Company: REI
Filing Date: 2025-03-05
Form Type: 10-K
Source: 0001628280-25-010585
Chunk: 99

Company: RING ENERGY, INC.
Filing Date: 2025-03-05
Form: 10-K
Item: Item 16
Chunk 99
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 as product pricing is based on published market prices and reduced for contract specified differentials (quality, transportation and other variables from benchmark prices). The guidance regarding ASU 2014-09 does not require that the transaction price be fixed or stated in the contract. Estimating the variable consideration does not require significant judgment and Ring engages third party sources to validate the estimates. Revenue is recognized net of royalties due to third parties in an amount that reflects the consideration the Company expects to receive in exchange for those products. See "NOTE 2 — REVENUE RECOGNITION" for additional information.

Income Taxes – Provisions for income taxes are based on taxes payable or refundable for the current year and deferred taxes. Deferred income taxes are provided on differences between the tax basis of assets and liabilities and their carrying 

F-13

amounts in the financial statements, and tax carryforwards. Deferred tax assets and liabilities are included in the financial statements at currently enacted income tax rates applicable to the period in which the deferred tax assets and liabilities are expected to be realized or settled. As changes in tax laws or rates are enacted, deferred tax assets and liabilities are adjusted through the provision for income taxes.  The Company recorded the following federal and state income tax provisions for the years ended December 31, 2024, 2023, and 2022. For the Years Ended December 31,202420232022Deferred federal income tax benefit (provision)$(19,096,010)$901,522 $(6,437,680)Current state income tax benefit (provision)(401,197)(72,213)— Deferred state income tax benefit (provision)(943,747)(954,551)(1,971,044)Provision for Income Taxes$(20,440,954)$(125,242)$(8,408,724)The Company’s overall effective tax rates are calculated as Provision for Income Taxes divided by Income Before Provision for Income Taxes. The effective tax rates for the years ended  December 31, 2024, 2023, and 2022 were as follows.For the Years Ended December 31,202420232022Effective tax rate (1)23.3 %0.1 %5.7 %(1) The effective tax rate for  the year ended December 31, 2023 was impacted by the release of valuation allowance on the Company's federal net deferred tax asset. A tax benefit of $24.2 million was recorded in the year