Company: REI
Filing Date: 2025-11-06
Form Type: 10-Q
Source: 0001384195-25-000018
Chunk: 147

Company: RING ENERGY, INC.
Filing Date: 2025-11-06
Form: 10-Q
Item: Part I, Item 8
Chunk 147
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. Historically, prices received for oil and natural gas production have been volatile and unpredictable. We expect pricing volatility to continue.

The prices we receive depend on many factors outside of our control. A significant decrease in the prices of oil or natural gas would likely have a material adverse effect on our financial condition and results of operations. In order to reduce commodity price uncertainty and increase cash flow predictability relating to the marketing of our crude oil and natural gas, we enter into crude oil and natural gas price hedging arrangements with respect to a portion of our expected production.

Customer Credit Risk

Our principal exposure to credit risk is through receivables from the sale of our oil and natural gas production (approximately $32.4 million as of September 30, 2025). We are subject to credit risk due to the concentration of our oil and natural gas receivables with our most significant customers, or purchasers. We do not require our purchasers to post collateral, and the inability of our significant purchasers to meet their obligations to us or their insolvency or liquidation may adversely affect our financial results. Refer to the following table for detail on the top three purchasers of our oil, natural gas, and NGL revenues for the nine months ended September 30, 2025. We believe that the loss of any of these purchasers would not materially impact our business as we could readily find other purchasers for our oil and natural gas.

For the Nine Months EndedAs ofSeptember 30, 2025September 30, 2025Percentage of Oil, Natural Gas, and Natural Gas Liquids RevenuesPercentage of accounts receivables from the sale of our oil and natural gas productionPurchaser:Phillips 66 Company ("Phillips")66%76%Concord Energy LLC ("Concord")13%10%NGL Crude Partners ("NGL Crude")9%6%

Interest Rate Risk

We are subject to market risk exposure related to changes in interest rates on our indebtedness under our Credit Facility, which bears variable interest based upon a prime rate and is therefore susceptible to interest rate fluctuations. Changes in interest rates affect the interest earned on the Company’s cash and cash equivalents and the interest rate paid on borrowings under the Credit Facility.

As of September 30, 2025, we had $428 million outstanding on our Credit Facility with a weighted average annual interest rate for the nine months ended September 30, 2025 of 8.3%. A 1% change in the interest rate on our Credit