Company: REI
Filing Date: 2025-08-06
Form Type: 10-Q
Source: 0001628280-25-038401
Chunk: 173

Company: RING ENERGY, INC.
Filing Date: 2025-08-06
Form: 10-Q
Item: Part I, Item 7
Chunk 173
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 prices for each month within that period, except when changes are fixed and determinable by existing contracts. We anticipate a decrease in the twelve month average price over the next several months which will reasonably likely lead to a non-cash impairment. Estimating potential future non-cash impairments is complex due to numerous factors affecting the ceiling test calculation, including but not limited to future prices, operating costs, upward or downward reserve revisions, reserve additions, and tax attributes.  The amount of any such potential non-cash impairment, if any, is not estimable at this time given the uncertainty of these factors. 

Natural Gas Takeaway Capacity

The Permian Basin has been experiencing a lack of sufficient pipeline transportation that is connected to markets that are purchasing the natural gas produced. This has resulted in negative natural gas prices at times, whereby the seller is actually paying the purchaser to take the gas. We have experienced negative realized gas prices at times and conditions are continuing. If these depressed or inverted natural gas prices continue in the region, our natural gas revenues will continue to be negatively impacted.

Inflation

Inflation has increased costs associated with our capital program and production operations. We have experienced increases in the costs of many of the materials, supplies, equipment and services used in our operations and we expect inflation to continue based on current economic circumstances, including tariffs, trade wars, and supply chain disruptions. In addition, the attempts to reduce inflation by the U.S. Federal Reserve have resulted in increased interest rates on debt. We continue to closely monitor costs and take all reasonable steps to mitigate the inflationary effect on our cost structure and also work to enhance our efficiency to minimize additional cost increases where possible.

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Results of Operations

Oil, Natural Gas, and Natural Gas Liquids Revenues for the Three Months Ended June 30, 2025 and 2024

For the Three Months EndedJune 30, 2025June 30, 2024Change% ChangeNet sales:Oil$82,778,476 $99,289,498 $(16,511,022)(17)%Natural gas(2,238,937)(2,972,807)733,870 25 %Natural gas liquids2,063,220 2,822,658 (759,438)(27)%Total sales$82,602,759 $99,139,349 $(16,536,590)(17)%Net production:Oil (Bbls)1,320,508 1,239,731