Ring Energy(US:REI)2025-11-07 21:35Financial Performance - Ring Energy generated $13.9 million of Adjusted Free Cash Flow in Q3 2025, maintaining cash flow positivity for 24 consecutive quarters[3] - The company reported a net loss of $51.6 million, including $72.9 million of non-cash ceiling test impairment charges, with Adjusted Net Income of $13.1 million[4] - Oil, natural gas, and natural gas liquids revenues for Q3 2025 were $78.6 million, a decrease of 5.5% from $82.6 million in Q2 2025 and a decrease of 12% from $89.2 million in Q3 2024[18] - Net loss for Q3 2025 was $51.6 million, compared to a net income of $20.6 million in Q2 2025 and $33.9 million in Q3 2024[18] - Basic earnings per share for Q3 2025 were $(0.25), compared to $0.10 in Q2 2025 and $0.17 in Q3 2024[18] - Adjusted Net Income for Q3 2025 was $13.12 million, or $0.06 per diluted share, compared to $10.98 million, or $0.05 per diluted share in Q2 2025[34] - Adjusted EBITDA for Q3 2025 was $47.73 million, with an Adjusted EBITDA margin of 61%[37] - Adjusted EBITDA for Q3 2025 was $47,728,721, down from $51,458,788 in Q2 2025 and down from $54,010,932 in Q3 2024[40] Sales and Production - Average daily sales volumes were 20,789 Boe/d, a 3% increase compared to Q3 2024, while crude oil sales were 13,332 Bo/d, a 1% increase year-over-year[5] - Average daily oil sales volumes for Q3 2025 were 13,332 Bbls/d, a decrease from 14,511 Bbls/d in Q2 2025 and 13,204 Bbls/d in Q3 2024[20] - The percentage of oil in total sales volumes for Q3 2025 was 64%, down from 68% in Q2 2025 and 66% in Q3 2024[20] - Total net sales volumes for Q3 2025 were 1,912,611 Boe, slightly down from 1,937,850 Boe in Q2 2025 and up from 1,849,934 Boe in Q3 2024[20] - For Q4 2025, the company projects total oil sales volumes between 12,700 and 13,600 Bo/d, with a midpoint of 13,150 Bo/d[11] Expenses and Costs - Total costs and operating expenses for Q3 2025 were $133.6 million, significantly higher than $59.1 million in Q2 2025 and $59.4 million in Q3 2024[18] - Lease Operating Expense (LOE) was $10.73 per Boe, 2% below the low end of guidance, reflecting ongoing cost reduction efforts[4] - General and Administrative Expense (G&A) for Q3 2025 was $8,139,771, an increase from $7,138,519 in Q2 2025 and $6,421,567 in Q3 2024[44] - G&A excluding share-based compensation for Q3 2025 was $6,521,171, compared to $5,786,680 in Q2 2025 and $6,389,480 in Q3 2024[44] - All-in cash operating costs for the three months ended September 30, 2025, were $42,743,297, with a per Boe cost of $22.35[58] - Cash operating margin per Boe for the three months ended September 30, 2025, was $18.75, compared to $21.12 for the same period in 2024[61] Capital Expenditures and Guidance - Capital expenditures for Q3 2025 were $24.6 million, below the midpoint of guidance, and the company plans to reduce capital spending by 36% year-over-year[4] - The full-year capital spending guidance is set at $92 to $102 million, with a midpoint of $97 million, allocating 60% for drilling and completion activities[12] - Capital expenditures for Q3 2025 totaled $24,589,282, compared to $16,827,513 in Q2 2025 and $42,691,163 in Q3 2024[40] Impairments and Non-Cash Charges - The company recorded a non-cash impairment charge of $72.9 million due to a decrease in average commodity pricing, which had no impact on cash flows[8] - The company reported a ceiling test impairment of $72.9 million in Q3 2025, with no impairments reported in Q2 2025[18] - The company incurred a ceiling test impairment of $72.91 million during the three months ended September 30, 2025[25] - Total non-cash charges acceptable to the Administrative Agent amounted to $(29,695,076) for the three months ended September 30, 2025[55] Liquidity and Debt - The company exited Q3 2025 with $157.3 million in liquidity, having paid down $20 million of debt, exceeding guidance by $2 million[4] - Cash and cash equivalents decreased to $286,907 from $1.87 million at the end of the previous year, indicating a significant decline in liquidity[25] - The company reported a consolidated total debt of $440,277,655, with a leverage ratio of 2.10 as of September 30, 2025[53] - The revolving line of credit increased to $428 million from $385 million, indicating a rise of about 11.1%[23] - The leverage ratio as of September 30, 2024, was 1.59, well below the maximum allowed of 3.00x[55] Shareholder Information - The company has a total of 206,688,003 diluted weighted-average shares outstanding as of Q3 2025[34] - Total stockholders' equity decreased to $847.66 million from $858.64 million, a decline of approximately 1.3%[23] - Share-based compensation for the three months ended September 30, 2025, was $2,458,682[55] Hedging Activities - The company has hedged 241,755 barrels of oil for Q4 2025 at a weighted average swap price of $65.56 per barrel[27] - The company has hedged 84,300 MMBtu of natural gas for Q4 2025 at a weighted average swap price of $4.25 per MMBtu[27] - The total hedged volume for oil in Q1 2026 is 608,350 barrels at a weighted average swap price of $67.95 per barrel[27] Operational Efficiency - Ring Energy drilled and completed five wells in Q3 2025, maintaining a focus on operational efficiency and capital discipline[9]