Company: REI
Filing Date: 2025-08-06
Form Type: 10-Q
Source: 0001628280-25-038401
Chunk: 87

Company: RING ENERGY, INC.
Filing Date: 2025-08-06
Form: 10-Q
Item: Part I, Item 8
Chunk 87
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 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 June 30, 2025 and December 31, 2024, the Company did not carry a valuation allowance against its federal and state deferred tax assets. The Company recorded the following federal and state income tax benefits (provisions) for the three and six months ended June 30, 2025 and 2024.  

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For the Three Months EndedFor the Six Months EndedJune 30, 2025June 30, 2024June 30, 2025June 30, 2024Deferred federal income tax provision$(5,776,325)$(6,427,828)$(8,592,403)$(7,979,587)Current state income tax provision(147,461)(152,385)(283,854)(255,018)Deferred state income tax provision(183,639)(240,272)(272,345)(314,766)Provision for Income Taxes$(6,107,425)$(6,820,485)$(9,148,602)$(8,549,371)Effective tax rate (1)22.84%23.33%23.52%23.43%(1) The Company’s overall effective tax rate is calculated as Provision for Income Taxes divided by Income Before Provision for Income Taxes. The effective tax rates for the three and six months ended June 30, 2025 and 2024 were higher than the federal statutory corporate tax rate, primarily impacted by the state income taxes.

Accounting for Uncertainty in Income Taxes – In accordance with GAAP, the Company has analyzed its filing positions in all jurisdictions where it is required to file income tax returns for the open tax years. The Company has identified its federal income tax return and its franchise tax return in Texas in which it operates as a “major” tax jurisdiction. The Company’s federal income tax returns for the years ended December 31, 2020 and after remain subject to examination. The Company’s federal income tax returns for the years ended December 31, 2008 and after remain subject to examination to the extent of the net operating loss (NOL) carryforwards. The Company’s franchise tax returns in Texas remain subject to examination for 2019 and after. The Company currently