Company: REI
Filing Date: 2025-08-06
Form Type: 10-Q
Source: 0001628280-25-038401
Chunk: 104

Company: RING ENERGY, INC.
Filing Date: 2025-08-06
Form: 10-Q
Item: Part I, Item 8
Chunk 104
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 to ensure the fair value level classification is appropriate. When transfers between levels occur, it is our policy to assume that the transfer occurred at the date of the event or change in circumstances that caused the transfer.The fair values of the Company’s derivatives are not actively quoted in the open market. The Company uses a market approach to estimate the fair values of its derivative instruments on a recurring basis, utilizing commodity futures pricing for the underlying commodities provided by a reputable third party, a Level 2 fair value measurement.The Company applies the provisions of the fair value measurement standard on a non-recurring basis to its non-financial assets and liabilities. These assets and liabilities are not measured at fair value on an ongoing basis but are subject to fair value adjustments if events or changes in certain circumstances indicate that adjustments may be necessary.

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The following table summarizes the valuation of our assets and liabilities that are measured at fair value on a recurring basis (further detail in "NOTE 6 — DERIVATIVE FINANCIAL INSTRUMENTS").Fair Value Measurement ClassificationQuoted prices inActive Marketsfor Identical Assetsor (Liabilities)(Level 1)Significant OtherObservable Inputs(Level 2)SignificantUnobservableInputs(Level 3)TotalAs of December 31, 2024Commodity Derivatives - Assets$— $10,970,432 $— $10,970,432 Commodity Derivatives - Liabilities$— $(9,323,292)$— $(9,323,292)Total$— $1,647,140 $— $1,647,140 As of June 30, 2025Commodity Derivatives - Assets$— $21,428,715 $— $21,428,715 Commodity Derivatives - Liabilities$— $(6,186,560)$— $(6,186,560)Total$— $15,242,155 $— $15,242,155 The carrying amounts reported for the revolving line of credit approximates fair value because the underlying instruments are at interest rates which approximate current market rates. The carrying amounts of receivables and accounts payable and other current assets and liabilities approximate fair value because of the short-term maturities and/or liquid nature of these assets and liabilities.

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NOTE 8 — REVOLVING LINE OF CREDITOn June 18, 2025, the Company, as borrower, Bank of America,