Company: REI
Filing Date: 2025-05-07
Form Type: 10-Q
Source: 0001628280-25-023254
Chunk: 101

Company: RING ENERGY, INC.
Filing Date: 2025-05-07
Form: 10-Q
Item: Part I, Item 8
Chunk 101
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 on management’s expectations for the future and include estimates of future oil and natural gas production or other applicable sales estimates, operational costs, and a risk-adjusted discount rate. The Company may use the present value of estimated future cash inflows and/or outflows or third-party offers or prices of comparable assets with consideration of current market conditions to value its non-financial assets and liabilities when circumstances dictate determining fair value is necessary. Given the significance of the unobservable nature of a number of the inputs, these are considered Level 3 on the fair value hierarchy.

Concentration of Credit Risk and Receivables – Financial instruments that potentially subject the Company to a concentration of credit risk consist principally of cash and receivables.Cash and cash equivalents – The Company had cash in excess of federally insured limits of $850,851 and $1,616,395 as of March 31, 2025 and December 31, 2024, 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. During the three months ended March 31, 2025, sales to three purchasers represented 67%, 13% and 10%, respectively, of total oil, natural gas, and natural gas liquids sales. As of March 31, 2025, receivables outstanding from these three purchasers represented 80%, 10% and 7%, respectively, of accounts receivable. The following table reflects the Company's beginning and ending balances of our account receivables from purchasers of our oil and gas.For the Three Months EndedMarch 31, 2025March 31, 2024Beginning balance of accounts receivable from purchasers of oil and gas$33,774,968 $37,879,779 Ending balance of accounts receivable from purchasers of oil and gas35,111,264 34,415,464 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