Company: REI
Filing Date: 2025-08-06
Form Type: 10-Q
Source: 0001628280-25-038401
Chunk: 94

Company: RING ENERGY, INC.
Filing Date: 2025-08-06
Form: 10-Q
Item: Part I, Item 8
Chunk 94
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s. Under these processing agreements, the Company recognizes revenue when control transfers to the purchaser at the point of delivery and it is probable the Company will collect the consideration it is entitled to receive. As such, the Company accounts for any fees and deductions as a reduction of the transaction price.Until April 30, 2022, under the Company's natural gas sales processing contracts for the bulk of our Northwest Shelf assets, the Company delivered unprocessed natural gas to a midstream processing entity at the wellhead. However, the Company maintained ownership of the gas through processing and received proceeds from the marketing of the resulting products. Under this processing agreement, the Company recognized the fees associated with the processing as an expense rather than netting these costs against Oil, Natural Gas, and Natural Gas Liquids Revenues in the Condensed Statements of Operations. Beginning May 1, 2022, these contracts were combined into one contract, and it was modified so that the Company no longer maintained ownership of the gas through processing. Accordingly, the Company from that point on accounts for any such fees and deductions as a reduction of the transaction price. There remains only one contract with a natural gas processing entity in place where point of control of gas dictates requiring the fees be recorded as an expense.Disaggregation of revenue – The following table presents revenues disaggregated by product:For the Three Months EndedFor the Six Months EndedJune 30, 2025June 30, 2024June 30, 2025June 30, 2024Oil, Natural Gas, and Natural Gas Liquids RevenuesOil$82,778,476 $99,289,498 $159,283,526 $191,584,083 Natural gas (1)(2,238,937)(2,972,807)(2,541,664)(3,791,042)Natural gas liquids2,063,220 2,822,658 4,952,104 5,849,444 Total oil, natural gas, and natural gas liquids revenues$82,602,759 $99,139,349 $161,693,966 $193,642,485 (1) In the three and six months ended June 30, 2025 and 2024, the Company experienced a net negative total gas revenue, due to a lower gross realized sales prices per Mcf compared with the plant fees per Mcf.

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NOTE 3 — LEASESThe Company has operating leases for