Company: REI
Filing Date: 2025-11-06
Form Type: 10-Q
Source: 0001384195-25-000018
Chunk: 91

Company: RING ENERGY, INC.
Filing Date: 2025-11-06
Form: 10-Q
Item: Part I, Item 8
Chunk 91
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 the deferred tax assets which may not be realized. The ultimate realization of deferred tax assets is assessed at each reporting period and is dependent upon the generation of future taxable income and the Company’s ability to utilize operating loss carryforwards during the periods in which the temporary differences become deductible. We also consider the reversal of deferred tax liabilities and available tax planning strategies. As of September 30, 2025 and December 31, 2024, the Company did not carry a valuation allowance against its federal and state deferred tax assets. On July 4, 2025, the One Big Beautiful Bill Act ("OBBBA") was enacted, which, among other items, allows for 100% bonus depreciation on a permanent basis for property acquired after January 19, 2025. Further, the OBBBA basis for Code Section 163(j) net interest expense deduction is based on EBITDA (earnings before interest, taxes, depreciation and amortization) rather than EBIT (earnings before interest and taxes) for taxable years beginning after December 31, 2024, and any disallowed interest expense can be carried forward indefinitely. We have incorporated these changes into our income tax provision for the three and nine months ended September 30, 2025. 

16

The Company recorded the following federal and state income tax benefits (provisions) for the three and nine months ended September 30, 2025 and 2024.  For the Three Months EndedFor the Nine Months EndedSeptember 30, 2025September 30, 2024September 30, 2025September 30, 2024Deferred federal income tax benefit (provision)$12,558,220 $(9,637,849)$3,965,817 $(17,617,436)Current state income tax provision(39,816)(74,899)(323,670)(329,917)Deferred state income tax benefit (provision)282,543 (375,206)10,198 (689,972)Benefit from (Provision for) Income Taxes$12,800,947 $(10,087,954)$3,652,345 $(18,637,325)Effective tax rate (1)19.87%22.94%14.30%23.17%(1) The Company’s overall effective tax rate is calculated as Benefit from (Provision for) Income Taxes divided by Income (Loss) Before Benefit from (Provision for) Income