Company: REI
Filing Date: 2025-03-05
Form Type: 10-K
Source: 0001628280-25-010585
Chunk: 45

Company: RING ENERGY, INC.
Filing Date: 2025-03-05
Form: 10-K
Item: Item 7A
Chunk 45
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Item 7A:    Quantitative and Qualitative Disclosures About Market Risk

Commodity Price Risk

Our major market risk exposure is in the pricing applicable to our oil and natural gas production. Market risk refers to the risk of loss from adverse changes in oil and natural gas prices. Realized pricing is primarily driven by the prevailing domestic price for crude oil and spot prices applicable to the region in which we produce oil and natural gas. Historically, prices received for oil and natural gas production have been volatile and unpredictable. We expect pricing volatility to continue.

The prices we receive depend on many factors outside of our control. Oil prices received during 2024 ranged from a monthly average low of $67.84 per barrel to a monthly average high of $84.43 per barrel. Natural gas prices realized during 2024 ranged from a monthly average low of $(2.38) per Mcf  to a monthly average high of $0.91 per Mcf. In some months, fees exceeded the pricing, causing a negative net realized price. Gross natural gas prices ranged from a monthly average low of $(0.82) per Mcf to a monthly average high of $2.43 per Mcf. Fees ranged from a monthly average low of $(1.88) per Mcf to a monthly average high of $(1.44) per Mcf. NGL prices received during 2024 ranged from a monthly average low of $7.04 per barrel to a monthly average high of $12.43 per barrel. A significant decline in the prices of oil or natural gas would likely have a material adverse effect on our financial condition and results of operations. In order to reduce commodity price uncertainty and increase cash flow predictability relating to the marketing of our crude oil and natural gas, we enter into crude oil and natural gas price hedging arrangements with respect to a portion of our expected production. The following table summarizes the Company's hedges in place on a monthly basis by commodity type. See "NOTE 7 — DERIVATIVE FINANCIAL INSTRUMENTS" to our financial statements for further information.

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Table of Contents

Oil Hedges (WTI)Gas Hedges (Henry Hub)MonthAverage BBL/dayAverage MMBtu/dayJanuary 20257,420 — February 202510,939 8,557 March 20259,963 7,558 April 202510,008 7,643 May 20259,616 7,248