Ring Energy(US:REI)2025-11-06 22:00Financial Performance - Total revenues for the three months ended September 30, 2025, were $78.6 million, a decrease of 12% compared to $89.2 million for the same period in 2024[17]. - Net income for the three months ended September 30, 2025, was a loss of $51.6 million, compared to a net income of $33.9 million for the same period in 2024[17]. - For the nine months ended September 30, 2025, the net income was a loss of $21,885,905 compared to a net income of $61,812,795 for the same period in 2024[21]. - The company reported a net loss of $51.63 million compared to a net income of $33.88 million for the same period in 2024[93]. - For the three months ended September 30, 2025, oil, natural gas, and natural gas liquids revenues were $78,601,336, a decrease from $89,244,383 in the same period of 2024[144]. - Oil revenues decreased by $11.5 million, or 13%, from $90.4 million to $78.9 million, primarily due to a price variance of $(12.4) million from a decrease in the average realized price per barrel from $74.43 to $64.32[168]. - For the nine months ended September 30, 2025, total sales decreased by approximately $42.6 million, or 15%, to $240.3 million compared to $282.9 million in 2024[171]. Assets and Liabilities - Total current assets increased to $55.8 million as of September 30, 2025, compared to $50.4 million as of December 31, 2024, reflecting a growth of 10%[15]. - The company's total assets reached $1.43 billion as of September 30, 2025, up from $1.41 billion as of December 31, 2024[15]. - Total liabilities increased to $587.0 million as of September 30, 2025, compared to $549.5 million as of December 31, 2024, marking an increase of 7%[15]. - The company’s retained earnings decreased to $36.1 million as of September 30, 2025, down from $58.0 million as of December 31, 2024[15]. - The company’s total stockholders' equity was $847.7 million as of September 30, 2025, compared to $858.6 million as of December 31, 2024[15]. Cash Flow and Investments - Cash provided by operating activities for the nine months ended September 30, 2025, was $106,160,584, down from $147,144,031 in 2024[21]. - Total cash used in investing activities for the nine months ended September 30, 2025, was $144,231,398, compared to $113,166,061 in 2024[21]. - The cash at the end of the period for September 30, 2025, was $286,907, compared to no cash at the end of the period in 2024[21]. - The company reported cash paid for interest of $23,559,423 for the nine months ended September 30, 2025, down from $30,208,974 in 2024[23]. Impairments and Expenses - The company reported a ceiling test impairment of $72.9 million for the three months ended September 30, 2025[17]. - The Company recorded impairments on oil and natural gas properties of $72,912,330 for both the three and nine months ended September 30, 2025, due to lower oil prices impacting the present value of estimated future net revenues[54]. - General and administrative expenses increased by approximately $2.3 million from $21.6 million to $23.9 million, driven by higher salaries and bonuses[193]. - The depletion expense for the three months ended September 30, 2025, was $24,902,199, with a depletion rate of $13.02 per barrel-of-oil-equivalent[52]. Derivative Instruments and Hedging - The company utilized derivative strategies to manage cash flow variability associated with future oil and natural gas production[101]. - The company recorded a current state income tax provision of $(39,816) for the three months ended September 30, 2025, compared to $(74,899) in 2024[67]. - The total gain or loss on derivative contracts is reflected as an adjustment to net cash provided by operating activities[75]. - The company recorded a gain on derivative contracts of $14.2 million for the nine months ended September 30, 2025, compared to a gain of $3.9 million for the same period in 2024[201]. Operational Activities - The company drilled and completed three 1-mile horizontal wells in the Northwest Shelf and multiple vertical wells in the Central Basin Platform, demonstrating ongoing operational activity and resource development[156][157][158]. - The company plans to reduce long-term debt primarily through excess cash flow and potential sales of non-core assets, aiming to strengthen its balance sheet[153][154]. - The company intends to employ industry-leading drilling and completion techniques to maximize returns and build future development opportunities[154]. Tax Provisions - The provision for income taxes changed from a provision of $10.1 million for the three months ended September 30, 2024, to a benefit of $12.8 million for the same period in 2025, representing a change of $22.9 million or 227%[203]. - For the nine months ended September 30, 2025, the provision for income taxes changed from a provision of $18.6 million in 2024 to a benefit of $3.7 million in 2025, reflecting a change of $22.3 million or 120%[204]. Future Outlook - The Company expects ongoing oil price volatility, which could materially impact oil revenue, although hedge contracts provide some mitigation[33]. - The company aims to maximize cash flow in 2025 through cost monitoring and prudent capital allocation, focusing on high-return projects in the current commodity price environment[206]. - The company is actively pursuing acquisitions and business combinations to enhance its portfolio with high-margin properties[206].