Company: REI
Filing Date: 2025-05-07
Form Type: 10-Q
Source: 0001628280-25-023254
Chunk: 78

Company: RING ENERGY, INC.
Filing Date: 2025-05-07
Form: 10-Q
Item: Part I, Item 1
Chunk 78
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 approximately $68.6 million in cash at closing (the “Closing Cash Consideration”), net of preliminary and customary purchase price adjustments and subject to final post-closing settlement between the Company and Lime Rock, $10.0 million due on or about December 31, 2025, and an aggregate of 6,452,879 shares of common stock of the Company, net of preliminary and customary purchase price adjustments. At the closing of the Lime Rock Acquisition, $5.0 million of the Closing Cash Consideration was retained in an escrow account to support Lime Rock’s indemnity obligations under the Purchase Agreement.

Drilling and Completion

In the first quarter of 2025, in the Northwest Shelf in Yoakum County, the Company drilled and completed three 1-mile horizontal wells and one 1.25-mile horizontal well, all with a working interest of 75%. In the Central Basin Platform in Ector County, the Company drilled and completed three vertical wells, all with a working interest of 100%.

The table below sets forth our drilling and completion activities for the three months ended March 31, 2025.

QuarterAreaWells DrilledWells CompletedDrilled Uncompleted ("DUC")1Q 2025Northwest Shelf (Horizontal)4 4 — Central Basin Platform (Horizontal)— — — Central Basin Platform (Vertical)3 3 — Total77— 

(1) Total does not include the SWD well(s) drilled and completed in the [  ].

Market Conditions and Commodity Prices

Our financial results depend on many factors, particularly the price of crude oil and natural gas and our ability to market our production on economically attractive terms. Commodity prices are affected by many factors outside of our control, including changes in market supply and demand both domestically and world wide, which are impacted by many factors. As a result, we cannot accurately predict future commodity prices, and therefore, we cannot determine with any degree of certainty what effect increases or decreases in these prices will have on our drilling program, production volumes or revenues.

Average oil and natural gas prices received through 2024 and 2025 to date continue to demonstrate commodity price volatility and we believe oil and natural gas prices will continue to be volatile for the foreseeable future. The ability to find and develop sufficient amounts of crude oil and natural gas reserves at economical costs are critical to our long-term success.

Natural Gas Takeaway Capacity

The Permian Basin has been experiencing a lack of sufficient pipeline transportation