Ring Energy(US:REI)2024-11-06 21:56markdown PART I — FINANCIAL INFORMATION [Item 1. Condensed Financial Statements](index=5&type=section&id=Item%201.%20Condensed%20Financial%20Statements) This section presents the company's unaudited condensed financial statements, including the balance sheets, statements of operations, statements of stockholders' equity, and statements of cash flows, along with comprehensive notes providing detailed accounting policies, financial instrument disclosures, and information on acquisitions, debt, and equity [Condensed Balance Sheets](index=7&type=page&id=Condensed%20Balance%20Sheets) The company's total assets increased to $1,399,765,010 as of September 30, 2024, from $1,376,496,392 at December 31, 2023, driven by an increase in net properties and equipment, while total liabilities decreased and stockholders' equity significantly increased | Metric | September 30, 2024 | December 31, 2023 | | :--------------------------- | :------------------- | :------------------ | | Total Assets | $1,399,765,010 | $1,376,496,392 | | Net Properties and Equipment | $1,326,747,039 | $1,293,420,786 | | Total Liabilities | $548,454,867 | $589,913,492 | | Total Stockholders' Equity | $851,310,143 | $786,582,900 | [Condensed Statements of Operations](index=8&type=page&id=Condensed%20Statements%20of%20Operations) For the three months ended September 30, 2024, the company reported a net income of $33,878,424, a significant improvement from a net loss of $(7,539,222) in the prior year period, primarily driven by a substantial gain on derivative contracts, offsetting a decrease in revenues and an increase in operating expenses, with Basic EPS improving to $0.17 from $(0.04) | Metric | For the Three Months Ended September 30, 2024 | For the Three Months Ended September 30, 2023 | | :------------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Oil, Natural Gas, and Natural Gas Liquids Revenues | $89,244,383 | $93,681,798 | | Total Costs and Operating Expenses | $59,399,091 | $54,108,273 | | Income from Operations | $29,845,292 | $39,573,525 | | Net Other Income (Expense) | $14,121,086 | $(50,524,083) | | Income (Loss) Before Benefit from (Provision for) Income Taxes | $43,966,378 | $(10,950,558) | | Benefit from (Provision for) Income Taxes | $(10,087,954) | $3,411,336 | | Net Income (Loss) | $33,878,424 | $(7,539,222) | | Basic Earnings (Loss) per Share | $0.17 | $(0.04) | | Diluted Earnings (Loss) per Share | $0.17 | $(0.04) | [Condensed Statements of Stockholders' Equity](index=9&type=page&id=Condensed%20Statements%20of%20Stockholders%27%20Equity) Total stockholders' equity increased significantly from $786,582,900 at December 31, 2023, to $851,310,143 at September 30, 2024, primarily driven by net income of $61,812,795 for the nine months ended September 30, 2024, and share-based compensation, partially offset by payments for tax withholdings on restricted stock | Metric | September 30, 2024 | December 31, 2023 | | :--------------------------- | :------------------- | :------------------ | | Total Stockholders' Equity | $851,310,143 | $786,582,900 | | Net income (Nine Months Ended Sep 30, 2024) | $61,812,795 | N/A | | Share-based compensation (Nine Months Ended Sep 30, 2024) | $3,833,697 | N/A | [Condensed Statements of Cash Flows](index=10&type=page&id=Condensed%20Statements%20of%20Cash%20Flows) Net cash provided by operating activities increased to $147.1 million for the nine months ended September 30, 2024, from $142.4 million in the prior year, mainly due to higher year-to-date revenues, while net cash used in investing activities decreased significantly to $113.2 million from $170.9 million, and net cash used in financing activities was $34.3 million, primarily due to a $33 million net paydown on the Credit Facility | Metric | Nine Months Ended September 30, 2024 | Nine Months Ended September 30, 2023 | | :------------------------------------ | :----------------------------------- | :----------------------------------- | | Net Cash Provided by Operating Activities | $147,144,031 | $142,437,252 | | Net Cash Used in Investing Activities | $(113,166,061) | $(170,917,037) | | Net Cash Used in Financing Activities | $(34,274,354) | $24,905,840 | | Cash at End of Period | $0 | $138,581 | - Net paydown of principal on Credit Facility for the nine months ended September 30, 2024, was **$33 million**[210](index=210&type=chunk) [Notes to the Condensed Financial Statements](index=12&type=page&id=Notes%20to%20the%20Condensed%20Financial%20Statements) This section provides detailed disclosures on the company's accounting policies, financial instruments, acquisitions, debt, equity, and other commitments, offering context to the condensed financial statements - The accompanying unaudited condensed financial statements are prepared in accordance with GAAP applicable to interim financial information and should be read in conjunction with the Company's audited financial statements and related notes included in its most recent Annual Report on Form 10-K[24](index=24&type=chunk) [Note 1 — Basis of Presentation & Significant Accounting Policies](index=12&type=page&id=Note%201%20%E2%80%94%20Basis%20of%20Presentation%20%26%20Significant%20Accounting%20Policies) Ring Energy is an independent exploration and production company focused on oil and natural gas development in the Permian Basin of Texas, with unaudited condensed financial statements prepared under GAAP for interim reporting, using derivative contracts to manage commodity price risk and employing the full cost method for oil and natural gas properties - Ring Energy is a growth-oriented independent exploration and production company focused on oil and natural gas development, production, acquisition, and exploration activities in the Permian Basin of Texas[25](index=25&type=chunk) - The Company uses the full cost method of accounting for oil and natural gas properties, capitalizing all costs associated with acquisition, exploration, and development[48](index=48&type=chunk) - Derivative instruments are not designated as hedges for accounting purposes; gains or losses from changes in fair value and settlements are recognized in earnings[35](index=35&type=chunk) [Note 2 — Revenue Recognition](index=19&type=page&id=Note%202%20%E2%80%94%20Revenue%20Recognition) Revenue is primarily derived from crude oil, natural gas, and NGL sales, recognized when control transfers to the purchaser at delivery, with natural gas sales experiencing a significant price decrease leading to negative realized prices for the three and nine months ended September 30, 2024, due to pipeline capacity constraints and processing fees - Revenue is predominantly from the sale of produced crude oil, natural gas, and NGLs, recognized when the product is delivered to the purchaser, net of royalties[78](index=78&type=chunk)[80](index=80&type=chunk) | Metric | For the Three Months Ended September 30, 2024 | For the Three Months Ended September 30, 2023 | | :-------------------- | :-------------------------------------------- | :-------------------------------------------- | | Natural gas sales | $(3,859,603) | $562,374 | | Average sales price (per Mcf) | $(2.26) | $0.36 | | Metric | For the Nine Months Ended September 30, 2024 | For the Nine Months Ended September 30, 2023 | | :-------------------- | :------------------------------------------- | :------------------------------------------- | | Natural gas sales | $(7,650,645) | $526,161 | | Average sales price (per Mcf) | $(1.61) | $0.11 | [Note 3 — Leases](index=20&type=page&id=Note%203%20%E2%80%94%20Leases) The company holds operating leases for office spaces and financing leases for vehicles, with operating lease liabilities totaling $2,207,249 and financing lease liabilities totaling $1,376,552 as of September 30, 2024, and operating lease expense increased due to additional office space | Metric | September 30, 2024 | December 31, 2023 | | :------------------------------------ | :------------------- | :------------------ | | Operating lease liability, total | $2,207,249 | $2,622,217 | | Financing lease liability, total | $1,376,552 | $1,862,584 | - The weighted average remaining term of operating leases was **3.66 years**, and for financing leases, it was **1.75 years** as of September 30, 2024[87](index=87&type=chunk)[88](index=88&type=chunk) | Metric | Nine Months Ended September 30, 2024 | Nine Months Ended September 30, 2023 | | :-------------------- | :----------------------------------- | :----------------------------------- | | Operating lease costs | $525,272 | $366,711 | [Note 4 — Earnings Per Share Information](index=22&type=page&id=Note%204%20%E2%80%94%20Earnings%20Per%20Share%20Information) Basic and diluted EPS for the three months ended September 30, 2024, were $0.17, a significant improvement from a loss of $(0.04) in the prior year, while for the nine months, basic and diluted EPS were $0.31, up from $0.29 and $0.28 respectively, with certain anti-dilutive securities excluded from calculations | Metric | For the Three Months Ended September 30, 2024 | For the Three Months Ended September 30, 2023 | | :-------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Basic Earnings (Loss) per Share | $0.17 | $(0.04) | | Diluted Earnings (Loss) per Share | $0.17 | $(0.04) | | Metric | For the Nine Months Ended September 30, 2024 | For the Nine Months Ended September 30, 2023 | | :-------------------------- | :------------------------------------------- | :------------------------------------------- | | Basic Earnings (Loss) per Share | $0.31 | $0.29 | | Diluted Earnings (Loss) per Share | $0.31 | $0.28 | - Antidilutive securities excluded from diluted EPS calculation for the nine months ended September 30, 2024, included **66,850 stock options**, **56,530 unvested restricted stock units**, and **1,198,361 unvested performance stock units**[95](index=95&type=chunk) [Note 5 — Acquisitions and Divestitures](index=23&type=page&id=Note%205%20%E2%80%94%20Acquisitions%20and%20Divestitures) The company completed several divestitures in 2023 and 2024, including Delaware Basin assets ($7.6 million cash), New Mexico assets ($3.6 million cash), Gaines County Texas properties ($1.4 million cash), and CBP vertical wells ($5.5 million cash), while the Founders Acquisition in August 2023 involved a total consideration of $61.9 million, primarily for oil and natural gas properties in the Central Basin Platform - Divestiture of Delaware Basin assets in May 2023 for approximately **$7.6 million cash**[98](index=98&type=chunk) **Founders Acquisition (August 2023) - Final Allocation of Total Cost:** | Item | Amount | | :--------------------------------- | :----------- | | Total consideration | $61,884,528 | | Oil and natural gas properties acquired | $64,886,472 | | Liabilities assumed (Suspense, ARO, Ad valorem tax) | $3,001,944 | - Divestiture of CBP vertical wells in September 2024 for **$5.5 million**, with the buyer assuming approximately **$2.7 million** in asset retirement obligations[104](index=104&type=chunk) [Note 6 — Derivative Financial Instruments](index=24&type=page&id=Note%206%20%E2%80%94%20Derivative%20Financial%20Instruments) Ring Energy uses derivative contracts (swaps, deferred premium puts, two-way collars) to manage exposure to crude oil (WTI) and natural gas (Henry Hub) price fluctuations, with gains/losses recognized in earnings as these are not designated as hedges, resulting in a net derivative asset of $8,646,693 as of September 30, 2024 - The Company uses derivative contracts (forward contracts, futures contracts, swaps, or options) to manage exposure to commodity price risk, specifically WTI crude oil and Henry Hub natural gas prices[105](index=105&type=chunk)[106](index=106&type=chunk) - Derivative instruments are not designated as hedges for accounting purposes; gains or losses are recognized in earnings as a component of 'Other Income' under 'Gain (loss) on derivative contracts'[109](index=109&type=chunk) | Metric | September 30, 2024 | December 31, 2023 | | :------------------------------------ | :------------------- | :------------------ | | Commodity Derivatives - Assets | $17,111,658 | $17,850,088 | | Commodity Derivatives - Liabilities | $(8,464,965) | $(19,030,704) | | Total | $8,646,693 | $(1,180,616) | [Note 7 — Fair Value Measurements](index=26&type=page&id=Note%207%20%E2%80%94%20Fair%20Value%20Measurements) The company measures derivative instruments at fair value on a recurring basis using a market approach, categorized as Level 2 in the fair value hierarchy due to observable market data, while non-financial assets and liabilities are subject to non-recurring fair value adjustments under specific circumstances, often categorized as Level 3 due to unobservable inputs - The fair values of the Company's derivative instruments are estimated using a market approach, utilizing commodity futures pricing from a reputable third party, categorized as a **Level 2 fair value measurement**[121](index=121&type=chunk) - Non-financial assets and liabilities are subject to fair value adjustments on a non-recurring basis, with inputs and assumptions often categorized as **Level 3** due to their unobservable nature[123](index=123&type=chunk)[33](index=33&type=chunk) [Note 8 — Revolving Line of Credit](index=28&type=page&id=Note%208%20%E2%80%94%20Revolving%20Line%20of%20Credit) The company's Second Credit Agreement has a borrowing base of $600 million, maturing in August 2026, with $392 million outstanding as of September 30, 2024, and the company was in compliance with all covenants, including maintaining hedging transactions for at least 50% of projected production and specific leverage and current asset ratios - The Second Credit Agreement has a borrowing base of **$600 million**, with **$392 million** outstanding as of September 30, 2024[128](index=128&type=chunk)[133](index=133&type=chunk) - The facility matures in **August 2026**, and the interest rate is based on the Secured Overnight Financing Rate (SOFR) plus a margin between **3.0% and 4.0%**[127](index=127&type=chunk)[131](index=131&type=chunk) - The Company was in compliance with all covenants as of September 30, 2024, including maintaining a total Leverage Ratio of not more than **3.0 to 1.0** and hedging transactions on not less than **50%** of projected production[132](index=132&type=chunk)[133](index=133&type=chunk) [Note 9 — Asset Retirement Obligation](index=29&type=page&id=Note%209%20%E2%80%94%20Asset%20Retirement%20Obligation) The asset retirement obligation (ARO) balance decreased to $26,232,994 as of September 30, 2024, from $28,248,084 at December 31, 2023, primarily due to liabilities sold and settled, partially offset by liabilities incurred and accretion expense, with revisions to estimates related to shorter estimated useful lives for plugging and abandonment | Metric | September 30, 2024 | December 31, 2023 | | :------------------------------------ | :------------------- | :------------------ | | Asset retirement obligations, total | $26,232,994 | $28,248,084 | - Key changes in ARO for the nine months ended September 30, 2024, included liabilities incurred (**$505,721**), liabilities sold (**$(3,219,651)**), liabilities settled (**$(492,167)**), and accretion expense (**$1,057,213**)[136](index=136&type=chunk) - Revisions of estimate for ARO were primarily related to shorter estimated useful lives regarding planned dates to plug and abandon assets[136](index=136&type=chunk) [Note 10 — Stockholders' Equity](index=30&type=page&id=Note%2010%20%E2%80%94%20Stockholders%27%20Equity) As of September 30, 2024, the company had 78,200 exercisable common warrants outstanding with an exercise price of $0.80 per warrant, with no common warrants exercised during the nine months ended September 30, 2024, while in April 2023, 14,512,166 common warrants were exercised at a reduced price of $0.62 per share, generating $8,997,543 in gross proceeds - As of September 30, 2024, there were **78,200 exercisable common warrants** outstanding with a contractual exercise price of **$0.80 per warrant**[139](index=139&type=chunk) - No common warrants were exercised during the nine months ended September 30, 2024[139](index=139&type=chunk) - In April 2023, **14,512,166 common warrants** were exercised at a reduced price of **$0.62 per share**, generating aggregate gross proceeds of **$8,997,543**[140](index=140&type=chunk) [Note 11 — Employee Stock Options and Restricted Stock Units](index=30&type=page&id=Note%2011%20%E2%80%94%20Employee%20Stock%20Options%20and%20Restricted%20Stock%20Units) Share-based compensation expense decreased significantly to $3,833,697 for the nine months ended September 30, 2024, from $6,374,743 in the prior year, with 65,500 stock options, 3,737,094 restricted stock units, and 2,537,054 performance stock units outstanding as of September 30, 2024, carrying unrecognized compensation costs of $2,925,708 and $4,353,631 respectively | Metric | Nine Months Ended September 30, 2024 | Nine Months Ended September 30, 2023 | | :-------------------------- | :----------------------------------- | :----------------------------------- | | Share-based compensation | $3,833,697 | $6,374,743 | - As of September 30, 2024, there were **65,500 stock options** outstanding, **3,737,094 restricted stock units** outstanding, and **2,537,054 performance stock units** outstanding[146](index=146&type=chunk)[147](index=147&type=chunk)[149](index=149&type=chunk) - Unrecognized compensation cost related to restricted stock unit grants was **$2,925,708** (weighted average period of **1.87 years**), and for performance stock unit awards was **$4,353,631** (weighted average period of **1.67 years**) as of September 30, 2024[147](index=147&type=chunk)[149](index=149&type=chunk) [Note 12 — Commitments and Contingencies](index=34&type=page&id=Note%2012%20%E2%80%94%20Commitments%20and%20Contingencies) As of September 30, 2024, the company had total standby letters of credit outstanding of $35,000 and total surety bonds of $2,275,000, with the standby letters of credit collateralized by the Credit Facility and the surety bonds including a $250,000 blanket performance bond and a $2,000,000 blanket plugging extension bond for Texas operations - Total standby letters of credit outstanding as of September 30, 2024, were **$35,000**[150](index=150&type=chunk) - Total surety bonds as of September 30, 2024, were **$2,275,000**, including a **$250,000** Texas Railroad Commission blanket performance bond and a **$2,000,000** blanket plugging extension bond[151](index=151&type=chunk) [Note 13 — Subsequent Events](index=35&type=page&id=Note%2013%20%E2%80%94%20Subsequent%20Events) The company reported no material subsequent events between September 30, 2024, and the issuance date of the condensed financial statements (November 6, 2024) - No material subsequent events to report between September 30, 2024, and November 6, 2024[152](index=152&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=36&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition and results, highlighting its focus on debt reduction, production growth in the Permian Basin, and strategic acquisitions, while also discussing market conditions, operational developments, and financial performance for the periods ended September 30, 2024 and 2023 - The Company is focused on balancing reduction of long-term debt and further developing its oil and gas properties to maintain or grow annual production[156](index=156&type=chunk) - Commodity prices for crude oil and natural gas continue to demonstrate volatility, and the Permian Basin has been experiencing a shortage of natural gas pipeline transportation, resulting in negative natural gas prices at times[168](index=168&type=chunk)[169](index=169&type=chunk) - Inflation has increased costs associated with the capital program and production operations since 2022, though service costs have remained flat or slightly decreased in 2024 due to muted industry activity[170](index=170&type=chunk) [Overview](index=36&type=page&id=Overview) Ring Energy, Inc. is a growth-oriented independent exploration and production company based in The Woodlands, Texas, primarily focused on oil and natural gas development, production, acquisition, and exploration activities in the Permian Basin of Texas, specifically targeting the Northwest Shelf and Central Basin Platform - Ring Energy is a growth-oriented independent exploration and production company[155](index=155&type=chunk) - Primary focus areas are the Northwest Shelf and Central Basin Platform in the Permian Basin of Texas[155](index=155&type=chunk) [Business Description and Plan of Operation](index=36&type=page&id=Business%20Description%20and%20Plan%20of%20Operation) The company's operational plan centers on reducing long-term debt through excess cash flow and non-core asset sales, while simultaneously growing production and reserves by developing its oil-rich resource base in the Permian Basin using advanced drilling and completion techniques, and pursuing strategic, accretive acquisitions that complement existing properties - The Company aims to balance reduction of long-term debt with developing oil and gas properties to maintain or grow annual production[156](index=156&type=chunk) - Debt reduction is primarily targeted through excess cash flow and potential sales of non-core assets[158](index=158&type=chunk) - The Company intends to grow production and reserves by developing its oil-rich resource base through conventional vertical and horizontal drilling in its Northwest Shelf and Central Basin Platform assets[157](index=157&type=chunk) - Strategic acquisitions with attractive upside potential are pursued to increase reserves and complement existing core properties[160](index=160&type=chunk) [2024 Developments and Highlights](index=37&type=page&id=2024%20Developments%20and%20Highlights) In the first nine months of 2024, Ring Energy actively engaged in drilling and completion activities across its Permian Basin assets, including drilling and completing 5 horizontal wells in the Northwest Shelf, 10 horizontal wells in the Central Basin Platform, and 15 vertical wells in the Central Basin Platform, along with one salt water disposal well, with two horizontal wells in Andrews County drilled but uncompleted as of September 30, 2024 **Drilling and Completion Activities (Nine Months Ended September 30, 2024):** | Area | Wells Drilled | Wells Completed | Drilled Uncompleted ("DUC") | | :---------------------------------- | :------------ | :-------------- | :---------------------------- | | Northwest Shelf (Horizontal) | 5 | 5 | — | | Central Basin Platform (Horizontal) | 12 | 10 | 2 | | Central Basin Platform (Vertical) | 15 | 15 | — | | Total (excluding SWD well) | 32 | 30 | 2 | - One salt water disposal (SWD) well was drilled and completed in Crane County (Central Basin Platform) in the first quarter of 2024[162](index=162&type=chunk) [Market Conditions and Commodity Prices](index=37&type=page&id=Market%20Conditions%20and%20Commodity%20Prices) The company's financial results are highly dependent on volatile crude oil and natural gas prices, which are influenced by global supply and demand, with the Permian Basin facing natural gas pipeline capacity shortages leading to negative natural gas prices, and inflation increasing operational costs, though service costs have recently stabilized or slightly decreased due to muted industry activity - Future commodity prices are unpredictable and will continue to be volatile, impacting drilling programs, production volumes, and revenues[167](index=167&type=chunk)[168](index=168&type=chunk) - The Permian Basin is experiencing natural gas pipeline transportation shortages, leading to negative natural gas prices at times, which negatively impacts natural gas revenues[169](index=169&type=chunk) - Inflation has increased costs for materials, supplies, equipment, and services since 2022, and rising interest rates have increased the cost of debt, however, 2024 service costs have remained flat or slightly decreased due to muted industry activity[170](index=170&type=chunk) [Results of Operations](index=39&type=page&id=Results%20of%20Operations) This section details the financial performance for the three and nine months ended September 30, 2024, compared to 2023, covering revenues, production costs, other operating expenses, other income/expense, and income taxes, with the company seeing improved net income driven by derivative gains, despite challenges in natural gas pricing **Net Income (Loss) Comparison:** | Period | September 30, 2024 | September 30, 2023 | | :------------------------------------ | :------------------- | :------------------- | | Three Months Ended | $33,878,424 | $(7,539,222) | | Nine Months Ended | $61,812,795 | $53,968,162 | [Oil, Natural Gas, and Natural Gas Liquids Revenues for the Three Months Ended September 30, 2024 and 2023](index=39&type=page&id=Oil%2C%20Natural%20Gas%2C%20and%20Natural%20Gas%20Liquids%20Revenues%20for%20the%20Three%20Months%20Ended%20September%2030%2C%202024%20and%202023) Total revenues decreased by 5% to $89.2 million, primarily due to a significant drop in natural gas prices to negative $(2.26) per Mcf, despite a 15% increase in total production (Boe), with oil sales volumes increasing by 10% but average oil prices decreasing by 9%, and NGL sales volumes increasing by 44% but average NGL prices decreasing by 32% **Net Sales (Three Months Ended September 30):** | Metric | 2024 | 2023 | Change | % Change | | :---------------- | :----------- | :----------- | :----- | :------- | | Oil | $90,416,363 | $90,392,004 | $24,359 | — % | | Natural gas | $(3,859,603) | $562,374 | $(4,421,977) | (786)% | | Natural gas liquids | $2,687,623 | $2,727,420 | $(39,797) | (1)% | | Total sales | $89,244,383 | $93,681,798 | $(4,437,415) | (5)% | **Net Production (Three Months Ended September 30):** | Metric | 2024 | 2023 | Change | % Change | | :--------------------------- | :--------- | :--------- | :----- | :------- | | Oil (Bbls) | 1,214,788 | 1,106,531 | 108,257 | 10% | | Natural gas (Mcf) | 1,705,027 | 1,567,104 | 137,923 | 9% | | Natural gas liquids (Bbls) | 350,975 | 243,142 | 107,833 | 44% | | Total production (Boe) | 1,849,934 | 1,610,857 | 239,077 | 15% | **Average Sales Price (Three Months Ended September 30):** | Metric | 2024 | 2023 | Change | % Change | | :-------------------- | :----- | :----- | :----- | :------- | | Oil (per Bbl) | $74.43 | $81.69 | $(7.26) | (9)% | | Natural gas (per Mcf) | $(2.26) | $0.36 | $(2.62) | (728)% | | Natural gas liquids (Bbl) | $7.66 | $11.22 | $(3.56) | (32)% | | Total per Boe | $48.24 | $58.16 | $(9.92) | (17)% | [Oil, Natural Gas, and Natural Gas Liquids Revenues for the Nine Months Ended September 30, 2024 and 2023](index=40&type=page&id=Oil%2C%20Natural%20Gas%2C%20and%20Natural%20Gas%20Liquids%20Revenues%20for%20the%20Nine%20Months%20Ended%20September%2030%2C%202024%20and%202023) Total revenues increased by 8% to $282.9 million, driven by a 10% increase in oil sales volume and a 28% increase in NGL sales volume, despite a significant decrease in natural gas prices to negative $(1.61) per Mcf, with average oil prices slightly increasing by 1% while NGL prices decreased by 22% **Net Sales (Nine Months Ended September 30):** | Metric | 2024 | 2023 | Change | % Change | | :---------------- | :----------- | :----------- | :----- | :------- | | Oil | $282,000,446 | $252,020,403 | $29,980,043 | 12% | | Natural gas | $(7,650,645) | $526,161 | $(8,176,806) | (2) NM | | Natural gas liquids | $8,537,067 | $8,566,719 | $(29,652) | 0% | | Total sales | $282,886,868 | $261,113,283 | $21,773,585 | 8% | **Net Production (Nine Months Ended September 30):** | Metric | 2024 | 2023 | Change | % Change | | :--------------------------- | :--------- | :--------- | :----- | :------- | | Oil (Bbls) | 3,673,356 | 3,325,323 | 348,033 | 10% | | Natural gas (Mcf) | 4,739,881 | 4,726,056 | 13,825 | — % | | Natural gas liquids (Bbls) | 919,225 | 715,832 | 203,393 | 28% | | Total production (Boe) | 5,382,561 | 4,828,831 | 553,730 | 11% | **Average Sales Price (Nine Months Ended September 30):** | Metric | 2024 | 2023 | Change | % Change | | :-------------------- | :----- | :----- | :----- | :------- | | Oil (per Bbl) | $76.77 | $75.79 | $0.98 | 1% | | Natural gas (per Mcf) | $(1.61) | $0.11 | $(1.72) | (2) NM | | Natural gas liquids (Bbl) | $9.29 | $11.97 | $(2.68) | (22)% | | Total per Boe | $52.56 | $54.07 | $(1.51) | (3)% | [Production Costs for the Three Months Ended September 30, 2024 and 2023](index=41&type=page&id=Production%20Costs%20for%20the%20Three%20Months%20Ended%20September%2030%2C%202024%20and%202023) Total lease operating expenses (LOE) increased by 13% to $20.3 million, primarily due to a 15% increase in production volume, though LOE per Boe slightly decreased, while gathering, transportation, and processing (GTP) costs increased significantly due to a specific contract, ad valorem taxes increased by 22%, and oil and natural gas production taxes decreased by 12% due to asset divestitures with higher tax rates **Production Costs (Three Months Ended September 30):** | Metric | 2024 | 2023 | Change | % Change | | :------------------------------------ | :----------- | :----------- | :----- | :------- | | Lease operating expenses ("LOE") | $20,315,282 | $18,015,348 | $2,299,934 | 13% | | Average LOE per Boe | $10.98 | $11.18 | $(0.20) | (2)% | | Gathering, transportation and processing costs ("GTP") | $102,420 | $(4,530) | $106,950 | (1) NM | | Ad valorem taxes | $2,164,562 | $1,779,163 | $385,399 | 22% | | Oil and natural gas production taxes | $4,203,851 | $4,753,289 | $(549,438) | (12)% | | Average Production taxes per Boe | $2.27 | $2.95 | $(0.68) | (23)% | | Production taxes as a percentage of total sales | 4.71% | 5.07% | (0.36)% | (7)% | [Production Costs for the Nine Months Ended September 30, 2024 and 2023](index=42&type=page&id=Production%20Costs%20for%20the%20Nine%20Months%20Ended%20September%2030%2C%202024%20and%202023) Total lease operating expenses (LOE) increased by 13% to $58.0 million, with LOE per Boe slightly increasing, gathering, transportation, and processing (GTP) costs increased significantly, ad valorem taxes increased by 10% mainly due to the Founders Acquisition, and oil and natural gas production taxes decreased by 7%, partly due to an accrual for estimated severance tax refunds **Production Costs (Nine Months Ended September 30):** | Metric | 2024 | 2023 | Change | % Change | | :------------------------------------ | :----------- | :----------- | :----- | :------- | | Lease operating expenses ("LOE") | $57,984,733 | $51,426,145 | $6,558,588 | 13% | | Average LOE per Boe | $10.77 | $10.65 | $0.12 | 1% | | Gathering, transportation and processing costs ("GTP") | $376,103 | $(6,985) | $383,088 | (1) NM | | Ad valorem taxes | $5,647,469 | $5,120,119 | $527,350 | 10% | | Oil and natural gas production taxes | $12,259,418 | $13,173,568 | $(914,150) | (7)% | | Average Production taxes per Boe | $2.28 | $2.73 | $(0.45) | (16)% | | Production taxes as a percentage of total sales | 4.33% | 5.05% | (0.72)% | (14)% | - The increase in ad valorem taxes was primarily due to the addition of Ector County properties acquired in the Founders Acquisition[189](index=189&type=chunk) - The decrease in oil and natural gas production taxes was partly due to an accrual of **$(0.9) million** for estimated severance tax refunds in May 2024[190](index=190&type=chunk) [Other Costs and Operating Expenses for the Three Months Ended September 30, 2024 and 2023](index=43&type=page&id=Other%20Costs%20and%20Operating%20Expenses%20for%20the%20Three%20Months%20Ended%20September%2030%2C%202024%20and%202023) Total depreciation, depletion, and amortization (DD&A) increased by 17% to $25.7 million, with DD&A per Boe increasing to $13.87, while general and administrative (G&A) expense decreased by 9% to $6.4 million, primarily due to a $2.1 million decrease in share-based compensation, despite increases in salaries, bonuses, and professional fees **Depreciation, Depletion and Amortization (DD&A) (Three Months Ended September 30):** | Metric | 2024 | 2023 | Change | % Change | | :------------------------------------ | :----------- | :----------- | :----- | :------- | | Total DD&A | $25,662,123 | $21,989,034 | $3,673,089 | 17% | | Depletion per Boe | $13.68 | $13.48 | $0.20 | 1% | | DD&A per Boe | $13.87 | $13.65 | $0.22 | 2% | **General and Administrative (G&A) Expense (Three Months Ended September 30):** | Metric | 2024 | 2023 | Change | % Change | | :------------------------------------ | :----------- | :----------- | :----- | :------- | | Total G&A expense | $6,421,567 | $7,083,574 | $(662,007) | (9)% | | Share-based compensation | $32,087 | $2,170,735 | $(2,138,648) | (99)% | | G&A per Boe | $3.47 | $4.40 | $(0.93) | (21)% | - Operating lease expense increased from **$138,220** to **$175,091** due to additional office space leased in The Woodlands office expansion[192](index=192&type=chunk) [Other Costs and Operating Expenses for the Nine Months Ended September 30, 2024 and 2023](index=44&type=page&id=Other%20Costs%20and%20Operating%20Expenses%20for%20the%20Nine%20Months%20Ended%20September%2030%2C%202024%20and%202023) Total depreciation, depletion, and amortization (DD&A) increased by 16% to $74.2 million, with DD&A per Boe increasing to $13.78, while general and administrative (G&A) expense increased by 3% to $21.6 million, driven by higher salaries, bonuses, and professional fees, partially offset by a $2.5 million decrease in share-based compensation **Depreciation, Depletion and Amortization (DD&A) (Nine Months Ended September 30):** | Metric | 2024 | 2023 | Change | % Change | | :------------------------------------ | :----------- | :----------- | :----- | :------- | | Total DD&A | $74,153,994 | $64,053,637 | $10,100,357 | 16% | | Depletion per Boe | $13.57 | $13.09 | $0.48 | 4% | | DD&A per Boe | $13.78 | $13.26 | $0.52 | 4% | **General and Administrative (G&A) Expense (Nine Months Ended September 30):** | Metric | 2024 | 2023 | Change | % Change | | :------------------------------------ | :----------- | :----------- | :----- | :------- | | Total G&A expense | $21,604,323 | $21,023,956 | $580,367 | 3% | | Share-based compensation | $3,833,697 | $6,374,743 | $(2,541,046) | (40)% | | G&A per Boe | $4.01 | $4.35 | $(0.34) | (8)% | - Operating lease expense increased from **$366,711** to **$525,272** due to additional office space leased in The Woodlands office[195](index=195&type=chunk) [Other Income (Expense) for the Three Months Ended September 30, 2024 and 2023](index=45&type=page&id=Other%20Income%20%28Expense%29%20for%20the%20Three%20Months%20Ended%20September%2030%2C%202024%20and%202023) Net other income was $14.1 million, a significant improvement from a net expense of $(50.5) million in the prior year, primarily driven by a $64.0 million swing in derivative contracts from a loss to a gain, and a decrease in interest expense due to lower outstanding debt **Other Income (Expense) (Three Months Ended September 30):** | Metric | 2024 | 2023 | Change | % Change | | :------------------------------------ | :----------- | :----------- | :----- | :------- | | Interest income | $143,704 | $80,426 | $63,278 | 79% | | Total interest expense | $10,754,243 | $11,381,754 | $(627,511) | (6)% | | Total gain (loss) on derivative contracts | $24,731,625 | $(39,222,755) | $63,954,380 | (163)% | - The reduction in realized loss on derivative contracts was a result of more favorable settlements of crude oil derivative contracts during the current year[200](index=200&type=chunk) - The change in unrealized gain/loss on derivative contracts was primarily due to changes in crude oil futures prices[200](index=200&type=chunk) [Other Income (Expense) for the Nine Months Ended September 30, 2024 and 2023](index=46&type=page&id=Other%20Income%20%28Expense%29%20for%20the%20Nine%20Months%20Ended%20September%2030%2C%202024%20and%202023) Net other expense decreased to $(28.8) million from $(58.7) million in the prior year, primarily due to a $30.4 million swing in derivative contracts from a loss to a gain, and increased interest income, with interest expense slightly increasing due to higher interest rates despite lower average debt **Other Income (Expense) (Nine Months Ended September 30):** | Metric | 2024 | 2023 | Change | % Change | | :------------------------------------ | :----------- | :----------- | :----- | :------- | | Interest income | $367,181 | $160,171 | $207,010 | 129% | | Total interest expense | $33,199,314 | $32,322,840 | $876,474 | 3% | | Total gain (loss) on derivative contracts | $3,888,531 | $(26,483,190) | $30,371,721 | (115)% | | Gain (loss) on disposal of assets | $89,693 | $(132,109) | $221,802 | (168)% | | Other income | $25,686 | $126,210 | $(100,524) | (80)% | - The increase in interest expense was primarily due to higher interest rates (**9.3% in 2024 vs. 8.7% in 2023**), partially offset by lower average outstanding debt on the Credit Facility[202](index=202&type=chunk) - The change in unrealized derivatives was primarily due to changes in crude oil futures prices on derivative contracts[204](index=204&type=chunk) [Benefit from (Provision for) Income Taxes for the Three Months Ended September 30, 2024 and 2023](index=47&type=page&id=Benefit%20from%20%28Provision%20for%29%20Income%20Taxes%20for%20the%20Three%20Months%20Ended%20September%2030%2C%202024%20and%202023) The company recorded an income tax provision of $10.1 million for the three months ended September 30, 2024, a significant change from a $3.4 million benefit in the prior year, with this shift calculated using the annual effective tax rate method based on estimated earnings and applicable tax laws **Benefit from (Provision for) Income Taxes (Three Months Ended September 30):** | Metric | 2024 | 2023 | Change | % Change | | :------------------------------------ | :----------- | :----------- | :----- | :------- | | Benefit from (Provision for) Income Taxes | $(10,087,954) | $3,411,336 | $(13,499,290) | (396)% | [Benefit from (Provision for) Income Taxes for the Nine Months Ended September 30, 2024 and 2023](index=47&type=page&id=Benefit%20from%20%28Provision%20for%29%20Income%20Taxes%20for%20the%20Nine%20Months%20Ended%20September%2030%2C%202024%20and%202023) The company recorded an income tax provision of $18.6 million for the nine months ended September 30, 2024, a significant change from a $7.7 million benefit in the prior year, reflecting the annual effective tax rate method applied to estimated earnings and tax obligations for 2024 **Benefit from (Provision for) Income Taxes (Nine Months Ended September 30):** | Metric | 2024 | 2023 | Change | % Change | | :------------------------------------ | :----------- | :----------- | :----- | :------- | | Benefit from (Provision for) Income Taxes | $(18,637,325) | $7,737,688 | $(26,375,013) | (341)% | [Liquidity and Capital Resources](index=48&type=page&id=Liquidity%20and%20Capital%20Resources) As of September 30, 2024, the company had no cash on hand, aiming to minimize outstanding debt, with net cash provided by operating activities increasing to $147.1 million for the nine months ended September 30, 2024, while net cash used in investing activities decreased to $113.2 million due to fewer large acquisition payments, and net cash used in financing activities was $34.3 million, including a $33 million net paydown on the Credit Facility, as the company plans to maximize cash flow, reduce debt, and pursue high-return projects and accretive acquisitions - Cash on hand was **$0.0 million** as of September 30, 2024, compared to **$0.3 million** as of December 31, 2023, reflecting a strategy to minimize outstanding debt[210](index=210&type=chunk) **Cash Flow Summary (Nine Months Ended September 30):** | Metric | 2024 | 2023 | | :------------------------------------ | :----------- | :----------- | | Net cash provided by operating activities | $147.1 million | $142.4 million | | Net cash used in investing activities | $113.2 million | $170.9 million | | Net cash used in financing activities | $34.3 million | N/A | - Net cash used in financing activities for the nine months ended September 30, 2024, included a **$33 million** net paydown of principal on the revolving line of credit[210](index=210&type=chunk) [Availability of Capital Resources under Credit Facility](index=48&type=page&id=Availability%20of%20Capital%20Resources%20under%20Credit%20Facility) As of September 30, 2024, the company had $392 million outstanding on its $600 million Credit Facility, which matures in August 2026, with the borrowing base redetermined semi-annually, and the company was in compliance with all covenants - As of September 30, 2024, **$392 million** was outstanding on the Credit Facility, which has a borrowing base of **$600 million** and matures in **August 2026**[213](index=213&type=chunk) - The Company was in compliance with all covenants under the Credit Facility as of September 30, 2024[213](index=213&type=chunk) [Derivative Financial Instruments](index=48&type=page&id=Derivative%20Financial%20Instruments) The company uses derivative contracts (swaps, deferred premium puts, two-way collars) to manage commodity price risk for oil (WTI) and natural gas (Henry Hub), with these instruments recorded at fair value and gains or losses recognized in earnings, and all derivative instruments are with lenders under the Credit Facility, mitigating counterparty risk - The Company utilizes swaps, deferred premium puts, and two-way collars for oil (WTI) and natural gas (Henry Hub) to manage commodity price risk[214](index=214&type=chunk)[216](index=216&type=chunk) - Derivative financial instruments are recorded at fair value, and any gains or losses are recognized in earnings as a component of Other Income (Expense)[218](index=218&type=chunk) - All derivative instruments are with lenders under the Credit Facility, which helps manage counterparty risk[219](index=219&type=chunk) [Effects of Inflation and Pricing](index=49&type=page&id=Effects%20of%20Inflation%20and%20Pricing) The oil and natural gas industry is cyclical, with commodity price volatility directly impacting revenues, reserve estimates, borrowing base calculations, and property values, and inflation has historically increased associated costs, with the company anticipating business costs will continue to vary with commodity prices and demand for services - The oil and natural gas industry is cyclical, and commodity price volatility significantly impacts revenue, reserve estimates, borrowing base calculations, and property values[220](index=220&type=chunk) - As prices for oil and natural gas increase, associated costs typically also increase[220](index=220&type=chunk) [Off-Balance Sheet Financing Arrangements](index=49&type=page&id=Off-Balance%20Sheet%20Financing%20Arrangements) As of September 30, 2024, the company had no off-balance sheet financing arrangements - The Company had no off-balance sheet financing arrangements as of September 30, 2024[221](index=221&type=chunk) [Capital Resources for Future Acquisition and Development Opportunities](index=49&type=page&id=Capital%20Resources%20for%20Future%20Acquisition%20and%20Development%20Opportunities) The company continuously evaluates potential acquisitions and development opportunities, focusing on lower-risk producing properties, with acquiring new properties being highly competitive and potentially requiring substantial capital through debt or equity sales, involving various costs such as consulting, engineering, and legal fees, and with no assurance that additional acquisitions will be consummated - The Company continuously evaluates potential acquisitions and development opportunities, prioritizing lower-risk producing properties with undeveloped drilling opportunities[222](index=222&type=chunk) - Acquiring additional properties is highly competitive and may require substantial capital, potentially through short-term or long-term debt or equity sales[223](index=223&type=chunk) - Costs associated with acquisitions include fees for consultants, investment bankers, petroleum engineering reports, legal services, and accounting, with no assurance that acquisitions will be consummated[225](index=225&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=51&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to market risks primarily from commodity price volatility for oil and natural gas, customer credit risk from receivables, and interest rate risk on its variable-rate Credit Facility, with hedging arrangements used to reduce commodity price uncertainty and customer credit risk concentrated among a few major purchasers - Major market risk exposures include commodity price risk (oil and natural gas), customer credit risk, and interest rate risk on the Credit Facility[227](index=227&type=chunk) - The Company uses crude oil and natural gas price hedging arrangements to reduce commodity price uncertainty and increase cash flow predictability[228](index=228&type=chunk) [Commodity Price Risk](index=51&type=page&id=Commodity%20Price%20Risk) The company's primary market risk is exposure to volatile crude oil and natural gas prices, which are influenced by external factors, with significant price decreases materially impacting financial condition and results, and hedging arrangements used to mitigate this risk and increase cash flow predictability - The major market risk exposure is in the pricing applicable to oil and natural gas production, which is volatile and unpredictable[227](index=227&type=chunk) - To reduce commodity price uncertainty, the Company enters into crude oil and natural gas price hedging arrangements for a portion of its expected production[228](index=228&type=chunk) [Customer Credit Risk](index=51&type=page&id=Customer%20Credit%20Risk) The company's main credit risk stems from receivables from oil and natural gas sales, totaling approximately $32.5 million as of September 30, 2024, with this risk concentrated among a few significant customers, including Phillips 66 Company, Concord Energy LLC, and LPC Crude III, LLC, accounting for 61%, 14%, and 13% of revenues, respectively, for the nine months ended September 30, 2024 - Principal exposure to credit risk is through receivables from the sale of oil and natural gas production, approximately **$32.5 million** as of September 30, 2024[229](index=229&type=chunk) **Top Three Purchasers (Nine Months Ended September 30, 2024):** | Purchaser | Percentage of Oil, Natural Gas, and NGL Revenues | Percentage of Accounts Receivables | | :-------------------------- | :----------------------------------------------- | :--------------------------------- | | Phillips 66 Company | 61% | 69% | | Concord Energy LLC | 14% | 11% | | LPC Crude III, LLC | 13% | 13% | [Interest Rate Risk](index=51&type=page&id=Interest%20Rate%20Risk) The company is exposed to interest rate risk due to its variable-rate Credit Facility, which had $392 million outstanding as of September 30, 2024, at a weighted average annual interest rate of 9.3%, where a 1% change in this rate would result in an estimated $3.9 million change in annual interest expense, and the company does not currently use interest rate derivative instruments - The Company is subject to market risk exposure related to changes in interest rates on its Credit Facility, which bears variable interest[231](index=231&type=chunk) - As of September 30, 2024, **$392 million** was outstanding on the Credit Facility, with a weighted average annual interest rate of **9.3%** for the nine months ended September 30, 2024[232](index=232&type=chunk) - A **1%** change in the interest rate on the Credit Facility would result in an estimated **$3.9 million** change in annual interest expense[232](index=232&type=chunk) [Currency Exchange Rate Risk](index=52&type=page&id=Currency%20Exchange%20Rate%20Risk) The company has no exposure to foreign currency exchange rate risk as foreign sales account for none of its total sales, and all commodity sales payments are accepted only in U.S. dollars - Foreign sales accounted for none of the Company's sales, and payments for commodity sales are accepted only in U.S. dollars[235](index=235&type=chunk) - Ring is not exposed to foreign currency exchange rate risk[235](index=235&type=chunk) [Item 4. Controls and Procedures](index=52&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the effectiveness of disclosure controls and procedures as of September 30, 2024, concluding they were effective in ensuring timely and accurate reporting, with no material changes in internal control over financial reporting occurring during the quarter - Management concluded that disclosure controls and procedures were effective as of September 30, 2024, ensuring timely and accurate reporting of information required by the Exchange Act[237](index=237&type=chunk) - No changes in internal control over financial reporting occurred during the three months ended September 30, 2024, that materially affected, or are reasonably likely to materially affect, internal control over financial reporting[240](index=240&type=chunk) [Evaluation of disclosure controls and procedures](index=52&type=page&id=Evaluation%20of%20disclosure%20controls%20and%20procedures) The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of September 30, 2024, ensuring that information required for SEC reports is recorded, processed, summarized, and reported accurately and on time, with management acknowledging that controls provide reasonable, not absolute, assurance - The principal executive officer and principal financial officer evaluated the effectiveness of disclosure controls and procedures, concluding they were effective as of September 30, 2024[237](index=237&type=chunk) - Disclosure controls and procedures ensure information required for Exchange Act reports is recorded, processed, summarized, and reported within specified time periods[237](index=237&type=chunk) [Changes in internal control over financial reporting](index=52&type=page&id=Changes%20in%20internal%20control%20over%20financial%20reporting) The company continuously reviews and adjusts its internal control system to improve efficiency and maintain an effective control environment, with no changes in internal control over financial reporting occurring during the three months ended September 30, 2024, that materially affected or are reasonably likely to materially affect it - The Company regularly reviews and makes changes to its system of internal control over financial reporting to improve controls and increase efficiency[239](index=239&type=chunk) - There were no changes in internal control over financial reporting during the three months ended September 30, 2024, that materially affected or are reasonably likely to materially affect it[240](index=240&type=chunk) PART II — OTHER INFORMATION [Item 1. Legal Proceedings](index=52&type=section&id=Item%201.%20Legal%20Proceedings) There were no material developments in legal proceedings during the quarter ended September 30, 2024, as described in the Annual Report on Form 10-K for the year ended December 31, 2023 - No material developments in legal proceedings occurred during the quarter ended September 30, 2024[241](index=241&type=chunk) [Item 1A. Risk Factors](index=52&type=page&id=Item%201A.%20Risk%20Factors) The company is subject to various business risks and hazards, as detailed in Item 1A of its Annual Report on Form 10-K for the year ended December 31, 2023, with future developments potentially introducing additional risks or elevating currently immaterial conditions to materially adverse effects on the business - The Company is subject to certain risks and hazards discussed in Item 1A of its Annual Report on Form 10-K for the year ended December 31, 2023[242](index=242&type=chunk) - Additional risks and uncertainties not currently known, or conditions currently deemed immaterial, may materially and adversely affect the business in the future[242](index=242&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=53&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities or use of proceeds during the quarter ended September 30, 2024 - None[243](index=243&type=chunk) [Item 3. Defaults Upon Senior Securities](index=53&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities during the quarter ended September 30, 2024 - None[243](index=243&type=chunk) [Item 4. Mine Safety Disclosures](index=53&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) The company reported no mine safety disclosures during the quarter ended September 30, 2024 - None[243](index=243&type=chunk) [Item 5. Other Information](index=53&type=section&id=Item%205.%20Other%20Information) During the quarter ended September 30, 2024, none of the company's directors or officers adopted, terminated, or modified any Rule 10b5-1 trading arrangements or non-Rule 10b5-1 trading arrangements - None of the Company's directors or officers adopted, terminated, or modified a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement during the quarter ended September 30, 2024[244](index=244&type=chunk) [Item 6. Exhibits](index=53&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Quarterly Report on Form 10-Q, including certifications by the CEO and CFO (Rule 13a-14(a) and Section 1350) and Inline XBRL Taxonomy Extension documents - Exhibits include Rule 13a-14(a) Certifications by the Chief Executive Officer and Chief Financial Officer[245](index=245&type=chunk) - Exhibits include Section 1350 Certifications by the Chief Executive Officer and Chief Financial Officer[245](index=245&type=chunk) - Exhibits include Inline XBRL Taxonomy Extension Schema, Calculation, Definition, Label, and Presentation Linkbase Documents[245](index=245&type=chunk) [SIGNATURES](index=54&type=section&id=SIGNATURES) The report is duly signed on November 6, 2024, by Paul D. McKinney, Chief Executive Officer, and Travis T. Thomas, Chief Financial Officer, authorizing its submission - The report was signed by Paul D. McKinney, Chief Executive Officer, and Travis T. Thomas, Chief Financial Officer[247](index=247&type=chunk) - Date of signing: November 6, 2024[247](index=247&type=chunk)