Company: REI
Filing Date: 2025-08-06
Form Type: 10-Q
Source: 0001628280-25-038401
Chunk: 126

Company: RING ENERGY, INC.
Filing Date: 2025-08-06
Form: 10-Q
Item: Part I, Item 8
Chunk 126
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 costs ("GTP")$133,809 $107,629 $26,180 24 %Average GTP per Boe$0.07 $0.06 $0.01 17 %Ad valorem taxes$1,648,647 $1,337,276 $311,371 23 %Average Ad valorem taxes per Boe$0.85 $0.74 $0.11 15 %Oil and natural gas production taxes$3,832,607 $3,627,264 $205,343 6 %Average Production taxes per Boe$1.98 $2.01 $(0.03)(1)%Production taxes as a percentage of total sales4.64 %3.66 %0.98 %27 %

Lease operating expenses. Our total lease operating expenses (“LOE”) increased from $19.3 million to $20.2 million and decreased on a per Boe basis from $10.72 to $10.45. These per Boe amounts are calculated by dividing our total lease operating expenses by our total volume sold, in Boe. Total LOE increased primarily due to an 8% increase in production of 137,280 Boe as a result of the increased production and well count from the Lime Rock Acquisition as well as new wells drilled and completed in our development program. The primary cost driver for the period was an increase of $1.7 million in electricity costs. Other impacting factors included an increase of $0.1 million for environmental sustainability, offset by reductions of $0.5 million for supplies, tools, and materials, $0.1 million for workovers, $0.1 million for hot oil costs, and $0.1 million for chemical costs.

Gathering, transportation and processing costs. Our total gathering, transportation and processing costs (“GTP”) increased from $107,629 to $133,809 and increased on a per Boe basis from $0.06 to $0.07. Beginning May 1, 2022, due to a natural gas processing entity taking control of transportation at the wellhead, GTP costs were re-classified as a reduction to oil and natural gas sales revenues. However, one contract remains in place with a natural gas processing entity where point of control of gas dictates requiring the fees be recorded as an expense. The increase in GTP costs was primarily due to the higher natural