Company: REI
Filing Date: 2025-08-06
Form Type: 10-Q
Source: 0001628280-25-038401
Chunk: 139

Company: RING ENERGY, INC.
Filing Date: 2025-08-06
Form: 10-Q
Item: Part I, Item 8
Chunk 139
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4 2025Q1 2026Q2 2026Q3 2026Q4 2026Q1 2027Q2 2027Argus basis swaps:Hedged volume (Bbl)183,000 276,000 — — — — — — Weighted average spread price (1)$1.00 $1.00 $— $— $— $— $— $— Gas Hedges (basis differential)Q3 2025Q4 2025Q1 2026Q2 2026Q3 2026Q4 2026Q1 2027Q2 2027El Paso Permian Basin basis swaps:Hedged volume (MMBtu)381,725 363,200 — — — — 700,000 — Weighted average spread price (2)$1.69 $1.69 $— $— $— $— $0.74 $— 

(1) The oil basis swap hedges are calculated as the fixed price (weighted average spread price above) less the difference between WTI Midland and WTI Cushing, in the issue of Argus Americas Crude. 

(2) The gas basis swap hedges are calculated as the Henry Hub natural gas price less the fixed amount specified as the weighted average spread price above. 

Derivative financial instruments are recorded at fair value and included as either assets or liabilities in the accompanying Condensed Balance Sheets. Any gains or losses resulting from changes in fair value of outstanding derivative financial instruments and from the settlement of derivative financial instruments are recognized in earnings and included as a component of Other Income (Expense) in the accompanying Condensed Statements of Operations.

The use of derivative transactions involves the risk that the counterparties, which generally are financial institutions, will be unable to meet the financial terms of such transactions. At June 30, 2025, 86% of our derivative instruments were with lenders under our Credit Facility.

Effects of Inflation and Pricing

The oil and natural gas industry is cyclical and the demand for goods and services of oil field companies, suppliers and others associated with the industry puts significant pressure on the economic stability and pricing structure within the industry. Typically, as prices for oil and natural gas increase, so do associated costs. Material changes in prices impact our current revenue stream, estimates of future reserves, borrowing base calculations