[Q2 2025 Financial and Operational Results](index=1&type=section&id=Q2%202025%20Financial%20and%20Operational%20Results) [Overview and Management Commentary](index=1&type=section&id=Overview%20and%20Management%20Commentary) Ring Energy achieved record oil and total sales volumes in Q2 2025, generating a record $24.8 million in Adjusted Free Cash Flow despite an 11% sequential decrease in realized pricing - Management successfully executed its revised plan to reduce capital spending, achieving a **36% year-over-year reduction** while maintaining **2% production growth**[3](index=3&type=chunk) - The company's strategic focus is on maximizing cash flow, controlling costs, and prioritizing debt reduction to strengthen its financial position[5](index=5&type=chunk) Q2 2025 Key Highlights | Metric | Value | Note | | :--- | :--- | :--- | | **Oil Sales** | 14,511 Bo/d | Record, exceeding midpoint of guidance | | **Total Sales** | 21,295 Boe/d | Record, near midpoint of guidance | | **Net Income** | $20.6 million | $0.10 per diluted share | | **Adjusted Net Income** | $11.0 million | $0.05 per diluted share | | **Adjusted EBITDA** | $51.5 million | - | | **Lease Operating Expense (LOE)** | $10.45 per Boe | 9% below the low end of guidance | | **Capital Expenditures** | $16.8 million | 48% lower than Q1 2025 | | **Adjusted Free Cash Flow (AFCF)** | $24.8 million | Record | | **Debt Reduction** | $12 million | Paid down during the quarter | | **Liquidity** | $137.0 million | As of June 30, 2025 | [Financial Performance Summary](index=2&type=section&id=Financial%20Performance%20Summary) Ring Energy's Q2 2025 revenues increased 4% sequentially to $82.6 million, with net income surging 126% to $20.6 million, driven by reduced capital expenditures and record Adjusted Free Cash Flow Quarterly Financial Performance Comparison | Metric | Q2 2025 | Q1 2025 | QoQ Change | Q2 2024 | YoY Change | | :--- | :--- | :--- | :--- | :--- | :--- | | **Revenues ($ million)** | $82.6 | $79.1 | 4% | $99.1 | (17)% | | **Net Income ($ million)** | $20.6 | $9.1 | 126% | $22.4 | (8)% | | **Adjusted EBITDA ($ million)** | $51.5 | $46.4 | 11% | $66.4 | (22)% | | **Capital Expenditures ($ million)** | $16.8 | $32.5 | (48)% | $35.4 | (53)% | | **Adjusted Free Cash Flow ($ million)** | $24.8 | $5.8 | 328% | $21.4 | 16% | Key Expenses per Boe | Expense Category ($/BOE) | Q2 2025 | Q1 2025 | QoQ Change | | :--- | :--- | :--- | | **Lease operating expenses** | $10.45 | $11.89 | (12)% | | **General and administrative expenses** | $3.68 | $5.21 | (29)% | | **Interest expense** | $6.07 | $5.74 | 6% | - The company recorded a significant gain on derivative contracts of **$14.6 million** in Q2 2025, primarily driven by unrealized gains, compared to a loss of $0.9 million in Q1 2025[8](index=8&type=chunk) [Operational Performance](index=2&type=section&id=Operational%20Performance) Q2 2025 operational performance saw record crude oil sales of 14,511 Bo/d and total sales of 21,295 Boe/d, with drilling and completion activity scaled back to two new wells Average Daily Sales Volumes | Product | Q2 2025 | Q1 2025 | QoQ Change | | :--- | :--- | :--- | :--- | | **Crude Oil (Bo/d)** | 14,511 | 12,074 | 20% | | **Total (Boe/d)** | 21,295 | 18,392 | 16% | Q2 2025 Drilling & Completion Activity | Area | Wells Drilled | Wells Completed | | :--- | :--- | :--- | | Central Basin Platform (Horizontal) | 1 | 1 | | Central Basin Platform (Vertical) | 1 | 1 | | **Total** | **2** | **2** | - The company drilled and completed **two wells** in the Central Basin Platform in Q2 2025, a significant reduction from the seven wells completed in Q1 2025[10](index=10&type=chunk)[11](index=11&type=chunk)[12](index=12&type=chunk) [Balance Sheet and Liquidity](index=3&type=section&id=Balance%20Sheet%20and%20Liquidity) Ring Energy maintained a solid liquidity of $137.0 million as of June 30, 2025, reducing debt by $12 million and extending its credit facility maturity to June 2029 - Total liquidity was approximately **$137.0 million** at the end of Q2 2025, consisting of cash and availability under the credit facility[9](index=9&type=chunk) - The company paid down **$12 million of debt** in Q2 2025, reducing borrowings on its credit facility from $460 million to **$448 million**[9](index=9&type=chunk) - A new credit agreement was established with an extended maturity of 34 months to June 2029 and a borrowing base of **$585 million**[4](index=4&type=chunk) [Updated Guidance](index=4&type=section&id=Updated%20Guidance) [Second Half 2025 and Q3 Sales Volumes, Capital Investment and Operating Expense Guidance](index=4&type=section&id=Second%20Half%202025%20and%20Q3%20Sales%20Volumes,%20Capital%20Investment%20and%20Operating%20Expense%20Guidance) Ring Energy reaffirmed its production and capital expenditure guidance for 2H 2025, while lowering LOE guidance, with Q3 sales volumes projected between 19,200-21,200 Boe/d and capital spending between $23-31 million Q3 and 2H 2025 Guidance | Metric | Q3 2025 | 2H 2025 | | :--- | :--- | :--- | | **Total Sales (Boe/d)** | 19,200 - 21,200 | 19,000 - 21,000 | | **Capital Spending ($ millions)** | $23 - $31 | $38 - $58 | | **LOE (per Boe)** | $11.00 - $12.00 | $11.00 - $12.00 | - The company lowered its LOE per Boe guidance for the second half of 2025, while reaffirming production and capital expenditures guidance[4](index=4&type=chunk) - Full-year 2025 capital expenditures guidance is now set at a midpoint of **$97 million**[14](index=14&type=chunk) - The capital allocation for 2H 2025 is estimated to be **61% for drilling and completion**, **33% for recompletions and workovers**, and **6% for other activities**[15](index=15&type=chunk) [Financial Statements](index=6&type=section&id=Financial%20Statements) [Condensed Statements of Operations](index=6&type=section&id=Condensed%20Statements%20of%20Operations) For Q2 2025, Ring Energy reported total revenues of $82.6 million and a net income of $20.6 million, or $0.10 per diluted share, a significant increase from Q1 2025 Statement of Operations Highlights (Three Months Ended June 30, 2025) | Line Item | Amount (USD) | | :--- | :--- | | **Revenues** | $82,602,759 | | **Total Costs and Operating Expenses** | $59,126,818 | | **Income from Operations** | $23,475,941 | | **Gain on derivative contracts** | $14,648,054 | | **Net Income** | $20,634,887 | | **Diluted Earnings per Share** | $0.10 | [Condensed Operating Data](index=7&type=section&id=Condensed%20Operating%20Data) In Q2 2025, total sales volumes reached 1,937,850 Boe (21,295 Boe/d), with crude oil comprising 68% of production, and an average realized price of $42.63 per Boe Q2 2025 Operating Metrics | Metric | Value | | :--- | :--- | | **Total Sales (Boe)** | 1,937,850 | | **Average Daily Sales (Boe/d)** | 21,295 | | **Oil as % of Total** | 68% | | **Average Realized Price ($/Boe)** | $42.63 | | **Average Realized Oil Price ($/Bbl)** | $62.69 | | **Lease Operating Expenses ($/Boe)** | $10.45 | [Condensed Balance Sheets](index=8&type=section&id=Condensed%20Balance%20Sheets) As of June 30, 2025, total assets increased to $1.516 billion, with total liabilities at $618.4 million due to an increased revolving line of credit, and total stockholders' equity rising to $897.9 million Balance Sheet Summary | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | $1,516,330,871 | $1,408,099,474 | | **Total Liabilities** | $618,435,102 | $549,459,492 | | Revolving line of credit | $448,000,000 | $385,000,000 | | **Total Stockholders' Equity** | $897,895,769 | $858,639,982 | [Condensed Statements of Cash Flows](index=9&type=section&id=Condensed%20Statements%20of%20Cash%20Flows) For Q2 2025, net cash provided by operating activities was $33.3 million, while investing activities used $18.4 million and financing activities used $16.0 million, reflecting debt paydown Cash Flow Summary (Three Months Ended June 30, 2025) | Cash Flow Category | Amount (USD) | | :--- | :--- | | **Net Cash Provided by Operating Activities** | $33,297,251 | | **Net Cash Used in Investing Activities** | ($18,359,030) | | **Net Cash Used in Financing Activities** | ($16,039,072) | [Supplementary Information](index=10&type=section&id=Supplementary%20Information) [Financial Commodity Derivative Positions](index=10&type=section&id=Financial%20Commodity%20Derivative%20Positions) As of June 30, 2025, Ring Energy hedged 55% of its expected 2H 2025 oil production at $64.87/bbl and 42% of natural gas at $3.37/MMBtu to mitigate price volatility - For the second half of 2025, the company has hedged approximately **55% of its oil sales guidance** at an average downside protection price of **$64.87** and **42% of its natural gas sales guidance** at an average downside protection price of **$3.37**[8](index=8&type=chunk) Oil & Gas Hedge Summary (Q3 2025) | Hedge Type | Hedged Volume | Weighted Avg. Price | | :--- | :--- | :--- | | **Oil Swaps (WTI)** | 471,917 Bbl | $68.64 | | **Oil Collars (WTI)** | 225,400 Bbl | Put: $65.00, Call: $78.91 | | **Gas Swaps (Henry Hub)** | 300,500 MMBtu | $3.88 | | **Gas Collars (Henry Hub)** | 309,350 MMBtu | Put: $3.17, Call: $4.98 | [Non-GAAP Financial Reconciliations](index=11&type=section&id=Non-GAAP%20Financial%20Reconciliations) This section defines and reconciles non-GAAP measures like Adjusted Net Income, Adjusted EBITDA, and Adjusted Free Cash Flow, providing a clearer view of core operational performance by excluding non-cash or non-recurring items [Adjusted Net Income](index=11&type=section&id=Adjusted%20Net%20Income) Adjusted Net Income for Q2 2025 was $11.0 million ($0.05 per diluted share), reflecting core operational profitability after adjusting GAAP net income for non-cash items Reconciliation of Net Income to Adjusted Net Income (Q2 2025) | Line Item | Amount (USD) | | :--- | :--- | | **Net income** | $20,634,887 | | Unrealized (gain) on derivatives | ($13,970,211) | | Share-based compensation | $1,351,839 | | Tax impact on adjusted items | $2,964,996 | | **Adjusted Net Income** | **$10,982,511** | [Adjusted EBITDA](index=12&type=section&id=Adjusted%20EBITDA) Adjusted EBITDA for Q2 2025 increased 11% to $51.5 million, providing a metric for underlying operational cash flow generation by excluding non-cash and non-operating charges Reconciliation of Net Income to Adjusted EBITDA (Q2 2025) | Line Item | Amount (USD) | | :--- | :--- | | **Net income** | $20,634,887 | | Interest expense, net | $11,687,746 | | Income tax expense | $6,107,425 | | Depreciation, depletion and amortization | $25,569,914 | | Unrealized (gain) on derivatives | ($13,970,211) | | Share-based compensation | $1,351,839 | | **Adjusted EBITDA** | **$51,458,788** | [Adjusted Free Cash Flow (AFCF)](index=13&type=section&id=Adjusted%20Free%20Cash%20Flow%20(AFCF)) The company generated a record Adjusted Free Cash Flow of $24.8 million in Q2 2025, representing cash available for debt reduction and other discretionary uses after adjusting operating cash flow for capital expenditures Reconciliation to Adjusted Free Cash Flow (Q2 2025) | Line Item | Amount (USD) | | :--- | :--- | | **Net Cash Provided by Operating Activities** | $33,297,251 | | Changes in operating assets and liabilities | $8,312,480 | | Capital expenditures | ($16,827,513) | | **Adjusted Free Cash Flow** | **$24,779,703** | [Leverage Ratio](index=15&type=section&id=Leverage%20Ratio) As of June 30, 2025, Ring Energy's leverage ratio was 2.05x, well below the maximum permitted 3.00x, indicating a healthy debt position relative to its earnings Leverage Ratio Calculation (as of June 30, 2025) | Metric | Value | | :--- | :--- | | **Consolidated Total Debt** | $458,000,000 | | **Pro Forma Consolidated EBITDAX (LTM)** | $223,297,611 | | **Leverage Ratio** | **2.05x** | | **Maximum Allowed** | ≤ 3.00x | [Other Non-GAAP Measures](index=18&type=section&id=Other%20Non-GAAP%20Measures) In Q2 2025, All-In Cash Operating Costs decreased to $21.51 per Boe, resulting in a Cash Operating Margin of $21.12 per Boe, reflecting improved operational profitability Cash Costs and Margin per Boe (Q2 2025) | Metric ($/Boe) | Q2 2025 | Q1 2025 | | :--- | :--- | :--- | | **Realized revenues per Boe** | $42.63 | $47.78 | | **All-in cash operating costs per Boe** | $21.51 | $24.33 | | **Cash Operating Margin per Boe** | **$21.12** | **$23.45** |

Financial Data and Key Metrics Changes - The company achieved record adjusted free cash flow of $24.8 million, marking the twenty-third consecutive quarter of generating free cash flow [12][21] - Net income for Q2 2025 was $20.6 million or $0.10 per diluted share, compared to $9.1 million or $0.05 per diluted share in Q1 2025 [20] - Adjusted EBITDA increased to $51.5 million from $46.4 million in the previous quarter, primarily due to higher oil revenue and lower G&A expenses [21] Business Line Data and Key Metrics Changes - The company sold 14,511 barrels of oil per day, near the high end of guidance, and 21,295 barrels of oil equivalent per day, just below the midpoint of guidance [12][16] - Lease operating expenses (LOE) were $10.45 per BOE, significantly lower than the guidance range of $11.5 to $12.5 per BOE [19] - Capital expenditures were $16.8 million, 48% lower than the first quarter [21] Market Data and Key Metrics Changes - The overall realized price decreased by 11% to $42.63 per BOE from $47.78 in Q1 2025, driven by a lower realized oil price of $62.69 [17] - NGL prices decreased by 36% to $6.19, while the average natural gas price differential from NYMEX futures pricing was negative $4.67 per Mcf [17] Company Strategy and Development Direction - The company is prioritizing debt reduction in the current lower price environment, with a focus on maintaining capital discipline [26] - The management team is exploring opportunities in other emerging plays, such as the Barnett, while continuing to focus on the San Andres horizontal wells [72][78] - The integration of LimeRock assets has led to significant operational efficiencies and cost reductions, which are expected to continue [8][46] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to manage operations effectively despite external challenges, emphasizing a strong operational performance [25] - The company anticipates that higher oil prices in the future will allow for increased capital allocation towards testing new intervals [78] Other Important Information - The company entered into an amended credit agreement with a $585 million borrowing base, providing a 34-month extension and improved terms [15][16] - The company has approximately 1.3 million barrels of oil hedged with an average downside protection price of $64.87, covering about 55% of oil sales guidance [22] Q&A Session Summary Question: Thoughts on stock performance relative to peers - Management noted that stock performance is influenced by various factors, including debt levels and company size, which may affect market perception [29][31] Question: Allocation of free cash flow from LimeRock acquisition - Management indicated plans to use free cash flow from LimeRock to reduce leverage while maintaining production levels [43][45] Question: Impact of midstream developments on gas price realizations - Management acknowledged that while there are ongoing midstream developments, infrastructure limitations will continue to affect price differentials in the near term [83]

Q2 2025 Performance Highlights - Ring Energy's Q2 2025 net production reached 21,295 Boe/d, with 68% oil and 85% liquids[7] - The company achieved a realized price of $42.63 per Boe in Q2 2025[13] - Adjusted EBITDA for Q2 2025 was $51.5 million, compared to $46.4 million in Q1 2025[13] - Adjusted Free Cash Flow (AFCF) hit a company record of $24.8 million in Q2 2025[11, 13] - Lease operating costs were reduced by 12% quarter-over-quarter to $10.45 per Boe[11, 13] - Capital expenditures decreased by 48% quarter-over-quarter to $16.8 million[11, 13] Updated Guidance and Reserves - The company updated its FY 2025E AFCF guidance to between ~$50 to ~$75 million, assuming $55 to $75 per BO WTI[11] - FY 2025 capital expenditure guidance was reduced by 36% year-over-year, while maintaining 2% year-over-year growth[11] - 2024 SEC Proved Reserves are 134 MMBoe with a PV10 of ~$1.5 billion[7] - The Lime Rock Acquisition added ~12 MMBoe with a PV10 of ~$160 million[7] Strategic Focus and Valuation - The company's leverage ratio decreased from ~40x in early 2021 to ~20x in Q2 2025[11] - The company hedged the remainder of 2025 with ~13 million BO at an average floor price of $64.87 per Bbl and FY 2026 with ~23 million BO at an average floor price of $65.44 per Bbl[11] - An analysis suggests that Ring Energy is trading at a discount, with a potential share price of $2.51 based on APA Divestiture and MNR Acquisition valuation metrics[56]

Core Insights - Ring Energy reported revenue of $82.6 million for the quarter ended June 2025, a decrease of 16.7% year-over-year, with EPS at $0.10 compared to $0.12 in the same quarter last year [1] - The revenue exceeded the Zacks Consensus Estimate of $81.11 million by 1.85%, while the EPS surprised positively by 900% against the consensus estimate of $0.01 [1] Financial Performance Metrics - Average realized sales price for natural gas was $-1.31 per thousand cubic feet, significantly lower than the estimated $0.46 [4] - Net sales volumes for oil were reported at 1,320.51 MBBL, slightly above the estimated 1,296.00 MBBL [4] - Net sales volumes for natural gas were 1,703.81 MMcf, below the estimated 1,867.50 MMcf [4] - Average realized sales price for oil was $62.69, exceeding the estimated $59.74 [4] - Revenues from oil were $82.78 million, compared to the average estimate of $78.67 million, reflecting a year-over-year decline of 16.6% [4] - Revenues from natural gas liquids were $2.06 million, above the estimated $1.55 million, but down 26.9% year-over-year [4] - Revenues from natural gas were reported at $-2.24 million, significantly lower than the estimated $0.84 million, representing a 24.7% decline year-over-year [4] Stock Performance - Over the past month, shares of Ring Energy have returned -4.7%, contrasting with the Zacks S&P 500 composite's +0.5% change [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [3]

Group 1 - Ring Energy reported quarterly earnings of $0.1 per share, exceeding the Zacks Consensus Estimate of $0.01 per share, but down from $0.12 per share a year ago, representing an earnings surprise of +900.00% [1] - The company posted revenues of $82.6 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 1.85%, but down from $99.14 million year-over-year [2] - Over the last four quarters, Ring Energy has surpassed consensus EPS estimates two times and topped consensus revenue estimates two times [2] Group 2 - The stock has underperformed, losing about 45.3% since the beginning of the year, compared to the S&P 500's gain of 7.1% [3] - The current consensus EPS estimate for the coming quarter is $0.03 on revenues of $83.18 million, and for the current fiscal year, it is $0.12 on revenues of $318.96 million [7] - The Zacks Industry Rank for Oil and Gas - Exploration and Production - United States is currently in the bottom 27% of over 250 Zacks industries, indicating potential underperformance compared to higher-ranked industries [8]

PART I — FINANCIAL INFORMATION [Item 1. Condensed Financial Statements](index=7&type=section&id=Item%201.%20Condensed%20Financial%20Statements) This section presents the unaudited condensed balance sheets, statements of operations, stockholders' equity, and cash flows, along with detailed notes on accounting policies and key financial components [Condensed Balance Sheets](index=8&type=section&id=Condensed%20Balance%20Sheets) The balance sheet as of June 30, 2025, shows an increase in total assets to **$1.52 billion** from **$1.41 billion** at year-end 2024, primarily driven by growth in oil and natural gas properties, with total liabilities increasing to **$618.4 million** and total stockholders' equity growing to **$897.9 million** Condensed Balance Sheet Summary (in millions) | Balance Sheet Items | June 30, 2025 ($) | December 31, 2024 ($) | | :--- | :--- | :--- | | **Total Current Assets** | 62.4 | 50.4 | | **Net Properties and Equipment** | 1,435.2 | 1,342.1 | | **Total Assets** | **1,516.3** | **1,408.1** | | **Total Current Liabilities** | 98.3 | 105.0 | | **Revolving line of credit** | 448.0 | 385.0 | | **Total Liabilities** | **618.4** | **549.5** | | **Total Stockholders' Equity** | **897.9** | **858.6** | [Condensed Statements of Operations](index=9&type=section&id=Condensed%20Statements%20of%20Operations) For the three months ended June 30, 2025, revenues decreased to **$82.6 million** from **$99.1 million** year-over-year, while net income slightly declined to **$20.6 million** from **$22.4 million**, though for the six-month period, net income increased to **$29.7 million** from **$27.9 million** due to derivative gains Key Operational Results (in millions, except EPS) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | **Revenues** | $82.6 | $99.1 | $161.7 | $193.6 | | **Income from Operations** | $23.5 | $41.8 | $45.8 | $79.4 | | **Net Income** | $20.6 | $22.4 | $29.7 | $27.9 | | **Diluted EPS** | $0.10 | $0.11 | $0.15 | $0.14 | [Condensed Statement of Stockholders' Equity](index=10&type=section&id=Condensed%20Statement%20of%20Stockholders%20Equity) Stockholders' equity increased from **$858.6 million** at the end of 2024 to **$897.9 million** as of June 30, 2025, primarily driven by net income of **$29.7 million** and a **$7.4 million** common stock issuance for the Lime Rock Acquisition Changes in Stockholders' Equity (For the Six Months Ended June 30, 2025) | Description | Amount ($) | | :--- | :--- | | **Balance, December 31, 2024** | 858,639,982 | | Common stock issuance for Lime Rock Acquisition | 7,420,811 | | Net income | 29,745,625 | | Share-based compensation | 1,690,958 | | Payments for tax withholdings, net | (953,446) | | **Balance, June 30, 2025** | **897,895,769** | [Condensed Statements of Cash Flows](index=11&type=section&id=Condensed%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2025, net cash from operating activities decreased to **$61.7 million** from **$95.8 million** year-over-year, while net cash used in investing activities significantly increased to **$121.0 million** due to the Lime Rock Acquisition, leading to net cash provided by financing activities of **$57.4 million** Cash Flow Summary (For the Six Months Ended June 30) | Cash Flow Activity | 2025 ($) | 2024 ($) | | :--- | :--- | :--- | | **Net Cash Provided by Operating Activities** | 61,668,259 | 95,807,099 | | **Net Cash Used in Investing Activities** | (120,966,327) | (76,367,768) | | **Net Cash Provided by (Used in) Financing Activities** | 57,431,673 | (18,556,903) | | **Net (Decrease) Increase in Cash** | (1,866,395) | 882,428 | [Notes to the Condensed Financial Statements](index=13&type=section&id=Notes%20to%20the%20Condensed%20Financial%20Statements) This section provides detailed explanations of the company's accounting policies and specific financial items, including the Lime Rock Acquisition, derivative instruments, the revolving line of credit, and the determination of a single reportable segment - The company completed the Lime Rock Acquisition on March 31, 2025, for a total consideration of **$87.7 million**, consisting of cash, common stock, and a deferred payment, with the transaction accounted for as an asset acquisition[99](index=99&type=chunk)[100](index=100&type=chunk)[102](index=102&type=chunk) - The company utilizes derivative instruments (swaps and collars) to manage commodity price risk, with the fair value of derivative assets at **$21.4 million** and liabilities at **$6.2 million** as of June 30, 2025, which are not designated as hedges for accounting purposes[103](index=103&type=chunk)[106](index=106&type=chunk)[120](index=120&type=chunk) - On June 18, 2025, the company amended its credit agreement, which has a borrowing base of **$585 million** and matures in June 2029, with **$448 million** outstanding as of June 30, 2025[122](index=122&type=chunk)[123](index=123&type=chunk)[127](index=127&type=chunk) - The company determined it has a single reportable segment, Exploration and Production, as its operations in the Permian Basin exhibit similar economic characteristics and are managed by a single chief operating decision maker group[144](index=144&type=chunk)[146](index=146&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=43&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) The MD&A section details the company's operational and financial performance, strategic focus, and market conditions, including the Lime Rock Acquisition, ongoing drilling activities, and the impact of commodity prices on revenues and production costs [Overview and 2025 Developments](index=43&type=section&id=Overview%20and%202025%20Developments) The company focuses on oil and natural gas development in the Permian Basin, balancing debt reduction and production growth, with a major development in 2025 being the Lime Rock Acquisition and continued drilling activities - The company's primary business strategy is to balance long-term debt reduction with the development of its oil and gas properties, aiming to operate within its generated cash flow[156](index=156&type=chunk) - On March 31, 2025, the company completed the Lime Rock Acquisition, acquiring oil and gas interests in Andrews County, Texas[158](index=158&type=chunk) Drilling and Completion Activity H1 2025 | Quarter | Area | Wells Drilled | Wells Completed | | :--- | :--- | :--- | :--- | | **1Q 2025** | Northwest Shelf (Horizontal) | 4 | 4 | | | Central Basin Platform (Vertical) | 3 | 3 | | **2Q 2025** | Central Basin Platform (Horizontal) | 1 | 1 | | | Central Basin Platform (Vertical) | 1 | 1 | | **Total** | | **9** | **9** | [Results of Operations](index=46&type=section&id=Results%20of%20Operations) This sub-section provides a detailed comparison of financial results for the three and six months ended June 30, 2025, and 2024, highlighting a **17%** decrease in Q2 2025 revenues to **$82.6 million** due to a **22%** drop in average realized oil price, despite an **8%** increase in total production volume Q2 2025 vs. Q2 2024 Performance | Metric | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | **Total Sales** | $82.6M | $99.1M | (17)% | | **Total Production (Boe)** | 1,937,850 | 1,800,570 | 8% | | **Average Oil Price (per Bbl)** | $62.69 | $80.09 | (22)% | | **Lease Operating Expenses (LOE)** | $20.2M | $19.3M | 5% | | **Average LOE per Boe** | $10.45 | $10.72 | (3)% | H1 2025 vs. H1 2024 Performance | Metric | H1 2025 | H1 2024 | % Change | | :--- | :--- | :--- | :--- | | **Total Sales** | $161.7M | $193.6M | (16)% | | **Total Production (Boe)** | 3,593,109 | 3,532,627 | 2% | | **Average Oil Price (per Bbl)** | $66.17 | $77.93 | (15)% | | **Lease Operating Expenses (LOE)** | $39.9M | $37.7M | 6% | | **Average LOE per Boe** | $11.11 | $10.66 | 4% | - For Q2 2025, the company recorded a gain on derivative contracts of **$14.6 million**, a significant reversal from the **$1.8 million** loss in Q2 2024, primarily due to changes in crude oil futures prices[197](index=197&type=chunk)[199](index=199&type=chunk) [Liquidity and Capital Resources](index=57&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 30, 2025, the company had no cash on hand, with net cash from operations for H1 2025 at **$61.7 million**, down from **$95.8 million** YoY, and **$448 million** outstanding on its **$585 million** borrowing base credit facility, maintaining a strategic focus on maximizing cash flow and reducing debt - Net cash provided by operating activities for H1 2025 was **$61.7 million**, a decrease from **$95.8 million** in H1 2024, primarily due to lower revenues[209](index=209&type=chunk) - As of June 30, 2025, the company had **$448 million** outstanding on its credit facility, which has a borrowing base of **$585 million** and matures in June 2029[211](index=211&type=chunk) - The company maintains a portfolio of oil and gas hedges (swaps and collars) extending into Q2 2027 to manage price risk and increase cash flow predictability[212](index=212&type=chunk)[213](index=213&type=chunk)[214](index=214&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=60&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risks are commodity price volatility, customer credit risk, and interest rate fluctuations, with commodity price risk actively managed through hedging and interest rate risk on its variable-rate credit facility potentially impacting annual interest expense by an estimated **$4.5 million** for a **1%** rate change - The company's major market risk is commodity price volatility for its oil and natural gas production, which it mitigates by entering into hedging arrangements[223](index=223&type=chunk)[224](index=224&type=chunk) Customer Concentration (H1 2025) | Purchaser | % of Revenues | % of A/R | | :--- | :--- | :--- | | Phillips 66 Company | 66% | 73% | | Concord Energy LLC | 13% | 10% | | NGL Crude Partners | 9% | 7% | - The company is exposed to interest rate risk on its **$448 million** of variable-rate debt, where a **1%** change in interest rates would result in an estimated **$4.5 million** change in annual interest expense[227](index=227&type=chunk)[228](index=228&type=chunk) [Item 4. Controls and Procedures](index=61&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of June 30, 2025, ensuring timely and accurate reporting, with no material changes to internal control over financial reporting during the quarter - Management concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by the report[233](index=233&type=chunk) - There were no changes in internal control over financial reporting during the quarter that have materially affected, or are reasonably likely to materially affect, the company's internal controls[236](index=236&type=chunk) PART II — OTHER INFORMATION [Item 1. Legal Proceedings](index=61&type=section&id=Item%201.%20Legal%20Proceedings) There were no material developments in legal proceedings during the quarter ended June 30, 2025 - No material developments occurred in the company's legal proceedings during the quarter ended June 30, 2025[238](index=238&type=chunk) [Item 1A. Risk Factors](index=61&type=section&id=Item%201A.%20Risk%20Factors) This section refers the reader to the company's Annual Report on Form 10-K for the year ended December 31, 2024, for a detailed discussion of risk factors, stating that the company is subject to various risks and hazards inherent in its business - For a discussion of risk factors, the report directs readers to "Item 1A. Risk Factors" in the Annual Report on Form 10-K for the year ended December 31, 2024[239](index=239&type=chunk) [Other Items (Items 2, 3, 4, 5, 6)](index=61&type=section&id=Other%20Items%20(Items%202,%203,%204,%205,%206)) This section consolidates minor items, including the incorporation by reference of a Form 8-K regarding unregistered sales of equity securities, confirmation of no defaults on senior securities or mine safety issues, and a listing of exhibits filed with the report - Information regarding unregistered sales of equity securities was previously disclosed in a Form 8-K filed on April 4, 2025, and is incorporated by reference[240](index=240&type=chunk) - The company reports no defaults upon senior securities and has no mine safety disclosures to report[241](index=241&type=chunk)[242](index=242&type=chunk) - No directors or officers adopted, terminated, or modified a Rule 10b5-1 trading arrangement during the quarter[243](index=243&type=chunk)

Core Insights - Ring Energy, Inc. reported strong operational and financial performance for Q2 2025, achieving record oil sales and adjusted free cash flow despite a challenging pricing environment [3][5][8] - The company successfully reduced capital expenditures by 48% compared to Q1 2025, while maintaining a 2% year-over-year production growth [3][5] - Management emphasized a value-focused strategy that allows for adaptability in fluctuating market conditions, prioritizing debt reduction in the current low-price landscape [3][5] Financial Performance - Average daily sales volumes reached 21,295 Boe/d, a 16% increase from Q1 2025 and an 8% increase year-over-year [5][24] - Net income for Q2 2025 was $20.6 million, a 126% increase from Q1 2025, while adjusted net income was $11.0 million [5][21] - Adjusted EBITDA for the quarter was reported at $51.5 million, an 11% increase from Q1 2025 [5][21] Capital Expenditures and Cash Flow - Capital expenditures for Q2 2025 were $16.8 million, down 48% from the previous quarter and 53% year-over-year [5][21] - The company generated a record adjusted free cash flow of $24.8 million, a 328% increase from Q1 2025 [5][21] - Total liquidity as of June 30, 2025, was approximately $137.0 million, with $448 million in borrowings outstanding on its credit facility [8][27] Production and Sales - The company sold a record 14,511 barrels of oil per day, exceeding guidance, and total sales on a Boe basis were near the mid-point of guidance [5][24] - Realized prices for crude oil decreased by 11% to $62.69 per barrel compared to Q1 2025, reflecting a broader decline in commodity prices [5][24] - The company reaffirmed production and capital expenditure guidance for the second half of 2025, with a focus on maximizing cash flow and controlling costs [11][12] Operational Efficiency - Lease operating expenses (LOE) were reported at $10.45 per Boe, which is 9% below the low end of guidance due to cost reduction efforts [5][24] - The company successfully drilled and completed two new wells in Q2 2025, contributing to its production growth [9][10] - The operational strategy focuses on oil-rich assets with low operating costs, ensuring resilience against price volatility [3][5]

THE WOODLANDS, Texas, July 16, 2025 (GLOBE NEWSWIRE) -- Ring Energy, Inc. (NYSE American: REI) (“Ring” or the “Company”) today announced the timing of its second quarter 2025 earnings release and conference call. Ring plans to issue its second quarter 2025 earnings release after the close of trading on Wednesday, August 6, 2025. The Company has scheduled a conference call on Thursday, August 7, 2025 at 11:00 a.m. ET (10:00 a.m. CT) to discuss its second quarter operational and financial results. To particip ...

Summary of Ring Energy Fireside Chat - July 15, 2025 Company Overview - **Company**: Ring Energy (REI) - **Industry**: Oil and Gas Exploration and Production - **Key Assets**: Concentrated in the Permian Basin, specifically the Central Basin Platform Key Points and Arguments 1. **Acquisition Details**: Ring Energy completed a $100 million acquisition of assets from Lime Rock Resources on March 31, 2025, enhancing its position in the Central Basin Platform [3] 2. **Production Metrics**: - Q1 2025 total production averaged 18,400 BOEs per day, with 12,100 barrels per day of oil - Projected Q2 2025 production is about 21,500 BOEs per day, and for the second half of 2025, it is expected to be around 20,000 BOEs per day [3] 3. **Operational Synergies**: The acquisition allows for operational efficiencies due to the proximity and similarity of the new assets to existing ones, leading to lower operating costs [4][5] 4. **Production Profile**: The acquired assets have a lower decline rate (13.5%) compared to Ring's overall decline rate (22%), which is beneficial for maintaining production levels and reducing capital expenditures [6][40] 5. **Development Locations**: The acquisition added approximately 40 gross development locations, which are competitive within Ring's existing portfolio [9][10] 6. **Cost Synergies**: Integration of operations has led to immediate cost savings, including the reduction of lease operators and workover rigs, and improved marketing agreements resulting in an additional $0.80 per barrel [12][14][15] 7. **Water Handling Capabilities**: The acquisition enhances water handling capabilities, crucial for drilling and produced water management in the Permian Basin [17][20] 8. **Debt Reduction Strategy**: Ring Energy is prioritizing debt reduction, with plans to pay off the Lime Rock acquisition within three to four quarters, even in a lower oil price environment [35][51] 9. **Market Conditions**: The current acquisition market is characterized by uncertainty, with sellers reluctant to sell at lower oil prices, impacting potential acquisition opportunities [64][65] 10. **Future Outlook**: The company is focused on maintaining flexibility in its operations to adapt to market volatility, with a long-term goal of reducing leverage and potentially introducing dividends in the future [73][74] Additional Important Insights - **Credit Facility**: Ring reaffirmed a credit facility borrowing base of $585 million, extended to June 2029, with a reduced pricing margin, indicating improved financial terms [53][56] - **Organic Growth**: While the focus has shifted towards debt reduction, the company remains interested in organic growth opportunities that offer high rates of return [68][70] - **Market Positioning**: The management emphasizes the importance of a strong balance sheet to withstand price volatility and maintain operational flexibility [49][51] This summary encapsulates the key discussions and insights from the Ring Energy fireside chat, highlighting the company's strategic focus on operational efficiency, debt reduction, and adaptability in a volatile market environment.

Core Viewpoint - Ring Energy, Inc. is actively engaging in discussions regarding its recent asset acquisition and strategies for maximizing synergies, which are crucial for its growth and operational efficiency [2][6]. Group 1: Event Participation - Ring Energy will participate in a fireside chat with Water Tower Research on July 15, 2025, at 10:00 AM Central Time [1]. - The discussion will be led by Jeff Robertson, Managing Director at WTR, and will feature Paul McKinney, Ring's Chairman and CEO [2]. Group 2: Discussion Topics - Key topics will include the integration of Central Basin Platform assets acquired from Lime Rock Resources IV, LP at the end of Q1 2025 [2]. - The conversation will also cover strategies to maximize cost synergies and adapt the capital program during market turbulence [6]. Group 3: Company Overview - Ring Energy, Inc. focuses on oil and gas exploration, development, and production, with current operations centered on its Permian Basin assets [4].