Company: REI
Filing Date: 2025-08-06
Form Type: 10-Q
Source: 0001628280-25-038401
Chunk: 185

Company: RING ENERGY, INC.
Filing Date: 2025-08-06
Form: 10-Q
Item: Part I, Item 7
Chunk 185
---
 from $144,933 to $69,658 due to lower interest earned from depositing excess cash balances in bank sweep accounts.

Interest expense. Interest expense increased from $10.9 million to $11.8 million primarily due to additional deferred financing costs recognized from the credit agreement modification which was completed in June 2025. Also impacting the increase in interest expense was the deferred cash payment accretion related to the Lime Rock acquisition which closed at the end of March 2025. Although the Company had higher amounts outstanding on its Credit Facility, with a weighted average daily debt of approximately $456.3 million during the second quarter of 2025 compared to approximately $420.3 million during the second quarter of 2024, the interest on the revolving line of credit decreased slightly due to a meaningful reduction in interest rates, with a weighted average annual interest rate of 8.5% in the second quarter of 2025 compared to 9.3% in the second quarter of 2024.

Gain (loss) on derivative contracts. We recorded a gain on derivative contracts of $14.6 million for the three months ended June 30, 2025 compared to a loss on derivative contracts of $1.8 million for the three months ended June 30, 2024. For the derivative contract settlements, we recorded a realized gain of $0.7 million for the three months ended June 30, 2025 and a realized loss of $2.6 million for the three months ended June 30, 2024. The change of $3.3 million in the realized gain (loss) was a result of more favorable settlements of crude oil derivative contracts during the current year. For the marked-to-market contracts, we recorded an unrealized gain of $14.0 million for the three months ended June 30, 2025 and an 

50

unrealized gain of $0.8 million for the three months ended June 30, 2024. The change in position was primarily due to the changes in crude oil futures prices.

Gain (loss) on disposal of assets. The Company's gain on disposal of assets increased by $103,955 from $51,338 during the three months ended June 30, 2024 to $155,293 during the three months ended June 30, 2025, with $89,716 of the increase from the sale of leased vehicles, and the remainder of $14,239 due to selling owned vehicles in the prior period