Ring Energy, Inc. (NYSE American: REI) (“Ring” or the “Company”)
today reported operational and financial results for third quarter
2024 and provided an outlook for the fourth quarter and updated
guidance for the full year.
Third Quarter 2024
Highlights
- Produced record sales of 20,108 barrels of oil equivalent per
day (“Boe/d”) (66% oil) exceeding the high end of guidance;
- Oil sales were 13,204 Bo/d which were within guidance;
- Reported net income of $33.9 million, or $0.17 per diluted
share, and Adjusted Net Income1 of $13.4 million, or $0.07 per
diluted share;
- Incurred Lease Operating Expense (“LOE”) of $10.98 per Boe,
near the midpoint of guidance;
- Recorded Adjusted EBITDA1 of $54.0 million;
- Divested non-core vertical wells and associated facilities in
the Central Basin Platform for $5.5 million with a valuation of
approximately 5.6 times estimated next twelve months cash
flow2;
- Guidance updated to reflect the impact of the divestiture;
- Successful development campaign resulted in capital spending of
$42.7 million (guidance was $35 million to $45 million) with 13
wells drilled and 11 wells completed and placed on production
during the quarter;
- Generated third quarter Adjusted Free Cash Flow1 of $1.9
million;
- Remained cash flow positive for the 20th consecutive
quarter;
- Ended the period with $392.0 million in outstanding borrowings
on the Company’s credit facility, reflecting a paydown of $15.0
million during the third quarter, $33.0 million YTD; and
- Increased liquidity to a record $208.0 million and Leverage
Ratio3 remained at 1.59x as of September 30, 2024.
Mr. Paul D. McKinney, Chairman of the Board and
Chief Executive Officer, commented, “Our strong performance during
the third quarter is a direct reflection of the Company’s
commitment to its stockholders and — more specifically — the
successful execution of our drilling and completion program and
continued focus on reducing our all-in cash operating costs by our
team of experienced professionals. Complementing this performance
was the divestiture of non-core vertical assets in the Central
Basin Platform (CBP). When combined with the cash flow from
operations, we were able to reduce debt by another $15 million
during the period, reducing our debt to $392 million. We believe it
is important to point out that our debt at the end of the third
quarter was $5 million less than debt we had at the end of the
quarter prior to closing the Founders acquisition last year, yet
our production is higher by over 2,800 Boe/d, enhancing our ability
to accelerate further debt reduction in the future.”
Mr. McKinney concluded, “As we look to the
remainder of the fourth quarter and into 2025, we believe we are
well positioned for continued success and further debt reduction as
we remain squarely focused on our strategy of maximizing cash flow
generation. As you know, further debt reduction over the coming
quarters will be subject to commodity prices. If future oil prices
are consistently lower than recent averages, we will pull back
capital to maintain production in favor of our ongoing focus on
debt reduction. Regarding our guidance, we have updated our full
year 2024 guidance to reflect only the recent divestiture of
non-core vertical assets. Our existing assets continue to meet or
exceed expectations. Regarding our capital spending program during
the fourth quarter, we look forward to the results of testing new
opportunities designed to unlock new producing zones on our
existing acreage. These investments represent a new phase of
potential inventory growth for our Company through seeking to
identify and develop new hydrocarbon resources organically.
Although we are adding organic inventory growth as another strategy
to create value, we will continue to pursue strategic, accretive
and balance sheet enhancing acquisitions as our primary source of
production and reserves growth. As in the past, we will maintain
the discipline associated with enhancing our balance sheet and
profitably achieving the size and scale designed to drive long-term
value for our stockholders. Thank you for your continued
support.”
Summary Results
|
|
Quarter |
Year to Date |
|
|
Q3 2024 |
Q2 2024 |
Q3 2024 to Q2 2024 % Change |
Q3 2023 |
Q3 2024 to Q3 2023 % Change |
YTD 2024 |
YTD 2023 |
YTD % Change |
|
Average Daily Sales Volumes (Boe/d) |
20,108 |
19,786 |
2% |
17,509 |
15% |
19,644 |
17,688 |
11% |
|
Crude Oil (Bo/d) |
13,204 |
13,623 |
(3)% |
12,028 |
10% |
13,406 |
12,181 |
10% |
| Net Sales
(MBoe) |
1,849.9 |
1,800.6 |
3% |
1,610.9 |
15% |
5,382.6 |
4,828.8 |
11% |
| Realized
Price - All Products ($/Boe) |
$48.24 |
$55.06 |
(12)% |
$58.16 |
(17)% |
$52.56 |
$54.07 |
(3)% |
|
Realized Price - Crude Oil ($/Bo) |
$74.43 |
$80.09 |
(7)% |
$81.69 |
(9)% |
$76.77 |
$75.79 |
1% |
| Revenues
($MM) |
$89.2 |
$99.1 |
(10)% |
$93.7 |
(5)% |
$282.9 |
$261.1 |
8% |
| Net
Income ($MM) |
$33.9 |
$22.4 |
51% |
$(7.5) |
549% |
$61.8 |
$54.0 |
15% |
| Adjusted
Net Income1 ($MM) |
$13.4 |
$23.4 |
(43)% |
$26.3 |
(49)% |
$57.2 |
$79.3 |
(28)% |
| Adjusted
EBITDA1 ($MM) |
$54.0 |
$66.4 |
(19)% |
$58.6 |
(8)% |
$182.4 |
$170.6 |
7% |
| Capital
Expenditures ($MM) |
$42.7 |
$35.4 |
21% |
$42.4 |
1% |
$114.3 |
$113.2 |
1% |
|
Adjusted Free Cash Flow1 ($MM) |
$1.9 |
$21.4 |
(91)% |
$6.1 |
(68)% |
$38.9 |
$29.1 |
34% |
| |
|
|
|
|
|
|
|
|
Adjusted Net Income, Adjusted EBITDA, and
Adjusted Free Cash Flow are non-GAAP financial measures, which are
described in more detail and reconciled to the most comparable GAAP
measures, in the tables shown later in this release under “Non-GAAP
Financial Information.”
Sales Volumes, Prices and
Revenues: Sales volumes for the third quarter of 2024 were
a record 20,108 Boe/d (66% oil, 15% natural gas and 19% NGLs), or
1,849,934 Boe. Positively impacting third quarter 2024 sales
volumes was the Founders Acquisition that closed in August 2023 and
incremental production brought online during the period associated
with the Company’s ongoing development program. Second quarter 2024
sales volumes were 19,786 Boe/d (69% oil, 14% natural gas and 17%
NGLs), or 1,800,570 Boe, and third quarter of 2023 sales volumes
were 17,509 Boe/d (69% oil, 16% natural gas and 15% NGLs), or
1,610,857 Boe. Third quarter 2024 sales volumes were comprised of
1,214,788 barrels (“Bbls”) of oil, 1,705,027 thousand cubic feet
(“Mcf”) of natural gas and 350,975 Bbls of NGLs.
For the third quarter of 2024, the Company
realized an average sales price of $74.43 per barrel of crude oil,
$(2.26) per Mcf of natural gas, and $7.66 per barrel of NGLs. The
realized natural gas and NGL prices were impacted by a fee
reduction to the value received. For the third quarter of 2024, the
weighted average natural gas price per Mcf was $(0.50) and the
weighted average fee per Mcf was $(1.76); the weighted average NGL
price per barrel was $18.45 offset by a weighted average fee per
barrel of $(10.79). The weighted average natural gas price for
third quarter 2024 reflects continued natural gas product takeaway
constraints, which could be alleviated through additional
third-party pipeline capacity. The combined average realized sales
price for the period was $48.24 per Boe versus $55.06 per Boe for
the second quarter of 2024 and $58.16 per Boe in the third quarter
of 2023. The average oil price differential the Company experienced
from NYMEX WTI futures pricing in the third quarter of 2024 was a
negative $0.56 per barrel of crude oil, while the average natural
gas price differential from NYMEX futures pricing was a negative
$4.43 per Mcf.
Revenues were $89.2 million for the third
quarter of 2024 compared to $99.1 million for the second quarter of
2024 and $93.7 million for the third quarter of 2023. The decrease
in third quarter 2024 revenues from the second quarter of 2024 was
driven by a decrease in overall realized pricing, partially offset
by increased sales volumes.
Lease Operating Expense
(“LOE”): LOE, which includes expensed workovers and
facilities maintenance, was $20.3 million, or $10.98 per Boe, in
the third quarter of 2024, which was near the midpoint of the
Company’s guidance of $10.50 to $11.25 per Boe. LOE was $19.3
million, or $10.72 per Boe in the second quarter of 2024 and $18.0
million, or $11.18 per Boe, for the third quarter of
2023.
Gathering, Transportation and Processing
(“GTP”) Costs: As previously disclosed, due to a
contractual change effective May 1, 2022, the Company no longer
maintains ownership and control of natural gas through processing
for the majority of its gas produced. As a result, the majority of
GTP costs are now reflected as a reduction to the natural gas sales
price and not as an expense item. There does remain one contract in
place with a natural gas processing entity where the point of
control of gas dictates requiring the fees to be recorded as an
expense.
Ad Valorem Taxes: Ad valorem
taxes were $1.17 per Boe for the third quarter of 2024 compared to
$0.74 per Boe in the second quarter of 2024 and $1.10 per Boe for
the third quarter of 2023.
Production Taxes: Production
taxes were $2.27 per Boe in the third quarter of 2024 compared to
$2.01 per Boe in the second quarter of 2024 and $2.95 per Boe in
third quarter of 2023. Production taxes ranged between 3.7% to 5.1%
of revenue for all three periods.
Depreciation, Depletion and Amortization
(“DD&A”) and Asset Retirement Obligation
Accretion: DD&A was $13.87 per Boe in the third
quarter of 2024 versus $13.72 per Boe for the second quarter of
2024 and $13.65 per Boe in the third quarter of 2023. Asset
retirement obligation accretion was $0.19 per Boe in the third
quarter of 2024, compared to $0.20 for the second quarter of 2024
and $0.22 per Boe in the third quarter of 2023.
General and Administrative Expenses
(“G&A”): G&A was $6.4 million ($3.47 per
Boe) for the third quarter of 2024 versus $7.7 million ($4.28 per
Boe) for the second quarter of 2024 and $7.1 million ($4.40 per
Boe) for the third quarter of 2023. G&A, excluding non-cash
share-based compensation, was $6.4 million ($3.45 per Boe) for the
third quarter of 2024 versus $5.6 million ($3.13 per Boe) for the
second quarter of 2024 and $4.9 million ($3.05 per Boe) for the
third quarter of 2023. G&A, excluding non-cash share-based
compensation and transaction costs, was $6.4 million ($3.45 per
Boe) for the third quarter of 2024 versus $5.6 million ($3.13 per
Boe) for the second quarter of 2024 and $5.1 million ($3.15 per
Boe) for the third quarter of 2023.
Interest Expense: Interest
expense was $10.8 million in the third quarter of 2024 versus $10.9
million for the second quarter of 2024 and $11.4 million for the
third quarter of 2023.
Derivative (Loss) Gain:
In the third quarter of 2024, Ring recorded a net gain of $24.7
million on its commodity derivative contracts, including a realized
$1.9 million cash commodity derivative loss and an unrealized $26.6
million non-cash commodity derivative gain. This compares to a net
loss of $1.8 million in the second quarter of 2024, including a
realized $2.6 million cash commodity derivative loss and an
unrealized $0.8 million non-cash commodity derivative gain. In the
third quarter of 2023, the Company recorded a net loss on commodity
derivative contracts of $39.2 million, including a realized $5.4
million cash commodity derivative loss and an unrealized $33.9
million non-cash commodity derivative loss.
A summary listing of the Company’s outstanding
derivative positions at September 30, 2024 is included in the
tables shown later in this release.
For the remainder (October through December) of
2024, the Company has approximately 0.6 million barrels of oil
(approximately 48% of oil sales guidance midpoint) hedged and
approximately 0.5 billion cubic feet of natural gas (approximately
32% of natural gas sales guidance midpoint) hedged.
Income Tax: The Company
recorded a non-cash income tax provision of $10.1 million in the
third quarter of 2024 versus a provision of $6.8 million in
the second quarter of 2024, and a benefit of $3.4 million for the
third quarter of 2023.
Sale of Non-Core Properties: On
September 30, 2024, the Company completed the sale of certain oil
and gas properties, including vertical wells and associated
facilities, within Andrews County, Texas and Gaines County, Texas
to an unaffiliated party for $5.5 million. As part of the sale, the
buyer assumed an asset retirement obligation balance of
approximately $2.7 million.
Balance Sheet and Liquidity:
Total liquidity (defined as cash and cash equivalents plus
borrowing base availability under the Company’s credit facility) at
September 30, 2024 was $208.0 million, a 7% increase from June
30, 2024. Liquidity at September 30, 2024 consisted of $208.0
million of availability under Ring’s revolving credit facility,
which included a reduction of $35 thousand for letters of credit.
On September 30, 2024, the Company had $392 million in
borrowings outstanding on its credit facility that has a current
borrowing base of $600 million. During the third quarter, Ring paid
down $15 million in borrowings. Consistent with the past, the
Company is targeting continued debt reduction, dependent on market
conditions, the timing and level of capital spending, and other
considerations.
Capital Expenditures: During
the third quarter of 2024, capital expenditures were $42.7 million,
which was within the Company’s guidance of $35 million to $45
million, and the number of wells drilled and completed (and placed
on production) — 13 and 11 wells, respectively — was also within
the Company’s guidance range. Three horizontal (“Hz”) wells were
drilled and completed in the Northwest Shelf, including two 1-mile
and one 1.5-mile. Four 1-mile Hz wells were drilled in the Central
Basin Platform, two of which were completed in October. Finally,
six vertical wells were drilled and completed in the Central Basin
Platform.
|
Quarter |
|
Area |
|
Wells Drilled |
|
Wells Completed |
|
Drilled Uncompleted ("DUC") |
| |
|
|
|
|
|
|
|
|
| 1Q 2024 |
|
Northwest Shelf
(Horizontal) |
|
2 |
|
2 |
|
— |
| |
|
Central Basin Platform
(Horizontal) |
|
3 |
|
3 |
|
— |
| |
|
Central
Basin Platform (Vertical) |
|
6 |
|
6 |
|
— |
| |
|
Total
(1) |
|
11 |
|
11 |
|
— |
| |
|
|
|
|
|
|
|
|
| 2Q 2024 |
|
Northwest Shelf
(Horizontal) |
|
— |
|
— |
|
— |
| |
|
Central Basin Platform
(Horizontal) |
|
5 |
|
5 |
|
— |
| |
|
Central
Basin Platform (Vertical) |
|
6 |
|
6 |
|
— |
| |
|
Total |
|
11 |
|
11 |
|
— |
| |
|
|
|
|
|
|
|
|
| 3Q 2024 |
|
Northwest Shelf
(Horizontal) |
|
3 |
|
3 |
|
— |
| |
|
Central Basin Platform
(Horizontal) |
|
4 |
|
2 |
|
2 |
| |
|
Central
Basin Platform (Vertical) |
|
6 |
|
6 |
|
— |
| |
|
Total |
|
13 |
|
11 |
|
2 |
(1) First quarter total does not include the SWD
well drilled and completed in the Central Basin Platform.
Full Year and Fourth Quarter 2024 Sales
Volumes, Capital Investment and Operating Expense
Guidance
The Company is updating its guidance to reflect
actual results through the third quarter and the previously
discussed divestiture of non-core assets that was completed on
September 30, 2024.
Ring’s 2024 development program includes two
rigs (one Hz and one vertical) focused on slightly growing oil
sales volumes and maintaining year-over-year Boe sales. The
Company’s YTD performance has led to greater year-over-year Boe and
oil sales volumes growth than originally planned.
For full year 2024, Ring now expects total
capital spending of $147 million to $155 million (versus $141
million to $161 million previously), with no change to the
midpoint. The updated program includes a balanced and capital
efficient combination of drilling, completing and placing on
production 21 to 23 Hz and 22 to 24 vertical wells across the
Company’s asset portfolio. Additionally, the full year capital
spending program includes funds for targeted well recompletions,
capital workovers, infrastructure upgrades, reactivations, and
leasing costs, as well as non-operated drilling, completion,
capital workovers, and ESG improvements.
All projects and estimates are based on assumed
WTI oil prices of $70 to $90 per barrel and Henry Hub prices of
$2.00 to $3.00 per Mcf. As in the past, Ring has designed its
spending program with flexibility to respond to changes in
commodity prices and other market conditions as appropriate.
Based on the $151 million midpoint of spending
guidance, the Company continues to expect the following estimated
allocation of capital, including:
- 77% for drilling, completion, and related infrastructure;
- 14% for recompletions and capital workovers;
- 5% for ESG improvements (environmental and emission reducing
upgrades); and
- 4% for land, non-operated capital, and other.
The Company is updating its full year 2024 oil
sales volumes guidance to between 13,250 and 13,450 Bo/d versus
13,200 to 13,800 Bo/d previously, which reflects a 1% reduction at
the midpoint due primarily to the divestiture of non-core assets
discussed above.
The Company remains focused on maximizing
Adjusted Free Cash Flow. All 2024 planned capital expenditures will
be fully funded by cash on hand and cash from operations, and
excess Adjusted Free Cash Flow is targeted for further debt
reduction.
For the fourth quarter of 2024, Ring is
providing guidance for sales volumes of 12,950 to 13,550 Bo/d and
19,200 to 20,000 Boe/d (68% oil, 13% natural gas, and 19%
NGLs).
The Company is targeting total capital
expenditures in fourth quarter 2024 of $33 million to $41 million,
primarily for drilling and completion activity. Additionally, the
capital spending program includes funds for targeted capital
workovers, infrastructure upgrades, well reactivations, leasing
acreage; and non-operated drilling, completion, and capital
workovers.
Ring expects LOE of $10.75 to $11.25 per Boe for
the fourth quarter and $10.70 to $11.00 per Boe for the full year.
The Company’s previous guidance for full year 2024 was $10.50 to
$11.25 per Boe.
The guidance in the table below represents the
Company's current good faith estimate of the range of likely future
results. Guidance could be affected by the factors discussed below
in the "Safe Harbor Statement" section.
| |
|
Q4 |
FY |
| |
|
2024 |
2024 |
| Sales
Volumes: |
|
|
|
|
Total Oil (Bo/d) |
|
12,950 - 13,550 |
13,250 - 13,450 |
|
Midpoint (Bo/d) |
|
13,250 |
13,350 |
|
Total (Boe/d) |
|
19,200 - 20,000 |
19,500 - 19,800 |
|
Midpoint (Boe/d) |
|
19,600 |
19,650 |
|
Oil (%) |
|
68% |
68% |
|
NGLs (%) |
|
19% |
18% |
|
Gas (%) |
|
13% |
14% |
| |
|
|
|
| Capital
Program: |
|
|
|
|
Capital spending(1) (millions) |
|
$33 - $41 |
$147 - $155 |
|
Midpoint (millions) |
|
$37 |
$151 |
|
New Hz wells drilled |
|
4 - 6 |
21 - 23 |
|
New Vertical wells drilled |
|
4 - 6 |
22 - 24 |
|
Completion of DUC wells |
|
2 |
n/a |
|
Wells completed and online |
|
10 - 14 |
43 - 47 |
| |
|
|
|
| Operating
Expenses: |
|
|
|
|
LOE (per Boe) |
|
$10.75 - $11.25 |
$10.70 - $11.00 |
|
Midpoint (per Boe) |
|
$11.00 |
$10.85 |
|
|
|
|
|
(1) In addition to Company-directed drilling and
completion activities, the capital spending outlook includes funds
for targeted well recompletions, capital workovers, infrastructure
upgrades, and well reactivations. Also included is anticipated
spending for leasing acreage; and non-operated drilling,
completion, capital workovers, and ESG improvements.
Conference Call Information
Ring will hold a conference call on Thursday,
November 7, 2024 at 12:00 p.m. ET (11 a.m. CT) to discuss its third
quarter 2024 operational and financial results. An updated investor
presentation will be posted to the Company’s website prior to the
conference call.
To participate in the conference call,
interested parties should dial 833-953-2433 at least five minutes
before the call is to begin. Please reference the “Ring Energy
Third Quarter 2024 Earnings Conference Call”. International callers
may participate by dialing 412-317-5762. The call will also be
webcast and available on Ring’s website at
www.ringenergy.com under “Investors” on the “News &
Events” page. An audio replay will also be available on the
Company’s website following the call.
About Ring Energy, Inc.
Ring Energy, Inc. is an oil and gas exploration,
development, and production company with current operations focused
on the development of its Permian Basin assets. For additional
information, please visit www.ringenergy.com.
Safe Harbor Statement
This release contains forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. Forward-looking statements involve a wide variety of risks
and uncertainties, and include, without limitation, statements with
respect to the Company’s strategy and prospects. The
forward-looking statements include statements about the expected
future reserves, production, financial position, business strategy,
revenues, earnings, costs, capital expenditures and debt levels of
the Company, and plans and objectives of management for future
operations. Forward-looking statements are based on current
expectations and assumptions and analyses made by Ring and its
management in light of their experience and perception of
historical trends, current conditions and expected future
developments, as well as other factors appropriate under the
circumstances. However, whether actual results and developments
will conform to expectations is subject to a number of material
risks and uncertainties, including but not limited to: declines in
oil, natural gas liquids or natural gas prices; the level of
success in exploration, development and production activities;
adverse weather conditions that may negatively impact development
or production activities particularly in the winter; the timing of
exploration and development expenditures; inaccuracies of reserve
estimates or assumptions underlying them; revisions to reserve
estimates as a result of changes in commodity prices; impacts to
financial statements as a result of impairment write-downs; risks
related to level of indebtedness and periodic redeterminations of
the borrowing base and interest rates under the Company’s credit
facility; Ring’s ability to generate sufficient cash flows from
operations to meet the internally funded portion of its capital
expenditures budget; the impacts of hedging on results of
operations; the effects of future regulatory or legislative
actions; cost and availability of transportation and storage
capacity as a result of oversupply, government regulation or other
factors; and Ring’s ability to replace oil and natural gas
reserves. Such statements are subject to certain risks and
uncertainties which are disclosed in the Company’s reports filed
with the Securities and Exchange Commission (“SEC”), including its
Form 10-K for the fiscal year ended December 31, 2023, and its
other SEC filings. Ring undertakes no obligation to revise or
update publicly any forward-looking statements, except as required
by law.
Contact Information
Al Petrie AdvisorsAl Petrie, Senior PartnerPhone:
281-975-2146 Email: apetrie@ringenergy.com
RING ENERGY,
INC.Condensed Statements of
Operations(Unaudited)
| |
Three Months Ended |
|
Nine Months Ended |
| |
September 30, |
|
June 30, |
|
September 30, |
|
September 30, |
|
September 30, |
|
|
|
2024 |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
| |
|
|
|
|
|
|
|
|
|
| Oil, Natural Gas, and
Natural Gas Liquids Revenues |
$ |
89,244,383 |
|
|
$ |
99,139,349 |
|
|
$ |
93,681,798 |
|
|
$ |
282,886,868 |
|
|
$ |
261,113,283 |
|
| |
|
|
|
|
|
|
|
|
|
| Costs and Operating
Expenses |
|
|
|
|
|
|
|
|
|
|
Lease operating expenses |
|
20,315,282 |
|
|
|
19,309,017 |
|
|
|
18,015,348 |
|
|
|
57,984,733 |
|
|
|
51,426,145 |
|
|
Gathering, transportation and processing costs |
|
102,420 |
|
|
|
107,629 |
|
|
|
(4,530 |
) |
|
|
376,103 |
|
|
|
(6,985 |
) |
|
Ad valorem taxes |
|
2,164,562 |
|
|
|
1,337,276 |
|
|
|
1,779,163 |
|
|
|
5,647,469 |
|
|
|
5,120,119 |
|
|
Oil and natural gas production taxes |
|
4,203,851 |
|
|
|
3,627,264 |
|
|
|
4,753,289 |
|
|
|
12,259,418 |
|
|
|
13,173,568 |
|
|
Depreciation, depletion and amortization |
|
25,662,123 |
|
|
|
24,699,421 |
|
|
|
21,989,034 |
|
|
|
74,153,994 |
|
|
|
64,053,637 |
|
|
Asset retirement obligation accretion |
|
354,195 |
|
|
|
352,184 |
|
|
|
354,175 |
|
|
|
1,057,213 |
|
|
|
1,073,900 |
|
|
Operating lease expense |
|
175,091 |
|
|
|
175,090 |
|
|
|
138,220 |
|
|
|
525,272 |
|
|
|
366,711 |
|
|
General and administrative expense |
|
6,421,567 |
|
|
|
7,713,534 |
|
|
|
7,083,574 |
|
|
|
21,604,323 |
|
|
|
21,023,956 |
|
| |
|
|
|
|
|
|
|
|
|
|
Total Costs and Operating Expenses |
|
59,399,091 |
|
|
|
57,321,415 |
|
|
|
54,108,273 |
|
|
|
173,608,525 |
|
|
|
156,231,051 |
|
| |
|
|
|
|
|
|
|
|
|
| Income from
Operations |
|
29,845,292 |
|
|
|
41,817,934 |
|
|
|
39,573,525 |
|
|
|
109,278,343 |
|
|
|
104,882,232 |
|
| |
|
|
|
|
|
|
|
|
|
| Other Income
(Expense) |
|
|
|
|
|
|
|
|
|
|
Interest income |
|
143,704 |
|
|
|
144,933 |
|
|
|
80,426 |
|
|
|
367,181 |
|
|
|
160,171 |
|
|
Interest (expense) |
|
(10,754,243 |
) |
|
|
(10,946,127 |
) |
|
|
(11,381,754 |
) |
|
|
(33,199,314 |
) |
|
|
(32,322,840 |
) |
|
Gain (loss) on derivative contracts |
|
24,731,625 |
|
|
|
(1,828,599 |
) |
|
|
(39,222,755 |
) |
|
|
3,888,531 |
|
|
|
(26,483,190 |
) |
|
Gain (loss) on disposal of assets |
|
— |
|
|
|
51,338 |
|
|
|
— |
|
|
|
89,693 |
|
|
|
(132,109 |
) |
|
Other income |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
25,686 |
|
|
|
126,210 |
|
|
Net Other Income (Expense) |
|
14,121,086 |
|
|
|
(12,578,455 |
) |
|
|
(50,524,083 |
) |
|
|
(28,828,223 |
) |
|
|
(58,651,758 |
) |
| |
|
|
|
|
|
|
|
|
|
| Income Before Benefit
from (Provision for) Income Taxes |
|
43,966,378 |
|
|
|
29,239,479 |
|
|
|
(10,950,558 |
) |
|
|
80,450,120 |
|
|
|
46,230,474 |
|
| |
|
|
|
|
|
|
|
|
|
| Benefit from
(Provision for) Income Taxes |
|
(10,087,954 |
) |
|
|
(6,820,485 |
) |
|
|
3,411,336 |
|
|
|
(18,637,325 |
) |
|
|
7,737,688 |
|
| |
|
|
|
|
|
|
|
|
|
| Net Income
(Loss) |
$ |
33,878,424 |
|
|
$ |
22,418,994 |
|
|
$ |
(7,539,222 |
) |
|
$ |
61,812,795 |
|
|
$ |
53,968,162 |
|
| |
|
|
|
|
|
|
|
|
|
| Basic Earnings (Loss)
per Share |
$ |
0.17 |
|
|
$ |
0.11 |
|
|
$ |
(0.04 |
) |
|
$ |
0.31 |
|
|
$ |
0.29 |
|
| Diluted Earnings
(Loss) per Share |
$ |
0.17 |
|
|
$ |
0.11 |
|
|
$ |
(0.04 |
) |
|
$ |
0.31 |
|
|
$ |
0.28 |
|
| |
|
|
|
|
|
|
|
|
|
| Basic Weighted-Average Shares
Outstanding |
|
198,177,046 |
|
|
|
197,976,721 |
|
|
|
195,361,476 |
|
|
|
197,850,538 |
|
|
|
188,865,752 |
|
| Diluted Weighted-Average
Shares Outstanding |
|
200,723,863 |
|
|
|
200,428,813 |
|
|
|
195,361,476 |
|
|
|
200,139,478 |
|
|
|
194,583,215 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RING ENERGY,
INC.Condensed Operating
Data(Unaudited)
| |
Three Months Ended |
|
Nine Months Ended |
| |
September 30, |
|
June 30, |
|
September 30, |
|
September 30, |
|
September 30, |
|
|
|
2024 |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
| |
|
|
|
|
|
|
|
|
|
| Net sales
volumes: |
|
|
|
|
|
|
|
|
|
|
Oil (Bbls) |
|
1,214,788 |
|
|
|
1,239,731 |
|
|
|
1,106,531 |
|
|
|
3,673,356 |
|
|
|
3,325,323 |
|
|
Natural gas (Mcf) |
|
1,705,027 |
|
|
|
1,538,347 |
|
|
|
1,567,104 |
|
|
|
4,739,881 |
|
|
|
4,726,056 |
|
|
Natural gas liquids (Bbls) |
|
350,975 |
|
|
|
304,448 |
|
|
|
243,142 |
|
|
|
919,225 |
|
|
|
715,832 |
|
|
Total oil, natural gas and natural gas liquids (Boe)(1) |
|
1,849,934 |
|
|
|
1,800,570 |
|
|
|
1,610,857 |
|
|
|
5,382,561 |
|
|
|
4,828,831 |
|
| |
|
|
|
|
|
|
|
|
|
|
% Oil |
|
66 |
% |
|
|
69 |
% |
|
|
69 |
% |
|
|
68 |
% |
|
|
69 |
% |
|
% Natural Gas |
|
15 |
% |
|
|
14 |
% |
|
|
16 |
% |
|
|
15 |
% |
|
|
16 |
% |
|
% Natural Gas Liquids |
|
19 |
% |
|
|
17 |
% |
|
|
15 |
% |
|
|
17 |
% |
|
|
15 |
% |
| |
|
|
|
|
|
|
|
|
|
| Average daily sales
volumes: |
|
|
|
|
|
|
|
|
|
|
Oil (Bbls/d) |
|
13,204 |
|
|
|
13,623 |
|
|
|
12,028 |
|
|
|
13,406 |
|
|
|
12,181 |
|
|
Natural gas (Mcf/d) |
|
18,533 |
|
|
|
16,905 |
|
|
|
17,034 |
|
|
|
17,299 |
|
|
|
17,312 |
|
|
Natural gas liquids (Bbls/d) |
|
3,815 |
|
|
|
3,346 |
|
|
|
2,643 |
|
|
|
3,355 |
|
|
|
2,622 |
|
| Average daily equivalent sales
(Boe/d) |
|
20,108 |
|
|
|
19,786 |
|
|
|
17,509 |
|
|
|
19,644 |
|
|
|
17,688 |
|
| |
|
|
|
|
|
|
|
|
|
| Average realized sales
prices: |
|
|
|
|
|
|
|
|
|
|
Oil ($/Bbl) |
$ |
74.43 |
|
|
$ |
80.09 |
|
|
$ |
81.69 |
|
|
$ |
76.77 |
|
|
$ |
75.79 |
|
|
Natural gas ($/Mcf) |
|
(2.26 |
) |
|
|
(1.93 |
) |
|
|
0.36 |
|
|
|
(1.61 |
) |
|
|
0.11 |
|
|
Natural gas liquids ($/Bbls) |
|
7.66 |
|
|
|
9.27 |
|
|
|
11.22 |
|
|
|
9.29 |
|
|
|
11.97 |
|
|
Barrel of oil equivalent ($/Boe) |
$ |
48.24 |
|
|
$ |
55.06 |
|
|
$ |
58.16 |
|
|
$ |
52.56 |
|
|
$ |
54.07 |
|
| |
|
|
|
|
|
|
|
|
|
| Average costs and
expenses per Boe ($/Boe): |
|
|
|
|
|
|
|
|
|
|
Lease operating expenses |
$ |
10.98 |
|
|
$ |
10.72 |
|
|
$ |
11.18 |
|
|
$ |
10.77 |
|
|
$ |
10.65 |
|
|
Gathering, transportation and processing costs |
|
0.06 |
|
|
|
0.06 |
|
|
|
— |
|
|
|
0.07 |
|
|
|
— |
|
|
Ad valorem taxes |
|
1.17 |
|
|
|
0.74 |
|
|
|
1.10 |
|
|
|
1.05 |
|
|
|
1.06 |
|
|
Oil and natural gas production taxes |
|
2.27 |
|
|
|
2.01 |
|
|
|
2.95 |
|
|
|
2.28 |
|
|
|
2.73 |
|
|
Depreciation, depletion and amortization |
|
13.87 |
|
|
|
13.72 |
|
|
|
13.65 |
|
|
|
13.78 |
|
|
|
13.26 |
|
|
Asset retirement obligation accretion |
|
0.19 |
|
|
|
0.20 |
|
|
|
0.22 |
|
|
|
0.20 |
|
|
|
0.22 |
|
|
Operating lease expense |
|
0.09 |
|
|
|
0.10 |
|
|
|
0.09 |
|
|
|
0.10 |
|
|
|
0.08 |
|
|
General and administrative expense (including share-based
compensation) |
|
3.47 |
|
|
|
4.28 |
|
|
|
4.40 |
|
|
|
4.01 |
|
|
|
4.35 |
|
|
G&A (excluding share-based compensation) |
|
3.45 |
|
|
|
3.13 |
|
|
|
3.05 |
|
|
|
3.30 |
|
|
|
3.03 |
|
|
G&A (excluding share-based compensation and transaction
costs) |
|
3.45 |
|
|
|
3.13 |
|
|
|
3.15 |
|
|
|
3.30 |
|
|
|
3.02 |
|
(1) Boe is determined using the ratio of six Mcf of natural gas
to one Bbl of oil (totals may not compute due to rounding.) The
conversion ratio does not assume price equivalency and the price on
an equivalent basis for oil, natural gas, and natural gas liquids
may differ significantly.
RING ENERGY,
INC.Condensed Balance
Sheets(Unaudited)
| |
|
September 30, 2024 |
|
December 31, 2023 |
| ASSETS |
|
|
|
|
| Current
Assets |
|
|
|
|
|
Cash and cash equivalents |
|
$ |
— |
|
|
$ |
296,384 |
|
| Accounts receivable |
|
|
36,394,451 |
|
|
|
38,965,002 |
|
| Joint interest billing
receivables, net |
|
|
1,343,801 |
|
|
|
2,422,274 |
|
| Derivative assets |
|
|
8,375,984 |
|
|
|
6,215,374 |
|
| Inventory |
|
|
4,627,980 |
|
|
|
6,136,935 |
|
| Prepaid expenses and other
assets |
|
|
2,076,896 |
|
|
|
1,874,850 |
|
| Total Current
Assets |
|
|
52,819,112 |
|
|
|
55,910,819 |
|
| Properties and
Equipment |
|
|
|
|
| Oil and natural gas
properties, full cost method |
|
|
1,770,078,718 |
|
|
|
1,663,548,249 |
|
| Financing lease asset subject
to depreciation |
|
|
4,192,099 |
|
|
|
3,896,316 |
|
| Fixed assets subject to
depreciation |
|
|
3,389,907 |
|
|
|
3,228,793 |
|
| Total Properties and
Equipment |
|
|
1,777,660,724 |
|
|
|
1,670,673,358 |
|
| Accumulated depreciation,
depletion and amortization |
|
|
(450,913,685 |
) |
|
|
(377,252,572 |
) |
| Net Properties and
Equipment |
|
|
1,326,747,039 |
|
|
|
1,293,420,786 |
|
| Operating lease asset |
|
|
2,057,096 |
|
|
|
2,499,592 |
|
| Derivative assets |
|
|
8,735,674 |
|
|
|
11,634,714 |
|
| Deferred financing costs |
|
|
9,406,089 |
|
|
|
13,030,481 |
|
| Total
Assets |
|
$ |
1,399,765,010 |
|
|
$ |
1,376,496,392 |
|
| |
|
|
|
|
| LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
|
| Current
Liabilities |
|
|
|
|
| Accounts payable |
|
$ |
90,143,131 |
|
|
$ |
104,064,124 |
|
| Income tax liability |
|
|
257,704 |
|
|
|
— |
|
| Financing lease liability |
|
|
879,598 |
|
|
|
956,254 |
|
| Operating lease liability |
|
|
633,132 |
|
|
|
568,176 |
|
| Derivative liabilities |
|
|
3,929,188 |
|
|
|
7,520,336 |
|
| Notes payable |
|
|
912,819 |
|
|
|
533,734 |
|
| Asset retirement
obligations |
|
|
836,421 |
|
|
|
165,642 |
|
| Total Current
Liabilities |
|
|
97,591,993 |
|
|
|
113,808,266 |
|
| |
|
|
|
|
| Non-current
Liabilities |
|
|
|
|
| Deferred income taxes |
|
|
26,859,453 |
|
|
|
8,552,045 |
|
| Revolving line of credit |
|
|
392,000,000 |
|
|
|
425,000,000 |
|
| Financing lease liability,
less current portion |
|
|
496,954 |
|
|
|
906,330 |
|
| Operating lease liability,
less current portion |
|
|
1,574,117 |
|
|
|
2,054,041 |
|
| Derivative liabilities |
|
|
4,535,777 |
|
|
|
11,510,368 |
|
| Asset retirement
obligations |
|
|
25,396,573 |
|
|
|
28,082,442 |
|
| Total
Liabilities |
|
|
548,454,867 |
|
|
|
589,913,492 |
|
| Commitments and
contingencies |
|
|
|
|
| Stockholders'
Equity |
|
|
|
|
| Preferred stock - $0.001 par
value; 50,000,000 shares authorized; no shares issued or
outstanding |
|
|
— |
|
|
|
— |
|
| Common stock - $0.001 par
value; 450,000,000 shares authorized; 198,196,034 shares and
196,837,001 shares issued and outstanding, respectively |
|
|
198,196 |
|
|
|
196,837 |
|
| Additional paid-in
capital |
|
|
798,747,764 |
|
|
|
795,834,675 |
|
| Retained earnings (Accumulated
deficit) |
|
|
52,364,183 |
|
|
|
(9,448,612 |
) |
| Total Stockholders’
Equity |
|
|
851,310,143 |
|
|
|
786,582,900 |
|
| Total Liabilities and
Stockholders' Equity |
|
$ |
1,399,765,010 |
|
|
$ |
1,376,496,392 |
|
| |
|
|
|
|
|
|
|
|
RING ENERGY,
INC.Condensed Statements of Cash
Flows(Unaudited)
| |
Three Months Ended |
|
Nine Months Ended |
| |
September 30, |
|
June 30, |
|
September 30, |
|
September 30, |
|
September 30, |
|
|
|
2024 |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
| Cash Flows From Operating Activities |
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
$ |
33,878,424 |
|
|
$ |
22,418,994 |
|
|
$ |
(7,539,222 |
) |
|
$ |
61,812,795 |
|
|
$ |
53,968,162 |
|
|
Adjustments to reconcile net income (loss) to net cash provided by
operating activities: |
|
|
|
|
|
|
|
|
|
|
Depreciation, depletion and amortization |
|
25,662,123 |
|
|
|
24,699,421 |
|
|
|
21,989,034 |
|
|
|
74,153,994 |
|
|
|
64,053,637 |
|
|
Asset retirement obligation accretion |
|
354,195 |
|
|
|
352,184 |
|
|
|
354,175 |
|
|
|
1,057,213 |
|
|
|
1,073,900 |
|
|
Amortization of deferred financing costs |
|
1,226,881 |
|
|
|
1,221,608 |
|
|
|
1,258,466 |
|
|
|
3,670,096 |
|
|
|
3,699,235 |
|
|
Share-based compensation |
|
32,087 |
|
|
|
2,077,778 |
|
|
|
2,170,735 |
|
|
|
3,833,697 |
|
|
|
6,374,743 |
|
|
Bad debt expense |
|
8,817 |
|
|
|
14,937 |
|
|
|
19,656 |
|
|
|
187,594 |
|
|
|
41,865 |
|
|
(Gain) loss on disposal of assets |
|
— |
|
|
|
(89,693 |
) |
|
|
— |
|
|
|
(89,693 |
) |
|
|
— |
|
|
Deferred income tax expense (benefit) |
|
10,005,502 |
|
|
|
6,621,128 |
|
|
|
(3,585,002 |
) |
|
|
18,212,075 |
|
|
|
(8,160,712 |
) |
|
Excess tax expense (benefit) related to share-based
compensation |
|
7,553 |
|
|
|
46,972 |
|
|
|
7,886 |
|
|
|
95,333 |
|
|
|
158,763 |
|
|
(Gain) loss on derivative contracts |
|
(24,731,625 |
) |
|
|
1,828,599 |
|
|
|
39,222,755 |
|
|
|
(3,888,531 |
) |
|
|
26,483,190 |
|
|
Cash received (paid) for derivative settlements, net |
|
(1,882,765 |
) |
|
|
(2,594,497 |
) |
|
|
(5,350,798 |
) |
|
|
(5,938,777 |
) |
|
|
(5,829,728 |
) |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
|
|
Accounts receivable |
|
5,529,542 |
|
|
|
2,955,975 |
|
|
|
(14,419,854 |
) |
|
|
3,245,030 |
|
|
|
(5,671,516 |
) |
|
Inventory |
|
1,148,418 |
|
|
|
189,121 |
|
|
|
1,778,460 |
|
|
|
1,508,955 |
|
|
|
3,701,882 |
|
|
Prepaid expenses and other assets |
|
545,529 |
|
|
|
(1,251,279 |
) |
|
|
1,028,203 |
|
|
|
(202,046 |
) |
|
|
68,525 |
|
|
Accounts payable |
|
(225,196 |
) |
|
|
(7,712,355 |
) |
|
|
18,562,202 |
|
|
|
(9,538,827 |
) |
|
|
3,500,913 |
|
|
Settlement of asset retirement obligation |
|
(222,553 |
) |
|
|
(160,963 |
) |
|
|
(105,721 |
) |
|
|
(974,877 |
) |
|
|
(1,025,607 |
) |
|
Net Cash Provided by Operating Activities |
|
51,336,932 |
|
|
|
50,617,930 |
|
— |
|
55,390,975 |
|
|
|
147,144,031 |
|
|
|
142,437,252 |
|
| |
|
|
|
|
|
|
|
|
|
| Cash Flows From Investing Activities |
|
|
|
|
|
|
|
|
|
|
Payments for the Stronghold Acquisition |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(18,511,170 |
) |
|
Payments for the Founders Acquisition |
|
— |
|
|
|
— |
|
|
|
(49,902,757 |
) |
|
|
— |
|
|
|
(49,902,757 |
) |
|
Payments to purchase oil and natural gas properties |
|
(164,481 |
) |
|
|
(147,004 |
) |
|
|
(726,519 |
) |
|
|
(787,343 |
) |
|
|
(1,605,262 |
) |
|
Payments to develop oil and natural gas properties |
|
(42,099,874 |
) |
|
|
(36,554,719 |
) |
|
|
(40,444,810 |
) |
|
|
(117,559,401 |
) |
|
|
(112,996,032 |
) |
|
Payments to acquire or improve fixed assets subject to
depreciation |
|
(33,938 |
) |
|
|
(26,649 |
) |
|
|
(183,904 |
) |
|
|
(185,524 |
) |
|
|
(209,798 |
) |
|
Proceeds from sale of fixed assets subject to depreciation |
|
— |
|
|
|
10,605 |
|
|
|
— |
|
|
|
10,605 |
|
|
|
332,230 |
|
|
Proceeds from divestiture of equipment for oil and natural gas
properties |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
54,558 |
|
|
Proceeds from sale of Delaware properties |
|
— |
|
|
|
— |
|
|
|
(384,225 |
) |
|
|
— |
|
|
|
7,608,692 |
|
|
Proceeds from sale of New Mexico properties |
|
— |
|
|
|
(144,398 |
) |
|
|
4,312,502 |
|
|
|
(144,398 |
) |
|
|
4,312,502 |
|
|
Proceeds from sale of CBP vertical wells |
|
5,500,000 |
|
|
|
— |
|
|
|
— |
|
|
|
5,500,000 |
|
|
|
— |
|
|
Net Cash Used in Investing Activities |
|
(36,798,293 |
) |
|
|
(36,862,165 |
) |
|
|
(87,329,713 |
) |
|
|
(113,166,061 |
) |
|
|
(170,917,037 |
) |
| |
|
|
|
|
|
|
|
|
|
| Cash Flows From Financing Activities |
|
|
|
|
|
|
|
|
|
|
Proceeds from revolving line of credit |
|
27,000,000 |
|
|
|
29,500,000 |
|
|
|
94,500,000 |
|
|
|
108,000,000 |
|
|
|
179,000,000 |
|
|
Payments on revolving line of credit |
|
(42,000,000 |
) |
|
|
(44,500,000 |
) |
|
|
(63,500,000 |
) |
|
|
(141,000,000 |
) |
|
|
(166,000,000 |
) |
|
Proceeds from issuance of common stock from warrant exercises |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
12,301,596 |
|
|
Payments for taxes withheld on vested restricted shares, net |
|
(17,273 |
) |
|
|
(86,991 |
) |
|
|
(18,302 |
) |
|
|
(919,249 |
) |
|
|
(294,365 |
) |
|
Proceeds from notes payable |
|
— |
|
|
|
1,501,507 |
|
|
|
— |
|
|
|
1,501,507 |
|
|
|
1,565,071 |
|
|
Payments on notes payable |
|
(442,976 |
) |
|
|
(145,712 |
) |
|
|
(462,606 |
) |
|
|
(1,122,422 |
) |
|
|
(1,114,883 |
) |
|
Payment of deferred financing costs |
|
— |
|
|
|
(45,704 |
) |
|
|
— |
|
|
|
(45,704 |
) |
|
|
— |
|
|
Reduction of financing lease liabilities |
|
(257,202 |
) |
|
|
(176,128 |
) |
|
|
(191,748 |
) |
|
|
(688,486 |
) |
|
|
(551,579 |
) |
|
Net Cash Provided by (Used in) Financing
Activities |
|
(15,717,451 |
) |
|
|
(13,953,028 |
) |
|
|
30,327,344 |
|
|
|
(34,274,354 |
) |
|
|
24,905,840 |
|
| |
|
|
|
|
|
|
|
|
|
| Net Increase (Decrease) in Cash |
|
(1,178,812 |
) |
|
|
(197,263 |
) |
|
|
(1,611,394 |
) |
|
|
(296,384 |
) |
|
|
(3,573,945 |
) |
| Cash at Beginning of Period |
|
1,178,812 |
|
|
|
1,376,075 |
|
|
|
1,749,975 |
|
|
|
296,384 |
|
|
|
3,712,526 |
|
| Cash at End of Period |
$ |
— |
|
|
$ |
1,178,812 |
|
|
$ |
138,581 |
|
|
$ |
— |
|
|
$ |
138,581 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RING ENERGY,
INC.Financial Commodity Derivative
PositionsAs of September 30,
2024
The following tables reflect the details of current derivative
contracts as of September 30, 2024 (quantities are in barrels
(Bbl) for the oil derivative contracts and in million British
thermal units (MMBtu) for the natural gas derivative
contracts):
| |
Oil Hedges (WTI) |
| |
Q4 2024 |
|
Q1 2025 |
|
Q2 2025 |
|
Q3 2025 |
|
Q4 2025 |
|
Q1 2026 |
|
Q2 2026 |
|
Q3 2026 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Swaps: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hedged volume (Bbl) |
|
368,000 |
|
|
71,897 |
|
|
52,063 |
|
|
265,517 |
|
|
64,555 |
|
|
449,350 |
|
|
432,701 |
|
|
— |
| Weighted average swap
price |
$ |
68.43 |
|
$ |
72.03 |
|
$ |
72.03 |
|
$ |
72.94 |
|
$ |
72.03 |
|
$ |
70.38 |
|
$ |
69.53 |
|
$ |
— |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Deferred premium
puts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Hedged volume (Bbl) |
|
88,405 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
| Weighted average strike
price |
$ |
75.00 |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
| Weighted average deferred
premium price |
$ |
2.61 |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Two-way
collars: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Hedged volume (Bbl) |
|
128,800 |
|
|
474,750 |
|
|
464,100 |
|
|
225,400 |
|
|
404,800 |
|
|
— |
|
|
— |
|
|
379,685 |
| Weighted average put
price |
$ |
60.00 |
|
$ |
57.06 |
|
$ |
60.00 |
|
$ |
65.00 |
|
$ |
60.00 |
|
$ |
— |
|
$ |
— |
|
$ |
60.00 |
| Weighted average call
price |
$ |
73.24 |
|
$ |
75.82 |
|
$ |
69.85 |
|
$ |
78.91 |
|
$ |
75.68 |
|
$ |
— |
|
$ |
— |
|
$ |
72.50 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Gas Hedges (Henry Hub) |
| |
Q4 2024 |
|
Q1 2025 |
|
Q2 2025 |
|
Q3 2025 |
|
Q4 2025 |
|
Q1 2026 |
|
Q2 2026 |
|
Q3 2026 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| NYMEX
Swaps: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hedged volume (MMBtu) |
|
431,800 |
|
|
616,199 |
|
|
594,400 |
|
|
289,550 |
|
|
— |
|
|
— |
|
|
532,500 |
|
|
— |
| Weighted average swap
price |
$ |
4.44 |
|
$ |
3.78 |
|
$ |
3.43 |
|
$ |
3.72 |
|
$ |
— |
|
$ |
— |
|
$ |
3.38 |
|
$ |
— |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Two-way
collars: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Hedged volume (MMBtu) |
|
18,300 |
|
|
33,401 |
|
|
27,300 |
|
|
308,200 |
|
|
598,000 |
|
|
553,500 |
|
|
— |
|
|
515,728 |
| Weighted average put
price |
$ |
3.00 |
|
$ |
3.00 |
|
$ |
3.00 |
|
$ |
3.00 |
|
$ |
3.00 |
|
$ |
3.50 |
|
$ |
— |
|
$ |
3.00 |
| Weighted average call
price |
$ |
4.15 |
|
$ |
4.39 |
|
$ |
4.15 |
|
$ |
4.75 |
|
$ |
4.15 |
|
$ |
5.03 |
|
$ |
— |
|
$ |
3.93 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Oil Hedges (basis differential) |
| |
Q4 2024 |
|
Q1 2025 |
|
Q2 2025 |
|
Q3 2025 |
|
Q4 2025 |
|
Q1 2026 |
|
Q2 2026 |
|
Q3 2026 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Argus basis
swaps: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hedged volume (Bbl) |
|
244,000 |
|
|
270,000 |
|
|
273,000 |
|
|
276,000 |
|
|
276,000 |
|
|
— |
|
|
— |
|
|
— |
| Weighted average spread price
(1) |
$ |
1.15 |
|
$ |
1.00 |
|
$ |
1.00 |
|
$ |
1.00 |
|
$ |
1.00 |
|
$ |
— |
|
$ |
— |
|
$ |
— |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) The oil basis swap hedges are calculated as
the fixed price (weighted average spread price above) less the
difference between WTI Midland and WTI Cushing, in the issue of
Argus Americas Crude.
RING ENERGY,
INC.Non-GAAP Financial Information
Certain financial information included in this
release are not measures of financial performance recognized by
accounting principles generally accepted in the United States
(“GAAP”). These non-GAAP financial measures are “Adjusted Net
Income,” “Adjusted EBITDA,” “Adjusted Free Cash Flow” or “AFCF,”
“Adjusted Cash Flow from Operations” or “ACFFO,” “G&A Excluding
Share-Based Compensation,” “G&A Excluding Share-Based
Compensation and Transaction Costs,” “Leverage Ratio,” “All-In Cash
Operating Costs,” and “Cash Operating Margin.” Management uses
these non-GAAP financial measures in its analysis of performance.
In addition, Adjusted EBITDA is a key metric used to determine a
portion of the Company’s incentive compensation awards. These
disclosures may not be viewed as a substitute for results
determined in accordance with GAAP and are not necessarily
comparable to non-GAAP performance measures which may be reported
by other companies.
Reconciliation of Net Income (Loss) to
Adjusted Net Income
“Adjusted Net Income” is calculated as net
income (loss) minus the estimated after-tax impact of share-based
compensation, ceiling test impairment, unrealized gains and losses
on changes in the fair value of derivatives, and transaction costs
for executed acquisitions and divestitures (A&D). Adjusted Net
Income is presented because the timing and amount of these items
cannot be reasonably estimated and affect the comparability of
operating results from period to period, and current period
to prior periods. The Company believes that the presentation of
Adjusted Net Income provides useful information to investors as it
is one of the metrics management uses to assess the Company’s
ongoing operating and financial performance, and also is a useful
metric for investors to compare our results with our peers.
| |
(Unaudited
for All Periods) |
| |
Three Months Ended |
|
Nine Months Ended |
| |
September 30, |
|
June 30, |
|
September 30, |
|
September 30, |
|
September 30, |
| |
|
2024 |
|
|
|
2024 |
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
| |
Total |
|
Per share - diluted |
|
Total |
|
Per share - diluted |
|
Total |
|
Per share - diluted |
|
Total |
|
Per share - diluted |
|
Total |
|
Per share - diluted |
|
Net Income (Loss) |
$ |
33,878,424 |
|
|
$ |
0.17 |
|
|
$ |
22,418,994 |
|
|
$ |
0.11 |
|
$ |
(7,539,222 |
) |
|
$ |
(0.04 |
) |
|
$ |
61,812,795 |
|
|
$ |
0.31 |
|
|
$ |
53,968,162 |
|
|
$ |
0.28 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Share-based compensation |
|
32,087 |
|
|
|
— |
|
|
|
2,077,778 |
|
|
|
0.01 |
|
|
2,170,735 |
|
|
|
0.01 |
|
|
|
3,833,697 |
|
|
|
0.02 |
|
|
|
6,374,743 |
|
|
|
0.03 |
|
| Unrealized loss (gain) on
change in fair value of derivatives |
|
(26,614,390 |
) |
|
|
(0.13 |
) |
|
|
(765,898 |
) |
|
|
— |
|
|
33,871,957 |
|
|
|
0.17 |
|
|
|
(9,827,308 |
) |
|
|
(0.05 |
) |
|
|
20,653,462 |
|
|
|
0.11 |
|
| Transaction costs - executed
A&D |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
(157,641 |
) |
|
|
— |
|
|
|
3,539 |
|
|
|
— |
|
|
|
62,550 |
|
|
|
— |
|
| Tax impact on adjusted
items |
|
6,132,537 |
|
|
|
0.03 |
|
|
|
(304,225 |
) |
|
|
— |
|
|
(2,059,802 |
) |
|
|
(0.01 |
) |
|
|
1,380,335 |
|
|
|
0.01 |
|
|
|
(1,752,617 |
) |
|
|
(0.01 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Adjusted Net
Income |
$ |
13,428,658 |
|
|
$ |
0.07 |
|
|
$ |
23,426,649 |
|
|
$ |
0.12 |
|
$ |
26,286,027 |
|
|
$ |
0.13 |
|
|
$ |
57,203,058 |
|
|
$ |
0.29 |
|
|
$ |
79,306,300 |
|
|
$ |
0.41 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Diluted Weighted-Average
Shares Outstanding |
|
200,723,863 |
|
|
|
|
|
200,428,813 |
|
|
|
|
|
195,361,476 |
|
|
|
|
|
200,139,478 |
|
|
|
|
|
194,583,215 |
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Adjusted Net Income
per Diluted Share |
$ |
0.07 |
|
|
|
|
$ |
0.12 |
|
|
|
|
$ |
0.13 |
|
|
|
|
$ |
0.29 |
|
|
|
|
$ |
0.41 |
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Net Income (Loss) to
Adjusted EBITDA
The Company defines “Adjusted EBITDA” as net
income (loss) plus net interest expense (including interest income
and expense), unrealized loss (gain) on change in fair value of
derivatives, ceiling test impairment, income tax (benefit) expense,
depreciation, depletion and amortization, asset retirement
obligation accretion, transaction costs for executed acquisitions
and divestitures (A&D), share-based compensation, loss (gain)
on disposal of assets, and backing out the effect of other income.
Company management believes Adjusted EBITDA is relevant and useful
because it helps investors understand Ring’s operating performance
and makes it easier to compare its results with those of other
companies that have different financing, capital and tax
structures. Adjusted EBITDA should not be considered in isolation
from or as a substitute for net income, as an indication of
operating performance or cash flows from operating activities or as
a measure of liquidity. Adjusted EBITDA, as Ring calculates it, may
not be comparable to Adjusted EBITDA measures reported by other
companies. In addition, Adjusted EBITDA does not represent funds
available for discretionary use.
| |
(Unaudited
for All Periods) |
| |
Three Months Ended |
|
Nine Months Ended |
| |
September 30, |
|
June 30, |
|
September 30, |
|
September 30, |
|
September 30, |
| |
|
2024 |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
| Net Income
(Loss) |
$ |
33,878,424 |
|
|
$ |
22,418,994 |
|
|
$ |
(7,539,222 |
) |
|
$ |
61,812,795 |
|
|
$ |
53,968,162 |
|
| |
|
|
|
|
|
|
|
|
|
|
Interest expense, net |
|
10,610,539 |
|
|
|
10,801,194 |
|
|
|
11,301,328 |
|
|
|
32,832,133 |
|
|
|
32,162,669 |
|
|
Unrealized loss (gain) on change in fair value of derivatives |
|
(26,614,390 |
) |
|
|
(765,898 |
) |
|
|
33,871,957 |
|
|
|
(9,827,308 |
) |
|
|
20,653,462 |
|
|
Income tax (benefit) expense |
|
10,087,954 |
|
|
|
6,820,485 |
|
|
|
(3,411,336 |
) |
|
|
18,637,325 |
|
|
|
(7,737,688 |
) |
|
Depreciation, depletion and amortization |
|
25,662,123 |
|
|
|
24,699,421 |
|
|
|
21,989,034 |
|
|
|
74,153,994 |
|
|
|
64,053,637 |
|
|
Asset retirement obligation accretion |
|
354,195 |
|
|
|
352,184 |
|
|
|
354,175 |
|
|
|
1,057,213 |
|
|
|
1,073,900 |
|
|
Transaction costs - executed A&D |
|
— |
|
|
|
— |
|
|
|
(157,641 |
) |
|
|
3,539 |
|
|
|
62,550 |
|
|
Share-based compensation |
|
32,087 |
|
|
|
2,077,778 |
|
|
|
2,170,735 |
|
|
|
3,833,697 |
|
|
|
6,374,743 |
|
|
Loss (gain) on disposal of assets |
|
— |
|
|
|
(51,338 |
) |
|
|
— |
|
|
|
(89,693 |
) |
|
|
132,109 |
|
|
Other income |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(25,686 |
) |
|
|
(126,210 |
) |
| |
|
|
|
|
|
|
|
|
|
| Adjusted
EBITDA |
$ |
54,010,932 |
|
|
$ |
66,352,820 |
|
|
$ |
58,579,030 |
|
|
$ |
182,388,009 |
|
|
$ |
170,617,334 |
|
| |
|
|
|
|
|
|
|
|
|
| Adjusted EBITDA
Margin |
|
61 |
% |
|
|
67 |
% |
|
|
63 |
% |
|
|
64 |
% |
|
|
65 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliations of Net Cash Provided by
Operating Activities to Adjusted Free Cash Flow and Adjusted EBITDA
to Adjusted Free Cash Flow
The Company defines “Adjusted Free Cash Flow” or
“AFCF” as Net Cash Provided by Operating Activities less changes in
operating assets and liabilities (as reflected on our Condensed
Statements of Cash Flows), plus transaction costs for executed
acquisitions and divestitures (A&D), current income tax expense
(benefit), proceeds from divestitures of equipment for oil and
natural gas properties, loss (gain) on disposal of assets, and less
capital expenditures, bad debt expense, and other income. For this
purpose, our definition of capital expenditures includes costs
incurred related to oil and natural gas properties (such as
drilling and infrastructure costs and the lease maintenance costs)
but excludes acquisition costs of oil and gas properties from third
parties that are not included in our capital expenditures guidance
provided to investors. Our management believes that Adjusted Free
Cash Flow is an important financial performance measure for use in
evaluating the performance and efficiency of our current operating
activities after the impact of capital expenditures and net
interest expense (including interest income and expense, excluding
amortization of deferred financing costs) and without being
impacted by items such as changes associated with working capital,
which can vary substantially from one period to another. Other
companies may use different definitions of Adjusted Free Cash
Flow.
| |
(Unaudited for All Periods) |
| |
Three Months Ended |
|
Nine Months Ended |
| |
September 30, |
|
June 30, |
|
September 30, |
|
September 30, |
|
September 30, |
|
|
|
2024 |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
| |
|
|
|
|
|
|
|
|
|
| Net Cash Provided by
Operating Activities |
$ |
51,336,932 |
|
|
$ |
50,617,930 |
|
|
$ |
55,390,975 |
|
|
$ |
147,144,031 |
|
|
$ |
142,437,252 |
|
| Adjustments - Condensed
Statements of Cash Flows |
|
|
|
|
|
|
|
|
|
|
Changes in operating assets and liabilities |
|
(6,775,740 |
) |
|
|
5,979,501 |
|
|
|
(6,843,290 |
) |
|
|
5,961,765 |
|
|
|
(574,197 |
) |
|
Transaction costs - executed A&D |
|
— |
|
|
|
— |
|
|
|
(157,641 |
) |
|
|
3,539 |
|
|
|
62,550 |
|
|
Income tax expense (benefit) - current |
|
74,899 |
|
|
|
152,385 |
|
|
|
165,780 |
|
|
|
329,917 |
|
|
|
264,261 |
|
|
Capital expenditures |
|
(42,691,163 |
) |
|
|
(35,360,832 |
) |
|
|
(42,398,484 |
) |
|
|
(114,313,003 |
) |
|
|
(113,152,655 |
) |
|
Proceeds from divestiture of equipment for oil and natural gas
properties |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
54,558 |
|
| Bad
debt expense |
|
(8,817 |
) |
|
|
(14,937 |
) |
|
|
(19,656 |
) |
|
|
(187,594 |
) |
|
|
(41,865 |
) |
|
Loss (gain) on disposal of assets |
|
— |
|
|
|
38,355 |
|
|
|
— |
|
|
|
— |
|
|
|
132,109 |
|
|
Other income |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(25,686 |
) |
|
|
(126,210 |
) |
| |
|
|
|
|
|
|
|
|
|
| Adjusted Free Cash
Flow |
$ |
1,936,111 |
|
|
$ |
21,412,402 |
|
|
$ |
6,137,684 |
|
|
$ |
38,912,969 |
|
|
$ |
29,055,803 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
(Unaudited for All Periods) |
| |
Three Months Ended |
|
Nine Months Ended |
| |
September 30, |
|
June 30, |
|
September 30, |
|
September 30, |
|
September 30, |
|
|
|
2024 |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
| |
|
|
|
|
|
|
|
|
|
| Adjusted
EBITDA |
$ |
54,010,932 |
|
|
$ |
66,352,820 |
|
|
$ |
58,579,030 |
|
|
$ |
182,388,009 |
|
|
$ |
170,617,334 |
|
| |
|
|
|
|
|
|
|
|
|
|
Net interest expense (excluding amortization of deferred financing
costs) |
|
(9,383,658 |
) |
|
|
(9,579,586 |
) |
|
|
(10,042,862 |
) |
|
|
(29,162,037 |
) |
|
|
(28,463,434 |
) |
|
Capital expenditures |
|
(42,691,163 |
) |
|
|
(35,360,832 |
) |
|
|
(42,398,484 |
) |
|
|
(114,313,003 |
) |
|
|
(113,152,655 |
) |
|
Proceeds from divestiture of equipment for oil and natural gas
properties |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
54,558 |
|
| |
|
|
|
|
|
|
|
|
|
| Adjusted Free Cash
Flow |
$ |
1,936,111 |
|
|
$ |
21,412,402 |
|
|
$ |
6,137,684 |
|
|
$ |
38,912,969 |
|
|
$ |
29,055,803 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Net Cash Provided by
Operating Activities to Adjusted Cash Flow from
Operations
The Company defines “Adjusted Cash Flow from
Operations” or “ACFFO” as Net Cash Provided by Operating
Activities, as reflected in our Condensed Statements of Cash Flows,
less the changes in operating assets and liabilities, which
includes accounts receivable, inventory, prepaid expenses and other
assets, accounts payable, and settlement of asset retirement
obligations, which are subject to variation due to the nature of
the Company’s operations. Accordingly, the Company believes this
non-GAAP measure is useful to investors because it is used often in
its industry and allows investors to compare this metric to other
companies in its peer group as well as the E&P sector.
| |
(Unaudited for All Periods) |
| |
Three Months Ended |
|
Nine Months Ended |
| |
September 30, |
|
June 30, |
|
September 30, |
|
September 30, |
|
September 30, |
|
|
|
2024 |
|
|
|
2024 |
|
|
2023 |
|
|
|
2024 |
|
|
2023 |
|
| |
|
|
|
|
|
|
|
|
|
| Net Cash Provided by
Operating Activities |
$ |
51,336,932 |
|
|
$ |
50,617,930 |
|
$ |
55,390,975 |
|
|
$ |
147,144,031 |
|
$ |
142,437,252 |
|
| |
|
|
|
|
|
|
|
|
|
| Changes in operating assets
and liabilities |
|
(6,775,740 |
) |
|
|
5,979,501 |
|
|
(6,843,290 |
) |
|
|
5,961,765 |
|
|
(574,197 |
) |
| |
|
|
|
|
|
|
|
|
|
| Adjusted Cash Flow
from Operations |
$ |
44,561,192 |
|
|
$ |
56,597,431 |
|
$ |
48,547,685 |
|
|
$ |
153,105,796 |
|
$ |
141,863,055 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of General and
Administrative Expense (G&A) to G&A Excluding Share-Based
Compensation and Transaction Costs
The following table presents a reconciliation of
General and Administrative Expense (G&A), a GAAP measure, to
G&A excluding share-based compensation, and G&A excluding
share-based compensation and transaction costs for executed
acquisitions and divestitures (A&D).
| |
(Unaudited for All Periods) |
| |
Three Months Ended |
|
Nine Months Ended |
| |
September 30, |
|
June 30, |
|
September 30, |
|
September 30, |
|
September 30, |
| |
2024 |
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|
|
|
|
|
|
|
|
|
|
|
|
General and administrative expense (G&A) |
$ |
6,421,567 |
|
$ |
7,713,534 |
|
$ |
7,083,574 |
|
|
$ |
21,604,323 |
|
$ |
21,023,956 |
|
Shared-based compensation |
|
32,087 |
|
|
2,077,778 |
|
|
2,170,735 |
|
|
|
3,833,697 |
|
|
6,374,743 |
|
G&A excluding share-based compensation |
|
6,389,480 |
|
|
5,635,756 |
|
|
4,912,839 |
|
|
|
17,770,626 |
|
|
14,649,213 |
|
Transaction costs - executed A&D |
|
— |
|
|
— |
|
|
(157,641 |
) |
|
|
3,539 |
|
|
62,550 |
|
G&A excluding share-based compensation and transaction
costs |
$ |
6,389,480 |
|
$ |
5,635,756 |
|
$ |
5,070,480 |
|
|
$ |
17,767,087 |
|
$ |
14,586,663 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Calculation of Leverage
Ratio
“Leverage” or the “Leverage Ratio” is calculated
under our existing senior revolving credit facility and means as of
any date, the ratio of (i) our consolidated total debt as of such
date to (ii) our Consolidated EBITDAX for the four consecutive
fiscal quarters ending on or immediately prior to such date for
which financial statements are required to have been delivered
under our existing senior revolving credit facility.
The Company defines “Consolidated EBITDAX” in
accordance with our existing senior revolving credit facility that
means for any period an amount equal to the sum of (i) consolidated
net income (loss) for such period plus (ii) to the extent deducted
in determining consolidated net income for such period, and without
duplication, (A) consolidated interest expense, (B) income tax
expense determined on a consolidated basis in accordance with GAAP,
(C) depreciation, depletion and amortization determined on a
consolidated basis in accordance with GAAP, (D) exploration
expenses determined on a consolidated basis in accordance with
GAAP, and (E) all other non-cash charges acceptable to our senior
revolving credit facility administrative agent determined on a
consolidated basis in accordance with GAAP, in each case for such
period minus (iii) all noncash income added to consolidated net
income (loss) for such period; provided that, for purposes of
calculating compliance with the financial covenants, to the extent
that during such period we shall have consummated an acquisition
permitted by the credit facility or any sale, transfer or other
disposition of any property or assets permitted by the senior
revolving credit facility, Consolidated EBITDAX will be calculated
on a pro forma basis with respect to the property or assets so
acquired or disposed of.
Also set forth in our existing senior revolving
credit facility is the maximum permitted Leverage Ratio of 3.00.
The following table shows the leverage ratio calculation for our
most recent fiscal quarter.
| |
(Unaudited) |
| |
Three Months Ended |
|
|
| |
December 31, |
|
March 31, |
|
June 30, |
|
September 30, |
|
Last Four Quarters |
| |
|
2023 |
|
|
|
2024 |
|
|
|
2024 |
|
|
|
2024 |
|
|
| Consolidated EBITDAX Calculation: |
|
|
|
|
|
|
|
|
|
| Net Income
(Loss) |
$ |
50,896,479 |
|
|
$ |
5,515,377 |
|
|
$ |
22,418,994 |
|
|
$ |
33,878,424 |
|
|
$ |
112,709,274 |
|
| Plus: Consolidated interest expense |
|
11,506,908 |
|
|
|
11,420,400 |
|
|
|
10,801,194 |
|
|
|
10,610,539 |
|
|
|
44,339,041 |
|
| Plus: Income tax provision (benefit) |
|
7,862,930 |
|
|
|
1,728,886 |
|
|
|
6,820,485 |
|
|
|
10,087,954 |
|
|
|
26,500,255 |
|
| Plus: Depreciation, depletion and amortization |
|
24,556,654 |
|
|
|
23,792,450 |
|
|
|
24,699,421 |
|
|
|
25,662,123 |
|
|
|
98,710,648 |
|
| Plus: non-cash charges acceptable to Administrative Agent |
|
(29,695,076 |
) |
|
|
19,627,646 |
|
|
|
1,664,064 |
|
|
|
(26,228,108 |
) |
|
|
(34,631,474 |
) |
| Consolidated EBITDAX |
$ |
65,127,895 |
|
|
$ |
62,084,759 |
|
|
$ |
66,404,158 |
|
|
$ |
54,010,932 |
|
|
$ |
247,627,744 |
|
| Plus: Pro Forma Acquired Consolidated EBITDAX |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
| Less: Pro Forma Divested Consolidated EBITDAX |
|
24,832 |
|
|
|
(124,084 |
) |
|
|
(469,376 |
) |
|
|
(600,460 |
) |
|
|
(1,169,088 |
) |
| Pro Forma Consolidated EBITDAX |
$ |
65,152,727 |
|
|
$ |
61,960,675 |
|
|
$ |
65,934,782 |
|
|
$ |
53,410,472 |
|
|
$ |
246,458,656 |
|
| |
|
|
|
|
|
|
|
|
|
| Non-cash charges acceptable to Administrative Agent |
|
|
|
|
|
|
|
|
|
| Asset retirement obligation accretion |
$ |
351,786 |
|
|
$ |
350,834 |
|
|
$ |
352,184 |
|
|
$ |
354,195 |
|
|
|
| Unrealized loss (gain) on derivative assets |
|
(32,505,544 |
) |
|
|
17,552,980 |
|
|
|
(765,898 |
) |
|
|
(26,614,390 |
) |
|
|
| Share-based compensation |
|
2,458,682 |
|
|
|
1,723,832 |
|
|
|
2,077,778 |
|
|
|
32,087 |
|
|
|
| Total non-cash charges acceptable to Administrative Agent |
$ |
(29,695,076 |
) |
|
$ |
19,627,646 |
|
|
$ |
1,664,064 |
|
|
$ |
(26,228,108 |
) |
|
|
| |
|
|
|
|
|
|
|
|
|
| |
As of |
|
|
|
|
|
|
|
|
| |
September 30, |
|
|
|
|
|
|
|
|
| |
|
2024 |
|
|
|
|
|
|
|
|
|
| Leverage Ratio Covenant: |
|
|
|
|
|
|
|
|
|
| Revolving line of credit |
$ |
392,000,000 |
|
|
|
|
|
|
|
|
|
| Pro Forma Consolidated EBITDAX |
|
246,458,656 |
|
|
|
|
|
|
|
|
|
| Leverage Ratio |
|
1.59 |
|
|
|
|
|
|
|
|
|
| Maximum Allowed |
|
≤
3.00x |
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
All-In Cash Operating Costs
The Company defines All-In Cash Operating Costs,
a non-GAAP financial measure, as “all in cash” costs which includes
lease operating expenses, G&A costs excluding share-based
compensation, net interest expense (including interest income and
expense, excluding amortization of deferred financing costs),
workovers and other operating expenses, production taxes, ad
valorem taxes, and gathering/transportation costs. Management
believes that this metric provides useful additional information to
investors to assess the Company’s operating costs in comparison to
its peers, which may vary from company to company.
| |
(Unaudited for All Periods) |
| |
Three Months Ended |
|
Nine Months Ended |
| |
September 30, |
|
June 30, |
|
September 30, |
|
September 30, |
|
September 30, |
|
|
|
2024 |
|
|
2024 |
|
|
2023 |
|
|
|
2024 |
|
|
2023 |
|
| All-In Cash Operating
Costs: |
|
|
|
|
|
|
|
|
|
|
Lease operating expenses (including workovers) |
$ |
20,315,282 |
|
$ |
19,309,017 |
|
$ |
18,015,348 |
|
|
$ |
57,984,733 |
|
$ |
51,426,145 |
|
|
G&A excluding share-based compensation |
|
6,389,480 |
|
|
5,635,756 |
|
|
4,912,839 |
|
|
|
17,770,626 |
|
|
14,649,213 |
|
|
Net interest expense (excluding amortization of deferred financing
costs) |
|
9,383,658 |
|
|
9,579,586 |
|
|
10,042,862 |
|
|
|
29,162,037 |
|
|
28,463,434 |
|
|
Operating lease expense |
|
175,091 |
|
|
175,090 |
|
|
138,220 |
|
|
|
525,272 |
|
|
366,711 |
|
|
Oil and natural gas production taxes |
|
4,203,851 |
|
|
3,627,264 |
|
|
4,753,289 |
|
|
|
12,259,418 |
|
|
13,173,568 |
|
|
Ad valorem taxes |
|
2,164,562 |
|
|
1,337,276 |
|
|
1,779,163 |
|
|
|
5,647,469 |
|
|
5,120,119 |
|
|
Gathering, transportation and processing costs |
|
102,420 |
|
|
107,629 |
|
|
(4,530 |
) |
|
|
376,103 |
|
|
(6,985 |
) |
| All-in cash operating
costs |
$ |
42,734,344 |
|
$ |
39,771,618 |
|
$ |
39,637,191 |
|
|
$ |
123,725,658 |
|
$ |
113,192,205 |
|
| |
|
|
|
|
|
|
|
|
|
| Boe |
|
1,849,934 |
|
|
1,800,570 |
|
|
1,610,857 |
|
|
|
5,382,561 |
|
|
4,828,831 |
|
| |
|
|
|
|
|
|
|
|
|
| All-in cash operating
costs per Boe |
$ |
23.10 |
|
$ |
22.09 |
|
$ |
24.61 |
|
|
$ |
22.99 |
|
$ |
23.44 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Operating Margin
The Company defines Cash Operating Margin, a
non-GAAP financial measure, as realized revenues per Boe less
“all-in cash operating costs per Boe. Management believes that this
metric provides useful additional information to investors to
assess the Company’s operating margins in comparison to its peers,
which may vary from company to company.
| |
(Unaudited for All Periods) |
| |
Three Months Ended |
|
Nine Months Ended |
| |
September 30, |
|
June 30, |
|
September 30, |
|
September 30, |
|
September 30, |
|
|
|
2024 |
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
| Cash Operating
Margin |
|
|
|
|
|
|
|
|
|
|
Realized revenues per Boe |
$ |
48.24 |
|
$ |
55.06 |
|
$ |
58.16 |
|
$ |
52.56 |
|
$ |
54.07 |
|
All-in cash operating costs per Boe |
|
23.10 |
|
|
22.09 |
|
|
24.61 |
|
|
22.99 |
|
|
23.44 |
| Cash Operating Margin
per Boe |
$ |
25.14 |
|
$ |
32.97 |
|
$ |
33.55 |
|
$ |
29.57 |
|
$ |
30.63 |
1 A non-GAAP financial measure; see the “Non-GAAP Information”
section in this release for more information including
reconciliations to the most comparable GAAP measures.
2 The cash flow for the next twelve months (“NTM”) represents
field level cash flow based on a strip price as of September 12,
2024.
3 Refer to the “Non-GAAP Information” section in this release
for calculation of the Leverage Ratio.
This press release was published by a CLEAR® Verified
individual.
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