Company: REI
Filing Date: 2025-03-05
Form Type: 10-K
Source: 0001628280-25-010585
Chunk: 11

Company: RING ENERGY, INC.
Filing Date: 2025-03-05
Form: 10-K
Item: Item 7
Chunk 11
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 on derivative contracts of approximately $2.4 million. During 2023, the Company recorded a gain on derivative contracts of approximately $2.8 million. For the derivative contract settlements, the Company recorded  a realized loss of $5.2 million during 2024 and a realized loss of $9.1 million during 2023. The decrease of $3.9 million in the realized loss was $1.1 million from realized oil derivative settlements and $2.8 million from realized natural gas derivative settlements. For the marked-to-market contracts, the Company recorded an unrealized gain of $2.8 million during 2024 and an unrealized gain of $11.9 million during 2023. This change of approximately $9.0 million in unrealized derivatives was from $2.6 million in unfavorable derivative portfolio changes and futures pricing for marked-to-market oil derivative contracts, as well as $6.4 million unfavorable changes to the marked-to-market natural gas derivative contract balance.

Gain (loss) on disposal of assets. Gain (loss) on disposal of assets increased $176,821 to a gain $89,693 in 2024 from a loss of $87,128 in 2023. The increase was primarily the result of the Company recognizing a gain on disposal of assets primarily from selling multiple leased vehicles during 2024, as opposed to a loss on disposal of assets primarily from selling multiple company owned vehicles during 2023.

Other income. Other income decreased $92,279 to $106,656 in 2024 from $198,935 in 2023. The decrease primarily resulted from the termination of The Woodlands office operating lease in 2023. Offsetting this reduction was a higher bank rebate related to the use of a vendor payment program earned in 2024 compared to 2023.

Provision for income taxes. The provision for income taxes changed to a provision of $20,440,954 for 2024 from a provision of $125,242 for 2023. The provision for income taxes was calculated using the annual effective tax rate method based on our estimated earnings and estimated state and federal income taxes due for 2024, taking into account all applicable tax rates and laws.

Net income. The Company achieved net income of $67,470,314 in 2024 compared to net income of $104,864,641 in 2023. The decrease in income associated with operations was due to increased LOE