Company: REI
Filing Date: 2025-03-05
Form Type: 10-K
Source: 0001628280-25-010585
Chunk: 135

Company: RING ENERGY, INC.
Filing Date: 2025-03-05
Form: 10-K
Item: Item 16
Chunk 135
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:12/31/2024Total12/31/2023TotalDeferred Tax AssetsNet operating loss (NOL) carryforward68,516,720 82,011,212 Share-based compensation1,097,273 1,372,277 Asset retirement obligation5,755,174 6,165,239 Fair value of derivative instruments— 224,209 §163(j) business interest expense carryforward18,838,600 12,854,900 Other1,672,268 1,638,297 Gross Deferred Tax Assets95,880,035 104,266,134 Less: valuation allowance— — Net Deferred Tax Assets95,880,035 104,266,134 Deferred Tax LiabilitiesProperty and equipment(123,318,803)(111,872,367)Fair value of derivative instruments(392,761)— Other(760,273)(945,812)Net Deferred Tax Liabilities(124,471,837)(112,818,179)Net Deferred Tax Liability(28,591,802)(8,552,045)As of December 31, 2024, the Company had net operating loss carryforwards for federal income tax reporting purposes of approximately $89.7 million which, if unused, will begin to expire in 2033 and fully expire in 2037 and an additional $235.0 million that can be carried forward indefinitely. The shares issued for the Stronghold Acquisition (further discussed in NOTE 5 — ACQUISITIONS & DIVESTITURES) resulted in the Company having an ownership change under Section 382 of the Internal Revenue Code of 1986, as amended. Section 382 limits the availability of certain tax attributes, including net operating losses and disallowed interest carryforwards, to offset future taxable income of the Company. In evaluating its need for a valuation allowance against its deferred tax assets, the Company has estimated the amount of tax attributes related to the pre-ownership change period to be available under Section 382 in periods in which it expects deferred tax liabilities to be realized based on currently available information. Based on its current analysis, the Company does not anticipate any material tax attributes to expire unused as result of the Section 382 ownership change; however, the ultimate timing in the amount of tax attributes available in future periods may be different than the Company's current estimate and will be determined in each year as new information becomes available. Changes in expectation in the timing of the availability