas and natural gas liquids (Boe)(1) |
|
1,800,570 |
|
|
|
1,732,057 |
|
|
|
1,571,668 |
|
|
|
3,532,627 |
|
|
|
3,217,974 |
|
| |
|
|
|
|
|
|
|
|
|
|
% Oil |
|
69 |
% |
|
|
70 |
% |
|
|
69 |
% |
|
|
70 |
% |
|
|
69 |
% |
|
% Natural Gas |
|
14 |
% |
|
|
15 |
% |
|
|
16 |
% |
|
|
14 |
% |
|
|
16 |
% |
|
% Natural Gas Liquids |
|
17 |
% |
|
|
15 |
% |
|
|
15 |
% |
|
|
16 |
% |
|
|
15 |
% |
| |
|
|
|
|
|
|
|
|
|
| Average daily sales
volumes: |
|
|
|
|
|
|
|
|
|
|
Oil (Bbls/d) |
|
13,623 |
|
|
|
13,394 |
|
|
|
11,861 |
|
|
|
13,509 |
|
|
|
12,259 |
|
|
Natural gas (Mcf/d) |
|
16,905 |
|
|
|
16,445 |
|
|
|
17,116 |
|
|
|
16,675 |
|
|
|
17,453 |
|
|
Natural gas liquids (Bbls/d) |
|
3,346 |
|
|
|
2,899 |
|
|
|
2,557 |
|
|
|
3,122 |
|
|
|
2,612 |
|
| Average daily equivalent sales
(Boe/d) |
|
19,786 |
|
|
|
19,034 |
|
|
|
17,271 |
|
|
|
19,410 |
|
|
|
17,779 |
|
| |
|
|
|
|
|
|
|
|
|
| Average realized sales
prices: |
|
|
|
|
|
|
|
|
|
|
Oil ($/Bbl) |
$ |
80.09 |
|
|
$ |
75.72 |
|
|
$ |
72.30 |
|
|
$ |
77.93 |
|
|
$ |
72.85 |
|
|
Natural gas ($/Mcf) |
|
(1.93 |
) |
|
|
(0.55 |
) |
|
|
(0.71 |
) |
|
|
(1.25 |
) |
|
|
(0.01 |
) |
|
Natural gas liquids ($/Bbls) |
|
9.27 |
|
|
|
11.47 |
|
|
|
10.35 |
|
|
|
10.29 |
|
|
|
12.35 |
|
|
Barrel of oil equivalent ($/Boe) |
$ |
55.06 |
|
|
$ |
54.56 |
|
|
$ |
50.49 |
|
|
$ |
54.82 |
|
|
$ |
52.03 |
|
| |
|
|
|
|
|
|
|
|
|
| Average costs and
expenses per Boe ($/Boe): |
|
|
|
|
|
|
|
|
|
|
Lease operating expenses |
$ |
10.72 |
|
|
$ |
10.60 |
|
|
$ |
10.14 |
|
|
$ |
10.66 |
|
|
$ |
10.38 |
|
|
Gathering, transportation and processing costs |
|
0.06 |
|
|
|
0.10 |
|
|
|
— |
|
|
|
0.08 |
|
|
|
— |
|
|
Ad valorem taxes |
|
0.74 |
|
|
|
1.24 |
|
|
|
1.06 |
|
|
|
0.99 |
|
|
|
1.04 |
|
|
Oil and natural gas production taxes |
|
2.01 |
|
|
|
2.56 |
|
|
|
2.55 |
|
|
|
2.28 |
|
|
|
2.62 |
|
|
Depreciation, depletion and amortization |
|
13.72 |
|
|
|
13.74 |
|
|
|
13.23 |
|
|
|
13.73 |
|
|
|
13.07 |
|
|
Asset retirement obligation accretion |
|
0.20 |
|
|
|
0.20 |
|
|
|
0.23 |
|
|
|
0.20 |
|
|
|
0.22 |
|
|
Operating lease expense |
|
0.10 |
|
|
|
0.10 |
|
|
|
0.07 |
|
|
|
0.10 |
|
|
|
0.07 |
|
|
General and administrative expense (including share-based
compensation) |
|
4.28 |
|
|
|
4.31 |
|
|
|
4.33 |
|
|
|
4.30 |
|
|
|
4.33 |
|
|
G&A (excluding share-based compensation) |
|
3.13 |
|
|
|
3.32 |
|
|
|
2.89 |
|
|
|
3.22 |
|
|
|
3.03 |
|
|
G&A (excluding share-based compensation and transaction
costs) |
|
3.13 |
|
|
|
3.32 |
|
|
|
2.75 |
|
|
|
3.22 |
|
|
|
2.96 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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
Sheets(Unaudited) |
| |
|
|
|
June 30, 2024 |
|
December 31, 2023 |
| ASSETS |
|
|
|
|
| Current
Assets |
|
|
|
|
|
Cash and cash equivalents |
|
$ |
1,178,812 |
|
|
$ |
296,384 |
|
| Accounts receivable |
|
|
41,578,158 |
|
|
|
38,965,002 |
|
| Joint interest billing
receivables, net |
|
|
1,698,453 |
|
|
|
2,422,274 |
|
| Derivative assets |
|
|
3,369,762 |
|
|
|
6,215,374 |
|
| Inventory |
|
|
5,776,398 |
|
|
|
6,136,935 |
|
| Prepaid expenses and other
assets |
|
|
2,622,425 |
|
|
|
1,874,850 |
|
| Total Current
Assets |
|
|
56,224,008 |
|
|
|
55,910,819 |
|
| Properties and
Equipment |
|
|
|
|
| Oil and natural gas
properties, full cost method |
|
|
1,735,534,624 |
|
|
|
1,663,548,249 |
|
| Financing lease asset subject
to depreciation |
|
|
4,192,099 |
|
|
|
3,896,316 |
|
| Fixed assets subject to
depreciation |
|
|
3,355,968 |
|
|
|
3,228,793 |
|
| Total Properties and
Equipment |
|
|
1,743,082,691 |
|
|
|
1,670,673,358 |
|
| Accumulated depreciation,
depletion and amortization |
|
|
(425,424,564 |
) |
|
|
(377,252,572 |
) |
| Net Properties and
Equipment |
|
|
1,317,658,127 |
|
|
|
1,293,420,786 |
|
| Operating lease asset |
|
|
2,206,218 |
|
|
|
2,499,592 |
|
| Derivative assets |
|
|
3,032,562 |
|
|
|
11,634,714 |
|
| Deferred financing costs |
|
|
10,632,970 |
|
|
|
13,030,481 |
|
| Total
Assets |
|
$ |
1,389,753,885 |
|
|
$ |
1,376,496,392 |
|
| |
|
|
|
|
| LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
|
| Current
Liabilities |
|
|
|
|
| Accounts payable |
|
$ |
90,014,041 |
|
|
$ |
104,064,124 |
|
| Income tax liability |
|
|
182,805 |
|
|
|
— |
|
| Financing lease liability |
|
|
948,283 |
|
|
|
956,254 |
|
| Operating lease liability |
|
|
622,694 |
|
|
|
568,176 |
|
| Derivative liabilities |
|
|
18,114,594 |
|
|
|
7,520,336 |
|
| Notes payable |
|
|
1,355,795 |
|
|
|
533,734 |
|
| Asset retirement
obligations |
|
|
165,720 |
|
|
|
165,642 |
|
| Total Current
Liabilities |
|
|
111,403,932 |
|
|
|
113,808,266 |
|
| |
|
|
|
|
| Non-current
Liabilities |
|
|
|
|
| Deferred income taxes |
|
|
16,846,398 |
|
|
|
8,552,045 |
|
| Revolving line of credit |
|
|
407,000,000 |
|
|
|
425,000,000 |
|
| Financing lease liability,
less current portion |
|
|
685,471 |
|
|
|
906,330 |
|
| Operating lease liability,
less current portion |
|
|
1,736,051 |
|
|
|
2,054,041 |
|
| Derivative liabilities |
|
|
6,255,428 |
|
|
|
11,510,368 |
|
| Asset retirement
obligations |
|
|
28,409,700 |
|
|
|
28,082,442 |
|
| Total
Liabilities |
|
|
572,336,980 |
|
|
|
589,913,492 |
|
| 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; 198,166,297 shares and
196,837,001 shares issued and outstanding, respectively |
|
|
198,166 |
|
|
|
196,837 |
|
| Additional paid-in
capital |
|
|
798,732,980 |
|
|
|
795,834,675 |
|
| Retained earnings (Accumulated
deficit) |
|
|
18,485,759 |
|
|
|
(9,448,612 |
) |
| Total Stockholders’
Equity |
|
|
817,416,905 |
|
|
|
786,582,900 |
|
| Total Liabilities and
Stockholders' Equity |
|
$ |
1,389,753,885 |
|
|
$ |
1,376,496,392 |
|
| |
|
|
|
|
|
|
|
|
|
RING ENERGY, INC.Condensed Statements of Cash
Flows(Unaudited) |
| |
| |
Three Months Ended |
|
Six Months Ended |
|
|
June 30, |
|
March 31, |
|
June 30, |
|
June 30, |
|
June 30, |
|
|
|
2024 |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
| |
|
|
|
|
|
|
|
|
|
| Cash Flows From
Operating Activities |
|
|
|
|
|
|
|
|
|
|
Net income |
$ |
22,418,994 |
|
|
$ |
5,515,377 |
|
|
$ |
28,791,605 |
|
|
$ |
27,934,371 |
|
|
$ |
61,507,384 |
|
|
Adjustments to reconcile net income to net cash provided by
operating activities: |
|
|
|
|
|
|
|
|
|
|
Depreciation, depletion and amortization |
|
24,699,421 |
|
|
|
23,792,450 |
|
|
|
20,792,932 |
|
|
|
48,491,871 |
|
|
|
42,064,603 |
|
|
Asset retirement obligation accretion |
|
352,184 |
|
|
|
350,834 |
|
|
|
353,878 |
|
|
|
703,018 |
|
|
|
719,725 |
|
|
Amortization of deferred financing costs |
|
1,221,608 |
|
|
|
1,221,607 |
|
|
|
1,220,385 |
|
|
|
2,443,215 |
|
|
|
2,440,769 |
|
|
Share-based compensation |
|
2,077,778 |
|
|
|
1,723,832 |
|
|
|
2,260,312 |
|
|
|
3,801,610 |
|
|
|
4,204,008 |
|
|
Bad debt expense |
|
14,937 |
|
|
|
163,840 |
|
|
|
19,315 |
|
|
|
178,777 |
|
|
|
22,209 |
|
|
(Gain) loss on disposal of assets |
|
(89,693 |
) |
|
|
— |
|
|
|
— |
|
|
|
(89,693 |
) |
|
|
— |
|
|
Deferred income tax expense (benefit) |
|
6,621,128 |
|
|
|
1,585,445 |
|
|
|
(6,548,363 |
) |
|
|
8,206,573 |
|
|
|
(4,575,710 |
) |
|
Excess tax expense (benefit) related to share-based
compensation |
|
46,972 |
|
|
|
40,808 |
|
|
|
150,877 |
|
|
|
87,780 |
|
|
|
150,877 |
|
|
(Gain) loss on derivative contracts |
|
1,828,599 |
|
|
|
19,014,495 |
|
|
|
(3,264,660 |
) |
|
|
20,843,094 |
|
|
|
(12,739,565 |
) |
|
Cash received (paid) for derivative settlements, net |
|
(2,594,497 |
) |
|
|
(1,461,515 |
) |
|
|
179,595 |
|
|
|
(4,056,012 |
) |
|
|
(478,930 |
) |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
|
|
Accounts receivable |
|
2,955,975 |
|
|
|
(5,240,487 |
) |
|
|
5,320,051 |
|
|
|
(2,284,512 |
) |
|
|
8,748,338 |
|
|
Inventory |
|
189,121 |
|
|
|
171,416 |
|
|
|
1,480,824 |
|
|
|
360,537 |
|
|
|
1,923,422 |
|
|
Prepaid expenses and other assets |
|
(1,251,279 |
) |
|
|
503,704 |
|
|
|
(1,489,612 |
) |
|
|
(747,575 |
) |
|
|
(959,678 |
) |
|
Accounts payable |
|
(7,712,355 |
) |
|
|
(1,601,276 |
) |
|
|
(5,471,391 |
) |
|
|
(9,313,631 |
) |
|
|
(15,061,289 |
) |
|
Settlement of asset retirement obligation |
|
(160,963 |
) |
|
|
(591,361 |
) |
|
|
(429,567 |
) |
|
|
(752,324 |
) |
|
|
(919,886 |
) |
|
Net Cash Provided by Operating Activities |
|
50,617,930 |
|
|
|
45,189,169 |
|
|
|
43,366,181 |
|
|
|
95,807,099 |
|
|
|
87,046,277 |
|
| |
|
|
|
|
|
|
|
|
|
| Cash Flows From
Investing Activities |
|
|
|
|
|
|
|
|
|
|
Payments for the Stronghold Acquisition |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(18,511,170 |
) |
|
Payments to purchase oil and natural gas properties |
|
(147,004 |
) |
|
|
(475,858 |
) |
|
|
(819,644 |
) |
|
|
(622,862 |
) |
|
|
(878,743 |
) |
|
Payments to develop oil and natural gas properties |
|
(36,554,719 |
) |
|
|
(38,904,808 |
) |
|
|
(35,611,915 |
) |
|
|
(75,459,527 |
) |
|
|
(72,551,222 |
) |
|
Payments to acquire or improve fixed assets subject to
depreciation |
|
(26,649 |
) |
|
|
(124,937 |
) |
|
|
(11,324 |
) |
|
|
(151,586 |
) |
|
|
(25,894 |
) |
|
Proceeds from sale of fixed assets subject to depreciation |
|
10,605 |
|
|
|
— |
|
|
|
332,230 |
|
|
|
10,605 |
|
|
|
332,230 |
|
|
Proceeds from divestiture of equipment for oil and natural gas
properties |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
54,558 |
|
|
Proceeds from sale of Delaware properties |
|
— |
|
|
|
— |
|
|
|
7,992,917 |
|
|
|
— |
|
|
|
7,992,917 |
|
|
Proceeds from sale of New Mexico properties |
|
(144,398 |
) |
|
|
— |
|
|
|
— |
|
|
|
(144,398 |
) |
|
|
— |
|
|
Net Cash Used in Investing Activities |
|
(36,862,165 |
) |
|
|
(39,505,603 |
) |
|
|
(28,117,736 |
) |
|
|
(76,367,768 |
) |
|
|
(83,587,324 |
) |
| |
|
|
|
|
|
|
|
|
|
| Cash Flows From
Financing Activities |
|
|
|
|
|
|
|
|
|
|
Proceeds from revolving line of credit |
|
29,500,000 |
|
|
|
51,500,000 |
|
|
|
28,500,000 |
|
|
|
81,000,000 |
|
|
|
84,500,000 |
|
|
Payments on revolving line of credit |
|
(44,500,000 |
) |
|
|
(54,500,000 |
) |
|
|
(53,500,000 |
) |
|
|
(99,000,000 |
) |
|
|
(102,500,000 |
) |
|
Proceeds from issuance of common stock from warrant exercises |
|
— |
|
|
|
— |
|
|
|
8,687,655 |
|
|
|
— |
|
|
|
12,301,596 |
|
|
Payments for taxes withheld on vested restricted shares, net |
|
(86,991 |
) |
|
|
(814,985 |
) |
|
|
(141,682 |
) |
|
|
(901,976 |
) |
|
|
(276,063 |
) |
|
Proceeds from notes payable |
|
1,501,507 |
|
|
|
— |
|
|
|
1,565,071 |
|
|
|
1,501,507 |
|
|
|
1,565,071 |
|
|
Payments on notes payable |
|
(145,712 |
) |
|
|
(533,734 |
) |
|
|
(152,397 |
) |
|
|
(679,446 |
) |
|
|
(652,277 |
) |
|
Payment of deferred financing costs |
|
(45,704 |
) |
|
|
— |
|
|
|
— |
|
|
|
(45,704 |
) |
|
|
— |
|
|
Reduction of financing lease liabilities |
|
(176,128 |
) |
|
|
(255,156 |
) |
|
|
(182,817 |
) |
|
|
(431,284 |
) |
|
|
(359,831 |
) |
|
Net Cash Provided by (Used in) Financing
Activities |
|
(13,953,028 |
) |
|
|
(4,603,875 |
) |
|
|
(15,224,170 |
) |
|
|
(18,556,903 |
) |
|
|
(5,421,504 |
) |
| |
|
|
|
|
|
|
|
|
|
| Net Increase
(Decrease) in Cash |
|
(197,263 |
) |
|
|
1,079,691 |
|
|
|
24,275 |
|
|
|
882,428 |
|
|
|
(1,962,551 |
) |
| Cash at Beginning of
Period |
|
1,376,075 |
|
|
|
296,384 |
|
|
|
1,725,700 |
|
|
|
296,384 |
|
|
|
3,712,526 |
|
| Cash at End of
Period |
$ |
1,178,812 |
|
|
$ |
1,376,075 |
|
|
$ |
1,749,975 |
|
|
$ |
1,178,812 |
|
|
$ |
1,749,975 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RING ENERGY, INC.Financial Commodity Derivative PositionsAs
of June 30, 2024 |
| |
The following tables reflect the details of current derivative
contracts as of June 30, 2024 (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) |
| |
Q3 2024 |
|
Q4 2024 |
|
Q1 2025 |
|
Q2 2025 |
|
Q3 2025 |
|
Q4 2025 |
|
Q1 2026 |
|
Q2 2026 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Swaps: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hedged volume (Bbl) |
|
282,900 |
|
|
368,000 |
|
|
71,897 |
|
|
52,063 |
|
|
265,517 |
|
|
64,555 |
|
|
449,350 |
|
|
432,701 |
| Weighted average swap
price |
$ |
65.49 |
|
$ |
68.43 |
|
$ |
72.03 |
|
$ |
72.03 |
|
$ |
72.94 |
|
$ |
72.03 |
|
$ |
70.38 |
|
$ |
69.53 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Deferred premium
puts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Hedged volume (Bbl) |
|
125,070 |
|
|
88,405 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
| Weighted average strike
price |
$ |
75.00 |
|
$ |
75.00 |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
| Weighted average deferred
premium price |
$ |
2.61 |
|
$ |
2.61 |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Two-way
collars: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Hedged volume (Bbl) |
|
230,000 |
|
|
128,800 |
|
|
474,750 |
|
|
464,100 |
|
|
225,400 |
|
|
404,800 |
|
|
— |
|
|
— |
| Weighted average put
price |
$ |
64.00 |
|
$ |
60.00 |
|
$ |
57.06 |
|
$ |
60.00 |
|
$ |
65.00 |
|
$ |
60.00 |
|
$ |
— |
|
$ |
— |
| Weighted average call
price |
$ |
76.50 |
|
$ |
73.24 |
|
$ |
75.82 |
|
$ |
69.85 |
|
$ |
78.91 |
|
$ |
75.68 |
|
$ |
— |
|
$ |
— |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Gas Hedges (Henry Hub) |
| |
Q3 2024 |
|
Q4 2024 |
|
Q1 2025 |
|
Q2 2025 |
|
Q3 2025 |
|
Q4 2025 |
|
Q1 2026 |
|
Q2 2026 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| NYMEX
Swaps: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hedged volume (MMBtu) |
|
86,350 |
|
|
653,100 |
|
|
616,199 |
|
|
594,400 |
|
|
289,550 |
|
|
— |
|
|
— |
|
|
532,500 |
| Weighted average swap
price |
$ |
3.55 |
|
$ |
4.43 |
|
$ |
3.78 |
|
$ |
3.43 |
|
$ |
3.72 |
|
$ |
— |
|
$ |
— |
|
$ |
3.38 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Two-way
collars: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Hedged volume (MMBtu) |
|
387,350 |
|
|
27,600 |
|
|
33,401 |
|
|
27,300 |
|
|
308,200 |
|
|
598,000 |
|
|
553,500 |
|
|
— |
| Weighted average put
price |
$ |
3.94 |
|
$ |
3.00 |
|
$ |
3.00 |
|
$ |
3.00 |
|
$ |
3.00 |
|
$ |
3.00 |
|
$ |
3.50 |
|
$ |
— |
| Weighted average call
price |
$ |
6.17 |
|
$ |
4.15 |
|
$ |
4.39 |
|
$ |
4.15 |
|
$ |
4.75 |
|
$ |
4.15 |
|
$ |
5.03 |
|
$ |
— |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Oil Hedges (basis differential) |
| |
Q3 2024 |
|
Q4 2024 |
|
Q1 2025 |
|
Q2 2025 |
|
Q3 2025 |
|
Q4 2025 |
|
Q1 2026 |
|
Q2 2026 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Argus basis
swaps: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hedged volume (Bbl) |
|
244,000 |
|
|
368,000 |
|
|
270,000 |
|
|
273,000 |
|
|
276,000 |
|
|
276,000 |
|
|
— |
|
|
— |
| Weighted average spread price
(1) |
$ |
1.15 |
|
$ |
1.15 |
|
$ |
1.00 |
|
$ |
1.00 |
|
$ |
1.00 |
|
$ |
1.00 |
|
$ |
— |
|
$ |
— |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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.
|
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. In addition, Adjusted EBITDA is a key metric used
to determine a portion of the Company’s incentive compensation
awards. 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 (Loss) to
Adjusted Net Income
“Adjusted Net Income” is calculated as net
income (loss) 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 our results with our peers.
| |
(Unaudited for All Periods) |
| |
Three Months Ended |
|
Six Months Ended |
| |
June 30, |
|
March 31, |
|
June 30, |
|
June 30, |
|
June 30, |
| |
|
2024 |
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
| |
Total |
|
Per share - diluted |
|
Total |
|
Per share - diluted |
|
Total |
|
Per share - diluted |
|
Total |
|
Per share - diluted |
|
Total |
|
Per share - diluted |
|
Net Income (Loss) |
$ |
22,418,994 |
|
|
$ |
0.11 |
|
$ |
5,515,377 |
|
|
$ |
0.03 |
|
|
$ |
28,791,605 |
|
|
$ |
0.15 |
|
|
$ |
27,934,371 |
|
|
$ |
0.14 |
|
|
$ |
61,507,384 |
|
|
$ |
0.32 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Share-based compensation |
|
2,077,778 |
|
|
|
0.01 |
|
|
1,723,832 |
|
|
|
0.01 |
|
|
|
2,260,312 |
|
|
|
0.01 |
|
|
|
3,801,610 |
|
|
|
0.02 |
|
|
|
4,204,008 |
|
|
|
0.02 |
|
| Unrealized loss (gain) on
change in fair value of derivatives |
|
(765,898 |
) |
|
|
— |
|
|
17,552,980 |
|
|
|
0.08 |
|
|
|
(3,085,065 |
) |
|
|
(0.02 |
) |
|
|
16,787,082 |
|
|
|
0.08 |
|
|
|
(13,218,495 |
) |
|
|
(0.07 |
) |
| Transaction costs - executed
A&D |
|
— |
|
|
|
— |
|
|
3,539 |
|
|
|
— |
|
|
|
220,191 |
|
|
|
— |
|
|
|
3,539 |
|
|
|
— |
|
|
|
220,191 |
|
|
|
— |
|
| Tax impact on adjusted
items |
|
(304,225 |
) |
|
|
— |
|
|
(4,447,977 |
) |
|
|
(0.02 |
) |
|
|
(171,282 |
) |
|
|
— |
|
|
|
(4,752,202 |
) |
|
|
(0.02 |
) |
|
|
307,185 |
|
|
|
— |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Adjusted Net
Income |
$ |
23,426,649 |
|
|
$ |
0.12 |
|
$ |
20,347,751 |
|
|
$ |
0.10 |
|
|
$ |
28,015,761 |
|
|
$ |
0.14 |
|
|
$ |
43,774,400 |
|
|
$ |
0.22 |
|
|
$ |
53,020,273 |
|
|
$ |
0.27 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Diluted Weighted-Average
Shares Outstanding |
|
200,428,813 |
|
|
|
|
|
199,305,150 |
|
|
|
|
|
195,866,533 |
|
|
|
|
|
199,845,512 |
|
|
|
|
|
193,023,966 |
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Adjusted Net Income
per Diluted Share |
$ |
0.12 |
|
|
|
|
$ |
0.10 |
|
|
|
|
$ |
0.14 |
|
|
|
|
$ |
0.22 |
|
|
|
|
$ |
0.27 |
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Net Income (Loss) to
Adjusted EBITDA
The Company defines “Adjusted EBITDA” as net
income (loss) plus net interest 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 |
|
Six Months Ended |
| |
June 30, |
|
March 31, |
|
June 30, |
|
June 30, |
|
June 30, |
|
|
|
2024 |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
| Net Income
(Loss) |
$ |
22,418,994 |
|
|
$ |
5,515,377 |
|
|
$ |
28,791,605 |
|
|
$ |
27,934,371 |
|
|
$ |
61,507,384 |
|
| |
|
|
|
|
|
|
|
|
|
|
Interest expense, net |
|
10,801,194 |
|
|
|
11,420,400 |
|
|
|
10,471,062 |
|
|
|
22,221,594 |
|
|
|
20,861,341 |
|
|
Unrealized loss (gain) on change in fair value of derivatives |
|
(765,898 |
) |
|
|
17,552,980 |
|
|
|
(3,085,065 |
) |
|
|
16,787,082 |
|
|
|
(13,218,495 |
) |
|
Income tax (benefit) expense |
|
6,820,485 |
|
|
|
1,728,886 |
|
|
|
(6,356,295 |
) |
|
|
8,549,371 |
|
|
|
(4,326,352 |
) |
|
Depreciation, depletion and amortization |
|
24,699,421 |
|
|
|
23,792,450 |
|
|
|
20,792,932 |
|
|
|
48,491,871 |
|
|
|
42,064,603 |
|
|
Asset retirement obligation accretion |
|
352,184 |
|
|
|
350,834 |
|
|
|
353,878 |
|
|
|
703,018 |
|
|
|
719,725 |
|
|
Transaction costs - executed A&D |
|
— |
|
|
|
3,539 |
|
|
|
220,191 |
|
|
|
3,539 |
|
|
|
220,191 |
|
|
Share-based compensation |
|
2,077,778 |
|
|
|
1,723,832 |
|
|
|
2,260,312 |
|
|
|
3,801,610 |
|
|
|
4,204,008 |
|
|
Loss (gain) on disposal of assets |
|
(51,338 |
) |
|
|
(38,355 |
) |
|
|
132,109 |
|
|
|
(89,693 |
) |
|
|
132,109 |
|
|
Other income |
|
— |
|
|
|
(25,686 |
) |
|
|
(116,610 |
) |
|
|
(25,686 |
) |
|
|
(126,210 |
) |
| |
|
|
|
|
|
|
|
|
|
| Adjusted
EBITDA |
$ |
66,352,820 |
|
|
$ |
62,024,257 |
|
|
$ |
53,464,119 |
|
|
$ |
128,377,077 |
|
|
$ |
112,038,304 |
|
| |
|
|
|
|
|
|
|
|
|
| Adjusted EBITDA
Margin |
|
67 |
% |
|
|
66 |
% |
|
|
67 |
% |
|
|
66 |
% |
|
|
67 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 our 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, bad debt expense, and other income. For this
purpose, our definition of capital expenditures includes costs
incurred related to oil and natural gas properties (such as
drilling and infrastructure costs and the lease maintenance costs)
but excludes acquisition costs of oil and gas properties from third
parties that are not included in our capital expenditures guidance
provided to investors. Our management believes that Adjusted Free
Cash Flow is an important financial performance measure for use in
evaluating the performance and efficiency of our current operating
activities after the impact of capital expenditures and net
interest expense 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 |
|
Six Months Ended |
| |
June 30, |
|
March 31, |
|
June 30, |
|
June 30, |
|
June 30, |
|
|
|
2024 |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
| |
|
|
|
|
|
|
|
|
|
| Net Cash Provided by
Operating Activities |
$ |
50,617,930 |
|
|
$ |
45,189,169 |
|
|
$ |
43,366,181 |
|
|
$ |
95,807,099 |
|
|
$ |
87,046,277 |
|
| Adjustments - Condensed
Statements of Cash Flows |
|
|
|
|
|
|
|
|
|
|
Changes in operating assets and liabilities |
|
5,979,501 |
|
|
|
6,758,004 |
|
|
|
589,695 |
|
|
|
12,737,505 |
|
|
|
6,269,093 |
|
|
Transaction costs - executed A&D |
|
— |
|
|
|
3,539 |
|
|
|
220,191 |
|
|
|
3,539 |
|
|
|
220,191 |
|
|
Income tax expense (benefit) - current |
|
152,385 |
|
|
|
102,633 |
|
|
|
41,191 |
|
|
|
255,018 |
|
|
|
98,481 |
|
|
Capital expenditures |
|
(35,360,832 |
) |
|
|
(36,261,008 |
) |
|
|
(31,608,483 |
) |
|
|
(71,621,840 |
) |
|
|
(70,533,980 |
) |
|
Proceeds from divestiture of equipment for oil and natural gas
properties |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
54,558 |
|
|
Bad debt expense |
|
(14,937 |
) |
|
|
(163,840 |
) |
|
|
(19,315 |
) |
|
|
(178,777 |
) |
|
|
(22,209 |
) |
|
Loss (gain) on disposal of assets |
|
38,355 |
|
|
|
(38,355 |
) |
|
|
132,109 |
|
|
|
— |
|
|
|
132,109 |
|
|
Other income |
|
— |
|
|
|
(25,686 |
) |
|
|
(116,610 |
) |
|
|
(25,686 |
) |
|
|
(126,210 |
) |
| |
|
|
|
|
|
|
|
|
|
| Adjusted Free Cash
Flow |
$ |
21,412,402 |
|
|
$ |
15,564,456 |
|
|
$ |
12,604,959 |
|
|
$ |
36,976,858 |
|
|
$ |
23,138,310 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
(Unaudited for All Periods) |
| |
Three Months Ended |
|
Six Months Ended |
| |
June 30, |
|
March 31, |
|
June 30, |
|
June 30, |
|
June 30, |
|
|
|
2024 |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
| |
|
|
|
|
|
|
|
|
|
| Adjusted
EBITDA |
$ |
66,352,820 |
|
|
$ |
62,024,257 |
|
|
$ |
53,464,119 |
|
|
$ |
128,377,077 |
|
|
$ |
112,038,304 |
|
| |
|
|
|
|
|
|
|
|
|
|
Net interest expense (excluding amortization of deferred financing
costs) |
|
(9,579,586 |
) |
|
|
(10,198,793 |
) |
|
|
(9,250,677 |
) |
|
|
(19,778,379 |
) |
|
|
(18,420,572 |
) |
|
Capital expenditures |
|
(35,360,832 |
) |
|
|
(36,261,008 |
) |
|
|
(31,608,483 |
) |
|
|
(71,621,840 |
) |
|
|
(70,533,980 |
) |
|
Proceeds from divestiture of equipment for oil and natural gas
properties |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
54,558 |
|
| |
|
|
|
|
|
|
|
|
|
| Adjusted Free Cash
Flow |
$ |
21,412,402 |
|
|
$ |
15,564,456 |
|
|
$ |
12,604,959 |
|
|
$ |
36,976,858 |
|
|
$ |
23,138,310 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 our 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 |
|
Six Months Ended |
| |
June 30, |
|
March 31, |
|
June 30, |
|
June 30, |
|
June 30, |
|
|
|
2024 |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
| |
|
|
|
|
|
|
|
|
|
| Net Cash Provided by
Operating Activities |
$ |
50,617,930 |
|
|
$ |
45,189,169 |
|
|
$ |
43,366,181 |
|
|
$ |
95,807,099 |
|
|
$ |
87,046,277 |
|
| |
|
|
|
|
|
|
|
|
|
| Changes in operating assets
and liabilities |
|
5,979,501 |
|
|
|
6,758,004 |
|
|
|
589,695 |
|
|
|
12,737,505 |
|
|
|
6,269,093 |
|
| |
|
|
|
|
|
|
|
|
|
| Adjusted Cash Flow
from Operations |
$ |
56,597,431 |
|
|
$ |
51,947,173 |
|
|
$ |
43,955,876 |
|
|
$ |
108,544,604 |
|
|
$ |
93,315,370 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 |
|
Six Months Ended |
| |
June 30, |
|
March 31, |
|
June 30, |
|
June 30, |
|
June 30, |
|
|
|
2024 |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
General and administrative expense (G&A) |
$ |
7,713,534 |
|
|
$ |
7,469,222 |
|
|
$ |
6,810,243 |
|
|
$ |
15,182,756 |
|
|
$ |
13,940,382 |
|
|
Shared-based compensation |
|
2,077,778 |
|
|
|
1,723,832 |
|
|
|
2,260,312 |
|
|
|
3,801,610 |
|
|
|
4,204,008 |
|
|
G&A excluding share-based compensation |
|
5,635,756 |
|
|
|
5,745,390 |
|
|
|
4,549,931 |
|
|
|
11,381,146 |
|
|
|
9,736,374 |
|
|
Transaction costs - executed A&D |
|
— |
|
|
|
3,539 |
|
|
|
220,191 |
|
|
|
3,539 |
|
|
|
220,191 |
|
|
G&A excluding share-based compensation and transaction
costs |
$ |
5,635,756 |
|
|
$ |
5,741,851 |
|
|
$ |
4,329,740 |
|
|
$ |
11,377,607 |
|
|
$ |
9,516,183 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Calculation of Leverage
Ratio
“Leverage” or the “Leverage Ratio” is calculated
under our existing senior revolving credit facility and means as of
any date, the ratio of (i) our consolidated total debt as of such
date to (ii) our 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 our existing senior revolving credit facility; provided that
for the purposes of the definition of ‘Leverage Ratio’: (a) for the
fiscal quarter ended March 31, 2023, Consolidated EBITDAX is
calculated by multiplying Consolidated EBITDAX for the three fiscal
quarter periods ended on March 31, 2023 by four-thirds, and (b) for
each fiscal quarter thereafter, Consolidated EBITDAX will be
calculated by adding Consolidated EBITDAX for the four consecutive
fiscal quarters ending on such date.
The Company defines “Consolidated EBITDAX” in
accordance with our 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 our 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 we 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 our existing senior revolving
credit facility is the maximum permitted Leverage Ratio of 3.00.
The following table shows the leverage ratio calculation for our
most recent fiscal quarter.
| |
(Unaudited) |
| |
Three Months Ended |
|
|
| |
September 30, |
|
December 31, |
|
March 31, |
|
June 30, |
|
Last Four Quarters |
| |
|
2023 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2024 |
|
|
| Consolidated EBITDAX
Calculation: |
|
|
|
|
|
|
|
|
|
|
Net Income (Loss) |
$ |
(7,539,222 |
) |
|
$ |
50,896,479 |
|
|
$ |
5,515,377 |
|
|
$ |
22,418,994 |
|
|
$ |
71,291,628 |
|
| Plus: Consolidated interest
expense |
|
11,301,328 |
|
|
|
11,506,908 |
|
|
|
11,420,400 |
|
|
|
10,801,194 |
|
|
|
45,029,830 |
|
| Plus: Income tax provision
(benefit) |
|
(3,411,336 |
) |
|
|
7,862,930 |
|
|
|
1,728,886 |
|
|
|
6,820,485 |
|
|
|
13,000,965 |
|
| Plus: Depreciation, depletion
and amortization |
|
21,989,034 |
|
|
|
24,556,654 |
|
|
|
23,792,450 |
|
|
|
24,699,421 |
|
|
|
95,037,559 |
|
| Plus: non-cash charges
acceptable to Administrative Agent |
|
36,396,867 |
|
|
|
(29,695,076 |
) |
|
|
19,627,646 |
|
|
|
1,664,064 |
|
|
|
27,993,501 |
|
| Consolidated
EBITDAX |
$ |
58,736,671 |
|
|
$ |
65,127,895 |
|
|
$ |
62,084,759 |
|
|
$ |
66,404,158 |
|
|
$ |
252,353,483 |
|
| Plus: Pro Forma Acquired
Consolidated EBITDAX |
|
4,810,123 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
4,810,123 |
|
| Less: Pro Forma Divested
Consolidated EBITDAX |
|
(672,113 |
) |
|
|
(66,463 |
) |
|
|
40,474 |
|
|
|
(4,643 |
) |
|
|
(702,745 |
) |
| Pro Forma Consolidated
EBITDAX |
$ |
62,874,681 |
|
|
$ |
65,061,432 |
|
|
$ |
62,125,233 |
|
|
$ |
66,399,515 |
|
|
$ |
256,460,861 |
|
| |
|
|
|
|
|
|
|
|
|
| Non-cash charges acceptable to
Administrative Agent |
|
|
|
|
|
|
|
|
|
| Asset retirement obligation
accretion |
$ |
354,175 |
|
|
$ |
351,786 |
|
|
$ |
350,834 |
|
|
$ |
352,184 |
|
|
|
| Unrealized loss (gain) on
derivative assets |
|
33,871,957 |
|
|
|
(32,505,544 |
) |
|
|
17,552,980 |
|
|
|
(765,898 |
) |
|
|
| Share-based compensation |
|
2,170,735 |
|
|
|
2,458,682 |
|
|
|
1,723,832 |
|
|
|
2,077,778 |
|
|
|
| Total non-cash charges
acceptable to Administrative Agent |
$ |
36,396,867 |
|
|
$ |
(29,695,076 |
) |
|
$ |
19,627,646 |
|
|
$ |
1,664,064 |
|
|
|
| |
|
|
|
|
|
|
|
|
|
| |
As of |
|
|
|
|
|
|
|
|
| |
June 30, |
|
|
|
|
|
|
|
|
| |
|
2024 |
|
|
|
|
|
|
|
|
|
| Leverage Ratio Covenant: |
|
|
|
|
|
|
|
|
|
| Revolving line of credit |
$ |
407,000,000 |
|
|
|
|
|
|
|
|
|
| Pro Forma Consolidated
EBITDAX |
|
256,460,861 |
|
|
|
|
|
|
|
|
|
| Leverage
Ratio |
|
1.59 |
|
|
|
|
|
|
|
|
|
| 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, interest expense, 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 |
|
Six Months Ended |
| |
June 30, |
|
March 31, |
|
June 30, |
|
June 30, |
|
June 30, |
|
|
|
2024 |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
| All-In Cash Operating
Costs: |
|
|
|
|
|
|
|
|
|
|
Lease operating expenses (including workovers) |
$ |
19,309,017 |
|
|
$ |
18,360,434 |
|
|
$ |
15,938,106 |
|
|
|
37,669,451 |
|
|
|
33,410,797 |
|
|
G&A excluding share-based compensation |
|
5,635,756 |
|
|
|
5,745,390 |
|
|
|
4,549,931 |
|
|
|
11,381,146 |
|
|
|
9,736,374 |
|
|
Net interest expense (excluding amortization of deferred financing
costs) |
|
9,579,586 |
|
|
|
10,198,793 |
|
|
|
9,250,677 |
|
|
|
19,778,379 |
|
|
|
18,420,572 |
|
|
Operating lease expense |
|
175,090 |
|
|
|
175,091 |
|
|
|
115,353 |
|
|
|
350,181 |
|
|
|
228,491 |
|
|
Oil and natural gas production taxes |
|
3,627,264 |
|
|
|
4,428,303 |
|
|
|
4,012,139 |
|
|
|
8,055,567 |
|
|
|
8,420,279 |
|
|
Ad valorem taxes |
|
1,337,276 |
|
|
|
2,145,631 |
|
|
|
1,670,343 |
|
|
|
3,482,907 |
|
|
|
3,340,956 |
|
|
Gathering, transportation and processing costs |
|
107,629 |
|
|
|
166,054 |
|
|
|
(1,632 |
) |
|
|
273,683 |
|
|
|
(2,455 |
) |
| All-in cash operating
costs |
$ |
39,771,618 |
|
|
$ |
41,219,696 |
|
|
$ |
35,534,917 |
|
|
|
80,991,314 |
|
|
|
73,555,014 |
|
| |
|
|
|
|
|
|
|
|
|
| Boe |
|
1,800,570 |
|
|
|
1,732,057 |
|
|
|
1,571,668 |
|
|
|
3,532,627 |
|
|
|
3,217,974 |
|
| |
|
|
|
|
|
|
|
|
|
| All-in cash operating
costs per Boe |
$ |
22.09 |
|
|
$ |
23.80 |
|
|
$ |
22.61 |
|
|
$ |
22.93 |
|
|
$ |
22.86 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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.
| |
Three Months Ended |
|
Six Months Ended |
| |
June 30, |
|
March 31, |
|
June 30, |
|
June 30, |
|
June 30, |
|
|
|
2024 |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
| Cash Operating
Margin |
|
|
|
|
|
|
|
|
|
|
Realized revenues per Boe |
$ |
55.06 |
|
|
$ |
54.56 |
|
|
$ |
50.49 |
|
|
$ |
54.82 |
|
|
$ |
52.03 |
|
|
All-in cash operating costs per Boe |
|
22.09 |
|
|
|
23.80 |
|
|
|
22.61 |
|
|
|
22.93 |
|
|
|
22.86 |
|
| Cash Operating Margin
per Boe |
$ |
32.97 |
|
|
$ |
30.76 |
|
|
$ |
27.88 |
|
|
$ |
31.89 |
|
|
$ |
29.17 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ring Energy (AMEX:REI)
Historical Stock Chart
From Oct 2024 to Nov 2024
Ring Energy (AMEX:REI)
Historical Stock Chart
From Nov 2023 to Nov 2024
