Company: REI
Filing Date: 2025-08-06
Form Type: 10-Q
Source: 0001628280-25-038401
Chunk: 153

Company: RING ENERGY, INC.
Filing Date: 2025-08-06
Form: 10-Q
Item: Part I, Item 2
Chunk 153
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.1 million for hot oil costs, and $0.1 million for chemical costs.

Gathering, transportation and processing costs. Our total gathering, transportation and processing costs (“GTP”) increased from $107,629 to $133,809 and increased on a per Boe basis from $0.06 to $0.07. Beginning May 1, 2022, due to a natural gas processing entity taking control of transportation at the wellhead, GTP costs were re-classified as a reduction to oil and natural gas sales revenues. However, one contract remains in place with a natural gas processing entity where point of control of gas dictates requiring the fees be recorded as an expense. The increase in GTP costs was primarily due to the higher natural gas Mcf and NGL barrels processed. 

Ad valorem taxes. Our total ad valorem taxes increased from $1.3 million to $1.6 million and increased on a per Boe basis from $0.74 to $0.85. Of the $0.3 million increase in ad valorem taxes, $0.6 million was related to Andrews County tax estimates, primarily related to the Lime Rock acquisition. There was also an increase of $0.1 million for Ector County tax estimates. These were offset by a reduction of $(0.4) million for Yoakum County tax estimates.

Oil and natural gas production taxes. Oil and natural gas production taxes as a percentage of oil and natural gas sales were 3.66% for the three months ended June 30, 2024 and increased to 4.64% for the three months ended June 30, 2025. The tax in the three months ended June 30, 2024 included an accrual for refunds that had been filed with the state comptroller and therefore was less than the regular expected percentage of revenues.

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Production Costs for the Six Months Ended June 30, 2025 and 2024

For the Six Months EndedJune 30, 2025June 30, 2024Change% ChangeLease operating expenses ("LOE")$39,923,533 $37,669,451 $2,254,082 6 %Average LOE per Boe$11.11 $10.66 $0.45 4 %Gathering, transportation and processing costs ("GTP")$337,421 $273,683 $63,738 23 %Average G