Company: REI
Filing Date: 2025-11-06
Form Type: 10-Q
Source: 0001384195-25-000018
Chunk: 43

Company: RING ENERGY, INC.
Filing Date: 2025-11-06
Form: 10-Q
Item: Part I, Item 1
Chunk 43
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 basis for evaluating performance and determining resource allocation. The significant expense categories provided to the CODM include lease operating expenses; gathering, transportation and processing costs; ad valorem taxes; and oil and natural gas production taxes. Each of these costs are deducted from oil, natural gas, and natural gas liquids revenues by operating segment to arrive at operating segment profit, used to assess performance. The Company assessed whether its operating segments exhibited similar economic characteristics and whether its operating segments had a similar nature of products, services, production processes, purchaser types/classes, product distribution, and regulatory environment. Each operating segment has similar products (oil, natural gas, and NGLs), similar production processes, similar types of purchasers (midstream companies, or companies with midstream components), similar methods of product delivery, and is governed by the same regulations. After a thorough analysis of each of these factors with regards to the Company's operating segments, it has been determined that it is appropriate to aggregate its operating segments into a single reportable segment, Exploration and Production, which includes all of its revenues, lease operating expenses, gathering, transportation and processing costs, ad valorem taxes, and oil and natural gas production taxes. Refer to the table below.

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For the Three Months Ended September 30,For the Nine Months Ended September 30,2025202420252024Exploration and ProductionOil, natural gas, and natural gas liquids revenues (1)$78,601,336 $89,244,383 $240,295,302 $282,886,868 Lease operating expenses (2)(20,518,472)(20,315,282)(60,442,005)(57,984,733)Gathering, transportation and processing costs(126,569)(102,420)(463,990)(376,103)Ad valorem taxes(2,446,565)(2,164,562)(5,627,320)(5,647,469)Oil and natural gas production taxes(3,670,987)(4,203,851)(11,088,049)(12,259,418)Exploration and Production segment profit$51,838,743 $62,458,268 $162,673,938 $206,619,145 (1) All of the Company's revenues are within the Permian Basin within the United States.(2) The CODM also reviews the following cost categories within lease operating expenses. Refer to the following table.For the Three Months Ended September 30