Company: REI
Filing Date: 2025-03-05
Form Type: 10-K
Source: 0001628280-25-010585
Chunk: 94

Company: RING ENERGY, INC.
Filing Date: 2025-03-05
Form: 10-K
Item: Item 16
Chunk 94
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,616,395 and $46,384 as of December 31, 2024 and 2023, respectively. The Company places its cash with a high credit quality financial institution. The Company has not experienced any losses in such accounts and believes it is not exposed to significant credit risk in this area.Accounts receivable – Substantially all of the Company’s accounts receivable is from purchasers of oil and natural gas. Oil and natural gas sales are generally unsecured. Accounts receivable from purchasers outstanding longer than the contractual payment terms are considered past due. The Company has not had any significant credit losses in the past and believes its accounts receivable are fully collectable. Refer to the "Major Purchasers" section below for detail on purchaser activity for the years ended December 31, 2024, 2023, and 2022.Production imbalances – The Company accounts for natural gas production imbalances using the sales method, which recognizes revenue on all natural gas sold even though the natural gas volumes sold may be more or less than the Company's ownership entitles it to sell. Liabilities are recorded for imbalances greater than the Company’s proportionate share of remaining estimated natural gas reserves. The Company recorded no imbalances as of December 31, 2024 or 2023.Joint interest billing receivables, net – The Company also has joint interest billing receivables. Joint interest billing receivables are collateralized by the pro rata revenue attributable to the joint interest holders and further by the interest itself. Receivables from joint interest owners outstanding longer than the contractual payment terms are considered past due. The following table indicates the Company's provisions for credit loss expense associated with its joint interest billing receivables during the years ended December 31, 2024, 2023, and 2022.For the Years Ended December 31,202420232022Credit loss expense$160,847$134,007$242,247The following table reflects the Company's joint interest billing receivables and allowance for credit losses as of December 31, 2024 and 2023.20242023Joint interest billing receivables$1,264,897 $2,480,843 Allowance for credit losses(181,733)(58,569)Joint interest billing receivables, net$1,083,164 $2,422,274 

F-10

The increase of $123,164 in the allowance for credit losses during the year ended December